Matthew Ferry's List: Domestic Economics

• New York passed a law called the Bakeshop Act. It didn't set a minimum wage — the minimum wage didn't exist yet in the U.S. — but it limited working hours and required that bakeries be kept clean.
• Several decades later, Franklin D. Roosevelt was president. To fight the Depression, he wanted to put money in peoples' pockets. "If all employers will work together to shorten hours and raise wages, we can put people back to work," he said.

• Perhaps more powerful than the sign were the perks that went along with agreeing to offer higher wages: Participating businesses were allowed to form cartels and set prices. (At the time, the country was suffering from deflation, with prices and wages plunging.)

• The act, "applying to products in interstate, ends child labor, sets a floor below wages and a ceiling over the hours of labor," Roosevelt said at the time.

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• It pretty much won, convincing regulators that forcing banks to get rid of a complex debt security used by smaller institutions to raise capital would impose immediate and unnecessary costs on small community banks.

• Regulators creating international banking standards in Basel, Switzerland, have also faced a drumbeat of criticism from bankers who argue that proposed rules to increase the capital cushion international banks must amass to buffer against losses would slice 3.5 percent from the world’s economic output and cost 7.5 million jobs.

• Consider joblessness, which damages physical and mental health and breeds poverty, which contributes to crime. It affects the structure of families. Only about 500,000 new households were formed each year from 2007 to 2010, a third of the average pace during the previous decade.

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• “Increased droughts, more unpredictable variability, 100-year floods every two years,” said Jeffrey Seabright, Coke’s vice president for environment and water resources, listing the problems that he said were also disrupting the company’s supply of sugar cane and sugar beets, as well as citrus for its fruit juices. “When we look at our most essential ingredients, we see those events as threats.”
• Their position is at striking odds with the longstanding argument, advanced by the coal industry and others, that policies to curb carbon emissions are more economically harmful than the impact of climate change.
• Both Nike and Coke are responding internally: Coke uses water-conservation technologies and Nike is using more synthetic material that is less dependent on weather conditions. At Davos and in global capitals, the companies are also lobbying governments to enact environmentally friendly policies.

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• For last month, despite what seems like an endless series of snowstorms on the East Coast and arctic conditions in the Midwest recently, the reference week for the latest survey was Jan. 12-18, when conditions were fairly normal as Januaries go, limiting some of the impact of the weather in this report.

   

• "Gross National Product does not allow for the health of our children, the quality of their education, or the joy of their play," he said. "It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate, or the integrity of our public officials."

• Both Newman and Barankay suggested that other states and cities would take the cue from Los Angeles and introduce their own higher minimum-wage levels. Other big U.S. cities that recently increased the hourly minimum wage include Chicago ($13 by 2019), San Francisco ($15 by 2018) and Seattle ($15 from April).