econlife - The Innovations That a Pandemic Inspires by Elaine Schwartz

As xkcd suggests, our 2019 selves would have been mystified by a surging interest in flour during 2020:

But you can see that online interest in bread machines has also increased:

Pandemic Innovations

Affordability

Expecting consumers to cut back on spending, companies are simultaneously targeting luxury and economy. For the U.S., Europe, and emerging market economies, the goal is a menu of similar products that cater to different budgets. PepsiCo tried the same approach during the Great Recession (Dec. 2007-June 2009) when they based marketing on paycheck cycles. Convinced that we are more loyal to a brand if we have cash, they publicized pricier packages when we were paid and smaller packs later in the month. Somewhat similarly, Proctor & Gamble has a version of Tide that is 20 percent cheaper and Nestlé is producing smaller seasoning packets as well as the normal sizes.

Hands-free

In Thailand, a mall is experimenting with elevators that have foot controls. Instead of selecting a button to indicate your destination, you use your foot on a pedal:

For doorknob safety, a British firm developed a “hygienehook.” The idea here is to open a door without touching it:

There also is a Hygiene Hand that touches the elevator button, the ATM, and the phone screen for you:

Sanitizing

The Hong Kong International airport is testing a disinfectant enclosure. From what I could surmise, travelers step inside for a 40-second spritz. Inside you get your temperature checked and your clothing cleaned of viruses and bacteria:

Our Bottom Line: Structural Change

I suspect that our economy will experience some structural change during the next several years. Defined as the replacement of old industries by new ones, structural change requires new skills from workers, new capital, and new products. Our best example is the replacement of typewriters by computers, and of horse and buggy apparatus by autos. Also though, I can remember pre-9/11 airport design when there was no security perimeter to prevent gate and shops access.

Because of the coronavirus, some of the places and devices that brought us closer together will be replaced by a socially distanced and sanitized array of goods and services. They will range from everyday sanitation to traditional offices that could become obsolete.

Returning to where we began, more interest in flour seems minor but it could be the tip of a massively restructured “remote” economy.

My sources and more: Seeing the xkcd cartoon, I knew there had to be other examples beyond this WSJ article on smaller packages. So, from there, you might enjoy (as did I) tales of innovations from Aljazeera, and FastCompany, and the Standard.

Our featured image is from Pixabay.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - How the Location of Creative Talent is Changing by Elaine Schwartz

If you are looking for creative talent, a University of Toronto economist suggests you target occupations rather than college degrees. Otherwise you could be skipping too many people. The reason? People with college degrees are likely to be in the creative class. But 6 out of 10 individuals who do creative class jobs did not graduate from college.

Where are we going? To how the geography of creative talent has changed.

The Geography of Creative Talent

Between 2005 and 2017, the creative class was spreading. By 2017, cities like San Francisco, Washington D.C., Austin, and Boston could no longer claim a creative monopoly.

On our “before” map, approximately 10 U.S cities were creative job centers. They were the regions with the science, healthcare, business, tech, art, and science occupations. They had the educated professionals.

Before

2005 Map

2005:

After

In 2017, the places with a vast proportion of creative talent increased. Reflecting a spread, the greater number of red splotches reflects a more highly concentrated creatively talented people. But also we have more orange:

The 2017 map shows the same top five cities (in different order) with a higher proportion of creative talent in their population than in 2015:

The key difference though for 2017 is more orange. The change in color illustrates the spread to cities like Salt Lake City, Pittsburgh, and Cincinnati where the creative class is growing.

Our Bottom Line: Human Capital

To understand human capital we can imagine the tools and equipment in a factory. Called physical capital, tools and equipment create your productive capacity. Like those tools and equipment, our creative talent makes our human capital more productive.

Because the jobs that require more creative human capital tend to have higher salaries and boost diversity, their spread should fuel economic growth in stagnating Rust Belt cities and other similar regions.

My sources and more: This City Lab article has a detailed look at the geography of talent. From there, if you want to read onward, Richard Florida’s research, here and here, digs deeper into economic geography.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - Looking For Peak Creativity by Elaine Schwartz

The average Nobel laureate received his award at 59.7 years. (Sadly, yes it is his award. 847 went to men; 51 to women from 1901-2017.). So his most creative years must have been before then? Probably but not necessarily.

Peak Scientific Creativity

It is possible that our leading scientists peak near 40. The reason could be the time it takes to learn what you need to know:

People in the arts also seem to have that early midlife peak. One researcher said it was when you’ve lived 62% of your life:

However, in addition to age, there are other ways to slice the data. There is a divide between discoveries that are more or less abstract. The abstract breakthroughs come at an earlier age, perhaps because more experience is necessary for the “experimentalists.” The data comparing the two, below, came from Nobel laureates:

We can also use time to assess our facts. Then we would find we are getting older. Comparing the beginning and end of the 20th century, we have to add six years to the average age of a distinctive achievement:

Our Bottom Line: Human Capital Investment

Our common threat here is human capital. Whether looking at science or the arts, at Albert Einstein at 26 or Clint Eastwood at 84, we have people who are adding to their store of learning. And when they do, they have increased their human capital.

A second thread is a host of questions. The researchers really do not agree. The fact that the young are most creative has been challenged as well as peak creativity data for each discipline. And we have a host of other variables to consider that include funding, institutional biases and family responsibilities.

I even would ask if we have to judge peak creativity as we do business cycle data. We can never be sure until the (life) cycle ends. So too with all of us.

Let’s just conclude by saying we have young geniuses and old masters…and all of us might still look forward to our creative peak…or we could figure out if we are at that 62% point.


My sources and more: For the data and the disagreement, I recommend this 2016 paper this one that disagrees, and this article. However, if you just want a good read, the Washington Post Wonkblog had it.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - Pink It, Shrink It, and Gender Design Discrimination by Elaine Schwartz

For years, women have needed sweaters, jackets, even snuggies at work. The reason takes us to some solid science…for men.

Our story starts with a 154 pound man in a business suit. Decades ago, the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) needed guidelines for indoor climate control. To get some answers, they quantified the thermal protection from a man’s clothing (the clo scale) and a man’s activity (his MET).

What they wound up with is great for most men. But not for women. And not for a political candidate. I added the arrow:



Because women like and need it warmer–75 degrees rather than the male 70 degrees–much less cooling is necessary in commercial buildings.

This thermal comfort gender discrimination is only the beginning…

Design Discrimination

Outdoor Gear

According to the “Shrunk and Punk’d” podcast from New Hampshire Public Radio, women who want serious gear head for the men’s section in most stores.

When you look in the men’s department for backpacks, the usual choice is dark gray or black. Described as sleek and rather urban, men’s backpacks have metal loops and a generous supply of pockets. The women’s version is typically smaller and purple, pink, or light gray. It has fewer pockets, loops that are less durably made, and even a totally useless fringe. It is supposed to be “pretty.”

Seatbelts

For seatbelts also, the men have been favored. A 2011 study concluded that women wearing seatbelts had a 71% higher chance of moderate injury than a man in a seatbelt. One possible reason? According to CBS News, seatbelts are designed for the average 40-year old man.

We should add though that the National Highway Administration started using female crash dummies in 2003 and GM, way before that, during the 1980s. However, the 2016 safety data still indicate the male is safer because of seatbelt design.

Our Bottom Line: Gender Design Discrimination

While there is gender design discrimination, we can end on a hopeful note.

Citing thermal sexism, New York’s Cynthia Nixon requested that a 76-degree room temperature for her debate with Governor Andrew Cuomo. Wired Magazine tells us that a female VP for merchandising was one reason that that REI is designing equipment and clothing for many body shapes and sizes. As for seatbelts, I can cite one female Swedish researcher at the Swedish National Road and Transport Institute. In 2016, she was working (2016) with Volvo on a female crash dummy.

You can see where I am going.

Breaking through glass ceilings, women have entered the rooms where men have been making political, design, and car safety decisions.

My sources and more: Thanks to Outside/In for making one of my walks a delight by telling me about “Shrunk and Punk’d.” Hearing that, I went to the Wired, the NY Times, this study, and this Medium article. Finally, for more on seatbelts, CBS and Driving had some facts while here is Cynthia Nixon’s 76 degree protest.

Our featured image is a Nest thermostat.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - The Best Reasons For Later School Start Times by Elaine Schwartz

Last September, a bill flopped in the California state legislature. Advocating an 8:30 (or later) start time at schools, it fell far short of the votes it needed. Currently they are reconsidering.

I wonder if those lawmakers know they are really talking about the GDP.

The Wake up Call

In California. the average school start time is 8:07. By moving it 23 minutes later, we could diminish tardiness and car accidents. Researchers hypothesize also that graduation rates would rise.

Studies show that teens would go to bed at the same time but sleep later if school began after 8:30. They would also get better quality sleep during the morning hours. In dollars, a Rand study reports that after the initial cost, the benefit to California alone would be $10 billion ($83 billion for the entire U.S.) if you just project fewer auto accidents (20% of teen accidents from sleepiness) and higher graduation rates. From there, they say, students then move onward to better jobs and more of an economic contribution.

The predicted gains in state domestic product could be considerable:



As did I, you might suspect that some of this reflects a statistical leap. But even when we consider the high cost of compressed bus schedules and lighting for later activities, the basics make sense.

Our Bottom Line: Human Capital

Really, we are just talking about human capital. As a resource that fuels economic growth, human capital includes our education, entrepreneurial spirit, and health. With U.S. economic growth at a 2.2% rate for Q1 (2018) and 4.1% for Q2 (2018), maybe we could sustain the increase by giving adolescents a bit more sleep?

And finally, I could not resist this xkcd cartoon. After all, the impact of sleep deprivation extends far beyond teens.



My sources and more: This LA Times article tells about the California schools sleep bill rejection while this site has the update. But for a report chock full of detail, do look at the original paper from Rand or this summary.

Please note that I repeated several phrases from a past econlife post on the same topic.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - Do We Really Have a Student Loan Crisis? by Elaine Schwartz

The Wall Street Journal recently introduced us to an orthodontist who had not yet repaid $1 million of his student debt…and probably never will.

You can see below that becoming a dentist is expensive:



Not quite typical, this orthodontist was one of 101 people whose outstanding federal student loan exceeds $1 million. At the $100,000 level, there are approximately 2.5 million individuals. As for the average, it is a more down-to-earth $17,000.

Should we be concerned?

These are some of the facts…

Where?

Based on four-year state institutions, the Midwest and Northeast have the most student debt. If you live in New Hampshire, Maine, or Pennsylvania it is likely that you owe more than someone who comes from New Mexico, California or Wyoming. But you probably owe more because tuition is higher.

Below, the darkest states have the highest proportion of student loans:

Who?

The AAUW (American Association of University Women) tells us that women hold two-thirds of all student debt. They point out that yes, there are more female students. But still, women’s average debt exceeds men’s. And the burden is compounded by the amount of interest women owe because they repay debt more slowly, .

You can see how the AAUW uses two graphs to connect the gender pay gap to the college loan problem:

How Many?

Fifty-three percent of all adults with a bachelor’s degree or more education have outstanding student debt. Furthermore, comparing 2011-2012 to 1989-1990, we’ve moved from half to two-thirds of all college seniors using loans for their education.

How Much?

Now at $1.3 trillion, the amount of student debt owed by U.S. households has tripled from 2001-2016. However, unlike other forms of household debt, delinquencies have been rising:




So, should we worry?

Our Bottom Line: Economic Growth

In their “Feds Notes,” the Federal Reserve does not sound very concerned. Attributing the surge in loans to higher college enrollment and rising tuition, they don’t believe the debt will constrain the consumption that is close to 70% of the GDP. Furthermore, because 90% of outstanding student loan debt is guaranteed by the federal government, financial institutions are not “highly exposed.”

They do express concern that household spending could be crowded out by debt service but then conclude a minimal drag on GDP growth. Similarly, they point out that at risk borrowers could jeopardize other credit markets but again conclude the risk is not considerable.

Instead, the Fed reminds us that the loans are adding to the human capital that fuels consumption. And that returns us to our orthodontist who owns a $400,000 house, drives a Tesla, and earns more than $255,000 a year.

My sources and more: Having just seen a WSJ  article about the largest loan careers, this Brookings commentary was especially relevant. From there, this CNN  student loan discussion provided a new perspective as did the AAUW report. But if you want more data, Pew, the Urban Institute, these “Fed’s Notes,” and a 2018 Federal Reserve Report have it.

Please note that the numbers I use from WSJ differ slightly from a 2018 Federal Reserve Report.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - More on the Mom Penalty by Elaine Schwartz

During February, we had lots to say about the mommy penalty. Now there is more.

Our first stop is a cartoon and then a study from Denmark.

The Cartoon

In “You Should’ve Asked,” French cartoonist Emma perfectly sums up the mommy penalty in two words: Mental Load.

Emma tells us that, “When a man expects his partner to ask him to do things, he’s viewing her as the manager of household chores…So it’s up to her to know what needs to be done and when…” And to cope with home as her second full-time job.

This is a brief excerpt from a much longer (phenomenal) cartoon:

The Denmark Study

To remember the quantitative side of the mental load, just think, “20%.” From 1980 to 2013, the long run gender pay gap averaged close to 20%.

Who

Although the data is from Denmark, it is not just about them. Initially, the Scandinavian countries did have less of a gender pay gap. Then though, their progress slowed, others accelerated, and all of us are close to the same spot now.

Below, the convergence is evident:

Why

Asking why that gap continues, the authors of this study say it is the children. Women switch to more family friendly firms and jobs. They work for fewer hours. Their pay dives– initially down close to 30%. Meanwhile for men, no change.

You can see the drop for women right after a first child was born. Even 20 years later, it never bounced back:

Furthermore, this study’s authors emphatically believe that we have causation here, not correlation.

Our Bottom Line:  Human Capital

Because we are also talking about raising children, we can ask if it’s good or bad for them that women are drawn to the home.

If you support the “good” side, then comparative advantage comes into play. Thinking traditionally, you believe that women are more suited to childrearing.  Consequently, they should be doing more of it and accept the opportunity cost.

On the other hand, blaming outdated social norms, you could believe that moms who work should not be tethered to the home. The data below is from 2002 but might still prevail:

Whichever, your side, we can all agree that most women have more of a mental load in the home than their partners.

My sources and more: If you go to just one link after econlife, do see the entire cartoon. But if you do continue to the academic side, this paper is a possibility.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.