Tag Archives: economy

Economists against the War on Drugs

Picturing the War on Drugs in Pittsburgh. Photo by Christopher "Rice" via flickr CC.

Picturing the War on Drugs in Pittsburgh. Photo by Christopher “Rice” via flickr CC.

As far as the London School of Economics is concerned, it is time to end the global War on Drugs. According to LSE’s new report, the “War” is a “billion-dollar failure.” The report was signed by five Nobel-Prize winning economists (Kenneth Arrow, Christopher Pissarides, Thomas Schelling, Vernon Smith, and Oliver Williamson), as well as former U.S. Secretary of State George Schultz, British Prime Minister Nick Clegg, and former NATO and EU foreign policy chief Javier Solana. Al Jazeera explains:

“The pursuit of a militarised and enforcement-led global ‘war on drugs’ strategy has produced enormous negative outcomes and collateral damage.” Citing mass drug-related incarceration in the US, corruption and violence in developing countries and an HIV epidemic in Russia, the group urged the UN to drop its “repressive, one-size-fits-all approach” to tackling drugs, which, according to the report, has created a $300bn black market.”

The LSE report urges a shift toward evidence-based approaches to illicit drug use: the tremendous resources devoted to the drug war could be diverted to more rigorous analysis and effective policy with “a focus on public health, minimising the impact of the illegal drug trade.”

Financial Planning with the Three Six Mafia

"Soliciting," by Rachel's Secret via Flickr Creative Commons.

“Soliciting,” by Rachel’s Secret via Flickr Creative Commons.

It’s been a few weeks since CNN highlighted a new report by the Urban Institute’s Justice Policy Center on the income from underground commercial sex economies. Perhaps it was the pain of doing my taxes this week (down to the wire, I know) that jogged my memory. But the report estimates that this underground economy in Atlanta alone nets those working in the sex trade—from pimps to erotic massage providers—$290 million per year, with pimps making an average of $33,000 a week.

Until now, there has been little information about the size and scale of the sex economy. Though this report examines only eight cities across the U.S. (notably omitting Las Vegas), is one of the first forays into quantification. Meredith Dank from the Urban Institute told Time magazine,

With knowing the size of the economy, you get better a sense of what you’re dealing with and how big this market is. Law enforcement now knows they can potentially seize $290 million in Atlanta that can be used toward providing services and education.

Beyond what police asset seizures might do for city infrastructure, the studies also point out the enormous numbers of people working in the sex trade. Due to the secretive nature of their work, they may live outside the social systems of taxes, safety net benefits, and healthcare.

 

Little Pink Subprimes

Photo by Kristine Lewis via flickr.com.

Photo by Kristine Lewis via flickr.com.

For many, the “American Dream” means owning a comfortable home in a nice neighborhood, and that idea brings a certain Mellencamp tune to mind.

The song nods to a deeper point: the history of American housing policy from the New Deal and the G.I. Bill onwards was often defined by who couldn’t get a little pink house. In fact, racial biases among policymakers and bureaucrats made it difficult or impossible for minorities to get support for housing in white neighborhoods (For a great account of this history, see Ira Katznelson’s book When Affirmative Action Was White, or his recent blog post over at The Scholars Strategy Network).

Today’s housing policies may be flipping the script on this story, but not necessarily in a good way.

The Atlantic Cities reports new research from NYU Sociologist Jacob Faber on the 2006 housing bubble that preceded the massive economic crash and kickoff to the U.S. “Great Recession” in 2008. It turns out that during this bubble, in addition to denying home loans to racial minority groups, banks were also targeting minority groups for lower quality loans. The article reports:

Black and Hispanic families making more than $200,000 a year were more likely on average to be given a subprime loan than a white family making less than $30,000 a year… blacks were 2.8 times more likely to be denied for a loan, and Latinos were two times more likely. When they were approved, blacks and Latinos were 2.4 times more likely to receive a subprime loan than white applicants.

Faber adds that the trend doesn’t just deny support to these minority groups, it actually ignores their financial successes.

…this data offers another illustration that middle-class blacks have often not been able to leverage their income status for the same benefits as middle-class whites.

Ain’t that America?

Economics, Sentimentality, and the Safe Baby

Catalog photo by travelingcookie via flickr.com.

Catalog photo by travelingcookie via flickr.com.

Adam Davidson, of NPR’s “Planet Money,” makes a sheepish confession right at the very start of his latest NYTimes piece: “raising a child in Park Slope, Brooklyn, can bear an embarrassing resemblance to the TV show ‘Portlandia.’” Having trucked his family down to the Brooklyn Baby Expo, Davidson saw everything from plant-resin teething rings to organic-cotton car seat covers (to limit babies’ exposure to manmade fibers). He realized, the baby market is a commodity market, and that’s when he started to feel better:

It’s easy to feel like a sucker once you realize that nearly every dollar you’ve paid over the commodity price is probably wasted. But the process also has enormous benefits for all consumers.

When companies need to compete, they must differentiate, and in the baby market that can mean safety innovations that set the newest standard—possibly inspiring the government to raise safety regulations. Even if you’re not an early adopter of BPA-free bottles, you may soon find that your store brand bottles are BPA-free, just like joovy® “boob baby bottle.” And then everyone’s a little safer, even if that concern is relatively new.

Davidson turns to classic research from sociologist Viviana Zelizer to expand on “The Sippy Cup 1%” and changing childhood:

It might shock the shoppers at Brooklyn Baby Expo, but the idea that everything children touch should be completely safe is a fairly new one. In previous generations—and for most people currently living in poorer countries—having children was an economic investment. Viviana Zelizer, a Princeton sociologist, in her 1985 classic, “Pricing the Priceless Child,” tracked how childhood in America was transformed between the 1880s and the 1930s. During this period, Zelizer says, parents stopped seeing their children as economic actors who were expected to contribute to household finances. Families used to routinely take out life insurance plans on their children to make up for lost wages in the not unlikely event of a child’s death.

But eventually, increased societal wealth, child-labor laws and the significant drop in child mortality led parents to reclassify their children, Zelizer explained, as “a separate sphere, untainted by economic concerns.” This came along with “an increasingly sentimentalized view of children,” in which their comfort and protection can be given no price. Now, for the first time in human history, having a child in the United States is a net financial cost for a parent. This, of course, has been a huge boon to child-product manufacturers. Companies profit from our sentiment with extraneous features. The whole process is prone to produce absurdities like the $4,495 Roddler custom stroller, but the best advances become inexpensively incorporated into everybody’s products. In the end, it really does contribute to making children safer than ever.

Graduates: The Pay Gap Starts Now

Photo by mahalie stackpole via flickr.com.

Photo by mahalie stackpole via flickr.com.

“Pomp and Circumstance” is no longer ringing in the rafters at college arenas across the country, and many members of the Class of 2013 are searching for their first post-graduation jobs. One wrinkle: though more than half of those graduates are female, according to a report by the American Association of University Women (AAUW), men working full-time one year after graduation will receive salaries that are 18% higher.

The study pushes back against notions that women’s wages are lower because of decisions now made later in the life course (such as leaving the corporate ladder to have children, for example). Researches found that approximately two-thirds of the pay gap just one year after graduation can be explained by field of study, grades, hours worked, and occupation, but the remaining portion is unexplained—that is, the only commonality is that the people getting the lower salaries are women.

The fact that so much of this pay gap escapes explanation poses a problem for rectifying the situation. Christianne Corbett, a senior researcher with the AAUW and one of the study’s authors, explains:

The pay gap cannot be solved by individual women alone. The bulk of the work has to be done by employers because it’s a systemic problem.

Learning is good, but doing will be better.

Movin’ on… Down

Photo by Richard Eriksson via flickr.com.

Photo by Richard Eriksson via flickr.com.

Thinking about moving conjures images of moving up—for a better job, a cooler city, or even that deluxe apartment in the sky. However, a recent article from USA Today paints a much different picture about the reasons people in the U.S. pack up and go.

The report sums up a new analysis of Census data presented by the US 2010 project under the leadership of Brown University sociologist John Logan. It confirms our worst suspicions about the Great Recession: more people are moving down into cheaper housing, having lost their jobs or taken pay cuts. From the article:

“Typically, over the last couple of decades, when Americans moved, they moved to improve their lives,” said Michael Stoll, author of the research and chairman of UCLA’s public policy department. “This is the shock: For the first time, Americans are moving for downward economic mobility. Either they lost their house or can’t afford where they’re renting currently or needed to save money.”

In the face of the data, maybe it’s time to stop humming the theme from “The Jeffersons” and start listening to the words of Billy Joel: “If that’s movin’ up,” well, we’re just “movin’ out.”

Service with a Smile—Or Else.

At TGI Friday's, "flair"=fun. Photo by Derek Morrison via flickr.com.

At TGI Friday’s, “flair”=fun. Photo by Derek Morrison via flickr.com.

It’s a common problem in post-recession America: you hate your job, but you also can’t just up and get a new one. We usually have social options for dealing with this, ranging from commiserating with co-workers in the breakroom to organizing for better working conditions. But if you work in the service industry, where the customer isn’t too keen on knowing you hate your job, bosses can try to bust up the social bandwagon.

A piece for MSNBC’s The Ed Show makes great use of Arlie Hochschild’s concept of “emotional labor.” The piece gives a handful of examples in which employees, from Starbucks baristas to Wal-Mart greeters, are increasingly burdened with managers’ attempts to regulate how much they demonstrate enjoying their work. The author even quotes one account of employees who could be fired for not touching each other frequently enough!

This raises some fascinating questions for work in the 21st century. We know all social interactions are governed by rules and institutions, but when work is a scarce necessity, do we have the luxury of “doing what we love,” or must we “fake it ‘til we make it”… to a better job?

Slow Down to Pick Up the Pace

Photo by Adam Lynch via flickr.com

Photo by Adam Lynch via flickr.com

It seems like there’s never enough time: today’s workplaces demand efficiency and getting more done in less time. Workers cut down on breaks, vacation, and precious sleep. Luckily, Tony Schwartz brings good news in his op-ed for the New York Times:

A new and growing body of multidisciplinary research shows that strategic renewal—including daytime workouts, short afternoon naps, longer sleep hours, more time away from the office and longer, more frequent vacations—boosts productivity, job performance and, of course, health.

In a country where “more than 50 percent [of workers] assume they’ll work during their vacations,” “an average of 9.2 vacation days [go] unused,” and “sleep deprivation costs American companies $63.2 billion a year in lost productivity,” these midday renewals offer much needed relief. Schwartz cites study after study showing everything from a full night’s sleep improving basketball performance to naps improving memory test results and alertness and reaction time among air traffic controllers. Another study found:

Working in 90-minute intervals turns out to be a prescription for maximizing productivity. Professor K. Anders Ericsson and his colleagues at Florida State University have studied elite performers, including musicians, athletes, actors and chess players. In each of these fields, Dr. Ericsson found that the best performers typically practice in uninterrupted sessions that last no more than 90 minutes.

Next time you find yourself joking about needing a nap, pull up that carpet square, kindergarten style. Those kids know what they’re up to.

Excavating the Wealth Gap

A chart from O'Rourke's paper, via the Boston Globe.

A chart from O’Rourke’s paper, via the Boston Globe.

A social problem examined by sociologists for decades, the white-black wealth gap has widened to record highs during the recession, with the median wealth for white households at twenty times that of their black counterparts. On the Boston Globe’s Brainiac blog, Kevin Hartnett shares a recent study by Princeton sociology graduate student Rourke O’Brien. The study quantitatively tests the idea that this wealth discrepancy is due, in part, to giving or loaning money to relatives.

Middle-income blacks are more than twice as likely as middle-income whites to have a poor sibling and more than four times as likely to have parents below the poverty line. And because of these relationships, they’re called upon more often to provide financial assistance.

Whereas investments can be used to generate more wealth, gifts and informal loans to family members are usually spent  paying bills or covering immediate financial needs. O’Brien argues that informal financial support networks can account for roughly 27% of the white-black wealth gap.

The Invisible Employee

At 80 years old, Hubert Elliot is North Carolina's oldest Department of Transportation Worker. Photo by NCDOT Communications via flickr.com.

At 80 years old, Hubert Elliot is North Carolina’s oldest Department of Transportation Worker. Photo by NCDOT Communications via flickr.com.

As the baby boomers age, so does the American workforce. It is projected that by the end of this decade, a quarter of the nation’s workforce will be fifty-five or older. Sociologist Amy Blackstone, of the University of Maine, took interest and undertook a study of this group’s workplace experiences. In a piece for the Bangor Daily News, Blackstone explains the distressing results:

While older workers generally report positive experiences on the job, there are notable patterns in the harmful experiences they report. A significant number of older workers report feeling undervalued and bullied at work. Further, many older workers do not speak up about their negative experiences, nor do those who witness bullying or harassment of older workers intervene on their behalf.

In Blackstone’s survey results, older workers said they felt devalued by their younger coworkers, as though they were useless. They felt ignored and even bullied. One woman wrote:

“After about age 60-65, I began to notice that people would sometimes ignore me as though I had become invisible.”

Blackstone provides a few suggestions for improving employment for older workers. These include educating and reminding employers and employees of the importance of a positive workplace atmosphere, the knowledge and experience older workers may hold, and the need for support and bystander intervention.