Archive for the Money Category

Employment Duration Indexed Minimum Wage

Posted in Law, Money on December 23, 2016 by daviddiel

minimum-wage-map

Minimum wage vs rental prices (Ref: U.S. Senator Bernie Sanders Facebook Page)

When considering minimum wage proposals, some may ask, why not let the free market decide? And the answer is that the employment market is far from ideal. Two of the classical market problems are information asymmetry and lack of liquidity. I present a simple proposal below that addresses both.

With regard to information asymmetry, employees may not be aware that the market can bear a greater wage than they might otherwise settle for. With regard to liquidity, the market needs to push employers to reduce their utilization of low-wage workers in permanent positions. In the job market, liquidity means unemployment, so my proposal is to set the bar low for initial employment and then raise it incrementally. I call this the employment-duration-indexed minimum wage. For example:

1st month = $5/hr minimum
2nd month = $10/hr minimum
3rd month and beyond = $15/hr minimum

The key idea here is the structure, not the specific wage levels that would change over time. This structure would enable internships, seasonal odd jobs, trial periods, and young people getting started. This rule would be enforced for the cumulative lifetime work of each person on a per-company basis. That way, large companies like McDonalds and WalMart could not skirt the law by firing and re-hiring, so they would end up paying $15/hr for the vast majority of their workforce.

This rule would increase employee turnover, but if this pushes people to find a role in the workforce where they create greater value and earn more, instead of settling, then they will be better off and require less government assistance in the long term.

For background, this idea came from thinking about two different perspectives that are both true:
 
1. If I agree to work for you for 8 hours on a Saturday at $2 per hour, it does no harm whatsoever to the rest of the society. Assuming that I include this on my income taxes as required by law, I will actually end up donating a few dollars to the government which it definitely would not have received if I had stayed home and watched TV instead.
 
2. It is a fact that long-term low-wage employees end up utilizing government welfare programs far more than those who earn 2-3 times the minimum wage. Additionally, when the minimum wage is raised, it turns out that the vast majority of employers are able to create higher valued positions, and employees who were pushed out of low-wage jobs migrate to these positions. However, creating a higher barrier-to-entry has a harmful effect at the low end of the market.
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MLS My Home is a scam

Posted in Law, Money on March 25, 2016 by daviddiel

On Feb 28, 2016, I paid $149.95 to list a rental property on the MLS (Transaction ID XXXXXX5945). Soon after, I was contacted by a licensed Realtor who wanted me to sign additional paperwork in order to list on the MLS. I did not want to sign his paperwork, so I asked MLS My Home for a refund.

According to their webpage, “As long as your property has not already been listed on the MLS or Realtor.com, you may cancel your order by calling customer support at (888) 476-9990 during normal weekday business hours between 9:00am and 5:00pm EST.”

By phone and by email, I asked Jeannie Spencer three times to process my refund, but she refused. The rental property has not been listed on the MLS or Realtor.com. This is consumer fraud, plain and simple.

Potential customers need to understand that the folks at MLS My Home do not think it is their job to list your home on the MLS. They apparently charge a fee to put you in contact with a Realtor who may or may not list your home on the MLS. However, I never heard from Joe Dale Iley (Texas Broker License #9002442), who represents MLS My Home. Instead, they referred me to a third party. What waste of time and money! Run away as fast as you can!

A solution for the Black Lives Matter movement

Posted in Law, Money, Psychology on January 16, 2015 by daviddiel

Some protesters blocked I-93 yesterday to remind us all about the tragic deaths of Michael Brown and Eric Garner. Their campaign has grabbed a lot of attention, but the protest messages have focused on race and skewed interpretations of the facts. In response, I would like to offer up a clear solution that would prevent deaths while maintaining the rule of law going forward.

Before you scroll down to see my proposed solution, try to put aside the arguments that you may have heard about race, prejudice, and controversial details of the case. Consider the possibility that an entire society could be so caught up in drama that we failed to see the forest for the trees.

The big picture is that our laws are based on a system of excessive punishment for minor sins. Many people believe that no crime should go unpunished, and that heavy handed punishments for small crimes will prevent larger crimes. This notion, sometimes implemented as a Broken Window Policy or Stop-and-Frisk Policy, was an experiment in human behavioural psychology that has turned out to have unintended consequences.

Michael Brown was suspected of stealing cigarillos and possibly blocking traffic. Eric Garner was suspected of stealing by breaking cigarette tax law and possibly loitering. These are bad behaviours, but in reality they are no big deal.

Some of you will immediately think that it is heresy to say any crime is “no big deal.” If that is you, then please take a deep breath and reconsider whether you want to support laws that cause small crimes to escalate to the level of deadly force.

When faced with arrest, both Michael Brown and Eric Garner had been conditioned to expect to be physically pushed down, handcuffed, held for hours, made to fill out numerous forms, stripped of their clothes and other belongings, locked in a poorly air-conditioned cell, fed low quality food, delayed receipt of medications and medical care, forced to post bail or remain locked up, forced to attend a court hearing, then either further imprisoned or excessively fined, and they would have a public record of shame to follow them for the rest of their lives.

The solution is simply to match the severity of punishments to the severity of crimes. These men should have received a fine on the order of a traffic ticket. A small financial crime, on the order of tens of dollars, should illicit only a relatively small financial penalty. For example, the fine could be capped at ten times the amount stolen plus a reasonable processing fee. More importantly, these men should not have had to fear arrest, because petty theft should not be an arrestable offence. The fear of excessive punishment was the key element that triggered their defensiveness, anger, and eventual bad decisions that led to their deaths.

The cops were merely stuck in the middle between abusively harsh laws and two desperately poor men. Reasonably limit the penalties for small crimes, especially crimes borne out of poverty, and these kinds of tragedies will eventually stop happening.

Boston Sports Club Screws Another Customer

Posted in Law, Money, Sports and Recreation, Uncategorized with tags , , on August 25, 2014 by daviddiel

Why do gyms routinely screw customers out of a final payment? Every business that charges a fee to cancel service should be sued into obscurity. This letter from Boston Sports club at Wellington Circle sounds nice, until the part about processing one last payment…

Hi David,

Thank you for your membership cancellation inquiry, I’m sorry to hear you will be leaving us. Do you mind if I ask why? I’m happy to help you with your request either way. I need to collect your final payment for your 30 day notice and then your cancellation will be finalized. Please call or email me at your convenience to provide me with the billing information you would like to use for your final payment. Unfortunately we cannot use the card you have on file as for your security we only have access to the last 4 digits and all 16 are needed to process the payment.

I hope to hear from you soon.

Thank you for being a valued member of our club over the years.

John XXXXX
General Manager
Boston Sports Clubs
Wellington Circle
70 Station Landing
Medford, MA 02155
o: XXX.XXX.XXXX
e: XXXX.XXXXX@bostonsportsclubs.com

Edit: It turned out that the corporate office was able to cancel my membership without a final payment, but only because my case had special circumstances. The underlying business practice is still going on, and that’s why I’m leaving this post up for others to see.

Real immigration reform means forms that can be saved

Posted in Law, Money, Software on July 7, 2013 by daviddiel

There are many aspects of the US immigration system that need improvement. However, most people are unfamiliar with the types of frequent injustices faced by immigrants. Besides insane waiting times that destroy families and fees verging on extortion, there are also long forms that you must fill out that do not let you save your data.
CannotSaveForm

Every year, more than a million people fill out DS-230 Application for Immigrant Visa and Alien Registration (previous versions authored by “Butch”). This form is supposed to take about 1 hour to complete. Of course, it takes much longer than that, because you have to find the information to put in the fields. That’s when things get tricky, because you need to go look things up, but you can’t save the form. Furthermore, you know that one mistake could result in months of delay to your application process. As a result, tens of millions of hours have surely been wasted over repeated attempts to fill out this form correctly, all because somebody didn’t check a box to allow the form fields to be saved.

This is one small example, but it illustrates how a little bit of unaccountability in government can lead to lots of suffering for immigrants. Other examples include inability to change address, inability to renew a driver’s license, and inability to change employers, all of which have terrible repercussions. There is currently no appeal court for immigrants.

Toys from trash

Posted in Education, Money on May 19, 2013 by daviddiel

This TED talk and accompanying website has tons of toy designs that can be made from very inexpensive materials. These toys teach scientific and mathematical principles to kids in a most natural and easy way. I hope to use these on a classroom full of kids someday.

Why is the right to marry a foreigner less important than gay rights?

Posted in Law, Money on March 27, 2013 by daviddiel

Many people are concerned about the rights of gays to marry. But who will stand up for the right of a US Citizen to marry a foreigner? Marrying a foreigner is currently far more difficult, involving long periods of forced separation, high fees, invasion of privacy, and the summary judgement of a single unaccountable officer, with no right to appeal the decision for 10 years. The Supreme Court is debating gay marriage, and Congress is debating immigration reform, but this issue isn’t on their agenda. Let’s bring light to this injustice!