Cincinnatus C. ([info]cincinnatus_c_) wrote,
@ 2008-04-23 23:59:00
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Current mood: late

A cloud comes over the sunlit arch
Currently at Toronto Pearson: 14. High today: 22.

Cold front through this afternoon, a brief shower and a rumble of thunder; hourly dewpoints from 2 p.m.: 13, 10, 9, 5, -3, -5, -6, -3, -2. But still no major shift in the blocked pattern coming until the weekend. The temperature maps have been remarkable the last few days--a bulge of blue from the Northwest Territories down to the Dakotas, and a finger of red from the South up to James Bay. Could be some snowflakes here next week, though. Could be some snowflakes in the middle of May--you never know.

The latest thing The Media have come up with to make me crazy is stories about the rising price of food. Of course, it is true that, worldwide, food prices are rising, catastrophically in some places. But since the news is now all about You, The Consumer (or You, The Taxpayer), the stories--at least, two of the three I've seen on the television--have to say something about how it's Hitting You In The Wallet. This, to me, living in Toronto in the middle of a grocery price war (driven by Wal*Mart's attempt to monopolize all aspects of low-end retail), is obviously insane, but I did wonder whether the price war is confined to Toronto (though one of the local stations ran a web poll asking whether you have changed your eating habits in response to rising food costs, and 44% of respondents claimed they had ... come to think of it, I wonder what kind of response they would get if they asked whether you missed work due to the recent TTC strike)--until the March CPI report came out from StatsCan last week, showing that the rate of inflation for food is running a full percentage point below the total inflation rate. There has, in fact, been pretty close to zero inflation in food prices in Canada over the last year: 0.4%. I would bet that, in Toronto, there has been deflation. (Incidentally, there has been Canada-wide deflation since last year in the "Clothing and footwear" category (in which the CPI, which has 2002 as its base=100 year, is currently at 96), and in "Goods" generally as opposed to "Services" (the latter of which is up 3.3% over last year, which I guess is due to wages rising above inflation--which you would expect they would have to, given that most of what we buy is now made by people in other parts of the world who make much less than us). Inflation in Canada is currently being driven by two things: energy (5.4% over last year, 143.2 relative to 2002) and housing (4.1%, 120.1).)

For those of you from out of town, there was no recent TTC strike. The hysteria leading up to the strike deadline coupled with the ongoing hysteria over the state of the US economy got me to thinking how preemptive North American society has become. I don't remember everyone getting as freaked out over the actual TTC strike that lasted a few days when I was in highschool as everyone did over this potential TTC strike. And given all the gnashing of teeth about The Economy, the fact that we're still not sure there is or will be a recession at all, is, really, unbelievable. (Something I read somewhere recently was claiming that the US economy indisputably has been in recession in per capita terms for at least one quarter, but that we conventionally talk about recessions in terms of total GDP because the total is what matters in geostrategic terms.) This must be partly due to the ubiquity of The Media these days. But I also have the feeling that everyone these days thinks of themselves as living right on the precipice--like, if you miss a single day of work because of a TTC strike, your world will come crashing down. (You compleekayted leetle man!) I get this from my students, this anxiety dripping off of them. But at the same time, they pass up so many easy opportunities to help themselves succeed. I get this from myself.

The other interesting thing about the TTC non-strike, a particular aspect of the massive public outpouring of hatred for the TTC employees, is the outrage at the employees getting 3% wage increases in each year of the contract. People expect that this will make the TTC more expensive for them, that it will set a precedent for other city workers that will force tax increases, and so forth. What's interesting to me about this, since I've been looking up numbers on wage inflation in Canada over the last sixteen years, is that people seem generally inclined to oppose everyone else's wage increases, especially when they're above the rate of inflation. But, presumably, wage inflation benefits most people. I mean, this appears pretty simple, but maybe it's over-simplifying: either the prices of goods will inflate faster than wages, or wages will inflate faster than the prices of goods. If the prices of goods inflate faster, then more money will flow toward capital in the form of profit on goods. If wages inflate faster, then more money flows toward labour. Presumably most people make most of their money on labour and not on capital (though I'm really not sure if this is true anymore in developed economies; anyway, people these days seem disproportionately interested in their capital investments), so presumably wage inflation benefits most people. If any given inflationary wage increases the likelihood of further inflationary wage increases (though that's a big if), then most people's long-term material interests are served by other people's inflationary wage increases, even if their short-term material interests are damaged by them.

Which brings me to What's Wrong with Pennsylvania. Clinging and bitter Obama brought Thomas Frank back with a vengeance to bookforum.com, which brought to my attention for the first time Frank's acrimonious exchange with Larry Bartels, which, it turns out, is really fascinating. In 2005, Bartels gave a paper (pdf) at the American Political Science Association using stats to argue that poor white voters weren't really abandoning the Democrats on "values" issues (and that only southern poor white voters were abandoning the Democrats at all, and that this is to be accounted for by the breakup of the southern Democratic monolith). Frank replied (pdf), saying among other things that Bartels had misread what he meant by "white working class", and that "without a college degree" was a better definiens than "poor". So Bartels re-did (pdf) his paper using that definition, and came up with results that look even worse for Frank: white Americans without college degrees regard the Democratic party as being well to their left on economic issues, and regard both parties as being to their right on social issues.

The Slate article that led me to all this (but which unfortunately says that Frank's response to Bartels was to the final paper) suggests (or quotes someone drawing the inference, or something) that "working class" white folks like the Republicans better than the Democrats on economics because they don't regard themselves as being downtrodden but rather are "aspirational". I think there's a very simple way to understand why working class people, however you define "working class", don't like redistributive economic policies: the most immediate and obvious effect of redistributive economic policies is that they take money away from you. What you get back indirectly is much less impressive than what you pay directly, even if you get a lot more back indirectly than you pay directly. This is fairly obvious in general, but it really crystallized for me a little while ago when my grandfather (who acquired most of his money as a capitalist, but spent his working life on the shop floor, starting from nothing) said something about how some guy probably supported some tax hike because he was rich and could afford to pay it. I suspect this is strongly representative of the economic views of "working class" people broadly speaking: taxes are more onerous on poorer people than they are on wealthier people, because wealthier people can afford to pay them more easily. (I doubt it makes much difference to this view how progressive you make the tax system, since if you regard yourself as among the less well off, all taxes are onerous, since your income is too low to begin with.)

However, notwithstanding all that, there's a glaring problem with Bartels's analysis, no matter which definition of "working class" he uses, which is that one of his measures of people's views on economic issues--and he doesn't use many measures to begin with, because there aren't many consistently to be had--as opposed to social issues is their views on social and economic affirmative action for black people. Frank ridicules Bartels for including this as an economic issue rather than as a social one; Bartels's response is something to the effect that it's evidently an economic issue because "working class" white people's responses are in line with their responses on other economic issues and not on other social issues--which seems ridiculously circular. Now, evidently, you could throw that category out altogether and it wouldn't make any difference to Bartels's conclusions. What it would do is leave Bartels's with only two indicators of people's views on economic issues, which would seem to call the statistical significance of his findings into question. What makes this interesting is the acrimonious subtext of the Bartels-Frank exchange: Frank starts out by saying sarcastically what an honour it is to have his work cut up by an Ivy League egghead from Princeton, and he accuses Bartels of "class-baiting" him. Frank the folksy pop-sociologist claims that Bartels's bloodless stats don't reflect the real world--they might as well be about the moon, he says; if you want to know what's really going on, you need to get out there and get a feel for things. Bartels the political scientist assumes that people's feels for things can be wrong, and people's feels for things can be proven wrong quantitatively. Personally, I'm sympathetic to both sides. But here, both of them come out looking bad. Bartels's quantitative conclusions are impressive, but if you look at how he arrives at them, it's questionable whether the numbers actually mean what he says they mean. (This always horrifies me when I'm trying to come up with quantitative representations of complex phenomena--students' performances in courses, for instance, or my Incredible Waste of Time last fall. When you come up with the final numbers and chart or graph the breakdowns and the trends, they look real and hard, and it is horrifyingly easy to forget all the sloppiness and uncertainty that went into coming up with them.)

Frank, on the other hand, reeks of ressentiment; his response looks like classic pop-intellectual academy-anxiety. Turns out he has a PhD from the University of Chicago. Good grief.

Here are a couple of Interesting Facts which I have been meaning to note for a long time. First: the unemployment rate in the US, and presumably also in Canada, is arrived at by telephone survey: somebody from the government calls and asks how many people in your household are working, not working but looking for work, etc. Second: since the Montreal Canadiens fired Bob Berry in February 1984, they have hired nine permanent head coaches. The only one of those with any prior NHL head coaching experience was Jacques Demers. (Looking that up again just now, I have discovered some more Interesting Facts: Guy Carbonneau was preceded as both the captain of the Canadiens and as their head coach by Bob Gainey. He was succeeded as captain by Kirk Muller, who is now his assistant coach.) This may say something to the Toronto canard that teams in hockey pressure-cookers like Toronto need coaches with lots of experience. Then again, it may not: another notable fact about that list of nine head coaches is that eight of them have been Quebecois (the exception being Pat Burns, who was a cop in Hull, Quebec before he was a coach, and so presumably also spoke fluent French), and three of them have been former Habs hero players. Speaking of Habs heroes: I felt shame as a Leafs fan the other night when the camera scanned the crowd in Montreal and showed the royalty of both Quebec politics and Montreal hockey (two-in-one with Ken Dryden). When the Leafs are in the playoffs--I'm pretty sure that did used to happen sometimes--we get like Mike Myers in the crowd.



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[info]de_horror_vacui
2008-04-24 02:15 pm UTC (link)
More than seven out of every ten years since I was born, including a stretch from 1999-2004. It's only the last three years that they've been out.

You should mention to Cliff that you, in fact, have no NHL head coaching experience and are therefore highly qualified for the job.

Next time you meet him in the smoking room at the club, I mean.

***

One of the things that drove me crazy out East was the constant anxiety about the economy (and politics in general) from the people of one of the richest and most educated counties in the United States, even at the housing bubble's apogee (people living in multi-million dollar condos they bought for $36k). I wanted to play pool and make dick jokes after work, and they wanted to talk about every political issue that came down the pike.

"What do you think about Ehrlich's hurricane insurance reform."

"In Maryland?"

***

Wage increases are tricky things to analyze. I don't know if thinking about it in such large blocks (money goes to "labor", money goes to "capital") helps to understand it, though.

If we're worried about how someone else's wage increase affects you, then we have to figure out how much of that is likely to show up as increased prices and how much it will affect the labor supply for your job.

For example, a UAW wage increase would probably not increase the price of my next car much, but it definitely wouldn't affect my wage at all. Even if I lose little, it gives me nothing.

Still, your reasoning is why the UAW, the AFL/CIO, and so on stump for higher minimum wages: they think they give the union more bargaining power.

Furthermore, people are very interested in relative wages. Two examples:

First, professors only get real raises when they shift academic ranks. There are only three academic ranks, really, unless they want to migrate to the administration. The rest of the time they get their COLAs. So, they get two raises in the course of their careers, one about five years after they land the job and one a few years after that. Given they have tenure and get the job when they're thirty, they make about the same absolute wage (in constant dollars) from the time they're forty or so until they retire.

New professors, especially in engineering, are constantly being enticed with larger and larger salaries. So, it's common for a newly-minted associate professor to make less than the fellow the department just hired. How do the professors react to this? Not particularly well, I've only learned about this because they love to talk about it at lunch.

There is an exception to this.

The other example is the minimum wage. You'd think that when you're working near the minimum wage, you'd be very happy to see it coming. But, if you've been working for a place to two years and have harvested a couple of those nickel-an-hour increases so that you're now making $5.30 instead of $4.75, and the government raises the minimum wage to $5.25, you feel rather let down. Your wage doesn't raise concomitantly, most of the history that's aggegated into and symbolized by my wage is wiped out. It's as if I never did get those raises.

And I'll never get that history back.

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[info]de_horror_vacui
2008-04-24 02:16 pm UTC (link)
Switched from you to me in the last couple of sentences. Sorry.

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[info]de_horror_vacui
2008-04-24 05:17 pm UTC (link)
As I was standing in line for coffee after I wrote this, I was reminded of an event that shed a little light on all this. For me, at least. The idea that relative wages are a status issue is often postulated by social scientists; evolutionary psychologists have gone so far as to say that this is a feeling rooted in our genetic structure. I can understand this. In the case above, the fellow who'd finally worked off the stigma of working at or near minimum wage returns to having it. However, what happened in front of the coffee stall makes me think that the issue is less societial and biological and more abstract and philosophical.

It's rooted in a notion of fairness.

I was standing in line for coffee a couple of hours ago at the auxilliary student center, and it was a long line. The manager then yelled out, "Form two lines, one for each register! Form two lines!" One firl responded. The other kids did not. Before I jumped in, being in the very back, as asked the girl ahead of me if she wanted to get in the new line. She had a hard time with the concept of one line splitting into two, so I had to explain it to her. Some of the other kids overheard, and moved in ahead of us both.

There's a lesson there. I think it's got something to do with altruism and hand grenades, but that's not what I'd like to focus on. I'd like to examine the last time the manager split the lines.

On that occasion, I hadn't been so nice. After I'd heard the call "Form two lines, one for each register! Form two lines!" twice and nobody moved, I just went with the traditional motto, "you snooze, you lose." Everyone had a reasonable chance, just like when I'd been in the same position I had had a reasonable chance to move.

One woman, who'd been several places ahead of me, confronted me in my uncouthness. She was dressed far too well for her age, location, and emotional stability. She's a thirty year-old head of some art initiative or other, taking advantage of the fact that since state universities can't pay to take donors out to topless bars any more, they need to hire sweet young things to raise money from dirty old men. She was flaming mad that I'd stepped in front of her as she'd been dicking around with her blackberry.

She wasn't concerned with the eight people ahead of her, still standing in the original line. She just knew (because I'm AWESOME, HOT, and HARD) that I'd been behind her and now I was about to get coffee before she did. So a minute after everyone else queued into the new line, she walked on up, dressed me down, and cut in front.* She also showed no interest in the people behind me. I mention this twice to emphasize that she hadn't been acting out of general priniciple.

She was ahead of me, and so she'd earned the right to get her caffiene three minutes before me by standing around, and hell be damned if she'd let take her advantage without earning it in her estimation. And in her estimation, paying attention wasn't enough to counter her historical claim.

This, I think, is quite similar to the attitude of the lower class fellow toward raises in the minimum wage: a man who's been working at the 7-eleven for five years sees people who haven't earned their dues scaping hard nacho sauce off of the counter being treated exactly as he is. The symbol of his past in the present have been purged, and that will never feel fair.

Whether it is or not is another matter.


* Women, being oppressed, powerless, and intimidated, do things like this a lot.

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[info]cincinnatus_c_
2008-04-24 09:57 pm UTC (link)
They haven't been in the playoffs for four years, though. They've never been in the playoffs in The New NHL! They haven't been in the playoffs for, like, the last 20% of the years that I have cared whether they were in the playoffs or not.

Cliff's job right now is to find his own replacement. I suspect he's going to pull a Cheney and find himself.

a UAW wage increase would probably not increase the price of my next car much, but it definitely wouldn't affect my wage at all.

I'm not so sure. I'm not having much luck finding credible numbers on this, but it appears that the average CAW autoworker makes somewhere in the neighbourhood of $40/hour. (GM has claimed it's $77.75, which doesn't seem credible, but who knows.) That would put the average annual income of an autoworker in the neighbourhood of $70 000 (GM's figure would have to put it over $100 000)--which is to say, within shouting distance of the average annual academic salary. (The salary floors for the three ranks at York--which, given the union militancy here, are probably higher than the Canadian average--are around $60 000, $70 000, and $88 000. I have no real idea how much more than that most profs make, though there's a sunshine law in Ontario that reveals that none of them make more than around $120 000.)

So, every wage increase the autoworkers get puts them closer to the academic average; I imagine that has some effect on academic negotiations. In general, I think there may be a growing sense of concern among academics that their incomes have fallen behind those of all kinds of professionals, and are now falling behind those of skilled tradespeople. (Of course, given the vast reserve army of the academic un- and under-employed, you could say it's surprising that academics still make as much as they do.)

Moreover, the current York faculty collective agreement calls for annual wage increases of 3, 3.5, and 3.5%. These are pretty much standard wage increases for strong unions in Canada these days. (Again, the TTC got 3, 3, and 3.) If the CAW lost its nerve and accepted an agreement with increases below the 3%-range, I suspect it would have a ripple effect in Canadian labour that would be felt all the way to academia.

My take on this as opposed to yours may reflect a difference in the academic labour cultures in Canada and the US--in Canada, it's normal for faculty to be unionized, whereas my impression is that it's not in the US. And then of course there is our usual Two Cultures problem, as reflected in what you're saying about engineers.

I agree with you absolutely about people's interest in relative wages. This is something I like to go on about--people are always mistaking pride for greed, thumos for appetite. I don't think Roger Clemens cares whether he's getting paid $30 thousand or $30 million, as long as he's getting paid 25% more than the next-highest-paid pitcher in baseball.

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[info]kest
2008-05-07 03:29 pm UTC (link)
My experience with minimum wage jobs has been that if the minimum wage goes up, they do adjust everyone somewhat accordingly. Because the raises to some degree reflect hierarchy and also loyalty, which are beneficial to the structure of the company.

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[info]saintalbatross
2008-04-24 09:16 pm UTC (link)
Just as an aside:

My cost of food at the restuarant went up about 10% between February and late summer of last year. This means that it went from around 33-34% of sales to around 37%. Since profit comes last, and I had to at least try and live off profit and not off credit, this was in effect a pay cut of around $15,000 a year. Hit in the wallet, indeed.

~

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[info]cincinnatus_c_
2008-04-24 10:17 pm UTC (link)
The biggest difference between there and here is the dollar. Canada has been insulated against rising food prices in the last year by the rising dollar--it's up about 15% from the beginning of 2007 against the US$. (An instance of what things are like for food producers up here these days: the Canadian government is paying pork farmers to cull their pigs and let most of the meat go to waste.)

The question is what happens if/when commodities prices come back down and the Canadian dollar gives that 15% back.

I wonder whether the hitting-you-in-the-wallet stories around here are being produced by a meme that's jumped the border. They'd be legitimate down there, but not here. Yet.

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[info]saintalbatross
2008-04-24 10:41 pm UTC (link)
Maybe. But I do know that I miss the guilty pleasure of staying at the I'm Super Moneyed Grand Hotel in Vancouver for a Travellodge rate. Won't someone bring back the Good Old Days?

:>

~

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