Category: Economics

Human-Male-White-Newborn-Baby-CryingBirthrates across the globe are going down even as life expectancy increases. The former trend is marked particularly in developed nations.

There are lots of reasons for people to have kids or not have kids. Some of these reasons are economic. As I’ve argued previously, “One of the common concerns that drives prospective parents to put off having children is economic, specifically that they won’t have the financial resources to support a growing family. This is a worry that’s been around as long as there have been families.”

Perhaps it really is more difficult in America today to make the economic sacrifice (or perhaps better understood as investment) required for having kids.

But often these kinds of economic reasons end up being used as rationalizations. More honest, at least, is this characterization of a ‘rational’ approach to procreation:

Not having children isn’t selfish. Not having children is a perfectly rational and reasonable response given that humans are essentially parasites on the face of a perfectly lovely and well-balanced planet, ploughing through its natural resources, eradicating its endangered species, and ruining its most wonderful landscapes. This might sound misanthropic, and it is, but it is also true.


fireOf all the disheartening scenes of unrest coming out of Baltimore this week, few have been as dispiriting as the image of a church project that was set ablaze.

For the past eight years the Southern Baptist Church in East Baltimore has been working on a project that would provide a community center and low-income housing in the form of 60 senior-citizen apartments. The construction was expected to be completed in December. And last night it all burned to the ground.

Those associated with the project have remained optimistic. Kevin Bell, senior vice president of The Woda Group, vowed to rebuild and said, “This does not make us go away.” And Rev. Donte Hickman, the pastor of the church, says, “This fire is going to spark a revival.”

We should pray the project will soon be back on track and that the community as a whole will heal quickly. But we should also be aware of the long term impact that riots have on a city.

In 2004, the National Bureau of Economic Research (NBER) published two papers that examined the effect of the riots in the 1960s and early 1970s. From 1964 to 1971, as many as 700 riots erupted in cities across America. The large numbers of injuries, deaths, property damage that occurred in predominantly black neighborhoods caused considerable short-term damage on the communities. But the impact over the long run (from 1960 to 1980) was even more severe. According to the NBER,

woman-waitressDo you remember trying to find that first job? You’d be told you needed experience by an would-be employer, but no one would hire you so you could get the experience. Finally, a burger joint or a summer ice cream shop or a retailer would give you a chance, usually beginning at minimum wage.

At AEI, Mark J. Perry looks at the world of the minimum wage worker. Here are a few facts:

  • While teens are the ones who typically earn minimum wage, they don’t stay there for long. In 2014, 85 percent of working teens earned above minimum wage.
  • If a worker does not have a high school diploma, the chances that he/she will earn minimum wage are higher. The more educated a person is, the more he/she will earn.
  • Being married typically means a person will earn more.
  • Part-time workers are much more likely to earn minimum wage than full-time employees.


In an enthusiastic reaction to his first job offer, Ben Sunderman, a 19-year-old with Down syndrome, has spread lots of smiles across the internet. In doing so, he reminds us of the power of work to bring joy to human lives, and of the gift-giving capacity God has given to each of us, including those we often dismiss as “disabled.”

Caught on video by his mother, Sunderman literally jumps for joy after reading about his acceptance to an internship at Embassy Suites. “I did it!” he yells. “I got a job!”

Watch the full video:

For the broader story, see the following interview with his family: (more…)

80s fashionI grew up in a very small town. Our fashion purchases were limited to the dry goods store (yes, it still went by that name) which carried things like Buster Brown shoes and sensible sweaters, or the grain elevator, where you could buy durable overalls for farm work.

As someone who eagerly awaited Seventeen magazine every month and witnessed the birth of MTV, you can imagine my fashion dilemma. The closest mall was 70 miles away. I needed Calvin Klein jeans, Candies heels and Esprit tops like, now.

Steven Quartz, a philosopher and neuroscientist at Caltech, along with Anette Asp, a political scientist and neuromarketer, feel for me. In The Atlantic, Bourree Lam talked with the two about the connection between “cool” and capitalism. Quartz and Asp, believe, in as sense, that capitalism created “cool.” First, though, Quartz says there are four myths linked to capitalism (or what some would call “consumerism”) that their research shows to be false:

First, that it doesn’t make us happy. Second, that it relies on instilling false needs in us because it’s contrary to our real nature. Third, that it erodes public life.  Fourth, that it’s primarily about “stuff.”


Dorothy Sayers“If we put our neighbor first, we are putting man above God, and that is what we have been doing ever since we began to worship humanity and make man the measure of all things. Whenever man is made the center of things, he becomes the storm center of trouble – and that is precisely the catch about serving the community.” –Dorothy Sayers

In orienting our perspective on work and stewardship, one of the best starting points is Lester DeKoster’s view about work being service to neighbor and thus to God. And yet, even here, we ought to be attentive about the order of things, keeping in mind Samuel’s reminder that “to obey is better than sacrifice.”

It may seem overly picky, but it may be more accurate to say that our work is service to God, and thus to neighbor. For without obedience to God, service to neighbor will be severely limited at best, and wholly destructive at worst.

I was reminded of this when reading Dorothy Sayers’ popular essay, “Why Work?”, which she concludes by offering a strong warning against various calls to “serve the community” — a challenge she describes as “the most revolutionary of them all.”

“The only way to serve the community is to forget the community and serve the work,” she writes, meaning that only when we work for the glory of God can we hope for the flourishing of our neighbors (and selves). “The danger of ‘serving the community’ is that one is part of the community, and that in serving it one may only be serving a kind of communal egotism,” she continues. (more…)

raise-minimum-wagejpg“I’m tired all the time.” That’s the lament of one of the working mothers in the video below (from The Guardian), as she describes her life working minimum wage jobs. She and the other women featured are all fighting for an increase in pay to $15 per hour (like Seattle’s recent mandate.)

I feel for them. I can’t imagine trying to raise a family on minimum wage salaries. But I have several issues with what I see in this video. (more…)

gravity-incomeWhen the city of Seattle recently voted to increase the minimum wage to $15 an hour, some critics (like me) snarked that if $15 would help workers why not raise it to $20, $25, or even $30 an hour.

Apparently, one CEO in Seattle didn’t realize we were joking. Dan Price of Gravity Payments recently announced that every one of his 120 employees would soon be making a minimum of $70,000 a year—a minimum wage of $33.65 an hour.

The media reaction to the story has been about as fawning and uncritical as you would expect. While Price is rightfully being praised for his generosity (he’s cutting his own pay from $1 million to $70,000 a year to fund the pay increase), few people have—so far—pointed out how his largess may soon put his employees out of a job. Here’s why.

RefuseServiceSignIn today’s Acton Commentary, “The Logic of Economic Discrimination,” I take up a small slice of the larger controversy and discussion surrounding religious liberty laws like the one passed recently in Indiana. My point, drawing out some of the implications of observations made by others, including Ryan Anderson and Shikha Dalmia, is that anti-discrimination boycotts depend on discrimination. Or as Dalmia puts it, “what is deeply ironic is that corporate America was able to wield its right not to do business (and boycott Indiana) by circumscribing the same right of Indiana businesses.”

Now there are lots of other angles and significant points to explore surrounding this enormously complex and important debate. Many have criticized the hypocrisy of corporations like Apple for doing business in places like China and Saudi Arabia even while they grandstand against Indiana. Others are now pointing to the actions of many in Silicon Valley, which despite the proclamations of support for social justice, have actually created huge inequalities. Tech centers like Silicon Valley are great, it seems, unless you are a woman, have a family, or are a blue-collar worker.

Indiana politicians, under massive scrutiny, have since moved to “clarify” the RFRA law that was passed, a move that has mollified some but not others. From the beginning, these conversations about religious liberty and economic rights have, in my view, insufficiently included sensitivity to considerations like freedom of association. Hopefully the larger context and interactions of contracts and rights, not merely “religious liberty” narrowly defined, can help broaden and mature the conversation.

Blog author: jcarter
Tuesday, April 7, 2015

Profit-Risk-LossYesterday I noted how Americans tend to overestimate the amount of profit earned by corporations. The actual profit margins are so thin that, as Mark J. Perry points out, for the typical company all sales revenue from January 1 to December 7 would go to cover the firm’s expenses for the year, and its sales on roughly the last 24 days of December from December 8 to December 31 would represent its profits.

For the other industries displayed in the table above that operate on thin profit margins of less than 4%, companies in those industries have to operate until the middle of December (airlines for example at December 18), or even until the last week (department stores), or in the case of grocery stores until the middle of the last week of December. Think about it — a grocery chain like Safeway or Kroger has to operate from January 1 to December 26 until it breaks even for the year, and only then will its sales revenue from the the last 4.4 days starting on December 27 represent the profits for the entire year! And that’s only if everything goes exactly right, and nothing goes wrong — like a sales slump from a recessionary slowdown or from increased competition from a new competitor like Walmart and Target (now in the grocery business); or like an unexpected increase in costs that can’t be passed along in the form of higher prices, etc.

As a percentage of operating costs, profits are often miniscule. Yet they play an outsized moral role in the creation and distribution of goods and services. “Profits motivate people to work hard for themselves and to make life bette for others,” says economist Walter Williams.