• Women experience appearance discrimination.

    It Ain’t Easy Being Pretty

    Nov 19 • Behavioral Economics, Businesses, Fashion, Gender Issues, Government, Labor, Lifestyle, Media • 329 Views

    For one whole year, Australian Today Show anchor Karl Stefanovic wore the same suit and no one realized. Explaining, he said, “I’m judged on my interviews, my appalling sense of humour – on how I do my job, basically. Whereas women are quite often judged on what they’re wearing or how their hair is … that’s [what I wanted to test].”

    Where are we going? To appearance discrimination.

    Appearance Discrimination

    A bartender is fired because she would not tease her hair, wear lipstick or nail polish (and the court rules for the employer). A banker at Citibank sues when she is told not to wear fitted clothing because her body shape made her distracting. Also claiming appearance discrimination, a Harvard librarian took the school to court saying she was passed over for promotions because they viewed her as a “pretty girl,” not your stereotypical librarian.

    While these are cases that were litigated, most are about everyday life. And that returns us to the Today show. While Karl Stefanovic can wear the same suit everyday, his co-host, Lisa Wilkinson, regularly gets email about her clothing. Told that a viewer said Wilknson’s “…outfit is particularly jarring and awful. Get some style,” Stefanovic points out that he is judged on how he does his job.

    Our Bottom Line: Gender Gap

    Whenever gender inequity is discussed, the pay gap gets the headlines. Perhaps though, because job discrimination based on appearance can reflect a patriarchal attitude toward women, the dominance of one social group’s values, and unfair performance reviews, it should receive more attention. But, I am torn because having workplace dress code rules is not necessarily bad.

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  • Everyday economics and automation

    The Robots Are Taking Over! (Our Most Mundane Jobs)

    Nov 18 • Businesses, Demand, Supply, and Markets, Economic History, Innovation, Labor, Tech • 330 Views

    Imagining the next half century, Americans told Pew Research the inventions they hope (and some expect) will enter their lives. The one innovation I most liked was the personal robot servant. Named by eight percent of respondents aged 30-49, the personal robot was on a list that included wearable implants and devices, drones, driverless cars and even “teleportation” through which we can abandon our planes and trains.

    From Pew, this table provides some idea of what people were contemplating:

    The impact of innovation on human capital and job creation

    Where are we going? To the impact of technology on jobs.

    “Lousy and Lovely” Jobs

    With machines playing a larger role in our lives, work will become very different. Described in “Lousy and Lovely Jobs,” automation creates polarization. The jobs we wind up with are “lovely” at the top because they involve cognition, variety and high pay. At the bottom, the “lousy” low paying jobs that will remain require “non-routine” manual skills.

    Meanwhile, the middle shrinks. Documented as having already begun to happen by MIT economists, middle income jobs are being replaced by automation. The arrows, below, indicate the extent to which the relative numbers of specific jobs have gone up or down.

    The impact of automation on job creation.Job creation and automation of middle income employment

    Asked about the common denominator for job increases and declines, the authors of the study say that routine is the reason. More routine means more of a chance of being replaced by a machine. Then, looking at specific jobs, they conclude that middle income earners are hit the hardest by automation because of their jobs’ repetitive patterns. The result is a polarized labor force dominated by “lovely” high paying and “lousy” less lucrative jobs.

    Our Bottom Line: Job Creation

    With an increasingly larger hole in the middle that is occupied by machines, the U.S. labor force will become more polarized. But, instead of a skilled and unskilled divide, we wind up with routine being the key variable.


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  • Everyday economic of lower gas prices

    The Downside of Cheap Oil

    Nov 17 • Businesses, Demand, Supply, and Markets, Developing Economies, Economic Growth, Economic History, International Trade and Finance, Labor, Macroeconomic Measurement, Thinking Economically • 352 Views

    I have heard that the traders in commodities pits say high prices solve high prices. To depress rising oil prices, we just needed less demand and more production. According to the U.S. Energy Information Administration (EIA), global demand is weakening and you can see below that U.S. oil production has grown:

    GDP impact of oil production

    From: Manhattan Institute based on EIA data


    Oil prices are down (futures):

    Oil futures will affect GDP



    And, elated, people are talking about an invigorated consumer. Spending less at the pump, she has more to enjoy elsewhere:

    GDP regular gas prices

    The Tradeoff

    However, there is no free lunch. While the consumer is benefitting, the oil producers that fueled our economic recovery are not. You can see below the oil and natural gas job creation:

    GDP and Job creation impact


    With Texas leading the way, those jobs came from these major oil and natural gas producing regions:

    GDP US map oil nat gas producing states


    When price drops and producers cut back, a ripple of contraction moves through the industry. This week’s Barron’s suggests an initial 0.25 percent boost in economic growth from lower oil prices will be more than offset by shale oil cutbacks that become “uneconomic” because of lower prices.

    You can see that oil prices are already below some breakevens:

    Break Even Shale Prices

    Our Bottom Line: GDP Growth

    Affecting the gross investment and consumer spending components of the GDP (government expenditures and exports minus imports are the other two), lower oil prices are a plus for consumers and a minus for business investment. Which do you choose?

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  • Everyday Economics and the opportunity cost of eliminating gestation crates is less than what we sacrifice by keeping them.

    Why Humane Treatment is Good Economics

    Nov 16 • Businesses, Demand, Supply, and Markets, Developing Economies, Economic Debates, Environment, Government, Innovation, Labor, Macroeconomic Measurement, Regulation, Thinking Economically • 343 Views

    By Elizabeth Fournier (recently interviewed by Bloomberg for her work with pig advocacy) with Elaine Schwartz

    Below is a “pig map,” which shows the density of pigs in the world. You can see the dark green in Europe and the United States, which represents over 250 pigs per square kilometer. What’s the difference between the two? In the United States, pigs are confined to gestation crates.

    The opportunity cost of eliminating gestation crates is less than what we sacrifice by keeping them.

    From: From: “Mapping the Global Distribution of Livestock” by Timothy P. Robinson et al.


    Where are we going? To why gestation crates are not only inhumane, but are also not economically advantageous.

    Humane Treatment is Good Economics

    During the three delicate months of their pregnancies, mother pigs are confined to gestation crates. These metal cages, which are usually six feet by two feet, provide these intelligent creatures with nearly no room for movement. Keep in mind that most mother pigs are bred eight times before being slaughtered, and are more intelligent than your cats and dogs at home. Although some members of the pork industry may disagree, gestation crates are both inhumane and not economically viable.

    An alternative to gestation crates, “group housing,” can vary slightly depending on pen layout and group size but allows mother pigs to move and interact with each other.

    Iowa State University recently completed an economic comparison between gestation crates and group housing. They tracked 353 sows, and found that “reproductive performance can be maintained or enhanced in well-managed group housing systems… without increasing labor” and that “group housing… resulted in a weaned pig cost that was 11 percent less than the cost of a weaned pig from the individual stall confinement system.”

    The European Union and nine states have already outlawed the use of gestation crates. Backed by public support, a bill is currently waiting for Governor Christie’s signature in New Jersey.

    Our Bottom line: Opportunity Cost

    What exactly is the opportunity cost of switching to a more humane method of confinement for mother pigs and is it worth the sacrifice?  Comparing individual confinement structures and group housing, the Iowa State University study concluded that group housing costs less to build, farmers had more weaned pigs at a lower total cost, and operating costs were similar for both approaches. Even if treatment of pigs isn’t your main concern, if you care about economic efficiency, you will oppose gestation crates.

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  • The econlife.com Weekly Roundup

    Our Weekly Roundup: From Bank Regulation to Water Taxation

    Nov 15 • Behavioral Economics, Developing Economies, Economic Debates, Economic Growth, Economic History, Economic Thinkers, Environment, Financial Markets, Government, Labor, Macroeconomic Measurement, Money and Monetary Policy, Regulation, Thinking Economically • 271 Views

    Our Posts Roundup

    Everyday economics and the minimum wageSunday 11.09.14 Why we can’t agree on the minimum wage…more


    More people vote when they believe it is a social norm.Monday 11.10.14 The big impact of a small voting sticker…more


    Everyday economics: China's tragedy of the commons.Tuesday 11.11.14 How China’s air pollution is a tragedy of the commons…more


    Everyday Economics of Dodd-FrankWednesday 11.12.14 What happened to Dodd-Frank…more


    Everyday Economics: Because water is not a public good, neither Ireland nor Detroit need provide it without charging.Thursday 11.13.14 Deciding whether we deserve free water…more


    Cost benefit analysis of our behavior when we negotiate at home and at work would reveal inaccurate self-awareness.Friday 11.14.14 The cost of mistaken self-awareness…more



    Ideas Roundup

    • confirmation bias
    • minimum wage
    • price floor
    • cost-benefit analysis
    • social norms
    • negative externalities
    • tragedy of the commons
    • financial regulation
    • unintended consequences
    • public goods

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