July 14, 2024

Economic Scene: Pro-Baby, but Stingy With Money

In December, Ross Douthat wrote an Op-Ed column for The New York Times titled “More Babies, Please,” which noted that the United States’ relatively high birthrates would give it an edge against aging rivals around the world.

But there is an odd inconsistency in conservatives’ stance on procreation: many also support some of the harshest cuts in memory to government benefit programs for families and children.

First Focus, an advocacy group for child-friendly policies, will release on Wednesday its latest “Children’s Budget,” which shows how federal spending on children has declined more than 15 percent in real terms from its high in 2010, when the fiscal stimulus law raised spending on programs like Head Start and K-12 education.

Some school districts have been forced to fire teachers, cut services and even shorten the school week. Head Start has cut its rolls. Families have lost housing support. And the 2014 budget passed by Republicans in the House cuts investments in children further — sharply reducing money for the Departments of Education, Labor and Health and Human Services.

Birth rates have dropped precipitously since the onset of the recession six years ago — to 63.2 per 1,000 women of childbearing age in 2011, the lowest at least since 1920. The total fertility rate of American women — the number of children they will bear in a lifetime — fell to 1.9, the lowest in a quarter-century, well below the 2.1 children per woman needed to maintain a stable population.

The abrupt decline has multiple causes, including less immigration from Latin America, where women tend to have more children. Bruce Sacerdote, an economist at Dartmouth College who has studied fertility, surmises that the deep recession and weak recovery produced enormous pessimism about the future, prompting many families to postpone plans to have children.

But perhaps the biggest factor affecting families’ decisions to delay childbearing, cut back on their numbers of children or even forgo having babies entirely is the cost of rearing them, either in money or the value of women’s time.

“It is all about the costs and the opportunity costs for women,” notes Professor Sacerdote.

After more than a decade of stagnant incomes, many families stressed by the rising cost of providing an education to their children appear to have concluded they are too costly.

Fertility can rebound. It has done so before. Birthrates plummeted in the 1960s and 1970s as women by the tens of millions opted out of their traditional role as housewives and mothers, went to college and got jobs — postponing and often forgoing what until then had been the classical American family of a single male breadwinner and a stay-at-home mother.

In economists’ terms, women’s “opportunity cost” of children rose. By the middle of the 1970s, the fertility rate of American women fell to just over 1.7 children from 2.7 a decade earlier.

But fertility didn’t continue to fall. By 1990, it had bounced back to around 2.1, the rate needed to stabilize the population.

In an important study, Professor Sacerdote and his Dartmouth colleagues James Feyrer and Ariel Dora Stern noted that families worked out a way for women to accommodate children and a job. In 1975, women performed three-quarters of the family hours devoted to child care, according to the Multinational Time Use Study. By 1995, they performed 60 percent.

In 2012, men in families with children under 6 spent 59 percent as much time as women performing primary child care duties, compared with 45 percent in 2003.

This shift in cultural norms within American families can explain why fertility in the United States is higher than in many other advanced nations — places like Japan, Germany, Spain and Hong Kong, where women still shoulder an overwhelming share of child care.

But though American families may have adapted better than others to women’s march into the labor force, the United States lags far behind in providing the government support that makes it easier for many couples to start a family.

There is widespread evidence that government assistance to families increases fertility. France’s generous child subsidies, for instance, have been credited with lifting that nation’s fertility rate above 2, from about 1.75 in the mid-1990s. A study in Quebec found that increasing benefits to new parents by 1,000 Canadian dollars increased the probability of having a child by 16.9 percent. One study in Sweden traced its higher fertility compared to other Scandinavian countries to government programs like paid leave and subsidized day care, which made it easier for mothers to work.

Article source: http://www.nytimes.com/2013/07/24/business/economy/pro-baby-but-not-in-an-economic-sense.html?partner=rss&emc=rss

Airlines Confident in Boeing’s 787, but Doubts Linger

Air accident investigators continued on Sunday to try to figure out why a parked 787 Dreamliner caught fire on Friday in London, while airlines around the world kept flying the plane and expressed confidence in it.

Passengers and investors in Boeing, the Chicago-based plane maker, were left to make their own calculations about how serious the problem would turn out to be.

In that sense, the situation seemed like a return to the limbo of early January, after a battery fire broke out on a Dreamliner parked in Boston and federal safety officials began an investigation. Only after a battery started smoking on another 787 days later were regulators compelled to ground the planes worldwide for four months.

Now, the latest episode raises its own puzzling question: Is the innovative jet passing through mere growing pains, or is there a more serious problem in its design or manufacturing?

Investigators in London have essentially put to rest any concerns about a repeat of the battery hazards. But it is still not clear whether the fire on the Ethiopian Airlines 787, which sat unoccupied in a remote spot at Heathrow Airport, was caused by something as simple as a galley stove that had been left on or a faulty component, or indicated a more serious problem.

Several of the 13 airlines flying the plane, including Ethiopian, and several that have ordered the planes, including Virgin Atlantic, said they were confident in Boeing and were sticking with the Dreamliner. Some frequent fliers and passenger-rights groups, however, were more skeptical.

“What do we tell consumers? ‘Flier beware,’ ” said Kate Hanni, the founder of FlyersRights.org, an airline passenger advocacy group.

Ms. Hanni, a real estate broker in Napa, Calif., said she was personally concerned because she and her husband were scheduled to fly to Tokyo on the Dreamliner in mid-August. Depending on the outcome of the investigation into the fire at Heathrow, she said, she might ask to fly on a different aircraft.

“I am very nervous about it,” she said. But, she added, “so far the Dreamliner appears to be safe while in flight.”

United Airlines, the only United States carrier that is flying the 787 so far, said on Sunday that it had not made any changes to its 787 flight schedule as a result of the fire. “We won’t speculate on the cause but will closely monitor the findings of the investigation,” it said in a statement. British Airways reiterated that it planned to start its Dreamliner service on Sept. 1.

Several airlines also said they had been in close touch with Boeing, which has sent a team to London to support the British investigators. Boeing said in a statement that the safety of passengers and crew members was “our highest priority.” It added: “We are confident the 787 is safe and we stand behind its overall integrity.”

Still, unless the cause of the Heathrow fire is pinpointed quickly, Boeing, the airlines and the Federal Aviation Administration could once again find themselves in a delicate spot in balancing passenger safety with high financial stakes, including millions in lost revenue that would come from any delays or suspensions in service.

Boeing and its suppliers have invested more than $20 billion in the Dreamliner, which uses lightweight carbon materials and more efficient engines to cut operating costs by some 20 percent. The company has delivered 68 of the planes to the 13 airlines, and it expects to sell thousands of the planes over the next two decades.

The F.A.A. and the National Transportation Safety Board, which investigates aircraft safety issues, are assisting the Air Accidents Investigation Branch in Britain with the Heathrow inquiry. Federal officials said the F.A.A. typically needs to have more information about what went wrong — and indications that the problems apply to more than one aircraft — before it takes any action.

Former federal safety officials said that so far they were not picking up the kind of urgent alarms about the Heathrow fire from current safety officials as they did after the Boston battery fire. Aviation consultants said the airlines were also not quite sure what to make of the problem, in part because Ethiopian Airlines workers could have made a mistake in doing maintenance on the plane.

Natasha Singer, Georgi Kantchev and Stephen Castle contributed reporting.

Article source: http://www.nytimes.com/2013/07/15/business/airlines-confident-in-boeings-787-but-doubts-linger.html?partner=rss&emc=rss

Special Report: Business of Green: An Energy Supergrid for Europe Faces Big Obstacles

LONDON — Advocates of renewable energy say an electricity supergrid could enhance the clean-power industry by connecting power sources like wind farms in Scotland and solar arrays in Spain or North Africa to the population centers of Europe.

The technical arguments for a significantly expanded and upgraded power network in Europe are clear, they say. Yet the political, regulatory and economic obstacles are formidable.

A supergrid “is absolutely essential” if Europe is to make widespread use of clean power supplies and significantly cut its emissions of atmosphere-warming carbon dioxide, said Doug Parr, chief scientist at the British arm of Greenpeace, the environmental group.

But “it’s not garnering political weight and support,” he said recently by telephone. “Things are proceeding, but they could proceed a little quicker if there was buy-in at a higher level” among the European Union’s institutions in Brussels.

With its windy weather, Britain could be a big beneficiary of better international power connections, eventually exporting energy to Continental Europe, experts in the renewable energy sector say. Supergrid advocates hoped London would be a driving force behind the idea, but they have not seen a significant push from the government of Prime Minister David Cameron, said Ana Aguado, chief executive of Friends of the Supergrid, an advocacy group in Brussels made up of companies that would help build the international network.

Britain is working with countries including France, Germany, Norway and Sweden to negotiate the North Sea Countries Offshore Grid Initiative, a planned network of underwater cables that would connect offshore wind farms and other power sources to nearby countries.

The project, likely to take decades, is seen as a potential building block for a broader European grid that could eventually stretch from Ireland to the Baltic states and as far south as North Africa, carrying large power loads on highly efficient direct-current cables.

Some cross-border power connections exist, but many European countries still produce and supply most of their own electricity or have links to just one other country. Experts say a richer cross-border network will reduce power prices for consumers and make supplies more secure by promoting competition and distributing surplus production more efficiently.

Renewable power advocates say improved connections are essential for making sources like wind and solar practical on a large scale. Potential energy-producing areas, like the windy coasts of Scotland and Ireland and the deserts of North Africa, are often far from larger cities with their power-hungry consumers.

Broad networks could also help ease one of renewable energy’s biggest problems: intermittency. When the wind drops in Britain, it may still be strong in Germany, or the sun may be shining in Tunisia. Households drawing power from a grid thousands of miles wide are less likely to be affected by the vagaries of any individual source’s output. That in turn means less need for expensive backup generating capacity from power plants that use natural gas or coal.

The Energy and Climate Change Committee of Britain’s main parliamentary chamber, the House of Commons, said in a report in September that a drastically improved grid would be crucial for the viability of the country’s plans for significant investment in offshore wind power.

For now, Britain “is virtually an energy island,” the report said, adding that the current approach of linking each offshore wind farm directly to land, rather than to a wider network, was costly and inefficient.

But the report listed several caveats about the development of a Europe-wide grid, saying the cost would probably be high and the challenge of coordinating national energy regulations would be daunting.

Tim Yeo, the committee’s Conservative chairman, said by phone recently that better connections would give the British energy industry access to big markets. It would also enable the country to make more use of wind power domestically by ensuring that imported power would be available in calm weather.

But he warned that the decades-long time frame for investing in energy infrastructure inevitably contrasted with the shorter-term focus of politicians.

Because energy is a heavily regulated sector, one of the biggest obstacles to building a supergrid is the long negotiations required to bridge differences among individual countries’ rules.

Budget woes, too, may limit the availability of investment from Brussels and national capitals.

Still, some advocates said poor economic conditions could actually make it easier to raise private financing.

Article source: http://www.nytimes.com/2012/01/17/business/global/17iht-rbog-grid17.html?partner=rss&emc=rss

Oil Spill Moves Toward Nigerian Coast

Royal Dutch Shell confirmed that the deepwater spill occurred on Tuesday during what the company called a “routine transfer” of crude from a floating storage device in the Bonga oil fields 75 miles offshore to a tanker; a leak in one of the transfer lines caused the spill.

The company said that at most about 40,000 barrels had been lost, which would be less than one percent of the oil thought to have spurted from the well beneath the Deepwater Horizon during the catastrophic Gulf of Mexico spill in 2010. The company also said that 50 percent of the oil had already evaporated into the air or been dispersed by wave action.

But Peter Idabor, the head of Nigeria’s National Oil Spill Detection and Response Agency, said the leakage could be three times as large as Shell contends and may be the country’s worst case of oil pollution in 10 years.

“This is potentially a major incident that is likely to affect the environment and the people for a long time,” Mr. Idabor said.

The spill also comes just days after Shell received final permission from the Obama administration to start drilling exploratory wells in the highly ecologically sensitive region of the Arctic, a fact not lost on American critics of the drilling.

“It is a reminder, also, that we have no business drilling for oil in the Arctic waters,” said Bob Deans of the Natural Resources Defense Council, a New York-based environmental advocacy group. “Look at what this oil is doing in Nigeria, then imagine trying to clean it up in waters choked with ice eight months a year, with gale winds and 20-foot seas, in a place a five-day cruise by cutter from the nearest U.S. Coast Guard station, in Kodiak.”

Shell has been blamed for many previous oil spills in the Nigerian Niger Delta, where a majority of the population lives in poverty atop some of the world’s richest reserves of oil and gas.

A United Nations environmental assessment report released in August said Shell’s operations were responsible for the contamination of farmlands and rivers in the Ogoni area of the Delta. Environmentalists say many oil spills go unreported, and they have accused the oil companies of deliberately underreporting those that do become public.

John Amos, the president of SkyTruth, a nonprofit organization based in West Virginia that provides independent information on environmental catastrophes, said that his group’s analysis of photos and satellite images indicated that Shell’s estimate of the size of the spill off the coast of Nigeria on Tuesday was not far off.

“We believe the spill is consistent with the high end of their estimate,” Mr. Amos said.

SkyTruth estimated the size of the slick at 350 square miles.

Nigerian lawmakers said Thursday that if the Bonga spill did indeed occur during a routine loading, that would indicate a weakness in operational standards. “The spill calls for a need to review the standards in the industry,” said Magnus Abbe, the chairman of the Senate committee on petroleum.

Shell said late Thursday that remotely operated underwater vehicles had confirmed that the spill was caused by a leak in a “flexible export line” that linked a tanker to a large floating storage container. David R. Williams, a Shell spokesman, said the company was investigating what caused the leak in the line feeding the tanker, as well as why the leak was not stopped before so much oil had spilled.

Shell has closed down the entire Bonga oil field, a site 75 miles off the coast of Nigeria that normally produces roughly 200,000 barrels of oil and gas a day.

Tony Okonedo, a Shell spokesman in Nigeria, said satellite pictures had shown that the overall area covered by the sheen was less than a hundredth of a millimeter thick in most areas and that the company was deploying considerable resources to combat it.

Among the tools Shell said it was using were five ships with dispersants, infrared equipment to locate areas in the slick where the sheen may be thicker and mapping of sensitive ecological areas on land and sea so booms could be placed strategically.

Musikilu Mojeed reported from Lagos, Nigeria, and Leslie Kaufman from New York.

Article source: http://www.nytimes.com/2011/12/23/science/earth/oil-spill-moves-toward-nigerian-coast.html?partner=rss&emc=rss

Justices Rule for Wal-Mart in Class-Action Bias Case

The suit claimed that Wal-Mart’s policies and practices had led to countless discriminatory decisions over pay and promotions.

The court divided 5 to 4 along ideological lines on the basic question in the case — whether the suit satisfied a requirement of the class-action rules that “there are questions of law or fact common to the class” of female employees. The court’s five more conservative justices said no, shutting down the suit and limiting the ability of other plaintiffs to band together in large class actions.

The court was unanimous, however, in saying that the plaintiffs’ lawyers had improperly sued under a part of the class-action rules that was not primarily concerned with monetary claims.

Business groups welcomed the decision, and labor and consumer groups strongly criticized it. But all agreed it was momentous.

“This is without a doubt the most important class-action case in more than a decade,” said Robin S. Conrad, a lawyer with the litigation unit of the United States Chamber of Commerce, the business advocacy group.

The court did not decide whether Wal-Mart had, in fact, discriminated against the women, only that they could not proceed as a class. The court’s decision on that issue will almost certainly affect all sorts of other class-action suits, including ones brought by investors and consumers, because it tightened the definition of what constituted a common issue for a class action and said that judges must often consider the merits of plaintiffs’ claims in deciding whether they may proceed as a class.

“You will have people invoking the decision in lots of different cases,” said Brian T. Fitzpatrick, a law professor at Vanderbilt University specializing in class-action law. “The Supreme Court has said that it’s O.K. to look at the merits of the lawsuit to decide whether to allow it to go forward at the earliest possible moment.”

Justice Antonin Scalia, writing for the majority, said the women suing Wal-Mart could not show that they would receive “a common answer to the crucial question, why was I disfavored?” He noted that the company, the nation’s largest private employer, operated some 3,400 stores, had an expressed policy forbidding discrimination and granted local managers substantial discretion.

“On its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action,” Justice Scalia wrote. “It is a policy against having uniform employment practices.”

The case involved “literally millions of employment decisions,” Justice Scalia wrote, and the plaintiffs were required to point to “some glue holding the alleged reasons for all those decisions together.”

The plaintiffs sought to make that case with testimony from William T. Bielby, a sociologist specializing in social framework analysis.

Professor Bielby told a lower court that he had collected general “scientific evidence about gender bias, stereotypes and the structure and dynamics of gender inequality in organizations.” He said he also had reviewed extensive litigation materials gathered by the lawyers in the case.

He concluded that Wal-Mart’s culture might foster pay and other disparities through a centralized personnel policy that allowed for subjective decisions by local managers. Such practices, he argued, allowed stereotypes to sway personnel choices, making “decisions about compensation and promotion vulnerable to gender bias.”

Justice Scalia rejected the testimony, which he called crucial to the plaintiffs’ case.

“It is worlds away,” he wrote, “from ‘significant proof’ that Wal-Mart ‘operated under a general policy of discrimination.’ ”

Nor was Justice Scalia impressed with the anecdotal and statistical evidence offered.

One of the plaintiffs named in the suit, Christine Kwapnoski, had testified, for instance, that a male manager yelled at female employees but not male ones, and had instructed her to “doll up.” Justice Scalia said that scattered anecdotes — “about 1 for every 12,500 class members,” he wrote — were insignificant.

Stephanie Clifford contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=268dba1ef86854368c58f9fd0af9aa0c

Bucks: Married Gay Couples ‘Refuse to Lie’ on Tax Forms

The
Courtesy of Equality Florida The “Refuse to Lie” campaign was created gay activists who believe that the federal government should acknowledge same-sex marriage.

What if You're Gay - Your Money - Bucks Blog - NYTimes.com

Some same-sex married couples are refusing to file their federal tax returns separately this tax season, as part of a movement demonstrating that they’re no longer content to quietly comply with the federal law that does not recognize same-sex marriage. And in some cases, these taxpayers will pay Uncle Sam more when they do so.

Same-sex couples who have married, or who have a legal status equivalent to marriage in certain states, must still file separate federal returns because the government — and therefore the Internal Revenue Service — defines marriage as a legal union between a man and a woman.

Using that definition, federal tax returns ask taxpayers to check one of five options under their filing status: single, married filing jointly, married filing separately, head of household or qualifying widow(er) with dependent child. Married same-sex partners typically file their own federal returns either as single or, if they qualify, as head of household, which has more favorable rates than the single filing status.

But many same-sex couples contend that filing as single amounts to lying about their marriage status, and that’s the message behind the “Refuse to Lie” campaign created by gay activists, which is timed to coincide with tax season.

“More people are refusing to lie on those forms, even though the government is telling them to,” said Nadine Smith, executive director of the gay, lesbian, bisexual and transgender advocacy group Equality Florida, who plans on filing a joint return with her wife, Andrea. “It would be both dishonest and deeply humiliating to now disavow each other or our marriage and declare ourselves single on our tax form.”

Nina E. Olson, the national taxpayer advocate who acts as an ombudsman for the I.R.S., acknowledged the uncertainty surrounding federal taxation of same-gender spouses in an annual report to Congress. In the report, she said that taxpayers may take a filing position without penalty if there is “substantial authority” to do so, such as a court case that hasn’t been overruled by the United States Court of Appeals. And there happen to be two such cases, which are currently on appeal.

In July 2010, the Federal District Court in Massachusetts declared the Defense of Marriage Act — the federal law known as DOMA that defines marriage as between a man and a woman — as unconstitutional in two cases. They are now being appealed in the First Circuit. “Thus, there may be substantial authority for same-gender spouses to take certain tax positions as married as long as the Massachusetts district court’s opinions stands,” Ms. Olson said in the report.

The “Refuse to Lie” Web site warns same-sex couples of the risks of filing jointly, and explains different options to both adhere to the law while expressing that they disagree with it. One way to do that would be to put an asterisk by the “single” box, and then indicate at the bottom of the tax form that you are “only single under DOMA.” Another option, the site says, is to attach a note with a similar message.

The campaign also explains on its Web site how to file a joint return while avoiding penalties. In the first method, each partner would file their own single return and include an attachment stating that they’re married, and then file an amended return jointly. “Once the I.R.S. rejects the amended return, or if six months passes and they do nothing, the taxpayers who file an amended return have the right to file suit in Federal District Court claiming the refund,” the activists’ site said, adding that this option would avoid penalties because your original return would be filed according to the law.

Another method suggests filing two returns: one filed jointly (and showing the tax due on the joint return) and one filed as a single taxpayer (showing the tax due on that return). Pay whatever is due on the single return — which means you will not have underpaid — and then ask the I.R.S. which return to accept. But if the I.R.S. accepts the joint return and issues you a refund, “there is no way to know what will happen if you are later audited,” the site said.

“People who follow this example need to do so with a clear head about the decision they are making and that what could happen is unclear,” Ms. Smith, of Equality Florida, said. “It’s not without risk.”

But there’s another way to preserve your right to collect any refunds due to you if the law is eventually struck down. Patricia Cain, a professor at Santa Clara Law and an expert on sexuality and federal tax law, said that couples who would benefit from a joint filing — that is, couples who would pay less in taxes or receive refunds — can file a protective claim using I.R.S. Form 843. (File separate returns in accordance with the law, then attach the form to an amended joint return).

“If you state on Form 843 that your claim is based on the unconstitutionality of DOMA, which is an issue pending in current litigation, it is more likely that the I.R.S. will do nothing until the issue is finally determined,” she added. “And if DOMA is struck down as unconstitutional, you should be entitled to the refund on the amended return.”

Although she generally recommends that same-sex married couples file their own returns in accordance with the law, she said that couples living in Massachusetts might be able to better justify filing their returns jointly because of the two court cases there.

“The question is whether that is sufficient as substantial authority to avoid being assessed penalties if you were audited by the I.R.S. and found to have filed incorrectly,” Professor Cain said.

She also said that she knew some same-sex couples in several different states who had filed joint returns and received refunds. “It’s because the returns are handled by machines,” she said, adding that the 1040 forms don’t have any gender markers on them. “That doesn’t mean they won’t be audited sometime. But honestly, I think the I.R.S. has bigger fish to fry than figuring out where same-sex couples filed jointly.”

Taxpayers who don’t pay the proper amount of tax will be levied a 20 percent penalty on top of the amount of tax owed. An I.R.S. spokeswoman said the agency followed the federal Marriage Act and declined further comment.

But for Kate Kendell it’s about more than the money. Ms. Kendell, executive director of the National Center for Lesbian Rights, said she and her wife, Sandy, who have been together for 18 years and have two children, are going to file as married this year (they married in California during the brief window in 2008 when same-sex marriage was permitted there).

“As a lawyer and a legal advocate for the L.G.B.T. community, I am often in a position to advise people to exercise great caution and to comply in most cases with the letter of the law, even when that means denying who we are,” she said. “This is my small way of saying, where we can, we are not going to play the game anymore.”

In their case, the move is going to cost the couple more than $5,000.

If you’re part of a same-sex couple and would like to file jointly, how far would you go to show that you disagree with the current law? And what does everyone else think about this effort?

Article source: http://feeds.nytimes.com/click.phdo?i=c9e8552f674bb1277242a3a8695383bc