Monday, June 22, 2020

My response to Chris Tomlinson on the protests

I sent this to The San Antonio Express-News a couple of weeks ago. But it looks like they are not going to print it. Here is the link to the article I responded to

Tomlinson: Americans must address protesters’ social and economic grievances.

Chris Tomlinson mainly blames economic problems for the recent protests (“Economic and social grievances have to be addressed,” June 3). But the evidence he provides is minimal and somewhat misleading.

He starts with “the gap between rich and poor never has been greater.” But he does not explain how he knows this or examine if it actually causes unrest.

One measure economists use to measure inequality is the Gini coefficient. It ranges from zero to one and lower means a more equal distribution of income.

In 2018, the most recent year measured, it was 0.452 for family income, near the highest ever. It has mostly been above 0.440 since 2005.

The lowest Gini coefficient ever was 0.348 in 1968. From 1965-1976 it was always below 0.360.

But we had a period of riots back then, even though incomes were fairly equal. Sociologist Susan Olzak found that there were “a total of 957 riots in 133 cities from 1963 until 1968.”

So, it is possible to have less inequality, yet still have protests and riots. Tomlinson did not consider this.

Also, economist Timothy Taylor recently wrote that the cities that did not have riots in the 1960s had about the same white-black income differences as the cities that did.

Then Tomlinson says “More than half of African-American adults now are jobless.” But this only occurred recently, due to COVID-19.

Greg Ip of The Wall Street Journal reported “between 2011 and February, the black unemployment rate fell from 16% to 5.8%, near the lowest since records began in the early 1970s.” Using data from the Census Bureau, I find that from 2014-2018, black median household income rose 10%, adjusted for inflation.

For the bottom 20% of the distribution, real mean household income rose about 18% from 2014-2018. The poverty rate in 2018 was 11.8%, the lowest since 2001 and ninth lowest ever.

With unemployment falling from 3.9% in 2018 to 3.7% in 2019, poverty will probably be even lower when the next report comes out. So, maybe economic issues are not causing these protests, unless you want to blame COVID-19.

Then Tomlinson says “the minimum wage, meanwhile, has not kept up with inflation, otherwise, it would be $13 an hour.” He does not say how he calculated that figure.

The current $7.25 national minimum wage went into effect in 2009. Since then, the Consumer Price Index has gone up 19%, meaning that if the minimum wage had kept up, it would be $8.63 right now.

The 1967 minimum wage of $1.40 was 40% higher than it was in 1956, far outpacing the 22.8% increase in the CPI. Yet, as stated earlier, this was a period with riots and they coincided with a rising real minimum wage.

Tomlinson also mentioned “Rents also are rising faster than wages.” That is not necessarily a problem of capitalism, but, and even liberals have said this, of costly government regulations and zoning laws.

The reasons for the recent unrest may be outside of economics. Economist Roland Fryer found in his research that "blacks and Hispanics are more than 50 percent more likely to experience some form of force."

Even liberals like Julian Castro and The New York Times say police unions are part of the problem in that they protect bad cops. Tomlinson does not mention them.

What about “qualified immunity,” which shields government officials from being sued for discretionary actions performed within their official capacity?

Capitalism has not turned into a zero-sum game (as Tomlinson suggests). Let’s take a closer look at how government might be the problem.

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