Hasta La Gadget!

Harvard and City are two equal-opportunity universities. Every professor — male and female  –  at both universities, is paid a salary that is appropriate given his or her qualifications. To be specific, superstar faculty members are paid $120K annually and other faculty members are paid $80K per year. Let us say that half the professors are superstars and half of them are not. However, only 20 percent of available professors are women and 80 percent are men. Both Harvard and City each have 100 spots for faculty and there are 200 professors available.

Harvard likes to hire superstar faculty and City likes to hire any good faculty they can get. Every professor prefers to work at Harvard because of its prestige rather than at City even though the salary given the qualifications are the same at both universities.

Scenario 1: Harvard hires all 100 superstar faculty — 80 men and 20 women where each gets paid $120K. City hires all remaining faculty — 80 men and 20 women where each gets paid $80K. Harvard gets known as the university with superstar faculty with high salaries and City gets known as the more affordable good university where faculty are paid reasonable salaries. There is no difference in salaries of men and women faculty at either university.

Scenario 2: A leading national newspaper writes a scathing attack on both universities complaining that only twenty percent of their faculty are women and they must do more to improve gender balance.

Consequently, Harvard decides to hire 10 more women faculty (who are not superstars) by replacing 10 of its superstar male faculty. The new women faculty are happy to work for the same salary of $80K because it is more prestigious to be at Harvard rather than at City. The 10 superstar male faculty denied tenure at Harvard are enthusiastically hired by City paying them the same high salary ($120K) they were getting at Harvard. Harvard has managed to improve the gender balance going from 20 percent women professors to 30 percent women professors. Unfortunately, City is not so fortunate — after all there are only a limited number of women faculty available. They console themselves by publicizing that they have managed to improve the average quality of their faculty.

Notice that now Harvard has 70 superstar male faculty members, twenty superstar female faculty members (all getting $120K salaries) and 10 female faculty members who are not superstars (who get $80K salaries). The average salaries of male professors at Harvard will now be higher ($120K) than average salaries of female professors (between $80K and $120K). How about City? City now has 10 superstar male faculty (receiving $120K each) and 80 male and 10 female faculty members who are not superstars (receiving $80K each). The average salaries of male professors at City also will now be higher (because of ten superstars getting $120K each) than average salaries of female professors ($80K). Correspondingly, the average quality of male professors at both universities will be higher than those of female professors.

The leading national newspaper now writes another scathing article lamenting that top universities like Harvard have managed to improve the gender balance of their faculty but it has become worse at other universities such as City but there really has been no change in the gender balance across the country (of course, not). Moreover, women and men used to be paid equally but now women professors’ salaries are lower everywhere compared to professors who are men.

What is the moral of the story above? Simply finding evidence that women on average are paid less than men at most organizations does not necessarily prove that there is gender-based discrimination. Trying to cure gender imbalance by pushing organizations to hire more women will not only fail overall — more aggressive organizations will succeed at the expense of less aggressive ones — but also  —  and this came as a surprise to me and many of my colleagues  –  it would make the salary imbalance between men and women appear worse  –  because average quality of women will fall – at all organizations (even though there is no change in quality overall).

The main culprit is the pipeline. If the percentage of qualified women remains lower than that of men, gender balance at all organizations is mathematically impossible. The cure then is to fix the pipeline. The gender balance in pay will follow. Moreover, as the Nobel Laureate Gary Becker pointed out, if women continue to get paid less than their male counterparts, profit-maximizing competitive firms can hire more women (if they are less expensive to hire) and fire men (if they are more expensive to hire) improving, and perhaps even reversing, not only gender balance but also their bottom lines at the peril of their competitors who continue to discriminate against women by hiring (more expensive) male labor force.

This blog post first appeared on Medium on September 24, 2014.

“It is but equity that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.” — Adam Smith, Wealth of Nations

Don’t let Adam Smith fool you. He wasn’t talking about a “living wage”. He was talking about a “minimum wage” that was set at a decent level. The difference matters, and will matter more as America confronts its income inequality problem.

A “minimum wage” is a government-established standard for what a private sector employer must pay to a private sector employee. It’s been law since the New Deal, varying from state to state. It affects all employers, as defined in law, and is seen as a basic worker protection. The Right says it depresses employment; the Left says it assures decent compensation and has no long-term effect on jobs.

A “living wage” is something different, although there’s a lot of sloppy verbiage about it and the two are often used interchangeably. A “living wage” is considerably higher than a minimum wage and is required only of those employers who receive significant public benefits. In other words, if you get taxpayer money to build your project, then people who are employed there are to be paid a higher wage than the marketplace would offer. If you get a public subsidy, you pay your employees enough to live on. If you don’t want to pay a living wage, don’t take the subsidy.

There’s a lot more to living wage proposals than emotional appeals to help working families and reaction to corporate welfare. Increasing wages will increase spendable income which will increase demand which will increase economic activity that benefits everyone. It’s anti-austerity economics turned into a workable program.

Whatever opposition exists to government wage setting, there’s little intellectual basis for opposing government setting economic conditions when it gives public money to a private person. Developers and other corporate beneficiaries of taxpayer largesse don’t have much of a place to stand when they oppose living wages. Even otherwise sensible developers like NY’s Doug Durst fall back on untrue-isms used against the minimum wage. “If you mandate that people get higher benefits at projects that the city puts money into, you’re not going to get tenants.” That’s just holdover nonsense from the Bloomberg era.

The rise in national concern about income inequality has been a little slow to develop workable remedies. They will come as more thinking is devoted to it and as Americans demand government action to undo the policies that have concentrated wealth and made it hard to live for average working families. Living wage proposals seem to be the fastest and easiest to explain of the current remedies.

The Left’s newest icon, Mayor Bill de Blasio has just jumped to the front of the line of living wage proponents, deciding to greatly expand the number of workers covered and the amount they will receive. It’s a solid proposal, but needs better explaining. The public has generally accepted the idea of minimum wage increases. But support for living wage increases, because they’re tied to public subsidies for corporations, will be bigger, faster and more sustained. It should be Number One in de Blasio’s ambition to create a progressive model for workable, efficient government.

Shifts in public opinion are faster than the development of concrete remedies. So it is with living wage proposals. But the combination of Bill de Blasio and Adam Smith should be enough to kick start a national upsurge of living wage laws. It’s good economics and it’s good policy.

While much focus has been placed on the recent slew of smartwatch releases, such as the Motorola Moto 360 as well as the Apple Watch, this does not mean that a regular timepiece that you wear on your wrist no longer has any more value. No sir, far from it – in fact, here we are with what is known as the Kisai Vortex, which is a unique watch as it sports a spiraling time display that is located right under a sleek concave lens.

Not only that, the Kisai Vortex prides itself in being a limited edition touchscreen watch that will boast a slew of other features. There will be a couple of time zones that will help frequent travelers keep track of the time at home as well as what the exact time it is right there and then with but a single glance. You will also be able to know just what date it is after crossing way too many time zones to keep count, and there is also an alarm function, some animation, a light up LED as well as audio feedback – all of it housed within a stainless steel case.

Right now, the Kisai Vortex can be yours for just $179 with free shipping thrown into the mix, and this offer is good until October 2nd, 11am Japan time – whereby after that, do expect to see the price gain a jump.
[ Kisai Vortex tells the time in style copyright by Coolest Gadgets ]

It’s one thing to say that a smartphone can survive water splashes; it’s another altogether to say that the phone can actually work underwater. That is exactly what Sony promised with the Xperia Z3 smartphone that runs Android.

The phone has front and rear cameras like all modern smartphones and it can even be used to take video and photos underwater. I’m sure you have seen unboxing videos before where geeks get a new device and make a video of themselves taking it out of the box. The gang at Carphone Warehouse in the UK took unboxing somewhere new with an underwater unboxing video for the Z3.

Not only does the diving helmet-wearing host unbox the smartphone under water, he also uses it to take pictures and video of the crew filming the unboxing. The phone holds up extremely well, and manages to take some incredibly sharp pictures despite being underwater. The cardboard box and phone accessories on the other hand…

Does your son or daughter want to be the next Pele? Mia Hamm? Or are they into soccer, but you’re not sure how to help them develop their skills? My First Football Boots can help with that. These soccer boots were specially designed to help kids improve their dribbling skills.