Antibiotics in Chicken – Not Just a Hippie Concern

A quick post on a piece in the NY Times about antibiotics in chicken.  Kristof goes on about a study that found what terrible conditions chickens are raised in, the random chemicals used in raising them, and the usual barrage of scare you into veganism talk.

I am a firm believer in cheap and abundant food, and this is why I consume all kinds of terrible, low-quality food to the disgust of most San Franciscans.  I am not thwarted by fears of low level pesticide exposure.  I don’t want to pay triple for my eggs so that the chickens can have a happy and fulfilling life (and not be able to psychologically process what that means).

However, for the first time, Kristof very clearly articulated a real concern that resonates with me:  antibiotics in chicken (and other meat) means that we are more likely to have bacteria grow resistant to these antibiotics.  This is huge.  I have always been a member of the let your children eat dirt camp, that believes that exposing your children to bacteria help them develop natural defenses and that antibacterial soap makes us less able to deal with low level bacteria.  Similarly, having seen the effect of malaria that is resistant to drugs, I don’t want to find ourselves without antibiotics that can fight of disease-causing bacteria.

So, believe it or not, I may start paying attention to the kind of meat I eat.

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Everyone Should Learn to Code

There has been a lot of talk recently about needing to retrain American workers to fill the jobs being created in the new economy.  As anyone looking to hire a programmer in the Bay Area knows, there is a severe shortage of people who can write code for all the web-based businesses being started.  As a result, founders (like myself) are forced to learn to code for themselves.

In an article from the New York Times, the case is rightly made for teaching students how to code or at least how to think in a way that promotes the ability to code.  This can take many forms but for me, learning about databases and learning SQL was the most important building block for my current programming endeavor as all computer languages are similar in how they rely on basic logic, if…then statements, and the likes.

MIT has created a computer language, Scratch, that allows you to create interactive stories and art and many other cool things.  It is focused on elementary students but is a great introduction.  The ability to write some code that then creates something useful for yourself is very powerful.  If this was integrated into all kinds of classes, it would be incredibly useful.  For instance, English classes could learn basic HTML and CSS to build static web pages to host their writing.  For science classes, students could learn SQL to help analyze their data.  Web programming should be to current students what word processing and the Office suite was to students of my time – a basic, essential skill that is expected of everyone.

Foxconn and Labor in China – A Market Perspective

With all the talk about low wages and exploited workers in Chinese factories, like Foxconn, it was great to see the New York Times publish an article talking about the realities of the labor market in China.  With the boom in exports, the increased demand for labor, and the increasing shortage of blue collar workers, market forces have led to increase wages for Chinese workers, naturally.  The article claims wages are increasing close to 15% annually, a number unheard of in the US, except for on Wall Street (though not this year).  This did not require the outrage of American citizens for the Chinese government to intervene.

Several factors are at play in China.  First, as with every developing country, as the economy and demand pick up, more and more self-employed artisans and farmers begin to move to urban areas and take on wage jobs at factories.  Eventually, this supply of cheap labor dries up and the factories have to increase wages to convince workers to either move from the hinterlands or to work at their factory instead of the factory next door.  The NY Times article describes some of the tactics factories are using including using agents who are like blue collar headhunters trying to recruit workers, as well as offering workers hiring bonuses.  This sounds more like Wall Street than what American blue collar workers experience.

Secondly, like many American blue-collar workers in years past, Chinese workers often are looking to work more hours because they want the extra time and a half or double time, because they are ambitious and trying to raise their family out of poverty.  Working more (for double the wage) is a great way to do this, so their children don’t have to.  When I worked moving boxes in a warehouse, I eagerly anticipated getting some overtime in.  Indeed, only 18% of workers said their hours were too long, according to the Fair Labor Association’s survey of Foxconn.

Lastly, the Chinese government, since 2008, has imposed restrictions on hours worked that is even more stringent than the US.  In the US, as long as workers are paid overtime, there is no limit to the number of hours a worker can work past 40 hours.  In China, you can only work an extra 3 hours a day and a maximum of 6 days a week.  Moreover, even if both owner and worker agree to more hours, it is banned by law.

I ran into similar reactions from friends in the US when I told them I paid workers in Kenya 180 shillings per day (roughly $2.25).  These workers (who were constructing a farmer planting kit for me) would otherwise be driving their bicycle taxi around town, where they may earn 130 shillings (less than $2) in a day.  If I had offered even $5/day, there would have been fights and riots over getting that work.

This is all to say that it is important to view working conditions and wages in the context of where the work is occurring and not by our US standards.


Supreme Court Obama Health Care Law Hearings – Day 3

With the Supreme Court hearing arguments about the health care law championed by Obama for the third day, I thought I would add a couple thoughts.

First, from an economic perspective, the health care mandate section of the law makes a lot of sense.  In one of my favorite books on the economic fallacies of the right and the left, Economics Without Illusions, Health argues that health insurance should be single payer and universal.  Insurance is one of those goods that becomes cheaper the greater the number of people that are participating.  It’s a simple matter of risk.  If I’m asked to guess whether you will get cancer in this lifetime, I may look at the statistics and say, no.  If I was then asked to insure you against cancer, which will cost $1M to treat, I would then consider what the likelihood was that you would get it based upon national statistics (say 20% of people like you get it).  A basic risk calculation would say that I have a 20% chance of having to pay $1M, so I would charge you an amount for insurance that would amount to at least $200k over your lifetime.  However, if you then said, fine – here’s $200k and if I get cancer, you owe me $1M, would I take the bet?  Seeing as I don’t know that much about you and whether you would be part of the 20% or the 80% and seeing as I have $800k to lose if I bet wrong, I probably wouldn’t make the bet.  To compensate for the added risk of insuring just one person, I may require $300k of insurance payments.

However, if I was betting on the overall US population, I could bet with much more confidence.  After all, it is no longer binary and if 5% more people get cancer than I am expecting, my downside is not as great.  Thus, the more people in the insurance pool, the lower the risk, and thus the lower the cost to insure them, on average.

Two other brief arguments we are hearing are somewhat related.  The first one comes from young, healthy (knock on wood) men like myself.  They argue that they don’t need health insurance and recognize that they are somewhat subsidizing older and unhealthier patients.  Of course, this is partially true.  However, these same healthy individuals are overestimating the likelihood that they will suffer a major disease or catastrophic injury, which if they have no insurance and are unable to pay will be covered by the hospitals who pass it on to the insurance companies who pass it on to the insured.  These people are raising the cost for others (and eventually themselves, assuming they will want coverage at some point in their lives) by excluding themselves from the insurance pool and thus making it a more risky, less healthy pool and by shedding their costs onto the pool when they suffer the unexpected illness.

All of this, however, dodges the Constitutional question before the Court.  Whether this is within the powers of Congress to enact is much less certain than is the economic benefit of the law.


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