Last July I wrote about the inequity of prize money between women and men who play at Wimbledon. The twist is that women play the best of three sets, while men play best of five. So women champions spend much less time on the courts:

Over the past five years (2001-2005), Wimbledon Men’s Champions - usually Roger Federer - have played 53% more sets (and 66% more games) en route to the championship than the women’s champions during the same period. If the averages hold up for 2006, the Gentlemen’s Champion will have earned $51,376 per set played while the Ladies Champion would take home $75,126 per set played at Wimbledon. There you have it: women earn 46% more than men at Wimbledon.

Yesterday, Wimbledon announced that it will pay equal prize money to men and women. While I support equal pay for men and women, I also support equal play. Women should play best of five sets just as men do. It makes for some of the most exciting, suspenseful tennis matches on the men’s side. And too many women’s tennis matches are lopsided 45 minute affairs - hardly ideal for the TV ratings. Introducing the stamina factor might even out the women’s field.

There is no physiological reason that female tennis players couldn’t pull through a grueling five hour match as some men do. Women run the same marathons that men run, play on the same sized soccer fields, and work the same 40 hour week that men work.

But what if the Wimbledon standard were applied to life? What if equal pay could be earned by someone even though it only required 66% less work? Or put another way, what if women paid the same amount but received 51% more in services or products? Courts would be smaller, hoops wider, bank lines shorter, sandwiches more delicious. The world would certainly be easier (I especially support the new Wimbledon holidays and the longer Wimbledon hot dogs), but would it be fair?

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In the Saturday Op-eds, The Washington Post again called out the Bush administration for falsely claiming that tax cuts pay for themselves. Tax cuts pay for themselves in much the same way that a ten cent coupon pays for a can of soup. Yes, some tax cuts help stimulate the economy, but no study has found that tax cuts are self-funding.

Estimates range, but a sample of three non-partisan studies indicates that income tax cuts do not pay for themselves - not even close. Most studies indicate that tax cuts do increase personal income and consumption, resulting in a very moderate economic stimulus. But this minor boost in economic growth does not replenish government coffers. For every $100 lost to tax cuts, the government only recoups between 10% to 28% due to economic growth. Even former chairman of President Bush’s Council of Economic Advisors, Gregory Mankiw’s most rosy estimates demonstrate that tax cuts lose 50% of their value.

So tax cuts cost the government money. End of story. Unless you’re the president writing an op-ed in the Wall Street Journal:

It is also a fact that our tax cuts have fueled robust economic growth and record revenues. … The bottom line is tax relief and spending restraint are good for the American worker, good for the American taxpayer, and good for the federal budget. Now is not the time to raise taxes on the American people.

Tax relief has benefited the American worker - as long as you’re talking about the American worker in a household making more than $100,000 per year. According to a study by the non-partisan Tax Policy Center, last year’s tax “relief” amounted a whopping $68 to the 125 million households making less than $100,000. Meanwhile the 20 million earning more than $100,000 received an average of $2,861 per household, 42 times more tax relief than those at the bottom of the income scale.

Indeed, now is the time for Democrats to end Bush’s tax cuts for the rich.

And if you have to pour over tax policies in great depth, I would recommend Tim Hecker’s album Harmonies in Ultraviolet (number 14 on Pitchfork’s best of 2006): ambient static and dissonance for blogging in the middle of a rainy night.

*Mankiw: Income Tax Cut measured with dynamic scoring

Sources: Washington Post, Congressional Budget Office, Wikipedia, Tax Policy Center

Throughout history, walls have been built primarily for the purpose of defense (The Great Wall of China), politics (Berlin), religious separation (Northern Ireland), ethnic divide (Cyprus), or some nasty combination of all four (Israel). But rarely are walls built purely to rebuff wage invaders.

Illegal immigration is an economic issue, thus the rules of supply and demand apply. If the demand for illegal workers is cut, wages for illegals will fall, and the supply of immigrants will fall as well. Right now it is a challenge for employers to verify the legal status of some workers (although, our policy of turning a blind eye doesn’t help).

The immigration bill currently in Congress addresses this by adding $1.6 billion for a computerized system to verify the eligibility of applicants for lawful employment. Once this is in place, fines could be increased for employers caught employing illegal immigrants. Voila, demand for illegal immigrants falls and so would the number tempted to cross an open border.

But the immigration bill directs twice as much money to the Department of Homeland Security. DHS is being authorized to spend $3.3 billion on border defense that consists of 370 miles of fencing and 500 miles of vehicle barriers that will only cover 47% of our border with Mexico. Construction of one foot of the fencing alone will cost $568.

Israel has spent billions of dollars on walls, trenches, even a proposed sunken highway. Meanwhile, smugglers between the Sinai Peninsula and Gaza spent just $76 per foot to tunnel underneath. We should count ourselves lucky to only have impoverished day workers trying to cross our border (I discount the terrorism threat - terrorists could more easily cross our 5,500 mile border to the north).

By employing a historically military tactic to a primarily economic issue, we will spend ourselves into a hole.  At least there will plenty of illegal immigrants to help us dig it.

Sources: Sunken road: Cornell University, The Current; U.S. Mexico Border Fence: Congressional Budget Office estimate; Isareai Wall of Separation: Palestinian Environmental NGOs Network; Fourth generation of Berlin Wall: Berlin Wall Online; Smuggling Tunnels: Defense Update; Vinyl Picket Fence: Hoover Fence, Co.

Notes: According to Berlin Wall Online a 3.957 foot wide segment of the Berlin Wall cost 359 East German Marks in 1975. Because this was not a freely traded currency, historical exchange rates are hard to come by. However, as a note of comparison, Berlin Wall Online mentions that a loaf of bread cost 1.04 East German Marks at the time. Thus the store of value in a segment of the wall is equivalent to 345 loaves of bread. In 2006 in the price of a loaf of bread in the U.S. averaged $1.30, so each 4 foot segment of the Berlin Wall was valued at $448.75. It’s not perfect, but you get the idea.

The GOP fell short of forcing Democrats to vote for a raise in the minimum wage. Why? The Republicans cleverly couched a raise for this country’s working poor in a distasteful estate tax cut for the super rich. Among other things, the bill would have exempted estates worth $5 million or less from any estate taxes whatsoever, costing the government $268 million in revenue over 10 years.

The Republican strategy of sweetening their death tax cut with a Democrat-friendly minimum wage increase reminds me of when we used to wrap our dog’s heartworm pill in bacon to get him to swallow it. But the estate tax cut is no remedy - it’s just a bitter pill for poor Americans.

There’s been plenty of hot air in Washington, DC this week, thanks to our politicians, Al Gore’s movie (which causes global warming), and our forefathers (who paved a swamp and called it the capital).

So Statastico set out to see what could possibly hold more hot air than a politician. Ironically, it’s a pet project of the U.S. military that holds the most hot air (ok, it’s helium): the proposed High Altitude Airship. It’s conceptual, but the plan was to build 500 foot-long blimps that hovers 65,000 feet over the earth to “detect and track incoming ballistic missiles as they approach U.S. coastal regions.” Dear god. Makes those those ubiquitous Goodyear blimps that hover 1,500 feet over domed football stadiums seem downright sensible.

So how many breaths does it take to fill up some common things that are full of hot air? The average adult lung capacity is about .18 cubic feet (5 liters) of air. So it would take one breath from about half a million politicians to fill up the average hot air balloon. There aren’t enough politicians to get the job done, but I’m betting that they can call in some help from the lobbyists.

Sources: Statastic research, wikipedia, balloonhq, Goodyearblimp.com, missilethreat.com

Notes: Wikipedia now estimates adult lung capacity at 6 liters. This comparison used 5 liters which was previously cited in Wikipedia. Average hot air balloon has a basket with a capacity of 3-4 people.

Statastico appreciates nurses. They know when to apply pressure, whether to put ice (or is it heat?) on a sprain, even how to keep someone conscious who might otherwise go into shock. With a rapidly aging American population and massive cost increases in the medical industry, it’s hard to understand why there is constantly talk of nursing shortages.

Sure it seems a little simplistic, but aren’t nurse wages subject to the same supply and demand forces as other wages? If there aren’t enough nurses, don’t salaries just go up to attract more young folks into the profession? Somewhat.

Nursing has historically benefitted from a captive labor market: women. Women in the post-war years had scarcely any choice besides teaching or nursing. No longer. Women now make up 48.5% of our future doctors, and earn 47.5% of the law degrees. While the next generation of women has expanded into new occupations, nursing has remained decidedly behind the times, as seen in Chart 4.

So the nursing population is aging. But is it underpaid? It depends where you are. There are indeed shortages in rural areas and numerous states have implemented programs such as loan forgiveness to lure nurses to less desirable areas.

An economic concept called monopsony may help explain why nursing shortages persist in some of these areas. Whereas a monopoly company can dictate prices to consumers because it’s the only business in town (e.g. cable TV), a monopsony is the only employer in town for a particular industry. This means that a single hospital in a smaller town might be able to dictate wages to nurses who are unwilling to relocate.

But is there a really a looming nursing shortage? In a 2001, Douglas Staiger, an economics professor at Dartmouth predicted “a 400,000-nurse shortage in 20 years.” Despite expert projections, Statastico is going out on a limb and predicting that the shortage won’t occur.

Why? The market is already reacting. From 2000 to 2004, average inflation-adjusted nursing salaries went up by 12.8%. That’s real salary, not nominal, folks. Salaries for teachers and nurses were about equal in 1986. Now full-time nurses average $60,000 annually, while teachers make about $48,000. In fact, over the last 20 years, registered nurse salaries have risen faster than teachers, professors, architects, engineers, ubiquitous lawyers, even physicians.

The high percentage of (ahem) “seasoned” nurses does tend to skew salary averages upward. But assuming that the National Labor Relations Board doesn’t scare new recruits away from nursing by preventing unionization, we’ll surely find an unanticipated source. Currently, men make up only 5.7% of registered nurses. Perhaps more lucrative salaries will lure them to the field, reducing the taboo of the male nurse.

Gender equality may yet reach the medical profession.

Notes: Teachers include primary and secondary school teachers. Academia includes all full time college faculty. All data are median salaries except for registered nurses and teachers which are average salaries.

Sources: Teacher salaries 1996-2005: National Education Association

Teachers (national) salaries 1986-1995: Pennsylvania State Data Center

Academia, physicians, lawyers, engineers & architects 1986-2005: American Association of University Professors; Original source for Figure 3: ‘‘Median Weekly Earnings of Wage and Salary Workers Who Usually Work Full Time, by Detailed Occupation and Sex, 1983–2002’’ and ‘‘Median Usual Weekly Earnings of Employed Full-Time Wage and Salary Workers by Occupation, 2000–04,’’ unpublished tables, U.S. Bureau of Labor Statistics, January 2006.

Registered Nurse salaries 1984-2004: U.S. Department of Health and Human Services; 1986 and 2005 estimated by statastic. 1986 was calculated by averaging real salaries from 1984 and 1988. 2005 was estimated to continue the 3.1% real annual increase that occurred between 2000-2004.

CPI-Inflation statistics: Federal Reserve

In 1972, the year Statastico was born, a penny was worth the equivalent of a 2006 nickel. Imagine if the U.S. Mint decided in 1972 to start making new coins called Fifths (with a portrait of James Monroe, naturally) and they were worth 1/5 of a cent. Well, we have them today and we call them pennies.

As recently as 2002, the U.S. Mint pulled in $24 million in seigniorage by producing pennies. No more. The Washington Post recently reported that because of rising zinc prices, the U.S. Mint is paying about 1.2 cents for every penny produced – not a very good return on investment.

Getting rid of pennies is a contentious issue. There is a pro-penny organization and people seem to attribute more value to a penny than it’s actual worth. Americans are frugal enough to pick a penny up off the street 76% of the time, though rich folks are more than twice as likely to leave that penny on the ground.

Indeed the mighty dollar’s biggest currency rival, the euro, also has 1 cent coins. However, businesses in Finland, the Netherlands and Greece commonly round to the nearest 5 cents to avoid those coins, so maybe the Europeans are onto something.

What about the rest of the world? Comparing a country’s most humble coins is a little tricky. A penny and a centavo both divide a major unit of currency by 100, but that’s where the similarity ends. First, you have to factor in the ebb and flow of exchange rates. Then it’s important to consider what a centavo buys locally, also known as purchasing power parity (PPP). One centavo might buy a whole mango in Guatemala, but it would only get you the mango’s stem in a U.S. grocery store.

So how worthless is the penny? Only the Chinese produce a more worthless coin (and we all know that their currency is undervalued). On the other end of the scale, the Japanese 1 yen coin is worth almost six times more than a U.S. penny in local wages.

And while we’re on the subject, have a look at our largest commonly used coin, the quarter. In coin-crazy Japan, they mint the most valuable coin in the world at currect exchange rates: The 500 yen coin is worth $4.33.

But once you factor in the lower local wages, it’s the Central and West African CFA (a vestigial franc from French colonial rule) that truly stands out. The 500 CFA coin - popular and convenient for highway bribes - is worth about 80% of the local hourly wage in Cameroon, the equivalent of a coin worth $16.50 in the U.S.!

Sources: Statastic research; Wikipedia; xe.com; IMF

*Notes: These are the highest and lowest value coins that commonly used in these selected countries. Coin currency equivalent was converted to dollars using exchange rate as of 7.13.06. Average hourly wages were calculated using the PPP of GDP per capita, and assume that workers toil 50 weeks per year, 40 hours per week.

Today is Major League Baseball’s 77th All-Star Game. Statastico was curious about how well these all stars are compensated relative to NFL Pro Bowl players, MLS All Stars, and NBA All Stars.

The NFL has the highest per game average for its best athletes, but the NBA, with much smaller teams, has the highest annual average salaries. Baseball pays its stars the most, while even the richest Major League Soccer star come in well below the poorest NBA star.

Back in the 1930s and 1940s, the Chief of the Bureau of Public Roads Thomas Harris MacDonald imagined a nationwide network of toll-free highways. His vision was largely implemented: Today only 1 out of every 16 miles on the Interstate system is toll road. All of these freeways has helped (ahem) fuel urban sprawl resulting in more cars per person, more miles driven, and arguably, increased American tubbiness.

Statasico would love to remedy this by raising the gas tax. Among other things, ncreasing the gas tax would:

1) Capture the negative externalities caused by greenhouse gas emissions and traffic

2) Create a potential pool of money for mass transit projects

3) Really upset the oil companies, and

4) Never happen with gas prices hovering around $3 per gallon.

What about mass transit? Isn’t some of that federal 14.7 cent per gallon gas tax applied toward mass transit? Yes… in spirit. Right now a whopping 1% of the price of every gallon of gas (about 2.7 cents of every gallon) goes toward the Mass Transit Account.

So I’m giving in. Let’s build more highways. And make every one of them a tollway. But don’t stop with just the new highways. We should also convert the remaining miles of the Interstate system to toll roads. I’m not advocating that states continue privatizing toll collection. That’s one role the government should not outsource.

One of the common complaints about toll roads was the inefficiency of sitting in a line of cars sputtering greenhouse gasses while someone ahead of you scrambles for change. But E-ZPass has started to change that. Unfortunately, toll collection is still slow because not all cars use the E-ZPass lanes. So the government should require every to have an electronic toll collection (ETC) technology installed as soon as a car is registered.

The government must stay actively involved because tollways are a regressive tax. Fixed tolls take a higher percentage of wages from low income workers than high income workers. Once again, technology can help remedy this. E-ZPass could be linked to a driver’s tax bracket, enabling the government to impose lower tolls for low income workers. Likewise, hybrid cars or alternative fuel cars could pay lower tolls.

Even better toll collection technology already exists across the Atlantic. Last year, Germany introduced an automatic toll system for trucks traveling along its 7500 miles of autobahn. The Toll-Collect system utilizes GPS technology, so Germany can reap about $3.2 billion annually while never requiring trucks to slow down to collect a single toll.

So what is the gas tax equivalent of tolls? Looking around the country, tolls average about $.04 per mile. With average passenger car and light truck fuel economy was 21.8 miles per gallon in 2004, those tolls are the equivalent to a gas tax of $.83 per gallon. Unlike a gas tax, tolls don’t necessarily lead consumers to buy more fuel efficient cars. But tollways make it easy for drivers to see some of the expenses associated with 46,000 miles of “free”ways. And with added toll revenue, perhaps we can beef up that Mass Transit Account and start to get people out of their cars.

*Uses the 2004 average fuel economy for cars and light trucks in the U.S. of 20.8 miles per gallon.

“Republicans Cut Minimum Wage by 21%” – or – “Do-Nothing Congress is Something of a Misnomer”

This week, Democrats are threatening to block a bill that would give members of Congress a raise until the minimum wage is increased. While I applaud the Democrats in Congress for re-opening this issue, minimum wage should not be subject to political winds. Since 1938, the annual minimum wage (based on working 40 hours per week, 50 weeks per year) has ranged from $6,807 to $18,621 in 2006 dollars. During that time minimum wage has ebbed and flowed, creating instability and unpredictable incomes for the poorest American workers.

Much of this instability is masked by inflation. Inflation silently eats away at minimum wage when Congress is in a do-nothing sort of mood. In 1981, the Democratic Congress raised the minimum wage from $3.10 to $3.35 where it remained for 8 years. Unfortunately, that same $3.35 in 1981 was only worth $2.46 by 1989. Effectively, inaction on minimum wage cut worker pay by 27% between 1981 and 1989.

Not to be outdone, the Republicans increased minimum wage from $4.75 to $5.15 in 1997, where it has remained ever since. Unfortunately, that same $5.15 in 1997 only buys $4.08 of goods in 2006, a reduction of 21% due to inflation.

The Democrats have proposed raising minimum wage by $.70 per year until 2009 when it would top out at $7.25/hour. This would raise minimum wage by about 15% annually. While this proposal does rescue minimum wage – and Congress – from the ignominy of falling below the poverty level for the first time since 1949, it is a sudden increase for those who employ minimum wage workers.

Inaction (or sudden action) on minimum wage creates wage cost volatility for employers. Jarring increases in the wage costs make it more difficult for businesses to plan.  These infrequent and unpredictable increases in minimum wage can also create a political backlash from small business owners.

The solution is to create an automatic, annual increase of the minimum wage based on either the federal consumer price index, or some fixed percentage over the federally-determined threshold for poverty. Make minimum wage more transparent to employers and the working poor, and let do-nothing Congresses get back to their flag burning amendments.

*Historical Minimum Wage assumes working 40 hours/week, 50 weeks/year and is adjusted by the CPI.

^#U.S. Census Bureau 2005 Poverty Threshold for single person under 65, adjusted upwards by 3% for 2006 estimated inflation.

^6.27.06 - Reuters reported a Democratic proposal in Congress to raise minimum wage by $.70 per year until 2009 when it would top out at $7.25/hour.