A student sent me a link to this piece about the price of beer at Oktoberfest. The article itself, not the price of beer, completely defies economic logic. It starts bad, and only “improves” from there. Here is the start, kudos to folks who see the defiance of economic logic (how does this stuff get published anyway?):
Beer is what economists call an elastic good; the more it costs, the less of it people buy.
There are at least two problems with this sentence, in case you are wondering.
In other news, here’s more from the frontlines of the real 1%:
Termination was too harsh a penalty for a tenured teacher who created a spurt of news stories after he was found with bags of heroin when trying to enter Manhattan Supreme Court, where he was serving on jury duty….
Maybe he was just a civics teacher trying to make a point?
In other news, this paper was interesting, not just for the obvious reasons. You see, we can all argue about the size and reach of government – but there are far less arguments about what I think is more important: conditional on any government activity, how much should take place at the federal vs. local levels. There is some evidence in this paper for why I think this is important (bolded below). And yes, there is other stuff of note here.
Wages, Pensions, and Public-Private Sector Compensation
Differentials for Older Workers by Philipp Bewerunge, Harvey S. Rosen – NBER Working Paper # 19454We use a sample of full-time workers over 50 years of age from the 2004 and 2006 waves of the Health and Retirement Study to investigate whether workers in federal, state, and local government receive more
generous wage and pension compensation than private sector workers, ceteris paribus. With respect to hourly remuneration (wages plus employer contributions to defined contribution plans), federal
workers earn a premium of about 28 log points, taking differences in employee characteristics into account. However, there are no statistically discernible differences between state and local workers
and their private sector counterparts, ceteris paribus. These findings are about the same whether or not indicators of occupation are included in the model. On the other hand, pension wealth
accumulation is greater for employees in all three government sectors than for private sector workers, even after taking worker characteristics into account. As a proportion of the hourly
private-sector wage, the hourly equivalent public-private differentials are about 17.2 percent, 13.4 percent, and 12.6 percent for federal, state, and local workers, respectively. We find no
evidence that highly-educated individuals are penalized by taking jobs in the public sector, either with respect to wages or pension wealth.
These guys are good economists, so I am pretty sure they controlled for the possibility that federal jobs are different in a way that would make it reasonable for their salaries to be higher.
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