In July, eitght years ago, Detroit filed for bankruptcy protection. The US was well into an economic expansion, but the expansion had largely bypassed Detroit. The Detroit area unemployment rate was 9.7%, and the Detroit city rate was 17%, among the highest in the nation. Tax income was not sufficient to pay retirement or current employees. The city was riven by corruption and crime, and attendance in school was dismal, less that 25% in some districts, about 55% as an overall average. Kids no longer saw a value in education. After bankruptcy, things started to improve dramatically.
Detroit area unemployment rate, 2005 to 2021.
The largest cause of the problem, and of the solution, in my opinion, was a high Detroit minimum wage that applied before bankruptcy and that was voided by bankruptcy. It was called a “living wage”. In 2013 it was $16/ hour and applied to any business that dealt with the city and did not offer health insurance (see more on the specifics here).The stated purpose was to insure that all workers could support a family of four in some middle-class standard, by one wage-earner working 40 hours per week. It was a view of Detroit family life and economic need that didn’t match Detroit reality. In practice most of Detroit were not 4 person, one wage-earner households. It meant that most Detroiters could not find jobs, since most companies worked in some way with the city. The only workers who could find jobs were those with special skills or political connections. The alternative was criminal business including drug sales, prostitution and burglary. The unemployment rate was 70% among Detroit’s teenagers.
The high minimum wage bought loyalty for Detroit’s political bosses; they gave out jobs for kickbacks, and some went to jail, including the mayor. Most Detroiters could not find jobs, though, and this especially hurt those looking for their first job: the job that would demonstrate that math and spelling were important; that you had to show up on time, dressed clean, and that you were not to insult the customers. High unemployment meant low tax revenue, made worse by high city employment costs for basic services: janitors, secretaries, and mail room personnel. The city was a mess.
When Detroit went bankrupt, among the first changes was to eliminate the $!6/hour living wage for employees and others doing business with the city. This helped bring the city budget into balance, and it brought in residents, businesses, and developers. By January 2020 Detroit’s unemployment rate had fallen to 6%, and Detroit metro unemployment had fallen to 4.2%, the lowest rates on record. Employment gives a motivation to stay in Detroit and to stay in school: there are jobs to be had for those who could add and spell. I covered these improvements here.
Seattle are unemployment rate 2015 to 2021. Seattle’s unemployment rate is now higher than Detroit’s.
Meanwhile, Seattle voted to raise their minimum wage to $15, with the change law taking effect in stages. The law fully came into effect three months ago, in January, 2021. New York voted for similar changes more recently. It is hard to be sure of the effect of the high minimum wage but already it seems to have hit employment. By the latest data, Seattle’s unemployment rate has risen to 6.9%. That’s higher than in Detroit, a real reversal. While unemployment in New York City has yet to rise much, they have seen a drop in rent rates while Detroit has seen a rise. New York’s are also moving to be more out of balance, something that leads to corruption and bankruptcy. We’ll see how this works out.
California likely leads the nation in socially activist government kindness. It also leads the nation in homelessness, chronic homelessness, and homeless veterans. The US Council on Homelessnesses estimates that, on any given day, 129,972 Californians are homeless, including 6,702 family households, and 10,836 veterans; 34,332 people are listed among “the chronic homeless”. That is, Californians with a disability who have been continuously homeless for one year or cumulatively homeless for 12 months in the past three years. No other state comes close to these numbers. The vast majority of these homeless are in the richer areas of two rich California cities: Los Angeles and San Francisco (mostly Los Angeles). Along with the homeless in these cities, there’s been a rise in 3rd world diseases: cholera, typhoid, typhus, etc. I’d like to explore the relationship between the policies of these cities and the rise of homelessness and disease. And I’d like to suggest a few cures, mostly involving sanitation.
A homeless encampment in LosAngeles
Most of the US homeless do not live in camps or on the streets. The better off US homelessness find it is a temporary situation. They survive living in hotels or homeless shelters, or they “couch-serf,” with family or friends. They tend to take part time jobs, or collect unemployment, and they eventually find a permanent residence. For the chronic homeless things are a lot grimmer, especially in California. The chronic unemployed do not get unemployment insurance, and California’s work rules tend to mean there are no part time jobs, and there is not even a viable can and bottle return system in California, so the homeless are denied even this source of income*. There is welfare and SSI, but you have to be somewhat stable to sign up and collect. The result is that California’s chronic homeless tend to live in squalor strewn tent cities, supported by food handouts.
Californians provide generous food handouts, but there is inadequate sewage, or trash collection, and limited access to clean water. Many of the chronic homeless are drug-dependent or mentally ill, and though they might benefit from religion-based missions, Los Angeles has pushed the missions to the edges of the cities, away from the homeless. The excess food and lack of trash collection tends to breed rats and disease, and as in the middle ages, the rats help spread the diseases.
Total homelessness by state, 2018; California leads the nation. The better off among these individuals do not live on the streets, but in hotels or homeless shelters. For most, this is a short term situation. The rest, about 20%, are chronically homeless. About half of these live on the streets without adequate sewage and water. Many are drug-dependent.
The first major outbreaks of the homeless camps appeared in Los Angeles in August and September of 2017. They reappeared in 2018, and by late summer, rates were roughly double 2017’s. This year, 2019, looks like it could be a real disaster. The first case of a typhoid infected police officer showed up in May. By June there were six police officers with typhoid, and that suggests record numbers are brewing among the homeless.
To see why sanitation is an important part of the cure, it’s worth noting that typhoid is a disease of unclean hands, and a relative of botulism. It is spread by people who go to the bathroom and then handle food without washing their hands first. The homeless camps do not, by and large, have hand washing stations. and forced hygiene is prohibited. Los Angeles has set up porta-potties, with no easy hand washing. The result is typhoid epidemic that’s even affecting the police (six policemen in June!).
R-naught, reproduction number for some diseases, CDC.
Historically, the worst outbreaks of typhoid were spread by food workers. This was the case with “typhoid Mary of the early 20th century.” My guess is that some of the police who got typhoid, got it while trying to feed the needy. If so, this fellow could become another Typhoid Mary. Ideally, you’d want shelters and washing stations where the homeless are. You’d also want to pickup the dirtier among the homeless for forced washing and an occasional night in a homeless shelter. This is considered inhumane in Los Angeles, but they do things like this in New York, or they did.
Typhus is another major disease of the California homeless camps. It is related to typhoid but spread by rodents and their fleas. Infected rodents are attracted to the homeless camps by the excess food. When the rodents die, their infected fleas jump to the nearest warm body. Sometimes that’s a person, sometimes another animal. In a nastier city, like New York, the police come by and take away old food, dead animals, and dirty clothing; in Los Angeles they don’t. They believe the homeless have significant squatters rights. California’s kindness here results in typhus.
Reproduction number and generation time for some diseases.
The last of the major diseases of the homeless camps is cholera. It’s different from the others in that it is not dependent on squalor, just poor health. Cholera is an airborne disease, spread by coughing and sneezing. In California’s camps, the crazy and sick dwell close to each other and close to healthy tourists. Cholera outbreaks are a predictable result. And they can easily spread beyond the camps to your home town, and if that happens a national plague could spread really fast.
I’d discussed R-naught as a measure of contagiousness some months ago, comparing it to the reproductive number of an atom bomb design, but there is more to understanding a disease outbreak. R-naught refers merely to the number of people that each infected person will infect before getting cured or dying. An R-naught greater than one means the disease will spread, but to understand the rate of spread you also need the generation time. That’s the average time between when the host becomes infected, and when he or she infects others. The chart above shows that, for cholera, r-naught is about 10, and the latency period is short, about 9 days. Without a serious change in California’s treatment of the homeless, each cholera case in June will result in over 100 cases in July, and well over 10,000 in August. Cholera is somewhat contained in the camps, but once an outbreak leaves the camps, we could have a pandemic. Cholera is currently 80% curable by antibiotics, so a pandemic would be deadly.
Hygiene is the normal way to prevent all these outbreaks. To stop typhoid, make bathrooms available, with washing stations, and temporary shelters, ideally these should be run by the religious groups: the Salvation Army, the Catholic Church, “Loaveser and Fishes”, etc. To prevent typhus, clean the encampments on a regular basis, removing food, clothing, feces and moving squatters. For cholera, provide healthcare and temporary shelters where people will get clean water, clean food, and a bed. Allow the homeless to work at menial jobs by relaxing worker hiring and pay requirements. A high minimum wage is a killer that nearly destroyed Detroit. Allow a business to hire the homeless to sweep the street for $2/hour or for a sandwich, but make a condition that they wash their hands, and throw out the leftovers. I suspect that a lot of the problems of Puerto Rico are caused by a too-high minimum wage by the way. There will always be poor among you, says the Bible, but there doesn’t have to be typhoid among the poor, says Dr. Robert Buxbaum.
July 30, 2019. I ran for water commissioner in Oakland county, Michigan, 2016. If there is interest, I’ll run again. One of my big issues is clean water. Oakland could use some help in this regard.
Puerto Rico is in deep trouble and it’s getting worse. Unemployment is at 12%, double the next worst state or territory (Alaska), tourism is down, and poverty is at 41%. Tourists have begun to go elsewhere in the Caribbean: Bermuda, Haiti, Jamaica and Cuba. The island is effectively bankrupt and would have filed for bankruptcy last year except that they legally can’t. But neither can they pay their bills. The territory will go into default in less than 2 weeks, on July 1, 2016 unless congress creates a new funding mechanism for them before then. Statehood would allow Puerto Rico to go bankrupt, but there is no way for statehood to be achieved by July 1.
While bankruptcy might help Puerto Rico short-term, as would a new line of credit, it is worthwhile to ask why Puerto Rico is in this bad shape. Why are they worse off than Guam, for example; Guam is far more isolated. Puerto Rico isn’t run particularly well, but it’s no worse than Guam or Illinois. My first thought of what Puerto Rico should do differently is that they need to lower their minimum wage.
As the chart on the right shows, the wage of the average working Puerto Rican is very nearly the minimum wage. This is because, Puerto Rico’s economy is essentially tourism, and it competes for tourists with lower-wage Caribbean countries, Jamaica, Haiti, and Cuba. Neither Alaska nor Guam compete for tourist dollars with low cost alternatives. And Guam, in particular has a strong military presence; those are their main tourists. Competing for tourist dollars is a disaster for Puerto Rico that they could solve if they could lower their minimum wage. And a lower minimum would not cause people undue suffering because Puerto Rico is a place one can live cheaply. A single person may need to earn $8.50/ hour to live minimally well in Michigan, but his Puerto Rican cousin can get by on far less in Puerto Rico. With a lower minimum wage, tourism would be more attractive, and the government would not spend so much because they could pay their minimal-skill workers less. The net result is more Puerto Ricans would be able to find jobs, and the government would have a better chance to balance its books.
What prevents the territory from lowering its minimum wage is that it’s part of the US, and we set the minimum at $7.25/hour. Many people might prefer to work for less, but they can’t unless the federal government grants them an exemption. Without it, there is no obvious way for Puerto Rico to ever pay its bills.
There are many offensive Americans, but perhaps the most offensive must be those who eat at the famous Parker House restaurant, Boston; see photo taken by a friend of mine, historian Jim Wald. Parker House is the home of Parker House rolls and Boston Cream Pie. It’s also famous for its customers: e.g. the Saturday club of Emerson, Longfellow, Holmes, Agassiz, Dana, and Charles Dickens (Dickens lived in the Parker Hotel for two years). But more remarkable still is that a good number of the staff have so hated their customers that they went off and became revolutionary enemies of all things capitalist and American. And it only took a few months working at the Parker House.
The Parker House restaurant, Dec. 2015, photo by jim Wald, perhaps showing the next world leader.
Among Parker House employees we find Malcolm X, he worked as a busboy under his original, given name: Malcolm Little. We also find Ho Chi Minh, a pseudonym taken — it means, the enlightened one or the one who will enlighten (strangely enough, Genghis Kahn also means the enlightened one — in Mongol) was a pastry chef. he arrived in Boston as a ships cook, and worked in the hotel as Nguyen Cung. After Boston, he moved to Paris where he again made cakes and pies but changed his name to Nguyen O Phap (Nguyen who hates the French). Eventually, he and Malcolm X revolted against America and managed to turn the tables, as it were, on their customers.
Why do Parker House workers go off this way. Perhaps it’s because the hotel tries to hire hard-working, intelligent workers. You’ll notice, in the photo above that the waiters look at least as sharp as the customers and more physically fit. Beyond this, I suspect that the waitstaff are constantly exposed to socialist discussions from the customers. They are then sent off for coffee, or ignored, or perhaps insulted or groped, or not tipped. The Hotel seems to attract liberal libertarians — it was a favorite spot for John F. Kennedy.
My guess is that Malcolm X and Ho Chi Minh became socialist revolutionaries because of what they experienced from the customers at Parker House. So what can you do if you eat at Parker House, or any fancy restaurant? I think it pays to tip. Don’t do it in a way that makes your server feel like a beggar. It would help to chat too, I think. It’s important if your waiter is homicidal — or if your waiter becomes famous some day, or writes a book, or becomes a world dictator. You’d like to get a positive mention in that book, or have a positive story to tell — “I gave Genghis his first $10 bill…” And tipping is important so he/she doesn’t hate you. I’m given to understand that one main reasons people hate Satan so much is you can serve him, but he never tips.
Americans are among the richest and best paid people in the world. On a yearly basis, Americans produce and earn about 20% more than Britons and about 30% more than Japanese. On an hourly basis, counter to what you might expect, American workers produce about 30% more than Britons or Canadians, and about 50% more than the vaunted Japanese.
Per hour worker productivity, from the Economist. We do OK for backward hicks.
French and German workers produce about as much as we do, per hour, but tend to work fewer hours. Still, the differences are not quite what you might expect. French workers take many more hours off than we do and are still so much more productive than the British that it appears they could take an extra month off and still beat them in yearly output. Japanese workers meanwhile produce only as much as the French, per year, but take far more hours to do it. One thought is that it’s all the vacation time that makes French so productive and it’s perhaps the lack of vacations that causes the Japanese to be relatively unproductive.
Not that vacation time alone explains our high productivity, nor that of the Germans or Italians relative to the Canadians and Britons. One part of an answer, I suspect, is that we put fewer roadblocks to workers becoming business owners, and to running things their own way. Another thought is that US and Germany have a low minimum wage, comparatively, and Italy has no minimum wage at all; Germany had no minimum wage in 2013, the time of the productivity comparison. In countries like this, there is a larger profit to be had by clever individuals who work hard, think, and start their own businesses. With minimal requirement on how much to pay, the business owner can bring to bear a mix of low-wage, minimally productive workers with labor-saving innovation, allowing them to become rich while decreasing unemployment. It also allows them to serve otherwise under-served parts of the market and profit from it. And profit is a powerful motivator. As Friedrich Nietzsche said, “a why beats a how.”
The nine European countries with no minimum wage are among the richest on the continent, and among those with the lowest unemployment: Iceland, Lichtenstein, Norway, Sweden, Finland, Denmark, Austria, Italy, and Switzerland. By contrast, England, Canada, and Japan have relative high minimum wages and relatively high unemployment. There are also some poor countries with no minimum wage (Egypt, Zimbabwe, Rwanda…) but these countries suffer from other issues, like rampant crime. I’ve argued that the high “Living Wage” in Detroit is a major cause of Detroit’s high unemployment and bankruptcy. If low minimum wage is a major source of American worker productivity and wealth, it would be a real mistake to raise it.
Worker productivity is the best single predictor of long-term national success. As such, the long-term prediction for Britain, Canada, and Japan is not good. Unless something changes in these countries, we may expect to see them off to a long, dark tea-time of declining significance. Perhaps, it is a fear of this that was behind the resounding defeat of the Labour party in British elections last week. The Labour government oversaw England’s last big drop in productivity.
We are regularly lectured about the lack of kindness and humility of the western countries. Eastern and communist leaders in Russia, Iran, Saudi Arabia point to Western pollution, consumerism, unemployment as prof you need a strong leader and central control to do good by regulation, thought policing, and wealth redistribution.
Let me point out that the good these leaders provide is extracted from the populace, and the advantage of central control is rarely as clear to the populous as to the leadership. When leaders redistribute wealth or place limits on the internet, movies or books, the leaders are generally exempted, and the populous are not made more moral or generous either. One does not say a prisoner or slave-worker is more generous of moral than one on the outside despite the prisoner working for free. The leaders feel certain they are protecting their people from thought and greed, but it isn’t clear outside of the leadership that these dangers are as great as the danger of despotism or rule by whim.
Authors and thoughts are blocked in the East by the whim of a supreme leader who also determines who is an infidel or enemy, or friend, and which businesses should flourish, and who should be rich (his buddies). By contrast, two fundamentals of western society — things that lead to purported immorality, are citizen rights and the rule of law: that citizens can possess things and do things for their own reasons, or no reason at all, and that citizens may stand as equals before a bar of law, to be judged by spelled-out laws or freed, with equal believability and claim.
In Russia or Iran, the Commissar and Imam have special rights: they can take possessions from others at whim, shut down businesses at whim; imprison at whim — all based on their own interpretation of God’s will, the Koran, or “the good of the state.” Only they can sense the true good, or the true God well enough to make these decisions and laws. And when they violate those laws they are protected from the consequences; the masses can be prosecuted to the full extent of the law, and then some, not even requiring a trial in many places (Gaza, for example) if the leader feels speed is needed. The rule of law with equal treatment is a fundamental of western civilization (republicanism). It is commanded by Moses in the Bible at least seven times: Numbers 15:15, Numbers 15:16, Numbers 15:29, Exodus 12:49, Numbers 9:14, and Leviticus 24:22, “One law and one ordinance you should have, for the home-born, and the foreigner who dwells among you.”
The equal treatment under the law: for rich and poor, king and commoner, citizen and foreigner is a revolutionary idea of the west; that justice is blind. Another idea is personal possessions and freedoms. There is no concept of equality under business law unless there is a business that you can own, and personal possessions and rights. These are not in place in eastern theocracies: they tend to treat the preachers (imams) better than non preachers because they are presumed smarter and better; similarly men are treated better than women, who have few rights, and the state religion is treated better than infidels. In communist countries and dictatorships the dictator can get away with anything. Admittedly, in capitalistic states the rich and powerful find loopholes while the poor find prison, but not always (our Detroit’s ex-mayor is in prison) and it’s not the law. A feature of Eastern theocracies and dictatorships is that they lack a free press, and thus no forum for public exposure of legal mischief.
Einstein on freedom producing good. I’d say freedom is also a good in itself.
The strongest arguments for socialist dictatorship and theocracy is that this is needed to protect the weak. Clement Attlee (labor socialist British Prime Minister, 1945 -56) explained his government’s take over of almost all British business: “There was a time when employers were free to work little children for sixteen hours a day… when employers were free to employ sweated women workers on finishing trousers at a penny halfpenny a pair. There was a time when people were free to neglect sanitation so that thousands died of preventable diseases. For years every attempt to remedy these crying evils was blocked by the same plea of freedom for the individual. It was in fact freedom for the rich and slavery for the poor. Make no mistake, it has only been through the power of the State, given to it by Parliament, that the general public has been protected against the greed of ruthless profit-makers and property owners.” (Quotes from Spartacus.edu). it’s a brilliant speech, and it taps into the government’s role in the common defense, but it’s not at all clear that a chinless bureaucrat will be a better boss than the capitalist who built the firm. Nor is it clear that you help people by preventing them from work at a salary you decide is too low.
England suffered a malaise from public ownership and the distribution of profit by those close the liberal party. Under Attlee there was lack of food and coal while the rest of Europe, and particularly Germany prospered, and passed England in productivity. Germany had no minimum wage, and still doesn’t have one. In eastern countries, ingenuity is deadened by the knowledge that whatever a genius or worker achieves is taken by the state and redistributed. A cute joke exchange: Churchill and Attlee are supposed to have found themselves in adjoining stalls of the men’s room of Parliament. Churchill is supposed to have moved as far as possible from Attlee. “Feeling standoffish, Winston” Attlee is supposed to have said. “No. Frightened. “Whenever you see something large you try to nationalize it.” Perhaps more telling is this Margret Thatcher’s comment, and exchange. Making everyone’s outcome equal does more to penalize those with real pride in their ideas and work than it does to help the truly needy.
While there is a need for government in regards to safety, roads, and standards, and to maintain that equality of law. It seems to me the state should aid the poor only to the extent that it does not turn them into dependents. There is thus a natural tension between private good and public service similar to the tensegrity that holds cells together. Capitalists can only make money by providing desired goods and services at worthwhile rate, and paying enough to keep workers; they should be allowed to keep some of that, while some must be taken from them to get great things done. I’ve related the tensegrity of society to the balance between order and disorder in a chemical system.
Robert E. Buxbaum, August 27, 2014. This essay owes special thanks to a Princeton chum, Val Martinez. Though my training is in engineering, I’ve written hobby pieces on art, governance, history, and society. Check out the links at right.
It is generally thought (correctly I suspect) that welfare is a poor way to help the poor as it robs them of the dignity of work. Something like welfare is needed to keep the poor from starving, and the something that’s generally chosen in a living wage — a minimum wage set high enough that even a minimally skilled worker should be able to support a family of 4. This may be better than welfare, but I’d like to propose something better still — and a way to pay for it — a negative tax.
I suspect that a high minimum wage hurts the poor and middle class in a few ways. For one, by flattening the wage structure, it hurts the ego of higher skilled workers and reduces their incentive to improve. A senior worker should make more than an unskilled beginner, but a high minimum wage dampens this. What’s more, a high minimum wage cuts the lower rungs off of the employment ladder, making it harder for young folks, and unskilled folks to be productively employed. There may be some worthwhile minimum, but not everyone lives independently (or should) and not every job deserves to support a family of four, if only because not every unskilled worker is supporting a family of four. Many minimum wage earners are living at home or are heads of double-income couples, and only a few have the skills to justify the wage on a value added basis. A high minimum wage is thus needlessly costly for many workers. People accept the cost because it’s borne by the company (and companies are seen as evil). But passing the burden has limits, and a high minimum wage creates high unemployment in low skill areas, as employees are reluctant to pay a lot for low skill work. In Detroit before bankruptcy, the living wage was set so high that companies could not compete. Many went bankrupt and the others hired so selectively that the unskilled were basically unemployable. Even the city couldn’t pay the wage and its bills.
Even with the highest minimum wage, there is always a need for welfare, as some workers will be unemployable — because of disability, because of lack of skill, or from an ingrained desire to not work. The punishments a community can mete out are limited, and sooner or later some communities stop working and stop learning as they see no advantage.
The difficulties of taking care of the genuinely needy and disabled while the lazy and unskilled has gotten even some communist to reconsider wealth as a motivator. The Chinese have come to realize that workers work better at all levels if there is a financial reward to experience and skill at all levels. But that still leaves the question of who should pay to help those in need and how. Currently the welfare system only helps the disabled and the “looking” unemployed, but I suspect they should do more replacing some of the burden that our minimum wage laws places on the employers of unskilled labor. But I suspect the payment formula should be such that the worker ends up richer for every additional hour of work. That is, each dollar earned by a welfare recipient should result in less than one dollar reduction in welfare payment. Welfare would thus be set up as a negative tax that would continue to all levels of salary and need so that there is no sudden jump when the worker suddenly starts having to pay taxes. The current and proposed tax / welfare structure is shown below:
Currently (black) someone’s welfare check decreases by $1 for each dollar earned, then he enters a stage of no tax — one keeps all he earns, and then a graduated tax. I propose a system of negative tax (red) so each dollar earned adds real income.
The system I propose (red line) would treat identically someone who is incapacitated as someone who decided not to work, or to work at a job that paid $0/hr (e.g. working for a church). In the current system treats them differently, but there seems to be so much law and case-work and phony doctor reports involved in getting around it all that it hardly seems worth it. I’d use money as the sole motivator (all theoretical, and it may not work, but hang with me for now).
In the proposed system, a person who does not work would get some minimal income based on family need (there is still some need for case workers). If they are employed the employer would not have to pay minimum wage (or there would be a low minimum wage — $3/hr) but the employer would have to report the income and deduct, for every dollar earned some fraction in tax — 40¢ say. The net result would be that the amount of government subsidy received by the worker (disabled or not) would decrease by, for 40¢ for every dollar earned. At some salary the worker would discover that he/she was paying net tax and no longer receiving anything from the state. With this system, there is always an incentive to work more hours or develop more skills. If the minimum wage were removed too, there would be no penalty to hiring a completely unskilled worker.
At this point you may ask where the extra money will come from. In the long run, I hope the benefit comes from the reduced welfare rolls, but in the short-term, let me suggest tariffs. Tariffs can raise income and promote on-shore production. Up until 1900 or so, they were the main source of revenue for the USA. As an experiment, to see if this system works, it could be applied to enterprise zones, e.g. in Detroit.
R. E. Buxbaum, June 27, 2014. I worked out the math for this while daydreaming in an economics lecture. It strikes me as bizarre, by the way, that can contract with someone for barter, e.g. to help you move for a pizza, but you can’t contract for less than the minimum wage $7.45/hr. If you hire the worker for less you can go to jail. In Canada they have something even more bizarre, equal wages for equal skills — a cook and a manager must earn the same, independent of how well the cook cooks. No wonder violent crime is higher in Canada.
Detroit is bankrupt financially, but not because the public education teachers have negotiated rich contracts. If anything Detroit teachers are paid too little given the hardship of their work. The education problem in Detroit, I think, is with the quality of education, and of life. Parents leave Detroit, if they can afford it; students who can’t leave the city avoid the Detroit system by transferring to private schools, by commuting to schools in the suburbs, or by staying home. Fewer than half of Detroit students are in the Detroit public schools.
The average salary for a public school teacher in Detroit is (2013) $51,000 per year. That’s 3% less than the national average and $3,020/year less than the Michigan average. While some Detroit teachers are paid over $100,000 per year, a factoid that angers some on the right, that’s a minority of teachers, only those with advanced degrees and many years of seniority. For every one of these, the Detroit system has several assistant teachers, substitute teachers, and early childhood teachers earning $20,000 to $25,000/ year. That’s an awfully low salary given their education and the danger and difficulty of their work. It’s less than janitors are paid on an annual basis (janitors work more hours generally). This is a city with 25 times the murder rate in the rest of the state. If anything, good teachers deserve a higher salary.
Detroit public schools provide among the worst math education in the US. In 2009, showing the lowest math proficiency scores ever recorded in the 21-year history of the national math proficiency test. Attendance and graduation are low too: Friday attendance averages 71.2%, and is never as high as 80% on any day. The high-school graduation rate in Detroit is only 29.4%. Interested parents have responded by shifting their children out of the Detroit system at the rate of 8000/year. Currently, less than half of school age children go to Detroit public schools (51,070 last year); 50,076 go to charter schools, some 9,500 go to schools in the suburbs, and 8,783, those in the 5% in worst-performing schools, are now educated by the state reform district.
The state of Michigan has taken over the 5% worst performing schools in Detroit through their “Reform District” system. They provide supplies and emphasize job-skills.
Poor attendance and the departure of interested students makes it hard for any teacher to handle a class. Teachers must try to teach responsibility to kids who don’t show up, in a high crime setting, with only a crooked city council to look up to. This is a city council that oversaw decades of “pay for play,” where you had to bribe the elected officials to bid on projects. Even among officials who don’t directly steal, there is a pattern of giving themselves and their families fancy cars or gambling trips to Canada using taxpayers dollars. The mayor awarded Cadillac Escaldes to his family and friends, and had a 22-man team of police to protect him. On this environment, a teacher has to be a real hero to achieve even modest results.
Student departure means there a surfeit of teachers and schools, but it is hard to see what to do. You’d like to reassign teachers who are on the payroll, but doing little, and fire the worst teachers. Sorry to say, it’s hard to fire anyone, and it’s hard to figure out which are the bad teachers; just because your class can’t read doesn’t mean you are a bad teacher. Recently a teacher of the year was fired because the evaluation formula gave her a low rating.
Making changes involves upending union seniority rules. Further, there is an Americans with Disability Act that protects older teachers, along with the lazy, the thief, and the drug addict — assuming they claim disability by frailty, poor upbringing or mental disease. To speed change along, I would like to see the elected education board replaced by an appointed board with the power to act quickly and the responsibility to deliver quality education within the current budget. Unlike the present system, there must be oversight to keep them from using the money on themselves.
She state could take over more schools into the reform school district, or they could remove entire school districts from Detroit incorporation and make them Michigan townships. A Michigan township has more flexibility in how they run schools, police, and other services. They can run as many schools as they want, and can contract with their neighbors or independent suppliers for the rest. A city has to provide schools for everyone who’s not opted out. Detroit’s population density already matches that of rural areas; rural management might benefit some communities.
I would like to see the curriculum modified to be more financially relevant. Detroit schools could reinstate classes in shop and trade-skills. In effect that’s what’s done at Detroit’s magnet schools, e.g. the Cass Academy and the Edison Academy. It’s also the heart of several charter schools in the state-run reform district. Shop class teaches math, an important basis of science, and responsibility. If your project looks worse than your neighbor’s, you can only blame yourself, not the system. And if you take home your work, there is that reward for doing a good job. As a very last thought, I’d like to see teachers paid more than janitors; this means that the current wage structure has to change. If nothing else, a change would show that there is a monetary value in education.
Robert Buxbaum, August 16, 2013; I live outside Detroit, in one of the school districts that students go to when they flee the city.
Some moths ago, I argued that getting rid of its extra-high minimum wage was perhaps the single best thing that Detroit could do to improve its bankrupt finances and to provide jobs for its youth. I argued that this living wage of $11 or $14/hr, depending on whether healthcare was provided, was too much for the city to pay for it’s minimal skill workers. I also argued that a lower minimum wage would help the city finances, and would allow the unskilled of Detroit to find jobs: it would provide the first rung of a ladder. Well, sort-of good news: Detroit’s living wage has been declared unenforceable by the Michigan Supreme court.
Unenforceable does not mean that wages will lower immediately: anyone working for the city will keep their high salary job, so the finances of the city will remain strained. Also, private companies can not lower anyone’s contracted wages. The only difference is that workers on non-city jobs who agree to be paid $7.50 to $14/hr, can no longer sue to recover additional dollars to meet Detroit’s “living wage.” Bit by bit I expect that more low-skilled workers will be hired, and that their wages will stabilize downward to a free-market value.
The next big things that are needed are reduced crime and increased population who are employed in businesses other than selling drugs or themselves. One way to reduce crime, I think is to have less-stiff minimum penalties for non-violent crimes like drug possession and driving with a suspended license. Currently the penalty for possession runs to 15-20 years. No one who spends that much time in prison will fit back into society. Let’s do them and ourselves a favor by reducing minimum sentences so that the normal sentence is only 1-5 years (ideally with < 1 oz marijuana possession punished by a fine).
Another horror is the penalty for driving with a suspended license. It’s $3000 for a start (a reasonable amount, I think), but then the state adds a $4000 per year penalty for the next 3 years: a total of $15,000. That’s too much for a minimum-wage earner to pay, but the minimum wage earner needs a car to get to work. So he/she can’t work, or he/she drives without a license or insurance. Is this what we want? Lets give a second chance and lower the penalty to produce more working, law-abiding citizens. There is nothing wrong with Detroit that could not be fixed by 200,000 more, law-abiding, employed Detroiters.
R.E. Buxbaum owns REB Research, a maker of hydrogen purifiers and hydrogen generators. We used to be located in Detroit, but are now in Oakland county, 1/2 mile north of the Detroit border.
A cause of Detroit’s financial problems, it seems to me, is that Detroit has an uncommonly high minimum wage, $13.75/hr for all employees in any company that contracts with the city and does not provide free health care; or $10.50/hr for companies that provide healthcare. This minimum, called a living wage, is about double the state minimum wage of $7.40.
Although the city is financially bankrupt, the city can not hire janitors and pay less than this, nor hire accountants from a company that pays its janitors less than this. Besides the burden on Detroit’s budget, this puts a burden on its unemployment system. Many in Detroit don’t possess the education or skills to justify jobs at this wage. This high minimum wage effectively cuts them from the bottom rung of jobs at these companies — jobs at the bottom of the ladder of success. Many businesses find innovative ways around the law, using corruption and bribes to skirt enforcement, if the recent trials of the mayor are any indication, but a system of corruption is not good for the city.
As these wages are far above standard, most employed workers for the city get their jobs by corruption and connections, and most everyone knows they got their jobs this way rather than skill. As a result, workers have no incentive to improve at their job. In a corrupt system like this, there is no likelihood that a raise would come with improved performance.
The justification for the living wage is the cost to support a family of 4 or 5, but Detroit is a much cheaper place to live than most, and not all workers are supporting families of 4 or 5. It therefore makes little sense to force all potential workers to refuse entry-level employment at $8.00/hour, a wage that would allow a single, motivated individual a decent living and a chance to climb as his/her needs and skills grew. Instead of promoting hard work and merit, this ordinance fosters corruption and cronyism; it makes it expensive for the city to hire contractors, makes it hard for workers to get their first jobs, and removes the benefits that normally come with improved skills. It’s a disaster, I suspect, and a reason the city is bankrupt.
