Having Children Can Be Just As Selfish As Not Having Children

Sometimes we do not realize just how engrained social norms can be and how much they influence our lives. They can range from tipping at a restaurant as a social nicety to "you need a four-year college degree to succeed." Even in a country as diverse as the United States, we can still find societal norms or expectations. I came across another norm when I was reading an article from Rabbi Aharon Feldman on why homosexuality is problematic in Judaism, a view with which I strongly disagree. His argument is that homosexual relations are problematic because they are inherently "self-centered" because the way to be "other-centered" is to copulate and raise children. Apparently, this Rabbi is unaware that there are straight couples that opt not to have children, same-sex couples can have children through in-vitro fertilization, surrogacy, or this not-so-new thing called adoption. Same-sex couples can even parent as well as straight couples. Imagine that! But I digress.

In Rabbi Feldman's article emerges a larger theme and societal norm that has developed: the ultimate form of selflessness is having a child. In other words, if you decide not to have a child, you are deemed selfish. This view is neither unique to Rabbi Feldman nor the Jewish world. The Pope has gone on record saying not having children is selfish, as did Japanese political chief Toshihiro Nakai. At first glance, it might make sense to consider childrearing the "ultimate selfless act." After all, once a child is born, it becomes the parents' responsibility until the child becomes an adult. As a parent, your schedule no longer is strictly your own, but is shaped by the child's needs. And yes, putting that much time and effort into raising another human being is a lot of responsibility. The fact that the time and effort spent on childrearing could have been spent on more hours at the office, enjoying life with friends, or on self-care is why having children is considered so selfless and altruistic. I don't doubt that there are parents who have altruistic motives for having children. Nevertheless, what I am going to argue today is a) having children is not an inherently selfless act, b) there are multiple selfish reasons to have children, and c) there are selfless reasons for not having children.

Selfish Reasons to Have Children
For parents who unconditionally love their children and would do anything for them, I would be willing to take an educated guess that you are hard-pressed to find any selfish reason for having children. Worry not! I have generated a list for you.

1. Keeping up with the Joneses and/or because someone expects you to have children. The desire to conform is a strong one, and raising children is no exception. In spite of there being a respectable minority of childless individuals throughout history, raising children has been the norm, not the exception. Having a child is seen as a milestone in life, a sign that you have your life in order. Some decide to have children because it is expected from their family, friends, co-workers, or religious community. I'm sure we could think of parents who put pressure on their children to give them grandchildren or co-religionists who tell people that "G-d wants you to have children." We should not underestimate the power of wanting to fit into a community or giving into familial or peer pressure.    
2. Propagating your genes. There are those who think so highly of themselves that they feel the need to make sure that a piece of them is carried through the generations. Alternatively, there are those who are so worried about their mortality that this is the only way to be remembered post mortem. 
3. Giving your life purpose. While definitions vary, societies generally define purpose as the pursuit of something beyond yourself. As soon as that child is born, the child gives a parent something to pursue: childrearing. It is an intensive activity that provides goals and a sense of accomplishment. At the same time, it should not be a reason to have a child. Purpose is something that is ultimately developed internally, and you should not depend on a child (or any person, for that matter) to provide that. 
4. Living vicariously through your children. This is a more extreme version of the previous reason. Some parents were not able to pursue the career or lifestyle that they wanted, for whatever reason. There are some parents who view the child as a second chance to have that dream realized, even if it is accomplished indirectly. We have all met that parent who is so invested in their child's future to compensate for a past failure or shortcoming.  
5. Someone to be there to look after the parent in old age. As you get older, you are more likely to have your friends pass away. This is the reality of mortality, and as such, loneliness becomes more prevalent as we get older. With children in the picture, they can better help take care of the parent. This, of course, assumes that the parent lives near the child. It also assumes that the parent and child are on good terms or that the child does not end up dumping the parent in a retirement home. 
6. To have someone unconditionally love you. Not everyone has the luxury of growing up with loving and supportive parents. Some of us get parents who reject us or do not love us at all. The same could be said for someone who had a series of unloving romantic relationships or is currently in a loveless marriage. Any of these factors could contribute to wanting to bring someone in the world for the primary reason of having that child unconditionally love the parent. 
7. To keep a marriage together. Believe it or not, there are some who are in the middle of a failing relationship and think a child will make it all better. At first glance, it might seem like a solution because it increases the commitment and provides a common goal. However, if the relationship already has issues, a child will likely mask the issue instead of solve it.

Examining Selfishness
Let's forget for a moment that deeming something selfish is as arbitrary as it is subjective. For some, having two children could be selfish because you didn't have at least three. But I don't want to digress into that direction. I would like to ask how it is selfish to choose not to have children. When people use the term "selfish," it means putting your needs above others', usually at the expense or detriment of others (Webster's Dictionary). When talking about people voluntarily choosing not to have children, that is not the case because the children we're talking about are non-existent. It cannot definitionally be selfish if the children are not currently alive. Making a choice based on one's needs, desires, capabilities, and limitations is not selfishness: it's self-awareness.

Even if it were selfish, so what? If childless individuals want to enjoy life without the constraints or trade-offs inherent with childrearing, that is their choice. Some people do not want to have children because it is expensive. It could be that the expenses associated with childhood could mean the difference between being comfortable and living from paycheck to paycheck and not knowing if you can feed your child or put a roof over the child's head.

Others might not want to have to deal with the headache of raising a child. If that's the case, you should be happy they are not having children because it'd be a safe bet that they would force their unhappiness unto that child. More to the point, maybe we should view it as "I have assessed my needs, capabilities and limitations, and what I concluded is that it would be better emotionally for both me and the child if I didn't procreate." There is no perfect family environment, but at the same time, there is a minimum amount of security and psychological balance the child needs in order to thrive. Parenthood does not automatically make a person better or more selfless, nor does it guarantee a happy child, which is all the more true if the parent does not want to be a parent. There are more than plenty of people who were abused, hurt, abandoned, isolated, rejected, or broken by a parent when they were a child that can attest to that reality. By not having children, maybe that individual is saying "I don't want to burden myself or that child with my emotional baggage" or "I know that I cannot give the love and attention that a child deserves, and because of that, I don't want children."

Plus, let's also remember that having a child is not the only form of being selfless or altruistic. Childless couples can still have positive influences on children (e.g., friends' children, nephews and nieces) or society. Also, there are other ways to be in other-centered relationships, whether that is with a spouse/partner, family, friends, co-workers, or community members, or even spending free time volunteering or conducting charity work. Another reason people might choose not to have children is because they already have a lot on their plate, as this paragraph illustrates.

There are parents out there who have children for selfish reasons, and childless individuals who do not have children for selfless reasons. People also make choices that have a combination of selfish and selfless reasoning. It's not "either or." Not having children is not a moral failing. There are a variety of people in this world. Some are straight and some are gay. Some people like Mexican food and others like Chinese food. There are those who like a long walk on the beach and others who would rather stay indoors. What I am getting at is that people have a wide array of preferences, wants, desires, and interests. Not everyone wants to have a child or was meant to have a child. What we should do is acknowledge the stigma that exists against childless individuals. We have to remember that people who voluntarily choose to not have children are asserting their free will and autonomy. Choosing not to have children does not make an individual incomplete or inferior. It just makes childless individuals different, and as such, childless individuals should not be treated differently for that personal choice they made.

Why Seeing If You Can Live on the Minimum Wage Is a Red Herring

Before criticizing someone, you should walk a mile in their shoes....or so goes the proverb. Since our life experiences are so different, it is impossible to have the same exact conditions as another, even if you went through similar situations. The idea behind this proverb is to develop a sense of understanding of what another person is going through before you even begin to judge them. I don't disagree with the concept: we should try understanding where others are coming from. At the very least, you develop a fuller understanding of an argument or situation. This idea of a more empathetic understanding comes into play when people advocate for a higher minimum wage. It usually comes in the form of "You should try living on $7.25/hour to understand what it's like. Maybe that way, you'll change your mind."

To further illustrate this point, minimum wage advocates show how expensive it is for a minimum wage worker to afford a one-bedroom apartment. According to the National Low Income Housing Coalition, the average national housing wage for a modest one-bedroom apartment is $17.90, whereas the minimum wage worker makes $7.25. This means that a minimum wage worker would either have to work more than 40 hours a week or pay more than the recommended 30 percent of their income to afford housing.

Not being able to afford housing can be a problem because the financial strain of abject poverty can and does adversely affect physical and emotional health. Having workers provide enough for their families is a socially desirable outcome. Advocates make a fair point....at least to a point. At the same time, I think it is better to contextualize the problem before letting emotions take over by calling for a higher and higher minimum wage. Most of the data for today's analysis will be coming from the Bureau of Labor Statistics' (BLS) March 2018 report on the characteristics of minimum wage workers in 2017. I would like to take a look at this report and some other facets to get at the prevalence of the problem, demographics of minimum wage workers, and see what can be done.

1. How many minimum wage workers are there? Workers that make minimum wage or less than minimum wage account for 2.3 percent of hourly wage workers, which is a total of 1.85 million workers (BLS, Table 1). When looking at the number of workers as a percent of the civilian labor force (2017 average of 160,310,000), minimum wage workers only account for 1.2 percent of the overall workforce.  
2. Has the number of minimum wage workers increased or decreased? You'll be happy to know that the number of minimum wage workers has decreased from 7.9 percent of the hourly wage worker labor market in 1979 to 2.3 percent in 2017 (BLS, Table 10). This positive historical trend shows that "living on minimum wage" is becoming less prevalent of a problem. 
3. How many minimum wage workers are under 25? I ask this question because there is a high probability that those who are under 25 are living with their parents while working part-time jobs to supplement income. This age demographic accounts for 48.8 percent of minimum wage workers, which is a disproportionately high amount (BLS, Table 1). When filtering out this age demographic, the total of minimum wage workers decreases to 947,000 workers. Without factoring in anything else, an absolute maximum of 0.59 percent of workers are affected.
4. What percent of minimum wage workers are working part-time? I ask this question because it acts as a proxy of how many minimum wage workers are straining to make ends meet. 68.4 percent of minimum wage workers work less than 40 hours a week, whereas only 2.9 percent of minimum wage workers (or 53,650 minimum wage workers) work more than 40 hours a week (BLS, Table 9). This statistic also works in the backdrop of the fact that the percent of overall workers holding more than one job dropped from 6.1 percent in 1997 to 4.9 percent in 2017.

These facts illustrate that the vast majority of minimum wage workers, much less overall workers, have to wonder what it is like to live on minimum wage. Anyone who uses the exercise of "what is it like to live on minimum wage" to invoke your sympathy is cherry-picking to advance an agenda, plain and simple. To further my point of this exercise being a red herring, let us consider that the earned income tax credit (EITC) is a better policy alternative to fight poverty because minimum wage targets low-wage workers instead of low-wage households. Aside from poorly targeting low-income households, there is also increased unemployment of low-skilled labor, less job opportunities for low-skilled labor, higher cost of doing business, and higher consumer prices as a result of higher minimum wage.

I also think this is a red herring because it asks the wrong question. I brought this point up when looking at heating subsidies (LIHEAP), which is that if we throw money at the problem, we are masking the root issues. If we continue to increase wages, costs of productivity increase, which just means we'll keep having this conversation about minimum wage until the end of time. Instead of talking about a living wage, we should ask ourselves how to make living more affordable. The three major items that have increased in price considerably in the past twenty years are housing, health, and education. How can we make these three items less expensive? A major driver of high housing costs is limited housing supply caused by government regulation. Remove the land use regulations and there will be cheaper housing. The single largest culprit towards the increasing cost of education is federal loan subsidies. Health care is more complicated, but we should also focus on ways to bring health care costs down. Although asking "What Is It Like to Live on Minimum Wage" makes for an interesting policy analysis, it is asking the wrong question that adds nothing to a conversation that could actually help people escape low-wage jobs.

Greek Economy Still a Mess Even After IMF-EU Bailout Ends

This past Monday was as historic of a moment for Greece as Alexander the Great conquering much of the known world......okay, maybe not that great. Nevertheless, it is relatively historic in modern Greek history because the recession that Greece endured was the longest financial downturn since the Great Depression. Actually, it was arguably longer and deeper than the Great Depression was (see below). After eight years of bailouts from the International Monetary Fund (IMF) and the European Union, the emergency financial support came to an end this past Monday. Greece has been deemed in good enough financial shape where it can finally stand on its own two feet. Should we be celebrating the end of this previsionary emergency money?

On the one hand, one of the stated aims of this funding was to help Greece restructure its debt and to pass fiscal policy reforms in order that it avoided defaulting. The IMF Article IV Consultation released in July points out the Greek economy has stabilized is that the Greek government has largely eliminated macroeconomic imbalances (IMF, p. 5). According to the OECD's 2018 Economic Survey on Greece, fiscal consolidation led to primary surpluses well above target, which is why Greece has fiscal credibility (OECD, p. 5). In June 2018, Standard and Poor's upped Greece's credit rating from B to B+. Moody's was nice enough to upgrade Greece's credit rating two levels in February 2018. Greece also has a cash buffer of over $27 billion, which means that they probably won't need market help for about two years (assuming favorable market conditions). What this means is that investors have gained confidence in Greece, Greece has access to capital markets, and can raise money on its own. These are definitely positive indicators. Although Greece seems to endured the worse of it (at least for now), the Greeks are not done with its crazy fiscal Odyssey.

The IMF was not optimistic in its outlook on the Greek economy:

"As the country exits the program era..., crisis legacies and an unfinished policy reform agenda in most areas weigh on Greece's prospects. High public debt, weak bank balance sheets, reliance on capital controls and emergency liquidity assistance, and worrisome social indicators, inducing still-high unemployment, all weigh on growth and social cohesion. "

I could stop there, but let me press on as to why the Greek economy is in calamity. For one, Greece's GDP was about a third smaller in 2017 than it was in 2010. If you look at Greece's GDP growth since 2010 (OECD), it's no wonder that this primary macroeconomic indicator is damning.

Greece still has an unemployment rate of 20 percent, and has one in four of its citizens living below the poverty line (OECD, p. 10). Greece maintains an unemployment rate that is above its European peers (OECD, p. 13). Don't forget that 48 percent of Greece's loans are non-performing, which is about 10 times higher than the rest of the European Union.

Plus, Greece is expected to maintain an average primary surplus of 2.2 percent of GDP until 2060. Given that economies go through boom and bust cycles, is it realistic to expect that Greece can maintain that growth level without inflicting financial pain on its citizens? Just take a look at what is happening in Italy or Turkey, and tell me that Greece will not somehow be affected by neighboring markets. The IMF is not confident that Greece will make it in the long-run without further debt relief (IMF, p. 10). And this doesn't take into consideration that the upcoming Greek elections increase uncertainty of fiscal reform (IMF, p. 6).

I could analyze other economic indicators, but I want to conclude by asking this: Did the bailout prevent something worse? I would like to think so. Given the IMF's well-deserved reputation of "lender of last resort," it is more than plausible. As much as I would like to think that the end of the bailout is the end of Greece's woes, I have more than a feeling that we could see another Greek tragedy on our hands.

For more information, please consult:

• The Hellenic Statistical Authority
• IMF Article IV Consultation
• OECD 2018 Economic Survey
• European Commission
• Foundation for Economic and Industrial Research
• Governor of the Bank of Greece
• Coface Group

John Oliver Hilariously Illustrates Trump's Ignorance of International Trade

I find John Oliver to be a hit-or-miss sort of comedian. I usually think he does hilarious work (e.g., voter ID laws, police militarization, Puerto Rican debt). There have also been times where he is completely off-base, such as when he reported on charter schools or net neutrality. I have a background in international trade policy, so when I saw Oliver's latest episode on trade (see below), I was as impressed as I was amused.

I was amused because he is able to deliver it in his usual, hysterical style. I was impressed because he was able to get a lot of facts about trade into a segment that lasted a little over 20 minutes. As Oliver points out, trade is a topic that Trump knows nothing about, and here is why:

1. On the morning of July 24, 2018, Trump tweeted that tariffs were great. Later that day, the Trump administration announced that is going to subsidize the farming industry with $12 billion to cover the damage done by tariffs. 
2. On August 4, Trump tweeted that if other countries cannot negotiate better trade deals, they will pay us in tariffs. What Trump fails to realize is that a tariff is a tax on consumers. Prices increasing on consumer goods and services as a result of tariffs is something we have seen with past tariffs, and is something already apparent with Trump's current trade war.
3. Let's forget for a moment that Trump erroneously thinks the U.S. ran a $817 billion trade deficit last year. Trump thinks that trade deficits are inherently bad, and that's not the case. I covered this in detail back in 2017, but a few main points. One, there is more to the economy than trade balance. Two, we're not throwing away money when we run up a trade deficit because we are consuming goods and services that are improving our quality of life. Three, we have run a trade deficit for over 40 years, and U.S. economic growth has been fine. Finally, if you want to focus on trade deficit, you need to focus on capital and savings, not trade flows.
4. Trump argues that trade with China is the main reason why we have lost so many manufacturing jobs. While some manufacturing jobs went overseas, the reality is that technological development [in the form of automation] is responsible for about 85 percent of the loss in U.S. manufacturing jobs. 
5. Economists do not fully agree on much. However, there is an overwhelming consensus among economists (including Trump's former economic advisor, Gary Cohn) from across the aisle that freer trade creates jobs, lowers production costs, and is a net benefit to both nations. 
6. While tariffs can create some jobs, what tariffs do on net is create greater unemployment because the inputs to create goods has increased as a result of the tariff. In the case of steel, steel tariffs help those who produce steel, but hurts those who use steel to manufacture their goods.
7. Trump does not understand just how complicated supply chains are. It is foolish to think that a product is entirely made in the United States without at least some input having a foreign origin. Trump made a comment that he wants to impose tariffs on Mercedes-Benz and BMW cars from coming in the country because it comes from a German company. It turns out that the largest BMW plant is in Spartanburg County, SC. 
8. The economy is so interconnected that you cannot tinker with one thing without causing a ripple effect. The Federal Reserve recently expressed concern that because many countries use Chinese intermediate inputs, it will increase the cost of doing business and make the U.S. less competitive in the global market. 

We are finding ourselves in a trade war. Trump has escalated the trade war from 18 products at the beginning of this year to 10,000 products. What is scarier is that this zero-sum view of trade is being driven by Trump's top trade advisor, Peter Navarro. If President Trump wants to make America great again, implementing policies that will increase the price of consumer goods, lower employment, agitate diplomatic relations with allies, and potentially create enough uncertainty to trigger a recession is not the way to go about it. Although the past is not a hopeful indicator, I hope that someone can get through to Trump before the trade war gets out of hand and we pay the consequences for Trump's ignorance. 

Turkish Lira Crisis: Why Care About Turkey's Current Account Deficits?

Do you have those moments when you observe a situation, think it cannot get any worse, and then it gets worse? That is how I felt earlier this week when I saw international investors trade out Turkish lira for other currency. The Turkish lira plunged by 11 percent against the dollar on Monday, which proceeded a 20 percent decline last week. This is hardly the first downturn for the Turkish lira. Since the beginning of 2018, the Turkish lira lost 45 percent of its value, which is not good considering that Turkey is the 18th largest economy in the world. What the Turkish lira is undergoing a similar currency crash to the Argentinian peso, a topic that I covered back in May of this year. While there are some similarities to the Argentinian peso crisis (e.g., inflation, currency depreciation), there are some differences that make the Turkish crisis a notable one.

Source: XE Corporation

Although Turkey has multiple causes to its latest currency crisis, one feature that stands out is its current account deficit. In short, what a current account deficit means is that a given country is a net borrower from abroad. The current account includes three parts: the trade deficit, net primary income from abroad, and net cash transfers.

CA = (X-M) + NY + NCT

In spite of what President Trump has to say on the topic, trade deficits are not a bad thing. It is not so much that Turkey is running a deficit, but rather the size of the deficit and an inability to pay back the deficit incurred. Turkey's current account deficit has widened to 5 percent, which, as the International Monetary Fund [IMF] points out in its most recent Article IV Consultation (released in April), is higher than its peers (IMF, p. 4). Then there is the currency depreciation that caused the inflation (IMF, p. 5). Not only did this sharp currency depreciation fuel inflation, but it put pressure on local banks and undermined economic growth (Bloomberg). Turkey's projected growth for 2018 dropped from 7.4 percent to 4.8 percent, a projection that Fitch pointed out during its credit rating downrating of Turkey. Standard and Poor's followed suit in downgrading its credit rating this year and deepening Turkey's junk bond status, citing the volatility of Turkey's exchange rate and deteriorating outlook on its inflation.

Turkey's external financing needs for this year amount to $200 billion (or 25 percent of its GDP), and as such, Turkey is going to need the backing from an organization such as the IMF that could finance the current account deficit. The problem is that Turkish President Recep Tayyip Erdoğan is probably going to ask for help. I'm not saying it's impossible. After all, Argentina historically has a relationship with IMF that could hardly be considered smooth sailing. If anything, it was nothing short of a miracle that Argentina was able to sit down with the IMF and negotiate a three-year stand-by agreement. Nevertheless, Erdoğan probably will not ask the IMF for help. This goes beyond looking weak or incompetent after recently winning the presidential election. Asking the IMF for help would mean repairing damaged relationships with the United States, who happens to be the IMF's primary backer. President Trump doubling Turkish steel tariffs and the politics behind Pastor Andrew Brunson's imprisonment indicate that U.S.-Turkish tension is not likely to abate anytime soon.

What happens if Erdoğan doesn't feel like going to the IMF? He has a few other options, but they are not going to be pretty. Erdoğan could raise interest rates to help the fact that Turkey has a low savings rate (IMF, p. 26), except that he considers high interest rates "the mother of all evil." There is the possibility of a currency board to get Turkey out of this mess, but there is concern over whether Turkey has the theoretical conditions to make it a reality. Bloomberg already dismissed the possibility of capital controls working for Turkey because, as economist John Cochrane points out, government debt is the problem. What will Turkey do? That is a good question, and largely up to Erdoğan. If the European Central Bank and Bank of Japan are indicative of anything, it could be the path of least resistance. Erdoğan has some political incentive to not shake things up too badly, but given the direction it is heading, that wouldn't be the wisest decision. The longer that Turkey waits to do something significant, the more likely Turkey sets it up for failure, as well as be more likely to trigger a global economic disaster.

Workforce Innovation and Opportunity Act: Thoughts on Government's Role in Job-Training Programs

In 2013, President Obama signed into law what would be known as Workforce and Innovation and Opportunity Act (WIOA). The WIOA replaced its predecessor, the Workforce Investment Act of 1998 (WIA). The purpose of WIOA is to strengthen the U.S. workforce so more U.S. citizens have access to high-quality jobs, as well as help ensure that employers can retain these employees. Making sure people have jobs is important. After all, a job or a career is a path to providing for one's family. For some, it is more than a livelihood: it is a status symbol. Plus, look at alternative of long-term unemployment. It is generally accepted that having citizens employed, as well as make sure that skill sets are matched to market demand, is an important value for society and workforce development policy. I have to wonder if the WIOA and its predecessor, the WIA, have succeeded in such a task.

The inspiration for this blog entry came from the Heritage Foundation and their Blueprint for Balance project that was released a couple of months ago. Essentially, the Heritage Foundation looked at the federal budget to see what could be reformed. The Heritage Foundation came up with 181 recommendations, one of which was to eliminate WIOA. For one, Heritage Foundation put a price tag on WIOA: $3.3 billion. That is how much we spend on this Department of Labor program. A price tag unto itself is not justification to eliminate the program because perhaps the program generates net benefit. However, I have reason to doubt such an assertion.

My largest basis for doubting WIOA's efficacy is a 2016 evaluation from Mathematica Policy Center that was commissioned by the Department of Labor (DOL). The evaluation primarily looks at WIOA's predecessor, the WIA. Mathematica emphasizes that the report still has practical implications for WIOA because the basic set of services has not changed, nor have the eligible recipients (p. xv). What did the evaluation conclude? Although the findings are preliminary (a final evaluation is to be released later this year), those who received full-WIA services (e.g., skills assessments, workshops, job-search assistance) did not have earnings that were statistically significant from the core group (p. xxiii-xxv). Even in spite of having training and other one-on-one assistance, it does not seem to affect salary, which is the single most important metric for something such as WIOA. What is even more significant is that only 32 percent of full-WIA participants found jobs in their field, which sadly was not much higher than the core group (p. 87).

While the Mathematica study is not the only study showing a lack of positive outcomes, it is the most recent one. The Government Accountability Office wrote reports on issues with collecting WIA data (see 2013 and 2014 reports). A University of Massachusetts-Boston study showed how the WIA had issues acclimating to the labor market (Fesko et al., 2003). An economist from Georgetown University argues that the Earned Income Tax Credit [EITC] would be more effective than the WIA (Holzer, 2009). One study goes as far as saying that "most employment and training programs have either no impact or modest positive impact" (Barnow and Smith, 2009).

Even so, job-training programs on the whole have mixed results (e.g., Heinrich et al., 2008). What we have to keep in mind when analyzing such programs is that with all government programs, benefits need to exceed costs before one could even begin to justify the existence of that program. I'm not anticipating the WIOA going away anytime soon, even with President Trump wanting to cut WIOA funding, but I do hope that WIOA's future justification can be based on evidence-based analysis.

Parsha Re'eh: A Spiritual Life Lesson on Judaism's Prohibition of Mixing Meat and Dairy

Food plays such a major role in our lives. We eat three meals a day, not to mention food is a great way to bring people together. What we don't eat almost says as much as what we do eat. Some decide to cut out carbohydrates (Atkins). Others decide to cut out meat (vegetarian) or go as far as not eating animal products (vegan). Why people make these dietary decisions ranges from health to moral reasons. In this week's Torah portion, we come across a particular form of food to cut out of the Jewish diet:

לא תבשל גדי בחלב אמו.

Do not cook a kid (baby goat) in its mother's milk. -Deuteronomy 14:21

Although the verse itself only mentions a goat, the Rabbis interpreted this verse to prohibit cooking, eating, and benefiting from a mixture of meat and dairy (also see Exodus 23:19, 34:26). That means no chicken parmesan or no cheeseburgers. What lesson is G-d trying to teach us in this prohibition? Some believe that Jewish dietary laws fall under the category of חק (chok), that which does not have an explanation or reason to it. Much like Rambam (Maimonides), I don't believe that G-d created these laws without reason. I believe that Judaism provides us with the opportunity to elevate the mundane into the holy. I also believe that we are what we eat, a concept I detail while analyzing the Jewish prohibition on pork and the Jewish decree that fish need to have fins and scales in order to be consumed. This makes sense considering that earlier in Deuteronomy 14:21, G-d gives us these laws because "the Jews are a holy people."  Bringing it back to the initial question: what exactly about not mixing meat and dairy is holy? There are a few explanations in Jewish tradition:

1. A choice between life and death. Milk represents life, and meat represents death. Perhaps the purpose of tradition is teach us the importance of distinction and functionality in order that we a) are conscientious of what leads us towards life and towards death, and b) that we choose life so we may live (Deuteronomy 30:19). 
2. Against animal cruelty and human cruelty. R. Abraham ibn Izra said that mixing a kid with its mother's milk implies extreme barbarism. R. Abraham Joshua Heschel said that "How ungrateful and callous we would be to take the child of an animal to whom we are so indebted and cook it in the very milk which nourishes us and is given to us so freely by its mother." If we are supposed to consider animal cruelty as a part of our spiritual practice, we are a fortiori all the more obligated to make sure we are not cruel towards our fellow human beings.
3. The animalistic versus the spiritual side of life. R. Samson Hirsch takes the dichotomy between meat and dairy in a different direction. For R. Hirsch, meat represents the animal portion of life, i.e., reproduction and sexual activity. Milk is the nourishment that supports new life. While these are actions that are natural, we should learn to differentiate between our activities and makes sure they are channeled toward the service of G-d. R. Hirsch saw the prohibition on this mixture as an embodiment of Jewish holiness (R. Hirsch on Exodus 23:19).
4. Idolatry. In his text Guide for the Perplexed (III, xlviii), Rambam suggests that cooking a kid in its mother's milk was an idolatrous practice in the days of yore, hence the prohibition. The only flaw with this argument is that no such rite is known. 
5. Gluttony. The verses that refer to the prohibition of such a mixture use the goat as the example. I was thinking to myself, "What makes the goat special in this context?" I was reading in the Sonchino Chumash that goats are rich in milk. Taking that reality to the next level, the abundance of milk that the goat produced could be seen as a metaphor for gluttony (Rashbam). 

Although it might not seem probable, I can actually tie together these interpretations. I have brought up this point up before, but idolatry is when you take G-d out of the equation and worship something else. In the case of not mixing meat and dairy, the idolatry that this mixture is supposed to represent is gluttony. Gluttony is a form of worshiping the self, one's animalistic desires. This is not to say we should never take ourselves into consideration because there is room for self-care and worrying about oneself. At the same time, when it is only about the self and it is at the expense of other people (and as this passage teaches, at the expense of animals), we lose sight of our humanity, much like we saw with Sodom.

As human beings, we are so much more than unadulterated selfishness or a life of straight-up hedonism. What separates us from the animals is our ability to discern. We can choose between right and wrong. We can choose to be cruel or kind. We can choose to give into our most animalistic of urges or we can channel it towards something higher. The prohibition is more than some seemingly arbitrary dietary rule to make another facet of life more difficult. It is a reminder of a Jew's higher purpose. Judaism teaches us enjoy the pleasures of this world, but not overdoing it. This prohibition is a reminder to be kind instead of cruel. In short, a Jew's calling is to choose life. Amazing what spiritual lessons not eating a cheeseburger can teach!

Why Is Wage Growth Stagnant?: An Analysis of 10 Theories Behind the "Wage Puzzle"

Last week, the Bureau of Labor Statistics announced that the U.S. economy added 157,000 jobs, and that the unemployment rate edged towards 3.9 percent. The U.S. unemployment rate has not been this low since 2000. Not only has the unemployment rate been quite low, but the economy is growing more than anticipated. Just last quarter, the GDP grew 4.1 percent. Granted, the reasons for why are debated, but we are seeing some good macroeconomic indicators. There is one macroeconomic indicator that is perplexing economists and public policy experts: the wage growth. Basic economics tells us that when the demand of a good or service increases, so does the price. In this case, as the demand for workers increases, wages also increase because employers need to attract increasingly scarce labor. This is known as the Law of Demand. And yet, what we have seen since the 1970s is wage stagnation. This has been notable since the economic recovery from the Great Recession (see below). This phenomenon has been labeled "the wage puzzle." Many have tried to figure out what is causing the stagnation, including those at the New York Times and Forbes. What I would like to explore here is whether we could solve the puzzle, or at the very least, see if some pieces of the puzzle fit better than others.

1. More labor market slack: This argument assumes that the unemployment rate is higher than we think. In order to measure official unemployment, we use what is referred to as U-3 unemployment. I have discussed the limits of this official unemployment measurement, but essentially, U-3 unemployment overstates the health of the market because it does not include those who left the labor market. If the Great Recession did indeed drive people out of the labor market but are willing to rejoin the labor market, that would mean that the official unemployment rate paints too rosy of a picture of our economic health. This could explain how the unemployment rate and wage growth can simultaneously be low. However, there are some issues with this theory. One is that we are unsure as to whether prime-age employment (i.e., 25-54 years of age) is below the long-term trend. As a matter of fact, we see there is a good correlation between prime-age employment and wages (see below). The second is that other macroeconomic indicators (e.g., number of job openings, rate at which workers voluntarily quit their jobs) point to a robust labor market. Essentially, the U-6 unemployment rate and the prime-age employment rate are not quite as good as they could be, which means there is some slack. Even so, I do not think that there is so much slack that it is the main piece of the wage puzzle.

2. Substitution Effect - Retirement of Baby Boomers: Evidence from the Federal Reserve Bank of San Francisco implies that the wage stagnation is caused by a structural shift in workers (Daly et al., 2016). As Baby Boomers retire, younger workers are entering the market. Since younger workers have less experience and skills than those retiring, they do not get paid as much as their more senior workers, hence the stagnation.

3. Increase in non-wage benefits: One of the flaws at looking at wage growth is that looking at wages excludes non-wage benefits. The American workplace has experienced an increased prevalence in health benefits, retirement benefits, child care, employee discounts, and vacation time. I think this is convincing when considering healthcare costs. Most employees are on what is known as employer-sponsored health insurance. This tax break drives up healthcare costs in a way no other country experiences while exacerbating income inequality. It is so bad that three years ago, I called it the worst tax break in the American tax code. However, I do have a concern with this explanation. In 1987, the BLS found that benefits account for 26.8 percent of overall worker compensation. By 2018, that figure increased to 31.8 percent (Table 1). Looking at these figures, I think that non-wage benefits are a piece of the puzzle, but hardly the largest one out there.

4. Lower productivity: Basic microeconomic theory postulates that wages are primarily determined by productivity. In the past ten years, productivity growth has been dismal relative to previous years, as the BLS and Vox pointed out. The IMF recently released research going as far as stating that "weak wage growth is mostly a product of low productivity growth (Abdih and Danninger, 2018)." The Right-leaning Heritage Foundation released some research showing how experts across the political aisle have found a strong connection between productivity and wages (Sherk, 2016). A working paper led by a Princeton University professor (Grossman et al., 2017) suggests that productivity slowdown is part of the puzzle because "when human capital is more complementary with physical capital rather than raw labor....[it] can itself lead to a shift in the functional distribution of income away from labor and towards capital." Given that the IT sector involves greater capital intensity, this explanation is certainly feasible (Karabarbounis and Neiman, 2017).

5. Increased Market Concentration and Monopsony Power: A paper from MIT argues that increased market concentration, from companies known as superstar firms, has contributed to the reduction in labor's share of total income (Autor et al., 2017). A report from the National Bureau of Economic Research argues that from 1979 to 2009, markets have become more concentrated (Benmelech et al., 2018), as does a paper from Harvard Law Review (Naidu et al., 2018). With less employers in the market, employers have more power to set wages, hence the monopsony-like power. Part of this trend is due to increased emphasis on inorganic growth (e.g., mergers, acquisitions), but much of it is due to the collusion between Big Business and Big Government.

Granted, this trend of market concentration varies from market to market, but research shows that 23 percent of Americans are in moderately or highly concentrated labor markets (Azar et al., 2018). Also, the research on monopsony power is relatively new, which makes it difficult to determine the extent to which this affects stagnant wages. Nevertheless, given the amount of time I have spent doing market research professionally, I can safely say that my experience backs up the notion of increased market concentration, hence making it a piece of the wage puzzle.

6. Backlog of wage cuts from Great Recession - Wage Rigidity: During recessions, it is typical for employers to cut wages in order to correct for the economic downturn. After the recession is over, wages go back up. However, we did not experience that during the Great Recession. This economic phenomenon is known as downward nominal wage rigidity. It caught the eye of the Federal Reserve Bank of San Francisco to the point where they assumed it to be a major contributing factor post-Great Recession (Daly and Hobijn, 2015). If this theory is indeed true, then we still have employers whose ability to respond to economic conditions (whether good or bad) has been impaired.

7. Corporate tax rates: Another theory, this one coming from the Right-leaning American Enterprise Institute, postulates that wage growth is being driven by corporate tax rates. AEI found that the tax incidence of the corporate tax falls primarily on the workers. By lowering the corporate tax rate, wages will increase because workers will foot less of the bill. Don't get me wrong. I think the corporate tax rate should be lower (see here and here). A permanent tax cut was one of the features of the GOP tax bill I found appealing. Nevertheless, I am skeptical of this being a [major] piece of the wage puzzle for two reasons. One is that both statutory and effective corporate tax rates decreased between the 1970s and now. The second reason is that wage stagnation is not strictly a U.S.-based problem: it affects the global economy, including countries with lower corporate tax rates. As much of a proponent I am of a lower corporate tax rate, I am doubtful as to whether or not it would ameliorate wage stagnation.

8. Increase of women and foreign-born workers in the marketplace: The libertarian Mercatus Center theorizes that the influx of women and the influx of foreign-born workers is a cause of a wage stagnation because less experienced and skilled workers drag down wage growth. I would find it more believable that women entering the workforce would have this effect since it was during the 1970s that women entered the workforce at significantly higher rates. However, more than a generation has passed since then, and women have become more competitive in the workplace. I'm not so sure about foreign-born workers. When looking at H1-B visas, for example, we see that higher-skilled foreign-born labor tends to get paid less. A similar phenomenon is observed with lower-skilled foreign-born workers. I would argue that the influx of foreign-born workers presently has more of an impact on wage stagnation than women entering the workplace.

9. Decreased unionism: One of the favorite arguments of the Left is that the decline of unions has caused many adverse effects, including wage stagnation. Because private-sector union membership declined from 21.2 percent in 1980 to 6.5 percent in 2017, wages have stayed stagnant, or so argues the Left-leaning Economic Policy Institute. The main problem with this argument is that union membership as a percent of the overall workforce was declining more than a decade before wage stagnation became an issue in the 1970s (Dinlersoz and Greenwood, 2012). Even the IMF thought it was a relatively small contributor, especially in comparison to automation and technological development (Abdih and Danninger, 2017, p. 16). Speaking of which.......

10. Automation and technological development: In the aforementioned 2017 IMF study, the authors found that automation was the single largest contributing factor to wage stagnation (p. 21). The theory behind this is that technology has allowed for increased automation. Technological development, particularly in information and communication technology, made capital easier. As such, there was a decline in the labor share (p. 6). Automation had such an effect that it was the single largest factor in contributing to the decline of employment in the U.S. manufacturing sector.

Conclusion
There were some other theories out there, including the gig economy, globalization, increased usage of noncompete clauses, and minimum wage laws. Nevertheless, I wanted to cover the theories that were most prevalent. Even with these theories, I have three reasons to be skeptical about excessively worrying about the wage puzzle:

1. Moody's economist Adam Ozinek found that when looking at the employment rate (as opposed to the unemployment rate), wage growth is where it ought to be.
2. When adjusting for inflation and including the amount that employers contribute to benefits, there is not wage stagnation. That is not my conclusion, but rather that of a scholar at the Urban Institute, an organization that tends to lean towards the Left.
3. Looking at wage growth in isolation does not take into account purchasing power or the fact that consumption has increased both in quantity and quality over the past 40 years (Sacerdote, 2017). Without looking at consumption or purchasing power, wage growth is divorced from context.

Assuming that we, as a society, decide to label wage stagnation as a problem, how to resolve it would depend on which pieces of the wage puzzle you define as the biggest. For me, the arguments that are most convincing are low productivity, retirement of Baby Boomers, technological development, and increased market concentration. Even if we could agree on which pieces are largest, there would still be a matter of policy prescription. Naturally, I believe that policy should help as many people as possible to live their lives as fully as possible. On the other hand, I am unsure how these issues will be addressed. As progress is further made, I hope to discuss the matter in more concrete terms. In the meantime, I hope this provides some insight to a complex, interconnected topic.

Should We Be Worried About 3D-Printed Guns?

You know how you watch a sci-fi movie that has "out of this world" technology, and then some years later, that fiction becomes a reality? That is sort of the idea with 3D-printed items. We used to think the ability to create items from a 3D printer was magic or hokum. Now it is becoming more and more of a reality. Not only is it becoming a reality, it is becoming more of a threat that one of the 3D-printed items are 3D-printed guns. I bring this up because of recent federal court proceedings. During the Obama administration, an anarchist named Cody Wilson published blueprints online on how to construct a 3D-printed gun. The Obama administration was successful in blocking the dissemination of such information. Last month, the Trump administration reverse the Obama administration's decision by having the Department of State settle with Wilson. However, eight states filed a lawsuit to block Trump's agreement with Wilson.

The concern about 3D-printed guns is that of safety. 3D-printed guns could not only decrease manufacturing costs, but increase accessibility to firearms. There is particular concern about giving such access to hardened criminals, minors, and those who are mentally ill. This increased supply and accessibility of firearms could lead to an increased homicide rate, one that could be more difficult to contain once this Pandora's box has been opened. On top of that, there is a national security concern. 3D-printed guns could also create a national security issue because the plastic parts of a 3D-printed gun would be invisible by a metal detector. How valid are the concerns brought up by gun control proponents?

Traceable guns. The idea behind the 3D-printed guns is that they will come without serial numbers, which means that criminal investigators would have one less avenue to trace guns to their users. One is that the files for the 3D blueprints are traceable. A second point, one I have brought up before, is that criminals are more likely to acquire their firearms through someone they know in the criminal world than they are to go through the laborious background check.

Are 3D-printed guns killing machines? 3D-printer tech experts are divided on whether 3D-printed guns are a practical choice for criminals. With the current technology, the 3D printer doesn't simply spit out a firearm. The 3D-printer can only build 80 percent of a firearm receiver. Even with the receiver, you need the technological know-how to build the remaining 20 percent. After that, there is the question of whether or not they properly fire. Given where the technology currently stands, 3D-printed guns are not a significant threat to society. The thing one could counter with is that with economic and technological development, products generally become cheaper and of better quality over time. Yes, 3D-printers are currently expensive and product quality is questionable at best. However, that will in all probability change down the road. The good news is that right now, 3D printers are not a practical choice for criminals.

Metal Detectors. Right now, this is not a valid concern. The first thing is the Undetectable Firearms Act, a Reagan-era bill that says that a firearm needs at least some metal. There is also the matter that ammunition is still made of metal. The third thing is that security guards can be trained to look for plastic firearms, much like they are trained to be on the lookout for other unconventional weapons.

What do we go from here? I think if we look at the current state of 3D-printed guns now, they are not a significant threat. However, the concern is not right now, but an inevitable future in which 3D-printing will only become more advanced. Experts at Rand Corporation admit that firearms are already cheap and attainable in the United States. On the other hand, they express concern that homegrown terrorists or lone-wolf attackers could more easily attack weapons where they are currently prohibited (e.g., schools).

The question is whether there is policy that could slow down the growth of 3D-printing or somehow prevent certain individuals access. If there is a way to make sure dangerous people are prohibited such access while making sure everyone else's Second Amendment rights are protected, I'm all for that. However, there is some skepticism if such a targeted policy could be created, let alone implemented. Regardless of how the federal court case ends, there are already blueprints for 3D-printed guns on the Internet, and it will not be easy for the government to handle dissemination of information on the Internet. There is not going to be a flooding of the streets with 3D-printed guns if Wilson wins his case. It would involve the U.S. government to have China-like control over the Internet, or at least involve an injunction from the U.S. Department of Justice to remove the files from Google. Including blocking software is also futile because a) we cannot reliably detect which software is for firearms, and b) open-source firmware will work around that.

At the end, I think there is an inevitability of 3D-printed guns being easier to produce. That being said, I don't think the concerns about the evolution of 3D-printed guns are unfounded or irrational. Until the technology evolves to a certain level, I cannot really evaluate policy prescriptions. I can say that they are not a significant threat to safety right now. I also cannot say how the debate will end up, especially since the technology is in a nascent phase and not going anywhere anytime soon. For me, this is one of those topics I will keep my eye on over the years to see how gun control policy evolves over time.