Wednesday, June 30, 2021

NCAA Proposes Interim Policy for Athletes to Profit From Images

By Laine Higgins Louise Radnofsky of The WSJ.

I posted something on this last week when the Supreme Court ruled that limits on compensating college violate U.S. antitrust law (it is one the links below for related posts).

Excerpts from The WSJ article: 

"Under pressure to overhaul its vision of amateurism in college sports, the National Collegiate Athletic Association on Monday indicated that it would allow athletes in all 50 states to make money from their name, image and likeness as soon as July 1 without forfeiting their eligibility. 

In making the move—which is still one step from final approval—the NCAA bowed to the actions of numerous state legislatures around the country, which have already moved to make it legal for college athletes to profit from their images."

“While opening NIL activities to student-athletes, the policy leaves in place the commitment to avoid pay-for-play and improper inducements tied to choosing to attend a particular school,” said the NCAA in a statement. 

According to the Division I Council’s proposals, any student athlete in the country will be able to cash in once the policy is approved by the Board of Directors, no matter if their state has a law allowing athletes to profit from their name, image and likeness. The Board is scheduled to vote on the interim policy on Wednesday."

"On Monday, it confirmed that athletes may sign deals so long as they are “consistent with the law of the state where the school is located.”"

"The NCAA has repeatedly said it wants what it calls “guardrails” to prevent NIL activity from turning college sports into a pay-for-play venture. For example, the NCAA will not permit athletes to use the intellectual property of their universities or athletic conferences in NIL deals. The association also wants to limit the extent to which universities can facilitate sponsorships on behalf of their athletes to prevent nefarious recruiting inducements and booster involvement."

"Monday’s statement offered few details aside from suggesting that athletes disclose their NIL activity to their universities and athletic conferences and permitting them to use “professional services,” including agents, when negotiating endorsement and sponsorship deals."

Related posts:

Cost of attendance stipends in college sports 

How The Economics Of College Sports Might Be Distorted 

All is not well (financially) in the world of college football

Will Moving To NCAA Division I Status Pay Off For The University of the Incarnate Word?

The Flutie Effect: When The Teams Win, More Students Apply To The College.

There's A New Book On The Economics Of College Sports 

NCAA Takes Another Court Hit on Athlete Compensation: The Ninth Circuit ruled that the organization’s restrictions violated federal antitrust law 

The NCAA wants an antitrust exemption from Congress so it can oversee name, image and likeness deals

What Economists Say About "March Madness"

Public universities spend more per per athlete than they do per student

March Madness Is a Moneymaker. Most Schools Still Operate in Red. 

Supreme Court Rejects NCAA’s Tight Limits on Athlete Benefits, Compensation

Tuesday, June 29, 2021

Work Flexibility, Popular With Employees, Is Hardly a Holy Grail

Surveys show many Americans aren’t eager to return to the office, but companies have more to consider than just their feelings

By Laura Forman of The WSJ. Excerpts:

"But luring workers with more flexibility isn’t without downside. As president and co-founder of behavioral analytics company Humanyze, Ben Waber has studied team dynamics and work patterns for over a decade. He cautions that companies are taking big swings on remote work based on little to no data. Major effects take many innings to play out.

Mr. Waber’s research highlights how communication is often sacrificed in a fully remote workforce, and the deficit isn’t always perceived. In one survey he ran, the vast majority of employees said connectivity improved or stayed the same through remote work, even while he found a 21% reduction in connections outside of an employee’s core contacts. Among one of his Fortune 500 clients, he notes communication went up by 20% when employees worked in person just one day a week.

Productivity declines also are possible. A paper out of the Becker Friedman Institute for Economics at The University of Chicago showed productivity fell by about 20% at a large Asian IT services company during the work-from-home period of the pandemic. While total hours worked increased by roughly 30%, average output didn’t significantly change, the data showed."

"Many companies such as Apple and Alphabet’s Google are opting for something in between. But hybrid structures have their drawbacks, too. Research from Stanford economics professor Nicholas Bloom and co-authors Jose Maria Barrero and Steven J. Davis shows how hybrid structures could affect diversity within a company. Among college graduates with children, women want to work from home full time almost 50% more than men, the research shows. Mr. Bloom called that differentiation worrying, given a work-from-home study he ran in 2014 showed a 50% lower rate of promotion after 21 months compared with in-office colleagues."

"NYU Stern marketing professor Scott Galloway, who called work-life balance a myth in a blog post earlier this month, noting there are only trade-offs."

Related posts:

Companies Start to Think Remote Work Isn’t So Great After All

Since people feel more disorganized and chaotic when they are at home, should business leaders take this into account when they consider whether to make remote working the norm after the pandemic subsides?

Remote work is surprisingly productive (for now, but what about in the long-run?)  

Does a Raise or Remote Work Sound Better?  

With No Commute, Americans Simply Worked More During Coronavirus

Monday, June 28, 2021

Why did annual consumer price inflation in May (excluding food and energy) reach the highest level in 29 years?

As usual with prices, it is because of supply and demand. Demand has been going up due to the stimulus. Supply has been "constricted." Not clear if that means it decreased or simply did not increase enough to prevent the demand increase from bringing us such large price increases. If they both increase, but demand shifts more than supply, then prices rise.

See Risks Rise to Both the Fed’s Inflation and Employment Goals: Federal Reserve bets supply-driven inflation will be transitory—but that depends on inflation expectations staying low by Greg Ip of The WSJ. Excerpts:

"unemployment is still around 6% and payrolls are 7.6 million short of pre-pandemic levels. Yet annual consumer price inflation excluding food and energy reached 3.8% in May, the highest in 29 years, and ran at an 8% annualized rate in the past three months. Annual inflation will likely stay above 3% through the rest of this year.

Economists expected some price pressure as the economy reopened, but not this much. What happened? First, demand came back faster than expected thanks in part to two rounds of fiscal stimulus. Last September the Fed projected economic growth this year of 4%. By March, they had raised that to 6.5%.

Second, supply has been constricted by a litany of freak events. Pandemic-induced cuts to production and shifts in demand patterns, a container ship jamming the Suez Canal, a fire at a Japanese microchip factory and a winter storm in Texas created shortages of everything from used cars and semiconductors to chicken wings and lumber. Most strikingly, many workers who left the labor force last year have yet to return, putting upward pressure on wages."

"used-cars sales this year are roughly level with 2019, according to Cox Automotive. But supply has been held back by people hanging on to leased vehicles longer, and rental-car agencies having fewer vehicles to sell. That has pushed prices up 18% in the past two months according to the Labor Department, contributing about 0.5 percentage point to inflation."

"Enhanced unemployment benefits, the virus and changed priorities are keeping them [workers] out."

"The Fed can’t do anything about supply shocks." [chairman Powell said so recently]

"The inflation effect of supply shocks is transitory so long as the public doesn’t expect permanently higher future inflation. Higher expectations can change wage and price-setting behavior and thus become self-fulfilling." [if workers expect higher inflation they will ask for or seek higher wages before the higher prices come-that means higher resource prices which reduce supply and raise product prices]

"Back in the 1970s, expectations were poorly anchored so oil shocks in 1973 and 1979 fed into broader inflation, forcing the Fed to raise interest rates sharply, causing deep recessions.

But since the 1990s, inflation expectations have been relatively stable around 2% in most advanced countries"

"What should the Fed do? It won’t know for months whether the rise in inflation is more than transitory"

Sunday, June 27, 2021

Americans Are Keeping Their Cars Longer, as Vehicle Age Hits 12 Years

Cars remain in service longer as quality improves, prices rise

By Mike Colias of The WSJ. Excerpt:

"The average age of vehicles on U.S. roadways rose to a record 12.1 years last year, as lofty prices and improved quality prompt owners to hold on to their cars longer.

It was the first time the average vehicle age rose above 12 years, according to data released Monday by research firm IHS Markit. While the average vehicle age has risen steadily over the last 15 years, the trend accelerated during the coronavirus pandemic partly because of a drop in new-car sales, IHS said.

The finding reflects the stronger value of vehicles throughout their life cycles, from higher new-vehicle prices Americans have been paying for years to steeper prices on the used-car lot, said Todd Campau, associate director of aftermarket solutions at IHS. Improved vehicle quality also is a factor, he said.

Whereas 20 years ago a car might have changed hands once or twice and lasted 100,000 miles, it is more common today for a car to have multiple owners and last for 200,000 miles or more, he said."

Saturday, June 26, 2021

Monoclonal-antibody drugs and the law of increasing opportunity cost

Rapidly increasing production of a certain good in a short period of time leads to increasing opportunity costs as less capable resources have to be switched over (capital has to be re-tooled and workers retrained). All of that adds costs that were not there before. So it actually costs more to produce additional units, on average.

See Beat tomorrow’s pandemic today by Scott Gottlieb. Excerpt:

"When Covid struck, the U.S. didn’t have excess capacity to make monoclonal-antibody drugs or vaccines. Making room for antibody production required repurposing facilities that had been churning out other critical drugs whose production moved to Europe. This is an expensive, risky and time-consuming process. For vaccines, there wasn’t idle capacity to manufacture at scale. While factories were built mostly from scratch, vaccines had to be rationed for months.

There are lessons from the case of Emergent BioSolutions in the early 2000s. The country was preparing for the risk of a pandemic of H5N1 bird flu. The George W. Bush administration funded the construction of domestic facilities to make flu vaccines. But in many cases, in the years since these facilities, including Emergent, were not kept fully operational and properly staffed.

When Emergent’s plant was conscripted to make the Covid vaccine developed by Johnson & Johnson, it stumbled getting the process up to sufficient scale and maintaining proper quality control. An internal government analysis concluded that, over the years, Emergent had struggled to attract and retain the specialized personnel required to run such a facility, leaving it vulnerable."

Related posts:

Flushing out the true cause of the global toilet paper shortage amid coronavirus pandemic 

Ventilators and the law of increasing opportunity cost

Hand sanitizer and the law of increasing opportunity cost  

Here are some basic terms that economists use to discuss this issue:

Opportunity Cost-
The value of the best foregone alternative. There is no such thing as a free lunch. If we want to build one more skyscraper, we may have to give up one submarine, since there may not be enough steel to go around (steel is scarce!).

The law of increasing opportunity cost-
As more of a particular good is produced, the opportunity cost of its production rises. Why is the law of increasing opportunity cost true? Different resources are better suited to different productive activities. This is just about the same as saying people have different abilities, like some are more entrepreneurial and some are more bureaucratic.

Let’s assume that we have society with five workers who can make either of two goods, candles or shoes. Now the best candle maker will not necessarily be the best shoemaker and some candle makers will be better than others. This simply means that workers have different abilities.

In the real world, the best doctor would not be the best lawyer. Some plumbers are better than others.

In the table below, the number of candles OR shoes that each worker can make in a day is listed.


Again, the workers have different abilities, just as they do in the real world.

What are all of the combinations of candles and shoes that this society can make? If all the workers make candles, they can make 25 (just add up how much each worker can make). How many shoes? ZERO, since each worker spends all day in the candle factory (this is combination A in the table below).

If we want to make some shoes, the first worker we would tell to stop making candles, if we are rational and trying to get the best deal, would be worker V.  So we gain 7 shoes and lose 3 candles. That is why combination A is 22 and 7. Worker V no longer makes candles since they are making shoes. So the opportunity cost of making a shoe is some number of candles (and vice-versa).

The rest of the combinations that show what would happen if we kept moving workers out of candle making and into shoe making is in the table below.


Now what happens to the opportunity cost as we move from combination A to combination B? Then combination B to combination C, and so on? The table below shows this:

Candles Given Up
Shoes Gained
Candles per Shoe
A to B
B to C
C to D
D to E
E to F

By moving from point A to point B, we give up 3 candles to gain 7 shoes. The cost of each shoe in candles is .429 (3/7). Then we give up 4 candles to get 6 shoes, with each shoe costing .667 candles. The more shoes we try to produce, the more candles that have to be given up to get each shoe. So the opportunity cost of producing shoes rises.

This is called the law of increasing opportunity cost.

The law of increasing opportunity cost-As more of a particular good is produced, the opportunity cost of its production rises. (see how the numbers rise in the “Candles per Shoe” column in the table above)

Why is the law of increasing opportunity cost true? Different resources are better suited to different productive activities. This is just about the same as saying people have different abilities, which is what we see in the number of candles and shoes each worker can make.

Friday, June 25, 2021

Heavier Passengers on Planes Mean New Safety Limits for Airlines

A change in an FAA weight rule could result in more fliers getting bumped from flights and more baggage delays

By Scott McCartney of The WSJ.

In micro, I use a supplemental text, The Economics of Public Issues by Roger Miller, Daniel Benjamin and Douglass North. This WSJ article touches on two chapters from that book.

One chapter is about obesity and why it has been rising in the U.S. Mainly because our jobs have gotten more sedentary while the cost of food has fallen. People burn fewer calories while consuming more.

Another chapter is about airline safety. It mentions that customers do punish less safe airlines by flying with them less. It also mentions that we should keep adding safety features as long as the marginal benefit is greater than the marginal cost. But with a change in circumstances, it might change the efficient level of safety. With people getting heavier, that could mean more safety limits. So the cost of keeping flying safe is going up, but it might be justified if the circumstances have changed that make it more dangerous (heavier passengers).

Excerpts from the article:

"Passengers keep getting bigger. Now airlines must account more accurately for that.

The Federal Aviation Administration is requiring updates to passenger and baggage weight estimates that airlines use to keep each flight within airplane safety limits. Each U.S. airline must submit a plan by June 12 explaining which average weights for passengers and baggage they’ll use, down to phones and clothing, and how they estimated those weights. The FAA must approve each airline’s plan.

Airline officials say the weight estimates used for passengers and baggage are going up between 5% and 10%. That will affect some flights, possibly requiring that more passengers get bumped or more baggage left behind. Impact is likelier on unusually hot days and in cities higher above sea level, when the weight an airplane can safely carry is reduced because wings won’t generate as much lift. Flights into stiff headwinds that require more fuel also may face more weight issues."

"The FAA says it’s pushing the change to make sure that aircraft are loaded in accordance with airplane flight-manual limitations. The changes increase safety by reducing the possibility of an overloaded airplane.

While airlines are supposed to keep up with passenger changes, the agency realized that weight gains hadn’t been updated in years."

"One remedy for higher weights is to substitute larger planes in high-altitude markets in summer, but airlines have less flexibility to do that this summer."

"Alaska says it will increase the average estimates it has been using since 2013 by 7 pounds for adults, 2 pounds for carry-on bags and 4 pounds for checked luggage"

"Airlines can use the U.S. Centers for Disease Control and Prevention health survey results to estimate their typical passenger."

"The higher average weights might add more than 3,000 pounds to weight-and-balance calculations for a fully loaded 737 with 172 passengers. That’s significant—close to what 500 gallons of jet fuel weighs."

"The latest data from the CDC’s National Center for Health Statistics, published in January based on a 2015-2018 survey, puts the average male weight at 199.8 pounds and the average female weight at 170.8 pounds. In 2005, the last time the FAA required airlines to update, the same survey found that people weighed, on average, about 5% less: Men averaged 190.4 pounds and women 163.3."

"The Civil Aviation Authority of New Zealand requires Air New Zealand to hold a “weigh week” every five years to keep the average weight estimate current. The most recent weigh week happened in April."

Thursday, June 24, 2021

Example of cross industry competition for workers

In micro, I talk about how higher wages in one industry attract workers from other industries (assuming wages are held constant in those other industries). This article seems like an example.

See Wage Gains at Factories Fall Behind Growth in Fast Food: Workers find more opportunities as pay rises and demand for their labor increases Austen Hufford and Nora Naughton of The WSJ. The print the edition had the title "Factory Jobs Go Begging As Wages Fail to Keep Up." 

Excerpts from the article:

"Pay for factory jobs has grown so slowly in the U.S. that manufacturers are having trouble competing with fast-food restaurants.

Take Western Michigan, home to many office-furniture and car-parts factories as well as a growing tourism industry. Restaurants and hotels along Lake Michigan have been hiring rapidly as people, kept fairly stationary during the pandemic, start traveling again. The shift is making it harder for factories to staff their production lines, and the added demand has increased both openings and the rate at which workers leave their jobs.

Ann Harten, head of human resources at furniture maker Haworth Inc., said her company is looking beyond the unemployment lines and needs to hire applicants away from their current jobs as the economy recovers and the labor market tightens. “We have competition for labor outside of our industry,” she said.

For years, factory jobs paid significantly more than those in many other fields, especially for less-educated workers. That is changing, according to economists, manufacturers and federal data.

Haworth has raised wages at factories near its Holland, Mich., headquarters to $15 an hour, plus another dollar for the night shift. It has amenities like a 24-hour gym as well as annual Thanksgiving turkey and Christmas gift giveaways. Haworth still isn’t finding enough workers. That could hold back production at a time of red-hot demand for furniture, vehicles and many other consumer goods.

Some workers recently left Haworth’s factory in the nearby town of Ludington for hospitality jobs, Ms. Harten said. Haworth is advertising assembly jobs for $14 at that facility—the same starting pay rate at a nearby Wendy’s restaurant. “Manufacturing can be taxing,” said Ms. Harten, who also believes enhanced Covid-19 unemployment benefits are discouraging some people from taking open jobs."

"The $23.41 that hourly factory workers made on average in April is 27% more than average pay for retail workers, according to the Labor Department, down from a 40% premium for factory workers 10 years ago. Factory work pays 56% more than restaurant and fast-food jobs, the data shows, down from 83% a decade ago."

Wednesday, June 23, 2021

Two interesting quotes from Fed Chairman Jerome Powell

These 2 quotes were in the WSJ recently.

“It turns out it’s a heck of a lot easier to create demand than it is to—you know, to bring supply back up to snuff,” Fed Chairman Jerome Powell said Wednesday after the central bank’s most recent policy meeting.

“This is an extraordinarily unusual time, and we really don’t have a template of any experiences of a situation like this,” said Fed Chairman Jerome Powell in a press conference Wednesday following the central bank’s June meeting. “We have to be humble about our ability to understand the data.”

Tuesday, June 22, 2021

Supreme Court Rejects NCAA’s Tight Limits on Athlete Benefits, Compensation

The court rules the NCAA violated antitrust law by limiting schools from competing for player talent by offering better benefits

By Brent Kendall & Louise Radnofsky of The WSJ. Excerpts:

"The Supreme Court ruled unanimously that strict NCAA limits on compensating college athletes violate U.S. antitrust law, a decision that could have broad ramifications for the future of college sports.

Monday’s ruling, written by Justice Neil Gorsuch, upheld lower court rulings that said the National Collegiate Athletic Association unlawfully limited schools from competing for player talent by offering better benefits, to the detriment of college athletes.

The 9-0 decision doesn’t open up a world of direct, unlimited pay for college athletes, an issue that wasn’t before the court. Instead, the justices said the NCAA must allow colleges to recruit athletes by offering them additional compensation and benefits, as long as they are tied to education.

That means schools could offer compensation beyond the cost of attending college, such as scholarships for graduate or vocational schools, internships, computer equipment and study-abroad programs—and limited cash awards for athletes, potentially nearly $6,000 for now, who do well in the classroom."

"The court’s decision comes a day before representatives of the association’s most powerful schools and athletic conferences will again try to chart a future course for college sports in the face of a wave of state laws permitting athletes to sign endorsement deals.

Justice Gorsuch said while the NCAA is entitled to some leeway to administer the college-sports landscape, that didn’t mean the association enjoyed de facto immunity from the Sherman Act, the central federal law barring anticompetitive conduct, just because its restrictions “happen to fall at the intersection of higher education, sports, and money.”" 

"The court throughout its ruling said the association still had ways to control and protect the product of college sports, but it said restricting athletes’ compensation related to education went too far."

"They just can’t all collectively agree not to provide more benefits."

"The NCAA, the court said, also retains authority to determine what kinds of compensation are and aren’t related to education"

Related posts:

Cost of attendance stipends in college sports 

How The Economics Of College Sports Might Be Distorted 

All is not well (financially) in the world of college football

Will Moving To NCAA Division I Status Pay Off For The University of the Incarnate Word?

The Flutie Effect: When The Teams Win, More Students Apply To The College.

There's A New Book On The Economics Of College Sports 

NCAA Takes Another Court Hit on Athlete Compensation: The Ninth Circuit ruled that the organization’s restrictions violated federal antitrust law 

The NCAA wants an antitrust exemption from Congress so it can oversee name, image and likeness deals

What Economists Say About "March Madness"

Public universities spend more per per athlete than they do per student

March Madness Is a Moneymaker. Most Schools Still Operate in Red.

Monday, June 21, 2021

Less labor supply and more labor demand lead to higher wages

We expect price to rise for a good when its supply decreases and its demand increases. This seems to be happening with labor right now.

See Tight Labor Market Returns the Upper Hand to American Workers: Employers competing for low-wage workers are offering signing bonuses and other perks by Eric Morath and Greg Ip of The WSJ. Excerpts:

"Low-wage workers found something unexpected in the economy’s recovery from the pandemic: leverage.

Ballooning job openings in fields requiring minimal education—including in restaurants, transportation, warehousing and manufacturing—combined with a shrinking labor force are giving low-wage workers perks previously reserved for white-collar employees. That often means bonuses, bigger raises and competing offers.

Average weekly wages in leisure and hospitality, the sector that suffered the steepest job losses in 2020, were up 10.4% in May from February 2020, Labor Department data show, outpacing the private sector overall and inflation. Pay for those with only high school diplomas is rising faster than for college graduates, according to the Federal Reserve Bank of Atlanta.

“It’s a workers’ labor market right now and increasingly so for blue-collar workers,” said Becky Frankiewicz, president of staffing firm ManpowerGroup Inc.’s North America operations. “We have plenty of demand and not enough workers.”

Lower-wage employers are boosting pay and offering gift cards to applicants who show up for interviews, along with sign-on and retention bonuses, and sometimes immediate employment before drug screenings and background checks, she said."

"Low-wage workers’ newfound leverage could have staying power—and, in fact, began to emerge before the start of the Covid-19 pandemic. The pandemic pushed some Americans into retirement and convinced others they should return to work only for more pay or improved conditions. Raises that increase base pay to attract workers now will be tough to roll back later, employers and economists say.

Although that bargaining power may be nearing a peak and begin to ease once pandemic-era benefits expire, many economists expect the labor market to remain tight for the foreseeable future."

"Some of the deterrents to work may reverse once the economy fully reopens. Nearly 15 million people claimed unemployment insurance benefits in late May, up from about 2 million before the pandemic. Some may not be working because they receive more from the enhanced unemployment benefits offered during the crisis than they would earn in the available jobs. But those benefits expire in September."

"When unemployment fell below 5% in the late 1990s and again in 2017, wage growth accelerated and employers stepped up recruiting from long-disadvantaged groups."

"The combination of the reopening economy, several rounds of fiscal stimulus and near-zero interest rates could soon recreate the tight labor market conditions that bolstered pay in 2019. Last week, Federal Reserve officials predicted the unemployment rate would fall to 3.5% by the end of 2023, matching its pre-pandemic lows.

Whereas demand for labor drove wage gains in 2019, now both demand and a smaller pool of workers are at play. The share of the working-age population either holding or seeking a job has fallen to 61.6% in May from 63.3% in February 2020—a loss of 3.5 million potential employees. This may have raised what economists call the “reservation” wage, the lowest pay for which someone is willing to work. Workers without a college degree have increased their annual reservation wage to $61,000 from $52,000 in late 2019, according to surveys by the Federal Reserve Bank of New York.

The Dot Foods Inc. distribution center in Williamsport, Md., has raised wages an average of 4% in each of the past four years in an effort to stay ahead of other area employers, including an Amazon warehouse and Target Corp. store, said Brian Duffield Sr., general manager of the center and other East Coast locations. Dot warehouse workers start at $19.25 an hour."

Sunday, June 20, 2021

Adam Smith Meets Jonathan Haidt (on political polarization and the animosity of hostile factions)

Jonathan Haidt wrote the book The Righteous Mind: Why Good People Are Divided by Politics and Religion. It is about how polarized and nasty our politics have become, how everyone loves to demonize and ridicule anyone from a different political party. But these are things that Adam Smith talked about in his book The Theory of Moral Sentiments. I will have an excerpt from that at the end of the post.

Haidt is also concerned about how politically biased higher education has become, with the vast majority of professors being liberal, especially in the social sciences and humanities. So he and some other professors have founded the Heterodox Academy. Here is what they are about:

"We are a politically diverse group of social scientists, natural scientists, humanists, and other scholars who want to improve our academic disciplines and universities.

We share a concern about a growing problem: the loss or lack of “viewpoint diversity.” When nearly everyone in a field shares the same political orientation, certain ideas become orthodoxy, dissent is discouraged, and errors can go unchallenged.

To reverse this process, we have come together to advocate for a more intellectually diverse and heterodox academy."
The Chronicle of Higher Education ran an article in 2017 titled  Can Jonathan Haidt Calm the Culture Wars? You might have to be a subscriber to read it. Excerpts:
""The extremes, the far left and the far right, are being" — Haidt pauses a beat — "well, I’d say bizarre and crazy, but first, that would be a microaggression" — a roar of laughter from the audience — "and second, it would not be true. What’s happening isn’t crazy. It’s straight moral psychology.""

[Haidt] "explains what he calls "the new moral culture spreading on many college campuses." It is a culture, he says, that values victims, prioritizes emotional safety, silences dissent, and distorts scholarship. It is a culture that undermines the university’s traditional mission to pursue truth"veritas" is right there on the seals of Harvard and Yale — in favor of a new mission: the pursuit of social justice. It is a culture that Haidt believes is fueled by three factors: political polarization, the rise of social media, and a lack of ideological diversity in the professoriate."

"Today, however, precious few conservatives are in psychology departments. "If you say something pleasing to the left about race, gender, immigration, or any other issue, it’s likely to get waved through to publication," says Haidt. "People won’t ask hard questions. They like it. They want to believe it." This represents "a real research-legitimacy problem in the social sciences.""

"His critics, of whom there are many, see his efforts to shift the conversation about diversity away from race and gender and toward politics as at best obtuse and at worst hostile. They say his absolutist stance on free speech is at odds with the need for a diverse and inclusive university. They say he lends a social-scientific sheen to old conservative arguments. They say his penchant for skewering the left, coupled with his willingness to engage the right, is suspect and creates confusion about where his sympathies actually lie. They say he’s either a closet conservative or a useful idiot for the right.

Haidt acknowledges that, especially in the wake of Donald Trump’s election, he risks sounding like a guy in Berlin in 1933 insisting that wisdom is to be found on both sides of the political spectrum. "The election has ramped up emotions so strongly that any effort to say, ‘You really need to have more conservatives in the university, and you need to listen to them’ strikes some people as immoral." On the other hand, he says, the election has forced a reckoning. More academics are saying, "Wow, we really are in a bubble. We must get out of this bubble.""

"On the left in the early 2000s, he grew frustrated by what he saw as the failure of Al Gore and John Kerry to speak to voters’ moral concerns. Haidt shifted his research focus to political psychology and immersed himself in conservative media, subscribing to National Review and watching Fox News. "My reaction was constantly like, ‘Oh, I never thought of that. Oh, that’s a good critique,’ " he says. "The scales were falling from my eyes." He’s since carefully positioned himself as a centrist, a neutral broker who speaks with all sides."

"Some liberal professors fear giving even inadvertent comfort to the right, especially with Trump in the White House and a Republican majority in Congress. Others, he argues, are intimidated by the bullying tactics of the far left.

That diagnosis rings true to David Bromwich, a professor of English at Yale. His 1992 book about the campus culture wars, Politics by Other Means (Yale University Press), is a withering assault on both traditionalists of the right and thought-policers of the left. (As John Silber wrote in a review, the book might have been called A Plague on Both Your Houses.) Asked how the current mood on elite campuses compares with that time, Bromwich says it’s at least as bad. "There is a horror of being associated with anything or anyone conservative," he says, calling it "a mark of the timidity of the academic personality in our time. It leads to a great deal of conformity, small acts of cowardice, and the voluntary self-suppression of ideas.""

"It’s human nature to make things sacred — people, places, books, ideas, Haidt says. "So what’s sacred at a university?" he asks. "Victims are sacred," he answers. And a victimhood culture offers only two ways to get prestige: Be a victim, or, if you can’t manage that, stand up for victims. How? "By punishing the hell out of anyone who in any way, shape, or form, even inadvertently, marginalizes a member of a victim class.""

""I’m very alarmed by the decline of our democracy." He grabs a stack of four books from beside his keyboard. The spines read like a map of his anxious mind: The Authoritarian Dynamic, The Federalist Papers, Rude Democracy, Why Nations Fail. He is especially worried about how social media deepen our political divisions. "We are all immersed in a river of outrage, drowning in videos of the other side at its worst," he says"
Here is the passage from Adam Smith:
"The animosity of hostile factions, whether civil or ecclesiastical, is often still more furious than that of hostile nations; and their conduct towards one another is often still more atrocious. What may be called the laws of faction have often been laid down by grave authors with still less regard to the rules of justice than what are called the laws of nations. The most ferocious patriot never stated it as a serious question, Whether faith ought to be kept with public enemies?—Whether faith ought to be kept with rebels? Whether faith ought to be kept with heretics? are questions which have been often furiously agitated by celebrated doctors both civil and ecclesiastical. It is needless to observe, I presume, that both rebels and heretics are those unlucky persons, who, when things have come to a certain degree of violence, have the misfortune to be of the weaker party. In a nation distracted by faction, there are, no doubt, always a few, though commonly but a very few, who preserve their judgment untainted by the general contagion. They seldom amount to more than, here and there, a solitary individual, without any influence, excluded, by his own candour, from the confidence of either party, and who, though he may be one of the wisest, is necessarily, upon that very account, one of the most insignificant men in the society. All such people are held in contempt and derision, frequently in detestation, by the furious zealots of both parties. A true party-man hates and despises candour; and, in reality, there is no vice which could so effectually disqualify him for the trade of a party-man as that single virtue. The real, revered, and impartial spectator, therefore, is, upon no occasion, at a greater distance than amidst the violence and rage of contending parties. To them, it may be said, that such a spectator scarce exists any where in the universe. Even to the great Judge of the universe, they impute all their own prejudices, and often view that Divine Being as animated by all their own vindictive and implacable passions. Of all the corrupters of moral sentiments, therefore, faction and fanaticism have always been by far the greatest."

Friday, June 18, 2021

Summer Job Market for Teens Is Sweet

Share of working teens hits 13-year high, as more employers turn to young people to fill hiring gaps 

By Patrick Thomas of The WSJ

Possible reasons for the labor shortage (and hence the need for companies to hire teens) include enhanced federal unemployment benefits, continuing fear of contracting Covid-19 or lack of child care.


"Young Americans are saving the summer.

Businesses are counting on teenage workers to staff restaurants, golf clubs, resorts and other hot-weather entertainment spots emerging from pandemic lockdowns. Many employers are struggling to find enough adult workers, and so to fill the gap, they are leaning on teens like never before and heavily courting them to keep businesses running in a busy summer.

For many young adults now flooding into the hot summer labor market, conditions are creating a job bonanza, complete with more accommodating bosses, greater schedule flexibility and even higher pay than in summers past.

Teens are answering the call to work. In May, the share of 16- to 19-year-olds who work rose to 33.2%, the highest rate since 2008, according to figures released by the Bureau of Labor Statistics on Friday. That teenage-employment rate is still far off the near-50% levels of the 1970s, when summer and part-time jobs were more common rites of passage into adulthood. But it marks a sharp rebound from the record-low 20% employment rate among teens in April 2020, shortly after the pandemic set in and dried up millions of lower-wage job opportunities.

Likewise, the unemployment rate for 16- to 19-year-olds dropped in May to 9.6% from 12.3% in April, its lowest level since 1953, according to the federal jobs data."

"Many of the businesses now facing labor shortages are big employers of teenagers to begin with. At the end of March, there were 1.2 million open jobs in the leisure and hospitality sectors and 734,000 open retail jobs. Last year, about 40% of working teens worked in leisure and hospitality, while retailers employed another 25%."

"Luke Pardue, an economist for Gusto, a payroll and benefits company with more than 100,000 small-business clients, says teens are often more willing to work for lower wages than older workers.

“We’ve seen a pent-up demand for tourism and recreation jobs where teens are most likely to be employed,” Mr. Pardue says. “Hesitancy among older workers, a higher demand for these types of jobs, could combine to make 2021 a record year for teen employment.”"

Thursday, June 17, 2021

Companies Adapt to Activism by Athletes

See Sweetgreen Bet Big on Naomi Osaka. Then It Doubled Down. by Heather Haddon of The WSJ.

Should companies try to improve society or try to make a profit? Might they make society better off by trying to maximize their profit? 

In his book The Wealth of Nations, Adam Smith wrote about how self-interested people were led by the "invisible hand" to make society better off:

"But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestick industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the publick interest, nor knows how much he is promoting it. By preferring the support of domestick to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the publick good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it."

Excerpts from the WSJ article"

"Many companies are now pursuing “purpose-driven marketing,” industry experts say, seeking to demonstrate their commitment to improving society, as well as customers’ meals or cleaning routines. Americans, meanwhile, are placing more trust in the values a company projects. More than half of 2,000 adults surveyed recently by market-research firm Mintel said they consider buying from brands they view as ethical a form of activism.

And athlete activism has also grown, especially around the tumultuous summer of 2020, with mental health advocacy a cause embraced by athletes in sports including gymnastics, track and swimming. For some athletes, such activism extends to striking deals with brands that they say support them in their advocacy and their personal lives.

“What drew me to Athleta is that they don’t only care that we’re an athlete but they truly care about how we’re doing as individuals and what we want to accomplish outside the sport,” gymnast Simone Biles told The Wall Street Journal in April when she said she was leaving Nike for the Gap. Inc.-owned brand.

Ms. Osaka, the No. 2 women’s tennis player in the world, has won prize money and endorsement deals from companies such as Nike and Mastercard Inc. worth more than $50 million.

She has also been an outspoken advocate for social causes. She forced a suspension of her semifinal match during the Western & Southern Open last summer to protest police violence against Black people following the shooting of Jacob Blake in Kenosha, Wis. She wore face masks bearing the names of Black victims of racist violence or police brutality during the U.S. Open."

Related posts

The hidden costs of corporate social responsibility

C.E.O.s Are Qualified to Make Profits, Not Lead Society

ESG Investing in the Pandemic Shows Power of Luck

ESG Investing Shines in Market Turmoil, With Help From Big Tech: The strength of socially responsible funds suggests they have staying power; ‘ESG is not a fad’

Funds that market themselves as sustainable investments aren’t necessarily focused on companies that fight climate change, develop wind turbines or promote diverse boards

ESG Funds Draw SEC Scrutiny (companies that pursue strategies to address environmental, social or governance challenges)

Is it a retailer’s job to keep shoppers from their vices? (or Adam Smith vs. CVS pharmacy)

Can You Find Virtue by Investing in Vice?

What if companies pledge to adhere to social and environmental accountability guidelines?

Conspicuous Consumption, Conspicuous Virtue, Thorstein Veblen (and Adam Smith, too!) 

Data show that socially responsible investments can outperform the S&P 500 index

Is altruism a result of selfishness?

Do you have to be selfish to make more money?

Does collective self-deception mask selfish behavior?

Why Doing Good Makes It Easier to Be Bad

Businesses intentionally display their social and environmental performance in addition to their financial performance to stakeholders

Should you invest according to religious guidelines?

For a humorous view of this issue see

A Snickers a Day Keeps the Doctor Away: Why does CVS want to make my migraine cures hard to find? by Joseph C. Sternberg of the WSJ