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No: Rich People Don’t Work More

The meme is ubiquitous, and widely documented: Rich people work longer hours. Obvious implication: they deserve what they get, right? Ditto the poor.


Why? All the research supporting that meme looks at workers, not families. It completely ignores students, the retired, and anyone else who isn’t working. Alert the media: workers work more than non-workers.

And, news flash: rich families are full of non-workers. If you look at families and their hours worked per person, you see a very different picture:

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Here’s the same 3+ household data for working-age families only: those with a head of household under age 65.

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Pretty much the same story.

This is all based on a fast-and-dirty random census pull of about 5,000 U. S. households, from IPUMS. It uses 3+ households as a proxy for families — probably not a bad proxy. A professional economist doing proper due diligence would fine-tune that, or even better turn to the Panel Study of Income Dynamics (PSID), which has better microdata to track families. Careful work would even allow them to track extended, multi-generation families, not just nuclear families living together. (Think: dynasties.) I’d expect the pattern we see here to be more pronounced in that view (though that’s just a surmise).

Here’s some more evidence, from across the pond:

Figure 1: Average hours of work across the distribution of earnings: UK, 2013


Figure 2: Changes in post-tax real hourly earnings and average hours for the median and top 1 per cent


Even as rich people’s incentives to work have skyrocketed, their hours worked have plummeted. This even though they’re far more likely to be doing doing interesting, engaging work in pleasant environments. Curious.

But still: low-income people work less. More of them are unemployed. Is that a surprise to anyone? (I’ll leave the “voluntary” argument to my gentle readers.)

There’s a stylized fact out there, universally repeated by economists and pundits, that seems to misrepresent the state of the world. There are some nice tractable research projects here for those who are paid to do such things.

Cross-posted at Asymptosis.

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Obviously, the New York Times Editorial Page is Lying*

I know for a fact that the alleged facts stated in this New York Times editorial today are false.  Or at least that, contrary to the editorial’s claim, those facts, if true, no longer have any impact on black Americans’ financial status and educational opportunities.  None whatsoever.

I know this because I read John Roberts’ and Anthony Kennedy’s opinions in cases that touch on such matters.

Okay, so maybe the writer of that editorial isn’t actually a liar.  Maybe he or she actually believes that the claims in the editorial are true.  Which would indicate that that writer does not read John Roberts’ and Anthony Kennedy’s opinions, at least not the ones that concern such things.

In any event, that editorial should be retracted.  Immediately.  With a concession that it misstates fact.


*Okay, I know from experience that someone will post an angry comment here indicating that he or she thinks the title of the post, and the post itself, aren’t, y’know, facetious.  The title of the post, and the post itself, are facetious. The Times editorial, by the way, is titled “How Racism Doomed Baltimore.”

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Pubic Opinion of the PPACA

A recent Kaiser Poll shows favorable results for the PPACA the first time since 2012. 43% have a favorable view of the PPACA and 42% have an unfavorable view of it. While the report shows a favorable view, it is within the margin of error (+ or – 3%) and not statistically significant (Click on the graph[s] for a larger version).

Public's View of PPACA has Improved

Even though the Public’s View is split and slightly favoring the PPACA, the percentage of people who wish Congress to finish implementation or expand the PPACA is 46% as opposed to those wishing to repeal or scale it back at 41%. This opinion has remained consistent for six months of the Kaiser survey.

Partisan Differences in What Should Be Done with PPACA

In how the PPACA is viewed plays mostly along partisan political lines with Democrats favoring it and Republicans opposing it. In total, it is an equal split favoring and opposing it.

Partisan Divide in Views of PPACA

Does the PPACA hurt, help, or have a direct impact upon you. Again, this plays along the partisan political beliefs of the people with Democrats claiming it helped as opposed to the Republicans claiming it hurt. In all three cases and taking into consideration the politics of the people, the majority claimed the PPACA had “No Direct Impact” upon them.

Perception of Personal Impact

In March 2015, the CBO recalculated and revised the expected costs of the PPACA downward. This went largely unnoticed and few people realize the PPACA would cost less than expected. 50% still believe it would cost more and another 15% said the same as originally estimated.

PPACA Is Costing Less Than Estimated

Interestingly enough is the agreement of the #1 priority for healthcare; all politics aside and by a super-majority, people want “drugs for chronic conditions to be affordable to those who need them. When looking at the Total picture, drug prices and hospital charges are other priorities people wish addressed.

Partisan Differences in Top Priorities

There is more to the Kaiser Survey which can be found here: Kaiser Health Tracking Poll: April 2015. Looking at Figure 6 of the survey, both Democrats and Republicans agree on making prescription drugs more affordable giving it the highest priority for Congress. Other priorities were making hospital costs more affordable and greater protections against out-of network doctors and associated costs; making sure provider networks were sufficiently large enough in the plans, and making information more readily available to patients about the price of doctors’ visits, procedures, and tests, such as hip replacements and MRIs.

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British Elections are Weird

I have been following the British Parliamentary elections all night and final numbers are not in. But we have the outgoing government with the following numbers: Conservative 302 and partners Liberal Democrats 56 plus maybe NI Democratic Unionists 8. In a system where you mostly need 326 for a majority.

Now we are coming up on a situation where the Conservatives might end up with 326 on their own (but maybe not) but where almost all of that was poached off their one time partners the Liberal Democrats. Which depending on the breaks means a much narrower majority. But based on the coverage I have been watching all night this is going to be posed as a huge victory for David Cameron and the Tories. Even though his overall majority in Parliament might be shaved to just about nothing. Because SNP. Or other acronyms. I find all this fascinating and invite others to weigh in on this Open Thread.

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Setting a Limit: Free Speech vs Eliminationism

There have been a number of ad-hoc limits proposed to Free Speech Absolutism in the past. For example “You can’t yell ‘Fire’ in a crowded theater” or “Your free speech rights end where your waving arms and fists intersect my nose” and those get us into the right arena. But I want to propose a more concrete rule and one that is actually in place in parts of Europe today: “You don’t get to propose Eliminationism or deny historical examples of it”.

And I would suggest defining “Eliminationism” to include both extermination and absolute exclusion and would entertain expansion of it to total conversion, at least where that is accompanied by force.

Some examples:

She is beautiful, articulate, and controversial. But she is also fanatical, and even dangerous. Radical Jewish anti-Islamic activist and Fox News regular Pamela Geller said on her blog in 2010: “And I pray dearly that in the ungodly event that Tehran or its jihadi proxies (Hez’Ballah, Hamas, etc.) target Israel with a nuke, that she retaliate with everything she has at Tehran, Mecca, Medina……not to mention Europe. They exterminated all their Jews, but that wasn’t enough. These monsters then went on to import the next generation of Jew-killers.” By “Jew-killers,” she means Muslims: “This new hatred comes from Muslim immigrants. The Jewish people are afraid now.”

Geller shares a similar view with Israeli advocates of “The Samson Option”: if Israel is to be destroyed by nuclear attack, it should destroy the whole world by unloading its entire nuclear arsenal upon it. (See Does the Bible Predict Israel’s “Nuclear Shield?”)

Pam Geller is an eliminationist. And that kind of free speech should not be tolerated. Just as similar language when applied against Jews would be criminalized in Germany.

We should invade their countries, kill their leaders and convert them to Christianity. We weren’t punctilious about locating and punishing only Hitler and his top officers. We carpet-bombed German cities; we killed civilians. That’s war. And this is war.

Ann Coulter is an eliminationist. That should put her beyond the pale. I am not suggesting that this is just easy peasy to actually apply in practice. But only that fencing in speech with a prohibition against advocating mass murder against an entire class of people is a reasonable limit.

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The Shifting Consensus on Capital Controls: Gallagher’s “Ruling Capital”

by Joseph Joyce

The Shifting Consensus on Capital Controls: Gallagher’s “Ruling Capital”

Among the many consequences of the global financial crisis of 2007-09 was a shift in the IMF’s stance on capital controls. The IMF, which once urged developing economies to emulate the advanced economies in deregulating the capital account, now acknowledges the need to include controls in the tool kit of policymakers. Kevin Gallagher of Boston University explains how this transformation was achieved in his new book, Ruling Capital: Emerging Markets and the Reregulation of Cross-Border Finance.

By the 1990s the Fund had long abandoned the Bretton Woods solution to the trilemma: fixed exchange rates and the use of capital controls to allow monetary autonomy. Instead, the IMF encouraged developing economies to open their borders to capital flows that would increase investment and achieve a more efficient allocation of savings (see Chapter 5 here). IMF officials proposed an amendment to its Articles of Agreement that would establish capital account liberalization as a goal for its members, but the amendment was shelved after the Asian financial crisis of 1997-98. The IMF subsequently continued to recommend capital account liberalization as a suitable long-term goal, but acknowledged the need to implement deregulation sequentially, beginning with long-term foreign direct investment before opening up to portfolio flows and bank loans.

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Thought Cartoon: an Exercise in Free Speech for Pam Geller

Picture (literally) this: The Wailing Wall seen from a distance that would represent base to height. With as normal observant Jews at that base praying and inserting prayers into cracks in the wall. At the height a depiction of the Prophet mounted on his horse immediately prior to his Ascent to Heaven (traditionally from the Dome of the Rock). Further with that horse depicted as raising his tail and defecating off the top of Temple Mount onto the prayerful below. Ya think that THIS cartoon of Mohammed would earn a $10,000 top prize from Pam’s contest in Garland Texas? After all it would still be blashemous in Muslim terms and most likely as cartoonish as any other contestant. But somehow I suspect that “First Amendment Absolutist” Pam Geller would be no more amused than was Rudy Giuliani when faced with the (in)famous “Piss Christ” installation back in the day.

Or let us take this a different direction. Back in the day Pam Geller was a prominent right leaning war-blogger who ran a blog called Atlas Shrugs. Which blog often featured pictures of the blog-mistress incidentally(?) dressed in ways that showed off her rather admirable figure. Which led certain irreverant and perhaps obnoxious lefties to refer to her site as Atlas Jugs. Which was to be sure by any standard misogynistic. But certainly protected by the same Free Speech principles that Pam claims to be motivated by today.

I just wonder whether Pam would defend our theoretical Mohammed Horse cartoon or those very real Atlas Juggs references today? If not why not?

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Do Initial Claims tell if Unemployment is really at 5.5%?

The unemployment rate is officially at 5.5% in the US. But is that rate true? Maybe the rate should actually be higher when one considers the low labor participation rate and the long-term unemployed.

Civilian Labor Force

The civilian labor force has not risen much since the crisis. (link)

civ 1

Do we conclude therefore that there are many unemployed out there beyond the 5.5% unemployment rate?

4-week Average of Initial Claims

Initial claims of workers seeking state jobless benefits has declined to a level near the ends of past business cycles. (link)

civ 2

A higher level of initial claims shows a weaker economy. Can we expect initial claims to fall more if we expect the economy to get even stronger from here into the future?

Initial Claims / Civilian Labor Force

How can we get a sense if the labor market is reaching a saturation point that would show that unemployment is near its natural potential?

The 4-week moving average of initial claims can be divided by the civilian labor force. (link)

civ 3

In this graph, since the crisis, initial claims have declined in relation to the civilian labor force employed. The economy has been recovering. Since last October, though, the initial claims have been rising slowly in relation to the civilian labor force.

The graph would imply that maybe unemployment has reached a saturation point consistent with past business cycles. Or can the line continue downward? Could we expect the civilian labor force to continue rising with initial claims to continue falling?

If you see the saturation point taking effect now, then you might conclude that a 5.5% unemployment rate is fairly reliable and that unemployment is getting close to its natural potential..

However, if you see the saturation point going even lower with fewer initial claims per civilian worker, then you might conclude that a 5.5% unemployment rate is too low to reflect normal labor market conditions and that unemployment is not yet near its natural potential.

Update: The unemployment rate is here plotted against the last graph above. The unemployment rate will begin to bottom out when the line for 4-week moving average of initial claims divided by civilian labor force reaches its saturation point. But where is that saturation point?

civ 4a

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