Economics

On The Detroit Dole

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Or one reason you might be paying a little more for less when you buy a car from Detroit’s big three:

Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet metal, spend their days counting the hours in a jobs bank set up by Detroit automakers and Delphi Corp. as part of an extraordinary job security agreement with the United Auto Workers union.
The jobs bank programs were the price the industry paid in the 1980s to win UAW support for controversial efforts to boost productivity through increased automation and more flexible manufacturing.

Assuming benefits at 20% and using the $31/hour dole noted in the article this works out to about $928 million/year. This tracks closly to the $4.17/billion that the participants agreed to contribute over 4 years beginning in 2003.To us watching from the sidelines this seems like a lot of money and a big deal.
On the other hand just how big a deal is this? That $4.17 billion over 4 years will be a very small portion of the big three’s revenue during the same period: less than 2-tenths of 1 percent. This doesn’t make living on the dole right but perhaps the auto companys should not be screaming too loudly or folks might start looking at some of the taxpayer provided subsidies (PDF) they get.
It does not strike me as unreasonable for an employer to help a layed off employee retrain and find another job. However, after a year (more or less) of retraining I can’t think of any good reason these 12,000 should not have been sent out to get real jobs.
Via overtaken~by~events.
Update (10/18): The last paragraph may lead you to believe, as it did Don Singleton, that I think these 12,000 are in a retraining program. I don’t. I understand that they are sitting on their duff (some doing various volunteer work) and apparently not even looking for new skills/jobs on their own initiative. I should have provided a better transition to the suggestion that employers might be expected to provide substantially more assistance to riffed workers than they do today but that should take a specific form as suggested.

DART seeks fare solution?

This entry was posted in Capitalism Economics Libertarianism Transportation on by

Perhaps they should be seeking a fair solution instead?

Rising gas prices are prompting a growing number of North Texas commuters to park their cars in favor of buses and trains, but Dallas Area Rapid Transit is considering service cuts to help balance its budget.
Though DART ridership has increased 11 percent on its bus and light-rail lines and 18 percent on the Trinity Railway Express commuter line, the additional passengers have not helped the agency’s finances.
The problem: a lower-than-expected sales tax revenue forecast for 2006 throughout the region, and increased fuel costs.
The sales tax numbers are crucial because DART gets most of its revenue from that source. The transit agency, which spends about $887,000 a day to run its buses and rail lines, recovers about 11 percent of its daily operating cost through fares.
…….
According to DART, Route 234 attracts an average of 59 riders a day, and that translates into a subsidy of almost $24 for every passenger trip. The transit agency has pushed for those riders to form van pools, which have a subsidy of about $1 per passenger trip
In considering which bus lines to shrink or eliminate, DART weighs one route’s performance against similar routes. Route 234 supporters argued to the board that the Plano-to-Irving bus service is vastly different from other express routes that run from outlying stops directly to downtown Dallas. Those routes have a goal of a $4.50 subsidy per passenger trip.

Reads like another typical case of a government involved market failure.
The only fair solution is one where the subsidy per passenger trip is $0.00 and fares cover both the cost of operations and capital. If the passengers object then they should seek out an alternative that does not include taking money from others to subsidize their choices of where to live and work.

Price Gouging?

This entry was posted in Business US Economics Energy Environment Federal Government Libertarianism Regulation on by

Post Katrina gas prices maybe went up 10-15% depending on where you lived and in most cases they have rolled back down. Nevertheless, cries of price gouging were rampant and continue. But that is gas. If it is some other good like, say, oysters then it is a feel good story:

With two-thirds of Louisiana oyster beds wiped out by the Aug. 29 storm, prices of Pacific oysters have soared as Gulf Coast processors scour for alternatives thousands of miles away. That’s allowed Taylor Shellfish to raise its prices 38 percent in the past month to $40 per gallon of oysters.
“It’s the strongest demand that I’ve ever seen for oysters,” says William Taylor, ……
Prices have surged as much as 50 percent since the hurricane, according to the Pacific Coast Shellfish Growers Association, giving the Northwest growers some relief, even as they sympathize with the hurricane victims 2,000 miles away.

Imagine the outcry if gasoline prices had gone up 50%!
Seems like so-called market forces working the way they should in both cases. It can, though, be a bit hard to tell if the market is really working in the extensively regulated and subsidized oil and gasoline business.

Serenity Shindig

This entry was posted in Anarchism Economics Government Libertarianism Science Fiction on by

Over at Catallarchy.
Jonathon Wilde explores Firefly at length and presents a review of each of the episodes.
Oh, if you haven’t seen Serenity yet just what are you waiting for? Go now!
Update: I just got around to reading Julian Sanchez’s review having previously bookmarked it until I’d seen the movie due to some spoilers:

Of course, you don’t have to have read Camus, or even be fond of berets or clove cigarettes, to be a fan of Serenity. The film’s genius is that it works on so many levels—political, philosophical, and (not least) narrative. If you show up in theaters just looking for a tightly plotted, smartly scripted sci-fi action flick, you’ll come away happy. For the attentive viewer, though, Serenity is not just a string of good chase scenes, but an “absurd reasoning,” a surprisingly profound meditation on what freedom means—both in politics and, perhaps more importantly, as a source of personal meaning.

Read the rest.