The Rocket Girls and the Wage Gap

It’s a lovely photograph. Twenty seven women in two rows, lined up outdoors at Caltech in 1953. Young and old, saucy and stern, black and white, a wonderful panorama of mid-twentieth century American womanhood. Recently memorialized by Nathalia Holt in her book, “Rise of the Rocket Girls,” these women are called out as true heroes.

They were computers, at a time that when that was still most generally a human profession, not a machine. They were an island of women in a sea of male engineers and researchers and administrators.

And in their computational labors at the Jet Propulsion Laboratory, eventually to become a unit of NASA, they helped shepherd us into the space age. Calculating trajectories and orbits and escape velocities and safe reentry vectors, they were the unheralded heroes who made Explorer, Voyager, the Apollo moon landings, and the Viking Mars expedition resounding successes.

And they were most certainly paid less than their male colleagues.

Which is inequitable, unfair, and just plain not right, penalizing both the women and their families and society in general.

In 1960, the average compensation for women was 60% of that of men. That stark difference has slowly been equalized but seems to have stalled just shy of 80% since 2001. While outright discrimination and exploitation play a part, there may be something more to it.

As long ago as 2012, the New York Times cited studies identifying a significant wage penalty in developed world economies for working mothers. Terming it the “Mommy Penalty,” the Times cautioned us that the true impact could be even worse:

“And remember, those wage gaps are for full-time workers only. The gap widens if you compare all working mothers, since women are much more likely than men to work part time.”

The Times reporting, as well as other studies, suggest that women earn less than men because they tend to be the ones who bear children, and that might impact the time and/or energy invested in work outside the home.

In our current political climate, with our obsessive drive for equality of outcomes, let’s consider some prescriptive policy relief. To assure equality of results, let’s impose some legislative conditions on men.

Let’s start with the amount of time expended in employment. To create a level playing field, it must be equalized. So when a woman bears a child and begins to dial back her time commitment to work, her male partner should be required to do likewise. The man must take off the same time for doctor appointments, the delivery, the recovery, early child rearing. And as the child grows and the woman leaves early to take the child to athletic events or to attend a school play, her mate must do the same. When the wife declines a business trip due to family obligations, so, too, must her husband.

If the woman declines a promotion because she wants to maintain her family work/life balance, so must the guy she married.

As you might sense, if this were the case, that stubborn wage gap might finally again begin to dwindle.

But this is only the beginning. Since we are in a regulatory mood, let’s not waste the moment.

Imagine the relative number of female vs. male workers in various professions. Roofers, sheetrock hangers, firefighters, police, lumberjacks. Let us legislate that the ratio must be 50/50 men and women, even if that requires firing some men to reach that ratio. Now compare the wage gap again.

But we aren’t done yet. How many manicurists do we have in town vs. bank officers, and how many are men and how many women? We may need to fire some male bank officers and make them into manicurists in order to reach our equality goal. This is command economy intervention at such a height that only a true socialist could comprehend and appreciate.

But the wage gap, stubborn as it is, would finally be beaten into submission. Only at the cost of our overall economy, and the financial health of our families, but darn it, equality would be worth it.

All this a bit tongue in cheek but based on economic reality. A more productive set of policies might be to provide increased funding for women's education and skills development, expand subsidized public daycare and pre-school, and encourage aggressive EEOC actions to root out bias. But even this will not eliminate the gap.

Perhaps one day technology will rescue us, where fetuses are gestated in artificial wombs and infants cared for by robotic nannies. But, unfortunately, until that day, some degree of wage inequality may persist.

The Rocket Girls, with their impeccable logic and mad mathematical skills, would understand this well.

Resolution for 2014 - Bring back the middle class!

Erie, PA, is nearly a perfect example. Situated on a rare natural harbor at the confluence of major railroad lines and highways, Erie grew to become a crown jewel in the armory of freedom. Foundries and metal working abounded. Huge factory buildings lined 12^th Street, employing tens of thousands of skilled and semi-skilled and even illiterate workers. During and immediately after World War II, this was a booming manufacturing economy.

But then in the 1970s, recession and the beginnings of globalization struck. Companies went bankrupt. Plants were relocated or closed. The noon whistle summoned far fewer workers to open their lunch buckets. It was the beginning of the squeeze on the middle class. Today, 12^th Street is lined with derelict factory buildings, windows broken and boarded up. This is what "the rust belt" means.

And the same is true of Lowell and Fall River and Pawtucket, where mill workers' jobs first moved south and then overseas. Attleboro, where jewelry making had supported many families for many years, has seen those jobs evaporate.

One would think that manufacturing is a game that we have lost, and we’d better get used to it.

But the truth is dramatically different. The United States is a huge contributor to the world’s manufacturing output. With nearly $2 trillion generated from manufacturing in 2011, the US equaled the total output of Germany, Italy, South Korea, Brazil, and Russia combined.

If this is the case, then, why is our middle class suffering? Why is our unemployment rate still over 7%?

The answer is that there is a huge skills gap for manufacturing jobs. This can be explained in part by the enormous productivity of the American worker. China requires nearly ten times the workers to generate the same manufacturing output as the US. Largely this is due to our manufacturing mix. They are making consumer electronics and hardware while we are making supercomputers and airliners.

But there is more. Even locally, in Erie PA and Attleboro, there are manufacturing and skilled trades jobs open that can’t be filled. Employers are looking for workers who can program a CNC machine, not just turn a wrench. Illiteracy, or worse, innumeracy, are huge disqualifications. So nationwide, millions of jobs go unfilled for want of qualified candidates. Students who fail to graduate high school can’t possibly compete for these jobs. And worse, many graduates lack the necessary skills that employers require.

When we see educational rankings by country, with the US listed 26^th in math, how can we expect to fuel our high tech manufacturing sector with qualified workers? It’s a serious problem when only 75% of American students graduate from high school, and many who do graduate are weak in STEM (science, technology, engineering, and math). The needs of the future are clear – we will require more literate, STEM-qualified workers, not fewer.

So in this new year of 2014, what can we do? What can you, in particular, do? Here are a few suggestions.

1. Support your local literacy center. In Attleboro, it is the TLC (www.theliteracycenter.com). Literacy centers help retool adults who need a boost. Donate funds, volunteer as a tutor.
2. Support your local schools. But be demanding. What are they doing to reward and replicate the accomplishments of successful teachers? Are they cranking out graduates who need remedial training in the real world? Are local employers lining up at the door to snap up graduates?
3. Educate yourself and vote. Forget the party line. Vote for whomever explains how to improve the educational attainment of our youth. If that’s through the public schools, how?  Parochial or charter schools? Elevating the importance of trade schools? German-style apprenticeship programs?

If we want to see our middle class revitalized, the key is to rebuild our manufacturing and trades sectors. But to do that, we need to equip prospective workers with something of value. Employees must be able to fluently navigate the literacy and engineering and math requirements of the modern manufacturing job. And we can help them achieve that. 
 
The bottom line is that you can be an active part of the solution if you inform yourself and take action. This is a case where bottom-up social activism can be effective, but only if enough of us care. Make this a resolution for 2014.

Start with a call to your Literacy Center.

Happy New Year!

Let’s all be poor together

A wealthy woman.

American CEOs are much too rich, live in monstrous, gaudy mansions, and we hate them for it. So whines  Dan Thomasson, a columnist for the Scripps Howard New Service (“Not quite your great-great-grandfather’s log cabin”, July 22, 2013), openly declaring his blatant jealousy. Of a similar philosophy, an NPR commentator, recently opining on the purchase of a $250 million work of art by a wealthy banker, complained that that purchase was only possible because the banker was taxed far too little.

What an odd bunch of economically illiterate hypocrites we are. For while bemoaning the wealth and spending ability of capitalists, we never seem to complain about the affluence of the Hollywood elite or star athletes. Who grumbles about Dustin Pedroia’s recent $110 million contract with the Red Sox? Not I, not you – we love Dustin!

But honestly, folks, while Hollywood and Major League Baseball admittedly generate a few jobs, those pale in comparison to the hundred million jobs created and maintained by our nations bankers and CEOs. Yet we hate capitalists. 

Here’s an idea. Let’s deny the rich their trappings. Huge taxes on yachts, mansions, works of arts. Make it so punitive that we’ll see the end of the $20 million castles that give Thomasson such agita. 

Yay! The anarchists, anti-capitalists, and wealth redistributionists will have won. But who loses? No, really, who loses?

Imagine what goes on in building a $20 million home. Here is a short, incomplete list of losers should we successfully thwart its building.

• The landowner who would have sold the lot and the realtor who managed the sale – both losers.
• The architect and general contractor who would have designed the home and planned the building project – losers.
• The excavator who would have cleared and leveled the lot and dug out the basement – a loser.
• The concrete man who would have built forms for the foundation and poured the concrete – a loser.
• The asphalt guy who would have paved that long, winding drive – a loser.
• The landscaper who would have planned and planted the lawn and shrubs and gardens – another loser.
• The framing carpenters and sheetrock hangers and roofers and electricians and plumbers and HVAC guys – all losers.
• The interior designer, cabinetmakers, carpet layers – all losers.
• The local town, whose assessor's office is forgoing a significant property tax revenue stream – a loser.
• And finally, the grocers and hairdressers and launderers and restaurateurs to all of the above losers – all losers, too.

While our national pastime is to revile capitalistic wealth, we seem terribly shortsighted in not realizing that wealthy people create the vast majority of our jobs. And in addition to that, they spend their money – lots of money. We stifle them at our own economic peril.

So instead of jealously, perhaps Thomasson should stick his neck out. Invest in the market or start a new firm. Hire some employees and make the payroll week after week. Learn what it’s like to manage an international firm where business goes on 24 hours a day, 7 days a week. See what it’s like to spend scant time with his family.

Either that or shed the hypocrisy and write scathing columns about the wealth of Julia Roberts and Dustin Pedroia, too. After all, if we hate wealth, let’s hate all of it. And then we can all be poor together.

Economic principles are older than history

Economics is incredibly complicated, we are told.  Economists would have us believe so because, otherwise, why would we need them?  Politicians likewise prefer befuddled voters as they are easy to manipulate.  Our economic system is indeed complex because of its enormous scale.  But it is based on some very simple principles, and we can use them to understand fundamental relationships.
 

In case you hadn’t noticed, the global economy is in a funk.  Investors aren’t investing, bankers aren’t lending, consumers aren’t consuming, manufacturers aren’t hiring... what to do?

There is a debate raging on the choice between growth or austerity (reducing debt) to improve things.  By “growth”, its proponents mean public sector spending (hiring more cops, clerks, and teachers), funded by higher taxes or increased borrowing. Those on the other side say that austerity works just fine, thank you very much, it just takes a little longer.  And further, they argue, “growth” could and should be nurtured in the private sector – it need not be a codeword for public spending.

Public sector, private sector, spending, growth, debt, taxes… it’s enough to make your head spin.  What should we do?  How do we decide?

Let’s take a look at how economics began. Imagine a prehistoric tribe made up of ten individuals.  We will focus on the adults and ignore the children for now.  The adults  are divvied up as follows:

• 3 hunters
• 4 gatherers
• 1 shaman (active)
• 1 shaman (retired)
• 1 hunter (disabled)

The three hunters, as you might guess, track, pursue, and take game animals, large and small.  The four gatherers cultivate simple grains and vegetables and collect wild fruits and berries. The hunters and gatherers make up the private sector, as they produce the means to keep the tribe alive.  Their output feeds the entire tribe.

The shaman uses magic to forecast the future, cast spells on the tribe’s enemies, and teaches basic skills to the tribe’s children.  He makes up the public sector.

The disabled hunter, unfortunately, is no longer able to contribute because of a badly wrenched back from trying to haul a large elk.  The retired shaman, too old to prognosticate, and the disabled hunter are social beneficiaries.    

All of the grains, berries, rabbits and venison produced by the hunters and gatherers must be shared with the public sector (current shaman) and the social beneficiaries (retired shaman and disabled hunter).  Every rabbit, sheave of grain, and basket of berries must be shared ten ways, even though only seven are responsible for production. For every 10 rabbits a hunter snares, he must give up 3 to support the public and social beneficiary sectors. This is a tax.

Imagine that a prolonged drought results in poor yields for both hunters and gatherers… the economy is a mess.  People are hungry, starving, and something must be done.  So what is the logical conclusion… shall we hire another shaman from the tribe in the next valley?

That’s what some argue… that by expanding our public sector, economic output will be increased.  But we still have only 3 hunters and 4 gatherers, who must now share their output 11 ways instead of 10.  They are rightfully baffled by this decision, because there are now more mouths to feed but no increase in production to do so.

Does this mean that the public sector is bad and that we shouldn’t support those in need?  Absolutely not!  In our real economy, public servants are crucial to our society’s functioning, keeping us safe from crime, putting out fires, and teaching the next generation of productive citizens.  And it is only decent to sustain those who are truly in need.  But remember that we can only do what we can afford to do.  That is the mistake made by the Greeks – chronic overpromising, living beyond their means.

When the government expands the public sector or expands social benefits, these costs must be paid.  There are only two choices… by raising taxes now or raising taxes later.  In the latter case, we can borrow a surplus from the tribe in the next valley, but it must eventually be repaid (plus interest), which requires a future tax.

This is not meant to convince you to think in any given way, only to think.  When presented with economic alternatives, think.  Then choose.  But do so based on an informed consideration.

The tragedy of the commons

Cows in an overgrazed commons.

Central Falls, Rhode Island, is bankrupt.  The city, at 1.29 square miles, was once famous as the most densely populated city in America. Bordered on the east by the Blackstone River, Central Falls was at the heart of early America’s Industrial Revolution. But water-powered foundries and textile mills quickly became a thing of that past, leaving Central Falls’ skilled workforce high and dry.

In more recent years, Central Falls’ politicians continued to spend money as if they still had a tax base. They made generous pension promises to the city unions who elected them, creating liabilities that couldn’t possibly be met. So now they are broke and retiree benefits have been slashed in half. There are no winners.

How did this happen?  The most likely cause is a phenomenon called “the tragedy of the commons,” a theory describing human behavior when dealing with shared resources.  Ecologist Garrett Hardin wrote an influential article on the topic in 1968, describing the behavior of a group of herders who all shared the same parcel of land.  Since no one herder owned the land, each was motivated to maximize personal return, resulting in overgrazing to the detriment of all.

This effect can be seen wherever private ownership is absent.  Fishing fleets deplete ocean fisheries.  Graffiti artists deface public property.  Vandals destroy anything that is not theirs.  Politicians make promises they cannot fulfill (it's not their money).

The good news is that humans are very resourceful, recognizing the problem and developing creative solutions.  Taking the long view, farmers often organized and regulated the use of common grazing lands.  The federal government allocates fishing rights and radio frequency spectra. And enlightened politicians recognize that heavy taxation and reckless spending impair the economy that supplies them with tax revenues.

Here is what you can do.  Be aware that the economy, whether local, national, or global, is a commons. We all rise or fall on the tide of jobs, capital, and opportunity thereby produced. The economy is enhanced by the animal spirits of individual entrepreneurs and investors and is depleted by the ravages of short-sighted politicians.

Make your choices wisely.  Take the long view.  Educate yourself. Remember that there is never something for nothing.

The people of Central Falls, often portrayed as victims, repeatedly elected their betrayers.  Be smarter than that. 

Waves of change

Railroad trestle in Spartansburg, PA

The first wave of prosperity to lift New Bedford, Massachusetts, was whaling and related nautical industries.  Through most of the nineteenth century, we lit our homes, streets, and factories with whale oil lamps.  Fortunes were made and New Bedford flourished.  Then, an innocuous event occurred in northwestern Pennsylvania just south of the small town of Titusville.   In the summer of 1859, Col. Edwin Drake drilled the country’s first commercially viable oil well, sealing the fate of the whaling industry.  A spur railway was quickly built from the nearest railhead in Corry, through the Amish village of Spartansburg, and on to Titusville.  Soon, tanker cars steamed eastward carrying petroleum to be processed at former whale oil refineries, at much less cost, risk, and greater profits.  Consumers and the country benefited, but the world’s whaling ports began to wither. 

New Bedford faltered, actually losing population according to the 1870 census, but quickly recovered on a new wave of textile manufacturing.  By the 1880s, the city was growing again, buoyed by robust, expanding textile manufacturing.  It was no secret, however, that former able bodied seamen and harpooners were not necessarily the best loom operators.  A new set of skills was required to become gainfully employed. 

Then, another wave.  By the 1940s, textile manufacturing moved to the southern United States where wages were lower and business burdens lighter.  New Bedford again faltered, but quickly rebounded on the wartime demand for manufacturing.  Tool and die operations sustained the city through the post war years but began to ebb in the 1970s as these products were increasingly supplied by Japan and other countries.

Today, New Bedford’s unemployment rate averages about 10%.  Still a robust fishing port, the employment offered by this industry cannot support the city’s population.  Health care and some limited manufacturing round out the employers, but many of the city’s workers lack the skills for these jobs.

What are the points that may be gleaned from this?  There are several.  First, it seems that waves of change are inevitable, and government can be of little help in assisting us.  We could subsidize whalers, and loom operators, and buggy whip assemblers, but to what effect?  The best that we can do for ourselves, and that government can do for us, is to provide training and skills enhancement.  In our increasingly knowledge-based economy, it is important to be agile, adaptable, and engaged in order to be employable.

Far be it from me to be an expert, but long observation gives me a few suggestions on how to achieve this goal of maximizing employability in an ever-changing economy:

• Be literate in spoken and written English.  While it may be comforting to press 2 for Spanish, that will not help your employability.
• Likewise, be literate with basic mathematics.  Math has to do with logic and reasoning, and will serve you well in many fields.
• Become comfortable with computers and the Internet.  They are the fabric of our information economy. 

How to accomplish these goals?  First, use your local public library.  In addition to supplying books and periodicals, they also provide computers, internet access, and often classes in English proficiency.  Many local high schools offer adult continuing education classes ranging from Photoshop to woodworking to welding.  Potential employers want to see that you have solid, basic skills and are capable of learning new ones.  This is what sets you apart from the permanent minimum wage crowd, who may well be comfortable where they are (which is largely unemployable). 

Titusville, Pennsylvania, suffered the same fate as New Bedford.  Multiple waves of change have washed over her, and her citizens are dumfounded.  Even the few manufacturing jobs that remain require the ability to operate sophisticated CNC milling machines.  The only cure is to rise to your potential, to learn basic English, mathematical, and computer skills, and to mentor those who are struggling.  We are all in this together.