Friday, March 25, 2016

The more we build our human and financial capital, the more prepared we are when a downturn comes or to capitalize on other opportunities

See Oil layoffs are not because companies are greedy. From The San Antonio Express-News, by Christopher E. Baecker, who manages fixed assets for Pioneer Energy Services and is an adjunct lecturer of economics at Northwest Vista College in San Antonio. Excerpts:
"Our employment is at-will — meaning we are as free to leave the company as it is to eliminate our position or terminate our employment. It works both ways, and many people forget that when bemoaning “big evil corporations interested only in making a buck.”

Our labor market flexibility is one thing that makes the U.S. economy better than most, with fewer regulations on freedom of movement and deployment of resources. It’s a big reason we typically have a lower unemployment rate than other countries.

After the first such round of workforce reductions a year prior, the same daughter (the most inquisitive of my four) asked if I had a backup plan. I pointed to my efforts to sharpen my Spanish, among other things. I’ve had the pleasure of knowing many individuals who are proactive in that regard.

In addition to her speech pathology work, my sister, whose husband works in our industry, recently started selling cleaning supplies. One friend with whom I work is now an Uber driver in her free time. Another colleague at a previous job saved enough to open her own haircutting franchise. Many of the people working in the field have commercial driver’s licenses and experience in construction.
The more we build our human and financial capital, the more prepared we are when a downturn comes or to capitalize on other opportunities. Such behavior and farsighted use of spare time makes this possible — that’s why the best job security is job insecurity.

I have found that differentiating between cyclical unemployment (shifts in the business cycle from growth to downturn and back) and frictional unemployment (voluntary movements) is not terribly difficult for my college students to grasp in the abstract. But when it happens to you in real life, it naturally tends to have an adverse emotional impact.

There are various forms of temporary assistance available to people who find themselves swept up by large macroeconomic forces. Many companies offer severance packages. As a society, we have deemed it appropriate to offer unemployment insurance funded by taxes levied on employers. There’s COBRA and Medicaid for those qualifying to help with health expenses.
In December, the government helped by possibly flipping the script on the other type of unemployment — structural — when Congress and President Barack Obama lifted the ban on crude oil exports." 
"Also in the budget is a proposal to enhance unemployment insurance.

Assistance for workers who can prove they lost their job as a direct result of liberalized trade has always had support. It helps smooth acceptance of changes that will benefit our country as a whole. The proposed changes would pay a person a portion of the difference between the job lost and a lower-paying new job.

These modifications, however, would numb the incentives of the good habits spurred by job insecurity.

Current Federal Reserve policies don’t help, as they discourage folks from saving, a cruel irony given that those very same policies play a role in the boom and bust nature of our industry.

There have actually been a few calls to “bail out” the oil industry, but that’s the last thing that needs to happen.

We should be bailing out fewer companies, not more. What those employed in our industry, and likely laborers in general, would probably appreciate more than anything is stable policy from Uncle Sam, so they can shape and direct their lives on their own terms."

Friday, March 11, 2016

Do Some Sellers on eBay Have an Edge Over Other Sellers?

See Male Sellers on eBay Have an Edge Over Women, Study Finds. By PAM BELLUCK of the NY Times. Excerpts:
"on average, when men and women with equal selling reputations sold the same products, women received lower prices than men."

"The difference was far less pronounced for used items: Women sellers received about 97 cents for every dollar men received. But with new items, where the authors say direct comparison is easier, women received about 80 cents on average for every dollar men sellers received."

"“The basic point — that people have different expectations of women versus men and so we treat them very differently in the world — it’s fascinating and depressing,” said Linda Babcock, an economics professor at Carnegie Mellon University, who was not involved in the study."

"The study did not paint a universally negative picture for women. For some items, like toys and pet products, women received somewhat higher prices than men. And women tended to have better reputations as sellers, although they tended to have less selling experience.

Nor did the study, which controlled for seller reputation, experience, number of photos, use of bold lettering and other elements, indicate that buyers were actively or even consciously discriminating. Male and female buyers appeared to treat women sellers the same, the authors said."

"We actually think that most of it is unconscious,” said Tamar Kricheli-Katz, a professor of law and sociology at Tel Aviv University, who conducted the study with Tali Regev, an economist at IDC Herzliya."

"the researchers conducted an experiment to see if people could tell the gender of sellers from user profiles. People guessed correctly in 1,127 of 2,000 cases, wrong in 170 and did not know the rest.
In another experiment, the researchers asked people to place value on a $100 Amazon gift card sold by someone named either Alison or Brad. On average, Alison’s gift card was valued at $83.34, while Brad’s was valued at $87.42.

Claudia Goldin, a Harvard economist and expert on gender wage gaps, said the study was intriguing but needed more analysis. “Just perceiving that somebody’s a woman, what exactly does it mean?” she asked. “It’s got to mean something about the quality of the good or service or something that’s not captured in the data that they have.”"

Friday, March 04, 2016

Amusement Park Changes Its Pricing Strategy

See Disneyland 'demand pricing' will cost you $5 less on slow days and $20 more when it's busy.  I'm skeptical about Disney saying this not being about maximizing profits. Everything firms do is about profits, especially if they see demand being different on different days. When demand increases, price goes up. Excerpts:
"Walt Disney Co. is adopting a new pricing policy at Disneyland and other U.S. theme parks that would reduce ticket costs on low-demand days and boost entrance fees for more popular times.

Starting Sunday, anyone willing to drop in on a typically slow day — maybe a Wednesday in September — will pay a few dollars less than previously. But for most days of the year, expect to spend more for a daily ticket.

Disney is portraying the move to peak pricing as a crowd-management technique rather than a push to maximize profits.

Airlines and hotels do it during spring break and other high-demand times; Uber and Lyft also charge more when the need for ride-hailing services surges, such as New Year's Eve.

"The demand for our theme parks continues to grow, particularly during peak periods," Disneyland spokeswoman Suzi Brown said. "In addition to expanding our parks, we are adopting seasonal pricing on our one-day ticket to help better spread visitation throughout the year."

Disneyland and Disney California Adventure have been charging $99 for a one-day ticket. Under the new policy, each day on the calendar will be designated a "value" day, a "regular" day or a "peak" day. The new price will be $95 for a value day, $105 for a regular day and $119 for a peak day."