Saturday, March 13, 2010

The Great P.S.A. Prostate Mistake: It's A Hugely Expensive Public Health Disaster Says Inventor

Richard Albin, the discoverer/inventor of the P.S.A. test in 1970, writes in the New York Times:

"Americans spend an enormous amount testing for prostate cancer. The annual bill for P.S.A. screening is at least $3 billion, with much of it paid for by Medicare and the Veterans Administration.

Prostate cancer may get a lot of press, but consider the numbers: American men have a 16 percent lifetime chance of receiving a diagnosis of prostate cancer, but only a 3 percent chance of dying from it. That’s because the majority of prostate cancers grow slowly. In other words, men lucky enough to reach old age are much more likely to die with prostate cancer than to die of it.

Even then, the test is hardly more effective than a coin toss. As I’ve been trying to make clear for many years now, P.S.A. testing can’t detect prostate cancer and, more important, it can’t distinguish between the two types of prostate cancer — the one that will kill you and the one that won’t.

I never dreamed that my discovery four decades ago would lead to such a profit-driven public health disaster. The medical community must confront reality and stop the inappropriate use of P.S.A. screening. Doing so would save billions of dollars and rescue millions of men from unnecessary, debilitating treatments."

Interesting Fact of the Day: Specialist Nurses Are Paid More than Family Doctors for Fourth Year

MONEY -- Primary care doctors were offered an average base salary of $173,000 in 2009 compared to an average base salary of $189,000 offered to certified nurse anesthetists, or CRNAs. Projections for 2010 indicate that the average base salary for family physicians will be about $178,000 compared to $186,000 for CRNAs.

"It's the fourth year in a row that CRNAs were recruited at a higher pay than a family doctor," said Kurt Mosley, staffing expert with Merritt Hawkins & Associates.

International Air Traffic Gains Continue in January

From the International Air Transport Association:

Demand statistics for international scheduled air traffic showed continuing improvement in January (see red line in graph). Compared to the previous year, January passenger demand was up 6.4%. Against this improving demand, a 1.2% increase in passenger capacity in January pushed load factors to 75.9% (up from the 72.2% recorded for January 2009).

For international passenger demand:

Asia Pacific carriers experienced a 6.5% increase in demand compared to the previous year.

* Carriers in North America and Europe saw demand increase by 2.1% and 3.1% respectively.

* Middle Eastern carriers grew throughout the recession. Growth accelerated to 23.6% in January.

* Latin American carriers saw demand increase by 11% in January on the back of a strong regional economy.

* African carriers recorded a 6.3% improvement in January, assisted by robust regional economic activity.

International cargo demand showed a 28.3% improvement with only a 3.7% increase in capacity (see green line in graph above). This pushed the cargo load factor to 49.6% which is a step-change from the 40.1% recorded in January 2009.

Are Some Races More Equal Than Others?

How will the Obama administration respond to a formal complaint in the wake of serious black-on-Asian violence at South Philadelphia High School (SPHS)?

"Secretary of Education Arne Duncan has just announced a new push to enforce civil rights laws to combat discrimination in our schools.

According to Asian advocates, the whole Philadelphia district has been plagued by harassment and violence towards Asian students for many years. At SPHS, the assaults have occurred in the cafeteria line, in bathrooms, in stairwells, on school buses, and elsewhere. The incidents ran the gamut from verbal abuse, physical intimidation, blocking doorways, cutting in line ahead of Asian students in the cafeteria, use of anti-Asian racial epithets, and more serious physical abuse including shoving, kicking, and punching—sometimes at the hands of more than one assailant. Advocates have accused school officials, including school Superintendent Arlene Ackerman and Principal LaGreta Brown (both black) of indifference to the plight of Asian students in their charge.

Will the Obama administration act aggressively to ensure Asian rights to a public education free of intimidation and actual violence—surely a basic civil right? Or will such action be taken only when blacks are the victims rather than the perpetrators? If the administration acts in the interest of the Asians, black students will be singled out as racially hostile troublemakers—a conclusion that neither the Department of Education nor the DOJ will welcome, if Duncan’s announcement means what it says."

~Abigail Thernstrom and Tim Fay in the

Friday, March 12, 2010

Obamacare: It's The Wrong Bill at the Wrong Time

"Even if Democrats extract the votes to put ObamaCare over the top, it will at best be a Pyrrhic victory for them. Regardless of the outcome, this monstrosity might cost the Democrats the Congress this November, ruin the party for a long time and prematurely render Barack Obama a lame duck president for the rest of his term.

The real reason why ObamaCare is so unpopular is that it is proposing a giant expansion of the entitlement state precisely when this state everywhere is coming apart: here and abroad; at the federal level and the state; in the public sector and the private. Suggesting a giant government takeover of a sixth of the economy can't be a popular selling point in a country whose DNA has a programmed hostility to Big Government.

Even before President Obama rammed through his trillion-dollar-plus stimulus/bailout packages last year, there was a growing sentiment that the country's top priority ought to be tackling the entitlement programs whose liabilities are like a swelling aneurysm in the brain of the body politic waiting to rupture. The combined unfunded liabilities of Medicare and Social Security--the federal health care and the pension programs for the elderly--are $107 trillion, seven times the current GDP. Meanwhile, Medicaid, the joint federal-state health insurance program, is consuming on average 21% of state budgets, their single biggest ticket item even before ObamaCare dumps another 16 million people into the program, expanding the Medicaid population by 25%. Beyond that, state and local government have promised their employees a trillion dollars more in pension and other benefits than they have funds to deliver.

There are not enough taxpayers in the country or creditors in China capable of financing all these promises. Expanding this massive, multifarious entitlement state even more strikes most normal people as sheer lunacy--especially now that it is visibly coming apart at the seams."

Shikha Dalmia writing in Forbes

Bloomberg U.S. Financial Conditions Index Reaches A 32-Month High, Highest Level Since July 2007

The Bloomberg U.S. Financial Conditions Index provides a daily measure of the relative strength of the U.S. money, bond and equity markets, and is considered a useful gauge of the overall conditions in U.S. financial and credit markets. The Financial Conditions Index closed yesterday at 0.49, reaching the highest level since mid-July 2007 (see chart above), and hitting a 32-month high.

This is one more positive sign that an economic recovery is underway, financial markets are back on solid ground, and overall financial conditions have returned to the strength and stability of the summer of 2007, reflected in the Financial Conditions Index being in positive territory again.

Can Nancy Pelosi Get the Votes? Maybe Not.

Intrade odds fall below 50% today for Obamacare to pass by June.

Michael Barone
in the WSJ:

"Are there enough votes in the House to pass the Senate's health-care bill? As of today, it's clear there aren't. Speaker Nancy Pelosi has indeed shown mastery at amassing majorities. But it's hard to see how she'll do so on this one. The arithmetic as I see it doesn't add up."

Rail Freight Continues to Show Signs of Recovery

WASHINGTON, D.C. - Mar. 11, 2010 - "Rail freight volume on U.S. railroads is continuing to show some signs of recovery, with both carload freight and intermodal traffic during the week ended March 6 registering gains from last year," the Association of American Railroads reported yesterday. Highlights include:

1. U.S. railroads originated 285,160 carloads during the week, up 3.7% from the comparable week in 2009.

2. Intermodal traffic totaled 212,296 trailers and containers, up 17.9% from last year and up 2.9% compared with 2008.

3. Compared with the same week in 2009, container volume increased 22.6% and trailer volume slipped 3.2%.

4. Compared with the same week in 2008, container volume was up 15.3% while trailer volume fell 36.2%.

5. Total volume for the week was estimated at 31.1 billion ton-miles, up 5.1% from last year.

Thursday, March 11, 2010

Number and Percent of Nonpayers At Record High; More Tax Filers Now See IRS as a Source of Income

Maximum Income a Married Couple with Two Children Can Earn and Pay NO Federal Income Tax
From The Tax Foundation:

"A nonpaying tax return is one filed by an individual or couple who, thanks to legal credits and deductions, owes nothing. Nonpaying status used to be a sure sign of poverty or near-poverty, but Congress and the President have changed the tax laws to pull much of the middle class into the growing pool of nonpayers. The income level at which a typical family of four will owe no income taxes has risen rapidly, now topping $51,000 (see chart above)."

As a result, recently released IRS data for the 2008 tax year show that a record 51.6 million filers had no income tax obligation (see chart, click to enlarge). That means more than 36% of all Americans who filed a tax return for 2008 were nonpayers, raising serious doubts about the ability of the income tax system to continue funding the federal government's ballooning expenditures.

Bottom Line: Over the past two decades, Washington lawmakers have increasingly turned to the tax code to deliver social benefits, incentivize behaviors, and funnel money to targeted groups, which they always refer to as "helping the middle class." These measures have not only added complexity to an already Byzantine tax system, they have also eliminated the income tax obligation for millions of tax filers and their families. As a result, a record 51.6 million tax filers—36 percent of all filers—had little or no connection with the basic costs of government in 2008.

Tax years 2009 and 2010 are likely to produce a number of nonpayers equal to or greater than in 2008 because of Obama's new tax credits targeted at lower- and middle-income taxpayers. As the number of refundable tax credits continues to grow, more and more tax filers are seeing the IRS as a source of income, not something to which taxes are paid. The consequences of these trends deserve a broader national discussion than either party in Washington seems willing to engage in."

Unintended Consequences of New Flight Rules, II

Following up on this recent CD post, this is from today's WSJ:

"Airlines are pushing back against new rules that give fliers more rights. They are threatening to cancel scores of flights in response to a new rule that would prohibit airlines from keeping passengers on the tarmac for more than three hours without giving travelers the opportunity to get off the plane. As of April 29, carriers that break the rule would face steep fines of up to $27,500 per passenger, or more than $4 million on a full Boeing 737 or Airbus A320.

Carriers say that to avoid those fines, they will aggressively cancel flights before and during storms—even if the bad weather never materializes. The threats could foreshadow significant changes in air travel, making it even less reliable for millions of road warriors and vacationers. By canceling flights, it could take days for all travelers to get home when storms strike."

Obama First: Disapprove: 48.8% > Approve: 47.5%'s consensus of all polls.

2009 Household Net Worth Increased by $2.8 T

WALL STREET JOURNAL -- "Americans got richer for a third straight quarter at the end of 2009, a favorable trend for an economic recovery that could use some more fuel. A quarterly Federal Reserve report Thursday said U.S. households' total net worth climbed 1.3% in the fourth quarter, to $54.18 trillion from the third quarter's $53.49 trillion. For 2009 as a whole, net worth rose 5.4%. Household net worth is assets, such as home equity, minus liabilities, such as mortgage debt.

A large chunk of the increase in net worth came from a drop in household debt, as an increasing number of financially stretched consumers defaulted on mortgage and credit-card debts. While the defaults are painful for families and costly to banks and investors, economists say they are also speeding the financial rehabilitation necessary for a return to robust growth. "It puts us closer to the point where the consumer can start making a stronger contribution to recovery," said Joseph Carson, director of global economic research at AllianceBernstein in New York."

MP: The $2.8 trillion increase in household net worth represents an increase per household of almost $25,000, and brings average net worth per household to $477,277.

Markets In Everything: Movie Box-Office Futures

LA TIMES -- "Welcome to Hollywood's newest version of risky business: movie derivatives.

Two trading firms, one of them an established Wall Street player and the other a Midwest upstart, are each about to premiere a sophisticated new financial tool: a box-office futures exchange that would allow Hollywood studios and others to hedge against the box-office performance of movies, similar to the way farmers swap corn or wheat futures to protect themselves from crop failures."

HT: Scott Jagow

Why Would AOL Abandon Bebo Rather Than Sell It?

A good example of how the corporate U.S. tax code can encourage the destruction of wealth.

The Public School Monopoly Feels the Heat in NYC

NY TIMES -- "As charter schools have grown around the country, both in number and in popularity, public school principals like Ms. Espinal are being forced to compete for bodies or risk having their schools closed. So among their many challenges, some of these principals, who had never given much thought to attracting students, have been spending considerable time toiling over ways to market their schools. They are revamping school logos, encouraging students and teachers to wear T-shirts emblazoned with the new designs. They emphasize their after-school programs as an alternative to the extended days at many charter schools. A few have worked with professional marketing firms to create sophisticated Web sites and blogs.

Brochures, fliers and open houses have become all but required in New York City neighborhoods like Harlem, where many schools have shown lagging academic performance. Where parents once simply sent their children to the nearby school, they now can enter lotteries for two dozen charters."

MP: A good example of one of the benefits of school choice - the public school monopoly is forced to be more competititve and deliver better service.

John Stossel Takes on the Licensing Police

John Stossel takes on the licensing police on his FOX Business show tonight, watch a preview above. We license doctors, lawyers, drivers, dogs. The state of Louisiana licenses at least 87 professions, including acupuncturist assistants, athletic trainers, manicurists, and, of all things, florists. It's intuitive to think that government licenses will PROTECT us. But as often happens, what we think we know may NOT be so.

Thursday 8pm & 11pm ET
Friday 10pm ET
Saturday 7pm ET
Sunday 11pm ET

Wednesday, March 10, 2010

Union Backlash

Exhibit A: A Gallup Poll finds that for the first time in polling history going back to the 1930s, fewer than half of Americans (48%) approve of labor unions (see chart above).

Exhibit B: Township officials expressed frustration that several unions representing Moorestown, New Jersey government workers have not agreed to reopen contract negotiations.

"It's more than frustrating," said Councilman Greg Gallo. "It's irresponsible and it shows tremendous shortsightedness and, frankly, I think it shows a disrespect to the taxpayers and to council to not even enter into a conversation."

Exhibit C: "If it's legal, Las Vegas should fire all city employees and then offer to hire them back for a reduced work week, Mayor Oscar Goodman said Wednesday.

Such a move could save the city enough money to avoid layoffs and program cuts, he said, and he directed the city attorney's office to study the idea. "If we're permitted to do that legally, I'm prepared to take the risk of political capital," Goodman said. Union leaders called Goodman a "bully" and said he just wants to throw out existing labor contracts."

Exhibit D
: Detroit Mayor Dave Bing said that more employee layoffs are imminent because the city has been unable to reach a contract agreement with its largest union.

A Tsunami of Special Interest Spending; Maybe This Helps Explain The "Unionocracy" of California

Sacramento Bee -- "The California Teachers Association (CTA) has spent more than $200 million on campaign contributions and lobbying efforts in the last decade, leading what the Fair Political Practices Commission calls a "billion-dollar club" of moneyed political interests.

The FPPC's report, entitled "Big Money Talks," delves into the 25 biggest - at least in financial terms - political players in the state, which have collectively spent $1.3 billion on political action in the last 10 years.

"This tsunami of special interest spending drowns out the voices of average voters," FPPC chairman Ross Johnson said in a statement, "and intimidates political opponents and elected officials alike."

The $211.9 million spent by the CTA is nearly twice as much as the $107.5 million committed by the second-highest spender, the California State Council of Service Employees, but after those two union groups, the remaining 13 on the Top 15 list are all either business groups, such as No. 3 Pharmaceutical Research and Manufacturers of America ($104.9 million), individual corporations or casino-owning Indian tribes, which have three of the 15 top spots."

HT: Economics 101 Blog

The Color Test


Michigan Index Shows Ongoing Economic Recovery

Comerica Bank’s Michigan Economic Activity Index rose 4 points in January, to a level of 81 (see chart above). January’s reading is the highest Index observation since November 2008. The Index for January is up 6 percent compared to the June 2009 cyclical low.

“After plateauing for three months, our Index surged in January, with eight of nine components contributing positively,” said Dana Johnson, Chief Economist at Comerica Bank. “The January reading was driven by strong steel production and natural gas sales. Given the severe weather patterns experienced in the early part of this year, gas sales likely outpaced normal seasonal trends in February as well, which should give the upcoming Index another boost. Over the course of the year, the Index should continue to trend higher, reflecting an ongoing recovery in Michigan.”

MP: Hey, if there's an ongoing V-shaped economic recovery in Michigan, there's hope everywhere. Michigan jobs increased by 4,100 in January, and its jobless rate fell to 14.3%, the lowest since last August.

Two Americas: Public vs. Private Sector Update

The BLS released its quarterly report today on "Employer Costs for Employee Compensation" for December 2009, and the key results are displayed above and summarized below.

Private industry employers spent an average of $27.42 per hour worked for total employee compensation in December 2009. Wages and salaries averaged $19.41 per hour worked and accounted for 70.8% of these costs, while benefits averaged $8.00 per hour and accounted for the remaining 29.2%.

Total compensation costs for state and local government workers averaged $39.60 per hour worked in December 2009 (including benefits of $13.50 per hour), which was 44.5% higher than compensation for private industry workers.

Update: Texas vs. the Unionocracy of California

According to today's BLS report, total employment in Texas (data) increased for the eighth straight month in January. The gain of more than 35,000 jobs was the largest monthly increase in almost ten years, and brings total employment in Texas to a record high level of 11,094,500 in January (see graph above).

In contrast, California (
data) started the year with another monthly loss of 17,500 jobs in January, marking the 24th straight month of job losses going back to February 2008. From the January 2008 peak, California has shed 1,222,192 jobs over the last two years, and now has the lowest employment level (15.85 million) since December 1999, more than ten years ago.

Bottom Line: America's two most populous states have taken radically different approaches over the last decade or more in terms of economic policies, and those differences are reflected now in radically different outcomes for how those two states survived the economic stress of the Great Recession.

The low-tax, business-friendly, right-to-work state of Texas survived the recession with only seven months of mild job losses, and has now made a complete recovery with January employment at the highest level in state history and an unemployment rate 1.5% below the national rate (8.2% in Texas vs. 9.7% for the U.S.).

In contrast, the high-tax, big-government, forced unionism approach of California has been a prescription for major job losses (more than 1.2 million bringing total employment back to the late 1990s level), a 12.5% jobless rate that is almost three percent above the national rate, and a net outflow of people and businesses.

Tuesday, March 09, 2010


Sweden is a powerful example of the importance of public policy. The Nordic nation became rich between 1870 and 1970 when government was very small, but then began to stagnate as welfare state policies were implemented in the 1970s and 1980s. The Center for Freedom and Prosperity Foundation video explains that Sweden is now shifting back to economic freedom in hopes of undoing the damage caused by an excessive welfare state.

Highlight: The "peeing in your pants" analogy as an economic model about half way through is priceless.

Related: Income distribution in the U.S vs. Sweden (HT: Nick Schulz)

Sick Canadian Faces Death or Bankruptcy

"Our supposedly universal federal health care system, the pride of most Canadians and the political struggle of America, is only as good as the length of the waiting line and whether you have the right disease at the right time.

Suffering from brain cancer, Kent Pankow of Edmonton, Alberta, was literally forced to go to the Mayo Clinic in Rochester, Minn. for lifesaving surgery — at a cost to family and friends of $106,000 — after the health-care system in Alberta left him hanging in bureaucratic limbo for 16 crucial days, his tumour meanwhile migrating to an unreachable part of the brain, while it dithered over his case file, ultimately deciding he was not surgery worthy."

more here.

HT: C. Clarke

Disruptive Innovation Brings Down Medical Costs

"The type of competition that brings prices down is disruptive innovation. Disruption in health care entails moving the simplest procedures now performed in expensive hospitals to outpatient clinics, retail clinics, and patients' homes. Costs will drop as more of the tasks performed only by doctors shift to nurses and physicians' assistants. Hoping that our hospitals and doctors will become cheap won't make health care more affordable and accessible, but a move toward lower-cost venues and lower-cost caregivers will."

~Clayton Christensen, professor at Harvard Business School,
writing in BusinessWeek

Traffic Rankings for Business and Econ Websites

Carpe Diem moves up to #12.

Consumers Value Convenience of Retail Clinics Over Receiving Care from MD By Factor of 2

LA TIMES -- "Given their druthers, people would rather see their own primary-care doctor in his or her office, receive care on the same day they call for the appointment and pay less than is standard. OK. Sounds reasonable. However, given that this situation does not exist in the real world, consumers are apt to use retail-based health clinics if they can save time and money.

In a survey, people were asked how they felt about various forms of medical care for a urinary tract infection or for influenza. While people preferred traditional, office-based care, they would opt to see a nurse-practitioner at a retail clinic if they could save at least $31.42. They would wait one day or more for an appointment if they would save at least $82.12.

The researchers concluded that the appointment wait period is the most important determining factor in an individual's choice on where to seek care for minor health problems such as influenza. Primary-care doctors who fear their business will be undercut by the growing popularity of retail health clinics may want to offer more same-day appointments and walk-in

Here's a
link to the full study published in the Annals of Family Medicine, and here's an excerpt from the conclusion:

"This study is the first in the United States to quantify the relative importance of and the utility associated with the main attributes of retail clinics. The utility (willingness to pay) associated with receiving same-day care is more than twice the utility associated with receiving care from a physician. Primary care physician practices, especially in competitive markets, are therefore likely to derive greater competitive advantage by addressing patient convenience features (such as same-day scheduling, walk-in hours, and extended hours) than by reducing fees."

My Friend Sarah

"My Friend Sarah" is about a young girl who was the president of her school's "Progressive" club, and then took an economics class.

This video is the winner of the 2009 Fraser Institute Video Contest, and was made by George Mason University students Mark Meranta and Terra Strong.

Consumer Greed Goes Wild: Extreme Couponers

Wall Street Journal -- "Under a futon in her Charleston, S.C., apartment, Stacy Smith has stashed boxes of soy bars, bags of potato chips, bottles of vitamin water, canned vegetables, soup, barbecue sauce and antibacterial wipes. Her bedroom closet is jammed with soda and shampoo, her bookcase with garlic salt and meat marinades. No, Ms. Smith isn't stocking up for a hurricane. The 39-year-old's apartment is stuffed with groceries because she's one of a growing flock of "extreme couponers."

These discount devotees have formed vast online communities that collectively unearth and swap digital, mobile-phone and paper coupons. The cleverest shoppers combine dozens of coupons and go from store to store buying items in quantity, getting stuff free of charge.

"If you can get 100 packs of toilet paper for free, you're going to," says Erin Libranda, 38. When the resident of Katy, Texas, has amassed enough coupons to buy many months' supply of eggs, she puts tiny cracks in them, adds lemon juice and freezes them."

MP: We hear a lot more about how corporations are disloyal to their communities and employees and about "corporate greed" (
459,000 Google hits) than we hear about "consumer greed" (20,500 hits), but consumers can be pretty disloyal, ruthless and cost-conscious themselves, as this story demonstrates. In fact, there's a marketing aphorism that sums it up pretty well: "There's no brand loyalty that the offer of a 'penny off' can't overcome it."

Monday, March 08, 2010

Open Letter to President Obama About Rationing

"CBS radio news this morning ran a clip of one of your recent speeches. In it, you criticize insurance companies because they “ration coverage … according to who can pay and who can’t.”

My first thought was “not exactly; coverage is rationed according to who pays and who doesn’t.” Ability to pay isn’t the same thing as actually paying, and what insurers care about is the latter. Many folks – especially young adults – have the ability to pay but choose not to do so. They get no coverage.

But further pondering of your point leads me to look beyond such nit-picking to see fascinating possibilities. Not only insurers, but all producers who greedily refuse to supply persons who don’t pay should be set aright. Now I’m sure that you don’t ration the supply of the books you write according to any criteria as sordid as requiring people actually to pay for them. But our society is full of people less enlightened than you.

For example, the typical worker rations his labor services according to who pays and who doesn’t. That must stop. Oh, and supermarkets! Every single one rations groceries according to who pays. Likewise with restaurants, clothing stores, home-builders, furniture makers, even lawyers! You name it, rationing is done according to who pays. Indeed, my own county government has been corrupted by this greedy attitude: if I don’t pay my taxes, the sheriff takes my house – effectively booting me out of the county merely because I didn’t pay for its services.


I look forward to your changing this selfish and unfair system of rationing that for too long now has kept Americans impoverished.

Donald J. Boudreaux, Professor of Economics
George Mason University

Free Movie Tix to Donate Blood, But Not a Kidney?

You can donate blood and receive two free movie tickets, or cookies (see photo above, courtesy of Virginia Postrel) but according to The National Organ Transplant Act of 1984 (co-sponsored by Al Gore and Orrin Hatch), it would be illegal to receive any compensation, even a movie ticket or cookie, for providing a kidney.

HT: Virginia Postrel on the John Stossel program last week.

Markets In Everything:App to Delete Text Messages

"The new TigerText iPhone application lets people kill embarrassing text messages after they have been sent out. The smartphone program was named before fallen golf god Tiger Woods' public drubbing for philandering, which saw his alleged lovers tout text messages as proof of his indiscretions.

People receiving the messages are prompted to download the TigerText application for free in order to read the text, which is not actually sent to the recipient's iPhone. Instead, the message is hosted on the company's servers where it can be erased whenever the sender wishes.

Sent messages can be deleted on demand or be set to automatically vanish after a specified period. A "delete on read" feature starts a 60 second countdown when a text message is opened and then erases it at zero. TigerText messages cannot be saved, copied or forwarded by recipients."

Thanks to William Heasley.

40 Years Later: Air Quality Has Never Been Better

Earth Day (April 22) is only six weeks away, and I just noticed that the EPA recently updated air quality data for 2008 and thought it was worth featuring now in anticipation of the 40th anniversary of Earth Day:

Predictions made around the time of the first Earth Day in 1970:

“Air pollution is certainly going to take hundreds of thousands of lives in the next few years alone,” Paul Ehrlich in an interview in Mademoiselle magazine, April 1970.

Ehrlich also predicted that in 1973, 200,000 Americans would die from air pollution, and that by 1980 the life expectancy of Americans would be 42 years.

“By 1985, air pollution will have reduced the amount of sunlight reaching earth by one half...” Life magazine, January 1970.

“Man must stop pollution and conserve his resources, not merely to enhance existence but to save the race from the intolerable deteriorations and possible extinction,” The New York Times editorial, April 20, 1970.

The world will be “...eleven degrees colder in the year 2000. This is about twice what it would take to put us into an ice age,” Kenneth Watt, speaking at Swarthmore University, April 19, 1970.

“We are in an environmental crisis which threatens the survival of this nation, and of the world as a suitable place of human habitation,” biologist Barry Commoner, University of Washington, writing in the journal Environment, April 1970.

MP: Here we are 40 years later, the U.S. population has increased by more than 50%, traffic volume (miles driven) in the U.S. has increased 160%, and real GDP has increased 204%; and yet air quality in the U.S. is better than ever - nitrous dioxide, sulfur dioxide, carbon monoxide and lead have all decreased between 46% and 92% between 1980 and 2008 (see chart).

Average Faculty Salaries by Field and Rank

Click to enlarge.

Average Faculty Salaries by Field and Rank at 4-Year Colleges and Universities, 2009-10. Notice that competition is so fierce for business professors that salaries for new assistant professors with no experience ($95,822) are about $10,000 higher than existing assistant professors ($85,996).

Krugman's Universe as "Bitter, Partisan Columnist"

"From Paul Krugman's recent NY Times column:
Today, Democrats and Republicans live in different universes, both intellectually and morally. Take the question of helping the unemployed in the middle of a deep slump. What Democrats believe is what textbook economics says: that when the economy is deeply depressed, extending unemployment benefits not only helps those in need, it also reduces unemployment.

But that’s not how Republicans see it. Here’s what Senator Jon Kyl of Arizona, the second-ranking Republican in the Senate, had to say when defending Mr. Bunning’s position: unemployment relief “doesn’t create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work.”

In Mr. Kyl’s view, then, what we really need to worry about right now — with more than five unemployed workers for every job opening, and long-term unemployment at its highest level since the Great Depression — is whether we’re reducing the incentive of the unemployed to find jobs. To me, that’s a bizarre point of view — but then, I don’t live in Mr. Kyl’s universe. And the difference between the two universes isn’t just intellectual, it’s also moral.
From Paul Krugman's textbook (page 210):
Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker's incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of "Eurosclerosis," the persistent high unemployment that affects a number of European countries.
HT: James Taranto in the Wall Street Journal via Don Boudreaux

Charter School Success in Harlem. Who'd Object?

From the Wall Street Journal:

Today there are 24 Harlem charter schools. They select students by lottery, and they educate about 7,700 of the community's 50,000 school-age kids. Another 5,700 children matriculate at one of Harlem's 30 private and parochial schools.

"Harlem now has more school choice per square foot than any other place in the country," says Eva Moskowitz, who operates four charters in Harlem. Nationwide, the average black 12th grader reads at the level of a white eighth grader. Yet Harlem charter students at schools like KIPP and Democracy Prep are outperforming their white peers in wealthy suburbs. At the Promise Academy charter schools, 97% of third graders scored at or above grade level in math. At Harlem Village Academy, 100% of eighth graders aced the state science exam. Every third grader at Harlem Success Academy 1, operated by Ms. Moskowitz, passed the state math exam, and 71% of them achieved the top score.

This year, Harlem's charter schools received more than 11,000 applications for 2,000 available slots. More than 7,000 children are on wait lists.
With that kind of success, reflected in that kind of demand, who could object to more charter schools? Easy question.

The United Federation of Teachers and its political acolytes in the New York state legislature are hell-bent on blocking school choice for underprivileged families. Worried that high-performing charters are "saturating" Harlem, State Sen. Bill Perkins and State Assemblyman Keith Wright have backed legislation that would gut state per-pupil funding at charter schools and allow a single charter operator to educate no more than 5% of a district's students. Unions dislike charter schools because many aren't organized. But how does limiting the replication of successful public education models benefit ghetto kids?

These obstructionists, Mr. Clark says, aren't doing the community any favors. "The teachers unions ought to be ashamed of themselves because they know better than I do how bad these schools are," he says. "Everybody on my block and in my building and around the corner . . . they all want charter schools. They don't want a political debate."
To paraphrase Dennis Byrne:

If there’s ever an illustration of how “progressive” elites and organized labor are attempting to keep the very people they supposedly care about locked up on the plantation, it’s their consuming opposition to charter schools in Harlem and elsewhere.

Update: NY Times article "In Harlem, Epicenter for Charter Schools, a Senator Wars Against Them," thanks to Colin.

Sunday, March 07, 2010

Markets in Everything: iDump4U To Dump Someone


$10 Basic Breakup - We will call your other and make them your ex using the information you have given us.

$25 Engagement Breakoff - Yeah it’s heartless, but remember the Runaway Bride and all the trouble she caused in Atlanta or wherever? This is a lot easier way to do it. When you are ready to talk to your fiance/fiancee, we recommend you do however.

$50 Divorce Call - Sometimes it is just easier to get a divorce in motion by having someone else do it for you, some people might choose their mistress, etc .. but we can do it for you as well.

HT: Market Power

Lessons of a $618,616 Death: Sellers Don't Set the Prices and The Buyers Don't Know What They Are

BUSINESSWEEK - "Two years after her husband's death, Amanda Bennett's cover story examines the costs of keeping one man alive:

Looking at that stack of documents, it is easy to see why 31% of the money spent on health care went to paperwork and administration, according to research published in 2003 in the New England Journal of Medicine. That number has stayed the same or grown since then, says Dr. Steffie Woolhandler, a professor at Harvard Medical School and a co-author of the study.

The documents revealed an economic system in which the sellers don't set the prices and the buyers don't know what they are. Prices bear little relation to demand or how well goods and services work.

"No other nation would allow a health system to be run the way we do it. It's completely insane," said Uwe E. Reinhardt, a political economy professor at Princeton University who has advised Congress, the Veteran's Administration, and other federal agencies on health-care economics."

HT: Garret Hartwig

Intrade Odds: Academy Award Leaders

Best Picture:
Hurt Locker (53%) YES!
Avatar (40%)

Best Actor: YES!
Jeff Bridges (92%)

Best Actress: YES!
Sandra Bullock (68%)

Best Support Actor: YES!
Christoph Waltz (93.5%)

Supporting Actress: YES!
Mo'Nique (86%)

Best Director: YES!
Kathryn Bigelow, The Hurt Locker (85%)

Intrade (8:22 p.m. ET)

The Washington DC Uncertainty Principle

"Sears Holdings shares the stated goal of many public officials of creating jobs. But, we don't believe that we need large government programs to generate these jobs. Public officials often fail to recognize the obstacles they place in the way of job creation. For example, over the past year proposal after proposal has been put forward to reform health care, reform the financial system, increase taxes, and add regulations, all with the intention of making the United States a better and stronger country.

"Yet, as a business, trying to understand which of these proposals might become law, what their impact might be on business prospects and competition, and what additional costs they might impose creates a great deal of uncertainty. It has led our management team and board (and I am sure those managements and boards of other companies) to spend inordinate time trying to determine which investments we should make, defer, or cancel and which jobs to create, maintain, or eliminate. The removal of this uncertainty and the constant drumbeat of new threats against various businesses would go a long way to allowing American entrepreneurial energy to be unleashed."

~"Eddie" Lampert, chairman of Sears Holdings,
via the WSJ

MP: Corporate America is often criticized for being short-sighted and focusing on short-term profits only. But as Mr. Lampert reminds us, it's hard for businesses to focus on long-term goals, profits and investments in an atmosphere of uncertainty about future regulations, tax changes, legislation, and public policy.

From China's Sweatshops: A Wave of Prosperity from Market Forces and Ambition, Not Activism

China's Rural Boom, Factory Workers Get the Last Laugh

WUHU, China -- "Years after activists accused Nike and other Western brands of running Third World sweatshops, the issue has taken a surprising turn. The path of discovery winds from coastal factory floors far into China's interior, past women knee-deep in streams pounding laundry. It continues down a dusty village lane to a startling sight: arrays of gleaming three-story houses with balconies, balustrades and even Greek columns rising from rice paddies.

It turns out that factory workers -- not the activists labeled "preachy" by one expert, and not the Nike executives so wounded by criticism -- get the last laugh. Villagers who "went out," as Chinese say, for what critics described as dead-end manufacturing jobs are sending money back and returning with savings, building houses and starting businesses.

Workers who stitched shoes for Nike and apparel for Columbia Sportswear, both based near Beaverton, Oregon, are fueling a wave of prosperity in rural China. The boom has a solid feel, with villagers paying cash for houses. "No one would take out a mortgage to build a house," said Wang Jianguo, 37, who returned after a factory injury in a distant province to the area near Wuhu, west of Shanghai. "You wouldn't feel secure living in a house you didn't own."

In the end, market forces and ambition, not activism or corporate initiatives, pushed up wages and improved working conditions. The forces originally unleashed by the late Chinese leader Deng Xiaoping still drive China's economy, producing a manufacturing labor shortage and giving villagers viable choices beyond factory work."

MP: We shouldn't judge China's working and living standards with a 21st century American viewpoint, but we should more realistically view China with a viewpoint of America in the year 1900, when the U.S. went through a similar transformation from a rural, agricultural-based economy to an industrial powerhouse, characterized by sweatshops, poor working conditions, no safety standards, low wages, etc.

This story helps to illustrate the reality that the transition to an advanced industrialized economy includes a "sweatshop" phase on the path to greater prosperity and abundance. And to deny or condemn the "sweatshop phase" is to deny or delay a country's transition to a higher standard of living and greater prosperity on the other end. As the article points out, China's factory workers are getting the last laugh.

HT: Wayne Sanman

Two Americas: Public vs. Private Sector

1. The number of federal employees exceeded 2.8 million for the first time in January 2009, and federal jobs have increased by 82,000 employees since December 2008.

2. Average federal salaries exceed average private-sector pay in more than eight out of 10 comparable occupations. From
USA Today, a sampling of average annual salaries in 2008 are displayed below, the most recent data (click to enlarge):

3. Also
from USA Today, the typical federal worker is paid $11,091 more per year (20% higher salary) than private-sector workers in the same occupation, based on median annual salaries.

Federal Employees: $66,591

Private-Sector Employees: $55,500

4. According to USA Today, average annual benefits (health, pension, etc.) in 2008 for federal employees was more than 4 times greater than benefits for private workers, a difference of almost $31,000 per year:

Federal employees: $40,875

Private sector worker: $9,882

Other key findings from USA Today:

• Federal. The federal pay premium cut across all job categories — white-collar, blue-collar, management, professional, technical and low-skill. In all, 180 jobs paid better average salaries in the federal government (83%); 36 paid better in the private sector (17%).

•Private. The private sector paid more on average in a select group of high-skill occupations, including lawyers, veterinarians and airline pilots. The government's 5,200 computer research scientists made an average of $95,190, about $10,000 less than the average in the corporate world.

•State and local. State government employees had an average salary of $47,231 in 2008, about 5% less than comparable jobs in the private sector. City and county workers earned an average of $43,589, about 2% more than private workers in similar jobs. State and local workers have higher total compensation than private workers when the value of benefits is included.

See related previous CD post on Two Americas.

Saturday, March 06, 2010

The Jobs of Yesteryear: Creative Destruction

Slideshow from NPR (with audio), includes iceman, pinsetter, switchboard operator, typesetter, etc.

Russ Roberts via Pete Friedlander

Search Carpe Diem

There are now more than 5,800 posts in the Carpe Diem archives dating back to September 2006, and I expect to hit the 6,000 mark in the next month or so. The entire archive is searchable by keyword(s) in one of two ways:

1. At the top left-hand corner of the screen, there is a Blogger search function in the box to the left of where it says "Follow." It's not marked very well, except by a small magnifying glass icon, so it's probably easy to miss. This search function is somewhat limited, and often misses many posts that do contain the search word, and only returns a certain maximum number of results, and might not go all the way back to the earlier posts in the archive. It works best for finding recent posts, but is not comprehensive.

2. There's a Google search function on the right-hand side of the CD homepage in the "Links" section. It's always been there, but I just moved it up to the top of the "Links" section to make it easy to find. That is a full, comprehensive Google search that will find every post that contains a search word, going all the way back to beginning of the archives without any maximum search results, so I would highly recommend using the full Google search instead of the Blogger search.

Also, somebody was asking about problems with the RSS feed for Carpe Diem, and there shouldn't be any problems, the RSS feature is turned on. If anybody's having troubles, please send me an email and let me know, or leave a comment on this post.

Detroit School Board President Can't Write

As a follow-up to my National Grammar Day post, here's an article from Laura Berman, a columnist at the Detroit News:

"The president of the Detroit school board, Otis Mathis, is waging a legal battle to steer the academic future of 90,000 children, in the nation's lowest-achieving big city district. He also acknowledges he has difficulty composing a coherent English sentence. Here's a sample from an e-mail he sent to friends and supporters on Sunday night, uncorrected for errors of spelling, grammar, punctuation and usage. It begins:"

If you saw Sunday's Free Press that shown Robert Bobb the emergency financial manager for Detroit Public Schools, move Mark Twain to Boynton which have three times the number seats then students and was one of the reason's he gave for closing school to many empty seats.

Here's another example of President Mathis' writing:

Do DPS control the Foundation or outside group? If an outside group control the foundation, then what is DPS Board row with selection of is director? Our we mixing DPS and None DPS row's, and who is the watch dog?

Ms. Berman asks some tough questions:

"Is it absurd for a man who cannot write a simple English sentence to serve as the board president? Or to lead the elected board of a district that ranks at the nation's bottom for literacy?

Because of his struggles and perseverance, Mathis describes himself as a role model. But is he?"

Thanks to Colin, Mike Carlson and GW South for all directing me to this story.

Legalize It!

The graph above highlights the grim reality for those on the growing kidney waiting list - demand for kidney transplants keeps growing, while the supply of transplant operations is basically flat.

As of today 83,573 patients are on the waiting list, according to the United Network for Organ Sharing, and only about 20% of those patients will actually get a kidney this year. As recently as the early 1990s, patients on the waiting list had a greater than 50 percent chance of receiving a kidney in a given year, but the situation has worsened every year since 1991. Almost 13 patients on the waiting list die every single day of the year, and most of those deaths would be easily preventable, except that a 1984 federal law (co-sponsored by Al Gore) makes it illegal for organ donors to receive any financial compensation.

Think about it: Everybody involved in a kidney transplant operation gets paid and profits financially: the surgeons, the nurses, the hospitals, the pharmaceutical companies, the companies that make the hospital equipment and supplies, etc., in other words everybody EXCEPT the kidney donor, who gets nothing? How can that possibly make sense?

Basic Economics: When the demand for kidneys exceeds the supply by a factor of 5 and increases every year, simple economics tells us that the chronic kidney shortage results from an artificial price that is too low, in this case zero. The only way to effectively and permanently solve the kidney shortage is to legalize the victimless crime of accepting financial compensation for donating a kidney.

Read more here in my Washington Post editorial "
More Kidney Donors Are Needed to Meet a Rising Demand," co-authored with my colleague Sally Satel, resident scholar at American Enterprise Institute, and author of "When Altruism Isn't Enough: The Case for Compensating Kidney Donors."

Update: WSJ Editorial on the Minimum Wage; Excess Teen Unemployment Rose w/Min Wage

Teenage Unemployment vs. Minimum Wage

"Excess" Teenage Unemployment vs. Minimum Wage

Yesterday I featured the Wall Street Journal editorial on the minimum wage (WSJ here and CD post here), and it's generated some criticism (see one example here). The top graph above was my version of the WSJ graph that accompanied its article, showing the relationship between teenage unemployment rate and the increases in the minimum wage between 2002 and 2010. It's true that unemployment rates for all groups were rising over that period, and the rising jobless rate for teens might have been because of the general economic slowdown and not necessarily as a result of the minimum wage hikes, and that's a valid criticism.

However, the bottom graph attempts to better isolate the effects of the minimum wage increases between 2007 and 2009 by plotting the difference between the teenage jobless rate and the overall jobless rate, i.e. "excess teen unemployment," and the minimum wage. During the 2002-2007 period when the minimum wage was $5.15 per hour, teenage unemployment exceeded the national jobless rate by about 11% on average. Each of the three minimum wage increases was accompanied by about a 2 percentage point increase in the amount that the teenage jobless rate exceeded the overall rate, from 11 to 13% after the 2007 increase, from 13% to 15% following the second hike and from 15% to 17% following the last increase. The 17.5% "excess teen unemployment" in October 2009 was the highest on record, going back to at least 1972, and was almost 5 percent higher than the peak teen jobless rate gap in the last recession (12.7% in June 2003).

Remember that unskilled minimum wage workers are in direct competition with skilled workers. Especially during an economic downturn, unskilled workers have a potentially powerful weapon and advantage that can give them a competitive edge over skilled workers in a weak labor market - low wages. But between 2007 and 2009, politicians took away the competitive advantage of unskilled workers at the time they need it most, by boosting the minimum wage for unskilled workers by 42%, and essentially pricing them right out of the worst economy and labor market since the early 1980s.

Bottom Line: Economic theory and empirical evidence suggest that the overall effect of a minimum wage increase is always negative, on net, and can never be positive, on net. So the only real disagreement is how negative the effect will be, not whether it's negative on balance.

After all, if minimum wage laws could have positive net effects and politicians can legislate the creation of wealth with artificial price controls, why are they always being so stingy and miserly with such pitifully small increases; why don't they boost the minimum wage for unskilled workers up to something more respectable like $25, $50 or $75 per hour?

Friday, March 05, 2010

National Grammar Day: March 4 (March Forth)

Yesterday was National Grammar Day: "Language is something to be celebrated, and March 4 is the perfect day to do it. It's not only a date, it's an imperative: March forth on March 4 to speak well, write well, and help others do the same!"

To celebrate National Grammar Day, the Grammar Girl has prepared these Top Ten Grammar Myths.

In honor of National Grammar Day, here's my personal choice for the most abused grammar/spelling rule in the English language: the frequent misuse of "it's" (contraction for "it is") when it should be "its" (possessive).

Exhibit A: A Google search shows 72,600 results for the incorrect phrase "meet it's obligations."

Exhibit B: A Google search shows more than 9 million results for the incorrect phrase "at it's best."

What's so hard about such a simple rule and why do so many people get this wrong so frequently - I see it almost daily, and frequently in the comments on CD?

It's pretty basic: "It's" is always a contraction for "it is" and if you can't substitute "it is" for "it's" in a sentence, you know it's wrong, e.g. "the company couldn't meet it's obligation," and "boxing at it's best" are both wrong because you can't substitute "it is" in those sentences for "it's."

Government Data: More Than 95% of Americans Who've Tried Crack or Meth Are NOT Regular Users

From John Stossel:

"I believed the Drug Enforcement Administration's claim that drugs like crack and meth routinely addict people on first use. But Jacob Sullum, who wrote "
Saying Yes", says, "If you look at the government's own data about patterns of drug use, it clearly is not true."

The data are remarkable: 8.5 million Americans have tried crack, but there are only 359,000 regular users. The government defines "regular use" as using a drug at least once in the past 30 days. More than 12 million tried meth, but only 314,000 still take it. The story is similar for heroin. Most people who try these "instantly addictive drugs" do not get "hopelessly addicted." They give them up on their own.

[MP: According to government data, 95.8% of Americans who have tried crack are NOT regular users, and 97.4% of those who have tried meth are NOT regular users.]

As Sullum puts it: "The vast majority of people who use illegal drugs do not become heavy users, do not become addicts; it does not disrupt their lives. In fact, I would argue it enhances their lives. How do we know that? Because they use it."

But on the news, we constantly see people whose lives have been destroyed by drugs. Sullum says: 'When you have prohibition, the most visible users are the ones who are most anti-social, most screwed up. They're the ones who come to the attention of the police. ... People who present themselves as experts on drug use, because they come into contact with all these addicts, have a very skewed perspective because they are seeing a biased sample. The people who are well adjusted, responsible users are invisible.'"

Minimum Wage, Maximum Teenage Joblessness

From today's Wall Street Journal editorial "The Lost Wages of Youth"

"There's plenty of competition, but our vote for the recent act of Congress that has caused the most economic hardship goes to the May 2007 law raising the minimum wage in three stages to $7.25 an hour from $5.15. Rarely has a law hurt more vulnerable people more quickly.

A higher minimum wage has the biggest impact on those with the least experience or the fewest skills. That means in particular those looking for entry-level jobs, especially teenagers. And sure enough, as nearly all economic models predict, the higher minimum has wreaked havoc with teenage job seekers, well beyond what you would expect even in a recession.

Most Democrats won't bend on the minimum wage because it is a core union demand, but free thinkers ought to at least consider the teenage job problem. The long-term danger is that we are building in a higher level of structural unemployment as our least-skilled workers find it harder to climb onto the first rung of the job market.

Washington could at least establish a teenage, or sub-minimum, wage closer to $5 an hour. More than half of all minimum wage workers get a pay raise within one year on the job, so wages will rise naturally with experience and talent. More young people will be hired, and more will learn what it takes to get ahead in America."

MP: The charts above (top chart shows all teens and the bottom chart shows black teens) illustrate the adverse effects on teenage unemployment rates from the three increases in the minimum wage of 13% in 2007, 12% in 2008 and 11% in 2009, totalling to a whopping 41% from $5.15 in early 2007 to $7.25 by July 2009. Before the three-step increase, the teenage jobless rate was choppy from month-to-month but had been fairly stable within a range of between 14-18% over a number of years from 2002-2006.

But then just the first increase in the minimum wage to $5.85 drove teenage unemployment above 20%, and it's stayed there ever since, rising to almost 28% last year before gradually falling to 25% in February. The story is even worse for black teenagers by a factor of 2, since their jobless rates are almost twice as high as the overall teen rate, reaching a high of almost 50% last year, before "improving" slightly to 42% in February.

As the WSJ points out, the minimum wage can have long-term negative effects over a lifetime:

"Most readers remember the work habits they learned from their first job. Showing up on time, being courteous to customers, learning how to use technology—such habits are often more valuable than the actual paycheck. Studies have confirmed that when teens work during summer months or after school they have higher lifetime earnings than those who don't work. So raising the minimum wage may inadvertently reduce lifetime earnings."

Bottom Line: Artificially raising wages for unskilled workers reduces the demand for those workers at the same time that it increases the number of unskilled workers looking for work, which results in an excess supply of unskilled workers. Period. And another term for an "excess supply of unskilled workers" is an "increase in the teenage jobless rate." Despite the wishful thinking of politicians and labor unions, the laws of supply and demand are not optional.

Congress Declares War on Health Savings Accounts

"While Congress has been debating health reform, employers have been creating new consumer-driven health care (CDHC) plans. In fact, CDHC plans are the only type of health insurance that has been shown to reliably change patient and doctor behavior in ways that lower costs and improve the quality of care.

More than half of employers now offer consumer-driven options, including Health Savings Accounts (HSAs) or Health Reimbursement Arrangements (HRAs). In 2010, nearly 18 million people will be enrolled. Federal legislation can stop progress in its tracks, however.

For example, the health care bill passed by the Senate (December 24, 2009) does not directly outlaw HSA-eligible plans, but it restricts HSA options in insidious ways that will delay, deny, defeat and ultimately kill them. The proposed Senate health reform does not focus on improving health or health care. It is more about political power, centralizing federal control, growing government and expanding bureaucracies."

Ronald E. Bachman, President and CEO of Healthcare Visions and a senior fellow with the National Center for Policy Analysis

Record 5-Month Increase in Temporary Workers

From today's BLS employment report:

1) Manufacturing overtime hours decreased slightly to 3.4 hours in February from 3.5 hours in January, which was the highest level since August 2008 (see graph). This marks the first decline in overtime hours following ten straight months that overtime hours either increased or stayed the same as the previous month, which followed 16 months of declines (or no change) in average overtime hours. Despite the February decrease of .10 hours, overtime hours are still 26% above the level last February of 2.7 hours.

2) The number of temporary help workers increased in February by 47,500 to 2,008,700 employees, the highest level since December 2008 (see graph above). The February increase follows similar recent monthly increases of 50,200 in January and 49,700 in December. Temporary workers increased in February for the fifth straight month - the first time since 2005 of five consecutive monthly increases. The 284,000 increase in temporary jobs since the September-low is the largest 5-month increase since this data series started in 1990.

As I
reported on Tuesday, The American Staffing Association's Staffing Index increased almost 11% this week from a year ago, the highest annual increase in three years. That 11% increase marked the 13th consecutive week of positive (or flat) increases in the ASA Staffing Index compared to the same week in the previous year, following 80 consecutive weeks of decreases from May 2008 through mid-November 2009.

The fifth monthly increase in Temporary Help Workers according to the BLS, along with similar recent improvements in the ASA Staffing Index, provide evidence that the labor market is gradually improving. In these early stages of economic recovery, employers remain cautious in their hiring decisions, and use temporary workers initially to meet the higher demand for their products. Hopefully, as the economic rebound gathers greater momentum in the coming months and employers become more confident about a continued expansion, they'll start hiring permanent workers.

Update: See "Surprisingly Strong Job Figures" by Floyd Norris in the NY Times.