Posts Tagged ‘business’
“Only in our dreams are we free. The rest of the time we need wages.”*…
The Economist is repurposing one of its famous indices…
Since 1986 The Economist has produced the Big Mac index as a light-hearted gauge of whether currencies are at their “correct” level. The famous burger is a good test of currency valuations because of its global uniformity and ubiquity. The same properties make it a useful way of comparing international salaries: how many Big Macs, in principle, can a typical worker afford with their wages?
The more conventional way of comparing incomes is to convert wages in different countries into a common currency. But that is misleading because exchange rates are volatile. Moreover, one American dollar goes a lot farther in, say, the Philippines than it does in America itself. The Big Mac helps to solve this problem as a ready-made illustration of purchasing power: it represents a bundle of goods (or, rather, a bun of goods) that is identical everywhere, and so it serves as a yardstick of the real cost of things from country to country.
For the Big Mac wage analysis (the MacWage, for short), we started with full-time, pre-tax earnings in 2023 as reported by the OECD, a club of 38 mostly rich countries. We then made a simple adjustment, dividing wages by the price of a Big Mac—all in local currencies. That gave us the number of burgers that the average full-time worker can buy annually.
The results? Americans can perhaps be forgiven for having somewhat expansive waistlines. Although fast-food prices have rocketed since the pandemic, Americans still earn more greasy calories than any others in our analysis [chart below]. The average American worker takes home the equivalent of 14,000 Big Macs in wages for a year of full-time work. At 590 calories a pop, they could buy enough burgers to keep ten adults fed for a year. The Swiss and Danes come, respectively, second and third in MacWages. At the bottom are Mexican workers, who can afford to buy about 2,500 Big Macs with their average annual wages.
A standard objection to any measure of higher incomes in America is that its workers generally get less time off. To factor this in, we looked at average hours worked, based on data from the OECD and the Conference Board, a business-research group. This yields slightly different results (see chart 2). Americans still get more than enough Big Macs—pulling in the equivalent of about 7.4 per hour on the job—but they drop to third in the ranking. The burger champions are the Danes, who earn 8.1 per hour, followed by the Swiss. Looked at another way, the average Dane works for just seven minutes to make enough money to buy a Big Mac. In Mexico—still at the bottom of the rankings after this hourly adjustment—workers must toil for about 57 minutes.
The MacWage is, of course, far from perfect. Danes may celebrate their top performance, but our measure misses how income taxes (which can surpass 50% in Denmark) eat into their burger budgets. Much else of what goes into the cost of living, from housing to transportation, is also barely reflected in the price of burgers. In a developing country like Mexico, where housing is relatively cheap and American fast-food indulgences relatively expensive, a burger-based wage calculation understates how much stuff an average worker can actually afford. Still, as a quick method for comparing incomes around the world, the MacWage is easily digestible…
The purchasing power of average earners across the OECD: “An alternative use for The Economist’s Big Mac index” from @ECONdailycharts in @TheEconomist.
* Terry Pratchett
###
As we supersize that, we might recall that it was on this date in 1979 that the U.S. government agreed to a bailout of the Chrysler Corporation. The smallest of the “Big Three” automakers, but still the 10th largest company in America, Chrysler suffering from a combination a bad management decisions and increased competition from Japanese and German automakers. Facing a $500 million loss for the year (and probably bankruptcy), newly-installed CEO Lee Iacocca asked the government for a guarantee on a $1.5 Billion loan package. In return for detailed plans from Chrysler detailing both how the company would right its ship and how other constituents (employees, suppliers, lenders) would make concessions, the Carter Administration (which feared that a Chrysler failure could lead to a “depression”– and depression-level unemployment– in the auto industry) agreed. In return for its guarantee, the government received stock warrants in the company.
Chrysler did turn itself around: it proceeded to introduce the “K-Car” line, then mini-vans, then the earliest generation of SUVs. The company repaid the government-guaranteed debt ahead of schedule; the Treasury made about $500 million on its warrants.
But of course, nearly thirty years later, in 2008, Chrysler received billions in a new bailout from the U.S. government in the aftermath of the financial crisis that decimated automotive sales over the following few years. Chrysler filed for Chapter 11 bankruptcy in April 2009, before being acquired in total by Fiat in 2014.
“No one’s gonna tell me how to write. I’m gonna write the way I wanna write!”*…
Gill Paul on two pioneering women who revolutionized the book world…
During the Sixties, book publishing, like the rest of the country, was undergoing an upheaval. That venerable industry was at the beginning of a dramatic changing of the guard that would affect the staff they hired, the authors they published, and the way books were marketed to the reading public. And at the heart of it there were two trailblazing women, Jacqueline Susann and Jackie Collins.
In previous decades, publishing had been a refined gentleman’s business, peopled by well-educated men of independent means—figures such as Bennett Cerf, Horace Liveright, and Alfred A. Knopf who cared about Literature with a capital L. Knopf famously declared that he intended to publish “the best literature, whether it sold or not.” They acted on hunches, made deals over long lunches, and worked with authors to develop their long-term careers, even if their earliest books flopped.
Then, in 1959, the money men of Wall Street, sniffing around for the next bonanza, alighted on books. When Alfred A. Knopf’s company was absorbed into Random House in 1960, it was only the first of a series of mergers and acquisitions that would transform publishing from a career for literary gentlemen into a corporate money-making machine.
As an immediate result of the M&As, publishers had more cash to wave around, so they could offer big advances to authors whom they guessed (and it was largely guesswork) would be capable of delivering big sales. To find them, they began to rely on agents, who pushed the prices even higher. The corporate honchos wanted fast returns on their big bucks, so the books had to be what became known as ‘blockbusters’—incidentally, a term that originated during the war for bombs capable of destroying entire blocks.
Enter Jacqueline Susann. She knew exactly what she was doing when she wrote Valley of the Dolls, a thick, gossipy novel, which contained scenes of drug abuse and ‘kinky’ sex, and had leading characters said to have been based on famous actresses of the day (Judy Garland, Ethel Merman, and Carole Landis). Her sex is pretty tame compared to later bestsellers like Fifty Shades, but it was radical for its time. Legal judgements on previously banned books Lady Chatterley’s Lover (1959) and Tropic of Cancer (1964) had established that the courts did not have the right to suppress a book so long as it had literary merit.
Jacqueline Susann and, a couple of years later, Jackie Collins, were inspired by the sexy soap opera-style novels being produced by Harold Robbins, to great sales if not great reviews. “My only criticism of his books,” Collins said, “Was that his women were either in the kitchen or the bedroom.” Both Susann and Collins wrote about strong women with their own careers, who took control in the boardroom as in the bedroom, and demanded athletic performances from their men. Their subjects weren’t ladylike; they were raw and honest and sometimes the stories ended in tears, reflecting the way women’s real lives were being transformed but adding a splash of aspirational glamour…
…
… It was partly due to the two Jackies that publishers finally clocked there was a vast female audience for novels—and that they didn’t want challenging literary works from pompous white men. They wanted to be entertained by stories about women who faced similar life crises to them, and the best people to write those stories were other women.
Back in 1960, only 18 per cent of all books published in the US were written by women but, as publishers cottoned onto their female audience, strategies began to change: by 1970, a third of all books were by women and by 2021 that had risen to 50.45%. The divide is even starker in fiction: today, roughly three-quarters of published novels are written by women and roughly 80 per cent of fiction readers are women. There’s still a long way to go in terms of diversity, but novels by people of different social and ethnic backgrounds and sexual orientation are increasingly being championed by publishers.
While they were looking for female authors for a female readership, publishers were forced to reflect on the fact that their in-house decision-makers were almost exclusively male. If women were employed at all, it was in low-paid secretarial posts where they could use their home-maker skills to bring tea for the boys. Gradually, a few women managed to maneuver themselves from clerical to editorial positions but they were still excluded from the upper echelons of management, and equal pay was a distant pipe dream. The transformation took decades but now, women form the majority of the workforce in publishing: 78 per cent of editorial staff are female and 92% of publicists, according to a 2021 UK Publishers’ Association diversity study—though most of them are still white and cisgender. And on average they are paid less than employees in other communication industries.
Publishing is constantly evolving and seems likely to become more diverse in future; it’s unthinkable that it would ever revert to an exclusive gentleman’s club. And among the people responsible for this change were Jacqueline Susann and Jackie Collins….
Credit where credit is due: “How Jacqueline Susann and Jackie Collins Changed the Face of Publishing,” from @GillPaulAUTHOR in @lithub.
* Jacqueline Susann
###
As we turn the page, we might recall that it was on this date in 1922 that a woman who had her own massive impact on publishing tied the knot: Margaret Mitchell– the author of Gone With the Wind, of which over 30 million copies have been sold– married Berrien (“Red”) Kinnard Upshaw… in a union that may have contributed to Mitchell’s portrayal of the Scarlett-Rhett union.
Upshaw was an Annapolis drop out who supported himself bootlegging out of the Georgia mountains. By December the marriage to Upshaw had dissolved and he left. Mitchell suffered physical and emotional abuse, the result of Upshaw’s alcoholism and violent temper. Upshaw agreed to an uncontested divorce after the best man at their wedding, John Marsh, gave him a loan and Mitchell agreed not to press assault charges against him. Upshaw and Mitchell were divorced on October 16, 1924. Then (in a Susann/Collins-worthy twist), Mitchell and Marsh were married the following year.
“The worst part about having a mental illness is people expect you to behave as if you don’t”*…
Trends across all causes and risks of disease/disability show that there have been substantial declines in infectious diseases, malnutrition, cardiovascular diseases, and several cancers. But even as we make strides in addressing physical health, mental health challenges are on the rise. In sharp contrast, mental health disorders and alcohol-related disability adjusted life years (DALYS) have increased sharply over the last few decades, especially among people aged 25 to 74.
The WHO found that the two most common mental disorders, anxiety and depression, cost global GDP
$1 trillion in 2010. Lost output for the same time period attributed to mental, neurological, and substance
abuse disorders – which often intersect – was estimated between $2.5-$8.5 trillion. This is expected to double by 2030.
A report from the Aspen Institute and Dalberg explores the global rise of mental illness through economics, lived experiences, and expert insights…
According to the World Health Organization (WHO), 450 million people suffer from some form of mental illness over the course of their lives. So, it’s no surprise that many of us have experienced, or know some-one who has experienced, severe struggles with mental health. This is a full-blown crisis exacerbated by a lack of infrastructure, lack of funding, and a lack of health equity. This is despite the fact that mental health issues are the leading cause of disability globally. Also, according to the WHO, mental health conditions are the primary cause of suicide. And suicide is the second leading cause of death for people age 15to 29. This is a crisis of our time.
In this report, we offer a snapshot into both the magnitude and the scope of the mental health crisis facing humanity. In addition to briefly framing the issues, we share summaries of dozens of interviews we held with both “expert practitioners” working both in the public and private sectors and individuals with a “lived experience” touched by mental health struggles.
In the course of our work, we looked for recurring themes that could promote a dialogue about seeking sustainable, scalable solutions to the crisis. Among those themes are the challenges of building an infrastructure for access to quality mental healthcare, the continued lack of parity between the provision of services for mental health versus physical health, and the pervasiveness of stigma associated with diseases of the mind.
Further, although most of us do not think of mental health as related to investing, and if we do, we might find the notion distasteful, there are indeed a growing number of developing technologies and treatment modalities that hold promise for expanding access to mental health services and offering innovative practices. We highlight a handful of examples. The individuals who generously shared their personal struggles also shared the resources and practices that they found most helpful.
We acknowledge the global nature of the crisis and the role that both the pandemic and other contextual factors have played in substantial increases in anxiety disorders and other mental health issues. Further, we are seeing increases in specific demographics, such as poorer mental health among women, with one in five women experience a more common mental disorder (such as anxiety or depression), compared with one in eight men. No demographic is immune.
Given the crisis at hand, it is our hope that offering greater transparency to the world of mental health will stimulate a search for solutions…
Bracing– but important– reading: “A Crisis of Our Time.”
(Image above from a series of photos illustrating mental illness, from Christian Sampson.)
* from the notebook of Arthur Fleck (AKA, The Joker), via Todd Phillips 2019 film Joker
###
As we care about care, we might recall that it was on this date in 2019 that the first presentation print of Todd Phillip’s film Joker was shipped to Italy, where it premiered at the Venice International Film Festival and won the Golden Lion, the fest’s top prize. The film went on to box office success and set records for an October release. It grossed over $1 billion; the first R-rated to do so. It received numerous accolades, including two Academy Award wins at the 92nd Academy Awards for Best Actor (Joaquin Phoenix) & Best Original Score (Hildur Guðnadóttir) out of 11 nominations including Best Picture, first DC film to score.
“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair”*…
… or inflation is when you get less for the old price. Mark Dent on America’s most egregious case of shrinkflation– an investigation he began with a purchase from eBay…
… It’s everything I hoped for: a factory-sealed four-pack of regular Charmin Ultra toilet paper produced in 1992.
I look at the fine print and gasp…170 sheets per roll!
These days, a regular Charmin Ultra Soft roll, if you can find one, has 56 sheets. Even the roll they market as “Double” doesn’t have 170 sheets — it has 154. And the 1992 rolls are hardly the largest — the back of the package includes a note from parent company Procter & Gamble explaining these rolls have fewer sheets than a previous version.
Toilet paper is shrinkflation at its absolute worst. Imagine if Chipotle spent decades reducing the size of its burritos until they looked like tacos.
How far does the downsizing go? And why has the industry managed to make its products so small with barely any scrutiny?… I called Edgar Dworsky to help unroll the mystery of toilet paper shrinkage.
Dworsky, a Massachusetts-based consumer advocate who runs the consumer education websites Mouse Print* and Consumer World, is perhaps the only person in the US who reads the fine print, and he’s certainly the only one who’s consistently tracked changes to the sizes of products like cereal, snack chips, frozen pizza, and coffee mix, becoming the go-to shrinkflation source. As companies sought to avoid price hikes during the last couple of years and opted for shrinkflation, Dworsky’s decades-long work was profiled by the New York Times and praised by John Oliver.
When it comes to downsizing products, Dworsky tells me that toilet paper, along with paper towels, “probably come in first place.” And my 1992 toilet paper is just the tip of the iceberg…
[Dworsky helps Dent (and us) understand just how far shrinkflation has gone (e.g., a regular Charmin roll, 56 sheets today, had 650 sheets in 1974), why (the full range of) manufacturers are acting so aggressively (spoiler alert: it’s garden-variety greed, but also other forms of self-interest), and how they market less-for-more…]
… While it may seem deceptive to shrink toilet paper with little notice aside from the fine print — and to compare “Mega” and “Double” rolls to basically nonexistent products — it’s not against the law. Companies can shrink their product and charge the same amount, or more, while doing nothing to warn consumers aside from updating the fine print.
The new publicity around shrinkflation has at least caught the attention of legislators. Two new shrinkflation bills have been introduced this year. One would give the FTC power to punish shrinkflation and another would force companies to notify consumers when they shrink products while keeping the price the same. France enacted a similar law a few months ago.
Absent new protections, though, toilet paper will keep getting smaller and rebranded with deceptively larger names that actually contain less product. “There is no end,” Dworsky says.
He’s already spotted Charmin’s latest stunt: The company has swapped out “Super Mega” rolls for “Mega XL,” a rebrand with the same number of sheets. Dworsky suspects Charmin fears running out of descriptors and wants to save the mother of all superlatives, “Super Mega,” for the next time its shrinkage has gone too far.
“I mean, seriously, what can you do to Super Mega? Become Super Super Mega? Super Mega Plus?” he says.
The toilet paper companies will find a way. They always do…
“Why toilet paper keeps getting smaller and smaller,” from @mdent05 in @TheHustle.
* Sam Ewing
###
As we compare, we might send carefully-calculated birthday greetings to two important economists, both born on this date in 1954:
Katharine G. Abraham, a professor at the University of Maryland, served as the commissioner of the Bureau of Labor Statistics from 1993–2001 and a member of the Council of Economic Advisers from 2011–2013. She laid the groundwork for the American Time Use Survey, and (germanely to the piece above) testified repeatedly before Congress on the shortcomings of existing methodology of the Consumer Price Index in the 1990s (and the necessity of making revisions based on objective research) and expanded coverage of the prices of services in the Producer Price Index.
Sanjiv M. Ravi Kanbur, T.H. Lee Professor of World Affairs, International Professor of Applied Economics, and Professor of Economics at Cornell University. worked for the World Bank for almost two decades and was the director of the World Development Report. In May 2000, Kanbur resigned as director and lead author of the World Development Report, following the publication of the initial draft of the 2000/2001 report on the internet. Kanbur’s resignation came a year after the resignation of the World Bank’s senior vice-president and chief economist, Joseph Stiglitz…
Kanbur’s initial draft argued that, “anti-poverty strategies must emphasise ’empowerment’ (increasing poor people’s capacity to influence state institutions and social norms) and security (minimising the consequences of economic shocks for the poorest) as well as opportunity (access to assets).” The final version of the report still contained the three central pillars of: (a) empowerment, (b) security and (c) opportunity, however the order was changed to (a) opportunity (with emphasis given to market-driven economic growth and liberalisation as ways of reducing poverty), (b) empowerment and, (c) security. The World Bank denied that US treasury secretary Larry Summers or anyone else had influenced the report to make it less radical…. (source)
“We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex”*…
The world is a turbulent and sometimes dangerous place. No one knew that better than Dwight D. Eisenhower, who led Allied Forces in Europe during World War II and later served as President…
As President of the United States for two terms, Eisenhower had slowed the push for increased defense spending despite pressure to build more military equipment during the Cold War’s arms race. Nonetheless, the American military services and the defense industry had expanded a great deal in the 1950s. Eisenhower thought this growth was needed to counter the Soviet Union, but it confounded him. Though he did not say so explicitly, his standing as a military leader helped give him the credibility to stand up to the pressures of this new, powerful interest group. He eventually described it as a necessary evil.
A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction. . . . American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. . . . This conjunction of an immense military establishment and a large arms industry is new in the American experience. . . .Yet we must not fail to comprehend its grave implications. . . . In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
As Samuel Geddes argues, the dilemma has only ripened. Western defense giants tout cutting-edge tech, but their “state-of-the-art” systems often fall short in asymmetrical warfare. From faulty missile defense systems to overpriced carriers, the only thing that consistently works is the profit machine…
The ineffectiveness of “cutting-edge” military technology shown in Israel’s genocide in Gaza and the spillover conflicts undermines the notion that the military-industrial complex aims to win wars. Instead, it reveals its true objective: profiting from ongoing conflicts.
Since its crushing victory in the 1967 Six-Day War, one of Israel’s primary functions as a US-European client state has been that of a weapons laboratory. Throughout eight decades of repressing, invading, and annexing the territory of regional countries, it has served as a proving ground for arms manufacturers.
This continuous opportunity for such demonstration has enabled Israel, starting in the 1980s, to develop its own highly globalized military-industrial complex. From tanks to drones, “Israel” became a byword for the technical superiority and unbeatable effectiveness of western hard power over those on its receiving end.
Since the turn of the millennium, however, and especially since the Hamas-led Palestinian offensive against Israel on October 7, the region has become a weapons lab of a very different kind. It now showcases the armaments of its enemies and their ability, for a fraction of the cost and technical complexity, to render its space-age technology uneconomical and, by extension, obsolete.
The spread of cheap, cost-effective arms among asymmetric opponents of the West has significantly blunted the power of conventional weapons systems. The rational thing to do is accept this and redirect these hundreds of billions of wasted dollars to social programs and infrastructure. Almost anything would be more defensible than the status quo…
[Geddes unpacks the history of the last several decades and examines a number of troubled defense programs…]
… The most notorious example of wastefulness in military spending is undoubtedly the Lockheed Martin F-35 fighter jet. From the program’s inception in 2006 to the present, the F-35 was projected to cost over $1.7 trillion over its lifetime. Persistent cost overruns and development woes have angered even the Pentagon itself, which opened the program up to competitive bidding in 2012. More than a decade later, the rapid spread of drone technology has made it possible for unmanned craft, sometimes referred to as “loitering munitions,” to perform many of the tasks traditionally handled by fighter jets — with little overengineering and none of the risk to an actual pilot. That the total budget of this program could eradicate all American student loan debt or cover half the cost of a national health system only adds to the obscenity of it all.
It is well-known that the military-industrial economy is dependent on public subsidy. The technology in mobile phones, computers, and the internet — essential to modern life —was not “invented” by figures like Mark Zuckerberg or Bill Gates, but was instead developed by public investment. The initial funding came from decades of American taxpayer dollars.
Capitalism is not designed to be ethically consistent, but if it were, companies whose business model depends on state supports would be paying out dividends to every single American as a return on their initial investment.
In 2024, the US military budget reached an incredible $841 billion. If even a fraction of these funds were to be spent on restoring the education system to a level befitting the richest country on earth, canceling university tuition debt, or creating a national health system, it would achieve far greater benefits. While $1 trillion might not result in effective missile shields, it is very likely capable of creating a functioning health or educational system…
“The Incompetence of Masters of War,” from @SamuelGeddes in @jacobin.
Further to his point on the effectiveness of U.S. defense spending, see “America is not ready for a major war, says a bipartisan commission” and “The US might lose a war with China.”
And for more on the arguments for alternatives, see “The military-industrial complex as a variety of capitalism and threat to democracy: rethinking the political economy of guns versus butter.”
* Dwight D. Eisenhower
###
As we contemplate conflict, we might pause to contrast the rigorously serious with the frivolously venal: it was on this date in 1835 that the New York Sun began a series of six articles detailing the discovery of civilized life on the moon; circulation soared. Now known as “The Great Moon Hoax,” the articles attributed the “discovery” to Sir John Herschel (who figured in last Monday’s post), the greatest living astronomer of the day. Herschel was initially amused, wryly noting that his own real observations could never be as exciting. But ultimately he tired of having to answer questioners who believed the story. The series was not discovered to be a hoax for several weeks after its publication and, even then, while the paper did admit (on September 16, 1835) that the whole thing was a “satire,” it never issued a retraction (and didn’t suffer a drop in sales).
You must be logged in to post a comment.