Proudly Borrowed From Others

One of the many benefits of participating in UMW’s Domain of One’s Own project is the interaction generated between an expert from the Division of Teaching and Learning Technology and other colleagues.

I didn’t post on last week’s readings because I was already familiar with that particular subject and didn’t read anything new to me.  Nothing new, no new thoughts.  However, in the discussion Professor Mackintosh mentioned how he was experimenting with using a collaborative wiki to build a set of notes for his class.  He has since described it on his blog.  I’m now giving serious thought to incorporating this technique into some of my more advanced classes.

This exercise highlights one of the values of the program.  Even if I did not learn anything from a particular reading assignment – nothing against the reading list, it just happened that I was familiar with last week’s topic – having a dedicated time for discussing how to improve our teaching with technology is bearing fruit.


Solid Advice for Philanthropists

Too many people want to spend your money.  Don’t let them.

James Piereson wrote a great column urging innovators not to succumb to the urgings of people like Bill Gates and Warren Buffett, state and local governments, and other people who think they can spend your money better than you can. Mr. Piereson highlights the example of Robert Wilson, who gave away $500 million of his own money to the causes he supported while rejecting Bill Gate’s desire to influence his philanthropy.

Wilson wrote Gates “When I talk to young people who seem destined for great success, I tell them to forget about charities and giving.  Concentrate on your family and getting rich–which I found very hard work.  I personally and the world at large are very glad you [Bill Gates] were more interested in computer software than the underprivileged when you were young…  Which rich people reach 50 and are beginning to slow down is the time to begin engaging them in philanthropy.”

Not only does this make sense from a financial point of view, it makes sense from a long-term view of helping the world.  I admire some of the great things the Gates Foundation has done to make the world a better place, but none of these efforts come close to the benefits Gates helped usher in with the rise of the personal computer.  This does not mean people should be selfish – I personally am teaching my children the 10/80/10 rule of giving 10% of their income away, living on 80% or less, and saving 10% – but that while people are young and creative, they should maximize their creativity.

Mr. Piereson’s philanthropic advice may be summarized as “Donate to causes you care about, think long term, and remember it is your money.”  Let’s hope people read his words and follow his advice.

Thoughts and Findings on Minimum Wage

I was asked to write a column about the minimum wage for The Free Lance-Star.  It appeared in yesterday’s paper, and I thought I’d post it here as well.  The column is virtually identical, but I took advantage of the medium to include hyperlinks.

Should we raise the minimum wage?

That depends upon what we are trying to accomplish.

If the goal is to ensure that each person who has a job earns enough to support himself—and possibly a family—on it, then yes we need to raise it. However, we need to realize that any decision to raise the minimum wage will also reduce the number of people employed and adversely impact firms.

Businesses will either have to pass along the increased costs by raising prices or make other adjustments (include closing for firms that are currently operating on the margin). With today’s minimum wage, larger stores still find it more economical to buy self-service check-out scanners than pay a person. If you increase the cost of hiring people with low skills, you increase the incentive to automate these jobs.

If you doubt organizations react to changes in the law, consider one obvious response to the Affordable Care Act, commonly referred to as Obamacare. The law mandates health care coverage for everyone who works at least 30 hours a week at organizations with more than 50 full-time people.

So how did many large organizations—including the State of Virginia–react to this law? They no longer allow their part-time workers to work 30 hours a week (Click here for a list). So these folks still don’t have coverage but now either earn less or have to juggle multiple part-time jobs to make ends meet.

The other factor to consider is that minimum wage is mostly paid for jobs requiring little skill. However, the experience gained by working these jobs is crucial toward preparing people for future jobs that require more skills and education. For example, when I was 12, my first job paid below minimum wage—I had a bicycle paper route for an afternoon paper and was paid for each paper I delivered. Newspaper delivery people are among the many exceptions to the federal minimum wage law.

While I didn’t realize it at the time, being a paperboy taught me several key lessons. I learned to be responsible and to manage my time. It didn’t matter if I wanted to play when came home from school, I had to deliver the papers on time or people would complain and I’d be fired.

In addition to the job requirements (mostly fold the papers and deliver to each subscriber’s house by 5 p.m.), spending time working also forced me to be more efficient with my other time. By the time I finished my route, cleaned up, and had supper with my family it was about 6:30 p.m. before I could start on my homework. My parents were supportive of my having a paper route, but they made it clear if my grades suffered, I would have to quit.

I also learned firsthand about taxes—my reaction was similar to that of Rachel from the TV show Friends when she got her first job, “Who is this FICA guy and why is he getting all my money?” Despite Uncle Sam taking his share, I learned the relationship between working hard and having money to spend.

Shortly after I turned 14—the minimum age to work for most jobs outside of school hours—I found a job at a local bookstore and quit my paper route. I could work full-time in the summers and part-time during the school year. I made the minimum wage of $3.35 per hour. Considering inflation, it was similar to today’s minimum wage of $7.25 per hour.

Minimum wage jobs are more than sufficient for entry-level jobs, if the person being trained has someone else paying their living expenses. Since my parents paid for my necessities, $3.35 per hour—even after taxes—was more than sufficient for me to pay my own personal expenses and save money for college. The skills I learned from these low-skill entry-level jobs helped me progress to better paying jobs that required more skill, experience, and education.

The current minimum wage is not sufficient as a living wage, but is more than sufficient as a training wage. I agree with the goal of ensuring all families have the necessities to thrive, not just survive, but this may be better handled by reforming our social safety nets which drastically penalize people if they work. Raising the minimum wage will make it even more difficult for people to find their first job where they can learn key skills that will help prepare them for more challenging and better paying future jobs.

This is not just my opinion. In one of the most comprehensive reviews—if not the comprehensive review—of minimum wage studies, David Neumark and William Wascher (Minimum Wages, 2008) found three key findings.

First, increases in the minimum wage decreased the number of jobs for those currently earning minimum wage and for those trying to enter the job market. Second, increases in the minimum wage do not reduce the percentages of families near or below the poverty line (although several studies have found that it increases these percentages given the loss of low-skill jobs). Third, researchers found that when the minimum wage was increased, the motivation for those with low-paying jobs to continue with their education decreased, thus reducing their long-term opportunities for obtaining better jobs.

These clear consistent findings—replicated at different times by different researchers—make a strong argument for eliminating the minimum wage entirely. Raising the minimum wage will decrease the number of entry-level jobs available for those wanting to enter the workforce, will not help (and may harm) poor families as a group, and will reduce the likelihood of those with low-skill jobs going back to school.

Changes in Economic Environment

In my Marketing Principles class, I teach my students that the economic environment is one of the uncontrollable variables that businesses must monitor and – to the extent they can – manage their reactions to changes in it.  As an example, Friday’s Wall Street Journal had an article on how international airlines were now restricting ticket sales in Venezuela.

The airlines are doing this for several reasons.  First of all, the value of the Venezuelan bolivar is dropping (yet again).  Second, Venezuela has laws restricting how these airlines can move their profits out of the country.  Currently about $3.34 billion (US dollar equivalent) of the airlines profits is sitting in Venezuela – according to the WSJ, they could lose up to 45% of this just in currency devaluation.  Third, there is a large black market for currency exchanges where people pay much more than the government rate in bolivars for obtaining harder currencies such as the dollar.  So visitors to Venezuela were taking advantage of this, converting their home currency to bolivars, then stocking up on airline tickets.

And these are problems associated with doing business in just one country.  Imagine the complexities of doing business with most of the countries in the world.

Thoughts on Digital Identities

I am blessed to be part of an institution which truly values independent thought about how to use modern technologies.  Most of us take the internet for granted, a testament to human adaptability considering that the sites we depend upon didn’t exist 20 years ago.  For instance, I access Google multiple times a day from work, home, and even my phone.  Yet, how often do we take time to consider these modern tools and the implications of this usage?  As part of their Domain of One’s Own Initiative, UMW provides interested students and faculty with the tools and training to better express themselves online.

As part of this training, I had to read several articles about digital identity this week.  One of the authors (Gardner Campbell) proposed that universities provide all students with their own web servers and domain names.  Since it was an assigned reading, I suspect it served as a foundation piece for the Domain of One’s Own project which has many similarities to Campbell’s proposal.  The articles were interesting, but most assumed that everyone would be using the internet and posting information about themselves online.

Is this assumption true?  Would it be a good thing?  Along with the authors of the assigned reading, I enjoy high technology.  I am thoroughly sold on the benefits of the technology for some, but I am not convinced everyone needs an individual digital presence or would benefit from such.  Did the authors consider that over 70% of Americans do not have a bachelor’s degree?

Does a digital presence make sense for those whose life path does not require computer expertise?  I know a fair number of adults who do not own a computer, let alone have the technological skills to manage their own domain.  The internet makes it easy for everyone to publish, but what about those who lack basic proofing skills?  Is it better to have no presence on the web or to have a well-established presence under one’s control that is full of typos, grammatical mistakes, and misspellings?

For those with the skills to maintain a professional web presence, should they write under their own name or under a pseudonym?  While there are many advantages to the freedom to publish on the internet – today’s bloggers tackle many issues the corporate press ignore – publishing one’s opinion may come at a cost.  In today’s environment, there are often many viable applicants for every job opening.  If a potential employer with a differing opinion finds an article while researching the candidate, will this influence which applicants are interviewed?

I certainly do not have the answers to all of these questions.  However, while I see great benefits in controlling one’s social presence for those with the proper skills, I have yet to be convinced this will be a benefit to all.  I still have several years before my own children start posting, but I may recommend that they do so under a pseudonym until they have enough experience to make their own informed decision.