AEIdeas » Mark J. Perry http://www.aei-ideas.org The public policy blog of the American Enterprise Institute Wed, 22 Oct 2014 21:39:02 +0000 en-US hourly 1 It’s easy to take the ‘high road’ of high wages at Zingerman’s Deli in high-income Ann Arbor with $17.50 sandwiches http://www.aei-ideas.org/2014/10/its-easy-to-take-the-high-road-of-high-wages-at-zingermans-deli-in-high-income-ann-arbor-with-17-50-sandwiches/ http://www.aei-ideas.org/2014/10/its-easy-to-take-the-high-road-of-high-wages-at-zingermans-deli-in-high-income-ann-arbor-with-17-50-sandwiches/#comments Wed, 22 Oct 2014 21:13:13 +0000 http://www.aei-ideas.org/?p=139370 read more >]]> ZingermansOn the White House blog, Ann Arbor-based Zingerman’s Deli co-owner Paul Saginaw extols the virtues of raising the minimum wage, here’s an excerpt of his post titled “A Small Business Owner’s Perspective: ‘A High Road on the Minimum Wage‘”:

My partner, Ari Weinzweig, and I never subscribed to the conservative economic theory of Milton Friedman, that “the business of business is business.” To us, the right to conduct business is earned by being a good corporate citizen — by producing products and delivering services responsibly, hiring responsibly, generating profits responsibly, and finally, sharing profits with those who help produce them and with the wider community from which the revenues are drawn.

For more than three decades, our successful businesses have been profitable but never by underpaying our employees or withholding benefits. In fact, my 17 partners and I have always paid wages above the federal minimum and offered company-subsidized health care and paid time off. Rather than obstacles to profit, higher wages and benefits are profit enhancers. Good wages and good profits are interconnected because higher wages are directly tied to reduced business costs. Higher wages enable employees to be attentive and consistent in attendance and performance due to their abilities to meet transportation, health, and housing needs.

I would be an irresponsible employer if I provided jobs that could not support housing stability and health security. Currently at Zingerman’s, we have achieved consensus to gradually raise wages for all our base pay employees to a “thrive-able” level and increase the opportunity for employee ownership of the business brand. We’re motivated to invest in our employees, not in lobbyists who represent our industry associations that work to keep wages low.

I hear many in the restaurant industry say raising menu prices will result in customer loss and diminished profits, but I reject that and question the scale of those profit margins, wondering if the margins are maintained by shorting their employees. Now is a prime time to educate “voters” for ethical employment practices.

Many myths about the industry workforce and the minimum wage create a false reality and highly unproductive debate. The truth is that livable wages and profits are not mutually exclusive, and Zingerman’s are not the only businesses to know this and operate accordingly. RAISE, an alternative restaurant association, is aligning businesses across the nation to adopt “high road” labor practices. Zingerman’s Community of Businesses joined. I sense that there is public readiness to join this growing business leadership and leverage its consumer dollars to “vote” for raising standards for workers.

Every day, I am pained and motivated by the cruel irony that many of the 13 million women and men who produce and serve food in my industry are forced to use federal food stamps to feed themselves and their families. Change is needed now.

1. Perhaps one of the reasons that Paul Saginaw is able to adopt “high road” labor practices and pay high wages at Zingerman’s is because of the extremely “high prices” of his deli sandwiches, many of which are priced in the $16.50 to $17.50 range (see photo above). Add a soda, a cookie, tax and tip, and you’re looking at $30 tab at Zingerman’s for lunch. Mr. Saginaw is also operating his high-end, high-priced delicatessen in one of the most affluent counties of Michigan (Washtenaw), where the median household income is almost $60,000 and the median family income tops $82,000. Zingerman’s Deli is also located conveniently in close proximity to the University of Michigan, which employs almost 7,000 faculty and staff with annual salaries of $100,000 and higher. So it’s pretty easy for Mr. Saginaw to take the “high road” on wages when he’s selling “high-priced” sandwiches to such a “high income” clientele.

2. There are thousands of small businesses and fast food restaurants operating nationwide that don’t have the luxuries that Paul Saginaw enjoys operating Zingerman’s in Ann Arbor, and for them to take the “high road” of charging “high prices” and raising wages simply isn’t an option available to them if they want to remain in business and survive in the extremely competitive market for low-cost fast food. For example, imagine operating a McDonald’s franchise in one of Michigan’s nine poorest counties where median household income is below $35,000. For those fast-food restaurants to survive in low-income areas, many have to offer low-priced food items priced at only $1 (see the Dollar Menu above), and simply can’t afford to pay Zingerman-level wages.

3. Because Mr. Saginaw is already paying wages above the minimum wage, supported by his high-priced $17.50 sandwiches, an increase in the federal minimum wage would likely have a pretty minimal effect on his business and profits. On the other hand, many of Zingerman’s lower-price/lower-wage competitors could suffer significantly if they are forced to pay higher wages. In other words, a higher minimum wage would disproportionately and adversely impact Mr. Saginaw’s rivals, while leaving his business largely unaffected. It’s pretty easy to support raising the minimum wage when it doesn’t affect your business.

4. The fact that Zingerman’s high-price/high end deli in a high-income market can already afford wages above the federal minimum is really in essence an argument against a national, uniform one-size-fits-all minimum wage, without any adjustments for the significant differences in: a) the cost of living across the country, and b) the types of businesses and industries that hire entry-level workers. As Andrew Biggs and I argued our American.com article “A National Minimum Wage Is a Bad Fit for Low-Cost Communities,” a single national minimum wage will disproportionately and negatively affect low-skilled workers in low-cost areas of the country, and in low-wage, low-priced industries like fast-food restaurants. Mr. Saginaw might be able to afford wages above the federal minimum of $7.25 per hour because he’s operating a high-end, high-priced deli with an upscale clientele and the market conditions can support those wages – just like the market conditions in Williston, ND allow Walmart to offer starting wages of $17.40 an hour. But the small business owner or McDonald’s franchisee in Benton Harbor, MI or North Platte, NE might not be able to easily afford a 39% increase in the minimum wage to $10.10 per hour for entry-level workers and might even have to shut down – the market conditions for those small businesses in those areas just wouldn’t support the additional labor costs to employers of about $6,170 per year for each minimum-wage worker employed full-time.

Bottom Line: To further make the points raised above, I would challenge Mr. Saginaw to try opening a Zingerman’s Deli in Benton Harbor, MI where the median household income is $17,775 or in Flint, MI where the median household income is $26,000. Although McDonald’s successfully operates restaurants there – partly because they pay low wages and can offer some low-priced menu items for only $1 (see photo above) – I’m confident that Zingerman’s, with its $17.50 sandwiches and higher-than-minimum wages, couldn’t survive in those markets. And it probably couldn’t survive and operate profitably anywhere else in Michigan except at its current location near UM’s Ann Arbor campus, unless of course, it significantly cut both prices and wages. So it’s pretty easy for Zingerman’s to take the “high road” on wages when it’s operating an upscale operation with $17.50 sandwiches (5 times the cost of some sandwiches at Subway) in a high-income market like Ann Arbor. But let’s see them try that business model in Flint or Benton Harbor or Escanaba, Michigan, and they would quickly see that their “high road” doesn’t work so well. They would face the economic reality of many small businesses, who can’t afford the “Zingerman high-price, high-wage, high-income, high road” and can only survive with low prices and low wages, especially when their customers are mostly low-income and can’t afford $30 lunches at Zingerman’s.

Related: See Michael Saltsman’s WSJ op-ed from last April, “Why Subway Doesn’t Serve a $14 Reuben Sandwich.”

]]>
http://www.aei-ideas.org/2014/10/its-easy-to-take-the-high-road-of-high-wages-at-zingermans-deli-in-high-income-ann-arbor-with-17-50-sandwiches/feed/ 6
Quotation of the day on the moral case for fossil fuels…. http://www.aei-ideas.org/2014/10/quotation-of-the-day-on-the-moral-case-for-fossil-fuels/ http://www.aei-ideas.org/2014/10/quotation-of-the-day-on-the-moral-case-for-fossil-fuels/#comments Wed, 22 Oct 2014 18:30:52 +0000 http://www.aei-ideas.org/?p=139381 read more >]]> …. is from Alex Epstein’s forthcoming book “The Moral Case for Fossil Fuels“:

The cheap, plentiful, reliable energy we get from fossil fuels, combined with human ingenuity, gives us the ability to transform the world around us into a place that is far safer from any health hazards (man-made or natural), far safer from any climate change (man-made or natural), and far richer in resources now and in the future.

Fossil fuel technology transforms nature to improve human life on an epic scale. It is the only energy technology that can currently meet the energy needs of all 7+ billion people on this planet. While there are some truly exciting supplemental technologies that may rise to dominance in some distant future decade, that does not diminish the greatness or immense value of fossil fuel technology.

Ultimately, the moral case for fossil fuels is not about fossil fuels; its’ the moral case for using cheap, plentiful, reliable energy to amplify our abilities to make the world a better place – a better place for human beings.

The unpopular but moral case of our time is fossil fuels. Fossil fuels are easy to misunderstand and demonize, but they are absolutely good to use. And they absolutely need to be championed. Mankind’s use of fossil fuels is supremely virtuous – because human life is the standard of value, and because using fossil fuels transforms our environment to make it wonderful for human life.

]]>
http://www.aei-ideas.org/2014/10/quotation-of-the-day-on-the-moral-case-for-fossil-fuels/feed/ 7
Obama: There is not a black, white, Latino, Asian America, but there are black/white/Latino/Asian college applicants? http://www.aei-ideas.org/2014/10/obama-there-is-not-a-black-white-latino-asian-america-but-there-are-a-blackwhitelatinoasian-college-applicants/ http://www.aei-ideas.org/2014/10/obama-there-is-not-a-black-white-latino-asian-america-but-there-are-a-blackwhitelatinoasian-college-applicants/#comments Wed, 22 Oct 2014 00:41:03 +0000 http://www.aei-ideas.org/?p=139354 read more >]]> Barack Obama in 2004: There is not a black America and a white America and Latino America and Asian America; there’s the United States of America.

Barack Obama in 2014 discussing racial profiling and affirmative discrimination in college admissions: If the University of Michigan or California decides that there is a value in making sure that folks with different experiences in a classroom will enhance the educational experience of the students, and they do it in a careful way, the practice should be allowed.

Conclusion: Apparently when it comes to college applicants, there are black applicants and white applicants and Latino American applicants and Asian American applicants in Obama’s world, as Jennifer Gratz points out.

]]>
http://www.aei-ideas.org/2014/10/obama-there-is-not-a-black-white-latino-asian-america-but-there-are-a-blackwhitelatinoasian-college-applicants/feed/ 13
An amazing chart of an amazing job-creating state; we all owe a debt of gratitude to ‘Saudi Texas’ and the shale boom http://www.aei-ideas.org/2014/10/an-amazing-chart-of-an-amazing-job-creating-state-we-all-owe-a-debt-of-gratitude-to-saudi-texas-and-the-shale-boom/ http://www.aei-ideas.org/2014/10/an-amazing-chart-of-an-amazing-job-creating-state-we-all-owe-a-debt-of-gratitude-to-saudi-texas-and-the-shale-boom/#comments Tue, 21 Oct 2014 21:24:36 +0000 http://www.aei-ideas.org/?p=139320 read more >]]> The chart above shows a most amazing economic phenomenon: Since December 2007 when the Great Recession started, Texas civilian employment has increased by 12% and by more than 1.32 million jobs, from just over 11 million jobs in December 2007 to 12.32 million in September of this year (see blue line in chart). In contrast, civilian employment in the other 49 states without Texas is still 0.73% and almost one million jobs below the December 2007 level (see red line in chart) – 134.27 million non-Texas jobs in September vs. 135.26 million in December 2007.

It’s also important to note that while job growth in Texas slowed considerably in 2008 and 2009 due to the recession, the level of civilian employment in Texas never fell below its pre-recessionary, December 2007 level. Also, while Texas was able to actually increase jobs slightly even during the depths of the recession in 2008 and 2009, the US labor market minus Texas experienced a stunning loss of 8.374 million jobs (a percentage drop of 6.2%) in the two year period between December 2007 and December 2009.

In another job-related milestone for Texas, the BLS reported today that annual payroll employment in Texas increased in September by more than 400,000 jobs from a year ago for the second straight month, and established a new all-time state record for job growth over a 12-month period with a 413,700 gain from September 2013. Over the last year, Texas has added almost 1,600 new jobs every business day – a hiring rate of almost 200 jobs every hour! Also, Texas’s annual job gain of 413,700 through September represented 15.7% of the country’s 2.635 million increase in nonfarm payroll employment over that period, even though Texas’s population is only 8.4% of the US total. In percentage terms, Texas payrolls increased by 3.7% over the last 12 months, almost double the 1.9% growth in US payroll employment.

The chart and data tell a powerful and remarkable story of job creation in the Lone Star State of more than 1.32 million new jobs added since the start of the Great Recession, compared to a net deficit of almost one million jobs for the other 49 states combined. Much of the economic success of Texas in recent years that has fueled job creation in the state is a direct result of the shale oil and gas boom taking place in areas like the Permian Basin in west Texas (1.8 million barrels of oil per day) and the Eagle Ford in south central Texas (1.6 million barrels per day). Texas is now producing more than 36% of America’s total crude oil production, and as a separate country would be the world’s 8th largest oil-producer. Further, Texas has done a great job of attracting businesses like Toyota because of the state’s “employer-friendly combination of low taxes, fair courts, smart regulations and world-class workforce.”

Bottom Line: The country, the president, and all of us individually owe a huge debt of gratitude to the state of Texas and to the oil and gas industry for helping support the US economy during and after the Great Recession. Without the energy-driven economic stimulus from the fracking revolution, and without the gusher of jobs in the state of Texas, there’s no question that the Great Recession would have been much worse and lasted much longer, and the jobs picture today would be much bleaker. The chart above helps to illustrate how important the state of “Saudi Texas” is to the US labor market and economy – thanks largely to the Lone State State, the US has finally gained back all of the jobs lost during the Great Recession – September was actually the first month that employment in the US surpassed the pre-recession jobs peak. God Bless Texas.

]]>
http://www.aei-ideas.org/2014/10/an-amazing-chart-of-an-amazing-job-creating-state-we-all-owe-a-debt-of-gratitude-to-saudi-texas-and-the-shale-boom/feed/ 15
Quotation of the day…. http://www.aei-ideas.org/2014/10/quotation-of-the-day-26/ http://www.aei-ideas.org/2014/10/quotation-of-the-day-26/#comments Tue, 21 Oct 2014 18:39:22 +0000 http://www.aei-ideas.org/?p=139314 read more >]]> …. is from the introduction of Radley Balko’s book Rise of the Warrior Cop: The Militarization of America’s Police Forces:

How did we evolve from a country whose founding statesmen were adamant about the dangers of armed, standing government forces — a country that enshrined the Fourth Amendment in the Bill of Rights and revered and protected the age-old notion that the home is a place of privacy and sanctuary — to a country where it has become acceptable for armed government agents dressed in battle garb to storm private homes in the middle of the night — not to apprehend violent fugitives or thwart terrorist attacks, but to enforce laws against nonviolent, consensual activities?

And from a recent review of Radley Balko’s book by Aaron Tao:

After reading through “Rise of the Warrior Cop,” if there be a single lesson we should grasp, it is that police militarization and the War on Drugs are intimately tied. The former cannot be reversed unless the latter is ended. Thanks to the War on Drugs, the Castle Doctrine crumbled, the United States ended up with the largest incarcerated population in world history, and the Officer Friendlies of yesteryear have been replaced by a de-facto standing army clothed like Darth Vader.

HT: Warren Smith

]]>
http://www.aei-ideas.org/2014/10/quotation-of-the-day-26/feed/ 3
Thomas Sowell on ‘predatory lending’ and ‘predatory journalism’ http://www.aei-ideas.org/2014/10/thomas-sowell-on-predatory-lending-and-predatory-journalism/ http://www.aei-ideas.org/2014/10/thomas-sowell-on-predatory-lending-and-predatory-journalism/#comments Tue, 21 Oct 2014 15:57:46 +0000 http://www.aei-ideas.org/?p=139305 read more >]]> From a New York Times editorial on October 18 “A Rate Cap for All Consumers“:

Poor and working-class people across the country are being driven into poverty and default by deceptively packaged, usuriously priced loans. The obvious solution is a national standard for consumer lending. Both the House and Senate have bills pending that would adopt the 36 percent standard for all consumer transactions, including those involving payday loans, mortgages, car loans, credit cards, overdraft loans and so on.

Thomas Sowell responds in his column today “Predatory Journalism“:

The New York Times is again on the warpath against what it calls “predatory lending.”

Just what is predatory lending? It is lending that charges a higher interest rate than people like those at the New York Times approve of. According to such thinking — or lack of thinking — the answer is to have the government set an interest rate ceiling at a level that will be acceptable to third parties like the New York Times.

Low-income people often get short-terms loans when they run out of money to meet some exigency of the moment. The interest rates charged on such unsecured loans to people with low credit scores are usually higher than on loans to people whose higher incomes and better credit histories make them less of a risk.

Crusaders against such loans often make the interest rate charged seem even higher by quoting these interest rates in annual terms, even when the loan is actually repayable in a matter of weeks. It is like saying that a $100 a night hotel room costs $36,500 a year, when virtually nobody rents a hotel room for a year.

Because those who make unsecured short-term loans are usually poor and often ill-educated, the political left can cast the high interest rates as unconscionably taking advantage of vulnerable people.

Editorial demagoguery against “predatory” lending might well be called predatory journalism — taking advantage of other people’s ignorance of economics to score ideological points, and promote still more expansion of government powers that limit the options of poor people especially, who have few options already.

Update: Thanks to Gene Hayward (high school econ teacher and econ econ blogger) in the comment section for a link to the article “The Real Reason the Poor Go Without Bank Accounts,” written by Lisa Servon, a professor of urban policy at the New School. She who went “undercover” and spent four months working full-time last year as a teller at RiteCheck, a check cashing and financial services center located in the South Bronx. As Gene commented, Professor Servon came back with a story that would surprise the NY Times editorial board…. but not the people who use these services willingly and voluntarily. Here’s an excerpt of the article:

The primary critique of check cashers is that they are expensive. Sitting in my New School office eight miles south of Mott Haven, I had believed that, too. When I interviewed my customers, however, I learned that for many lower income people, commercial banks are ultimately more expensive. The rapidly increasing cost of bounced checked fees and late payment penalties has driven many customers away from banks, particularly those who live close to the edge, like many of my RiteCheck customers. A single overdraft can result in cascading bad checks and hundreds of dollars in charges.

Many factors—cost, transparency, convenience—go into the choice consumers make between a bank and a check casher.  Atmosphere and the attitudes of the staff are only one component, but this piece of the puzzle may be more important than we thought. Like the famous TV song goes, “You want to go where everyone knows your name.” If policy efforts to move the unbanked to banks are to be successful in the long run, banks need to remember they are a service industry involved in one of society’s most important and basic relationships.

]]>
http://www.aei-ideas.org/2014/10/thomas-sowell-on-predatory-lending-and-predatory-journalism/feed/ 12
Chart of the day: The Iowa Electronic Markets odds of Dems losing Senate have increased from 20% last year to 95% now http://www.aei-ideas.org/2014/10/chart-of-the-day-the-iowa-electronic-markets-odds-of-dems-losing-senate-have-increased-from-20-last-year-to-95-now/ http://www.aei-ideas.org/2014/10/chart-of-the-day-the-iowa-electronic-markets-odds-of-dems-losing-senate-have-increased-from-20-last-year-to-95-now/#comments Tue, 21 Oct 2014 14:32:51 +0000 http://www.aei-ideas.org/?p=139266 read more >]]> iowaThe chart above shows the history of market quotes for the Iowa Electronic Markets contract “2014 Senate Control Market” back to January 2013. Between January and June 2013, the odds for the Democrats to lose control of the Senate after the November 2014 mid-term elections were only about 20%, and were as low as 15% in May 2013 (see red line in chart). After a lot of volatility in the second half of last year, the odds of the Democrats losing the Senate increased and stabilized at around 60% between March and July of 2014, before gradually rising over the last three months to the current all-time contract high of 94.8% this week.

]]>
http://www.aei-ideas.org/2014/10/chart-of-the-day-the-iowa-electronic-markets-odds-of-dems-losing-senate-have-increased-from-20-last-year-to-95-now/feed/ 7
If only 12% of campus sexual assaults get reported, then only 1 in 32 women at Ohio State are sexually assaulted, not 1 in 5 http://www.aei-ideas.org/2014/10/if-only-12-of-campus-sexual-assaults-get-reported-then-only-1-in-32-women-at-ohio-state-are-sexually-assaulted-not-1-in-5/ http://www.aei-ideas.org/2014/10/if-only-12-of-campus-sexual-assaults-get-reported-then-only-1-in-32-women-at-ohio-state-are-sexually-assaulted-not-1-in-5/#comments Mon, 20 Oct 2014 20:54:49 +0000 http://www.aei-ideas.org/?p=139240 read more >]]> Assuming that only 12% of campus sexual assaults at OSU are reported.

osuAssuming that 1 in 5 women at OSU are assaulted over 4 years.

osu1

In May, I wrote a CD post titled “Using White House claim of under-reporting, only 1 in 34 women at Ohio State are sexually assaulted, not 1 in 5.” The analysis in that post was used by syndicated columnist George Will in an op-ed (“Colleges become the victims of progressivism“) that appeared in several hundred papers around the country, including the Washington Post on June 6. Here’s George Will’s reference to my May 9 blog post:

The administration’s crucial and contradictory statistics are validated the usual way, by official repetition; Joe Biden has been heard from. The statistics are: One in five women is sexually assaulted while in college, and only 12 percent of assaults are reported. Simple arithmetic demonstrates that if the 12 percent reporting rate is correct, the 20 percent assault rate is preposterous. Mark Perry of the American Enterprise Institute notes, for example, that in the four years 2009 to 2012 there were 98 reported sexual assaults at Ohio State. That would be 12 percent of 817 total out of a female student population of approximately 28,000, for a sexual assault rate of approximately 2.9 percent — too high but nowhere near 20 percent.

George Will’s column generated a lot of controversy, especially from women’s rights activist groups and a group of US senators, and the St. Louis Post-Dispatch, one of the largest newspapers in the Midwest, dropped Will’s syndicated column following the outburst of criticism. None of the other approximately 449 papers nationwide that subscribe to Will’s bi-weekly columns announced that they were dropping him. Washington Post Editorial Page Editor Fred Hiatt defended George Will and his column, saying it “was well within the bounds of legitimate debate.”

My original post and George Will’s column were both based on OSU’s campus crime data from 2009-2012. Now that Ohio State University has just released its Annual Campus Security Report for 2014, updated data for the years 2010-2013 are displayed in the top table above. From my previous post in May:

In a January 2014 report titled “Rape and Sexual Assault: A Renewed Call to Action” (which led to the creation of the “Task Force to Protect Students From Sexual Assault” headed by Biden), the White House made the following two statements:

White House Statement 1. Sexual assault is a particular problem on college campuses:1 in 5 women has been sexually assaulted while in college.

White House Statement 2. Reporting rates for campus sexual assault are also very low: on average only 12% of student victims report the assault to law enforcement.

There’s a huge, irreconcilable statistical problem here. Using actual reported crime statistics on sexual offenses at almost any US college and applying the White House claim that only 12% of campus sexual assaults actually get reported, we have to conclude that nowhere near 1 in 5 women are sexually assaulted while in college. Alternatively, if the “1 in 5 women” claim is true, the percentage of sexual assaults that get reported to the campus police would have to be much, much lower than 12%. In other words, the claims that the White House uses don’t work together and they therefore both can’t be simultaneously correct.

Here’s an updated analysis of sexual assaults at the Ohio State University, summarized in the top table above. Over the most recent four-year period from 2010 to 2013, there were 104 reports of “forcible sexual offenses” to the OSU’s Department of Public Safety, which included incidents that allegedly took place on campus, in university residence halls, on non-campus properties including fraternity and sorority houses, and on public property adjacent to or accessible from the campus. Using the White House claim that only 12% of campus sexual assaults get reported, there would have been 763 unreported forcible sexual offenses at OSU during that period, bringing the total number of sexual assaults (reported + unreported) to 867 (see top table above).

The Columbus campus of OSU has a total female student population of about 28,000. Dividing the 867 estimated sexual assaults over a four-year period into the 28,000 OSU female students would mean that only 3.1% of OSU women, or about 1 in 32.3, would be sexually assaulted while in college. Certainly that’s still too high, but not even close to the White House claim that one in five (and 20% of) female students are sexually assaulted while in college.

Further, these calculations make the assumptions that: a) 100% of the 104 forcible sexual offenses at OSU from 2009-2012 were male on female incidents (and none were female on male, male on male, or female on female), b) none of the 104 reported offenses were filed falsely or later retracted (see recent example here of a campus sexual assault that was falsely reported and later retracted), c) all of the 104 reported cases involved OSU students and none were reported by OSU faculty or staff. If any of those three assumptions don’t hold perfectly, the 3.1% figure above would be even lower, and the 1-in-32.3 ratio would be even greater.

Alternatively, we could ask the question: For the “1 in 5 women” claim to be true at OSU, what level of under-reporting would support that claim based on the actual reported assaults over the last four years? If one of every five of OSU’s 28,000 female students had been sexually assaulted from 2010 to 2013, there would have been 5,600 sexual assaults during those four years – or 1,400 sexual assaults every year and almost 4 every single day of the year. For that to be true, fewer than 2% of the actual sexual assaults would have been reported, and more than 98% would have to go unreported.

Bottom Line: From a political standpoint, using the totally implausible statistic that “1 in 5 women” are sexually assaulted while in college certainly gets a lot of attention. The “1 in 32 women” statistic found at Ohio State University over the most recent four years, though not as attention-grabbing as “1 in 5,” are probably pretty representative of college campuses around the country and much closer to the truth than what the White House is claiming. And for the “1 in 5 women” claim to be true, it would imply an unbelievably low reporting rate of less than 2% for campus sexual assaults. That would be almost 53 actual sexual offenses that take place on campus for every one that gets reported), which is an under-reporting rate so low that it must be insulting to women. Women and men attending college today, their parents, their college administrators and professors, and society in general, are all much better served by the truth about college sexual assault than by Team Obama’s misleading, exaggerated, and false claims about “1 in 5 women will be sexually assaulted while in college.”

]]>
http://www.aei-ideas.org/2014/10/if-only-12-of-campus-sexual-assaults-get-reported-then-only-1-in-32-women-at-ohio-state-are-sexually-assaulted-not-1-in-5/feed/ 34
Falling oil and gas prices are unambiguously good for the US economy, could save consumers $83 billion over next year http://www.aei-ideas.org/2014/10/falling-oil-and-gas-prices-are-unambigusously-good-for-the-us-economy-could-save-consumers-83-billion-over-next-year/ http://www.aei-ideas.org/2014/10/falling-oil-and-gas-prices-are-unambigusously-good-for-the-us-economy-could-save-consumers-83-billion-over-next-year/#comments Mon, 20 Oct 2014 15:44:26 +0000 http://www.aei-ideas.org/?p=139215 read more >]]> gaspricesoilOver the last six months, the average retail price of a gallon of gas has fallen by 62 cents, from $3.71 per gallon in late April to $3.09 per gallon currently, according to GasBuddy.com (see blue line in chart above). That’s almost a 17% decline in prices at the pump, and have followed a 22% decline in oil prices over that period, from about $105 per barrel in August to about $82 per barrel currently (see brown line in chart above).

How does that fall in retail gas prices translate into savings for consumers and households? The EIA estimates that Americans consume an average of 368,510,000 gallons of gas every day, so every one cent decline in the price of gas saves consumers $3.685 million per day, and $1.345 billion per year. Therefore, the 62 cent decline in gas prices since April will save consumers more than $83 billion over the next year, compared to the amount that would have been spent if prices stayed at $3.71 per gallon. On a per household basis, that would translate to an annual savings of more than $700 on average for every one of America’s 118 million households.

Bottom Line: For every additional penny that prices at the pump continue to fall, we can think of that as an additional $1.345 billion annual “tax cut” for consumers and alternatively as a $1.345 billion “economic stimulus” for the US economy. And therefore, those lower oil and gas prices are “unambiguously good for the US economy,” as Larry Kudlow pointed out in a recent commentary, here’s an excerpt:

One of the absolutely stupidest things I have heard in recent weeks is that the recent drop in oil prices is bad. Serious people on financial television are saying lower oil prices are a signal of worldwide economic collapse. Here at home that translates to recession, deflation, a profits collapse, and rising unemployment.

But the recent $20 drop in crude oil is an unambiguously good thing for the American and world economies. Unambiguous.

As I understand the lower-oil-prices-are-bad argument, the shift to around $80 a barrel from $100 a barrel will somehow close down the American energy revolution and destroy all the new jobs and related infrastructure services that have fueled our recovery.

Nonsense. I spoke with a CEO who is literally at the cutting edge of the horizontal-drilling and hydraulic-fracturing revolution about the so-called “profit break-even point,” or the marginal cost of producing the next barrel of oil. He told me it averages between $50 and $60 a barrel. And a new report from Citigroup energy analyst Edwin Morse argues that oil has to fall to $50 or less to fully halt shale-production growth.

More important: Virtually all consumers and producers will benefit from lower energy costs. Households could save as much as $100 billion because of today’s lower fuel costs. Business fuel savings will also be substantial. The result is a much more competitive U.S.

All these factors will increase U.S. economic growth, not reduce it. Basically, the fracking revolution has delivered a powerful and positive supply shock to the economy. It means that more output increases real growth and reduces inflation for any given increase in nominal GDP — the exact opposite of what we saw in the 1970s.

Let me help all those analysts who have lost their minds in this stock correction. We’re witnessing a big outward move of the energy supply curve. By nearly doubling our oil output in recent years, it’s surprising the oil-price break hasn’t come sooner. It has very little to do with falling demand.

Finally, a political message: Falling energy prices are so good for the economy that a new Republican Congress, in its first 90 days, should put a bill on President Obama’s desk authorizing the Keystone Pipeline, opening federal lands to energy development, and ending oil export restrictions. Totally pro-growth. Let the GOP dare the president to veto it.

]]>
http://www.aei-ideas.org/2014/10/falling-oil-and-gas-prices-are-unambigusously-good-for-the-us-economy-could-save-consumers-83-billion-over-next-year/feed/ 23
Video Saturday http://www.aei-ideas.org/2014/10/video-saturday-2/ http://www.aei-ideas.org/2014/10/video-saturday-2/#comments Sat, 18 Oct 2014 17:15:18 +0000 http://www.aei-ideas.org/?p=139203 read more >]]>

1. In the video above, Milton Friedman explains how the essential notion of a capitalist society is voluntary cooperation and voluntary exchange, and the essential notion of a socialist society is fundamentally force.

2. In the video above, learn how the world’s poorest people suffer and die from environmentalism.

]]>
http://www.aei-ideas.org/2014/10/video-saturday-2/feed/ 4