Public Radio and Public Goods

I listen to a decent amount of public radio on my various commutes to school and work. Inevitably, there comes a time every couple months where the station that I listen to tries to coerce its listeners into donating money to support the station. “Coerce” might be a strong word, but I do want to emphasize that these reporters really lay it on thick.

And they use a number of tactics. First, they try to emphasize that the dollar amount they’re asking for is really small. Who can’t part with a mere $5 a month? Second, they inform their listeners about some great deal where, if the listeners donate a certain amount, a charitably-minded company will match that amount. Of course this amazing opportunity only lasts for a short period of time, so listeners had better jump on it. Third, they share testimonials of individuals who have donated to the station and whose lives have consequently been changed for the better. Finally, and most interestingly, they appeal to the listener’s sense of morality. Is it really fair to be listening to the station without paying for it? Listeners who are basically stealing from the station in this way must feel so guilty. (Though, it should be noted that the station is offering their programming for free, so its hard to blame listeners for doing what the station is encouraging them to do. But more on this later.)

This entire process takes a good chunk of time. By the end of it I generally wonder why I didn’t just switch to a different station, but then I wouldn’t be able to write this post.

So what leads radio stations to behave in this way? Well, they are offering a good at no price and have to find some way to make money. The world is full of similar goods that consumers have the opportunity to benefit from without paying for directly. (Think of national defense, clean air, Thunder Over Louisville, etc.) In the world of Economics these are called “Public Goods” and have two distinctive characteristics: a) they are non-excludable, meaning it is difficult/impossible to prevent people from consuming them; b) they are non-rival, meaning that two individuals can consume the same good without limiting each other’s consumption.

Based on their characteristics, Public Goods suffer from a specific problem known as the “Free Rider” dilemma. If consumers know that a good will be available to them regardless of whether or not they pay for it, they will not be motivated to pay for it. The proper way to handle this issue would be to have each person pay what the good is worth to them. However, if you try to figure out how much said good is worth to them, they will likely understate its value.

There are a number of ways to handle this problem. From a government perspective, funding for Public Goods often comes from taxes. In the private arena businesses use advertisements, sponsorships, and other similar strategies to obtain funding.

Public radio is an interesting version of a public good, because they can use advertising to obtain funding but also often try (really hard) to get donations from their listeners. While these donations do provide the stations with money, they still fail to be completely efficient. Some people who pay a significant amount per month are still paying less than the station is worth to them, while others who were guilted into paying a small amount might be paying more than the station is worth to them.

I actually haven’t donated to this station and I probably will not, because it just is not that valuable to me. (Side note: I also disagree with many of this station’s positions, so I would have a hard time justifying supporting this station from that perspective. But that is really a separate issue.) Or to say that differently, to me the most valuable feature of public radio is the fact that it is free. If a price were imposed on my listening of a certain station, I would, without any remorse, merely switch to a different station or listen to music on my iPod. I admit that I am a “Free Rider” in this situation and I am okay with that.

If radio stations were really serious about obtaining funding from their listeners, they would try to restrict their product from being consumed freely. They could create some sort of subscription and only allow paid listeners to benefit from their programming. They haven’t done this yet, and I imagine that it is because there are significant amounts of listeners like me who would not continue to consume their products if they were no longer free. There are so many free substitutes available to consumers that, unless all radio stations imposed a price, the non-free stations would likely suffer significantly in this situation.

Public radio stations are in a unique and challenging situation. And until a workable solution comes forward, they will likely continue to try to obtain funding by begging their listeners for money. Maybe the true cost of listening to public radio is being tormented by twenty straight minutes of donation requests?

//

I hope you found this post to be interesting and/or informative. If you agree or disagree with the view expressed in this post, please leave a comment or shoot me an email. Thanks for reading!

The Evolution and Biases of Communication

(Note: the following post is based on a paper that I wrote for my Digital Culture class in Summer 2015. I think, based on the current cultural climate, it is quite relevant and I hope that you will come to the same conclusion.)

Each form of communication faces natural constraints to the types of content it is able to articulate. Neil Postman in Amusing Ourselves to Death uses this idea as part of the framework for his entire argument. Postman believes that the television has a place as a form of entertainment, but when it moves beyond amusement, it is ineffective. Talking about biases of form, Postman argues that “ventriloquism, dancing, and mime do not play well on radio, just as sustained, complex talk does not play well on television” (Postman 92).

As the means of discourse in our culture have evolved, each new technology exhibits biases of previous technologies. After all, no technology is created in a vacuum, but rather, new technology exists as an evolution of previous discoveries. Expanding on this idea of how technology evolves, Postman states, “each of the media that entered the electronic conversation in the late nineteenth and early twentieth centuries followed the lead of the telegraph and the photograph, and amplified their biases” (Postman 77). Whether this amplification occurs based on the inherent nature of the new technology or the epistemological mindset of new users, it is clear that our current media environment is strongly grounded in the background created by the telegraph and photograph.

Although our current digital media atmosphere is more nuanced and complex than the environment of 1985, the Internet and our other forms of digital media still exhibit many of the same constraints as the television. Many of these constraints were introduced by the telegraph, which “destroyed the prevailing definition of information, and in doing so gave a new meaning to public discourse” (Postman 65). The telegraph focused primarily on bridging distance and increasing the speed and accessibility of information. But in doing so it “made relevance irrelevant” (Postman 67), by providing consumers with more information than they needed or could possibly use. These types of conversations lacked context and “made information into a commodity, a ‘thing’ that could be bought and sold irrespective of its uses or meaning” (Postman 65). Information in our current digital age is very similar to information communicated by the telegraph. We so value accessibility and speed of communication that we send and receive information with almost no context. Think about how easily and frequently we send texts or tweets without enough background information and have to go back and explain ourselves. Even the limitations imposed on our character usage by these mediums show that we care more about communicating quickly and briefly than thoroughly and thoughtfully. This prioritization of quick communication hurts serious discourse by trading speed for context. Inability for serious discourse is perpetuated by our heightened accessibility to information via the Internet, which allows us to know anything that we want, regardless of its importance and relevance. We may know a lot about trivial things from YouTube or Tumblr but these pieces of knowledge probably will not help us carry on serious conversations.

The visual basis created by the photograph also contributes to constrain current digital media. Postman states, “the photograph presents the world as object; language, the world as idea” (Postman 72). Because of the photograph’s seeming objectivity, it leaves no room for imagination and hinders discussion. After all a photograph “offers no assertions to refute, so it is not refutable” (Postman 73). Although language must occur in sequence and in context to make sense, “there is no such thing as a photograph taken out of context, for a photograph does not require one” (Postman 73). Every medium with a screen has a leaning towards communication via pictures. Although we incorporate words into our digital media use, pictures are the foremost purpose and tool of the digital medium. And pictures, which are often deceptive, can obstruct public discourse. Because pictures seem objective but only deal with particulars, we have a tendency to be fooled by images. When we see an Instagram post of a friend at a party or a picture on the news of a sinister looking person, we make all sorts of assumptions about these people and their lives. In reality these pictures are brief, possibly manipulated slices of reality, which cannot communicate the vast extent of truth that they promise to share.

Because of the evolution of technology, we live in a visually based world of media where accessibility and speed of communication have trumped context and relevance, and have impeded serious, logical discussion.

 

For further reading, check out Postman’s book.

//

If this post piqued your interest or seems way out of line, please leave a comment or shoot me an email. As always, I’d love to hear what you have to say. Thanks for reading!

Tom Brady Was Innocent…But That’s Not the Real Issue

(Note: Although I’m literally years late in commenting on Deflategate, I figured better late than never. Also, we’re coming up on the two year anniversary of Deflategate, so in some ways, it’s seems like an appropriate time to talk about these issues.)

I’ll admit that I am far from unbiased when it comes to anything related to the New England Patriots. I grew up a huge Patriots fan and still vehemently follow and support them. So maybe I am not the best person to speak on the issue – I’m definitely not the most objective. However, I contend that Deflategate and the Patriots in general are very polarizing issues, so you’re unlikely to get commentary that is completely unbiased. And unlike many of the journalists that covered this topic, I am clearly stating my bias from the beginning, instead of trying to appear objective and neutral.

This is not intended to be an extensive report on this topic. If you want to read ALL of the facts of the matter and become an expert on this topic, I would point you “The Wells Report in Context,” which is a site created by the Patriots to respond to many of these *false* attacks. My intent, through this post, is to outline some of the main issues and point you all to various other resources so that you at least have to opportunity to become more educated on the topic. So, first things first:

  1. The NFL never cared about PSI levels and still doesn’t care. Let’s get this straight, if the NFL REALLY cared about PSI levels, they wouldn’t give an arbitrary range of PSI levels for teams to use. If cheating in this area was such a big concern, they wouldn’t blatantly disregard comments made by other NFL teams/players about football alteration. If PSI levels in footballs was a legitimate issue, the NFL would’ve actually recorded and kept data on PSI levels in 2015 in order to at least appear like they care about this issue. So let’s not pretend this has been an big issue over the years. The NFL gave this range of PSI, because they wanted quarterbacks to prepare footballs in a way that they liked in order to make the game more high scoring and entertaining. Nobody knew or even cared about PSI until Deflategate came up.
  2. The initial reports on PSI levels were completely erroneous. This is a well known fact, but is somehow completely ignored by many individuals when discussing Deflategate. The first tweet on this issue stated that 11 out of 12 Patriots footballs were under inflated by significant amounts. This tweet set the tone for the initial coverage and the responses to these allegations. Given the severity of these accusations, the Patriots were forced to figure out some way to respond to these charges, which were shown to be almost completely false six months later. But letting false ideas be considered and believed for six months can have serious effects, even when those same ideas are shown to be wrong in the future. These false reports did a lot to sway public opinion in the immediate future.
  3. Tom Brady behaved suspiciously, but that does not prove his guilt. I will admit that there are some things about this whole procedure that confuse me. The fact that Brady destroyed his phone around the time of the investigation is bizarre and admittedly seems suspicious. I’m not a celebrity and I don’t know how they handle their communication, but I wouldn’t say Brady’s reasoning for destroying his phone was terrible. That being said, the fact is we don’t have his phone, we never saw what was on it, and we can only speculate what he might have been trying to hide. This behavior is odd, suspicious, but far from conclusive. It would have been nice if people could have withheld judgment until more evidence came out.
  4. The entire NFL investigation process was a scam. Honestly, if the NFL hopes to maintain any appearance of credibility going forward they need to figure out how to investigate issues in an independent manner. It’s no secret that Ted Wells was not independent when he investigated this issue and that the NFL edited his report before it was published. Having Roger Goodell try to act as arbitrator after bringing these accusations against Brady and the Patriots is quite laughable for those who care at all about due process or fairness. There is definitely a legitimate and widespread concern that Goodell has far too much power and if the NFL wants to remain credible, they need to change these types of processes going forward. And this is hardly an isolated mistake on Goodell’s resumé. He has a history of totally mishandling issues likes these.

At the end of the day, Deflategate was not about Brady’s guilt or innocence, although I would argue that no conclusive evidence was shown to prove his guilt. The primary issues in the Deflategate saga were: poor journalism swaying public opinion, extreme public biases against the New England Patriots, and a terrible, unfair investigation process. This was a blatant smear job! Although I’m sure irreversible damage was done to Brady’s image and public opinion of the Patriots, Goodell actually succeeded in making himself less likable than he already was.

If you hate Tom Brady and think he was guilty, here’s a link to help you come to terms with your feelings. I know these beliefs are often deeply rooted and if you’re a fan of the Jets, Ravens, Bills, Colts, Dolphins or various other teams, there is likely no way that I can change your mind. And I’m okay with that. Hopefully this post has broadened your knowledge on these issues and created or reinforced a distaste for Roger Goodell’s managerial behavior.

If you’re a Patriots’ fan I hope this post provided you with some level of comfort and vindication. At the end of the day our team’s best response to outside hate and jealousy is to keep doing what they’ve been doing for 15 years – winning. Here’s to getting that fifth ring!

//

Regardless of your stance on this divisive issue, I would love for you to comment on this post or send me an email (unless you’re a Jets’ fan… just kidding). Thanks for reading!

 

Clichés, Stereotypes, and Sameness

(Note: the following post is based on a paper that I wrote for my Digital Culture class in Summer 2015. I hope it will be of relevance and interest to you.)

In “Enlightenment as Mass Deception” Adorno and Horkheimer base their discussion of the culture industry on the fact that “culture today is infecting everything with sameness” (Adorno and Horkheimer 94). The need to classify what we consume has all but disappeared since all the media before us occurs “cyclically” and “the details [have] become interchangeable” (Adorno and Horkheimer 98). Since all media put out by the culture industry is fundamentally the same, “the appearance of competition and choice” is deception (Adorno and Horkheimer 97). As consumers, even this pretense of choice and classification is meaningless since the culture industry has thoroughly classified everything for us (Adorno and Horkheimer 98). Whether sameness displays itself through patterns of form or through the transposable nature of the details, the products of the culture industry are fundamentally the same.

Clichés are an artifact of the culture industry that demonstrate this sameness. While clichés could probably be defined more broadly, I understand them to be interchangeable phrases that the majority of the public will understand and appreciate in a given situation because of their constant use. When Adorno and Horkheimer discuss clichés, they talk about them in the context of the film industry where these “ready-made clichés” can be “used here and there as desired and always [be] completely defined by the purpose they serve within the schema” (Adorno and Horkheimer 98). These phrases perpetuate sameness because they have been clearly defined through repetition, and, regardless of the situation, these clichés always mean the same thing. When someone uses the phrase “in the nick of time,” you do not stop and say, “That’s an odd phrase I wonder what it means?” Rather, although the specific vocabulary is peculiar and does not really make sense, you understand it’s meaning, regardless of the context, because you have heard it so many times.

Stereotypes also prolong sameness but in a more multifaceted manner than mere phrases. Although this definition is far from exhaustive, I understand a stereotype to be a common understanding of what something is like or how it should operate without being critically analyzed. Adorno and Horkheimer make a somewhat startling claim when they say, “the bread on which the culture industry feeds humanity, remains the stone of stereotype” (Adorno and Horkheimer 119). When understood within the context of their argument about the culture industry’s goal of sameness, this statement is enlightening. The culture industry bases the achievement of their goals on the cyclical nature and immutability of these stereotypes. Memes would definitely fit this category of stereotypes because the picture dictates the way that we understand the words without much need for analysis. When we notice memes of Dwight Schrute or the Most Interesting Man in the World, we can immediately predict the tone of the meme and then merely insert the specific words into that context to understand them. Beyond memes, we also see these patterns and repetitions through stereotypical characters in movies and stereotypical melodies in popular music, which can be understood and appreciated without an analytical or questioning mindset. Adorno and Horkheimer state that “in a film, the outcome can invariably be predicted at the start” and “in light music the prepared ear can always guess the continuation after the first bars of a hit song and is gratified when it actually occurs” (Adorno and Horkheimer 98-99). The culture industry is able to get away this repetition of form and detail because we not only tolerate it, but we welcome it.

The culture industry is able to continue injecting production with sameness because sameness sells. Pop music melodies and chord progressions are recycled because they have been proven to generate revenue. For the culture industry it is dangerous and unprofitable to break these patterns. Where greatness and innovation push boundaries and distrust style, the culture industry has promoted a “withering of imagination and spontaneity” through the closely monitored creation and promotion of patterns of sameness (Adorno and Horkheimer 100). Although we may hope for innovation and originality, we help prolong these cycles by buying into them. We may complain about the predictability of movie plots, but we still see the movies and support the industry. Maybe deep down we enjoy the stability and sense of control that we achieve through predicting the outcomes of songs and movies that, in essence, we’ve seen or heard many times before?

 

For further reading, check out Adorno and Horkheimer’s book.

//

Hopefully you found this post to be interesting. I’d love to hear what you have to say about it. Please leave a comment or send me an email with your thoughts. Thanks for reading!

 

Why the Minimum Wage is Ineffective and Costly

[Note: I was going to post about this topic later in time but given the fact that 19 states just increased their respective minimum wage amounts, I thought it would be especially relevant and interesting today.]

I don’t know about you, but every time I hear somebody praise the minimum wage or recommend that it should be increased, I inwardly (or sometimes outwardly) roll my eyes. That’s not to say I don’t understand this policy’s appeal to many individuals. However, once you look beneath the surface and see how this policy really works and some of its real but hidden consequences, it clearly possesses a host of problems. Based on this policy’s appeal to a wide variety of individuals, I want to offer a non-comprehensive summary of this policy and some of its inefficiencies and costs. I’m going to start this post with an outline of some ways that people might view and justify a minimum wage.

An Unrealistic (But Maybe Common) View of the Minimum Wage

I can’t say the ideas expressed in this section are based off of a single person’s opinion or the opinion of the majority of the minimum wage’s supporters. I do imagine, however, that these are some (potentially common) ways that people might think about and justify this policy.

  1. An increased minimum wage means that all (or most) low wage workers will benefit from a higher income.
  2. An increased minimum wage means that unemployed individuals will be more motivated to enter the job market, will obtain good jobs, and will be better off.*
  3. Companies are greedy and have reserves of money that they can and will open (if legally forced) to pay higher wages to their employees.

While there may be some degree of truth to each of these claims, these views have significant flaws, which will be expounded upon in the rest of this post.

The Reality of the Minimum Wage

What exactly is the minimum wage? The minimum wage is a wage floor or a legal minimum price for many types of labor.** It was designed to help the working poor by enforcing that companies pay a “living wage” (in other words, enough money to live on). In terms of market operations, a minimum wage increases the price of labor without any corresponding increase in the value of labor. (This is a significant disconnect which I’ll talk about more later.)

The fact is that companies (for the most part) seek to make profits and operate in a very competitive environment. Thus, it is hard to justify paying the same people a higher wage in order to do the same task. You might think that for the most part companies can and will just swallow the extra cost, but think about it from your perspective. If the price of a good that you consume increases significantly, do you continue to consume the same amount of that good as before? Unless you absolutely need that good, you likely try to cut back on your consumption and/or find alternatives. Like you, companies tend to be rational, think at the margin, and behave according to universal economic principles. So when price increases (imposition of a minimum wage), quantity demanded (desired number of employees) decreases.

Ways That Companies Respond to a Minimum Wage

Assuming that firms will not just accept these increased labor costs, how exactly do they attempt to cut costs in the face of a minimum wage?

  1. Hire less people. Whenever possible firms will try to replace workers with machines, kiosks, or just try to get more work out of a fewer number of laborers.
  2. Decrease fringe benefits for employees. Just because a company has to pay a certain hourly wage does not mean that they must continue to offer benefits such as employee discounts, paid time off, etc.
  3. Black market activity. Really desperate firms can break the law and try to hire workers at an illegally low wage rate.***
  4. Increased prices for consumers. In the face of higher operating costs companies will seek to share the burden with consumers in the form of higher prices. This will have varied results depending on particular products, markets, etc., but it leads to the potential for making a whole lot of people significantly worse off.

Some Additional Costs of the Minimum Wage

I’ve been quite negative regarding the minimum wage up to this point. I do want to be clear that this policy has at least one benefit: those low income workers who retain their jobs do indeed get to enjoy a higher wage rate. But what are some of the costs that society incurs in order to obtain this single benefit?

  1. Increased prices for consumers. As noted earlier, firms will not bear the burden of higher costs alone, and will share these costs with consumers in the form of higher product prices. Especially for those with smaller incomes (i.e. the poor), this increase in prices has the potential to cause significant harm.
  2. Disemployment of the poorest, most unskilled laborers. When firms are determining who to layoff they will likely get rid of the least skilled, most unproductive workers. Sadly, these are the exact individuals that the minimum wage seeks to help. This policy suffers from a significant disconnect between policy goals and actual outcomes.
  3. Fewer training opportunities. As noted earlier, the minimum wage creates an increase in price without a corresponding increase in value of labor. It makes sense to think that a worker earns low wages or remains unemployed because he/she is unproductive, untrained, or of little value to potential employers. Thus, the more education and training that low income workers can get, the higher wage they can demand. (It’s amazing that all of this can occur without the government intervening to adjust and distort the market… but I digress.) However, if the cost of labor is higher, and firms choose to hire less workers, then opportunities to gain work experience and training decrease significantly.
  4. Potentially fewer incentives to work. Those who remain employed at a higher wage rate might actually be incentivized to work less or not at all. Higher income leads to more taxes and less welfare, so there is a real possibility that the costs of working at a higher wage rate will outweigh the benefits to many individuals.
  5. Increased personal discrimination by employers. Whenever there is a surplus of a good, some sort of rationing mechanism must be in place in order to determine who can obtain the limited supply of said good. Without price to ration goods, employers are free to hire or not hire individuals based on personal characteristics, rather than productivity or other legitimate reasons. For a policy that seems to bear merit based on arguments of equity, this is a disturbing side effect.

Some Policy Alternatives to the Minimum Wage

At the end of the day, this policy intends to improve the lives of heads of households among the working poor.**** Having noted many of this policy’s problems, what are some better, alternative policies? After all, it would be less than productive to point out all of the problems with this policy without listing at least some potential alternatives.

  1. Lower or eliminate payroll taxes for unskilled, low income workers. FICA and state income tax withholdings can significantly decrease the incomes of the working poor. Why not give this concentrated group of hurting individuals a tax break?
  2. Expand or create policies similar to the Earned Income Tax Credit. The EIC is a remarkably effective form of welfare that provides low income, working individuals with a direct reduction in tax liability. It is a concentrated benefit (goes to individuals with an income below a certain amount) but also provides labor incentives (since you must be employed to get it).
  3. Enact contingent welfare policies. These types of programs would provide welfare to workers based on completion of training or some other achievement.
  4. Utilize wage subsidies. Government would, through these types of programs, provide employers with money to give directly to low income workers.

While it is unlikely that any of these policies would perfectly solve social employment problems in our country, they are worth at least considering. Each suggestion has its flaws, but succeeds at least in providing the target group of workers with benefits tied to labor incentives.

Conclusion

I hope you found this post to be informative and helpful. It ended up being pretty long so I hope I didn’t bore you too significantly. This post was HEAVILY influenced by my Intermediate Microeconomic Theory course taught by Dr. D. Eric Schansberg. So for further (and more eloquent) thoughts on these issues, I would point you towards his book Poor Policy: How Government Harms the Poor. Another useful reference book might be our class’ textbook: Microeconomics: Theory and Application by Browning and Zupan.

//

Like always, if you have thoughts of consensus or disagreement, please leave a comment or send me an email. I’d love to hear how you’ve thought about or been impacted by these policies. Thanks for reading!

 

Additional Notes:

*This effect likely occurs to some degree but is not really beneficial for two reasons: a) Research shows that generally labor supply is quite inelastic (meaning that increased wages do not lead to significant increased amounts of willing workers). b) And just because individuals and willing and able to work does not ensure that employers will hire them. Without a simultaneous increase in demand for labor, an increase in willing workers, according to this line of thinking, would actually lead to higher unemployment.

**It’s important to note that not all jobs are even covered in minimum wage legislation. 75% of unskilled workers have jobs that are not covered by the minimum wage, such as tipped workers, seasonal workers, farm workers, etc. Clearly this policy fails to impact the lives of many individuals in the specific category (unskilled, low income) that it attempts to better.

***Economic theory would suggest that a minimum wage would create a surplus of available workers, so there would likely be individuals who would be willing to work at lower wages and would be motivated to not turn these firms in to the government.

****It’s also worth noting that the minimum wage impacts not just heads of households. Individuals like high school student seeking to make some extra gas money are impacted in the exact same way as low income, unskilled heads of households. This policy is too broad and impacts a number of individuals who are not the primary target.