Blog

The Perils of the Restaurant Sector

There are approximately 15 million restaurant workers in the U.S. In Madison we see an artificial picture of this sector. You know what I mean: lithesome 20-year olds (Hi, I am Amy – or Josh—I will be your server this evening). These college students are happy with their periodic work in the “gig” economy. In economics we have a whole theory of the “permanent income.” These kids are pretty sure they will not be a waiter the rest of their life.

Go to a restaurant outside of a college town and you see broken down women (and a few men) still working because they cannot afford to quit. The average Social Security check in America is 2 about $1,500 a month. A career spent as a restaurant worker means a life spent living on tips— for which there is no payroll tax paid, and hence no credit for SS.

In Europe, restaurant work is a career path and it pays accordingly. Eating out in America is artificially cheap because we are shifting the financial burden on to restaurant workers. Resistance to salaried work in America’s restaurants is severe because it would raise the price point of meals by 10-15 percent. We are beguiled by the posted menu price, forgetting that we
must then add in a tip and tax at the end. The tip can be easily minimized. If we were faced with the full social costs of eating out, we would do it less. But the restaurants that survived would be properly priced and the workers would be treated as important parts of the business.

Once the crisis has passed, do not be surprised to see many restaurants reconfigured to bring employees into the wage/salary economy with fringe benefits. Eating out will become more expensive, and waiters will not try to charm us with their cute names

Dr. Daniel Bromley can be contact at dbromley@wisc.edu.

The Stock Market in Trouble: What is Going On?

As we watch the gyration in the stock market, the obvious question is –what is going on? Part of the answer is found how large corporations reward their executives.

Corporate pay in America has become exceedingly fixated on the value of the shares of one’s company in the stock market. All of the compensation packages over the past several decades have been driven by the idea that the corporation is an “asset” whose value is to be measured by its share prices. CEOs and other corporate leaders get massive payouts when the stock market surges. Worse, many (most?) of their actions have been geared to maximize the value of that stock so that they personally benefit. Indeed, since 1970 CEO compensation has tracked the S&P Index almost perfectly.

Only in America are the “multiples” at a bizarre level (the “multiple” being the ratio of CEO pay to “average worker” pay). The Trump tax cut of 2017 allowed companies to buy back their own stock—thereby inflating compensation to the very folks making a decision about how to allocate that bounty. None of that bounty was devoted to increasing worker pay.

So, as you watch the stock market decline, you may usefully consider it as a “take back” of most of the gains of the corporate sector that has been successful in driving up their own compensation schemes. Those folks are now stripped of something that was a contrivance of their own duplicity. How much correction is required to strip away their contrived earnings is unknown.

Dr. Daniel Bromley can be contact at dbromley@wisc.edu.

South Sudan: Institutions for Job Creation and Sustainable Livelihoods

South Sudan: Institutions for Job Creation and Sustainable Livelihoods

Work is essential to emotional thriving and stable communities. Engagement in work is essential to the full realization of being human. Unwilling idleness not only brings material suffering. Idleness gives rise to feelings of alienation from the on-going life of the community. Alienation is a psychological condition of estrangement between the individual and the world in which that individual must survive and flourish. A more serious aspect of unwanted idleness is that it can lead to civil conflict as young males confront a life without economic security and the hope of family formation. A reliable predictor of social unrest is the unemployment rate among males aged 16-30. What are the institutional impediments for meaningful employment in South Sudan? Why has job creation failed to materialize?

Country Policy and Instituational Environment

Country Policy and Instituational Environment

South Sudan became an independent nation on July 9, 2011. Eight years later it is still not a coherent state. Coherent states require two essential attributes—one of which is structural in nature, the second of which concerns processes. When these two necessary conditions are absent, the economy cannot perform its necessary functions, and civil conflict is inevitable. These necessary structural and procedural parameters are institutions.

South Sudan: The Institutional Environment For Service Delivery

South Sudan: The Institutional Environment For Service Delivery

South Sudan became an independent nation on July 9, 2011. Eight years later it is still not a coherent state. Coherent states require two essential attributes—one of which is structural in nature, the second of which concerns processes. When these two necessary conditions are absent, the economy cannot perform its necessary functions, and civil conflict is inevitable. These necessary structural and procedural parameters are institutions.

Reducing the Resource Gap in the FY2019/2020 Proposed Budget Through Transparency and Accountability in the Management of Oil Revenues

 Abstract: The FY2019/2020 draft budget of the Government of Republic of South Sudan (GRSS), which is going through various stages of parliamentary reading at the Transitional National Legislature (TNL), has a huge resource gap of SSP77 billion (or USD497 million)! The central premise of this paper is that this gap could be reduced significantly through innovative approaches within the overall framework for transparent and accountable management of   GRSS’ share of oil revenues. 

Reducing The Resource Gap in the FY2019

Risk Assessment of the Mining Industry In South Sudan: Towards a Framework For Transparency and Accountability

Risk Assessment of the Mining Industry – Peter Adwok Nyaba July 2019
 

This study, “Risk Assessment of the Mining Industry in South Sudan: Towards a Framework for Transparency and Accountability”, was commissioned by Ebony Center for Strategic Studies. It commenced in the second week of May 2019 and was completed by the first week of June. Mr. Azaria Gillo, a geologist working in the Ministry of Mining was my research assistant and his contribution led to the success of the research work. I thank him very much.

South Sudan Country Policy Environment: A Call for Institutional Readiness Assessment

To be funded by United States Institute of Peace (USIP) — On July 9, 2011, the Republic of South Sudan celebrated its independence. The country began its life with significant natural resources and a binding narrative of triumph and freedom, but with a legacy of over 50 years of conflict and an extremely low level of physical, human and institutional development (2012:1). The above passage from the World Bank is an important point of departure for this concept note on the urgency for an institutional assessment as one of the key pre-requisites for recovery and resilience programs, which the development partners are formulating.

 Feb. 18. Institutional Readiness Needs Assessment