Sunday, January 15, 2006

The Chief and the Disclaimer Or: How I Learned to Stop Worrying and Love the Long Boring Post.

The Chief came back this week. Though it was no vacation while everyone was gone, it was a respite of sorts. Everything was empty and slow, and I think I’ve said that before, 3 times at least. That’s a testament to how slow it was. I’m still stuck with the same thoughts. But that is, well has changed. As I said, the Chief is back, and with it, we are back in full swing. Rather than one or two things, I have several on my plate now. It’s good, I was getting a bit lethargic, and now I have something besides this blog to fill my insomniac section of the day.

Over the holidays I had enough free time to start getting involved in a new project, and even contacted the comrades at an old project to offer some help. We’ll see if I can follow through on that, though I should have the time. To further that follow-up, I’m even going public with my new commitments. This is a terrible mistake, but hopefully shame will keep me from going A.D.D. on this stuff.

This is all a self-serving post (but then again, narcissism kinda, you know, goes w/ blogging.) For the old project, as I’ve been keeping up w/ what they’ve been up to, I’ve been trying to figure out how to give them a plug. Then the NY Times magazine goes and publishes an article on the living wage movement in the U.S. A good article, of course, but lacking in certain regards.

On a preemptive side note...was at a dinner party at Vasco’s house the other night, stuck around a bit late, and had a conversation w/ her and her housemate. We were all taken aback at the fact that one of the NGO workers there freely admitted that she liked to tell strangers, especially when flying to a posting, that she was an aid worker because of the adulation they would give her. It’s perhaps natural, and I’m sure I’ve been guilty of such and will be in the future, but the unabashed pride bordered on self-righteousness. Us three than night seemed to agree that we all generally realize that we aren’t heroes (and would try to explain what the work was really like for those unfamiliar), there are, after all, many people doing this work. And I as a contract worker making more than enough of a salary and living a very pampered life am far from being a martyr. The same holds for the UN, World Bank, and many of the NGO workers. So having just recently just come off of a conversation about not patting one’s self on the back and seeking affirmation of oneself by bragging and such, I hope this post doesn’t come off as that.

Many of you all, of the D.C. folks, probably already know this. My introduction to the living wage movement was through my last year in law school. The main campus kids were doing a living wage campaign on campus, contacted me and asked that law students get involved and I ended tossing my hat in. The kids went on hunger strike, and 10 days later the school adopted what we claimed, at the time, to be the best living wage policy, officially called a “Just Employment Policy,” adopted by a University and likely one of the most progressive policies nationally. It’s likely that it is one of, if not the most progressive.

Some of the folks involved in the GU campaign went on to start the Living Wage Action Center. This group is first focusing on getting more campuses to launch living wage campaigns at their schools, and moreover provide support to campaigns already existing. It is probably already one of the quickest spreading student activist efforts in the U.S. The time was nigh, and the folks coming out of the GU campaign had a lot of valuable experience to share and pass on. Support them if you can, and of course, if you care to.

Back to the article. What is sorely lacking is some of the issues within the living wage movement. Yes, that wasn’t the theme of the article, nor probably of interest to most of the audience, but that was a major issue when we were organizing the campaign. (Key disclaimer, I jumped on board 2.5 years after the group started, and close to the end of the campaign.) One of the issues we had was that we didn’t just want a pay increase for the campus workers. We were looking for the school to change the framework in which it related to and dealt with its employees. The focus was on contracted workers (i.e not direct employees), as many of the local ordinances now focus on.

We wanted more than an increase in pay, which is what most of the local ordinances only deal with. That called for more than just boosting the pay. Though of course, that was the most explicit part of the policy and demands from the group. What was additional to that was a correct way to factor future wages, and include many other forms of compensation in a guaranteed wage package. Additionally, a guarantee of neutrality in union organizing efforts by workers, and measures to guarantee the job security and continuity of the contract workers if the university decided to make those positions internal employees. (There was more, and for those who care the link is above.) This was what we saw as what living wage should be, not only just more pay.

This is where the article and examples lack (and some of the internal issues arise). They don’t discuss that there are efforts to make the living wage movement much more than just about pay and cash. Though ACORN was supportive in our campaign, I believe they are focusing just on pay, and making “Living Wage” equal to “Pay Increase.” But we were in a much different environment that what the people in the article were/are in. We claimed the same moral issues, and had a Jesuit institution to leverage them on. We weren’t dealing with McDs. Nonetheless, I think it’s necessary to remember that a living wage can and should be much more than just about pay. Sadly, I think Georgetown had it right when they called it “Just Employment.” (Perhaps a new slogan, “Just Employment, not Just Pay”...though the word play may be a bit too much...) Though I don’t think that it would be politically expedient for the movement to start factionalizing, and that was our motivation in the group when we decided to stick with “Living Wage.” Either way, it’s simply encouraging and exciting to see the NY Times Magazine picking up the issue. I somewhat wish I was back in the States still working with the LWAC folks.

Ok, so the second effort is a group blog site. is being launched as an off-shoot of It’s an open forum that welcomes any and all bloggers that are some how tied into South Asia, i.e. they are or are concerned with ‘desi-s’ (or should it be desees??) . It’ll be launching at the end of this month, and since this post is long enough, I’ll post then, and when I actually start contributing to it.


Elizabeth said...

What's a desi?

Q. A. Shah said...

kinda the inverse of khariji as applied to south asia. it originally means "from the country/countryside", like in urdu 'desi-murgh' refers to the local village chickens rather than factory farmed or imported chickens.

the 2nd gen diaspora has co-opted the term for peeps of south asian origin, the pakistan vs. india vs. X_country distinction having washed away in a large part.

Vasco Pyjama said...

Hmmmm... In light of our discussions on salaries for national staff, I have to confess to having wondered about what the living wage in Kabul is. How much should a person be paid a month? Is $150/month enough?

My previous housekeeper was telling me that it is not enough to live on when you have a few dependents. Particularly as rent is so high in Kabul.

Q. A. Shah said...

I think the actual living wage would be quite low here. Of course, it would have to adjusted for the usual demographics here (i.e. different family sizes, structures, earning member arrangements and so on...). Basically in the U.S. a living wage (as our more progressive valuation of it was calculated) is probably the livelihood attainable by living off the dole in england or france. It's basically the ability to earn enough for basics w/ one 40 hour a week job, rather than two or three.

But since the housing/land market here is so effed up it would be interesting to see what a "living wage" is in Kabul. Especially because part of the justification of "lower" wages for national staff is that you don't want to throw off the economics here. Paying a "living wage" would be the low bar then, one would hope.

Vasco Pyjama said...

Yeah, the housing and land market is a bit screwed. One colleague was telling me that her rent is $150 per month. That's like almost half her salary.

Our dole in Australia is very comfortable. I lived on it for three months... heh. And have had friends who have lived on it for years. So yeah, that's a good indicator of a living wage in Australia for an individual. But for a family... That's a whole different kettle of fish.

Q. A. Shah said...

I wonder if your colleague could get cheaper housing, but just doesn't? One of my colleagues rents a house w/ 3 other guys, and they have a cook and a cleaner. He's probably not making much more than your colleague. Women, especially young single ones, don't live communally. Is she not living w/ her family? (Which I expect is the overwhelming norm for single young women here.)

Does the dole go up for families w/ dependants? Even we do that in America. But the baseline is so low that it doesn't really matter.

Glad to see you're back to commenting.

Anonymous said...

This was what we saw as what living wage should be, not only just more pay

Creepy. Dread-inducing.

Doesn't Señor Economics teach us that the market is probably better-suited to discern appropriate wage levels than is a motley, free-wheeling federation of well-meaning but untutored sloganeers? "Oh, oh -- but we have to have a living wage!" say the assembled goo-goo doers of good. But what is that exactly? And methodologically speaking, what leads us there?

There's high suspicion in some quarters that the answer is: nothing -- the numbers are plucked from the mental impressions that passing clouds make on the soft-minded. "I think that one over there kinda looks like a cat -- no! -- it looks more like $6.15-an-hour plus bennies."

Once, a wise man (in this very thread) remarked, "I have to confess to having wondered about what the living wage in Kabul is." It's a good observation, but what I wonder is: what's the so-called living wage anywhere? I mean, can any man compensate for the damaging information deficits he suffers when his pea brain is matched against the awesomely cerebral overclocked Pentium that is the unfettered market?

I think not!

But even if that were possible, there are other "problemas," says Señor Economics. Like what? Like that fact that "living wages" create deadweight losses. They make us collectively poorer. I know, I know. Who cares if we're collectively poorer, some say. So long as the worst-off get their gilded wheelbarrows of cash -- plus whatever sinister extra-wage benefits that Q.A. has in mind -- we might not care so much about impoverishing society just a teensy bit.

But wait: the justifiably scare-quote-encased "living wages" do more! They exert downward pressure on employment opportunities among the "beneficiary" classes. That is: they make more poor people unemployed. (Their perverse incentives also distort the labor market in unseemly ways, but that's a horror story for another campfire.) The bottom line is that in a "living wage" world, people who would have jobs, don't.

So, who gets left out in the cold?

There are two plausible possibilities. The first is that "living wage" rabble-rousing produces beneficiaries at random. These legatees owe their special status not to virtue, not to industry, but to pure luck. Which means that the people left out in the cold are selected, at least partially, also on the basis of luck. "Thanks," I'm sure they'd say. But more likely than that, the beneficiaries of "living wage" campaigns would tend to be the superior workers, the most productive lot -- exactly the people who least need special protection from the vagaries of the market.

The poorest of the working poor don't just get left out in the cold; they get marooned by the S.S. Living Wage on the shoals of a frigid Antarctic wasteland! Or something like that.


Q. A. Shah said...

This wont have as much “flava” as your comment, but here we go anyway:

I’ll agree that your quoted statement of mine does induce something in me, but rather than dread, merely a cringe.

Greg, I’ll do my best to address some of your points, it’s only fair, as I do count myself as a proponent of living wages. You knew that though. (And haven’t we had this discussion before, when I was actually involved w/ the campaign at GU...if I remember you may have been perturbed at the role I played rather than the actual campaign...btw, has JL had a chance to look at my paper and tell her I said hello.)

Though, you and I know, this is much more your province than mine. With that qualifier, I’ll continue and attempt a rationalization.

First, Senor Economics (how did you get that tilde btw?) lectures a lot. And a lot of the teachings under NCL econ are coming to unfounded. And you know I have less faith in markets populated by normal people rather that idealized people. The conventional wisdom about labor markets has come under a lot of debate in the past few years. The Card and Kreuger studies, mentioned in the NY Times Magazine article, are touted by many Living Wage (LW) proponents.

So with the contention, compounded by many other factors, i.e. political/philosophical leanings (such as economic redistribution being better accomplished through government rather than markets) I throw my weight behind the “motley, free-wheeling federation of well-meaning” AND well tutored sloganeers.

Now as far as how we calculated the living wage for D.C. and the methodology employed in determining that wage, look to the LW campaign site, linked to in the main post. Briefly though, that was a large part of the 2.5 years that I wasn’t part of the campaign. As I recall, the factors are that a base pay should be 1/2 of the total wages needed to support a family of four in the city based on a 40 hour week. The factors used to determine the “total wages” are housing, healthcare, and basically externals (clothing, food, etc...). The percentages that each factor contributes to the total wage, I can’t remember off hand, but it is there for you on the campaign web page. The costs were determined from conventional and well accepted surveys. The pay increase, of course was, basically a standard % that is regularly adjusted the cost of living increase as determined by that federal agency that I can’t remember (it not the Bureau of Labor Statistics, is it?).

So the only passing clouds that help to determine these numbers come from the hippies exhaling when smoking up, they definitely are not the cumulus clouds floating high above as you infer. Though at times there are a lot of cat sightings, and if there is, they of course want to add it to their collection of 50 ‘rescued’ house cats.

That wise man you quote, it’s a woman, wasn’t it Vasco that said that. Either way. So yes, the living wage is better determined locally, not nationally, not internationally. And you and your damn markets, granted my anti-market nature comes from my generally leftyism, but this whole Behavioral Econ stuff helps to point out that your market models don’t work to well. Overclocked Pentiums run a few specific programs really well, coming up with an alternate chip structure does the other programs real well. Chips are best when designed and controlled for the specific application. So are markets.

Los otros problemas...oy, deadweight losses. I’m not going to argue dead-weight loss. Mainly because I don’t know enough, but also because the amount of dead-weight that lies under the curve is so highly dependant upon the model, and the strict and controlled variables that go into the model. Being strict and controlled is generally good, but I don’t have enough faith in markets to believe that any dead-weight losses will be recapitalized into productive economic uses. Just saying there are dead-weight losses is not enough. “collectively poorer”...again, if I had faith in a fair or just market method for economic distribution, sure dead-weight would make us collectively poorer. I don’t have faith, and I don’t believe we’re collectively poorer for paying people enough to live rather than putting those resources other places.

As far as the downward pressure, see the Krueger and Card and many other more recent literature on the topic. The well accepted conclusion is starting to be unseeded. Sure the jury is still out. But until it’s conclusive that living wages do make poor people poorer, eff it, I find enough merit in a living wage to go for it. Additionally I’m guessing that the forces that would make the poor people poorer with wage increases aren’t solely coupled to wages, and those forces can be addressed. (I have nothing to back that up with, btw.)

I can’t dismiss the claim that “living-wage” may produce beneficiaries at random, but there are not many randomly chosen well paid firm lawyers that will become ‘living wage beneficiaries.’ It will generally be the specifically qualified workers that have or receive these jobs. And you are right that our rabble-rousing helped those “randomly” employed by GU. On the flip-side, an employer was specifically chosen and targeted to pay a living wage based upon characteristics claimed and cultivated by the employer. A lot of them coming from the fact that GU is a Jesuit institution. And those “randomly” chosen are increasing in number as the city now gets ready to adopt an LW policy.

As far as the contention that the productive workers will become complacent once ladled with a living wage? I’ll contend that by giving these “superior workers” more pay for less hours may be the key to enabling them to further climb the ladder. Clearing a spot on the bottom for the next random or superior worker to have a go at it. In the end protecting some people from some of the vagaries of the market isn’t a loss in my book. Especially when the conventional wisdom consequences are contentious claims.

The poorest of the working poor likely need a lot more than just a living wage. But if they become such beneficiaries, maybe some of those other needs can be more adequately addressed.

“the S.S. Living Wage”...can I steal that??

In the end, it was a lot easier to support a living wage under the conditions that our campaign was working under, i.e. a fairly rich private university. Even then, I still will be willing to man the helm, not believing we’re heading to Antarctica aboard the S.S. Living Wage, even if we are...hell the globe is warming, so we’ll be fine down there.

Anonymous said...

I can't read all that, so to cut to the chase: If employers have market power, which may be reasonable to assume in some cases, then they will probably act to some extent like monopolists. In those cases, they may hold down employment in order to hold down wages; so imposing a higher wage would also lead them to hire more people. The lesson from this: start off with an easier battle, identifying failures or problems in the labor market (e.g., price setters or assymetrical information).

More to the heart of the matter, though: are the women of Kabul hott?

Anonymous said...

Shorter Q.A.: “If you ignore economics, then a ‘living wage’ campaign is a great idea.” (Incidentally, I’m given to understand that Card and Krueger have largely been discredited, but I’m too lazy to resolve that one.) For critical commentary, check out this week’s entries over at Café Hayek and Econlog.

Vasco is a woman now?

Anonymous: now you’ve got me mad. I was totally set for Q.A.’s raunchy Afghan dispatches -- my mouth was agape, my tongue was all unfurled, everything. But then I got sidetracked by your assertion about monopoly power. As some might say, I can’t read all that, so to cut to the chase: We’re not talking about “living wage” campaigns in isolated outposts or one-company towns. For goodness’ sake, Q.A.’s campaign took place in the heart of economically vibrant Washington, D.C. I wouldn’t think that we’d find too many cases where “imposing a higher wage would . . . lead [firms] to hire more people.”

But even if we were to grant you your cutesy-poo “market power” hypothetical, a “living wage” law would generally still be too blunt of an instrument to be a useful corrective. Like I said above, I trust the market -- even an imperfect one -- more than I trust wandering bands of starry-eyed naifs armed only with their cruddy anecdotal indicia of poverty and their unbearable self-righteousness.

OK, bring out the dancing girls!

Or whatever.


Anonymous said...

Gary, I'm sorry I've gotten you mad. Would my writing have been more persuasive laden with "for goodness' sake," "cutesy-poo," and "starry-eyed naifs"? I think that has a ring to it, don't you?

What I trust, more than thoughtful if inchoate analysis or the invisible hand is some cloaked fellow on the internet whose argument boils down to "Gary likes it."

Q. A. Shah said...

I'm gonna side w/ Greg (who is Gary??) on this one. The living wage campaigns are usually launched in fairly robust markets, but to your point, often launched at monopolistic employers, such as municipal gov'ts or universities or bix-box employers. The NY Times article focuses on Santa Fe, NM, where actually none of that is true, but as the article points out, it is, I believe, the singular exception nationwide. And I'm still not following your logic. Been too long since I've been reading econ, eventually I may get back to it.

As far as your advice of starting w/ the easier battle, the market anomolies and exceptions. That is what is done, hence targeting moralizing institutions (Jesuit Universities) and Gov't employers.

Women in Kabul...i'm not gonna lift up the burka to find out it's a taliban suicide bomber underneath. Can't answer your question. And I wont.

Your curt summary holds some truth. I wont deny that I'm implying, if not directly saying, "ignore economics." That comes from my general lack of faith in econ as a "science," and in "science" in general. For me, this is more of a political issue than an "econ" issue.

And I believe I acknowledged Card and Krueger as being contentious. They aren't 'cold-fusion scientists' or 'korean stem cell researchers' but their research does shake up the CW a bit. That's enough for me to take off running w/ the political side of this.

Can you send some of the dancing girls this way??

Anonymous said...

Gary likes it! Gary likes it!


Anonymous said...

Pkunzip bitches!

-- Kompressor

Q. A. Shah said...

So I've been doing a bit more digging, trying to crack the Gary/Anonymous 'cloaked fellow on the internet' mystery. Is this my dear friend that actually is, or rather was an economist? Since I only have one, and you know who you are, it would clarify things. And if such is the case, can you point me to some good readings on dead-weight losses, especially in a labor market context?...q

Anonymous said...

    I wont deny that I'm implying, if not directly saying, "ignore economics." That comes from my general lack of faith in econ as a "science," and in "science" in general.


   For me, this is more of a political issue than an "econ" issue.

But dude, don’t the two go hand-in-hand? If it can be shown that “living wage” campaigns hurt the working poor, then doesn’t that kind of diminish their political appeal? I suppose I’m taking it for granted that you support “living wage” campaigns because you want to help the working poor, but maybe that’s wrong. Maybe you don’t care a lick about the working poor; maybe you’re a “living wage” booster simply because you think it’s fashionable or funny or something.

If, however, your goal is to help the working poor, then the economics is important.

I mean, what’s your “political” position, anyway? If, as you say, you reject economics (!) and science (!!!), then your position must be something like: “We should pass ‘living wage’ laws because they’ll either help the working poor or they’ll hurt the working poor -- but it doesn’t matter which!” That argument, however, strikes me as nonserious.

Lastly, Card and Krueger published their study in what, 1993? 1994? It was based on 1992 data. And, importantly, from what I’ve read, their study has been largely refuted. (Their methodology stunk.) Therefore, Card and Krueger aren’t “being contentious.” Nor “does” their research “shake up the conventional wisdom.” They produced a flawed study over a decade ago.

People laugh at them at cocktail parties and stuff.

Actually, one more thing. You asked for readings on deadweight losses. Even though you asked someone else, I’ll chime in anyway. Unless you have some specialized purpose in mind, I’d start with (and probably end with) what you can find in an introductory textbook, or whatever is turned up by google. In any case, although above I spoke out in favor of decentralized economic decisionmaking, and I also mentioned deadweight losses along the way, the most compelling reason to reject “living wage” measures may be the last point I made: that they tend to hurt the poorest of the working poor.


Q. A. Shah said...


So out of fear that this discussion could continue to eternity, and we don’t have a closing of a restaurant or Jenn’s bedtime to make us stop, I’m gonna try to be brief.

I think you took my denial of economics as a bit of a hyperbole, and the lack of faith in science was just me being a po-mo ass. But still true is that I’ll hold neo-classical econ at an arms length. I know enough to question it, but not enough to disavow or argue well against it.

Political Econ: Of course you think they go hand in hand. Isn’t that what it says on your degree?? My degree doesn’t, in fact my degree has neither of those words on it, so that could account for a difference of opinion. So back to the issue at hand (not hands...sorry), yes hurting the working poor would diminish the appeal for those that advocate for it. Part of the motivation is to *hurt* the top end in terms of economic redistribution. That’s partly where the supremacy of the politics over the actual economics goes, despite the facial hypocrisy of that motivation. And of course I’m a “living wage” booster cause it’s know me, always on the activist political edge... The truth of the matter is that GU, and many of the Universities where our campaigns could focus could easily adopt just employment policies, non-exploitation was something we felt was key for the educational institutions we attended. As far as the larger movement, I’m a bit more wary, for many of the reasons you point out, not that I don’t wish they were true, but I’m willing to accept that some of the scenarios may happen in an open labor market.

As far as I can recall, Card and Krueger put out another study in 2000 and have done other work that supplements their earlier findings. I haven’t paid too much attention to the methodological question, except to know that they are disputed. I’m sure there are people on both sides of the fence (though the reliability of either side I can’t speak too), and they get laughed at AND praised at cocktail parties. BTW, what type of cocktail parties have you been hitting up recently.

I’ll look at the deadweight losses stuff, partly for purely personal reasons, as it is often an issue in the debate about intellectual property laws, where I think it’s much more of an issue/argument.

As far as your last point, I’ll still see the jury as out. And some of those ways that a living wage policy hurts the working poor should be addressed. Further more, as a means to a greater end, I’m still all for it.