Month: August 2015

In 2012 I wrote Christmas gift for someone you hate: Windows 8. Today I allowed Microsoft to upgrade my desktop computer to Windows 10, which took about 10 minutes (presumably the 1 TB SSD C: drive helped). Everything seems to work, including the Dropbox and Crashplan background processes. The Windows 8 tablet interface seems to be gone and I’m back to “just a desktop” (conspiracy theory: Microsoft secretly replaced Windows 8 with Windows 7 plus a light re-skin and just told everyone that it was a new operating system).

How are readers doing with Windows 10? What new and useful features are there? Is there anything substantially better about it than Windows XP? Google Chrome was crashing pretty frequently for me before the upgrade. Is it time to move to the new Microsoft Edge browser?

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Netflix now offers a year of paid parental leave to both mothers and fathers (Washington Post). Readers would not forgive me if I didn’t try to explore the economics of this.

Suppose that Jack and Jill are expecting their first baby and are hoping to have a family of four children as well as own their own business. Both are skilled software engineers. They both take jobs at Netflix, earning a combined $300,000 per year. The are just finding their way around the class libraries a month later, without much working code expected of either of them. Jill gives birth to Child #1. Jack and Jill then sell their expensive Silicon Valley house and move to Lake Tahoe, Nevada where they write code for their future startup company while also enjoying skiing and hiking. Child care is cheap up there so they can park the baby any time that they want (or most of the time) for minimal dollars (see the California and Nevada chapters of Real World Divorce, State Background sections, for the statewide averages).

When Child #1 is a year old, they return to work, renting a short-term stay apartment. A month into the job, however, Jill gives birth to Child #2. Back to Lake Tahoe for another year of work on the startup while collecting $300,000 per year. When they go back of course their employer needs to send them to some training programs to brush up their knowledge of the latest Java framework. (Because of course they are all so much better than straight JSP that you need to throw out your framework every year and start with a different one.) A month after they return to Netflix the second time, having done nothing but learn a new framework, Jill gives birth to Child #3, continuing the 13-month spacing. Back to Lake Tahoe for another year. They do this again with Child #4, return to work for two months and then quit to run their own company, whose product is now basically ready (about four years of development effort by two skilled programmers has gone into it). Netflix has paid them for 4.5 years, a total of $1.35 million plus benefits worth another $300,000? Netflix has received nothing in exchange for this cash. Jack and Jill have four healthy children, all of the intellectual capital investment that they needed for their startup, and perhaps $400,000 saved because they were being paid at Silicon Valley rates but spending at rural Nevada rates. Their stock option grants from 4.5 years earlier are now fully vested so, if the asset bubble continued to inflate, they might have another $1 million in stock option value.

Do readers see any reason why this wouldn’t work? I don’t see how Netflix could justify firing either Jack or Jill at any point. What kind of performance expectations could be imposed on workers who show up for just one month at a time? And how would the usual sluggish big company firing process work when people go out on parental leave before the company has time to put their on a performance improvement plan? If the goal of people who work for big Silicon Valley companies is to found or join a startup, why not let Netflix parental leave finance that goal?

Related:

• nytimes article on the idealist who established a minimum wage of $70,000 per year at his company (turns out that being an idealist in a world of realists can be challenging)

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“Credit Supply and the Rise in College Tuition: Evidence from the Expansion in Federal Student Aid Programs” is a study by economists at the New York Fed on what percentage of tax dollars that were supposed to subsidize students actually ended up subsidizing colleges instead (because they could raise their tuition by more than 100% of the subsidy). They don’t look at the other folks who get rich off Federal student aid: lenders who provide student loans are fairly high interest rates yet in fact incur no risk because they can get more tax dollars if the students don’t pay.

For those interested in just how paralyzed and ineffective Americans can be when it comes to clear thinking about public policy, the study references a 1987 New York Times article by the Secretary of Education at the time (William Bennett). More than 30 years ago Bennett figured out that the subsidies helped colleges, not students, and that even if they were redesigned to help students it didn’t make sense to provide unlimited federal funds: “the chief beneficiaries of a college education are the students. On average, college graduates earn $640,000 more over their lifetimes than nongraduates do. It is simply not fair to ask taxpayers, many of whom do not go to college, to pay more than their fair share of the tuition burden.”

Related:

• Maybe Obama was right for trying to kill 529 Plans?
• government subsidies for flight schools
• survey of the latest economics papers on what kind of higher education does yield a good return on investment
• Missoula (what do students do once they get to college)

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It is almost time for Burning Man. Two years in a row is more burning than a Bostonian probably needs, but a friend pressed me into it.

We have the opportunity to load up part of a container here in Boston with whatever heavy non-perishable items that we want to have with us (but not liquids unless in cans, I think). So that leads to the question… what to bring?

We’ll be camping with the Pongo Lounge folks, which means that we will have a field kitchen and water supply, but I don’t imagine that it will be easy or simple to cook or clean up. It will be fairly easy to heat stuff up to lukewarm at least by leaving it out in the sun but tough to cool anything except perhaps by consuming it in the morning after a cold night.

If you had to live on canned and/or dry food for a week, what would you choose?

[Of course we will try to bring in some fresh food and keep it on ice but I have a feeling that after a couple of days we will be reduced to canned items.]

Related:

• Best way to visit Burning Man: work for the government (I want their menu!)

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“Pilot Shortage Halves Republic Airways Stock” is a Wall Street Journal article about how Republic, a regional jet operator, can’t find enough pilots to keep the planes going. In theory they could just offer a $20,000 signing bonus and have all the pilots that they needed, but presumably their union contract with pilots would prohibit that (since the more senior pilots would say “We should get the $20,000 instead”; see “Unions and Airlines” for my article on this toxic combination for shareholders).

I’m also wondering where these low-level pilot jobs will end up after the latest rounds of employment market intervention by the government. The union contract may say $19 per flight hour, for example, roughly $19,000 per year given the typical 1000-hour schedule. But due to the abysmal schedules assigned to new pilots in the U.S. (so that senior pilots can work minimal numbers of days), it might take 22 days per month at 14 hours per day to get in the full amount of flying. That’s about 3700 hours per year of deadheading, waiting around airports, and doing other stuff for the employer’s convenience. At the new $15/hour minimum wage, that’s $55,440 in straight time plus required overtime pay for a lot of those hours? Thus I am wondering if the argument over the typical low wages for entry-level airline jobs is moot. It may soon be illegal to pay anywhere close to those wages.

Labor is at least 20 percent of a U.S. airline’s cost (WSJ 2012; probably more right now due to the collapse of fuel prices). So it seems reasonable to expect ticket prices to go up.

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“Putting a Price on a Human Egg” is a Wall Street Journal story about collusion by fertility clinics to limit payments to human egg donors to $10,000 per cycle. There is a discussion that at least in some cases the process may simply transfer infertility from one woman to another: “Leah Campbell, a 32-year-old writer in Anchorage, Alaska, suffered complications following two donor-egg cycles while in her 20s and said she became infertile as a result.” A quick Google search revealed that nobody seems to know the correlation between egg donation and subsequent infertility.

As noted in Real World Divorce, it is straightforward to sell an abortion for $250,000 in lieu of expected child support payments and the link between abortion and subsequent infertility is well-studied (example paper).

The marketing for egg donation seems to be mostly directed at college students. What if, instead of selling eggs, they were to have sex with the men most conveniently available? http://www.masslive.com/database/umasspayroll/ shows that, in 2007, a full professor of Biology at the University of Massachusetts earned about $130,000 per year. Adding 3% annual increases since then gets us to a current salary of $165,000 per year. That’s $3173 in weekly pre-tax income. Feeding that into the Massachusetts Child Support Worksheet yields annual tax-free revenue of $30,368 or $698,464 over a 23-year period plus likely college tuition, day care, and other expenses of roughly $400,000. Thus the professor’s non-abortion cash payments are likely to be $1.1 million.

[Note that, if the professor is married, and his wife chooses to sue him for divorce after finding out about the dalliance with the student, if the student can get her lawsuit filed first and a child support order established, the claims of the wife and children of the marriage will be inferior to the claims of the owner of the out-of-wedlock child. The professor’s income for child support purposes when the wife sues will be figured by subtracting the existing child support order from the “gross weekly income” (fans of arithmetic/accounting will note that the “Other Support Obligations paid” field is an after-tax number being subtracted from a pre-tax gross number, so it is quite possible that the professor’s true after-tax and after-paying child support income is $0 and yet he would be subject to an additional order to pay more child support to a new plaintiff.]

So it would seem that without leaving the campus a student could easily sell an abortion for 25X what she can sell an egg for.

What do readers think? Should the fertility clinics be prohibited from fixing prices? If the answer is “no” and the clinics can fix prices, is $10,000 an acceptable number given the profits available to abortion retailers?

Related:

• Payment for surrogate mothers

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I’ve been going to bicycle shops lately trying to sort out the challenges of carrying children on bikes. I’ve been noticing a lot of bikes have extra dedicated brake discs on the front wheels, even bikes intended for on-road use. My stupid question for today is “Why?”

The rim is already a big brake disc, right? It is exposed to flowing air so it won’t build up heat with repeated braking. Due to its larger mass it should be a lot more heat-resistant than a small disc near the hub, no?

If we already incurred the weight of having rims on the bike why would it be a good idea to add more spinning mass in the form of dedicated brake discs?

Is the answer that the latest and greatest rims are carbon fiber and somehow don’t work as well as brake discs? But if that is the answer, why does one see disc brakes on bikes with conventional aluminum rims? Are dedicated discs somehow far superior in rain or after riding through a puddle?

Who has disc brakes and can talk about the practical advantages?

Dumb question #2: The bike shops seem to be selling tubeless tires for $90 each (Amazon has Hutchinsons for $70). TireRack.com will sell you a 195/65R15 tire for a Honda Accord for $52 (I’m going to guess that there is more rubber in the Honda Accord tire). Who is riding with tubeless tires? How do you like them? Why do they cost more than tires for a 3000+ lb. car?

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The time has come for new siding on our house, building in 1968 and under constant attack from New England weather, carpenter bees, etc. The architect said that one option was wood with a natural finish: “looks beautiful but it needs to be refinished every three years of so.” What does that cost? He estimated $4000. I replied “With the new minimum wage law and Obamacare health insurance cost increases for employers, that will be $8000 soon enough. What’s the alternative?” He suggested fiber cement siding, which looks like wood but the color is built in and it will probably never need to be touched again. Decision: HardiePanel Vertical Siding in the Select Cedarmill texture (not sure on color yet). Supposedly it costs slightly more to install because the material is hard to cut, but it will save perhaps $130,000 in maintenance over the next 50 years.

Readers: In what other unexpected ways can labor be cut from the U.S. economy in response to these new laws and regulations? (unexpected = not robots or touch-screen tablets for ordering at restaurants)

Example 1: Buy a new imported $130 bike instead of paying $60 for a repair that used to cost $45.

Example 2: Gutters with covers to keep out leaves instead of paying people to come once/year and clean out the gutters. (Suggesting the iRobot Looj wouldn’t count!)

Example 3: More cruise holidays on ships of international registry with international crews rather than holidays in the U.S. in hotels staffed with Americans and under U.S. labor regulations.

Related:

• Can Puerto Rico be a laboratory for the future of the rest of the U.S.?
• Caveman Economics: Will the next rounds of higher minimum wages cause massive unemployment?
• MIT professor studies high-wage retailers
• Attitudes toward Minimum Wage (from 2009)
• Book Review: The Redistribution Recession

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“The Least Meaningful Job in America” is a Slate article. Look at the small green circle at 29% “high meaning” and $103,000 in median annual pay. That’s “Computer Software Engineers, Applications” and it pretty well screams “Go to medical school so that you can at the top right of the chart instead.”

What do readers make of this chart? Can we rely on data from PayScale? Is it simply that people whose lives are meaningless choose computer nerdism or does computer nerdism render a person’s life at work meaningless?

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