Thursday, October 27, 2016

The state of adjunct professorship in the US

Kevin Birmingham - on how little adjuncts are paid. Quote:

I accept the Truman Capote Award in this spirit of justice. I would be remiss, therefore, if I did not address another injustice tarnishing the literary critical profession. I am, so far as I can tell, the first adjunct faculty member to receive this award. To be sure, I have one of the best non-ladder positions available. My paychecks cover my bills. I have health insurance. I can work full time. I know by the end of June if my appointment is renewed for the fall. And yet I am one of over one million non-tenure-track instructors working on a temporary or contingent basis and whose position offers no possibility of tenure. To be contingent means not to know if you’ll be teaching next semester or if your class will be cancelled days before it starts. Most adjuncts receive less than three weeks’ notice of an appointment. They rarely receive benefits and have virtually no say in university governance.

Yet to talk about adjuncts is to talk about the centerpiece of higher education. Tenured faculty represent only 17% of university instructors. Part-time adjuncts are now the majority of the professoriate and its fastest growing segment. From 1975 to 2011, the number of part-time adjuncts quadrupled. And the so-called “part time” designation is misleading because most of them are piecing together teaching jobs at multiple institutions simultaneously. A 2014 Congressional report suggests that 89% of adjuncts work at more than one institution. 13% work at four or more. The need for several appointments becomes obvious when we realize how little any one of them pays. In 2013 the Chronicle of Higher Education began collecting salary and benefits information from adjuncts across the country. An English Department adjunct at UC Berkeley, for example, received $6,500 to teach a full-semester course. To read the employment details from thousands of people teaching courses in language and literature is a demoralizing experience. It’s easy to lose sight of all those people struggling beneath the data points:

The University of Texas at Austin: $8,500 for a full course.

Columbia University: $6,000

The University of Chicago: $5,000

Vanderbilt: $5,900

Duke: $7,000

The University of Iowa: $5,950

These are the high numbers. According to the 2014 Congressional report, the median adjunct pay per course is $2,700. An annual report by the American Association of University Professors indicated that last year “the average part-time faculty member earned $16,718” per year. Other studies have similar findings. 31% of part-time faculty live near or below the poverty line. 25% receive public assistance, Medicaid or food stamps. One English Department adjunct who responded to the Congressional survey said that she sold her plasma on Tuesdays and Thursdays to pay for her daughter’s daycare. Another woman stated that she teaches four classes a year for less than $10,000. She writes, “I am currently pregnant with my first child… I will receive NO time off for the birth or recovery. It is necessary [that] I continue until the end of the semester in May in order to get paid, something I drastically need. The only recourse I have is to revert to an online classroom […] and do work while in the hospital.” 61% of adjunct faculty are women.

Sounds like someone needs to form a union. I mean, if adjuncts really are half of teaching staff in the US, all you need to do is unionize and do a national walkout, and it all ends then.

Wednesday, October 26, 2016

Council of Economic Advisers on labour market monopsony

CEA - labour market monopsony (pdf). Quote:

A growing literature has documented several indicators of declining competition in the United States, and economists have begun to explore the links between these trends and rising income inequality (Furman and Orzag 2015). While recent discussions have highlighted rising concentration among producers and monopoly pricing in sellers markets (The Economist 2016), reduced competition can also give employers power to dictate wages — so-called “monopsony” power in the labor market. While monopoly in product markets and monopsony in labor markets can be related and share some common causes, the latter has some distinct causes and policy implications.

This issue brief explains how monopsony, or wage-setting power, in the labor market can reduce wages, employment, and overall welfare, and describes various sources of monopsony power. It then reviews evidence suggesting that firms may have wage-setting power in a broad range of settings and describes several trends in recent decades consistent with a growing role for monopsony power in wage determination. It concludes with a discussion of several policy actions taken by the Obama Administration to help promote labor-market competition and ensure a level playing field for all workers.

Monday, October 24, 2016

Why trade deals lost legitimacy

Dani Rodrik - why trade deals lost legitimacy. Quote:

The elites minimized distributional concerns, though they turned out to be significant for the most directly affected communities. They oversold aggregate gains from trade deals, though they have been smallish since at least NAFTA. They said sovereignty would not be diminished though it clearly was in some instances. They claimed democratic principles would not be undermined, though they are in places. They said there'd be no social dumping though there clearly is at times. They advertised trade deals (and continue to do so) as "free trade" agreements, even though Adam Smith and David Ricardo would turn over in their graves if they read, say, any of the TPP chapters.

And because they failed to provide those distinctions and caveats now trade gets tarred with all kinds of ills even when it's not deserved. If the demagogues and nativists making nonsensical claims about trade are getting a hearing, it is trade's cheerleaders that deserve some of the blame.

One more thing. The opposition to trade deals is no longer solely about income losses. The standard remedy of compensation won't be enough -- even if carried out. It's about fairness, loss of control, and elites' loss of credibility. It hurts the cause of trade to pretend otherwise.

See, this is why I want to study political economy.

Noah Smith on the two liberal economicses

Noah Smith - liberals compete for the soul of economics. Quote:

In 2015, Forbes writer Adam Ozimek suggested that a “new liberal consensus” is forming in the economic-policy world. The data back him up. Many economics professors now tend to favor government intervention in the economy more than the general public. And the profession’s biggest public stars, from Paul Krugman to Thomas Piketty to Joseph Stiglitz, are now more likely to lean to the left than to the right. Meanwhile, I’ve tried to document the flood of new research showing that policies like public housing, welfare and public education spending are more beneficial than conservatives have recognized in decades past.

But there are not one, but two big trends in liberal economic thinking. One wants to modify the economic thinking of the past few decades, and the other wants to rip it up. I expect to see a lot of the economic debate in the coming years play out not between the left and right, but between these two strains of thought.

The research and people I’ve been writing about fit into what we might call the New Center-Left Consensus. This strain of thought is based on data and empiricism. Support for higher minimum wages, for example, has grown among economists because a large amount of careful empirical analysis has shown that minimum wage hikes don’t usually cause sizable immediate disruptions in local labor markets. These economists aren’t ignorant of the basic theory of labor supply and demand -- the kind that every undergrad econ student is forced to learn. They just realize that it might not be the right theory in this case.

The New Center-Left Consensus is attractive to academics and policy wonks. It draws on an eclectic mix of mainstream economic theory, empirical studies and historical experience. It refuses to assume, as many conservatives and libertarians do, that free markets are always the best unless there is a glaring case for government intervention. It’s more willing to entertain all kinds of ways that government can improve the economy, from welfare to infrastructure spending to regulation, but it also recognizes that these won’t always work. It embraces a philosophy of careful experimentation. Sometimes the new center-left is even in favor of deregulation -- for example, loosening zoning restrictions and reducing occupational licensing. It’s not ideologically opposed to the free market.


But there’s a second strain of progressive economic thinking that is gaining attention and strength. This alternative could be called the New Heterodox Explosion. It’s basically a movement to purge mainstream economics from progressive policy-making and thought.

The New Heterodox Explosion rose in large part out of strongly left-leaning intellectual circles, particularly sociology, the humanities and other disciplines outside economics. It has also found a home in some economics departments in other countries (most notably the U.K.). Recently, it has started to permeate blogs and the media.

Personally, I'd like to think I'm not even remotely heterodox in my own thinking. And I really think most of the heterodox movement's concerns can be addressed just by purging mainstream economics of the right-wing ideologues who've spent the past several decades turning the academic field into what it is today.

And I think the present disconnect between the policy world and the academic world will help a lot in driving economics back towards honesty.

Tuesday, October 18, 2016

The thing about $152 trillion in global debt....

The thing about $152 trillion in global debt is, it's also $152 trillion in global assets.

Tim Taylor - global debt hits all-time high. Quote:
Global debt is at an all-time high: specifically, "nonfinancial debt," which is the combined debt of governments, households, and nonfinancial firms in the 113 countries that make up 94% of world GDP. The IMF discusses the situation in its "Fiscal Monitor" for October 2016, which is subtitled "Debt: Use it Wisely."
But shouldn't global debt be at an all-time high if yields are so low? It obviously costs very little to service that debt, and there's a lot of money out there desperate to clip the paltry coupon on that debt.

I mean, the IMF says current debt is around 225% of world GDP; but at today's rates, that's probably only somewhere around 5-10% of world GDP that goes into debt servicing, depending on whether you're using the nominal or real rate, right?

And where else should investors' money go, if not into buying principal & coupon?

Savills estimates world real estate value at $217 trillion, so is global real estate underpriced relative to bonds? Is the world spending far too much of its GDP on renting land and buildings?

Global stock market capitalization is at around $70 trillion or so, supposedly; are global stock markets really underpriced so badly that they could accommodate a few tens of trillions leaving the global bond market?

There's only about $7 trillion in gold; is gold underpriced?

Or should investors dump bonds and just hold cash, the good ol' perpetual zero-coupon bond? Unfortunately, world broad money supply is only around $80 trillion.

Or, most likely: is the IMF simply pumping debt hysteria again?

As an aside:

Brad Setser - is China's problem too much debt, or rather is it too much savings?

Maybe the worldwide problem is too much savings?

Chris Dillow on what's not to like about neoliberalism

I wish the professors at school could reason so fairly and equitably about neoliberalism and free-market capitalism as Marxist Chris Dillow:

I agree that capitalism has been a force for progress – as, of course, did Marx. I agree that hard-core libertarianism is a difficult position to sustain; it always required a very selective reading to suggest that Adam Smith was a libertarian. And I agree on the need for some kind of mixed economy.

However, there are (very roughly speaking!) two types of mixed economy.

In healthy versions, the government corrects market failures whilst the market corrects government failures, and government acts to support entrepreneurship, perhaps in more ways than merely providing stable property rights – for example by ensuring the availability of finance and funding or even conducting fundamental research.

In unhealthy versions, however, we have crony capitalism in which the state supports capitalists at the expense of workers and funnels cash towards favoured clients.

And here’s the problem. For many of us, neoliberalism – insofar as it means anything – is the ideology which helps sustain the latter. Many on the left use “neoliberalism” to describe not just free market economics but also managerialism, hostility to the working class, the crass pursuit of wealth and power and the use of the state to enrich capitalists for example via the too big to fail subsidy to banks. 

I'd go further and say that there's "economics" and then there's "neoliberal propaganda", and a lot of economics Ph.D.s either don't seem to be able to tell the difference which is which, or purposefully teach the latter.

Larry Summers and Adair Turner on secular stagnation

Larry Summers and Adair Turner on secular stagnation: