The Share of Employment At New Businesses Has Been Falling

From Greg Mankiw.

"I enjoyed reading these remarks from University of Chicago economist Steve Davis.  The chart below, taken from Davis, is particularly striking."

This year restaurant employment in the major metropolitan areas with minimum wage increases has consistently experienced slower growth than restaurant employment in the rest of their states.

By Ben Gitis, Director of Labor Market Policy at the American Action Forum. Excerpts:

"For each metropolitan area, we measure the growth in food services and drinking places employment in 2015. Consequently, we measure the percent change in food services and drinking places employment from December 2014 to September 2015, the most recent month with available data. We do the same for the state that the metropolitan area is located in and exclude the metropolitan area itself."

"We then combine food services and drinking places employment in all of the metropolitan areas and combine employment in all of the metropolitan areas’ surrounding states. This allows us to compare restaurant employment growth in all the metropolitan areas that raised the minimum wage together to restaurant employment growth in all of the rest of the states together."

"The chart below shows that restaurant employment in metropolitan areas with cities that raised the minimum wage in 2015 has lagged behind employment in the rest of the states.



Clearly, restaurant employment has grown far slower this year in cities that raised the minimum wage than in the rest of the states in which those cities are located. This year restaurant employment in the metropolitan areas with major cities that raised the minimum wage only grew 1.1 percent through September. In the surrounding state areas, however, restaurant employment grew 2.8 percent."

"Restaurant employment in the major cities that raised the minimum wage this year has consistently been slower than the rest of the states in which the cities are located. Restaurant employment in Louisville grew 2.6 percent, 1.1 percentage points lower than restaurant employment growth in the rest of Kentucky. In Seattle, where the minimum wage is increasing to $15 per hour, restaurant employment has only grown 0.6 percent this year while restaurant employment in the rest of the state of Washington grew 6 percent.[1] In the other city that is phasing in a $15 minimum wage, San Francisco, restaurant employment only grew 1.4 percent and in the rest of California it grew 3.2 percent.

There are also a few exceptions in the major cities we examine. In particular, restaurant employment in Chicago grew at about the same rate as in the rest of Illinois (0.5 percent versus 0.4 percent). Also, restaurant employment in Oakland grew faster than the rest of California (4.1 percent versus 3.2 percent). Despite the faster growth in Oakland, however, restaurant employment in the three major cities of the San Francisco Bay Area only grew 1.9 percent. That is 1.7 percentage points slower than the 3.6 percent growth in restaurant employment experienced in the rest of California."

Less than 1 Percent of Federal Regulations Get Cost-Benefit Analysis

From Clyde Wayne Crews of CEI.

"The Obama administration likes to assert that all the rules and regulations pouring out of Washington have positive net-benefits.

Billions of dollars in postulated net benefits is common, sometimes even for individual rules.

But there is no way to make such a claim for the regulatory enterprise overall. Less than one percent of federal regulations get cost-benefit analysis. Let’s look at it.

In fiscal year 2014, for example, the White House Office of Management and Budget reviewed 54 major rules and a few hundred significant ones. Only 16 had cost estimates OMB reviewed, and only 13 had both cost and benefit assessments.

But, during the calendar year, there were 3,554 rules finalized by over 60 federal departments, agencies and commissions. Sure, regulators like to claim that the “major” rules reviewed account for the bulk of regulatory costs; but they themselves get to decide what counts as major.

Furthermore, OMB does not review independent agency rules, like the Federal Communications Commission’s net neutrality order. And entire categories of intervention (such as antitrust) get little scrutiny. Also, costs of regulatory dark matter like agency guidance, bulletins, circulars, and manuals don’t get tallied.

This absence of cost-benefit analysis is a long-standing issue. As the nearby chart, “The Funnel of Gov: On the Depth of Regulatory Cost Review, 2001-Present” shows, of several thousand agency rules issued (and of the several hundred non-major rules reviewed annually by OMB), just a handful of executive agency rules sport cost analysis alone, let alone cost-and-benefit analysis

(See online version of chart with extra detail here)

So, the upshot is, as a percentage of the annual flow of final rules in the Federal Register, the proportion of rules designated “major” with cost analysis averages around 36 percent over the decade.

But when we go beyond the officially designated major rules, the proportion of all rules with any reviewed cost analysis at all has averaged only around 0.46 percent, as the chart shows. The percentage of all rules with a reviewed cost assessment has never even reached one percent; the peak was 0.8 percent in 2009.

Benefit assessments, which the federal government declares justifies the modern regulatory state, fare even worse, yet net-benefit claims for Washington’s regulatory state are the norm.

In contrast to such hopeful net-benefit assertions, OMB’s once-common recognition that costs past and present “could easily be a factor of ten or more larger than the sum of the costs...reported,” was more appropriate.

The lack of clarity on the real costs and benefits of regulation (and their effect on jobs) is one of the factors driving the push for regulatory reform and liberalization on Capitol Hill and in the presidential campaign." 

Further wounds for Obamacare

From Tyler Cowen.

"UnitedHealth may exit the provision of ACA plans:

The nation’s largest health insurance provider, UnitedHealth Group, dealt a blow to the Affordable Care Act on Thursday when it warned it may stop offering coverage to individuals through public exchanges after taking a big hit to the bottom line from disappointing enrollment and the law’s unexpected effects.

The insurer’s withdrawal from the Obamacare exchanges would force some 540,000 Americans to find coverage from another provider.

UnitedHealth (UNH) downgraded its earnings forecast, bemoaning low growth projections for Obamacare enrollment and blaming the federal health care law for giving individuals too much flexibility to change plans.

People who purchase insurance through the public exchanges are typically heavy users of their plans, draining insurers’ profits, analysts say.

In a sharp reversal of its previously optimistic projections, UnitedHealth suspended marketing of its Obamacare exchange plans for 2016 — which the company has already committed to offer — to limit its exposure to additional losses.

“We see no data pointing to improvement” in the financial performance of public-exchange plans, UnitedHealth CEO Stephen Hemsley said on a conference call, though he added that “we remain hopeful” the market will recover.

The move comes amid indications that insurers are absorbing steeper costs than they expected from plans offered to individuals through the public exchanges, which are purchased online.

The average premium for medium-benefit plans offered to 40-year-old non-smokers is set to rise 10.1% in 2016, according to the Kaiser Family Foundation.

…Even though UnitedHealth wasn’t a major player yet on the ACA exchanges, the fact that it priced plans conservatively and entered cautiously made its statements more significant, said Katherine Hempstead, who heads the insurance coverage team at the Robert Wood Johnson Foundation.

“If they can’t make money on the exchanges, it seems it would be hard for anyone,” Hempstead said.

But that is not all the news.  There is also:

In many Obamacare markets, renewal is not an option
Shopping for health insurance is the new seasonal stress for many
Health care law forces business to consider growth’s costs
Many say their high deductibles make their health insurance all but useless
and my own Obamacare not as egalitarian as it appears

All five are from the NYT, the first three being from the last two or three days, the other two from last week.  They are not articles from The Weekly Standard…

To put it bluntly, I don’t think the mandate part of the bill is working.  These are mostly problems which decay and get worse, not problems which self-correct.

On UnitedHealth, here is commentary from Megan McArdle.  Here is Bob Laszewski.  Here is Vox."

Air Hostesses Then and Now

By Marian L. Tupy of Cato.

"In the mid-1960s, being an air hostess was considered to be a glamorous job. Back then, however, air stewardesses were paid less than half of what they make today. They also had to endure much longer flights, since 1960s airplanes carried relatively little fuel and had to stop for refueling. That also meant that flight attendants had to serve more meals and, consequently, worked harder during the flight. Most importantly, the likelihood of dying on the job declined substantially. In 1965, there were 1,142 airplane fatalities per 250 million passengers carried worldwide. Only 761 people died out of over 3 billion people who flew in 2014.

"

Sea Level Rise from Collapsing Antarctic Ice May Not be as Serious as Once Thought

By Catherine Griffin of Science World Report. 

"Antarctic ice melt may not have as much of an impact on sea level rise as first thought. While an Antarctic ice sheet collapse will have serious consequences over the next 200 years, it won't be as much as some have suggested.

In this latest study, the researchers used an ice-sheet model to predict the consequences of unstable retreat of the ice, which recent studies suggest has begun in West Antarctica. Scientists predict that the contribution is most likely to be 10 cm of sea-level rise this century under a mid to high climate scenario, but is extremely unlikely to be higher than 30 cm. When combined with other contributions, that's a significant challenge for adapting to future sea level rise. However, it's also far lower from some previous estimates.

With that said, the study's central estimate raises the Intergovernmental Panel on Climate Change (IPCC) central prediction of 60 cm global sea-level rise by just a few centimeters. This is because the new study factors in the likelihood of sea-level rise from substantial parts of the ice sheet collapsing, which is relatively new evidence.

"Our method is more comprehensive than previous estimates, because it has more exploration of uncertainty than previous model predictions and more physics than those based on extrapolation or expert judgement," said Tamsin Edwards, one of the researchers, in a news release.

The findings reveal that sea level rise will be an issue in the future. However, it's not as extreme as some predictions have dictated in the past. It's important to take steps now, though, in order to prepare for this rise.

The findings are published in the journal Nature."

More On Problems With Ethanol

By Nancy Smith of sunshinestatenews.com. Excerpts:

"It would be one thing if ethanol were actually good for cars or the environment, but that's not the case. "[Ethanol is] an inferior fuel that damages automobile engines and fuel systems, it's bad for the environment, it has forced U.S. taxpayers to spend billions of dollars in ethanol subsidies, it requires more energy to produce than it generates, and it raises fuel and food prices for consumers," American Enterprise Institute scholar Mark Perry wrote in 2013. "On a purely economic and scientific basis, corn ethanol is an inferior, costly fuel that wouldn't even come close to being a viable energy product."

Even Al Gore has called it a "mistake.""

"Ethanol uses up 40 percent of America's corn crop, forces up the prices of corn products, is as harmful to the environment as it is helpful. The Iowa economy will be hurt during the inevitable adjustment, but even environmentalist Robert Means, Johns Hopkins University climate and policy professor, confirmed on C-Span that ethanol is not the best renewable fuel source."