234 (14 October 2015)

Welcome to week 234!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(18 September 2015): “A Toxic Work World” (http://www.nytimes.com/2015/09/20/opinion/sunday/a-toxic-work-world.html)

——–[An author-bylined article by Anne-Marie Slaughter, whose Unfinished Business: Women Men Work Family (http://www.amazon.com/Unfinished-Business-Women-Work-Family-ebook/dp/B00VZZ2LME/) was recently published.]  “Form man Americans, life has become all competition all the time. . . . The people who can compete and succeed in this culture are an ever-narrower slice of American society: largely young people who are healthy, and wealthy enough not to have to care for family members. . . . this model of winning at all costs reinforces a distinctive American pathology of not making room for caregiving.  The result: we hemorrhage talent and hollow out our society.  To begin with, we are losing women.  America has unlocked the talent of its women in a way that few nations can match . . . But the ranks of those women still thin significantly as they rise toward the top . . . Far too many discover that what was once a manageable and enjoyable work-family balance can no longer be sustained—regardless of ambition, confidence or even a partner who shares tasks equally.”  This seems to look like a “women’s problem,” but it isn’t.  “It’s a work problem—the problem of an antiquated and broke system.”  The problem is “with a workplace designed for the ‘Mad Men’ era, for ‘Leave It to Beaver’ families in which one partner does all the work of earning an income and the other partner does all the work of turning that income into care—the care that is indispensable for our children, our sick and disabled, our elderly.  Our families and our responsibilities don’t look like that anymore, but our workplaces do not fit the realities of our lives.”

********The division of household labor expressed in “one partner does all the work of earning an income and the other partner does all the work of turning that income into care” caught my attention.  I’m hopeful that Unfinished Business provides many references to others who are now writing on caring from the perspective of economics and more broadly.  I was led to this article by way of Livia Gershon’s posting “Gender and Family Farms: An Investigation” (http://daily.jstor.org/gender-family-farms-investigation/).  Taking Slaughter’s book as her starting point, she draws attention to the 1996 work of Shaunna L. Scott on men and women on farms in southeastern Kentucky.  Gershon notes that “Scott writes that work on the region’s farms was consistently divided by gender. . . . What’s striking is the different ways men and women talk about the work of running a farm.  Scott writes that all 23 women interviewed for the paper described doing both male and female chores.  Men, on the other hand, talked mostly about male labor.”  Slaughter’s book is reviewed in this week’s Economist at: http://www.economist.com/news/books-and-arts/21672012-why-organisations-will-have-change-radically-make-work-life-balance.

(9 October 2015): “In Canada, Miniature Heavy-Oil Sites Overcome Slump in Crude Prices” [SR](http://www.wsj.com/articles/in-canada-miniature-heavy-oil-sites-overcome-slump-in-crude-prices-1444123817)

——–[Edam, Saskatchewan.]  “In a muddy field where rows of canola stood just three months ago, a miniature oi-sands plant is rapidly being assembled by a small crew of workers.  What is unusual about this project is the speed with which it is being built—in a matter of months—and its compact, football field-size. . . . At a time when slumping crude-oil prices have shelved most new oil-sands projects in neighboring Alberta and halted drilling for all but the most productive shale-oil wells in the Bakken formation on both sides of the border, pint-size sites are proliferating in Saskatchewan’s oil patch.”  These small plants “are profitable, even with crude prices at six-year lows.  That is due to advances in modular construction, amble rail and pipeline takeaway capacity and an attractive regulatory environment.”  The nature of the crude plays a role, too.  “In Western Saskatchewan, the crude is slightly less dense than in Alberta, which means it requires less steam to extract and doesn’t need to be processed into a lighter grade or diluted as much when shipped by pipeline.  That allows oil from these projects to command a premium of close to $10 a barrel over Albertan oil-sands crude.”

********This article clearly points out how important it is to remember the underlying diversity of natural resources and the different costs and benefits related to them.  The oil-sands of Alberta and the oil-sands of Saskatchewan are not the same, and plants can start up in the latter area at the same time as they are shutting down in the former.  This observation connects with the article “Cash Crunch Hits North Korea’s Elite” [SR](http://www.wsj.com/articles/cash-crunch-hits-north-koreas-elite-1444347499).  As it turns out, North Korea’s biggest export product is coal.  At a time when China is trying to reduce its carbon emissions, this could be a major problem for North Korea’s leader, Kim Jong Un.  As it turns out, however, North Korea’s exports are primarily anthracite, which is less dirty than bituminous.  So, it is conceivable that a drive to reduce coal-based carbon dioxide emissions will increase the demand for anthracite, thus benefitting North Korean exports and support Kim Jong Un’s government.

********Diversity of natural resources can yield surprises and so can diversity of opinions in, for example, the energy industry.  As reported in “Oil CEOs Differ on Carbon Strategy, Highlighting Industry Divide” [SR](http://www.wsj.com/articles/oil-ceos-differ-on-carbon-strategy-highlighting-industry-divide-1444252378), “The chief executives of Royal Dutch Shell PLC and Exon Mobil Corp. laid out contrasting visions this week for reducing fossil-fuel emissions, illustrating a divide between American and European energy companies ahead of a United Nations climate-change summit.  Rex Tillerson, CEO of U.S.-based Exxon, said Wednesday that innovation, free markets and competition were the best tools for curbing emissions.  His remarks came a day after Ben van Beurden, chief of Anglo-Dutch giant Shell, said technology wouldn’t be enough to bring about emissions cuts, and that governments needed to step in.”  So, just as oil sand is not the same everywhere, and just as coal is not the same everywhere, so opinions of energy-industry CEOs are not the same everywhere.

(10 October 2015): “Angus Deaton Awarded Nobel Prize in Economic Sciences” (http://www.wsj.com/articles/angus-deaton-awarded-nobel-prize-in-economic-sciences-1444649456)

——–“Princeton University economist Angus Deaton won the Nobel Prize in economics on Monday for his measurement of consumption patterns and what they reveal about economic development, particularly in poor countries.”  According to the Royal Swedish Academy of Sciences, “To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices . . . More than anyone else, Angus Deaton has enhanced this understanding.”

********The article draws attention of Deaton’s 2013 book The Great Escape: Health, Wealth, and the Origins of Inequality (http://www.amazon.com/Great-Escape-Health-Origins-Inequality/dp/0691165629/).  In it, Deaton “provided an upbeat assessment of human progress over the past 250 years . . . But also sounded notes of concern over vast inequalities between and within nations.”  A variety of additional documents on the 2015 prize, both popular and technical, can be found at the official Nobel Prize website: http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2015/.  You might also want to take a look at this week’s entry of Economic Principals at: http://www.economicprincipals.com/issues/2015.10.12/1815.html.

(14 October 2015): “Who Wants to Buy a Coal Mine?” [SR](http://www.wsj.com/articles/in-coal-industrys-slump-usual-buyers-go-underground-1444772623)

——–Tom Clarke is the head of the Virginia Conservation Legacy Fund Inc., which closed a deal with Patriot Coal Corp., which was trying to sell some of its Appalachian mines, earlier this year.  Clarke’s pitch?  His fund would “take control of mining operations and cleanup projects, aiming to sell coal bundled with carbon credits linking it to forestry projects.  Patriot, in exchange, would be freed from $400 million in liabilities tied to the mines but wouldn’t receive a significant payment.”  That Clarke’s deal with Patriot went through “illustrates the depth of the coal industry’s slump.  Major U.S. producers are scaling back, trying to shed mines and laying off employees.  But the financial investors and large industry buyers that figured prominently in the last coal shakeout as acquirers are largely sitting out this round.”  Those investors “are put off by the U.S. coal industry’s bleak long-term outlook.”

********Carbon dioxide emission rules, of course, are part of that bleak long-term outlook.  But some electric utilities are embracing those rules, rather than fighting them as pointed out in “With Market on Their Side, Electric Utilities Skip Fight Against Carbon Rule” [SR](http://www.wsj.com/articles/with-market-on-their-side-electric-utilities-skip-fight-against-carbon-rule-1444606397).  “The main reason, executives and experts say, is that economic forces are pushing the power industry inexorably toward a lower-carbon future.”  According to Dominion Resources Inc. CEO Tom Farrell, “Everybody is moving in this direction anyway.”  The CEO of Duke Energy Corp., Lynn Good, indicated that her experts are continuing to analyze the carbon rule, but notes, “I think there’s flexibility there.”  Nonetheless, “at least 16 states have expressed opposition to the regulation, and some are likely to file a formal suit once the EPA publishes the carbon rule in the Federal Register, which is expected to happen this month.”

********This is probably a good place to make note of “The circular economy: Greening of business” (http://www.economist.com/news/business-books-quarterly/21672014-helping-environment-must-be-presented-boon-business-first-greening) in this week’s Economist.  It provides three takes on what “Fans of the ‘circular economy’ [who] want growth decoupled from the ever more voracious consumption of resources” can do.  Most approvingly mentioned is No Ordinary Disruption: The Four Global Forces Breaking All the Trends, by Richard Dobbs, James Manyika, and Jonathan Woetzel.  You can learn more about it at: http://www.amazon.com/No-Ordinary-Disruption-Global-Breaking/dp/1610395794/.

 (14 October 2015): “Drivers Ride High on Trucking Boom” (http://www.wsj.com/articles/drivers-reap-benefits-of-trucking-boom-1444728780)

——–“After years of spending long hours behind the wheel without seeing their paychecks grow, U.S. truck drivers now have employers fighting for their services.”  In addition to higher average pay, which has increased by 17% since the end of 2013, employers are expanding amenities, “equipping their fleets with satellite televisions” among other things “to make life on the road more comfortable.”  Drivers are in demand “in the shifting $700 billion trucking industry.  Business is booming because the economy is expanding and the strong dollar increasing demand for imported goods to must be transported from ports to cities and towns nationwide . . . At the same time, interest in the profession is waning.”  Currently, the “long-haul trucking industry . . . employs about 800,000 people” but, according to that American Trucking Associations, an additional 48,000 drivers are needed.

********As the article notes, “Trucking companies have always had trouble holding on to staff, with a typical long-haul company replacing nearly all of its drivers over the course of a year.”  Working conditions help explain that: “Truck drivers might spend 11 hours a day, nearly every day, behind the wheel, sometimes for weeks on end.  They sleep in their truck’s cramped cabin and rely on truck stops for meals and showers—with quality varying widely.”

********In a related article, related because it also deals with a labor market, there is a discussion of pay cuts in the oil fields of Alberta.  As noted in “Cutting Staff Pay to Keep Workers” [SR](http://www.wsj.com/articles/cutting-staff-pay-to-keep-workers-1444690841), “As layoffs become the energy industry’s main response to low oil prices, a handful of producers are aiming to trim personnel costs without pink slips by spreading the pain among their employees. . . . In part, they’re trying to avoid the type of skilled worker shortages that followed mass job cuts in prior downturns.  But it’s also because their businesses can’t succeed without sufficient staff, especially if the downturn in oil prices reverse course.”

********Finally, another article on the labor market: “Sheepherders Are Set to Get a Raise” (http://www.wsj.com/articles/sheepherders-are-set-to-get-a-raise-1444776966).  “The U.S. Labor Department on Tuesday said foreign-born sheepherders must earn the federal minimum wage of $7.25 an hour, roughly doubling their pay. . . . The Labor Department had initially proposed tripling the minimum pay of sheepherders, but it decided on a lower wage rate after opposition from the American Sheep Industry Association, which said such an increase would have wiped out nearly 40% of its industry.”  Most of the sheepherders in the U.S. come from Latin America and “work under H-2A temporary visas [that] . . . had been exempt from federal minimum-wage law.”

May you have a good week!



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