Disparity Doesn't Automatically Mean Racism or Bigotry: The Woke Left Needs a Lesson on Correlation versus Causation

What isn't racist these days? If you listened to the woke Left, almost everything these days is racist. In 2020, the Smithsonian Institute declared logic, individualism, politeness, and "objective, linear thinking" as a part of "white culture." Earlier this year, Time magazine branded exercise as a form of white supremacy. Here are a few other things that the woke have called racist: homework, classical music, white babies, white paint, cycling (also see here), meritocracy, mathematics, the art industry, theatre, monkeypox, swimming, health care providers, Thanksgiving, and gardening.

The list of what the Left can call racist or bigoted can go on for ages. Google "the problem with racism in..." or "[insert thing] is racist" and odds are that you will find someone who has called something racist. And if it is not out there, I would be willing to bet that it is only be a matter of time before someone from Woke World calls something racist. For those who are woke, it is not a matter of whether something or someone is racist. It is a matter of "how it is racist." The problem with calling everything racist is not simply because it is intellectually lazy to do so. This oversimplified view is a narrow viewpoint not based in reality. 

By this so-called "logic," a disparity that exists in the world automatically means racism. As I am going to illustrate shortly, that is simply not that case. Let's start off with some questions that I know are going to irk the woke crowd:

• Does the NBA disproportionately having black basketball players mean the NBA is discriminatory against white people? 
• Men are more likely to commit crimes. Does that mean that the system is sexist against men or is it that men are more prone to aggressive behaviors than women are because of testosterone and other aspects more typical with men? 
• U.S. Hispanics live longer than white people in the U.S. Is the health system rigged against non-Hispanics or are there genetic or cultural factors to consider? 
• Does the fact that Asian-Americans are much less likely to be in prison mean that the system is in favor of Asian-Americans and wants to screw over everyone else, or is there a cultural element in play?
• Men are more likely to commit suicide than women are. Is society meaner towards men or are men less likely to open up about their emotions than women are?
• In terms of undergraduate college enrollment, 58 percent of students are women and 42 percent are men. Does this mean that those working in college admissions offices hate men? 

The examples above are mainly of people who are mostly considered in the majority or not consider particularly oppressed. If you are white, male, Christian, and/or heterosexual, the woke would consider your Original Sin to be your existence. Even before wokeness took a stranglehold on the Left, it was common for those on the Left to attribute racism and discrimination as the major causes of disparity that exists in the world. Since identity politics play a major role in the woke way of thinking, I would like to highlight a few examples that affect minorities and marginalized individuals to better illustrate the oversimplified view of the woke that everything is racist and/or bigoted. 

Gender Wage Gap. In America, women earn 82 cents for every dollar earned by men (Pew Research). At first glance, this seems unfair that women would earn less. As I have brought up since 2013, this is not an apples-to-apples comparison. Once you factor in educational attainment, occupational choices, and labor attachment, the wage gap all but disappears. Men are more likely to work longer hours. Women are more likely to have part-time jobs, in no small part because many women prioritize raising their children. The gender wage gap does not exist because of discrimination, but due to career choices that men and women make. 

Dating Transgender Individuals. I remember reading a study showing how nearly 90 percent of people are not interested in dating transgender people (Blair and Hoskin, 2019). Only 3 percent of heterosexuals were interested in dating someone who is transgender. It was higher among gay men (12 percent) and lesbians (29 percent). Bisexual and nonbinary individuals were at 50 percent. While the authors never asked the respondents why, one of the co-authors ascribed this unwillingness of dating transgender people to discrimination. 

There is a more obvious explanation as to why most people do not want to date transgender individuals than discrimination. For the vast majority of people, sexual and romantic attraction are based in biology. It is not about being attracted to gender identity, but one's sex. Gay men are attracted to other men. Heterosexuals are attracted to the opposite sex. Sexual attraction is about sex, what a concept! I cannot imagine how difficult it is for a transgender person to date. At the same time, "the very basis of the gay rights movement was that sexual [orientation] is a personal matter that is not beholden to anyone else's wishes or expectations."

Marriage taxes and racial disparity. While the topic of marriage taxes is more obscure, this piece from the Left-leaning Urban Institute caught my eye because it proves my point. Urban found that black couples were about 7 percent more likely than white couples to incur a marriage penalty under tax law. This sounds like it could be an example of discrimination. Thankfully, the analysts over at Urban are smarter than that. They recognized that it is tricky to deal with these disparities because the tax treatment of marriage does not explicitly refer to race. Both spouses are more likely to work in black couples than white couples. Also, black married couples were more likely to claim children as dependents than white married couples. While there is a disparity between black and white married couples, it was not due to a racist tax code. 

Using "They/Them" Pronouns on Job Résumé. Earlier this year, the people over at business.com released survey results about people who use "they/them" pronouns on their résumé. They found that nonbinary individuals who use pronouns on their résumé are about 10 percent less likely to get hired for a job. Forget for a moment they did not include those who use "he/him" or "she/her" pronouns on their résumé to see if it was an issue with preferred pronouns generally or "they/them" pronouns specifically. The author's conclusion was that this hiring trend was due to discrimination. 

Time to play Devil's Advocate. Maybe it comes off as virtual signaling for someone to add information that lacks practical purpose in the hiring process. Maybe it is because it is a subtle political statement, a point I made last year when criticizing the practice of preferred pronouns. Maybe it could be perceived that you are more likely to be difficult to work with or could be a liability. Maybe including this particular something that has zero bearing on job performance shows that you are less concerned about how your skill set would benefit a potential employer. All are plausible reasons that have nothing whatsoever to do with bigotry against nonbinary individuals. 

Conclusion

If a woke person does not like a certain outcome or takes issue with a certain disparity in life, it is easier to call it discrimination. I am not here to say that racism and bigotry have never existed nor do they exist. To say that would be a denial of history. At the same time, to attribute every disparity to racism or bigotry is a denial of reality. Simply because a certain correlation exists does not mean the causation is inevitably racism or bigotry. To quote the Foundation of Economic Education:

The problem with this [assumption of racism] is that human interactions are inherently messy and subjective. We treat each other all kinds of ways for all kinds of reasons. In this type of environment, if you look for a phenomenon in an interaction you will find evidence for it; even if the phenomenon doesn't actually exist in that interaction...A scholar will look at complicated interactions and will weight the evidence in search of the truth. An activist will dig for anything that supports their pre-existing dogma. 

As I illustrated above, it would have some weird conclusions if disparity automatically meant bigotry, especially when we are talking about differences between such large sets of people. We have to be able to understand the intricacies of a given issue and see what is contributing to a given problem if we are to solve it. It might feel nice to be on a certain high horse thinking you are going to fight "institutional racism" or "stick it to the white supremacists." But screaming about a nebulous, amorphous "systemic racism" and immaturely calling people "racist" or "a bigot" simply because they disagree with you on a policy proposal will accomplish nothing for the betterment of society.

Evidence Base for Youth Gender-Affirming Care Is Quite Weak: Should We Ban It, Encourage It, or Try Something Else?

While cancel culture has made its way into the United States' culture wars, there is another issue that has become prevalent: transgender issues. The pro-LGBT Williams Institute estimated in June 2022 that 0.5 percent of U.S. adults are transgender. In spite of transgender individuals representing a small percentage of the overall population, they have become a focal point for the political Left and Right alike. This has become clear when discussing the theme of gender transition, or what is also commonly referred to as gender-affirming care. The phrase "gender-affirming care" has become a catch-all for such procedures as puberty blockers, cross-sex hormones, and gender reassignment surgeries (e.g., mastectomy, penectomy). 

The U.S. political Left along with various U.S. medical organizations are unquestionably convinced that gender-affirming care is about sound health care practices and saving lives. For the U.S. political Left, you would either have to be an idiot or a monster to get in the way of someone's happiness and wellbeing like that. If only it were that simple and if only the topic of gender medicine did not become so politicized. 

For adults, I believe that they should be able to make an informed decision about what to do with their bodies as long as they do not harm others. If an adult discusses it with a doctor or other health professional and decides they want to transition, that is their life and their choice. 

Much like children in libertarian philosophy more generally, the theme of gender-affirming care for adolescents is more nuanced. Childhood is a formative time in one's life. Children do not know what is best in part because they are not fully autonomous beings with mens rea. To quote Bill Maher, "Kids do have phases. Kids are fluid about everything. If they know at age eight what they wanted to be, the world would be filled with princesses and cowboys. I wanted to be a pirate. Thank God no one scheduled me for eye removal and peg leg surgery." 

Take it from Dr. Riittakerttu Kaltiala, who is Finland's leading expert on pediatric gender medicine and has presided over gender transition treatments since 2011. Looking at the data in 12 studies, Dr. Kaltiala found that about four out of five children with cross-gender or gender variant behavior and are left to develop naturally do come to terms with their bodies and accept their biological sex.    

While the U.S. political Left might see this topic as a no-brainer, things are more nuanced on the other side of the Atlantic. There are multiple LGBT-friendly European countries that have conducted systematic reviews of the available data on the topic of gender-affirming care for adolescents, whether it is Sweden, Finland, Norway, or the United Kingdom. What they have concluded that gender-affirming care is not evidence-based medical practice. Even The Economist recently published an article entitled "The evidence to support medicalised gender transitions in adolescents is worryingly weak." 

Rather than hand out gender-affirming care as if it were candy, the aforementioned European nations are using it as the exception rather than the rule. Especially in Sweden and Finland, there are strict requirements for adolescents to qualify for gender-affirming care (e.g., no co-occurring mental health problems, undergo at least six months of psychotherapy, parental consent for hormonal therapy) and for any procedures to be done as part of clinical testing. France's main medical association, l'Académie National de Médicine, recommends that hormones should be used "in the greatest reserve." In these European countries, gender-affirming care is seen as a last resort rather than as a first resort.   

The British media outlet Unherd covers in further detail how the U.S. political Left selects low-quality studies to draw a conclusion instead of conducting systematic reviews like they do in Sweden. To quote the Economist, "Medical science is not supposed to work this way. Treatments are supposed to be backed by a growing body of well-researched evidence that weighs the risks and benefits of intervention. The responsibility is all the heavier when the treatments are irreversible and the decisions about whether to go ahead are being taken by vulnerable adolescents and their anxious parents." 

It is not only the irreverence for the scientific process or for finding evidence-based practice that I find troubling. It is the irreversible nature of these procedures. If you opt for a mastectomy or a penectomy and regret the decision later, it is not as if you can grow those body parts back. There have also been concerns about bone density, brain development, and infertility as a result of these procedures.     

I generally think that bans are unwise policy and have harmful effects, which is why I will not go as far as saying that gender-affirming care should be outright banned. A lack of evidence does not justify a ban in so far as that proponents very well could be proved correct once proper clinical trials are complete and if there is adequate evidence to show its benefits. 

I see the United States making a similar mistake with gender-affirming care that it did with its approach to the COVID pandemic. With the COVID pandemic, the U.S. political Left politicized the pandemic. It nearly exclusively obsessed over the costs of COVID. This one-sided view led to multiple harmful policies, including lockdowns, school closures, and travel bans. The cherry-picking of low-quality studies on the theme of gender-affirming care instead of more robust systematic reviews is reminiscent of what many on the U.S. political Left did with face masks. Ignoring the science during the pandemic not only increased non-COVID health costs, but it resulted in the accumulation of economic, education, and social costs. The powers that be silenced that debate and dissent during the COVID pandemic and we continue to pay the price for such folly. 

I hope that the United States can learn from the mistakes of ignoring the science and silencing dissent that took place during the pandemic. We should be able to balance the concerns on both sides of the gender-affirming care debate while gathering more clinical data. In the meantime, this much is true: European nations had been practicing gender-affirming care for about a decade and realized that the evidence base is too weak to justify an implementation as liberal as it is in the United States. If given too freely, the harm can easily outweigh the benefits. 

This is why the Scandinavian approach encourages psychotherapy and only allows for gender-affirming care sparingly and in a clinical trial setting. As we gather more clinical data, we can better determine whether or not gender-affirming care actually works and under what conditions it could be most beneficial, especially for children. Given the irreversible effects of gender-affirming care, not to mention the possibility for long-term harm, I agree that the caution within the Scandinavian approach is the more prudent and appropriate approach as we ascertain the truth on this procedure.

It Is About Bloody Time the FDA Removes the Ban on Gay and Bisexual Men from Donating Blood

The Food and Drug Administration (FDA) is not exactly an agency that I associate with doing a job well done. Multiple FDA regulations got in the way of this country's response to the pandemic. Then there is the FDA's e-cigarette regulations, drug importation laws, and the FDA exacerbating the continuing baby formula shortage. And what about its proposals to ban trans fats or menthol cigarettes? As much as I have criticized the FDA over the years, the FDA actually did something good last week. 

Since 1985, the FDA had a policy to ban blood donations from gay and bisexual men, also known as men who have sex with men (MSM). This ban was implemented in the heyday of the newly emerging human immunodeficiency virus (HIV). Blood services need to ensure that any blood for transfusion purposes is safe. Back then, the FDA saw a strict donation ban on the MSM population to be a way to ensure that safety. Since the MSM population continues to have a higher incidence of HIV, it is the main reason as to why the ban has remained for years. 

In 2015, that went from a lifetime ban to a one-year ban due to improved screening quality. In 2020, that ban was decreased to three months because of the shortage of blood during the pandemic. As of last week, the FDA has been completely eliminated, which makes me happy with the FDA. Donors will no longer be discriminated based on their sexual orientation. 

Instead, each individual donor will be asked about their sexual history in the past three months, regardless of their sexual orientation. First, a potential donor will be asked if they have had more than one sexual partner or a new sexual partner within the past three months. If they answer in the affirmative, they will then be asked if they had anal sex. If they respond yes, their donation will be deferred. 

Not only eliminating the ban is something that the Red Cross and American Medical Association have supported, but this move by the FDA is actually based in science. I had made the argument back in 2014 that we should get rid of this ban, and I will reiterate much of it here today. 

As of now, the window period for HIV to show up on a HIV test is three months, hence the three-month period of the current screening. It also did not make sense to ban monogamous homosexual individuals from donating blood while allowing promiscuous heterosexual individuals to donate blood. This new FDA regulation resolves the double standard by focusing on individual behavior instead of sexual orientation. 

Another area where I feel better about this choice is with the risk of HIV infection vis-à-vis transfusion. When I reported on this topic in 2014, the probability of infection was about 1 in 2,000,000. With improved screening since then, it stands to reason that the probability is lower than it was back then. As a matter of fact, I came across a paper that calculates that it can be as low as 1 in 8,000,000 for developed nations (Robbins Scott and Wu, 2019). As technology gets better, the risk of infection will get lower.

The truth is that the blood supply is always vulnerable and there is always going to be demand for blood donations. The most recent FDA regulation strikes the balance between safety of the blood supply and maximizing the blood supply. I could end with a "better late than never" attitude, but I am glad to see we can end a form of discrimination against the MSM population while helping greater society by alleviating blood shortages.

Title 42 Was Shoddy Public Health and Immigration Policy: Its Expiration Is Well Overdue

Whether it was Machiavelli or Winston Churchill, the adage of "never let a crisis go to waste" shows why some sayings are timeless. It certainly rang true during the COVID pandemic. Various governments took on emergency powers in the name of public health, including harmful lockdowns, ineffective mask mandates, pointless travel bans, and eviction bans. As of the end of last Thursday, another COVID emergency power ended: Title 42. 

In March 2020, the CDC under President Trump used the pretense of the pandemic to issue a public health order known as Title 42. Under Title 42, the Border Patrol could expel unauthorized border crossers and asylum seekers. They are immediately sent out of the country without the right to make a case before a U.S. judge to stay in the country. Over its three years of being used, Title 42 has resulted in about 2.8 million expulsions. The purported idea of using Title 42 was to stop COVID in its tracks, or at the very least, slow it down. What do we have to show for Title 42?

The primary rationale was public health, so let us see if it helped with public health. From the onset, public health experts expressed opposition to such a policy because "there is no public health rationale for denying admission to individuals based on legal status." It turns out that Title 42 did not do anything to help with the spread of transmission of COVID. 

For one, the Alpha, Delta, and Omicron variants entered the United States and quickly spread throughout the country in spite of Title 42 being enacted. Second, the four notable coronavirus variants were circulating in the United States before Mexico or Central America, according to the open-source repository of viral genomes GISAID. If anything, Americans brought the variants to Mexico and Central America, not the other way around. Third, as research from the Left-leaning Center for American Progress (CAP) indicates, there is no relationship between Title 42 expulsions and COVID cases (see below). 

As I explained in December 2021, travel bans on people traveling theoretically work best when there are very little to no cases in the domestic country. Travel bans rarely works in practice. Even when they have some effect, its effect is to delay the spread, not eliminate it. Title 42 operates similar to a travel ban, so it is no surprise that Title 42 did not help with lowering COVID transmission.  

I can get into a debate of whether the public health emergency aspect of COVID ended a while back or whether we should have simply learned to live with COVID-related risk much like we have in other areas in life. What is clear is that there was never a public health rationale for Title 42 regardless. Unlike the other COVID restrictions, Trump's real reason for implementing Title 42 was not about public health. Public health was a guise for the fact that he has an axe to grind with immigration. It does not matter whether it is "legal immigration" or undocumented workers, the immigration of low-skilled or high-skilled labor. As we see with Trump's immigration policy, he did whatever he could to lower immigration to this country. By not even allowing asylum seekers a trial to claim asylum, Trump all but eliminated the right of asylum.  

Title 42 was not meant to be a form of immigration policy, but it de facto became immigration policy. This is why I would like to view Title 42 from the lens of immigration policy. In the context of Trump's anti-immigration policy, he wanted to lower the number of people moving to the United States. How well did Title 42 help him succeed? 

A good place to start is looking at border crossings since that is what Title 42 was supposed to prevent. The Washington Office on Latin America (WOLA) took a look at Customs and Border Protection (CBP) data on border apprehensions and encounters (see CBP data here and here). What we see below is that border crossings are at an all-time high.  

I'm not saying Title 42 caused this mass immigration. Even before the pandemic, there was gang violence in Central America, a refugee crisis in Venezuela, and Haiti has been a fragile state for decades. In part, the health emergency strained countries that were already experiencing instability. It is also true that, as a 2021 report from the International Institute for Democracy and Electoral Assistance points out, "the world is becoming more authoritarian as non-democratic regimes become even more brazen in their repression." Then there is in a war in Ukraine, increasing energy prices, and less stable global markets to throw into the mix. With calamity after calamity, is it any wonder that people are fleeing oppression to seek a better life for themselves and their family?   

Given what these asylum seekers are facing in their home country, the fact that Title 42 did not deter people from crossing the border is not shocking. What is ironic is that Title 42 very well made crossings more likely. Recidivism is the likely someone is to recommit a crime. The Cato Institute looked at the percentage of repeat crossings from CBP, and the recidivism rate about doubled since Title 42 took hold. There was no legal consequence or punishment for crossing the border under Title 42 because they were simply expelled. Thinking of it as a type of "catch and release" policy. Knowing that there were no real repercussions and what they faced back home is worse, "if you don't first succeed, try, try, try again" became a mantra for many.   

There were some that were arrested multiple times, as we see above. However, if you try enough times, odds are that you can get through at some point. That we can see with the data on those who successfully entered the country illegally, also known as "gotaways." As the Cato Institute shows below, the number of "gotaways" increased dramatically during Title 42. So much for Title 42 keeping border crossings down!

What about the human rights cost of Title 42? Title 42 turned away from the United States without even a trial to determine their asylum status. Those who did not try to cross the border again were either sent to border towns or back to the oppressive country they were fleeing in the first place. According to a December 2022 report from the nonprofit Human Rights First, there were 13,840 reports of murder, torture, kidnapping, rape, and other violent attacks on migrants and other asylum seekers that were turned away as a result of Title 42.   

Title 42 is yet another example of why we should be skeptical of expanding government powers during a public health emergency. The government exaggerated the severity of COVID to keep us scared for as long as possible. While doing so, the government expanded its power in new ways. In the case of Title 42, Trump seized the moment to push his anti-immigration agenda. People went along with it because the fear of COVID was so strong that the government's general response to COVID put a near-exclusive emphasis on COVID while ignoring non-COVID health costs, as well as the economic, social, education, and mental health costs of COVID regulations. 

Instead of working on comprehensive immigration reform, the Biden administration decided to hold onto a policy that did nothing to stop the transmission of COVID either because he wanted to look tough on fighting COVID or border security (or possibly both). Title 42 did not stop people from coming, but rather created a backlog of those seeking asylum. In doing so, it worsened human rights violations of those fleeing oppression. I am glad to see Title 42 exit the scene of immigration policy. Now it is time to move on to comprehensive immigration policy that can both address the backlog of asylum seekers on the U.S. border while making sure we have a viable pathway to immigration in this country.  

SNAP Benefits Exacerbate Obesity and Diet-Related Disease: Can Something Be Done?

The debt ceiling fight wages on in Congress. One of the items that is part of this fight is Supplemental Nutrition Assistance Program (SNAP), more colloquially known as food stamps. Part of what the Republican Party is negotiating is to raise the work requirements for able-bodied adults without dependents (ABAWD) from 50 to 56. This reform would potentially affect over 1 million Americans currently receiving SNAP benefits. 

The people over at USA Today make it seem like a callous move by the Republicans. As I explained last month, this reform is a step in the right direction. It is needed to maintain the long-term sovereignty of the program. These new work requirements would improve employment rates, as well as the well-being of unemployed ABAWD individuals on SNAP benefits. That being said, the issues with SNAP go beyond budgetary or labor market issues. 

According to the U.S. Department of Agriculture (USDA), "SNAP provides nutrition benefits to supplement the food budget of needy families so they can purchase healthy food and move towards self-sufficiency." You would think that with "nutrition assistance" in the title, SNAP would actually deliver nutritious options to those who need it. Much like with the Inflation Reduction Act or the Affordable Care Act, the Supplemental Nutrition Assistance Program fails to live up to its name.  

Earlier this month, the center-Right American Enterprise Institute (AEI) released a report entitled Promoting Mobility Through SNAP: Toward Better Health and Employment Outcomes. AEI took a look at data from the U.S. Department of Agriculture (USDA) and the National Health Interview Survey (NHIS). One of the main findings of this report is that SNAP recipients have poorer health outcomes than non-recipients. The first shocking aspect is that SNAP recipients are more likely to have diet-related diseases. 

What is just as concerning is that SNAP recipients across all age categories are more likely to be obese than non-recipients, regardless of income bracket (AEI, p. 12). 

This finding lines up with a 2018 USDA report on the nutritional quality of food purchased by Americans. As we see from this report, SNAP recipients are more likely to purchase empty calories and refined grains. SNAP recipients are also less likely to purchase fruits, vegetables, protein, and whole grains. 

A 2016 USDA study similarly shows that 23 percent of SNAP benefits were spent on sweetened drinks, desserts, salty snacks, candy, and sugar. In other words, the U.S. government uses SNAP to spend $25 billion a year subsidizing junk food. The 2016 study found that soft drinks was the single largest commodity purchased under SNAP (USDA, 2016, p. 5). 

One has to ask why there is a correlation between SNAP benefits and poorer health outcomes. Advocates posit it is because SNAP recipients do not have nearby access to healthy food, that they live in food deserts. The USDA begs to differ: "Further, on all of our measures of nutritional quality, SNAP-participating households with low household-level access to food stores did not differ from SNAP-participating households with better access (USDA, 2018, p. 15)."  

Price of healthy food does not seem to be the culprit, either: "Contrary to conventional wisdom, research shows that when measured properly (per nutrient or per serving, for example), healthy foods actually cost less than unhealthy foods (AEI, p. 15)." You cannot blame American culture or poverty on these disparities because SNAP participants have worse health outcomes than low-income non-participants. Many who advocate for greater SNAP benefits would like to ignore that cost or access to healthier options are not the issue with SNAP, so what is?

While it is easier to identify what is not the cause of the health disparities, figuring out what is turns out to be a more difficult task. Part of these poor health outcomes comes from the fact that SNAP program has no nutrition standards whatsoever (AEI, p. 1). It still does not explain why SNAP recipients have worse health outcomes, even worse so than low-income individuals who do not receive SNAP benefits. Subsidies act as an economic incentive, that much is true. In this case, SNAP benefits are subsidizing a disproportionate amount of unhealthy eating and exacerbate public health outcomes, including the obesity epidemic. Do SNAP benefits incentivize poor health decisions or is this a demographic that happens to make more unwise decisions when it comes to their health?

Whether SNAP benefits are explicitly causing poor health or not, what remains clear is this: after years of food stamps and having increased funding for SNAP spending, nutrition and health outcomes for SNAP recipients remains poor. The question is whether anything could be done to reform SNAP.  I detailed in 2013 how we could reform the SNAP program. 

Conceptually, it would be nice to have nutrition requirements on SNAP benefits to help SNAP recipients have better health outcomes. Either banning the purchase of soda or having a certain percentage of benefits allotted towards fruits and vegetables comes to mind. I would even be for a limited Fruits and Vegetables program instead of no nutrition requirements. That alternative would cost only about $20 billion instead of $127 billion allotted for SNAP benefits in FY 2023. 

Much like with Social Security, I wonder if it would be simpler to scrap SNAP instead. The government getting the food pyramid wrong is an example of why the government does not have the best track record in telling people how they should eat. We cannot even get Congress to pass something as minimal as stricter work requirements after Biden did away with them in 2021. Plus, the Secretary of the USDA recently commented that nutrition requirements are not an option because they would stigmatize the obese. The intransigence in Congress gives me little hope that SNAP would be eliminated. Government gets spending regardless of whether a program works, and once established, it is hard to eliminate a government program. 

At the same time, I hope that private charities can step in while Congress gets its act together. Private food-related charities are at least incentivized to be more efficient with spending and fund programs that succeed. Regardless of the outcome in Congress, it does not change the fact the SNAP benefits do a poor job at promoting nutrition for its recipients. 

More Evidence Against Minimum Wage: Why Minimum Wage Fails to Reduce Poverty

Bernie Sanders says the darnedest things. There have been a number of his proposals I have criticized over the years: single-payer healthcare, free college, breaking up big banks, the financial transaction tax, and capping consumer loan interest rates. I can add another one to the list: a $17/hour minimum wage. For Sanders, a $15/hour minimum wage is not enough due to the inflation caused by the federal government's fiscal policy and Federal Reserve's monetary policy. Sanders is looking to introduce legislation next month to increase the minimum wage to $17/hour over the next five years. Let's forget the opposition that there would be in the Senate to more than double the minimum wage. 

Let's get at Sanders' argument, which is "If you work 40-50 hours a week, you should not be living in poverty. It's time to raise the minimum wage to a living wage." There are two insights from Bureau of Labor Statistics data on minimum wage workers that Sanders wants to conveniently ignore and that I brought up last year. One is that fewer workers in this country are minimum wage workers, decreasing from 6.9 million hourly workers (or 13.9 percent) in 1979 to 1.5 million workers (or 1.4 percent) in 2021. The second is that 52.9 percent of minimum wage workers are part-time, which is in contrast to the 8.9 percent of minimum wage workers who work over 40 hours a week, or approximately 120,000 workers. 

Even if we ignore BLS data, we still have a research paper from the National Bureau of Economic Research (NBER) that was released about a week ago entitled Minimum Wages and Poverty: New Evidence from Dynamic Difference-in-Differences Estimates (Burkhauser et al., 2023). The main finding of this paper is that "a 10 percent increase in the minimum wage is associated with a (statistically significant) 0.17 percent increase in the probability of longer-run poverty in all persons." This study is intriguing because it is more longitudinal because it spans over four decades. Plus, it spans over multiple industries, which I cannot say for the Card and Krueger study from 1994. That being said, I would like to explore why minimum wage would actually increase poverty instead of reduce it. 

For a minimum wage proponent, it makes sense that minimum wage should help alleviate poverty. After all, if you give someone a higher wage, it means they can better afford to pay their bills and claw their way out of poverty, right? 

It’s not that simple. Mainstream microeconomic theory posits that minimum wage acts as a price floor above the equilibrium point. This in turn causes a surplus of labor in this particular labor market, which is a fancy way of saying that minimum wage causes net unemployment (e.g., Neumark et al., 2021). The most recent report from the Congressional Budget Office (CBO) in 2021 showed that while a $15/hour minimum wage would pull 900,000 people out of poverty, it would also make 1.4 million people unemployed. Minimum wage only helps if you are one of the lucky ones who keeps their job. If you are one of those who loses their jobs, then you are earning $0/hour and will have a harder time gaining the skills and experience necessary to eventually acquire a higher-earning job (e.g., Clemens and Wither, 2014). 

This unemployment effect of minimum wage has a disproportionate effect on the marginalized. To quote the Foundation of Economic Education, "When jobs are scarce, then immigrants, workers with few skills or little education, and those with limited English proficiency are going to have a harder time convincing employers that their labor is work $15 an hour [or $17 if Bernie Sanders gets his way] than their better-skilled, native, English-speaking competitors." 

There is more to this puzzle. This point was mentioned at the end of the aforementioned NBER paper: "We find that less than 10 percent of workers who would be affected by a newly proposed $15 federal minimum wage live in poor families." That is because minimum wage is not determined by household income, but individual income. This is one of the main reasons why minimum wage is not effective at reducing poverty: because it is not targeting the poor. 

As the Foundation of Economic Education points out, there is only partial overlap between low-wage workers and the poor. This is important because poverty is measured at the household level, not the individual level. There are large segments of the poor who do not receive minimum wage, including the unemployed, stay-at-home parents, and gig workers. Conversely, there are many minimum wage workers who are not poor, such as teenagers and young adults living at home with their parents. Going back to that BLS data, workers under 25 account for 44 percent of those paid minimum wage or less. Contrast that with workers under 25 representing one-fifth of hourly paid workers nationwide. 

Another reason why minimum wage fails to reduce poverty is, as I have brought up before (see here, here, and here), because employers have ways to pass on the cost of minimum wage. It is not going to be the same response for each employee, but here are a few possibilities of working around minimum wage increases: cutting workers' hours, cutting workers' benefits, letting workers go, increasing consumer prices, and automation. 

To recap, here are the three main reasons why minimum wage does not reduce overall poverty levels. One is that it causes more unemployment than it does poverty reduction. The second reason is that minimum wage is not effective at targeting the poor. The third reason is that an employer can find ways around the labor costs that are part of minimum wage increases. I am open to discussing ideas of alleviating poverty so that all families in this country get a shot at the American dream. I am equally in favor of tossing such ineffective ideas as the minimum wage to the side. 

It Looks Like Carbon Taxes Do Not Significantly Harm the Economy

Economy v. Environment. It sounds like a court case, but it is how many perceive the discussion on environmental policy. The discourse goes something like this. If we try to lower carbon, it's at the expense of the economy. If we care about the economy, then it puts the environment at peril. That sounds about right as far as the discussion goes. This sort of argumentation has played out in the debate of carbon taxes: If we raise carbon taxes, it will hurt the economy. 

This is the sort of economic argument I made back in 2012. By taxing carbon emissions, the government is de facto taxing an important input of many industries: energy. I also expressed concern about deadweight loss, as well as the regressive nature of a tax that is arguably type of consumption tax. Also, the elasticity of the tax matters. It is plausible to believe that the elasticity of demand for coal and oil is low enough that polluters will more than likely not bear the cost of the tax instead of reducing carbon emissions.

On the other hand, I found an argument for carbon tax to be compelling when considering risk management. Personally, I have believed and still believe a carbon tax makes for better environmental policy than cap-and-trade. It still does not answer whether a carbon tax has negative impacts on the environment. 

I started questioning my previously conceived notion of the effect of carbon taxes on the economy when I read an economic paper entitled Five Myths About Carbon Pricing (Metcalf, 2023). The author argues that endogenous firm creation and technology adaptation lead to modest, positive growth in long-term GDP growth. I have at least some skepticism of the long-term prospect, especially if government imposes such heavy-handed regulations as Biden's vehicle standards.

Then I read an argument from an unexpected source: the Right-leaning Tax Foundation. In its analysis entitled Carbon Taxes in Theory and Practice that it released earlier this week, it shows that in practice, carbon taxes a) do not cause a significant, negative impact on GDP growth, b) are effective at lowering carbon emissions, and c) can be more revenue-neutral when paired with a tax reduction elsewhere (a capital tax reduction in particular). For sure, the effects of a carbon tax depend on the tax amount, who pays it, which sectors are affected the most, and what happens with the carbon tax revenue. While these are legitimate concerns, evidence from Europe shows that carbon taxes in practice have either had no or a modest, positive effect on GDP and employment.

As I argued in 2015, I am in favor of a carbon tax if it means replacing it with such distortive taxes as the wealth tax or corporate tax. Since the carbon tax acts as a consumption tax, it does less economic damage. I do have concerns about the particulars when it comes to implementation, much like I do with any policy. Provided that the social cost of carbon is not priced too high, it looks like carbon taxes are an effective way to lower carbon without causing notable harm to the economy.

Protests in Paris About Raising Retirement Age Beg Questions About Social Security Solvency in France and the United States

It might have faded from the U.S. media's attention, but France has continued the protests that started on January 19, 2023. I know that holding protests is part of French tradition. What has the French so upset that they have been protesting for the better part of four months? Pension reform. In a very unpopular move, President Emmanuel Macron raised the retirement age from 62 to 64 by 2023. Why would he do something that would have the French citizenry in such an uproar?

France has one of the lowest retirement ages in the industrialized world. France also has one of highest percentages of public spending on pensions (OECD). France spends 14.5 percent of its GDP on pensions, which is almost double the OECD average of 7.7 percent. Furthermore, the worker-to-retiree ratio is expected to decrease from 1.7 in 2019 to 1.2 in 2070. This worker-to-beneficiary ratio is even more dire than that of the United States' Social Security by 2040. 

This past Friday, Fitch Ratings downgraded France from an AA credit rating to AA-. This downgrade took place because of weak economic growth and continued increase in the debt-to-GDP ratio due to upward expenditure pressures (including pensions and social benefits). If that were not enough to satisfy you, look at the European Commission's 2021 Aging Report. The EC found that unchanged eligibility requirements (especially age) would have a sizable impact on pension expenditures. For France, it would mean an increase of 2.2 percentage points of GDP (EC, p. 95), which is higher than the European Union average. 

The people over at the far-Left Fairness and Accuracy in Reporting (FAIR) were dismayed by the U.S. media's coverage of these protests because it did not even entertain the possibility of France increasing taxes to fund the pensions. Let's entertain the thought for argument's sake. A panel of economic experts sponsored by the University of Chicago was asked about France raising its retirement age in comparison to two other policy options. The first policy option was raising social security taxes. Out of the economists that did answer, 87.8 percent believed that raising the retirement age was a better option to preserve the financial viability of France's pension system than raising taxes. 

As OECD data indicate, France already has a high marginal tax rate for social security contributions. According to accounting firm PwC, "the contributions are shared between employer and employee; on average, the employer 's share of contribution represents 45% of the gross salary. For 2022, the employee's share of French social contributions represents approximately 20% to 23% of the remuneration." 2022 calculations from the Right-leaning Tax Foundation found that marginal tax rates in France's social security taxes are so barking mad that a pay raise could face as much as 93 percent of that raise being taken as tax revenue. Raising taxes higher would only create deadweight loss that suppresses France's economic growth. 

The second policy alternative is lowering the current benefits. As University of Minnesota economics professor Kjetil Storesletten brings up, current benefit amounts are locked into place. Future benefits take a long time to pass and take into effect. The political backlash would be higher for cutting benefits than raising the retirement age. Similarly, there has been political backlash in France (i.e., 1987, 1993, and 2010) when the French government cut spending elsewhere in its budget. 

That being said, it is not like the France cannot handle it. France did not always have such a low retirement age. Former President François Mitterrand changed the retirement age to 60 in 1983. Beforehand, the retirement age was 65. Plus, the retirement age increased from 60 to 62 in 2010. I am sure that those who are protesting (middle-aged workers in particular) are worried that they will not have the same benefits. 

I would suggest encouraging French citizens to save retirement. The sad truth is the cultural expectation set for retiring French citizens is that the government will take care of them in their later years. On top of that, you have a different work-life balance that views early retirement in a more positive. How work was viewed and valued was clear to me when I visited France and talked with French citizens a few years ago.

As much as I understand that cultural norms around work are different in France, I understand even more the fiscal reality of what happens when you consistently pay out more money into a system than you accrue. It is not sustainable and something needs to be done to contain costs. Fitch Ratings found that raising the retirement age would create annual gross savings of EUR17.7 billion by 2030, or 0.6 percent of the GDP. 

Aside from fiscal reality, there is demographic reality. People in France are living longer with an average age of 85 for women and 79 for men (see below). France has a birth rate of 1.8, which is below the replacement rate of 2.1. Without a solution of actual reform, an overburdened system will eventually become insolvent. 

Source: Institut Nationale d'Études Démographiques (INED)

If your goal is to provide a pension system for your retirees to live on, then there has to be a way for it to last in the long-run. Increasing taxes in a country that already has such high tax rates will only make it more difficult to sustain its social security program and other government services. Much like I explained in 2013 when I argued for raising the retirement age for Social Security in the United States, raising the retirement age is that compromise one has to make in order for long-term solvency. People working longer not only means retirees withdrawing payments for as long, but it also means more people contributing to the system. Since both France and the United States have pay-as-you-go systems for their retirement accounts, I would surmise that France's issues are a canary in the mine for the solvency issues facing the United States with Social Security. While it is not a politically popular move, I at least give Macron kudos for having the balls to address an important issue that so few politicians in the United States are willing to tackle.