Tag Archives: economics

Economist on Labor in China

Via Mike Daisey’s blog I was led to the following bit by the Economist:

Anyway, that’s one angle: sweatshops are awful, but working a tiny rice farm is clearly worse, judging by the workers’ own preferences. However, the stance one takes on this depends on the question one is asking. An article on hardships in the garment industry in New York in 1909 might have elicited the response that things couldn’t be too bad since people were still immigrating from eastern Europe by the millions to take these jobs. Clearly they were better off working in a sweatshop in Manhattan than leading a miserable existence of poverty and repression in a shtetl in Poland. But at the same time, these workers were angry enough at the conditions they were subjected to that they staged the massive shirtwaist strike that year. Needless to say, that kind of politically free labour organisation is much harder to conduct in China because the state bans the formation of independent unions not controlled by the Communist Party. There’s a sequence in Mr Daisey’s piece where he describes seeing Foxconn’s perfectly open blacklist of employees who are to be immediately fired and not accepted at other factories because they are “troublemakers”; Mr Daisey notes that in a fascist dictatorship, you don’t have to resort to euphemisms the way management does in democracies. And that, too, rings true from my talks with underground Vietnamese labour activists. It’s hard to say how big the discount is on the manufacturing price of an iPhone due to the Chinese state’s ability to repress the formation of labour unions, but it’s not zero.

And I think that really hits an important point. Manufacturing in a totalitarian state means that there is an extra pressure against wage increase because labor organizing is a punishable crime.

There is some other great stuff in the article as well, so you should read the whole thing.

Freakonomics off the rails

Great post at American Scientist about how Freakonomics has gone off the rails.

In our analysis of the Freakonomics approach, we encountered a range of avoidable mistakes, from back-of-the-envelope analyses gone wrong to unexamined assumptions to an uncritical reliance on the work of Levitt’s friends and colleagues. This turns accessibility on its head: Readers must work to discern which conclusions are fully quantitative, which are somewhat data driven and which are purely speculative.

I loved their first book, but as the author says, the strongest part was around Levitt’s own peer reviewed research. As they’ve gotten further away from that over the years, the methodology has become a lot more hear say and writing to a deadline.

The Seeds of Psychohistory?

Isaac Asimov’s Foundation series was based on the idea that in the future overall societal events, like the rise and fall of governments, could be modeled mathematically.

Folks at the New England Complex Systems Institute have proposed a paper that looks at global food prices as compared to food riots and unrest, which in many cases directly preceeded much larger overthrows of governments. It’s a really interesting read.

This is not yet peer-reviewed published, so take that with the appropriate caution. The paper makes a point about the fact that many countries no longer have much of a local food system, which means they are directly impacted by global food price index. Two major statistical factors in the rise of global food prices are cited as commodity speculators and US corn ethanol policy.

I encourage interested people to read the whole paper, available on arXiv.

Hidden City Ticketting

I knew that Airline pricing was pretty crazy, but I didn’t realize it was this crazy:

Passengers flying to or from airports that are dominated by a single carrier — like Memphis, Newark or Dallas/Fort Worth — pay fares 20 or 30 percent higher than at non-hub airports. The prices are even more inflated when you’re flying from a smaller city with a limited number of flights. A nonstop one-way ticket from Des Moines to Dallas/Fort Worth is $375 onAmerican Airlines, for example — more than the $335 Delta will charge you to fly from Miami to Anchorage.

But what happens when you’re interested in flying American from Des Moines to Los Angeles, which hosts a more competitive airport? That flight is only about half the price ($186), despite its being more than double the distance. Now, here’s the trick: American flights from Des Moines to L.A. have a layover in Dallas. If you want to travel to Dallas, the best way to get a reasonable fare is to book the flight to Los Angeles instead, and simply get off the plane at Dallas.

There is an article on NY Times with a great graphic showing route comparisons. I wonder if this becomes enough of a thing, how the airlines will react.


What’s Google doing: Castles and Moats

There was a really great piece this week on the freight train that is Android:

So here is the kicker. Android, as well as Chrome and Chrome OS for that matter, are not “products” in the classic business sense. They have no plan to become their own “economic castles.” Rather they are very expensive and very aggressive “moats,” funded by the height and magnitude of Google’s castle. Google’s aim is defensive not offensive. They are not trying to make a profit on Android or Chrome. They want to take any layer that lives between themselves and the consumer and make it free (or even less than free). Because these layers are basically software products with no variable costs, this is a very viable defensive strategy.

His final comment is spot on:

In Silicon Valley we like to make light of industries that are facing digital disruption such as newspapers, the record industry, and the movie industry, suggesting that their executives “just don’t get it.” Perhaps now we are witnessing the disruption of not just analog businesses, but also formerly interesting digital businesses as well.


Neil DeGrasse Tyson on Science Literacy

This is a point that you’ve started to see resonating recently among both economics and science folks, Thomas Friedman is famous for it as well.  Science illiteracy is the biggest threat to the future of this nation, because it is the science and technology innovation engine that has made us the economic power that we are.  If we want to stay a great nation, we need to keep that engine running.

The video was recorded at this year’s world science festival in NYC.  I’m really going to have to get down there next year.

A snapshot of Dutchess County New York

After failing to convince a friend that his statement of “earning potential in the pure computer field in Dutchess county is around $27-30K at best” was both baseless, and entirely made up, I started trying to find some real data on what the answer was.  The fact that I just posted about the need for Data literacy made the event that much more ironic.

Along the way I found the Dutchess County Economic Development Corporation’s economic report.  It’s quite interesting, and gives a rather extensive set of data about the county, including housing and employment statistics.  Most of the data looks to be from 2008, though there are comments about updates in 2009.

And, at least a partial answer was found to the first question, on page 6 of the report, in the Representative Median Salaries 2008 section:

Computer Programmer – $82,690
Network Administrator – $61,210