Economics in the News – Oct. 2-8, 2023
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Harvard professor Claudia Goldin has been awarded the Nobel Prize in Economic Studies for her work in studying women in the work force. She becomes the third woman to win the Nobel Prize in economics, which was first awarded in 1969. She is the first woman to be honored solo rather than sharing in the prize.
Goldin studied the causes of the gender wage gap, the evolution of women’s participation in the job market over the last 200 years, and the implications for the future of the labor force. The Nobel committee praised Goldin’s efforts to show that employment among married women decreased in the 1800s, as the economy moved away from agriculture and toward industry. And it shifted once again in the 1900s with the expansion of the service sector. [The New York Times]
o Have you noticed a decrease in traffic stops and the writing of tickets since the pandemic? Since the intense social conflict that began in May 2020, the role and control of police have been under intense scrutiny. That has resulted in many US cities where police forces have dramatically reduced their low rate of traffic enforcement. But since the pandemic, the United States has seen a surge in traffic fatalities. More than 46,000 people died in car accidents in 2022, an 18 percent increase from 2019. According to the CDC, deaths from automobile crashes increased 28 percent from 2019 to 2022 in central counties of larger metropolitan areas, compared to just 6.6 percent in counties that are more rural and aren’t part of metropolitan areas.
While national data for traffic stops is limited, the Bureau of Labor Statistics’ most recent Police-Public Contact Survey in 2020 saw that nine percent of American drivers were involved in a traffic stop that year – either as a driver or a passenger. That is down from 10.3 percent in 2018 and 11 percent in 2015. Big cities have seen an even greater decrease, with traffic stops in Seattle down 90 percent from their pre-pandemic levels, almost 40 percent in New York, and 22 percent in St. Louis since 2019. In the meantime, traffic fatalities have surged in those cities, 34 percent in Seattle, 28 percent in New York, and 30 percent in St. Louis. [The Washington Post]
o Hamas’ attack on the southern border of Israel was the largest breach on the country’s borders since the 1973 Yom Kippur war. The attack was a relatively low-tech ground assault that was a stark contrast of the technological advances that the Israel military had built up over the last three years. Israel had built a 40-mile-long, state-of-the-art, high-tech barrier along the Gaza Strip.
The technology was supposed to aid in detecting invasions from the Palestinians. Much of the technology was focused on cyber capabilities, intelligence grabbing and advanced weaponry. Israel is now faced with a war that relies more on infantry and conventional artillery, areas in which have been deprioritized in recent years. Israeli leaders were caught off guard by Saturday’s attack because of a policy to boost Gaza’s economy. But, in contrast, Hamas became more sophisticated, using a combination of missiles, naval vessels, drones, and armed fighters to reach as far as 20 miles inside Israel’s border. [The Wall Street Journal]
o A potential benefit of artificial intelligence (AI) could help create healthier, tastier food. Pre-diabetes and diabetes are a major cause for concern in the United States, with nearly half of Americans having either pre-diabetes or diabetes.
Food is critical to glucose management, influencing the development of obesity, heart disease, and even cancer. Tools such as January AI – a company that markets the uses of a continuous glucose monitor (CGM) and an AI-powered app – can predict blood glucose impact of more than 32 million foods on each user and suggest healthier alternatives. The technology can also prompt users to start or stop intermittent fasting and to exercise at times that are optimal for reducing blood glucose spikes. [FORTUNE]
o The United Auto Workers (UAW) strike is now in its third week and for the first time in history, it is striking against the Big Three – General Motors, Ford and Stellantis – at once. UAW is taking a strategic approach to the strike, gradually escalating the number of workers to walk out of their jobs. The approach is intended to make it difficult for automakers to determine the amount of time they can withstand the strike, while also extending the UAW strike fund.
So far, UAW has not yet targeted the most profitable parts of the automakers’ production – full-sized trucks -- allowing automakers to withstand the strike. Pick-up trucks and large SUVs are core offerings to the Big Three, with the end of the year typically being the most profitable time of year. The UAW strike fund started the strike with $800 million with workers who are on strike being compensated $500 per week by the strike fund. The gradual approach to the strike allows UAW to slowly deplete its fund, allowing the union to strike for longer if needed. [NPR]