30 December 2009

Yes, I have an "Andrew Lloyd Webber" CD...

Several years ago I first watched a DVD of the "Phantom of the Opera". I was appalled. It seemed like a twisted, twisted love story and I denounced it forever. In the middle of last semester, the school had a masquerade and one of my roommates kept playing the Masquerade song. I remembered how catching it was.

I admit I was hooked and started listening to the soundtrack again. I told myself it was just a phase. Honestly.

I was making new music CDs for my drive back home when I realized I should have an "Andrew Lloyd Webber" CD. So I selected my 4 and 5 star songs from him and saw it would take two discs. "There is no way I like enough of Evita, Joseph and the Amazing Technicolor Dream Coat and other songs I don't even know what they belong to, to justify two CDs," I thought. I looked again and realized that most of the first CD was from the Phantom of the Opera. I guess I have to admit that I do really like the Phantom, at least the music.

In case you're wondering there will be only one "Andrew Lloyd Webber" CD...

But there will be a "Phantom of the Opera" CD too. The grand sweeping melody of the Overture, the bone tinglingly "Think of Me", the bright and punchy "Masquerade", and even the sobering "Learn to be Lonely" are just too good to not be listened to.

15 December 2009

25 Things to do with a Jerk

I want to say at the beginning that I hope you're not reading this because you have consciously chosen to spend time with a jerk, meany head or someone who is otherwise not good. I say this because these people shouldn't really be associated with (at least not while they are being mean) if it is at all avoidable. I understand that sometimes forces beyond our control compel us to spend time with such people so I thought I would offer some suggestions.

  1. Punch them in the face, stomach or other random place. While this course of action might get you in trouble, it can be quite relieving for you and would effectively communicate your feelings to the injure person. The punch might also serve as a wakeup call in which the Mr. Mean might adjust his attitude while he adjusts his face.
  2. Go on a Roller Coaster ride because let's face: when you're zooming at high speeds on rickety rails you really don't care who is sitting next to you.
  3. "Study" with them in the Library. The key isn't to be studying the same thing with them, then you would have to study together. Rather, you should be studying as distantly unrelated a topic as you can so that you can sit in relative silence letting your feelings towards them simmer.
  4. Prank call them, especially while they are in class. If they spend so much of their time being mean chances are they forgot to silence it. This will give you the satisfaction of knowing you embarrassed them and even if you didn't you would really never know. It also gives them a reason to continue to be mean to you.
  5. Go ice skating with them. While spending "quality time with them" you can imagine the ice suddenly melting and them drowning at the bottom of the rink.
  6. Actually sabotage the ice rink with them because you realized that if they would drown, so would you. Beside, industrial "accidents" happen.
  7. Kick them in the shin. Admit it; you would feel a little better.
  8. Better: Play soccer with them and then kick them in the shin. Admit it; you would feel a little better.
  9. Best: Play football, or another full contact sport, and tackle them every chance you get.
  10. Figure out who drives them crazy, then hangout with those people.
  11. Figure out who the jerk likes, then hangout with them. You never know, you might find some sympathetic spirits. At worst you would realize that the jerk is alone in the world.
  12. I was going to write "play tag and other children's games" and then I realized that this could prove detrimental to your attempts to remain healthy and well after spending time with the not good person.
  13. Watch "Anne of Green Gables" with them. Now can be a jerk for long with all that talk of "kindred spirits".
  14. Make a dessert with them. At least something would be sweet.
  15. Talk to them, it will be good for them and it will be good for you. You may find out that you are the only friend they have (a phrase here which means "the person closest to a friend they have"). Or, you may find out way they act the way they do.
  16. Give the meany head a sucker. Even if they don't smile, you will. Sucker!
  17. Go on a long, long drive in the country. Really, it doesn't matter where you go or even if you go at all. By spending mass quantities of time together the jerk will either begin to grow on you, you will become more like them, they will become more like you, or someone will have died from strangulation.
  18. Buy a small potted plant, name it after the jerk, and say wonderful loving words to it all night long (you can sing too).
  19. Remember that the jerk is someone's child and that if the parents could survive raising them, you can survive a few hours with them.
  20. Be cautious to not mention, intimate or even hint at leaving on long trips even if you think they wouldn't be remotely interested. Chances are, if you've spent this much time with the jerk you really don't understand them or yourself and they will want to accompany, call or heckle you while traveling.
  21. Visit a museum with them. One of several things might happen: you might lose them, they might lose you, or the dinosaurs might come to life and eat them (hey, don't rain on your own parade here).
  22. Go to a baseball game with them even if you don't like baseball (you can count ad spots or something else productive), there is a chance that America's pastime is jerk's pastime too.
  23. Take an Interpersonal Communication class with them. They might take the hint, but even if they don't you could your skills.
  24. Give the jerk a chocolate every time they do something good. Soon you'll have them trained to good behavior.
  25. "Kidnap" the jerk, go on a long drive and drop them off somewhere.
(P.S. These ideas are just for laughs, don't actually do them.)

13 December 2009

Error: Circular Reference

In 2007 Oregon amended its wage laws to peg minimum wage increases to the Consumer Product Index (read the Press Release). This was and remains a bad idea. To start with most people on minimum wage are single and many still live at home. According to a Joint Economic Committee Report issued in 1996 more than half of workers earning minimum wage were single and a third were still living with their parents, thus not requiring as much money to live. More specifically the report states: "Minimum wage workers are not parents struggling to feed their children. Rather, they are high school or college students living at home." While this report is a little old, it is not yet too old to be completely irrelevant. My real problem with having minimum wage tied to an inflation index is what Excel would call a 'circular reference' error. These are nasty errors that loop back on themselves and have to be used with caution. (In all my Excel experience I have never purposely used a circular reference in a spreadsheet, and I can barely imagine why they would be helpful.)

The Cascading Effect

A circular reference is a set of equations that reference each other in a loop. The looping causes the formulas to repeat infinitely and are thus difficult to use. For example, I calculate the cost of my widgets (a generic and fictitious product that economists often use in their models) by adding together my labor, facilities and materials costs times 1.5 so I can make some profit (the formula would be (l+f+m)*1.5). Let us say that each widget takes an hour to make and so they cost: $8.40 for an hour at minimum wage, $5.00 for the facility (building and utility costs), and $10.00 for the materials. At my 50% markup the finished product would cost $35.10 each. Next year, because the CPI increased, minimum wage increased to $9.00 an hour. My widgets now cost $36.00 each, a 3% increase. The next year minimum wage increases by 3% because I charge 3% more for my widgets and the new minimum wage is $9.27 an hour, my widgets now cost $36.41 each. These calculations do not take into account the increased expense of materials (labor increase affect the cost of raw materials as well) and so each year's minimum wage increase adds to the next year's inflation rate and thus the minimum wage endlessly increases except in a reccesion. In the Oregon law, minimum wage remains the same if the CPI is negative and so even in a recession or when a market is flooded with cheaper product the minimum wage remains the same.

The Soaking Effect

Remember the Joint Economic Committee Report said the employees getting paid minimum wage are: high school and college students working part-time, not people with families working full-time. Allow me to summarize what students spend money on in order of cost: school, toys and fun. Schooling, like most markets, is subject to the laws of supply and demand and most students can't dream of paying for school by themselves and so it should not be part of the discussion. That leaves us with: fun and toys. This means that most of the minimum wage increase goes to pay for non-essential items that, while providing a higher quality of life, are really luxury items (e.g. iPods, cell phones, text messaging plans, music downloads, etc.). While money spent in these industries does reenter the economy, they are industries with incredibly high margins that reflect the level of demand rather than the cost of manufacturing. For example, no matter how many times a song is downloaded there will be another copy available for download for the next customer. The producers' only worry is making sure they meet the original investment costs; everything past this amount is profit. Another example, the price of the highly popular iPhone isn't a markup based simply of original developments and continued production costs but instead is based on the most the company can charge for the phone while increasing market share at an acceptable rate. Consumers pay the added expense for the "coolness" factor.

Basically, these markets are much more flexible at soaking up disposable income than normal consumable products.

The Squishing Affect

Minimum wage increases affect more than just those on minimum wage; they affect everyone paid more than minimum wage. Imagine an employee getting paid $9.50 an hour instead of the $8.40 minimum wage. In theory this employee makes 13% more than the average cost to live, not bad for an entry level job. The next year, because my widgets increased the CPI, minimum wage increased to $9.00 an hour. Now the employee only makes 6% more than the average cost to live, in essence the State has issued pay cuts to all non-minimum wage employees. Continue to the next year when minimum wage increases again to $9.27 an hour and the employee only makes 2% above the average cost of living.

A job that used to give an employee about $216 a month ($2,588 a year) as disposable income (money beyond the cost of food, transportation, residence, etc.) changed to $91 a month ($1,098 a year) then to $41 a month ($490 a year). While increasing the wages of part-time students (the ones the Joint Economic Report says is making minimum wage) the State is decreasing the wages of full-time working families (the ones who make more than minimum wage). The State has pushed the lower class towards to upper class and in the process squished the middle class and lower class together.

The Triple Jeopardy Affect

As minimum wage continues to increase each year, employers have to make a choice: increase wages, decrease wages or fire employees. This is a triple no-win situation for employers.

The employer may not want to increase employee wages for two reasons. The first is that consistently increasing a worker's wage gives the worker the impression that they are entitled to raises, which is often not the case. The second reason is that in most cases the worker is not worth any more year to year. Except in cases involving unions and minimum wage, the going wage for any job is determined by supply and demand. For example, a chain store may pay more for cashiers in a metropolitan store than in a suburban store because it is harder to find qualified workers in the larger market than the smaller market. Another example, doctors and lawyers don't get paid a lot of money because their jobs are particularly hard but because there are not a lot of them to do the job. Job markets obey the laws of supply and demand for everything more than minimum wage.

If the employer chooses to not increase employee wages, they have in essences chosen to decrease them. In theory the minimum wage increase is due to an increase in the cost of living and if the employee makes the same this year as they did last year then the employee has less disposable income. This effect may not be noticed the first year, but will be noticed before too many years. Upon noticing this trend employees are likely to work less and become less loyal, demand a raise or search for other employment. Of course the employer may decide that with the spiraling increases in minimum wage the position is no longer worth the added expense and therefore the worker is expendable. Expendable employees don't often last long.

Minimum wage always makes showing the value of a job more difficult. If an employer wants to get an entry level worker that is above average they often offer to pay the position a little above minimum wage, say $9.00 an hour instead of $8.40 an hour. Being a little higher than minimum wage becomes increasingly more expensive as minimum wage increases.

The Market Correction Effect

I hate going through great lengths to identify problems in a system without suggesting possible fixes, so here is my suggestion: get rid of minimum wage.

"But Daniel, if there is no minimum wage capitalist pigs will take over and the economy will be destroyed." No, no my weak believer. I argue that if minimum wage were to be abolished that the job market might tank and but would then correct itself. Every free market (free from government intervention) always, always corrects itself. If wages plummeted so would income and costs. As income dropped margins would increase, making capitalists happy for a while but a lack of income would force prices down until local job markets balanced out paying employees what they should be paid. Getting rid of minimum wage might also take a significant dent out of unemployment because companies could afford to hire workers for things that don't justify the expense of current minimum wages.

"But Daniel, workers were abused before there was minimum wage." Not so my young believer, well not because of a lack of minimum wage. Workers were abused because they had no right to safe working conditions but now we have things like the Bureau of Labor and Industry (BOLI) to enforce wage payments to employees and Occupational Safety and Health Administration (OSHA) to make sure employees are working in safe conditions. The problem of employee abuse was more of a problem of no enforcement of wage contracts and abuse of human rights than a problem of not paying them enough.

Free markets always, always correct themselves.

Notes

A compilation of Joint Economic Committee reports about minimum wage can be found here.

Disclaimer: I fully understand that there are exceptions in every case, especially in statistics. I fully understand the words of Doug: "You can't manage to the exception." They're exceptions, not the rule and even if all our time is dedicated to handling exception we still would not be able to address them all. It is best to manage to the rule, especially when talking about a state full of people, and let the exceptions be handled on a case by case basis.

08 December 2009

Curious signage

This was on the Burger King bathroom door. I'm still trying to figure out what the "NO EXIT" part is about. By the way, the sign is on the woman's bathroom too.

03 December 2009

The Snowy Trip

It was a cold and wintery morning when I was headed home from school. The semester had just ended and I was excited to be done. That morning I had woken up twice, once to take a roommate to the bus stop so he could fly home and the second time was my time to go home. Between the two waking up times several inches had fallen, but we headed out anyway. The going was slow and one of the mountain passes was closed for an hour, but we got out of the mountains safely. The storm we had been driving in front of finally caught up to us as night set in.

The winds were blowing hard and the snow was pouring down and the trucks were going very slow. During the trip I was stuck behind three trucks in a row (caravan style). I was tired and it was getting late. I decided that I could pass the trucks and go at least a little bit faster than the trucks so I made the daring move into the left lane. The car was immediately hit by a blast of wind and snow. I couldn’t see anything and had to slow down more than I was already going. Not being able to pass the trucks I moved back into right lane, behind the trucks. Not wanting to go so slow I again tried to pass the trucks and was again met with a blast of snow and wind and again retreated behind the trucks. I then realized that the trucks were blocking me from the harsh winds and snow. Because of this shielding I couldn’t see, didn’t see, the true intensity of the storm.

This experience has been played out many time, not on the road but in relation to our leaders. Let me illustrate:

I have a friend who was recently promoted to be the manager of her department, replacing her previous boss. Before she got the new position she and I had talked about the slowness of progress that her managers made. After she got the new position we talked about how hard it was to lead the department in excellence. To fit with the story, she had been stuck behind the trucks and was waiting for an opportunity to pass them. She finally got her chance and realized that it was hard to lead in the face of the storm. Now her subordinates have a similar frustration that she had with the slowness of progress. (To prevent insubordination she shares with her subordinates the constraints of the process and allows them to try to pass up the organization and thus help bring innovation and change. This allows frustrated people to try their ideas; if they succeed then the organization becomes more efficient, if they fail then at least they better understand the difficulty of weathering the storm.)