Thursday, October 30, 2014

Quick Service Data Journalism from Matt Yglesias

America’s favorite ill-informed neoliberal pundit, Matt Yglesias, has unveiled a masterpiece.

Inspired by the New York Times’ excellent piece about Denmark’s high fast-food wages -- which are maintained by the power of the United Federation of Danish Workers -- Yglesias responded with an article headlined, “$20 an hour minimum wage really would cost a lot of people their jobs.” The sage of Vox believed he had spotted “the crucial fact buried in the 29th paragraph of the article”: namely, that McDonalds has far fewer restaurants in Denmark (relative to population) than we do in the U.S.

Conclusion? “Mandating high wages for fast food workers has more or less the impact you would expect — low levels of fast food employment.” (But also this ass-covering sentence: “Obviously this is not a slam-dunk proof that forcing US McDonaldses to pay Danish wages would lead to the closure of two-thirds of the McDonalds restaurants in the country.”)

Can you really reach that conclusion from a single data point? Is this data journalism?

The Times draws on research by Oren Ashenfelter and Stepan Jurajda, who gathered data on McDonalds wages in a number of different countries. As it happens, I noticed the study last year, and decided to look into exactly this question -- how the wage levels found related to the number of McDonalds in each country. It took me a couple hours. Since Vox is so fond of cheap labor, I’m offering my findings free of charge if they want to use them.

Ashenfelter and Jurajda show the “McWage” for a large number of countries: the gross hourly wage in 2007 for McDonalds crew workers, not including benefits or employer taxes. Unfortunately, they haven’t yet reported the actual numbers in tabular form. They only show each country’s McWage as a percentage of the U.S. McWage, and you have to read the figures off their graph, which can be found on page 31 of this, or page 20 of this. Fortunately, this doesn’t present much of an obstacle. 

As for the number of McDonalds restaurants in each country, you can find those numbers for Europe here (page 6); the company reports the numbers for other countries on the websites of its national affiliates.

OK, how do the numbers compare? Here’s a graph:

I’ll just point out the obvious. There is no relationship. 

The U.S. has a very high number of McDonalds, apparently because McDonalds is a U.S. company -- not because it can pay low wages. Canada and Australia have similarly high numbers of McDonalds, despite wages at the same levels as European countries with far fewer McDonalds. Denmark has about the same number of McDonalds as Germany and the Netherlands, despite far higher wages. Etc.

Now let’s try to put some dollar figures on this. Assume that the U.S. McWage was $7.93 in 2007. (That was the highest state minimum wage in the country at the time: Washington state). Then the dollar figures would look like this. (I've left the numbers in 2007 dollars; in today's dollars they would be 15% higher. Also note that in their graph, Ashenfelter and Jurajda compare McWage ratios using market exchange rates, so these numbers reflect that):

Of course, wages are not the only source of labor costs for an employer. There are also benefits and taxes. Let’s mark up the McWage by the average employer payroll tax for a low-wage single worker (data from the OECD), and call that the McLaborCost:

But maybe these numbers are misleading, because market exchange rates don’t always reflect the domestic price structure. So let’s take a different tack. Let’s look at the hourly McWage in each country as a ratio of that country’s hourly aggregate output, with both figures denominated in the same currency. (Hourly output data from the Conference Board.) Here are the ratios:

And here’s the same comparison using McLaborCost, rather than the McWage:

So, no. High wages for fast food workers do not have “more or less the impact” Matt Yglesias would expect. Vox should take down the article.

Tuesday, January 28, 2014

State of confusion

This started out as a comment for Freddie DeBoer's blog, in response to this post -- hence the use of the second person. It got very long, so now it's on my blog too. 

Freddie, the argument of my piece was right at the top – “let’s have a debate over the left and state, but not on the libertarians’ distorted terms.” I’m glad you wrote this response, because it represents just the kind of debate I was calling for -- but also because it’s a good illustration of what I meant by arguing on libertarians’ terms.

You write: “It’s like I said before: I’m left-wing like Fred Hampton, not left-wing like Mayor Daley. I’m with the people who get hit with nightsticks, not people who do the hitting.” That’s a fine sentiment, and I’m 100% behind it -- as long as we stipulate that it’s a bumper-sticker slogan and not anything resembling a theory of the state.

You come closer to formulating a real argument when you say: “A movement that prides itself for speaking for the dispossessed can’t run the risk of romanticizing the state that might help them, as it is precisely that same state that enforces the condition of their immiseration.”

I agree with that sentence too. It’s perfectly true as far as it goes. But logically, you could flip it around and it would still be true. In other words, you could also write: “A movement that prides itself on speaking for the dispossessed can’t run the risk of anathematizing the state that enforces the condition of their immiseration, as it is precisely the same state that might help them.”

If the original statement is true, then the inverted version can’t be any less true.

So we haven't gotten very far. That’s why I’d like to focus particular attention on the way you – and Peter, I think -- use the term “anti-statism.”

You write:

“The anti-statist rhetoric that is the actual target of…Ackerman’s essay…has a long, proud lineage on the radical left. Would Ackerman lump the Black Panther party in with the Rand Pauls of the world? Malcolm X? Eugene Debs? Each of these expressed anti-statist rhetoric so intense that it would make Rand Paul blush.”

Is that true? Would the Black Panthers’ anti-statist rhetoric make Rand Paul blush? I guess it depends on what you mean by anti-statism.

Let’s look at the Panthers’ 1966 Ten Point Program. Point Two, the first programmatic point, after a general statement calling for black self-determination, was: “We believe that the federal government is responsible and obligated to give every man employment or a guaranteed income.”

Point Four was a demand for the construction of housing cooperatives, “so that our community, with government aid, can build and make decent housing.” Another point demanded that the perceived promise made by the Civil War-era Congress, of forty acres and a mule to all freed slaves, be redeemed and paid out to black citizens in currency.***

So I agree with you: Rand Paul would certainly “blush” at the Panthers’ type of “anti-statism.” But above all, he would vigorously deny that it represents anti-statism of any kind.

And here is the crux of my argument: he would be right, and you would be wrong.

“Anti-statism” is a term and a concept that rightly belongs to Rand Paul. It’s useful to him and his ilk because they are trying to promote a vision of politics in which the central question is “how much state?” or “how big a role for government?” That vision of politics is, as I tried to argue in my piece, an “irrelevant monomania at best,” and at worst a rhetorical trap. I’m saying that you have fallen into the trap by accepting the libertarians’ conceptual apparatus.

You perceive our disagreement, I think, as me being “less anti-statist” whereas you’re “more anti-statist.” Is that really the case? I can’t claim to know your opinions on every issue, but I suspect that on most concrete questions we agree. Certainly we agree about NSA spying or whether Edward Snowden should be sent to jail. Like you, I’m sure, I was one of those people cheering on Snowden, hoping Russia would give him a visa, fretting he was about to get handcuffed on a plane in Bolivia.

The real nature of our disagreement is more subtle. Unless I’m wrong, it really stems from the fact that you have – erroneously in my opinion – chosen to acquiesce in a vision of politics as being, in some important way, about “good state” versus “bad state,” and perhaps therefore “more state” versus “less state.” In other words, you’ve accepted the framing of libertarians (and some anarchists). 

And that’s led you to think that there’s a great “anti-statist” tradition on the left running from Debs to the Panthers to Glenn Greenwald. Freddie, I certainly understand what you’re getting at when you say that, but I don’t think that your formulation is the right one.

Go back to the Panthers’ program. In addition to calling for a federal jobs-or-income guarantee and government housing aid, the program also called for an end to police brutality, the freeing of black prisoners, and an exemption for blacks from military service. In other words, it demanded both that the state stop doing things that were oppressive and start doing things that were emancipatory.

You can call that “anti-statism” if you like. But you’d be rendering the term meaningless if you did. It can’t be true that an “anti-statist” is someone who wants the state to do things they like and not do things they don’t like. If that were the case, almost everyone would be an anti-statist.

Now, an anarcho-capitalist, or a “minarchist,” or a certain type of anarchist -- or a libertarian – might be an “anti-statist.” That’s because, in theory, those positions are supposed to be grounded in some systematic opposition to all forms of state activity, some version of “that government governs best which governs least.” Those are genuinely “anti-statist” positions.

But my argument is that those positions have no basis in the left -- or at least not in the socialist left. Now, there is a long socialist tradition of critiquing the class character of the state. That tradition comes in many versions and all of them have pictured the ruling class as having some privileged relationship to the state. While some make that relationship simple and absolute (the state is “ultimately,” or “at bottom,” nothing more than the instrument of the oppressors), others see the relationship, while still privileged, as being much more qualified and contradictory.

The point, though, is that none -- or at least only the crudest -- have simply concluded “state = bad, less state = good.” That would be the truly “anti-statist” position.

To me, you seem to be arguing for that mistaken anti-statist position. But maybe I’m wrong. Maybe I’ve misread you, and it’s the socialist tradition that better represents your thinking, not the “anti-statist” one with its “more state vs. less state” framing. 

In that case, all I’m trying to say is that this difference is fundamental, not incidental, so that when we talk about the state -- and when we talk about various “anti-statists” -- you, we, should make that difference clear.

That’s the kind of debate I’m talking about.

*** Speaking of the Civil War, you might want to look up the incident Eric Foner has called the worst episode of racial violence in all of Reconstruction -- the Colfax Massacre. It was a battle over physical control of a county courthouse between the Louisiana state militia, controlled by black Union veterans, and white anti-incumbent insurgents. In other words, in that particular case I think that you, Freddie, would have been *against* the people getting hit by nightsticks, so to speak, and *for* the people doing the hitting.