Midwestern labor market

We recently visited a large avionics shop at an exurban Midwest airport. In business for many decades, they now employ 12 full-time technicians, for whom starting salary is $20/hour (median home price in the area is about $150,000; a brand-new 4BR house biking distance from the airport can be purchased for $250,000; so a person earning $20/hour could afford the median house and a two-income couple could afford the new 4BR house (source)). “It is getting harder every year to hire people who can do this work,” said the manager. What does a beginner avionics technician need to be able to do? Read a wiring diagram, cut wires to the correct length, crimp connectors onto wires, etc. The work must be done diligently and with attention to detail, but no college or engineering education is necessary.

Separately, painting aircraft is very labor-intensive (prepping/sanding) and also requires attention to detail. It can easily cost $50,000 to $100,000 to paint a light jet. One would think that there would be a thriving industry in Mexico to paint U.S.-based planes, but it doesn’t seem to be the case. The Wall Street Journal in 2010 described airlines getting some paint work done in Monterey, Mexico by Saltillo Jet Center, but most of the shops in the article were in the U.S. With labor costs rising in the U.S. could this be a business opportunity for an entrepreneur down there? The typical U.S. paint shop seems to have one or two real experts supervising a bunch of junior folks.

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Burning Man Lingo

I’m back from Burning Man and I learned some new terms, e.g., the following:

  • darktard/darkwad: person who walks around at night without wearing LEDs
  • Sunday watermelon: a gift that is more about the giver wanting to get rid of something heavy/bulky (the Man burns on Saturday evening so a “Sunday watermelon” would typically have been purchased at least one week earlier)

(See BRC Weekly for additional)

I noted some conversations unlikely to be heard elsewhere…

“It’s so cold you need to be dressed like it is fucking Siberia.”

Male Burner 1: “What should I wear tonight? I have got these tights.”; Burner 2: “If that isn’t gay, tell me what is.”

  • Burner 1 (looking at some photos): “These are great!”
  • Burner 2: “Thanks. I also took some good ones on the Playa this morning.”
  • Burner 1: “How do I find them?”
  • Burner 2: “Just keep scrolling until you see shaved pussy and you’ll be in the right area.”

“I don’t know why they make Viagra in 100 mg pills. You would have to be a fucking elephant to take 100 mg. Chop it into eighths and it gives you a nice tailwind.”

Burner eating cashews: “It says they are salted. Where the hell is the salt? Fucking health food.”

Burner eating breakfast: “This is almost as good as what they’re serving in Camp Superdouche.”

Medical professional burner: “He really should not do so many drugs.”

“Do these boots go with this bikini?”

Burner noticing tent-mate about to step into tent from camp shower: “Aaaargh! You have Playa Foot!” (paste of dust and water stuck to foot)

2015-09-03 11.59.01 HDR

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Good electronic source of bike rides?

Serious cyclists: What is a good source of curated bike routes? In the print world there a lot of books with suggested bike rides. But why lug a book around if you have a mobile phone in a handlebar phone mount? Is there a good source for scenic bike rides, organized by distance and geography, for some of the biking apps? For the fancy Garmin bike computers? Simply to download into Google or Apple Maps?

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How is it okay for restaurants to post Price X and then charge Price X*1.21?

At East Coast Aero Club if we posted prices for our aircraft and then charged customers an additional 21 percent “service fee” or “administrative fee” they would presumably be upset. In fact I wonder if it would violate some sort of regulation either federal or state. Yet restaurants are supposedly trending in this direction. This New York Times article says that, in our new Obamawage era, tips are being eliminated in favor of mandatory-for-all-customers 18-21-percent fees added onto the menu prices. U.S. merchants have gotten away with this practice with respect to sales tax, unlike their European and Asian counterparts. But can they actually do this for a fee that is charged to every customer and that they always collect?

Could I run a restaurant and advertise that pizza is $2, the cost of the ingredients, but then have some fine print at the bottom of the menu saying that customers must also pay a 500 percent “prep and service fee”? If not, how is it legal to do the same thing with a smaller fee percentage?

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More awesome than money: Serena Williams

The Wall Street Journal top headlines are mostly about money, but “How Serena Williams Produced Her Second Act” (August 26, 2015) is worth reading if you’re interested in seeing the breadth of the paper’s capabilities. It is comprehensive look at the strategies of this 33-year-old athlete, complete with six illustrative videos (try that in the supposed glory days of print journalism!). Here’s some stuff that I didn’t know about this great achiever:

After Williams won Wimbledon in 2010, she lacerated her foot on broken glass in a restaurant in Germany and needed surgery to repair a tendon. The next year she suffered blood clots in both her lungs, which can be a life-threatening condition.

“I didn’t think I would play tennis again and I didn’t care, I just wanted to get out and live and start a life,” Williams said.

She said the blood clots left her with permanently reduced lung capacity. “When you get one, it goes into your lung and it kills it, and that’s why you die, because it just kills your lungs, it slowly starts to turn black,” she said. “It’s for life.”

Related:

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Real statistics on airplane piston engine reliability: diesel versus gas

Let’s hear it for the Chinese and Germans. Continental, now Chinese-owned, acquired the bones of bankrupt German aircraft diesel engine manufacturer Thielert. The actual engines are based on a Mercedes car diesel engine, which is much heavier than the traditional aluminum air-cooled airplane piston engine, but is capable of burning jet fuel (much cheaper than Avgas in Europe and much more available at airports worldwide). Continental has been tracking the reliability of the engines they have produced. It turns out to be 3.3 inflight shut downs per 100,000 flight hours. Note that this would include, in a twin-engine plane, an intentional shutdown by a pilot who noticed a problem and decided to proceed with just one engine spinning.

Continental misleading cites some FAA statistics that older design engines experience 10 shutdowns per 100,000 hours. This could be true but those statistics include high-power engines and old engines. The proper comparison would be to relatively new engines with similar horsepower to the diesels. It is unfair to look at a 310-horsepower engine from 1990 that is past its 12-year recommended overhaul period and compare that to a two-year-old 135 hp diesel engine.

If these low-power piston engines can run for 30,000 hours before shutting down, what’s better? Supposedly the Pratt & Whitney PT6 has an in-flight shutdown rate of between 1 in 200,000 hours and 1 in 500,000 hours. The Honeywell turboprops (formerly Garrett) are somewhere in between.

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New paranoia: drugs in the water supply

I was trying to find a replacement water filter for a GE refrigerator (the machine is fresh from a $430 board swap that restored its ice-dispensing capability; examining the discarded PC board revealed a handful of chips and some relays labeled “Made in China”; perhaps $10 of parts total). This GE MWF seems to be the part. The product name is “Pharmaceutical refrigerator water filter” and I inferred that it was intended to be used in pharmacies somehow. Maybe they need extra pure water for giving to customers or for mixing with powders?

It turns out this is to address “Drugs in Our Drinking Water?”, something relatively new for Americans to worry about. Supposedly if your bones are aching you can just take a drink from the nearest river and will get plenty of ibuprofen. Or maybe just have a glass of tapwater.

What do readers think? Where does this paranoia rank? Above or below vaccine paranoia?

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Photoshop idea: Subtract shaded version of a subject to simulate the sun-as-spotlight

Here’s an idea for exploring all of the lighting possibilities for a big object even when you don’t have any control over the “natural light.” (Thanks, Andrea Matranga.)

I’m kind of shocked at how well this works.

Readers: What do you think of the technique?

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Why “inequality” will be an evergreen American politician’s talking point

“The Redistribution Fallacy” by James Piereson looks at some data on American income and concludes that, no matter how high taxes are, income inequality will be about the same (since the services provided to low-income Americans don’t count as “income”). Here’s a chart:

income-by-quintile-graph

 

Piereson explains:

Many in the redistribution camp attribute this pattern to a lack of progressivity in the U.S. income-tax system; a higher rate of taxation on the wealthy should solve it, they think. But the United States is already a highly taxed country with a highly progressive tax rate. Indeed, income taxes in the United States are at least as progressive as those in many other developed countries. The highest marginal rate in the States was 35 percent, from 2003 to 2012; today it is 39.6 percent for top earners—not far out of line with those of America’s chief competitors, including Germany, France, the United Kingdom, and Japan, where the highest marginal rates range between 40 and 46 percent.

[Note that Piereson here makes an error in comparing the total tax rates of these foreign countries with the U.S. federal rate; adding in state and city income tax here in the U.S. makes the true top rate closer to 50 percent in some high-income parts of the U.S., e.g., New York City and California]

Payroll taxes [40 percent of federal revenue] fall more heavily upon working- and middle-class wage and salary income earners than upon the wealthy, whose incomes come disproportionately from capital gains or whose salaries far exceed the maximum earnings subject to those taxes.

Turning to the spending side of fiscal policy, we encounter a murkier situation because of the sheer number and complexity of federal spending programs. The House of Representatives Budget Committee estimated in 2012 that the federal government spent nearly $800 billion on 92 separate anti-poverty programs that provided cash assistance, medical care, housing assistance, food stamps, and tax credits to the poor and near-poor. The number of people drawing benefits from anti-poverty programs has more than doubled since the 1980s, from 42 million in 1983 to 108 million in 2011. The redistributive effects of these programs are limited, however, because most funds are spent on services to assist the poor and only a small fraction of these expenditures are distributed in the form of cash or income.

As it turns out, most of the money goes not to poor or near-poor households but to providers of services. The late Daniel Patrick Moynihan once tartly described this as “feeding the horses to feed the sparrows.” This country pays exorbitant fees to middle-class and upper-middle-class providers to deliver services to the poor.

The American welfare state was built to deliver services rather than incomes in part because the American people have long viewed poverty as a condition to be overcome rather than one to be subsidized with cash. Many also believe that the poor would squander or misspend cash payments and so are better off receiving services and in-kind benefits such as food stamps, health care, and tuition assistance. With regard to aid to the poor, Americans have built a social-service state, not a redistribution state.

As one NBER study bluntly stated: “Social Security does not redistribute from people who are rich over their lifetime to those who are poor. In fact, it may even be slightly regressive.” This is partly because wealthier recipients tend to live longer than others and partly because they are more likely to have non-working spouses also eligible to collect benefits.

… the people and groups lobbying for federal programs are generally those who receive the salaries and income rather than those who get the services. They, as Senator Moynihan observed decades ago, are the direct beneficiaries of most of these programs, and they have the strongest interest in keeping them in place. The nation’s capital is home to countless trade associations, companies seeking government contracts, hospital and medical associations lobbying for Medicare and Medicaid expenditures, agricultural groups, college and university lobbyists, and advocacy organizations for the environment, the elderly, and the poor, all of them seeking a share of federal grants and contracts or some form of subsidy, tax break, or tariff.

What can we as citizens do about this? Perhaps save ourselves a lot of time by not listening when a politician promises to do something about the poorest Americans! We can be pretty sure that their ability to spend cash will be almost nonexistent, regardless of the tax rates applied to society’s highest earners.

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