322 (20 June 2018)

Welcome to week 322!  The articles below caught my attention this week.  What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  Article titles preceded by [SR] require a subscription to be read in their entirety, although complete articles may be found by an Internet title search.

Please let me know if you have questions or comments.

(15 June 2018): Why Aren’t More Men Working?The New York Times

——–Although the unemployment rate is 3.8 percent, the lowest in many years, “that number hides a perplexing anomaly: The percentage of men who are neither working nor looking for work has risen substantially over the past several decades.”  Such people are out of the labor force, according to the Bureau of Labor Statistics, in contrast to being employed (working) or unemployed (not working and looking for work).  From 1950 to today, the percentage of men out of the labor force has increased from 14 percent to 31 percent.  In contrast and for the same period, the percentage of women out of the labor force has decreased from 66 percent to 43 percent.  The question is, why has the percentage of men out of the labor force “nearly tripled?”  Explanations vary, from “declining opportunities for those with low levels of education” to “skill-biased technological change” to trends in international trade to an expanding social safety net.

********The author of the article is N. Gregory Mankiw, a professor of economics at Harvard University.  I am intrigued by the questions asked of data.  The percentage of men out of the labor force is going up and the percentage of women out of the labor force is going down, but it is the percentage of men that is the object of inquiry.  I suspect that a lot could be learned by looking at the common factors affecting both men and women.

(15 June 2018):’Dying at your desk is not a retirement plan’The Washington Post

********If you haven’t retired and aspire to retire, this article provides some ideas to consider.  It elicited one thousand comments.

(18 June 2018): Climate Change May Already Be Hitting the Housing MarketBloomberg.com

——–A new study by Attom Data Solutions, a curator of national property data, for Bloomberg News found that between “2007 and 2017, average home prices in areas facing the lowest risk of flooding, hurricanes and wildfires have far outpaced those with the greatest risk. . . . Homes in areas most exposed to flood and hurricane risk were worth less last year, on average, than a decade earlier.”  Attom Data “looked at the annual change in home prices and sales across 3,397 cities across the country, then divided those cities into five groups based on their exposure to various types of natural disasters.”

********The risk categories used by Attom Data are: Very Low, Low, Moderate, High, and Very High.  These results are now increasingly familiar but there are two things here that are new.  First, the sheer number of cities—3,396—examined.  Second, the variety of events considered—flooding, hurricanes, and wildfires.  Wildfires, in particular, provide another look at climate-related risk and property value.  As the article notes, the data “suggest the relationship between climate risk and home prices isn’t always a straight line.  That’s because home buyers have to weigh the risk of disasters against the so-called amenity value of living near water or at the edge of the forest.”  This calls out for a multivariable analysis of property value in which climate change risk is one of many explanatory variables

********Real estate markets have clearly been affected by climate change but so have energy markets, as noted in “Coal Plants Keep Shutting Despite Trump’s Order to Rescue ThemBloomberg.com.  On June 1st the president “ordered Energy Secretary Rick Perry . . . to take immediate action to stem further coal and nuclear plant closures in the name of national security.”  However, “utilities are reluctant to reverse course on plans put in motion years ago or to backtrack on pledges to embrace renewable energy.”  The move toward closing coal-fired power plants “has been underway for years.  Since 2010, nearly  40 percent of the capacity of the nation’s fleet . . . has either been shut down or designated for closure.”  And, according to Bloomberg New Energy Finance, “More than a quarter of U.S. nuclear power plants don’t make enough money to cover their operating costs, raising the threat of early retirements.”

********Contributing to the challenges faced by coal-fired and nuclear power plants is the decreasing cost of batteries and battery storage.  This is examined, with a particular emphasis on lithium-ion batteries for cars, in “How Batteries Went From Primitive Power to Global DominationBloomberg.com.

********This is a good place to call attention to work given impetus my Michael Bloomberg regarding the consequences of climate change.  First, there is the Risky Business project, which examines “the bottom line on climate change.”  It generated five reports on risk and return in relation to climate change and its regional and national impacts.  Second, there is the Task Force on Climate-related Financial Disclosures, which seeks to “develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders.”

(20 June 2018):This Form of Legal Immigration Is SoaringBloomberg.com

——–“As the fight over undocumented immigrants reaches a fever pitch along the U.S.-Mexican border, a surging number of farmworkers are arriving to pick tobacco, sweet potatoes and blueberries—and doing so legally.  The number of migrant workers in the U.S. on temporary agricultural visas is up 159 percent since 2011, as U.S. farmers seek replacements for the thousands of undocumented farmworkers scared away by anti-immigrant policies.  Now the farm lobby is pushing for changes that will allow farmers to double the number of legal immigrants, permit them to stay longer and cut the overall costs associated with using them. . . . The current farmworker visa program, called H2-A, has been reviled by growers for years, both because of its bureaucracy and costs.  Many avoided using it when illegal farm labor was more plentiful and less risky years. . . . For their part, undocumented workers prefer construction jobs, which are generally less seasonal and better paying,” according to Lee Wicker, the deputy direct of the North Carolina Growers Association.  He noted that “Farmworkers are not crossing the border illegally anymore to take a farm job.”

********This is another one of those articles that asks us to think about the relationships between legal and illegal activity, and how the invisible forces, especially the invisible foot of legal and political forces, affect them.  Concern about the prevalence of undocumented workers and illegal immigration resulted in the institution of H2-A visas, as well as the concomitant expansion of farm raids by ICE personnel.  The resulting labor shortages led to an increase in the demand for H2-A visas, as growers sought to bring in the crops.  Meanwhile, the undocumented have something new to consider, the possibility of an ICE apprehension.  If we are to believe the words of Lee Wicker, cited above, the result of that consideration has been for undocumented workers to focus more on construction than on farm work.

********A factor that will surely dramatically affect the demand for farm workers, legal or not, in the future is the continuing technological development of agriculture.  This is alluded to in “Deere Legal Battle Highlights Race for $240 Billion Farm Tech MarketBloomberg.com.  Once again, the invisible foot is at work, but in this case it is a matter of patent, rather than immigration, law.

(July/August 2018):How to Fight Amazon (Before You Turn 29)The Atlantic

——–The work of Lina Khan, a 29-year-old legal scholar, has been “cited approvingly by the lefty, rabble-rousing congressman Keith Ellison and by a Trump-appointed assistant attorney general, Makan Delrahim.  She has been interviewed by NPR and written op-eds for The New York Times.  She has done it neither by focusing on a hot-button issue nor my cultivating a telegenic demeanor.  She is just a young adult . . . interested in an old topic: antitrust law, that musty corner of American jurisprudence aimed at curtailing monopoly power.”  The work of Khan and her colleagues at the Open Markets Institute, in Washington, D.C., has included traditional antitrust topics such as cartel formation and prices kept artificially high, but more than that they are looking at potentially harmful cases where “monopolies appear to benefit consumers by offering free services or lows prices.”  Frequent targets of the group “are some of the most popular companies in America: Google, Facebook, and the one to which Khan has committed much of her published work, Amazon.  She tells a comprehensive story about how these companies make Americans less free.”

********Khan’s signal article is the 2017 “Amazon’s Antitrust ParadoxThe Yale Law Journal, which is available as a pdf.  According to its Abstract, “the current framework in antitrust—specifically its pegging competition to ‘consumer welfare,’ defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy.  We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output.  Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may proved anticompetitive.”  Khan’s article is long—96-pages—but looks to provide a valuable framework for thinking about the online giants that increasingly affect our lives.

May you have a good week!  Bruce


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