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Men need not apply…..

…. to work for First Lady Michelle Obama.….

Employee Salary Michelle obama’s 100% Female staff
Rosholm, Joanna $70,700.00 PRESS SECRETARY TO THE FIRST LADY

An analysis of 2014 White House salary data reveals that Michelle Obama’s staff of ten includes only women and no men (see table above), at a total annual cost of almost $900,000. Just chance? Gender bias/discrimination?


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Explaining the White House (and nationwide) gender pay gap — neither are primarily the result of gender discrimination

whitehouseI reported last week that there is a gender pay gap at the White House, based on an analysis of White House salaries for 2014. That analysis revealed that the median pay for female staffers at the White House is $65,650 compared to the median pay for men of $75,750, resulting in a 13.3% gender pay disparity. How can we explain the fact that women working at Obama’s White House earn only 86.7 cents on average for every $1 earned by men? Discrimination? Probably not. More likely explanations include factors that result in a national gender wage gap, currently at 19.1% according to the most recent BLS data — factors like age, continuous work experience, marital status and children.

The chart above might help to explain the 13.3% gender pay disparity at the White House (WH), by showing the female/male percentages of workers for three salary ranges: a) $42,000 to $85,300, b) $85,300 to $128,600 and c) $128,600 to $172,000. Each of those three individual salary ranges are about $43,000 from minimum to maximum, and the three ranges together cover the overall WH salary range of $130,200, from a minimum of $42,000 to a maximum of $172,200. Here are some facts:

1. In the lowest salary range of $42,000 to $85,300, female staffers are over-represented by headcount, representing almost 54% of the WH employees in that group. Among those lower-paid WH employees, average salaries for women ($55,552) are almost exactly equal to salaries for men of $55,756. Given the fact that women now earn more than 56% of bachelor’s degrees, and assuming most WH staffers have college degrees, it makes sense that women outnumber men at the White House for the more entry-level, lower-paid positions.

2. For the mid-level salary range of $85,300 to $128,600, women (55) and men (53) are almost equally represented by headcount, but men in that group have a slightly higher average salary of almost $107,000 compared to the average salary of $102,537 for their female counterparts. The higher average salary for men in that salary range can be explained by the fact that men outnumber women for salaries of $100,00 and above (up to $128,600) by 39 to 32, and men outnumber women by 11 to 7 for salaries of $120,000 and above (up to $128,600).

3. For the highest salary range of $128,600 to $172,200, we find that male staffers are far overrepresented (47 headcount and almost two-thirds of the total) compared to female staffers, who represent only about one-third of the WH employees in that highest salary range.

4. Another comparison, not shown in the chart, is that for WH staffers earning $100,000 or more, men outnumber women by 86 to 60, and represent 59% of employees in that salary category.

MP: So here’s an economic explanation for the 13.3% gender pay disparity at the White House. In the Washington, D.C. labor market, there are far more men than women who have the necessary qualifications to be hired for high-paying, senior staff level positions. And what are some of those qualifications? Probably 20 or more years of continuous work experience in government, public policy, or legal services, and the willingness and ability to work 50-60 hour weeks. While there are equal numbers of men and women qualified to work at the WH for the lower-level or mid-level positions, there are fewer men than women available for the higher-level positions. The WH staffers in lower-paid positions probably tend to be young and single with limited experience, while the staffers at the higher-level positions tend to be older, more experienced, and married, many with children.

In other words, part of the 13.3% WH gender pay disparity can be explained by age, continuous work experience, hours worked, marital status and number of children, the same factors that can help explain the 19.1% gender pay gap nationally. For example, the BLS data show that young women 25-34 years old earn on average 90.2% of their male counterparts, and women who have never married earn almost 96% of their male counterparts. In contrast, women who are married earn only 76.6% of what married men earn.

Bottom Line: The 13.3% gender pay gap at the White House isn’t a result of gender discrimination. It’s more likely the result of the voluntary choices of women, many of who marry and have children as they get older, which makes them less available for senior WH positions that require decades of uninterrupted work experience and long work hours. For example, one study of MBA graduates of the University of Chicago’s Booth School of Business found no gender difference in hours worked or incomes for recent MBA graduates. But significant gender pay gaps were found after longer periods of time, due to gender differences in career interruptions and increasing gender differences over time in hours worked following graduation.

From the paper (“Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors“):

Differential changes by sex in labor market activity in the period surrounding a first birth play a key role in this process. The presence of children is associated with less accumulated job experience, more career interruptions, shorter work hours, and substantial earnings declines for female but not for male MBAs.

Although President Obama’s rhetoric would have us believe that the 19.1% gender pay gap is the result of gender discrimination, which can only be corrected by legislation and executive orders, the 13.3% pay gap at his own White House suggests that factors besides gender discrimination can explain gender pay gaps – like motherhood and marriage. A salary analysis of most organizations like Target, Costco, Ford and Google would likely find a gender pay gap similar to the one at the White House. And those gender pay gaps could likely be mostly, if not completely, explained by the same factors that explain Obama’s 13.3% gender pay disparity.

Carpe Diem

Leaving Illinois for Texas: Evidence from U-Haul and Budget for one-way rental rates between Chicago to Houston

1. One-way rental rates for a 26-foot U-Haul truck on July 30, 2014 (includes 5 days of use):

Chicago to Houston: $2,911
Houston to Chicago: $473
Leaving Chicago-Leaving Houston Ratio: 6.2-to-1

2. One-way rental rates for an economy car through Budget on July 30, 2014 for 5 days:

Chicago to Houston: $1,259
Houston to Chicago: $815
Leaving Chicago-Leaving Houston Ratio: 1.5-to-1

Bottom Line: Based on market rates for one-way truck and car rentals, there are a LOT more people leaving Illinois for Texas, than leaving Texas for Illinois. The 6.2-to-1 one-way truck rental ratio above suggests that there is such a huge inventory of U-Haul trucks stranded in Texas, along with such a low demand for trucks going to Chicago, that you can rent a 26-foot U-Haul truck for only $473 to go from Houston to Chicago, which is 42% cheaper than a one-way economy car rental from Budget ($815) for the exact same distance. The fact that you can rent a 26-foot U-Haul truck for 42% less than an economy car from Budget to travel from Houston to Chicago probably means that U-Haul is renting trucks for below its cost, and is in fact so desperate to move trucks to the Chicago area that it is subsidizing customers renting those trucks.

Update: Watch the video below from the Illinois Policy Institute that tells the story of entrepreneur Sarah Travis, a young Chicagoan who owns and runs Brewhub, a successful mobile coffee-vending business. Until recently, Sarah’s business was located in Chicago – but because the city wouldn’t work with her to overcome regulatory burdens and red tape, she moved her business and all of her employees to Austin, Texas. Sara spent more than a year pleading with city officials in Chicago to give her a permit so she could operate legally. When she went down to Texas, she filled out simple paperwork and had everything she needed. According to the Illinois Policy Institute, these are the real-life effects of over-regulation and a lack of transparency in the city of Chicago and the state of Illinois: fledgling businesses struggle and eventually leave for more business-friendly states like Texas or die out.

And the exodus of taxpayers, families, and business owners who have been fleeing Illinois for decades for states like Texas that have more business friendly environments explains why there is the whopping difference below in one-way U-Haul truck rental rates between Chicago and Austin, even though Chicago’s population (2.7 million) is more than three times larger than Austin’s (842,000):

Chicago to Austin: $3,059
Austin to Chicago: $662
Leaving Chicago-Leaving Austin Ratio: 4.6-to-1

For more details, the Illinois Policy Institute just released this report – “Policy Lessons from Illinois’ Exodus of People and Money.”

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Six examples of how 3-D printing is changing our world

3-D printing continues to be one of the most exciting and innovative new technologies around, with lots of exciting applications in medicine, manufacturing, music, automobiles, etc. Here are six recent examples of how 3D printing is changing the world we live in….

1. In the future, 3D printing technologies could be used to print out spare or repair parts for large, ocean-going oil tankers. According to the video above produced by the Denmark-based shipping giant Maersk, “The idea is to install a 3D printer on a tanker vessel to allow the crew to ‘print out’ spare parts on demand. We can send a blueprint to the crew on board the tanker vessel, and they will simply push “print,” and in a matter of hours they get the part they need.”  (HT/hitssquad)

2. From TechCrunch:

Meet Normal, the customized, high-end earphone manufacturer looking to bring 3D printing to the mass market. From its offices and manufacturing facility in Manhattan, Normal is looking to sell $199 customized ear buds made to the shape of an individual’s ear.

3. 3D-printed prosthetic arms can be produced in several hours for only $100 and are rescuing child victims of war in places like war-torn Sudan.

4. 3D Printing is expected to play a major role in the future of Formula One racing.

5. 3D printing helps blind children enjoy classic bedtime stories. Launched by researchers at the University of Colorado, the Tactile Picture Books Project converts standard children’s books into textured pages using 3D printing technology.

6. 3D printing helped surgeons save a 5-year-old’s life: Spanish surgeons frustrated by a young boy’s seemingly inoperable tumor turned to 3D printing to tackle the challenging operation.

Carpe Diem

Tuesday afternoon chart-fest

oil1. US Reigns as World’s No. 1 Producer of Petroleum. In March, total US petroleum production exceeded production in Saudi for the 17th straight month (see chart above). By surpassing Saudi Arabia – the previous world leader in petroleum output – ‘Saudi America’ has been the world’s No. 1 petroleum producer in every month since November 2012 (EIA data here).

jobopenings2. Labor Market Improving. The BLS reported today that total job openings in May (4.63 million) reached their highest level since June 2007, and openings for private jobs (4.2 million) were the highest since April 2007. That brought the number of unemployed workers per job opening down to 2.11, which is the lowest in five years, going back to May 2008 (see chart above).

houston3. Houston vs. California. More building permits for single-family homes have been issued since 2011 in the Houston metro area (102,040) than in the entire state of California over that period (101,629), see chart above.

ndpermits4. North Dakota Building Boom. The number of building permits issued for single-family homes in North Dakota skyrocketed in May to 818, establishing a new record monthly high that was more than 57% above the previous record of 510 permits issued in April 2013, see chart above.

trend5. Inconvenient US Cooling. The government’s most accurate, up-to-date temperature data from the National Oceanic and Atmospheric Administration covering the period from January 2005 to April 2014 reveal a decade-long cooling trend for the US (contiguous 48 states), see chart above.

globaltemp6. Inconvenient Lack of Global Warming. According to the most recent Remote Sensing Systems (RSS) satellite data through May 2014, the global warming trend in the nearly 18 years since September 1996 is zero (see chart above, source here).

HT to Morganovich for the last two charts.

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How to renew US prosperity? Deregulate and unleash the creative spirit of American workers and entrepreneurs

As part of its special 125th anniversary edition today, the Wall Street Journal posed this question to 21 of its contributors including George Gilder, Arthur Brooks, Michelle Rhee, Charles Murray, Paul Ryan, etc.: “If you could propose one change in American policy, society or culture to revive prosperity and self-confidence, what would it be and why?” Eleven of the responses appeared in today’s print edition of the WSJ and all 21 responses are here online. My least favorite response was Juan Williams’ rather loopy suggestion that moving elections to weekends would increase voter turnout and that would somehow revive American prosperity? Here are two of my favorites, both focusing on easing regulatory burdens to make it easier for Americans to start and run businesses, and find and keep jobs.   

1. “Liberate Uber—and the Lemonade Stand” by Paul Otellini, former president and CEO of Intel.

It seems that hardly a summer passes nowadays without a story about how an enterprising child somewhere had his or her budding entrepreneurial hopes dashed by some bureaucrat shutting down a lemonade stand. Recently we have seen this same drama play out on a larger stage with regulatory moves to impede Web-based “disruptive” businesses like Uber, the innovative transportation service that has had to battle entrenched taxi cartels and sympathetic regulators. America is becoming an increasingly difficult place to do business, small or large.

We can and must be better. We must put in place a comprehensive approach to allowing free markets to function and capital to flow. Markets should determine the success or failure of businesses. What we need is neither hard nor unknown. First, review all of our regulations from the federal to the local level to ensure they make it easier to start and run businesses and employ workers while maintaining the essentials of health and safety that we have come to expect. Second, create competitive tax rates that incentivize U.S. companies to operate here and foreign companies to locate here.

Simply put, make America the best place to open and run a business. Unleash the creative spirit of American workers and entrepreneurs to do what they do better than anyone: create new products and technologies that improve the human condition. This edition of The Wall Street Journal celebrates 125 years of its existence. I can only imagine how readers of that first edition would react to our world today. They would certainly be amazed at the living standards we have and the wonderful gadgets we employ. But I think they would be appalled at how difficult we make it for people to build their dream, including that lemonade stand on the corner.

2. “Deregulate Labor Markets Now” by Richard A. Epstein, law professor at NYU Law School.

Wide-ranging deregulation of labor markets would produce an immediate economic jolt without costing taxpayers a dime. Labor markets are hobbled every day by ever-more-intrusive regulations and taxes, with two costly consequences. First, they reduce the opportunities for gains from trade between employers and employees. Quite simply, if the cost of regulatory or tax compliance exceeds the joint gains from the transaction, the deal is off. Second, these regulations add huge administrative expenses, both in the direct costs of government enforcement and in private compliance costs. We should never spend tax dollars to reduce productive activity.

So we have to bid farewell to the egalitarian mantra that we can lift the nation up out of its doldrums by raising minimum wages to living wages, by tightening overtime regulation, by strengthening public and private unions, by expanding family-leave protection, by continuing with aggressive enforcement of the antidiscrimination laws based on race, sex and age, by imposing a health-care mandate on employers, and by extending unemployment benefits. The tragic truth is that these feel-good measures hit hardest at the bottom end of the labor markets, especially minority teenagers desperate to gain work experience. Employers won’t hire if they think that reforms are short-term gimmicks. Protectionist policies never work. But long-term stable reform could and should reverse those dismal unemployment and labor-participation figures.

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Unfair? For every poor worker benefiting from a minimum wage hike, 2 workers in high-income families would benefit

Writing in today’s WSJ (“Who Really Gets the Minimum Wage“), UC-Irvine economist David Neumark makes a key point about one of the unintended effects of raising the minimum wage – it benefits low-wage workers in high-income families disproportionately more than it benefits low-wage, low-income workers, by a factor of two:

The president and others argue that a higher minimum wage is needed to help poor and low-income families, who have suffered from stagnating wages and rising income inequality. But a higher minimum wage would do little for such families.

Minimum wages are ineffective at helping poor families because such a small share of the benefits flow to them. One might think that low-wage workers and low-income families are the same. But Census data show that there is only a weak relationship between being a low-wage worker and being poor, for three reasons (this is simple descriptive evidence and not disputed by economists):

1. Many low-wage workers are in higher-income families—workers who are not the primary breadwinners and often contribute a small share of their family’s income.

2. Some workers in poor families earn higher wages but don’t work enough hours.

3. About half of poor families have no workers, in which case a higher minimum wage does no good.

Some history: In 1939, just after the federal minimum wage was established, 85% of low-wage workers (those earning less than one-half the private-sector wage) were in poor families. Such a high percentage implies that, in that year, the new minimum wage targeted poor families well. However, as the public safety net expanded, family structure changed and more people in families began working, this percentage fell sharply over time—to around 17% by the early 2000s.

In contrast, as of the early 2000s, 34% of low-wage workers were in families that were far from poor, with incomes more than three times the poverty line. In other words, for every poor minimum-wage worker who might directly benefit from the minimum wage, two workers in families with incomes more than three times the poverty line would benefit.

[Calculated estimates indicate that] if we were to raise the minimum wage to $10.10 per hour nationally, 18% of the benefits of the higher wages (holding employment fixed) would go to poor families, and 29% would go to families with incomes three times the poverty level or higher.

What about minimum wages as high as $15 an hour? Applying the same calculation as above for a $15 per hour minimum, the share of benefits going to poor families would decline to 12%, and the share to families more than three times the poverty line would increase to 36%.

It is hard to design government programs that narrowly target those we are trying to help, so evidence that some of the benefits accrue to those who aren’t targeted should not be used as a blanket condemnation. But the extent to which this happens with the minimum wage is staggering. The desire to help poor and low-income families is understandable. But increasing the minimum wage is a misguided way to do it.

MP: In other words, raising the minimum wage would benefit high-income families more than low-income families, and would therefore actually be more of a “welfare for the rich” policy than a poverty-reducing measure. It’s an overlooked, but very important point about one of the unintended consequences of government-mandated wage controls.

Carpe Diem

Chart and economic fact of the day: Texas has added one million jobs since 2007 vs. only 24,900 jobs in California


The chart above displays the changes in payroll employment since December 2007 (the start of the Great Recession and when employment levels nationally and in most states peaked) through May of this year in the states of Texas and California. Here are some observations:

1. By May of 2011, Texas had regained all of the jobs lost during the Great Recession. In contrast, it took California three years longer, until April of this year, to regain the state jobs lost due to the effects of the recession. Since the Lone Star State regained all of the lost recession-related payroll jobs by May 2011, the state has since then added more than one million new jobs, bringing the state’s employment level to a new record high in May 2014 of 11.53 million jobs.

2. Since December 2007, Texas payrolls have grown by 9.5% and by more than one million jobs through May 2014, while California employment has increased only 0.16% and by fewer than 25,000 jobs over that same period.

MP: What’s different about Texas and California that would explain why one state (Texas) has added more than one million net new jobs since 2007, while the other (California) has created almost no new net jobs over the last six and-a-half years? Let’s start by pointing out that one of those states — Texas — is pro-energy (i.e. fossil fuel energy), it’s a right-to-work state, it has no state income tax, its electricity prices are significantly lower because it doesn’t have a renewable energy mandate, and its regulatory burden on businesses is much lighter. In other words, Texas has created a pro-business and pro-growth environment that has helped to nurture the creation of more than one million jobs since December 2007. Meanwhile, California has created an increasingly anti-business climate with some of the highest state tax and regulatory burdens in the country, which along with sky-high industrial electricity prices (83% higher than in Texas), have stifled business and job creation, with almost no net job gains in more than six years.

Bottom Line: One million jobs added in the Lone Star State vs. fewer than 25,000 jobs in the Golden State since 2007 tells an important economic story that should be a lesson for the rest of the country.  That’s a point that was made very well in today’s WSJ by Dr. Bradley Allen, a candidate for Congress in California’s 24th District – “A Texas Guide to Economic Recovery.” It was that op-ed that inspired this chart and blog post.

Carpe Diem

Markets in everything: Self-serve beer stations

ESPN is reporting that self-serve beer stations are now operational at Target Field in Minneapolis, and will be available for this year’s All-Star Game there on July 15. Here’s how it works:

Fans attending Twins games can go to a cash register, show their ID and preload a $10 or $20 card. For the All-Star Game, a $50 card will be available. Fans then scan the card at the machine and can choose between four beers and regulate how much they want to have poured.

Bud and Bud Light will cost 38 cents per ounce, while Shock Top Lemon Shandy and Goose Island 312 Urban Pale Ale will cost 40 cents per ounce.

Update: Based on a StarTribune story today (ht to Morganovich) we can expect more and more Minnesota businesses to implement labor-saving technologies in the future like the self-serve beer stations at Target Field. Here’s why:

Minnesota Governor Mark Dayton signed into law the largest minimum wage increase automation-inducing legislation in state history Monday, giving raises to more than 325,000 Minnesotans and making good on a signature Democratic pledge during an election year.

The move to a $9.50 base hourly wage catapults the state from one of the lowest minimum wages to one of the highest once it is fully phased in by 2016. The state’s base wage will be tied to inflation starting in 2018, ensuring the buying power of the state’s lowest-paid workers keeps better pace with the cost of living ongoing incentives for companies to invest in labor-saving technologies that will replace low-skilled workers.


Carpe Diem

Quarterly grammar rant on the misuse of it’s

It’s time for my quarterly grammar rant on what I think must be the most common grammar/spelling/punctuation mistake in the English language — the misuse of it’s (or its’) for its — illustrated by the examples below collected from CD comments and other sources:

1. This space stands the traditional dark wood tavern on its’ head……..

2. And sadly there’s always a legitimate problem that sacrifices it’s integrity.

3. TCF relocated it’s headquarters to North Dakota…..

4. George Orwell nailed it about communism and it’s effects on the human spirit….

5. California has increased it’s share of national manufacturing employment since 1994….

6. Even at it’s highest bit rates, it does not sound good…..

7. Capitalism at it’s finest, supply & demand …..

8. If meth were legal there would be no need to hide it’s manufacture in basement labs….

9. It’s profits are offshore….

You can review the rule for the correct usage of its here, here and here.