Economics 101: The Law of Demand Really Works

News Headline: "New Wage Boost Puts Squeeze on Teenage Workers Across Arizona: Employers Are Cutting Back hours, Laying Off Young Staffers."

Some Arizona employers, especially those in the food industry, say payroll budgets have risen so much (because of the recent 31% minimum wage hike from $5.15 to $6.75 per hour) that they're cutting hours, instituting hiring freezes and laying off employees.

Mark Messner, owner of Pepi's Pizza in Phoenix, says he plans to lay off three teenage workers and decrease hours worked by others.

"I've had to go to some of my kids and say, Look, my payroll just increased 13 percent. Sorry, I don't have any hours for you."

Interesting Fact of the Day

"Income inequality" gets a lot of attention. Consider this:

There is significant income inequality of siblings with the exact same family background. One researcher found that the average annual earnings differential between brothers was about $28,000, compared with an earnings differential of $30,600 for men paired randomly.

That is, after controlling for sex, socio-economic status, religion, education opportunities, race, parental status, etc. (assuming those factors are usually the same for 2 brothers in the same family), there is significant income inequality of $28,000 between siblings within families, which is almost as much as the income inequality in the general population of males ($30,600).

And as Robin Hanson points out, there is also significant non-financial inequality, such as of popularity, respect, beauty, talent, ability, etc., and significant income inequality between the nations of a world, etc. that get very little attention, compared to the attention paid to income inequality among households in the U.S.

Congestion Pricing

Proposition 1. Any time you have congestion, it almost certain that market pricing is absent.

Proposition 2. Market pricing will almost always reduce or eliminate congestion.

From today's NY Times:

Congestion pricing — the concept of charging higher fees to consumers for a good or a service at times of heavy use — is well established in businesses like hotels, long-distance phone service and air travel. And while London and Stockholm have successfully enacted plans that levy fees on drivers who want to enter traffic-clogged city streets, the United States has been slow to apply the concept on the roads (see graph above for an example of congestion pricing in California).

By making people take into account the true cost of driving — beyond gasoline, insurance and lease payments — congestion pricing in theory encourages people to car-pool, or to drive at different times of the day, or to take the train or bus.

Cartoons

Computer Animated Music

Check out this clip on YouTube of computer animated music "Pipedream," from the first Animusic DVD.

Pipe Dream has been voted one of the 50 greatest animation projects ever (by 3D World magazine). A group of percussion instruments perform music by way of metal balls that fly out from pipes, reminiscent of "Blue Man Group."

Thanks to Club for Growth for the tip.

UFO Sightings: What Happened?

World's Best Performing Market: 787% in Kenya

Kenya has gone share crazy. The incredible performance of the Nairobi Stock Exchange (NSE) - which is next to the public auditorium and provides the live share-price feed - is the talk of the country. From 2002 to 2007, the main NSE index rose 787% in dollar terms (see graph above), according to Standard & Poor's, the investment research firm, making it one of the world's best-performing markets.

The NSE chairman, said: "We have several stock market billionaires. We've stopped counting the multimillionaires."

Read more here from the article "Share crazy: how Kenyans fell in love with their stock market," from the Guardian.