LeBron James failed to take the opportunity to deny that he would move from the Cavaliers to the Knicks next summer, according to reports.
Speculation over the possibility of James leaving Cleveland next summer, when he can opt out of his contract, has grown over the past few months.
After losing the NBA Finals 4-1 to Golden State Warriors, losing General Manager David Griffin and possibly teammate Kyrie Irving, James is said to be unsettled in Cleveland. A move to the Lakers has been suggested; a return to Miami Heat, too. But Clippers star Blake Griffin had a dfferent take, saying he doesn’t expect James to be heading for L.A. next summer, but could see him wearing a Knicks jersey in 2018.
“Honestly, I don’t see him coming to L.A.,” Griffin said on the ‘View From The Cheap Seats’ podcast earlier this week. “I think something is brewing with him and his group of guys. I don’t know what’s going to happen, but something’s brewing. And I think they’re going to try to make that work.
Related: LeBron James Misunderstanding Led to Kyrie Irving’s Trade Request
“I could see him going to New York before L.A. I still think, when you go to the Garden, it’s a completely different feeling. The energy there seems like there’s just a continual buzz the entire game.”
But when a TMZ photographer asked James about Griffin’s thoughts, he failed to confirm or deny any potential move; James is keeping his cards close to his chest.
“I don’t even know what you’re talking about, shawty,” James said. Those words reveal little over whether James will leave Cleveland next summer, or where he would go. But they suggest that he would not rule out heading to New York.
For now, James will continue to try and keep his Cavs team together in Cleveland as it prepares to bounce back next season.
LeBron James at ORACLE Arena, Oakland, California, June 12. Thearon W. Henderson/Getty
This article first appeared on the Hoover Institution website.
The topic of gender discrimination in the workplace is making headlines again thanks to two recent events.
The first is the release of the report “Women in the Workplace 2015” by Sheryl Sandberg’s LeanIn.Org and McKinsey & Co. Sandberg, writing in The Wall Street Journal, uses the report to conclude: “despite modest improvements since 2012, women remain underrepresented at every corporate level.”
The second, well critiqued by Sarah Ketterer, is the California Fair Pay Act, now awaiting Governor Jerry Brown’s signature. That bill would make it unlawful for employers to pay men and women different wages for “substantially similar work.”
Touted as an extension of California’s current Equal Pay Statute, the bill “would revise and recast the exceptions to require the employer to affirmatively demonstrate that a wage differential is based upon one or more specified factors, including a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or a bona fide factor other than sex, as specified.”
Both the report and the bill assume that something is deeply amiss in employment markets, which is leading to gender discrimination.
It is notable that there are no legal barriers to entry for women in virtually all professions. Indeed, a robust set of antidiscrimination laws are already on the books at both the federal and state level, which reflect a strong social sentiment against discrimination on the grounds of sex. At no point in the modern debate has anyone claimed, let alone demonstrated, that any institutionalized animus against women or even disparate treatment of female employees exists.
Sandberg’s Wall Street Journal op-ed rightly notes that the gender differences persist, notwithstanding the large percentage of CEOs that put the goal of improving gender diversity at the top of their list of priorities. Whether one calls this smart business acumen, affirmative action, or reverse discrimination is beside the point. What remains clear is that observed differences in the types of jobs taken by men and women are not attributable to any scheme that is tolerated at the firm level, let alone imposed by government.
We should hardly expect that any systematic discrimination against female employees would be tolerated now that women in large numbers have founded their own businesses and have risen in managerial ranks. The days of the all-white male boardroom are gone forever.
Similarly, in dealing with the wage gap between men and women, a careful analysis would show that the key drivers of that relate to factors that are not easily controlled within the workplace, and all of which are beyond the reach of the law.
The first is the choice of occupation. More men take more training in fields involving mathematics, computers, engineering and the sciences, notwithstanding the efforts at the undergraduate level to increase female participation in these areas. Math and science are critical to creating new technologies, so we should not be surprised if the number of male executives exceeds the number of female ones at start-up companies, where of course traditional hiring issues play no role.
The second key driver of gender differences in pay is the work/lifestyle trade off. Many women with children have a divided commitment to the workplace, given their greater commitments at home. An efficient division of labor within a marriage will typically require some level of specialization between the spouses, which is reflected in the well-established fact that men tend to put in substantially longer hours in the workplace than do women.
And last there is the question of what counts as a comfortable workplace environment. Sandberg notes that both married and unmarried women “cite stress and pressure” as the main reason why they choose not to pursue top leadership roles at work.
But it not possible to engineer these elements out of such positions in major firms. Senior executives have to travel a lot, spend weekends and nights on the job and constantly negotiate with difficult adversaries. Part-time employment and job-sharing are out.
One possibility that Sandberg does not mention could help explain why men and women take different paths in the workplace: Each employee makes a choice about the kind of job and lifestyle he or she wants. This hypothesis puts a very different spin on the observed data dealing with both promotion and wage differentials.
The LeanIn.Org/McKinsey report notes that at every level, the rate of expected advancement by women is 15 percentage points lower than it is for men. The report concludes that this fact “suggests that women face greater barriers to advancement” than men.
What the report misses is an alternative hypothesis for the observed trends. The report notes that women in entry and lower level positions are much more likely to choose jobs with support obligations rather than jobs with direct profit/loss responsibilities. Those choices are exactly what we should expect of women trying to balance corporate life with family life to a greater degree than men.
The reason why there is little movement in the aggregate numbers of high-level female executives is that the market is already in a stable equilibrium, driven as much as by women’s choices as by firm policy.
At this point, the only way in which the numbers are likely to change is if CEOs put more pressure on their managers to promote women to higher positions, even at the cost of displacing men who are better suited for those positions. Firms have probably done this already to an extent, so that by now most of the low-hanging fruit has been picked. The effort to create proportionality by gender in the executive suite creates greater internal pressure and subsidies.
Sandberg is right to insist that firms that ignore the female talent pool run the risk of falling behind. But by the same token, extra efforts to move the needle to favor female leaders could easily create performance and morale problems within firms, which in the end works to no one’s advantage.
No one is safe in making general prescriptions for all women in all corporate firms. A decentralized set of decisions by individual firms that trade off the benefits of greater female participation against other firm benefits is the way to go.
It is just these decentralized decisions that are totally disregarded in the California Fair Pay Act. In a given market system, the correct way to determine fairness is to ask whether the various decisions on pay and employment were made voluntarily—that is, were they made in a competitive market in which neither force nor misrepresentation was used by any party?
The term “fair” is twisted when it is used to argue that the outcomes of a fair process are unfair unless they meet someone’s preconceived external vision of what counts as a fair distribution of jobs and wages.
The Fair Pay Act shows a complete disregard of the fundamental principles of economics. It starts off with the usual overstatement of gender inequality when it notes that women in California earn 16 cents less on the dollar than men (which is a smaller gap than the national average of 22 cents). But it does not mention what corrections should be made for the variables mentioned above.
It then notes that the gap is still greater for Latina women, who make 44 cents less per dollar than white men, again without any correction, including for English language skills. The bill then announces the astonishing fact that “women working full time in California lose approximately $33,650,294,544 each year due to the gender wage gap”—based on the absurd assumption that every last dollar of the difference is due to improper factors.
To attack this imaginary pay gap, the Fair Pay Act adopts an administrative quagmire that makes it possible for dissatisfied employees to compare wages not only within firms, but also across different firms, where the comparisons are much more elusive, because prevailing wages and market conditions vary widely across the state.
Even the four exceptions to the law mentioned above—seniority system, a merit system, an output measure and bona fide factors other than sex—all bristle with interpretive difficulties. Rather than face these head on, the bill dumps the matter into the California Division of Labor Standards Enforcement , which in a heavily Democratic state is likely to be stacked with pro-worker members.
The sad point is that this entire exercise is unnecessary. An employee’s wage is usually determined after the employer takes into account all of the factors that were listed in the statutory exceptions. If there is an imbalance in one market segment, wages will adjust up or down until the market returns to equilibrium. The implicit assumption of the bill is that these opportunities exist, but firms will seek to profit from them without a shove from California’s benighted legislative Solons.
One incidental tragedy of this warped legislative proposal is that it makes a voluntary job change more difficult to implement. Any change, especially one that reduces the wages of the female employee, will be routinely subject to administrative second-guessing.
The bill makes explicit provision for a “civil action” which could be brought either by the Division or by a private attorney, seeking “the balance of the wages, including interest thereon, and an equal amount as liquidated damages, together with the costs of the suit and reasonable attorney’s fees, notwithstanding any agreement to work for a lesser wage.”
Of course, the bill contains no provision that allows a successful employer to recover its reasonable attorney fees from either the Division, the plaintiff, or his or her law firm. The asymmetrical outcomes are likely to distort labor markets further, and to give firms a strong incentive to expand their businesses elsewhere and even to transfer existing work out of the state.
The overall situation does not bode well for California. Worse still, a progressive Democratic presidential administration headed by either a Hillary Clinton or a Bernie Sanders is likely to treat the California legislation as a prototype of action that could be taken at the federal level, either by legislation or, more likely, by executive order.
It is a telling sign of today’s bad intellectual climate that proposals about how to fix the executive suite or to improve the lot of employees show no awareness of how labor markets actually work.
Labor markets are still in the tank with overall participation levels lower than ever. These proposals will only make matters worse.
Richard A. Epstein is the Peter and Kirsten Bedford senior fellow at the Hoover Institution.
South Africa’s competition watchdog has accused 17 international and local banks of colluding to fix the price of the country’s currency, the rand, over the past decade.
The Competition Commission said in a statement Wednesday that workers at more than a dozen global banks, including Barclays, HSBC, JPMorgan Chase, were involved.
Workers used instant messaging to collude on when to begin or halt trading to change the value of the rand. They also manipulated the prices of bids and created fake bids at certain times.
The Commission recommended that South Africa’s Competition Tribunal prosecute the banks and fine them 10 percent of their annual in-country turnover.
There have been major cases of foreign exchange manipulation in other parts of the world in recent years: five of the world’s largest banks—including JPMorgan Chase and Barclays—were fined $5.7 billion for rate rigging in the U.S. in 2015.
Several of the banks have said they will cooperate with South African authorities on the matter.
The findings, which come at the end of a two-year investigation, have provoked mixed reactions among South Africa’s political class. The ruling African National Congress (ANC) said it took an “extremely dim view” of the alleged price-fixing.
“The profit-driven assault on the South African rand through such collusion and corruption by the banks flies in the face of efforts by the South African nation to prosperity for all,” an ANC statement said.
The left-wing opposition Economic Freedom Fighters (EFF) said it would write to the country’s reserve bank to request that the banks involved have their trading licenses revoked. “We believe collusion around South Africa’s currency is treacherous and should be treated as such,” said the EFF.
But the main opposition Democratic Alliance, (DA) while condemning collusion as something that “ultimately hurts the consumer,” said the ANC had “prejudged the outcome of the case.” The DA’s shadow minister of economic development, Michael Cardo, said it “was clear” from President Jacob Zuma’s State of the Nation address on February 9 that he “intends to use the competition authorities as a tool of his populist and destructive agenda of ‘radical economic transformation.’”
Relations between the president and the banking sector are already tense after the banks closed the accounts of companies associated with the Guptas, a business family accused of using its close links with Zuma to wield political power.
South Africa’s economy recorded a sluggish 0.2 percent GDP growth in the last quarter, despite the country overtaking Nigeria in 2016 as Africa’s largest economy. Unemployment remains high and business confidence has reportedly been shaken by the unstable political situation.
Zuma has been implicated in multiple personal scandals over the past few years, including use of state funds to build a swimming pool and other amenities at his residence in Nkandla. The ANC also recorded its worst election result since 1994 in August 2016, when it lost control of the economic capital Johannesburg and several other key urban hubs.
Ukraine's Minister for Trade and Economy says that he wants Ikea to open a store in the country to show that the government has made progress in its battle against corruption.
In an interview with Swedish financial daily Dagens Industri, Aivaras Abromavicius said: "We hope that Ikea will open a store. It would be an important symbol, because of its good reputation and the fact that it doesn't pay bribes."
According to Agence France Presse, Ikea announced in 2009 that it wanted to open an outlet in Ukraine. However, after purchasing land outside of Odessa, the plans were dropped because Ukrainian officials had requested bribes.
In 2014, Bloomberg reported that almost half of Ukrainians wanted an Ikea store over any other global brand. In the same article, Bloomberg quoted Lennart Dahlgren, the former Ikea Russia executive, as saying in a 2010 interview with Russkiy Reporter magazine that he met with every president and prime minister in Ukraine since 2004 and they all said they wanted an Ikea in the country. "But we weren't able to make a deal because Ikea's system didn't have any money for bribes," Dahlgren was quoted as saying.
Abromavicius, who was visiting Sweden for the baptism of a friend's child, told Dagens Industri: "Now we are reaching out to Ikea. This time it's different."
Abromavicius also said that the Ukrainian economy was now stable. "When we took over, the treasury was empty and we had a huge debt," he said. "Since then, we have agreements with lenders, a 20 percent write-down of loans and the extension of the maturity."
A spokesperson for Ikea says the company is preparing a statement in response to Newsweek's questions. But the spokesperson was not able to respond in time for publication.
This article first appeared on the Foundation for Economic Education site.
Donald Trump is worried about working-class men in this country.
He’s not wrong to be worried. “The problem of labor market non-participation is particularly severe among men,” writes Eli Lehrer, president and co-founder of the R Street Institute for National Affairs.
Since the 1950s, the percentage of men who are in their prime working years who do not work has more than tripled. Since then, while men's workforce participation rates have consistently fallen, women have increased their labor participation. In 1948, women made up less than a third of the workforce. Today, women make up almost half of all workers.
In 1950, a quarter of all workers worked in manufacturing. In 2015, that number was 8 percent.
Why? We have outsourced and automated most of our low-skill jobs.So if outsourcing is the problem, isn’t insourcing the solution?
“People who are not economists often believe, incorrectly, that the United States can never compete with countries like China, where labor costs are a fraction of those here,” Bruce Bartlett wrote presciently in The New York Times in 2013. “This leads them to think that tariffs and import restrictions are an appropriate policy response.”
Trump is among these people. He blames international trade, which he derides as “globalism,” for the plight of the low-education American male. He’s promised to jettison any trade deals that might result in job losses for American workers.
One problem with Trump’s analysis is that robots have done at least as much, if not more, to eliminate agricultural and manufacturing jobs in the U.S. than outsourcing.
“Job losses due to automation and robotics are often overlooked in discussions about the unexpected rise of outside political candidates like Trump and Bernie Sanders,” Moshe Vardi, an expert on artificial intelligence at Rice University, told GeekWire.
A recent study showed that 85 percent of the job losses in manufacturing from 2000 to 2010 resulted from productivity growth, not outsourcing. The Center for Business and Economic Research at Ball State University found that in that period, 5.6 million factory jobs disappeared, but trade accounted for just 13 percent of those job losses.
And the robots aren’t done yet. Up to 47 percent of all U.S. jobs could be automated within the next two decades, according to estimates by Oxford University researchers.The second problem is that trade enriches the U.S.
Global trade makes us richer by making our workers more productive.
Global trade means that even if the factories are located in different countries, they can still compete with each other. Which means China’s innovations can incentivize U.S. productivity.
At the same time, as global trade incentivizes greater worker productivity, it lowers the cost of producing goods. You cannot do one without the other.
If trade is so great, why don’t people like it more?
Because the drawbacks are brutal, readily apparent and easy to understand, while the benefits are less intuitive, more complicated and harder to measure. You can see a closed factory and a lot of “For sale” signs. You can’t see productivity gains.
People see and feel the negative impact of global trade when their factory closes and they can’t sell their house because everyone else is trying to move away at the same time because there’s nowhere else to work in their tiny town.
As horrible as that is for the people affected, most people do get other jobs. In the 1800s, 80 percent of the U.S. labor force worked on farms. By 1945, 16 percent of the total labor force worked in agriculture. In 2014, that number was less than 2 percent.
When agriculture labor shrank to almost nothing, what happened to all those workers and all those farms? “Obviously mechanization didn’t destroy the economy,” author and entrepreneur Martin Ford told Wired. The vast majority found more productive ways to spend their days, and the fields found more productive uses as well.We’re producing more than ever before
Manufacturing employment has been falling for more than 30 years, but U.S. manufacturing output is near its all-time high. According to the Los Angeles Times, over the past 20 years U.S. manufacturing has seen real, inflation-adjusted output increase by almost 40 percent. “Annual value added by U.S. factories has reached a record $2.4 trillion.”
Rather than race to the bottom to depress wages, U.S. businesses have instead poured their resources into building robots that help make American workers get more done in less time. Instead of making shoes and shirts, American factory workers refine petroleum; produce prescription drugs; fabricate metals; work with plastics; and build cars, planes and aerospace equipment.
The U.S. has better technology, and our workforce has more skills and education than the Chinese. That means we offer the world millions of better-quality, more consistent products than China can offer at the same price. And we’re better paid as a result. Total manufacturing payrolls have risen over the past decade even though we’ve employed fewer workers.Most people do not notice, recognize or appreciate economic growth.
Free trade is like air. You don’t notice it until it’s gone, but when it’s gone, you notice in a hurry.
None of this is mere theory. We know how trade restrictions work because we’ve tried them before.
Europe tried it. In the 18th century, various countries implemented a trade theory called mercantilism. Instead of competing to achieve the highest productivity and the lowest prices, countries competed to see who could make trading with them least appealing. Not shockingly, the result was higher prices and lower productivity.
Perhaps thinking that what worked long term for no European country ever would work for the U.S., Herbert Hoover signed the Smoot-Hawley Tariff into law in 1930. It artificially raised prices for imported goods in order to protect U.S. businesses from overseas competition.
Unfortunately, America’s trading partners did not appreciate the American government making it more difficult for Americans to buy their goods. So they artificially raised the prices of American-made goods. In the end, according to former Federal Reserve Chairman Ben Bernanke, “Economists still agree that Smoot-Hawley and the ensuing tariff wars were highly counterproductive and contributed to the depth and length of the global Depression.”
“In the 19th century, this penchant for industrial protectionism and mercantilism became guild socialism, which mutated later into fascism and then into Nazism,” according to economics writer Jeffrey Tucker. By restricting trade to try to unfairly advantage U.S. businesses, the U.S. government not only failed to do so but inadvertently helped incentivize countries to try guild socialism in retaliation.
How interesting that the catastrophic economic mistake that helped give birth to fascism in Europe has been given new life by a wannabe fascist dictator in the U.S.
The U.S. government did not succeed in strong-arming nations into unfair trade deals in the 1930s, and it won’t do it today either.
Using government force to protect American workers from foreign competition will always lead to the same results: less trade. And possibly fascism. At the very least, America will once again lose out on the productivity gains and price decreases that trade creates.Watching poor Americans struggle is not easy
The truth is that while most workers will find more productive jobs, some will not. All the cheap cellphones in the world can’t console someone who’s lost a job and can’t find another one.
High levels of debt, copious regulations and high corporate taxes mean the American economy is not yet growing fast enough to absorb all of the workers displaced by global trade and automation.
Trade does increase average worker productivity, but unfortunately that means workers who are not able to improve their own productivity are left out in the cold. When the factory closes and the 53 year-old diabetic factory worker with no degree, no computer skills and a mortgage loses his job, no amount of Wal-Mart’s everyday low prices will soothe that loss.
First we need to recognize that international trade has been an unmitigated success at increasing American prosperity on net. But then we need to stop pretending that free trade is a good deal for everyone. Automation has displaced many workers, particularly those with low skills and low education. If we’re going to take advantage of the tremendous on-net benefits from trade, the least we can do as a country is to make sure everyone benefits on net.
We should replace our hole-ridden patchwork of wasteful welfare programs with a well-functioning safety net, one built on human volition rather than force and one that energizes the extraordinary generosity of the American people. This would be a much better move for the Americans displaced by trade than Trump’s disastrous plans.
Ironically, the very people who oppose a government-provided social safety net because they object to helping a small number of Americans at the expense of everyone else want to do exactly that by restricting trade. But unlike public assistance, trade barriers have a storied history of tanking economic growth.Protectionism won’t bring back jobs
If Trump gets his way, those jobs aren’t coming back.
First, they’re not coming back because they never left. Unless Trump wants to go around smashing robots, repetitive, low-skill jobs are not the future of the American workforce. And thank God. Restricting trade to protect jobs is choosing lots of work and little money over lots of money and little work.
Furthermore, what’s ironic about Trump selling protectionist trade restrictions as a solution to American poverty is that protectionism raises prices on household necessities, which hits poor Americans first and hardest.
The only thing that is sure to happen as a result of the U.S. erecting barriers to trade is that the U.S. will trade less with the rest of the world. The U.S. will not succeed in strong-arming nations into unfair trade deals. Global trade will continue with or without the U.S.
We cannot sacrifice economic growth to protect jobs that are not productive by hamstringing our ability to take advantage of gains from trade. Doing so is sacrificing the entire country for a small group. Instead, we should take care of the people trade left behind while innovating and growing the economy on net by trading with all nations.
Cathy Reisenwitz is editor-in-chief of Sex and the State.
This article was first published on the Cato Institute site.
Republican presidential candidate Donald Trump visited Mexico on Wednesday and met with Mexican President Enrique Peña Nieto.
In a press briefing after the meeting, Trump spoke about immigration and trade in a much more civil tone than he typically uses on the campaign trail.
Trump’s remarks about trade and NAFTA were especially interesting.
After claiming repeatedly that increased trade with Mexico “destroyed” the American economy, this is a whopper of a change in rhetoric.
Trump didn’t stop treating trade as a zero-sum game, but he added Mexico to our team. He said “our hemisphere” where he would normally say “America.”
An unfortunate reality of politics is that international trade is almost always discussed as a competition between us and them. They see protectionism as a way to “level the playing field” instead of as the special interest rent-seeking that it really is.
Politicians use the term outsourcing to ostracize members of team us who employ members of team them. Even when making a pitch for free trade, President Obama has said that we need the Trans-Pacific Partnership so that “the rules of trade” will benefit us (America) instead of them (China).
One big problem with this approach is that there is no economically rational or morally justified line to tell us who belongs in the us group and who is them. Nationalism is a politically convenient sort of tribalism, but there’s no objective reason why Michigan and California should be considered economic friends on a team that fights against Mexico.
Just as socialists have to claim that class lines are hard and objective, nationalists have to convince people that some lines on a map matter more than others.
It’s easy for politicians to draw a bigger circle (say, North America) or smaller circle (say, Ohio steel workers) when it serves their purposes. That’s just what Trump did on Wednesday in Mexico.
When you change who counts as us and who counts as them , interesting things can happen. Trump was willing to include Mexico in the us team, but still needed a bad guy, so he warned of competition from China.
Now that we’re on the same team, we can work (“beautifully”) together to protect ourselves against competition from them. It makes it possible for Trump to support NAFTA (once it’s vaguely “improved”) as a way to strengthen our team.
Even if politicians are set on dividing the world into us and them, there’s room for progress as long as the us keeps getting bigger and the them keeps getting smaller and farther away.
The U.S. economy will be better off if our politicians confine their belligerence to countries we don’t trade very much with. That’s why, even though everything Trump says about trade is wrong, it’s better if his scapegoat isn’t Mexico.
Now if we could just get Trump to visit China.
K. William Watson is a trade policy analyst with Cato’s Herbert A. Stiefel Center for Trade Policy Studies.