Economic Reality

What can we learn from the oil boom in North Dakota, the protest movement to raise the minimum wage and robots in California? – Maybe something about jobs, pay and the economy.

Start with the protesters.  The Huffington Post reports that the fight for a $15 minimum wage is heating up.  The protesters and organizers represent it as a fight for social justice.  With demonstrations in over 230 cities and on college campuses, they hope to pressure fast food companies into giving their employees raises.  McDonald’s has promised an increase, but the corporation controls wages only at owned stores, while the majority of their outlets are run by franchisees.

Perhaps the protesters will get their way, not the whole $15 but some concession.  As they wait, they should ask themselves a few questions.  When I get on an elevator, why is there just a row of buttons on the wall and not someone standing there all day whose job it is to drive the elevator?  When I make a phone call, how can I contact anyone in the world by just dialing a number without having to ask one or more switchboard operators to plug the wires together to make the connection?  When I call customer service, why must I negotiate past the mechanical voice to speak to a live human?  When I buy gasoline and groceries, why am I expected to do work once assigned to an employee?

These questions are relevant, because as MacDonald’s promises a small pay increase, they are testing order kiosks at restaurants to take the place of workers at the counter.  Of course, they will still need people to make the burgers, won’t they?  Not according to this Reason article about that robot company in California.  The company, Momentum Machines, claims that their equipment can replace “all of the hamburger line cooks in a restaurant,” doing “everything employees can do except better.”  That should not come as a surprise; it was just a matter of time.

That brings us to an important economic point.  Over the long run you can’t secure higher pay by protest.  Higher wages come to those who have developed or were born with superior skills and who are willing to work hard applying those skills.  Just as rare gems are more valuable than costume jewelry, rare skills are more valuable than common ones.  As a dramatic example, near the oil fields in North Dakota where the unemployment rate is about 1%, one Wal-Mart store offering $17.40 per hour to attract entry-level workers.  A similar situation exists near the oil sand in Western Canada.  But in New York City where employment choices are few and low skills are common, workers are forced to resort to coercion. 

The dispute is not about justice; it’s about economics.  This is an important lesson.  It’s too late for those workers who chose to have a family of four before developing the skills and ability to support a family of four -- but it’s not too late for our children.

Get the Facts: Movies and Pop Culture

Movies are very popular.  Americans spent over $10 billion going to the movies in each of the past 6 years.  Most of the movies shown are fiction, made-up stories to try to capture our attention and imagination.  Even those movies that play to the popular sentiment, making big businesses and Wall Street the villains, are made by big business and promoted in a way to get us to part with our money for a couple of hours of entertainment. 

As we sit in the theater mesmerized by the celebrities, special effects and other flickering lights on the screen, we tend to lose the perspective that it’s just a story – often pushing a viewpoint.  Some problems begin when we take the information and situations shown on the screen as fact, or as reflecting real life.  Documentary movies compound this problem by presenting only the facts that support a preconceived position, not giving the balanced viewpoint, apparently afraid to investigate too deeply for fear of being forced to give up their dearly held image of how the world works.  It would deprive them of the opportunity to make money and influence us to side with them by scaring us with these slanted views.

Back in 2004 Morgan Spurlock, an independent filmmaker, released his documentary movie, Super Size Me, which followed him on a 30-day exploration of the fast food industry to show how they use wily advertising to profit from encouraging poor nutrition and unhealthy habits.  A couple of years ago I posted a link to a video showing how a high school science teacher challenged his students to develop a healthy diet for him based purely on the menu from McDonald’s with varied meals and an eye toward total calories and fats.  After eating three meals everyday from MacDonald’s and beginning an exercise program where he walked for 45 minutes a day, he lost 37 pounds and his cholesterol dropped from 249 to 170.   Although it was rightly categorized as a documentary, this Super Size Me filmmaker clearly had an agenda and was appealing to an audience with similar feelings.

In 2014 comes another documentary.  This one, called Fed Up, has the objective of telling us how sugar is responsible for the worldwide obesity epidemic and how it is endangering our children.  Notice the common thread of blaming big business for tricking us while the government sits idly by.  Both try to scare us with a danger that is out of our control, giving us only facts and expert opinions that conform to their strongly held position in what is referred to as the health movement.

A long essay on the Science Based Medicine website specifically disputes many of the facts presented in this movie and points out the prejudices of the selected experts that appear in it.  The article concludes:  “The film’s thesis, that sugar has caused the obesity epidemic, is not well supported by evidence. It is a partial truth that the filmmakers have dogmatically represented as the whole truth, with nary a hint of nuance.”  They praise it for raising awareness of childhood obesity, but that it unfortunately does so through misrepresentation, hype and biased opinions “in support of the filmmakers’ political agenda of increasing food regulation.”

Don’t totally blame documentary films.  Network news does the same thing by deciding what to show and what to omit.  They show over and over a picture of a toddler drowned in the sea off Turkey and then days later marvel at the shift in public opinion on the refugee issue in Europe sparked by that single image.  When we stop thinking and start reacting, they rejoice. 

Americans are outraged by the dentist who killed a lion in Africa and sneer at a Kentucky County Clerk as a narrow-minded hater, but proudly wear t-shirts celebrating Che Guevara as a counter-culture hero and anti-establishment icon, apparently unaware of his history as a mass murderer and inventor of Cuban slave labor camps.  They probably saw him as the hero of a 2008 movie that, according to the New York Times, “cagily evades Che's ugly side, notably his increasing commitment to violence and seemingly endless war, but the movie is without question political—even if it emphasizes romantic adventure over realpolitik—because, like all films, it is predicated on getting, spending and making money.”

When a woman disagrees with the politics of others and refuses to issue wedding licenses, she ends up in jail.  When a man disagrees with the politics of others and has them summarily executed, he ends up as the hero of a movie and on a t-shirt.  Interesting.

Programmed for Status

Are we genetically programed to keep up with the “Joneses”?  A PBS NewsHour segment points in that direction.

The subject is status and what society calls cool, and how those considerations influence our buying behavior.  Co-author of the book, Cool, Steve Quartz worked with a team using an MRI to track activity in the medial prefrontal cortex, the part of the brain that tracks social status or perceived social status.  In 2005, he and his Caltech colleagues “were surprised to find that this chunk of gray matter is activated not only when thinking about our status, but also by looking at status symbols” including consumer products.  Also activated is a more primitive part of the brain called the ventral striatum, a reward sensor that “is involved in literally every form of addiction.”

When we look at a product perceived to be cool or a status symbol, like a fancy car or designer fashion that, we are told, says something about who we are, we crave it in part because we anticipate the amount of social reward we would get from friends and strangers when we drive it or wear it.  This anticipation gives a similar high to winning at gambling or taking drugs.

The argument is that there is valuable information in our cars and our clothing and our choice of computers that helps us evaluate each other.  It “gives us an opportunity to create social networks, to create friendships, to create alliances” and is particularly acute in teenagers, who are particularly brand-conscious and social-conscious.  Consider, though, how much more vulnerable teens and others are to the lure of advertising, and notice how the status-oriented ads are not just directed at teens.

A couple of messages are contained here.  Shouldn’t teens eventually mature and grow out of this phase in their lives?  Are those who evaluate us based on our cars and clothing the kind of friends we want to count on during troubled times?  Are these values of judging by appearance counter to those we learn from our faith and those we are trying to instill in our children?  Perspective is about valuing and appreciating what we have rather than always yearning for more, especially if our motive is to show off for others, to keep up with the Joneses.

There were two ironies to this story.  First it was shown on the eve of September 11, a day when we should pause to reflect on our blessings and find a little perspective. Second, it was followed by a segment on mindful meditation, how the ego is the biggest source of stress and the importance of living in the now instead of dwelling on our expectations of what should be.

ON SALE!

I’ve written before about the word “sale,” how it is one of those trigger words designed to turn people’s thinking off and get them acting right away.  JC Penney nearly went out of business betting on the assumption that Americans are smarter than to fall for such an obvious ploy.  Well, as Labor Day is upon us, you can count on the sales on items for picnics, grilling out and relaxing.  Among these are soft drinks.

I was shopping a couple of days ago at the local grocery, and as I walked down the aisle I noticed that, not surprisingly, both Coke and Pepsi products were on sale.  The puzzle though was the sale prices.  You could buy a 24-pack of either for $4.99, whereas the 12-packs were all on sale at 3 for $13.

You don’t have to be a math wizard to figure this one out.  A 24-pack has the same number of cans as two 12-packs.  Other than the packaging, the choice then comes down to 2 for $5 or 3 for $13.  That would be $2.50 each for the first two sets of 12 cans and $8 for the third one.  Yikes!  (How crazy it is can be determined with only addition and subtraction without even requiring division of 13 by 3, which can easily be done on most cell phones anyway.)

If your family was not big on soft drinks, you might only want 12 cans and not worry about the less than two-dollar difference.  But except that they might fit better into the refrigerator packaged twelve at a time, what would motivate anyone buy two or three 12-packs at that price?  It could be that this was the size they always bought and when they saw the sign for the sale the shopping cart was loaded moving along without another thought.

This kind of stuff is happening everyday right under our noses.  Of course, if anyone points out the ways we are taken advantage of with these tricks and trigger words, the blame is always placed on big business and their greedy executives.  Few think about the advantages of slowing down for some thoughtful consideration whenever we encounter one of these trigger words.  Therein lies the problem.

Dental Care, Obesity and Many Other Things

If I were to tell people that if they don’t take care of their teeth they would get cavities and gum disease, I would get very little argument.  Behavior has consequences.  Sometimes behaviors include those of omission.

But suppose a large number of Americans, more than half, started neglecting their teeth.  How would we handle it?  Would the news media identify this as a crisis, as a dental care epidemic?  Would the White House and the corporations get involved with public service campaigns, image advertising and start recommending or requiring changes to school scheduling to include mandatory tooth brushing breaks during the day, taking local control of the curriculum away?  Would those employers who provide dental insurance feel like they must set up in-house programs to encourage oral hygiene?  Would these programs make the news and would we see those companies as good citizens for doing so?

How would the people react as their teeth began to fall out?  “I just don’t have time to brush and floss.  With my job and the kids and my club and vacation planning and chores and social obligations, I just don’t have the time!  I hardly have time to sleep without trying to add another activity.”

Would Dr. Oz and other television doctors (and dentists?) feature programs showing magic formulas or miracle pills or herbal remedies – no effort or sacrifice needed to achieve better teeth – with a new secret every week?  Would people writing books about teeth be on the best-seller list with conflicting advice, but each with a celebrity spokesperson attesting to the results of the program?  When the health reports came on the local news programs would they tell us that scientists say if we don’t take care of our teeth we will get cavities and gum disease (even though we should already know it)?

Would other scientists publish studies finding that some people are genetically more susceptible to tooth decay and gum disease?  It’s not their fault it’s in their genes.  Would advocates come along with evidence that some people are addicted to not brushing?  How about those young girls with rotten teeth who, instead of making a healthy change, announce their “pride” and that gum disease is beautiful?

Finally, would anyone be surprised that the habits of the parents are reflected in those of their children?

All that seems pretty far-fetched and ridiculous for a societal problem/crisis/epidemic that everyone could easily solve with better individual behavior.  Doesn’t it?