Which space is more important for determining your wellbeing, work or home?


Most working adults in Western nations spend more waking hours at work than at home. Why do people spend so much time at work (and on long commutes) in order to spend as much as they can on large, ostentatious homes that they don’t spend much time enjoying and that they just want to get away from as soon as they can get a week or two of vacation?

Why don’t people spend more resources making their workplaces beautiful more like they spend at home?

Posted in Labor

The Lead Conspiracy

How much money would you require to be paid to voluntarily put yourself through lead poisoning that makes you sick without killing you? Some people would do it for a few million dollars. This helps explain why people lie and cheat in order to poison the world including themselves. After all, if you could earn millions of dollars for getting mildly poisoned and had no regard for the effects on others, would you do it? You could then afford to retire early and buy a property somewhere in a healthier environment along with the best medical care money can buy.

For example, Thomas Midgley patented Tetra-Ethyl Lead (TEL) as a gasoline additive. This was one of the worst environmental mistakes in history from a cost-benefit perspective. Other mistakes have been bigger like the effects of carbon on global warming, but other major mistakes also carried much larger flows of benefits. TEL was highly profitable because it was patented, but other alternatives worked equally well for most purposes, such as the simple, abundant, unpatentable ethyl alcohol.

In Midgely’s quest to promote TEL, he accidentally gave himself acute lead poisoning and had to convalesce for months in Florida. He gave himself lead poisoning in spite of the fact that he undoubtedly was well aware of the extreme toxcicity of TEL because it was common knowledge. In March 1922, Pierre du Pont, one of the heads of the Du Pont Corporation, wrote that TEL is “a colorless liquid of sweetish odor, very poisonous if absorbed through the skin, resulting in lead poisoning almost immediately.” That year, the US Surgeon General, H.S. Cumming, wrote Pierre to say, “since lead poisoning in human beings is of the cumulative type resulting frequently from the daily intake of minute quantities, it seems pertinent to inquire whether there might not be a decided health hazard associated with the extensive use of lead tetraethyl in engines.” That year a lab director with the US Public Health Service wrote that TEL was a “serious menace to public health” and that “several very serious cases of lead poisoning have resulted” among workers in the pilot production runs.

After the press learned about five deaths from lead poisoning at a TEL factory and symptoms of severe lead poisoning that afflicted over 80% of workers at the factory, Thomas Midgely, its inventor and a Vice President of the company, made a demonstration of rubbing it on his skin in front of reporters to fool them into thinking that it is nontoxic.

The celebrated engineer… who had only recently been forced to leave work to recover from lead poisoning, proposed to demonstrate that TEL was not dangerous in small quantities, by rubbing some of it on his hands. Midgley was fond of this exhibition and would repeat it elsewhere, washing his hands thoroughly in the fluid and drying them on his handkerchief. “‘I’m not taking any chance whatever,’ he said. ‘Nor would I take any chance doing that every day.'” The New York World cited unbelievable dispatches from Detroit claiming that Midgley “frequently bathed” in TEL to prove its safety to skeptics within the industry.

The above information comes from Jamie Lincoln Kitman’s masterful Secret History of Lead in which he details the masterful influence peddling of the TEL industry to cover up the dangers of lead and influence science and government regulators to keep up their profits. He writes that the results were deadly for the nation:

A 1985 EPA study estimated that as many as 5,000 Americans died annually from lead-related heart disease prior to the country’s lead phaseout… one can conservatively estimate that a total of about 68 million young children had toxic exposures to lead from gasoline from 1927 to 1987.

Lucas Reilly paints a vivid picture of what happened at Midgely’s factory that got the attention of the press and motivated him to put toxic TEL on his own hands (if it wasn’t just a sham act):

Walter Dymock didn’t mean to jump out his second-story bedroom window. He was queasy, not out of his mind. But on a mild October night in 1923, shortly after Dymock groggily tucked himself into bed, something within him snapped. Like a man possessed, Dymock rose, fumbled through the dark, opened his window, and leapt into his garden.

Hours later, a passerby discovered him lying in the dirt, still breathing. He was hurried to a hospital.

Dymock wasn’t alone. Many of his coworkers were acting erratically too. Take William McSweeney. One night that same week, he had arrived home feeling ill. By sunrise, he was thrashing at phantoms. His family rang the police for help—it would take four men to wrap him in a straitjacket. He’d join his co-worker William Kresge, who had mysteriously lost 22 pounds in four weeks, in the hospital.

A few miles away, Herbert Fuson was also losing his grip on reality. He’d be restrained in a straitjacket, too. The most troubling case, however, belonged to Ernest Oelgert. He had complained of delirium at work and was gripped by tremors and terrifying hallucinations. “Three coming at me at once!” he shrieked. But no one was there.

One day later, Oelgert was dead. Doctors examining his body observed strange beads of gas foaming from his tissue. The bubbles “continued to escape for hours after his death.”

“ODD GAS KILLS ONE, MAKES FOUR INSANE,” screamed The New York Times. The headlines kept coming as, one by one, the four other men died. Within a week, area hospitals held 36 more patients with similar symptoms.

All 41 patients shared one thing in common: They worked at a… refinery in Bayway, New Jersey, that produced tetraethyl lead, a gasoline additive that boosted the power of automobile engines. …Factory laborers joked about working in a “loony gas building.” When men were assigned to the tetraethyl lead floor, they’d tease each other with mock-solemn farewells and “undertaker jokes.”

They didn’t know that workers at another tetraethyl lead plant in Dayton, Ohio, had also gone mad. The Ohioans reported feeling insects wriggle over their skin. One said he saw “wallpaper converted into swarms of moving flies.” At least two [workers had previously] died there as well, and more than 60 others fell ill, but the newspapers never caught wind of it.

This time, the press pounced. Papers mused over what made the “loony gas” so deadly. One doctor postulated that the human body converts tetraethyl lead into alcohol, resulting in an overdose. An official for Standard Oil maintained the gas’s innocence: “These men probably went insane because they worked too hard,” he said.

One expert, however, saw past the speculation and spin. Brigadier General Amos O. Fries, the Chief of the Army Chemical Warfare Service, knew all about tetraethyl lead. The military had shortlisted it for gas warfare, he told the Times. The killer was obvious—it was the lead…

Lead makes humans sick because the body confuses it with calcium. The most abundant mineral in the human body, calcium helps oversee blood pressure, blood vessel function, muscle contractions, and cell growth. …In the brain, calcium ions bounce between neurons to help keep the synapses firing. But when the body absorbs lead, the toxic metal swoops in, replaces calcium, and starts doing these jobs terribly—if at all.

The consequences can be terrifying. Lead interferes… damaging DNA and killing neurons. Neurotransmitters, the chemical paperboys of the brain, stop delivering messages and start murdering nerve cells. …Lead poisoning is rarely caught in time. The heavy metal debilitates the mind so slowly that any impairment usually goes unnoticed until it’s too late.

Amazingly, the press never noticed the deaths and poisonings at the TEL plant in Dayton so that never came up as problematic for the industry. The companies who profited off of the patents and production of TEL gasoline included some of the largest in America: Standard Oil, General Motors, and DuPont. They funded research that gave the misleading impression that lead is environmentally benign. It was a masterful recovery from the PR disaster after word got out that they killed many of their own workers in Bayway, New Jersey.

Although scientists were well aware of lead’s extreme toxicity, the TEL industry funded research claiming that a high level of environmental lead was the natural state of the world. That was unquestioned until Claire Patterson devoted his life to studying lead. He discovered that lead levels in American bodies was 100 to 1000 times higher than it had been in ancient times and that the leaded gasoline industry had produced most of the problem.

His research was very expensive and he had been funded by some of the wealthiest institutions in the world: oil companies. However when he published research showing that these oil companies were poisoning the world by pumping tons of lead into the air out of the tailpipes of engines and refinery smokestacks, they weren’t happy.

This illustration comes from a graphic novella about Patterson’s story by Kevin Cannon and Michele Regenold. Their story about Patterson ends optimistically:

Whereas Patterson bravely fought off well-funded interest groups who tried to discredit him and is one of the most beneficial scientists you have never heard of, Thomas Midgely, was made wealthy by said interest groups and has been called the world’s deadliest inventor that you have never heard of for inventing both TEL and CFCs which nearly destroyed the ozone layer which protects life on earth.

In addition to directly making people sick and reducing IQ, lead poisoning also caused the crime wave of the 1970s-1990s which ended after we ended leaded gasoline.

Rick Nevin, Economist and housing consultant, and author of the book The Lucifer Curves: The Legacy of Lead Poisoning, found a relation between lead pollution and violent crime. According to Nevin, the delay between lead… poisoning, and violent crime increase is of around 20 years.

For the best written history of the science of how lead causes crime, see Kevin Drum’s 2013 essay and his brief 2018 update.  This documentary about the history of lead vividly shows the corruption.

Posted in Health, Public Finance

Is the Fed finally thinking about Americans at the median income and below?

Most people think that the president has a lot of power over the economy, but that isn’t true. Presidents have very little direct power over the economy by law. The Fed is the only part of government that has the power to directly modify the macroeconomy and I’m amazed how ignorant most people are about what the Fed is doing and there is finally some good news about the Fed’s direction.

I’ve written several posts complaining about how the Fed is set up to help the banks (“Wall Street”) rather than the workers (“Main Street”), but under Jerome Powell, the Fed finally seems to be paying attention to ordinary American working stiffs. Jared Bernstein reports:

Recent research I did with UMass Boston sociologist Keith Bentele finds that in tight labor markets, the annual earnings of all low-income, working-age households grow 6 percent faster than in slack labor markets. For low-income African Americans and single mothers, the differences are 8 and a whopping 13 percent, respectively.

Annual earnings combine the contribution of hourly wages and annual hours worked, and the latter is… a big reason for those earnings gains. The figure below on the left shows a clear, negative correlation between unemployment and annual hours worked for low-income, working-age households. In contrast, the random scatter of dots in the figure on the right shows that labor supply for high-income families is insensitive to the jobless rate.††††

… because tight labor markets disproportionately help those with relatively low incomes, high-pressure labor markets have an equalizing effect. Economist Josh Bivens recently wrote that “excess unemployment may well explain more than a third of the rise in wage inequality since 1979, and likely contributed to the redistribution of income from labor to capital owners.”

Bernstein says that the Fed has had a change of heart because of meeting with regular Americans and directly hearing stories about how unemployment is affecting them, but I’d speculate that Donald Trump may actually have also had some effect.

Trump is a selfish man and he believes that lower interest rates could help get him re-elected and help him save millions of dollars on his (possibly) billions of dollars of loans that he owes. So he has been lambasting the Fed for not lowering interest rates enough and the Fed may have been subtly influenced to reverse course and lower interest rates.

In general, the president is not supposed to have any power over the Fed’s economic policies because presidents can mess up the monetary system when they try to use it for selfish gain, but occasionally the selfish interests of a president can be aligned with the interests of the average worker and so far we seem to be in one of those times. Yea Trump!

Posted in Macro

The minimum wage is nearly dead

The federal government has just set the record for the longest period of time without an increase in the minimum wage to keep up with inflation. The minimum wage has now been ignored for over a decade and Kevin Drum says that our political leadership has effectively killed the federal minimum wage through willful neglect.

Today, thanks to their unwillingness to support an increase, well under one percent of workers earn the federal minimum wage, which makes it effectively meaningless.

It is actually much worse than that. Well under half of one percent of American workers earned the minimum wage in 2017. And lots of American workers earn less than the minimum wage. In fact, more than twice as many workers earned less than the minimum as earned the minimum wage in 2017.

Kevin Drum also produced the best kind of data for examining the real value of the minimum wage which is to calculate it as a percent of the median income.

This view… shows that the federal minimum didn’t really peak in the 60s and then decline. In reality, it’s been slowly declining ever since we started collecting income statistics in the 50s. Back then, a full year of minimum-wage work earned you about 40 percent of the median. Today that’s down to 20 percent, and on current trends the minimum wage will decline to its lowest point in history by next year.

The federal minimum wage is nearly irrelevant, so it is amazing that it generates so much opposition from business lobbies who have succeeded at convincing the public that economists are worried about it being too high when in reality, five times more economists want to raise it than oppose raising it.

And it isn’t just the minimum wage that is nearly dead. Overtime pay is also dying. Nick Hanour says, “the overtime threshold, which used to cover 65 percent of workers, today covers only 7 percent” of workers.

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Posted in Inequality, Labor, Public Finance

Is reading the most efficient way to consume information?

The average reader is a speed reader. Medium.com says they assume their average readers read at 275 words per minute (wpm) (or sometimes they claim 260 wpm). I averaged their estimated reading speed for nine essays and they really estimated an average reading speed of 241 wpm although I didn’t include time for appreciating pictures since they didn’t seem any more relevant than the picture I posted above. Medium.com estimates that the first photo adds 12 seconds and slightly less for subsequent photos.

Any of the above rates are speed-reading compared with speaking which is only about 100-150 wpm, and because there are about 250500 words per page, it is equivalent to reading about 30 to 60 pages an hour! If your average book is about 250 pages long, then you can read 50 books per year by just spending a little over 30-60 minutes per day reading. Why doesn’t everyone read that much? The median American only reads 4 books per year. That only takes about five minutes per day on average.

Despite some wild claims, the best speed readers probably don’t read faster than about 600 wpm with reasonable retention. Anything faster than that is just skimming, and there is no point skimming literature. But much of a nonfiction book can be skimmed and one of the great features of reading is that sometimes you want to skim and other times you want to slow down and focus more. That is very difficult to do with any other medium.

In general, reading is the most efficient medium for absorbing information because:

1.Video and audio information is harder to organize efficiently. 

It is harder to carefully organize information in video/audio than in print.  The printed word (with graphics) is the best medium for creators to carefully organize ideas into a logical structure whereas video/audio is best for rapidly throwing ideas together in an entertaining and persuasive way as demonstrated by the plethora of cheaply-produced call-in talk shows and interview programs throughout the media.  When video producers want well-organized information, they almost always begin by writing it out on paper on a story-board and/or a detailed script which is later read for recording.  The audience would usually be better informed if we could just read the scripts.  It is simply too easy to produce a stream of words in audio/video and that ease makes the word choice and organization less careful.  The difficulty of putting words and images on a page forces the author to think carefully and precisely about what is being communicated.  For the same reason, students learn more by taking notes by hand on paper over typing on a computer.  Because it is faster and easier to type, students aren’t as careful about what they write and don’t need to think as much about the topic.  Handwriting averages about 22 words per minute at best whereas typing is about 33 wpm.

We don’t talk as clearly as we write. As John Green said, “The problem with actual human speech is that it does not take place in the form of sentences.” Real-life speech is full of:

Repetition. Repetition.
Stu-stut-stuttering, slllurrring, lithping, or mumbrbl…
Collecting yourself, sorry, no, correcting yourself.
Whatsitcalled, um… disfluencies, you know, placeholders while you think.
And, like, being all, like, incorrigible with their use of “like.”
Some sentence when the grammar ain’t no good….
Going off on tangents which aren’t relevant to the plot. Like platypi. Or falafels
Awkward silences and spaces where people… note .
Verbal Ticsdesu.
Sneezing, coughing and *cough* *cough*, ahem, and so on…
Just letting sentences kinda…
Pauses or, y’know, interjections — right? — to make sure that the person understands. Get it?
Saying the wrong word by accident, and hoping nobody else involved in the constipation will notice…
Oh, and sentence fragments. Obviously.

(Another benefit of text, discussed below in #3, is that you can more easily skim/skip over bad writing like the above quote and don’t need to spend much time on it if you don’t want to.)

Only text can be organized into lists and outlines and paragraphs that gives the creator more power to organize it in a way that is more meaningful than would be possible with pure audio/video.

2. Video/audio information appeals more to irrational emotions and eye-candy

Authors (and producers) have more incentives to prioritize style over substance in video because it is much easier to elicit emotion using video and that brings in (and keeps) viewers.  The words ‘bloody murder’ elicit much less emotion than a bloody photo of a murder victim. That photo, in turn, elicits much less emotion than a video of a girl getting shot with the sound of sobbing and the death rattle of breathing her last breath. 

It is far easier to suck in viewers with sexy images than with words describing sexy images and more appealing yet when sexy images are moving.  This is why advertisers much prefer images and videos over words. They are trying to distract people from their primary thoughts and then persuade rather than inform.

As Stephen Pinker wrote in The Guardian:

Plane crashes always make the news, but car crashes, which kill far more people, almost never do. Not surprisingly, many people have a fear of flying, but almost no one has a fear of driving. People rank tornadoes (which kill about 50 Americans a year) as a more common cause of death than asthma (which kills more than 4,000 Americans a year), presumably because tornadoes make for better television.

The data scientist Kalev Leetaru applied a technique called sentiment mining to every article published in the New York Times between 1945 and 2005, and to an archive of translated articles and broadcasts from 130 countries between 1979 and 2010. Sentiment mining assesses the emotional tone of a text by tallying the number and contexts of words with positive and negative connotations, like good, nice, terrible, and horrific….  

News outlets [around] the world… became gloomier and gloomier from the late 1970s to the present day. The consequences of negative news are themselves negative. Far from being better informed, heavy newswatchers can become miscalibrated. They worry more about crime, even when rates are falling, and sometimes they part company with reality altogether: a 2016 poll found that a large majority of Americans follow news about Isis closely, and 77% agreed that “Islamic militants operating in Syria and Iraq pose a serious threat to the existence or survival of the United States,” a belief that is nothing short of delusional.

Consumers of negative news, not surprisingly, become glum: a recent literature review cited “misperception of risk, anxiety, lower mood levels, learned helplessness, contempt and hostility towards others, desensitization, and in some cases, … complete avoidance of the news.” And they become fatalistic, saying things like “Why should I vote? It’s not gonna help,” or “I could donate money, but there’s just gonna be another kid who’s starving next week.”

This is a much bigger problem with TV news than with print news, but the lines are blurring with traditional print organizations like the New York Times adding video and more flashy content to compete with more sensational outlets.

There are bad incentives for journalists to appeal to the irrational knee-jerk emotions  and unfortunately negativity sells in news, but it is particularly skewed in TV news which prioritizes emotional interviews and vivid images of disasters over less sensationalist issues that are more important but don’t suck viewers in with reptilian-brain emotions.  The best way to avoid this kind of media bias is never turning on the TV news because print news is so much better quality and can be absorbed much more quickly.

3. Video/audio is linear and passive by nature. 

Reading is the most actively engaging way to get information because you can easily choose what to read and what to skip and what to re-read (called “regression” by scholars) and pause and think about what you have just learned.  None of that happens with TV or radio news which is simply served to a passive audience who only chooses whether to tune in or out and cannot be engaged in actively deciding what information is important.  Almost every reader only selects less than 10% of any major newspaper because readers actively select what stories are important to them and skip the rest, but you cannot do that with TV or radio news.  All you can do is passively listen to whatever news is on regardless of what it is and the newscasters know that they keep eyeballs with sensationalism, not substance so they focus on sensationalism.  Print is completely different.  There is still way too much sensationalism in printed news, but there is less and most importantly, it is much easier to skip the crap because the printed word is the best medium for active, non-linear information gathering.  Hyperlinks make reading even more non-linear and engaging.

One reason why audio/video is tends to be so repetitive is that the listener cannot easily “regress” and repeat an important part. So good producers insert more repetitiveness to emphasize important points, but even the best producer cannot know what needs to be repeated for any particular person and it is harder to skim over repetition in audio/video when it is merely redundant for a listener.

It is harder to search audio/video for keywords (unless it is converted to text) and it cannot be as easily skimmed through to skip irrelevant parts and look for the most important.

4. Video and audio are bad for communicating the reliability of information

With video & audio, there is no easy way to cite sources and so sources are neglected.  It is harder to go back and correct mistakes in video/audio than in print.  This makes information in video and audio less reliable than in print. Just the ability to use quotation marks in text makes it much easier to attribute work to other people. In fact, videographers often resort to displaying a video of a text in order to visually cite a source, and that demonstrates the power of writing.

5. Video/audio is a slower way to gather verbal content

Most college-educated people read much faster than people talk. We are all speed readers in a sense. Americans speak at less than 150 words per minute, but most people think at at least twice that fast. There are varying estimates of just how fast people can think ranging from 400 wpm to 4000 wpm. It is a difficult research question and part of the variance in estimates studying different kinds of internal speech, but everyone agrees that people think much faster than they speak.

Part of the overwhelming evidence for the fact that people think faster than they speak is that normal, college-educated readers comfortably read almost twice as fast as they speak. So even normal readers are speed-readers compared with how they communicate out loud.

Another piece of evidence that people think twice as fast as they speak is that normal people can easily understand speech that is sped up by double or more. Again, the limiting factor that has prevented people from understanding rapid speech has been the difficulty of human physiology to produce it. Auctioneers with training will speak at 300 wpm, but they mostly say repetitive words because otherwise their intonation and consonants would be too slurred to understand. But computers can speed up normal speaking and preserve all the consonants and vowel sounds.

digitally accelerated speech is more intelligible than the natural speech of a person talking rapidly. ”When you try to speak faster and faster, speech gets very blurred,” Ms. Janse said. The distinctions fade, she said, whereas digitally accelerated speech uniformly preserves all the crucial intonations and inflections.

The fact that people think at least twice as fast as they speak (in wpm) is why it is so crucial to practice presentations out loud if you want to know how long your presentation will take. Most neophyte presenters practice in their heads because it feels awkward to say everything out loud, partly because it feels too slow and inefficient. But then when they actually have to give the real presentation and say everything out loud, they don’t have nearly enough time to finish because everything takes twice as long as when they practiced it because the speed of thought is at least twice as fast as the speed of the tongue. That is one reason why formal presenters have a tendency to speak unnaturally fast.

UPDATE: I’ve come to decide that audiobooks can almost rival reading as a medium of gathering information because modern audiobook players do such a good job of speeding up the audio by 100%.

I used to hate how SLOOOOOW audiobook narrators read because my mind tended to wander when there was so little information coming in. But when sped up double time, I find it is much easier to focus because there is more information to absorb and I become a more active listener who pauses the audio to think sometimes and occasionally rewinds to repeat sections for better understanding.

Unfortunately, only about 5% of audiobook users have ever tried listening at a faster speed because it feels unnatural at first. But with only a few hours of practice, anyone can get high comprehension from speech that is double-speed and it is worth experimenting with what speed feels best. After a short while, normal speed speech begins to feel uncomfortably slow. So if you listen to audiobooks or podcasts, you can get much of the efficiency of reading by using a good digital player that can speed up the speech. Some players claim to have better algorithms for speeding up audio, but I have found them all to work amazingly well. Digitally sped-up audio always sounds clear and has about the same intonation as the actual person. It is nothing like the old analog speed-up technologies that made people sound like chipmunks.

Although audio has its advantages, reading is still overall the most efficient and productive way to get verbal information, but sometimes you need your eyes for something else like keeping the car on the road and sped-up audiobooks are fantastic while gardening, washing dishes, or taking a walk.

What is video best for?

As mentioned above, video is best for appealing to the lizard brain and getting people’s attention. Video helps people feel more connected to one another. It is also the best, obviously, for showing motion, but unless you are doing a how-to video that shows the complex motions for taking apart something, motion usually isn’t necessary for communication and can be a distraction. That is why recipes are usually communicated in print rather than in video format even though they are one of the most common how-to instructions.

Posted in Culture, Personal (not econ)

What immigration crisis?

The Pew Research Center reports data that unauthorized immigrants in the US are at the lowest level in a decade of gradual declines.

Meanwhile, more and more Americans are favoring more legal immigration, so Americans aren’t suddenly becoming more nativist.  

Illegal border crossings as measured by apprehensions have dramatically fallen from their peak in the late 1990s and lower than they have been in nearly a half century (which was only shortly after America first started to restrict the freedom of people’s movement across our southern border). 

That reduction in apprehensions is happening despite much higher numbers of border patrol agents (about three times more agents), so it is unlikely that the US border patrol is just getting a lot worse at catching immigrants.

One reason apprehensions on the Mexico border is falling is that the biggest growth in unauthorized immigrants are not coming overland because they are coming from Asia, Africa, the Caribbean, South America, and other places rather than Mexico. 

Undocumented immigrants are increasingly entering legally by air and by sea and simply overstaying their visas.

Even deportations peaked in 2013 under President Obama and have been considerably lower ever since (in the data so far).

So why does the media say we are in the middle of an immigration crisis? Because the president says it is a crisis and the media prints it like it is a fact:

Throughout this election season — and ever since he declared his presidential candidacy — President Donald Trump has been calling illegal immigration a “crisis.” “I would like to provide an update to the American people regarding the crisis on our southern border,” the president said in his Thursday speech on the subject, “and crisis it is.”

All of Trump’s blathering about an immigration crisis on the southern border has also created a lot of publicity about immigration in Central America and perhaps in the spirit of all-publicity-is-good-publicity, the news of a border crisis is acting as an advertisement for would-be immigrants who have suddenly started going to the US border in recent months in record numbers (although still WAY below the overall peak in the 1990s).  

Even though Trump has attracted a lot of news coverage this year for being cruel to children by separating them from their families, the number of children coming has also dramatically increased.  

It is almost like the media exposure about families immigrating with children is giving more families from Honduras the idea that they could try immigrating. 

And in contrast with the previous immigration wave from Latin America which was predominately illegal, the new immigration wave is trying to do it legally.  This is a sharp increase in the number that are applying for asylum:

So if there is an immigration crisis, it didn’t start until after Trump started producing vast amounts of free ‘advertisement’ about immigration to America in the news media.  How else would poor campesinos learn about the caravans of immigrants that they can join to help them get to the US border and apply for refugee status with their children.  

There wasn’t an immigration crisis before Trump created oneLike most economists, I generally think that immigrants make America stronger, but if Trump really wanted to reduce the number of illegal immigrants in America, there is a sure-fire, inexpensive method to achieve his supposed goal.  The fact that he doesn’t use this method means that he is either stupid or corrupt.  

Posted in Globalization & International, Labor

If you pay them, they will come.

Most immigrants to the United States come because of higher wages. If you look at any two countries in the world, the net migration almost always flows from low-wage nations to high wage nations because the biggest draw for migrants is economic given the enormous gaps in wages between nations around the world. So the crime of illegal immigration is basically caused by American employers who illegally hire undocumented immigrants. If they had no prospect of jobs, very few would come and most would have to leave.

Some crimes like theft and murder involve victims who help law enforcement fight back. Other crimes like illegal drugs and illegal immigration are victimless and that makes them much harder to combat because none of the participants report the crime and law enforcement is on its own to try to find the crimes. Illegal drugs and illegal immigration are also part of a market system that can be explained with supply and demand which gives policymakers two separate mechanisms for reducing them. We can either reduce the supply or reduce the demand. Reducing the supply of illegal drugs doesn’t work very well because it typically has the perverse effect of increasing the price of drugs which increases the total revenues of the drug markets because of inelastic demand. So efforts to reduce demand are more effective at reducing the drug market than efforts to reduce supply by an equivalent amount. Whereas a reduction in supply will reduce the quantity, but increase the price, a reduction in demand will reduce both the price and the quantity.

Immigration can also be reduced by reducing the supply or the demand. Present enforcement focuses almost exclusively on reducing the supply of immigrants by building a border wall, 20,000 border guards, and raids of workplaces to jail and deport illegal workers. It would be much more efficient to reduce immigration by reducing the demand for immigrants rather than the supply, but for a different reason. This is because the demanders (employers) are easy to find and have money that can be taken away.

Whereas the US government currently spends nearly $40 billion dollars on border enforcement, and imprisoning and deporting undocumented workers, if the government started fining the employers instead, the anti-immigration program could make a profit and it would be more effective because most undocumented workers would self-deport.

Rather than spending billions of dollars jailing and flying undocumented immigrants home, the government could raise billions of dollars in fines by penalizing employers.  Whereas there are 8 million illegal workers in America, there are a lot fewer illegal employers because a relatively small number of big businesses hire many of them including, “24 percent of all workers in farming, fishing and forestry and 15 percent of those employed in construction”.  It is a lot easier to find the illegal employers than to round up all the illegal employees because the employers own property and have stable addresses whereas the employees are forced to live in the shadows.

Currently, most employers know that they are employing illegal immigrants even though they don’t care to find out because it doesn’t matter. “In 2014, the probability that one of the nation’s 6 million employers would be investigated for violating immigration laws was 0.03%” and even fewer actually faced any meaningful penalty. Many years, more Americans are struck by lightning than are prosecuted for illegally hiring undocumented workers.  For example, Trump doesn’t care about the employers (like his own businesses) who illegally hire immigrants.

Syracuse University’s immigration records research that found only 11 people and no companies were prosecuted for employing undocumented workers between the spring of 2018 and 2019. During the same time frame, 85,727 people were prosecuted for entering the US illegally.

Wayne Cornelius again:

The reasons for weak workplace enforcement are widely recognized. For starters, Congress deliberately included a gaping loophole in the Immigration Reform and Control Act, making it extremely difficult to prosecute employers that break the law. The loophole has remained since 1986 because it is politically advantageous.

There has never been much public or congressional appetite for a harsh crackdown on employers, especially the small businesses that depend most heavily on workers in the U.S. illegally. They are pillars of their communities and campaign contributors…

President-elect Trump has called for full implementation of an electronic employment eligibility verification system called E-Verify. Established as a pilot program by immigration authorities in 1996, E-Verify crosschecks basic information provided by job applicants with federal databases. Employer participation is voluntary, and only about 8% of businesses are enrolled… E-Verify, however, is no panacea. …as long as penalties are weak, requiring employers to use E-Verify will not significantly reduce violations.

Will Congress approve crippling fines or even prison sentences for business owners who ignore E-Verify rules? Will lawmakers direct the Justice Department to make these scofflaws a top priority? Unless and until that happens, many employers will continue to view hiring those in the U.S. illegally as a low-risk, high-reward crime.

Requiring and enforcing E-Verify would be much more cost effective than building a wall or spending billions on jailing illegal workers and flying them back to their countries of origin, but penalizing illegal employers is never popular because:

  1. The biggest illegal employers are rich corporations that have the money to influence politicians and the media to make it look like they are the victims of illegal employees rather than the ones who profit from hiring them. They want more immigration because they want cheaper employees and they don’t care about ineffective border walls as long as it diverts attention from sanctions on illegal employers. The business lobby loves immigrants and is happy to have ineffective enforcement. When ICE raids a workplace and rounds up illegal workers, it may hurt profits for a few days, but illegal employers know that there is always more where the first group came from. Sorta like in The Field of Dreams, if you pay them, they will come.
  2. Employers can vote and illegal immigrants cannot. This inherently means they are disenfranchised.
  3. Businesspeople are much more popular in America than immigrants. It is impossible to organize a political movement around punishing a super popular group of people. You might as well say that you want to punish puppies for pooping where we walk. Sure, we don’t like the poop, but puppies are popular and nobody is going to go along with a law that penalizes them if there is any other plausible way to address the problem.
  4. There is an active lobby for demonizing immigrants to justify our expensive supply-side immigration system. Tens of thousands of ICE employees and border enforcement unions profit and private prison corporations made about $650 million in 2017 alone. This costly system is extremely profitable because, “it costs $149.58 taxpayer dollars to detain one person for one day in a privately-run immigrant prisons, as opposed to $98.27 in a municipal-run immigrant jail.”

Because of those political impediments, even the very idea of fining employers for hiring illegal immigrants is quite new.  It took over two centuries before American legislators first made it illegal to hire illegal workers. The first fines were imposed in 1989.

Peter Brownell found that increased fines on employers reduced the wages that they paid illegal employees because it reduced the demand for them even though very few of the millions of illegal employers were ever fined. The Obama Administration used fines on employers more than any other Administration.

And that may be one reason why illegal immigration reversed direction and fell during the Obama years.

Although the Trump Administration said it would be tough on illegal employers, according to USA Today, it has reverted back to the older practice of arresting undocumented employees while letting employers take a pass:

It isn’t surprising that Trump prefers to revert to highly theatrical but ineffective supply-side immigration penalties because the Trump organization has a long history of illegally hiring undocumented immigrants and doesn’t even bother to use e-verify to try to screen them out.

Like most (62%!) of Americans, I have positive feelings towards immigrants.

The main economic argument against immigration is that it tends to increase inequality in America, but there is empirical disagreement about whether it has actually hurt any native-born Americans or whether it only brought in low-skilled newcomers who increase inequality not by lowering the wages of low-skilled Americans, but because the low-skilled immigrant population earns very low incomes.

immigration of unskilled workers boosts inequality. This works through two different channels.

One is that, separately from any impact on the labor market, in the short term immigration (regardless of the skill level of the immigrants) means there are fewer capital goods per person, which makes them more valuable to own and boosts the income of capital owners. That mostly means rich people (who own lots of stock) and, to a lesser, extent middle-class people (who generally own houses) and not at all poor people (who generally have debt, not assets). In the long run, this should theoretically even out as a result of new investment, but that could take a while.

The other, even more powerful mechanism is that when a poor person lives in a poor country, that person’s poverty is “off the books” in terms of American income statistics. When he moves to the United States, he goes on the books, and inequality goes up. Annual income per capita in Haiti, for example, is about $400 a year. If an average Haitian family of four moves to the United States, and ends up with one adult working full time at the federal minimum wage of $7.25, the family’s income will jump from $1,600 to $15,080, which would be a phenomenal increase. But the family would be very poor by American standards, and their presence in the country would cause measured inequality to go up.

Your mileage may vary as to whether it makes sense to worry about an increase in inequality that doesn’t make anyone worse off. Kaus himself wrote a pretty good book arguing that worrying about inequality per se is a bad idea, and I take these considerations about immigration to be an example of the reason why.

As a college-educated person, immigration is undoubtedly increases my real income by lowering the costs of goods and services that I buy, so like most educated people, I don’t have much reason not to be welcoming of more immigrants, but if we are going to spend resources on reducing illegal workers, we should at least start by doing the most efficient thing and start fining illegal employers. Anyone who claims that they want to reduce immigration, but doesn’t focus on illegal employers first simply shouldn’t be taken seriously.

Posted in Globalization & International, Labor

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