Legalized Prostitution and Unemployment Benefits

I am not opposed to exchanges made between two competent adults not under duress; i.e., I generally favour the freedom to make contracts (with exceptions for contract killings, etc., so clearly the freedom of contract should not be absolute).

But here is a problem posed by an article in the News.Telegraph. Germany has legalized prostitution. Because prostitution is legal, women can have their welfare/ unemployment benefits reduced or eliminated if they refuse to take jobs that are legal (including prostitution), and so

“There is now nothing in the law to stop women from being sent into the sex industry,” said Merchthild Garweg, a lawyer from Hamburg who specialises in such cases. “The new regulations say that working in the sex industry is not immoral any more, and so jobs cannot be turned down without a risk to benefits.”

I find this appalling.

The government had considered making brothels an exception on moral grounds, but decided that it would be too difficult to distinguish them from bars. As a result, job centres must treat employers looking for a prostitute in the same way as those looking for a dental nurse.

No wonder the German birth rate is dropping if their bureaucrats cannot distinguish between brothels and bars.

Pointer from LloydC

Man Urinates Way Out of Avalanche

A survival story from AlexK:

A Slovak man trapped in his car under an avalanche freed himself by drinking 60 bottles of beer and urinating on the snow to melt it.
Rescue teams found Richard Kral drunk and staggering along a mountain path four days after his Audi car was buried in the Slovak Tatra mountains.

… He said: “I was scooping the snow from above me and packing it down below the window, and then I peed on it to melt it.

My guess is that the calories in the beer helped him stay warm and heat up the fluid; otherwise it might have been just as effective (and quicker) to pour the beer directly on the snow.

Afterthought: Does this really seem plausible? How long would it take to drink 60 bottles of beer? And how much did he sleep? And how long did his flashlight last (assuming he had one)? The reason I ask is that I know I would pass out after 6 bottles of beer. One of my former colleagues, however, ….

Welfare, Incentives, and Family Formations

Rodney Hide, a Member of Parliament in New Zealand, quotes this in his blog:

A married couple, with the mother at home looking after a baby and the father earning $12.50 an hour, will have annual income of $23,254 after taking into account tax, family support and child tax credit. In contrast, if they had decided not to get married, with the woman on the DPB refusing to name the father of the baby and the man living in the same house as a “boarder”, their household income would be $35,780, some 53 per cent higher.

Some of the commenters are outraged: “Don’t they know that is illegal?” which misses the point. People respond to incentives, and sometimes they/we even do illegal things in response to those incentives. Laws and policies which fail to recognize this are sure to generate unexpected and unintended results.

Capital-Labour Substitution in Fast Foods

What happens when the minimum wage goes up? Employers have an incentive to use more capital and less low-wage, typically unskilled, labour.

But how do they do that in the fast food industry? How do you replace burger-flipping socionomology graduates with machines? You don’t, necessarily, but you can replace order-taking socionomology graduates with cheaper labour and some capital:

The McDonald’s restaurant in Hermiston, Oregon appears to be
“outsaucing” customers [sic] drive-thru meals.

The restaurant on Highway 395 has outsourced one of the most important jobs at the drive-through window — order taking.

When a customer drives through, they’ll be patched through to Grand Forks, North Dakota to place the order. Why? Because the minimum wage in North Dakota is $5.15, compared to Oregon’s $7.25.

Thanks for the pointer to JC, who wonders, “And what is an hour call to North Dakota costing?”

My guess is that with satellite telecommunications, long-distance calls from Oregon to North Dakota can be sufficiently low-priced to make this arrangement profitable. But why Grand Forks? Why not Bangladesh?

So much for the studies claiming that increases in the minimum wage have no effect on employment in fast-food enterprises.

UPDATE: Phil Miller of Market Power has another example; this one is about four outlets in Missouri using a centralized call centre in Colorado. But in this case it is done to lower costs (presumably through economies of scale, specialization, and improved quality).

60% Turnout in Iraq

In an earlier posting, I speculated that the expected marginal benefits of voting in Iraq might very well be outweighed by the expected marginal costs, given the threats of violence. Privately, I was estimating more violence than was observed, and I did not expect this high turnout.

It looks as if the voter turnout in the Kurdish and Shia regions was very high, but was fairly low in Sunni regions. Overall, the turnout was likely over 60%. I’m impressed (and just a bit more hopeful, now).
I clearly underestimated the expected marginal benefits and/or overestimated the expected marginal costs of voting in the minds of many voters.

Gates and Buffett Short the U.S. Dollar

Alex Tabarrok of Marginal Revolution quotes from this Bloomberg article.

Gates’s concern that widening U.S. budget and trade deficits are undermining the dollar was echoed in Davos by policymakers including European Central Bank President Jean-Claude Trichet and German Chancellor Gerhard Schroeder.

… Gates reflected the views of his friend Warren Buffett, the billionaire investor who has bet against the dollar since 2002. Buffett said last week that the U.S. trade gap will probably further weaken the currency.

As you probably know, I share these views.

Another Internet Ad for an Automobile

If you liked the internet ad for the VW Polo, you might like this one, too.

There are similar items at this site.

And be sure to check out what Snopes has to say about this ad and its evil twin.

Another Internet Ad for an Automobile

If you liked the internet ad for the VW Polo, you might like this one, too.

There are similar items at this site.

And be sure to check out what Snopes has to say about this ad and its evil twin.

Another Internet Ad for an Automobile

If you liked the internet ad for the VW Polo, you might like this one, too.

There are similar items at this site.

And be sure to check out what Snopes has to say about this ad and its evil twin.

Pinot Noir v. Plonk

Anne Kingston ($) reports the following interesting wine sales data [hat tip to Jack]:

In Ontario, sales of pinot noir rose 10.5% during November, December and the first two weeks of January versus the same period a year ago, according to Liquor Control Board of Ontario spokesman Chris Layton. Such an increase is “pretty significant,” he says, even though red wine sales have been trending up consistently over the past 15 years. Still, sales of cabernet sauvignon, for instance, only rose 3% in the same period.

Similar growth in sales has been reported elsewhere. She attributes the rapid growth in sales of pinot noir to the praise it receives in the acclaimed film, “Sideways“:

[M]oviegoers’ enthusiasm for the film has resulted in what The New YorkTimes has coined “the Sideways effect.” On the basis of anecdotal evidence, the Times estimated thismonth that pinot noir sales in Manhattan have risen 20% since the film was released in October. Onestore in Union Square reported selling 100 cases over the holiday period, up from 50 the year before.

For the handful of you who’ve not yet seen it, Sideways is the tale of
two buddies on a tasting tour of California’s Santa Inez wine country. The main character, Miles, views himself as an oenophile, a word that can be, as it is in his case, synonymous with “bore.” He’s given to irritating wine-speak: He talks of getting a “soupçon of asparagus” from one wine and dismisses another as “quaffable but far from transcendent.” His grand passion, one he shares with many other oenophiles, is pinot noir. He dismisses other wines out of hand and is particularly disdainful of that crowd-pleaser, merlot. “If anyone orders merlot, I’m leaving,” he says at one point. “I’m not drinking any f—ing merlot.”

If I were traveling with someone who has this attitude, I might consider ordering merlot or some other plonk just to get the snob to leave. In the end, though, I don’t really care all that much. The only thing that matters to me is, “Does the bottle have a screw-top cap [thanks, Cynthia]?”