Kruse Kronicle

Charities: Donations fall by record amount for top nonprofits

Christian Science Monitor: Charities: Donations fall by record amount for top nonprofits

Charities' donations in 2009 fell 11 percent for the largest 400 US charitable groups.

A new ranking of the 400 biggest U.S. charities shows donations dropped by 11 percent overall last year as the Great Recession ended — the worst decline in 20 years since the Chronicle of Philanthropy began keeping a tally.

The Philanthropy 400 report to be released Monday shows such familiar names as the United Way and the Salvation Army, both based near Washington, continue to dominate the ranking, despite the 2009 declines. The survey accounts for $68.6 billion in charitable contributions.

An earlier report by the Giving USA Foundation found overall charitable giving declined 3.6 percent last year. That report included giving to private foundations and to smaller charities, while the Chronicle's survey only includes top charities raising money from the public.

"It shows that charities are really having a tough time, and this is some of the most successful charities in the United States," Chronicle Editor Stacy Palmer said. "Usually bigger charities are more resilient, so that's the part that is still surprising."

The top charities may have taken such a hit as giving shifted to smaller, local groups and because people gave less money to arts and cultural groups, Palmer said. Plus, even though the recession has officially ended, unemployment remains high at nearly 10 percent nationally and the economy continues to sputter.

The Salvation Army, based in Alexandria, Virginia, maintained its No. 2 ranking after the United Way, with $1.7 billion in contributions, despite a decline of 8.4 percent. ...

The Wealth Inequality Mirage

RealClearMarkets.com: The Wealth Inequality Mirage

... Mr. Reich is wrong. He and other levelers exaggerate economic inequality, eagerly, because they rely on pretax income, which omits the 97% of federal income taxes paid by the top half of income earners and the many "transfer payments," such as food stamps, housing assistance, Medicaid and Medicare. This exaggerated portrait of inequality undergirds the present effort by the Democrats to raise income tax rates for people with taxable incomes of $209,000 a year on joint returns and $171,000 a year on single returns.

A more meaningful measure of inequality comes from an examination of spending. On Wednesday the Labor Department presented 2009 data on consumer spending, based on income quintiles, or fifths. This analysis shows that economic inequality has not increased, contrary to what the levelers contend.

Differences in per-person spending from the lowest income fifth to the highest are not dramatically different from 20 years ago. These measures of spending show less inequality than do measures of income. ...

...The Labor Department data, which are published every year, track spending by income group. Spending is vital because it determines our current standard of living and our confidence in the future. It shows how much purchasing power Americans have. The usual pretax measures of income, on which most inequality studies are based, don't show how much purchasing power some Americans have because they omit other benefits, and so don't provide an accurate measure of purchasing power inequality.

Further, income quintiles have different demographic characteristics, so comparisons of quintiles can be misleading. In 2009, households in the lowest fifth had an average of 1.7 people, and in half these households there were no earners. The highest fifth, however, had 3.1 persons per household, with 2.0 earners.

Household size at the bottom has been shrinking faster than at the top, adding to a false perception of inequality. Over the past 20 years, the size of households in the bottom quintile has declined by 5.6% and the middle quintile by 3.8%, whereas the size of the top-quintile household has been unchanged. This is due not only to the increased longevity of today's seniors, but also to the higher numbers of divorced couples and single-parent households.

Calculating spending on a per-person basis (these are my calculations, from the official data) produces comparable measures. The average annual spending for a household in the lowest quintile was $21,611, or $12,712 per person. In contrast, the average spending for a household in the top quintile was $94,244, or $30,401 per person.

On a per person basis, the new Labor Department numbers show that in 2009 households in the top fifth of the income distribution spent 2.4 times the amount spent by the bottom quintile. That, Professor Reich might note, was about the same as 20 years ago. The top quintile spent 1.8 times what the middle quintile spent per person. And that ratio has not been increasing. ...

This is one area where I'd like to do some research with the primary data, but it does fit what I've seen reported by others who study consumption data.

India's surprising economic miracle

Economist: India's surprising economic miracle

The country’s state may be weak, but its private companies are strong.

... Or does it? Despite the headlines, India is doing rather well. Its economy is expected to expand by 8.5% this year. It has a long way to go before it is as rich as China—the Chinese economy is four times bigger—but its growth rate could overtake China’s by 2013, if not before (see article). Some economists think India will grow faster than any other large country over the next 25 years. Rapid growth in a country of 1.2 billion people is exciting, to put it mildly.

People power

There are two reasons why India will soon start to outpace China. One is demography. China’s workforce will shortly start ageing; in a few years’ time, it will start shrinking. That’s because of its one-child policy—an oppressive measure that no Indian government would get away with. Indira Gandhi tried something similar in the 1970s, when she called a state of emergency and introduced a forced-sterilisation programme. There was an uproar of protest. Democracy was restored and coercive population policies were abandoned. India is now blessed with a young and growing workforce. Its dependency ratio—the proportion of children and old people to working-age adults—is one of the best in the world and will remain so for a generation. India’s economy will benefit from this “demographic dividend”, which has powered many of Asia’s economic miracles.

The second reason for optimism is India’s much-derided democracy. The notion that democracy retards development in poor countries has gained currency in recent years. Certainly, it has its disadvantages. Elected governments bow to the demands of selfish factions and interest groups. Even the most urgent decisions are endlessly debated and delayed.

China does not have this problem. When its technocrats decide to dam a river, build a road or move a village, the dam goes up, the road goes down and the village disappears. The displaced villagers may be compensated, but they are not allowed to stand in the way of progress. China’s leaders make rational decisions that balance the needs of all citizens over the long term. This has led to rapid, sustained growth that has lifted hundreds of millions of people out of poverty. Small wonder that authoritarians everywhere cite China as their best excuse not to allow democracy just yet.

No doubt a strong central government would have given India a less chaotic Commonwealth games, but there is more to life than badminton and rhythmic gymnastics. India’s state may be weak, but its private companies are strong. Indian capitalism is driven by millions of entrepreneurs all furiously doing their own thing. Since the early 1990s, when India dismantled the “licence raj” and opened up to foreign trade, Indian business has boomed. The country now boasts legions of thriving small businesses and a fair number of world-class ones whose English-speaking bosses network confidently with the global elite. They are less dependent on state patronage than Chinese firms, and often more innovative: they have pioneered the $2,000 car, the ultra-cheap heart operation and some novel ways to make management more responsive to customers. Ideas flow easily around India, since it lacks China’s culture of secrecy and censorship. That, plus China’s rampant piracy, is why knowledge-based industries such as software love India but shun the Middle Kingdom.

India’s individualistic brand of capitalism may also be more robust than China’s state-directed sort. ...

... Given the choice between doing business in China or India, most foreign investors would probably pick China. The market is bigger, the government easier to deal with, and if your supply chain for manufactured goods does not pass through China your shareholders will demand to know why. But as the global economy becomes more knowledge-intensive, India’s advantage will grow. That is something to ponder while stuck in the Delhi traffic.

The Generation That Can't Move On Up

Wall Street Journal: The Generation That Can't Move On Up

Most people assume that working-class members of the baby-boomer generation have been hurt the most by the outsourcing and automation in which millions of factory jobs moved overseas or disappeared into computer chips, a shift recently compounded by recession. But actually it may be their children's generation.

Not only are many members of the younger working class unprepared for the contemporary job market. New research we have done shows their striking inability to fit the middle-class ideal in family and religious life. It's a worrisome development for their lifestyle and our culture.

These are the people we used to call "blue collar," although you can no longer tell a person's social class by the color of his shirt. If we can speak of a working class at all, education is now the best way to define them.

Think of people with high school degrees but not four-year college degrees. They make up slightly more than half of all Americans between the ages of 25 and 44; old enough to have completed their schooling but young enough to be still having children, and 79% of them are white. Because they don't have the educational credentials to get most middle-class professional and managerial jobs, their earnings have sunk toward the wages of the working poor.

The grim employment picture is familiar, but what's less widely known is that they are losing not only jobs but also their connections to basic social institutions such as marriage and religion. They're becoming socially disengaged, floating away from the college-educated middle class.

Consider the settings in which they have children. According to surveys by the National Center for Health Statistics, much of the recent rise in childbearing outside of marriage reflects a rise in births to cohabiting couples rather than to women living alone. The percentage of working-class women of all races who were cohabiting when they gave birth rose from 10% in the early 1990s to 27% in the mid-2000s—the largest increase of any educational group.

These working-class couples still value marriage highly. But they don't think they have what it takes to make a marriage work. Across all social classes, in fact, Americans now believe that a couple isn't ready to marry until they can count on a steady income. That's an increasingly high bar for the younger working class. As a result, cohabitation is emerging as the relationship of choice for young adults who have some earnings but not enough steady work to reach the marriage bar.

The problem is that cohabiting relationships don't go the distance. In fact, children who are born to cohabiting parents are more than twice as likely as children born to married parents to see their parents break up by age five. These break-ups are especially troubling because they are often followed by a relationship-go-round, where children are exposed to a bewildering array of parents' partners and stepparents entering and exiting their home in succession.

Church-going habits are changing, too. Traditionally, working-class couples who are married and have steady incomes have attended church, in part, to get reinforcement for the "respectable" lives they lead. But now, when a transformed economy makes marriage and steady work more difficult to attain, those who in better times might have married and attended church appear to be reluctant to show up. Thus, working-class men and women aren't going to religious services as often as they used to.

The drop-off in attendance has been greatest among whites, according to the General Social Survey, conducted biennially by the National Opinion Research Center. In the 1970s, 35% of working-class whites aged 25-45 attended religious services nearly every week, the same percentage as college-educated whites in that age group. Today, the college-educated are the only group who attend services almost as frequently as they did in the 1970s. ...

I wonder if this has any connection with the post I did Friday about the recent drop in church attendance.

Census: Income gap between rich and poor got wider in 2009

USA Today: Census: Income gap between rich and poor got wider in 2009

WASHINGTON (AP) — The income gap between the richest and poorest Americans grew last year to its widest amount on record as young adults and children in particular struggled to stay afloat in the recession.

The top-earning 20% of Americans — those making more than $100,000 each year — received 49.4% of all income generated in the U.S., compared with the 3.4% earned by those below the poverty line, according to newly released Census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.

A different measure, the international Gini index, found U.S. income inequality at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations.

At the top, the wealthiest 5% of Americans, who earn more than $180,000, added slightly to their annual incomes last year, Census data show.

Median household income was $49,777 in 2009, down 0.7% from a year earlier, a change that was not statistically different from 2008, the agency said. ...

Two questions. It appears that household income is the issue here. We know wealthier households have been getting larger while poverty households have shrunk. I wonder what impact that has on per capita poverty. The other question relates to the upsurge in non-cash benefits employees have received in recent years. Do non-cash benefits lead to a widening or narrowing of the disparity?

Poverty measured purely by household income is slippery, but I am not surprised that poverty has increased during the recession.

Global targets, local ingenuity

The Economist: Global targets, local ingenuity

In ten years, the living conditions of the poor have been improving—but not necessarily because of the UN’s goals. ...

... The United Nations reckons that in 2008 over a quarter of children in the developing world were underweight, a sixth of people lacked access to safe drinking water, and just under half used insanitary toilets or none at all. But while these figures are disquieting, a smaller fraction of people were affected than was the case two decades ago. So such data also indicate the world’s progress towards meeting the Millennium Development Goals (MDGs), a set of targets adopted by world leaders at the UN ten years ago. ...

 ... But few go as far as Ban Ki-Moon, the UN secretary-general, who recently called the goals “a milestone in international co-operation” that had helped “hundreds of millions of people around the world.” Talking up the MDGs is, of course, part of Mr Ban’s job. And there has indeed been progress on many fronts (see table 2). But it is hard to assign much credit to the exercise itself.

Take the goal of halving the poverty rate from its 1990 level by 2015. The World Bank reckons that in 1990 46% of the developing world’s population fell below the internationally accepted poverty line of $1.25 a day at purchasing-power parity. By 2005 the rate had fallen to 27% and, despite a slowdown in progress in the past couple of years, it is now probably lower still. A global halving by 2015 seems well within reach. Yet this “victory” is mainly due to a drop in China’s poverty rate from 60% in 1990 to 16% in 2005. Because China and India accounted for over 62% of the planet’s poor in 1990, changes to the world’s poverty rate depend heavily on their performance. A global goal is therefore a poor way to give the governments of smaller countries an incentive to tackle poverty....

... Too often, the goals are reduced to working out how much money is needed to meet a particular target and then berating governments for not spending enough. Yet the countries that have made most progress in cutting poverty have largely done so not by spending public money, but by encouraging faster economic growth. China is the most obvious example. The best performers in Africa, too, are those that have managed to speed up growth. As Shanta Devarajan, the World Bank’s chief economist for Africa, points out, growth does not just make more money available for social spending. It also increases the demand for such things as schooling, and thus helps meet other development goals. Yet the goals, as drawn up, made no mention of economic growth. ...

The Recession Has (Officially) Ended

New York Times: The Recession Has (Officially) Ended

The recession officially ended in June 2009, according to the Business Cycle Dating Committee of the National Bureau of Economic Research, the official arbiter of such dates.

As many economists had expected, this official end date makes the most recent downturn the longest since World War II. This recent recession, having begun in December 2007, lasted 18 months. Until now the longest postwar recessions were those of 1973-5 and 1981-2, which each lasted 16 months.

The newly-declared end-date to the recession also confirms what many had suspected: The 2007-9 recession was the deepest on record since the Great Depression, at least in terms of job losses. ...

... Professor Gordon also said that nearly every indicator that the committee looks at simultaneously reached its low point in June 2009, which made that month a relatively easy selection as the official turning point. The main exception to this trend was employment, which hit its trough six months later, in December 2009.

This lag has led many to refer to the current situation as a “jobless recovery,” and had even prompted suggestions that the weak job market should play a bigger role in determining recession start and end dates.

Professor Gordon notes, however, that the lag between a turnaround in gross domestic product and a turnaround in the job market was even worse after the 2001 recession. ...

China Shifts From Emphasis on Low-Cost Factories

New York Times: China Shifts From Emphasis on Low-Cost Factories

DONGGUAN, China — Companies here in China’s industrial heartland are toiling to reinvent their businesses, fearing that the low-cost manufacturing that helped propel the nation’s economic ascent is fast becoming obsolete. ...

... For years, factories here in the Pearl River Delta region have served as the low-cost workshops for global brands, turning this part of China into the nation’s biggest export zone. The city of Dongguan, about 35 miles northwest of Hong Kong, has long churned out toys, textiles, furniture and sports shoes — including hundreds of millions of sneakers a year for companies like Nike and Adidas.

But now, with manufacturing costs rising and China looking to create a consumer middle class, experts say the revamping of this region’s industries could help reduce the nation’s wide income gap and encourage more balanced and sustainable economic growth.

“It is my hope that China’s comparative advantage as a low-wage producer does disappear — the sooner the better,” Fan Gang, an economics professor at Peking University, wrote in a recent essay, adding that China needed to upgrade and embark on “the next stage of development.”

Manufacturing costs have risen rapidly here in response to nagging labor shortages and worker demands for higher wages to help offset soaring food and property prices....

Latin America - So near and yet so far

The Economist: Latin America - So near and yet so far

... As Latin America marks the bicentenary of the start of its struggle for political independence, many of its constituent countries have more recent cause for celebration too. The five years to 2008 were Latin America’s best since the 1960s, with economic growth averaging 5.5% a year and inflation generally in single digits. Even more impressively, a region which had become a byword for financial instability mostly sailed through the recent recession. After a brief downturn in late 2008 and early 2009, a strong recovery is now under way, with most forecasts suggesting economic growth of over 5% this year for the region as a whole.

Along with growth came a better life. Between 2002 and 2008 some 40m Latin Americans, out of a total population of 580m, were lifted out of poverty, and income distribution became a bit less unequal almost everywhere. Poverty increased in 2009 because of the recession, but will start declining again this year. Average unemployment went up slightly to 8.2%, but should come down again this year to 7.8%, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).

Latin America weathered the recession partly thanks to good fortune but also to sound policies. After the cataclysmic debt crisis of 1982 the region’s policymakers abandoned the protectionism and fiscal profligacy that had brought hyperinflation and bankruptcy. In their place they adopted the market reforms of the Washington Consensus (opening up their economies to trade and foreign investment, privatisation and deregulation).

But they found the road to stability and faster growth a long and bumpy one. During a second bout of instability, from 1998 to 2002, the region introduced more pragmatic policies. ...

... Some Latin American countries may at last have found a path towards economic development. But getting there may be no quicker or easier than achieving independence. Latin America has often flattered to deceive (see article). Today there are at least three big worries. First, since 1960 it has seen the lowest growth in productivity of any region in the world, not least because around half of all economic activity takes place in the informal sector. Second, despite some recent improvement, its income distribution is still the most unequal anywhere. This has acted as a drag on growth and caused political conflict. Third, it suffers from widespread crime and violence, much of it perpetrated by organised drug gangs. The murder rate is hideously high in some countries.

A problem for any report such as this one is that Latin America is so diverse as to defy most generalisations. ...

Interactive Global Map of Who is in a Recession and Who is Expanding

Source: Dismal Scientist. Go to the site for the interactive effect.

Workplace Salaries: At Last, Women on Top

Time: Workplace Salaries: At Last, Women on Top

... But now there's evidence that the ship may finally be turning around: according to a new analysis of 2,000 communities by a market research company, in 147 out of 150 of the biggest cities in the U.S., the median full-time salaries of young women are 8% higher than those of the guys in their peer group. In two cities, Atlanta and Memphis, those women are making about 20% more. This squares with earlier research from Queens College, New York, that had suggested that this was happening in major metropolises. But the new study suggests that the gap is bigger than previously thought, with young women in New York City, Los Angeles and San Diego making 17%, 12% and 15% more than their male peers, respectively. And it also holds true even in reasonably small areas like the Raleigh-Durham region and Charlotte in North Carolina (both 14% more), and Jacksonville, Fla. (6%).

Here's the slightly deflating caveat: this reverse gender gap, as it's known, applies only to unmarried, childless women under 30 who live in cities. The rest of working women — even those of the same age, but who are married or don't live in a major metropolitan area — are still on the less scenic side of the wage divide. ...

As Mark Perry points out, this is strong evidence that the wage difference has less to do with discrimination in the workplace and more to do with life choices men and women make. Men work, on average, 10% more than the average woman. That factor explains half the gap in aggregate wages. Women frequently take trade-offs in less pay for more flexible hours, often to raise children. We can debate whether gender roles in society are valid, but it still suggests that job place discrimination is not the driving issue.

20 bullish charts

Calfia Beach Pundit: 20 bullish charts

Pessimism is rampant, and most of the articles and commentaries I see have some doom-and-gloom flavor to them; indeed, many pundits are already claiming to see a double-dip recession either in progress or as imminent. I think the "conservative" bull case—that the economy is growing at a sub-par trend rate of 3-4%, which will leave the unemployment rate uncomfortably high for some time to come—is not getting its fair share of the news. So here is my attempt to balance the scales: a collection of charts that to me point to ongoing economic growth, however mild that might be, with not a hint of a double-dip recession. All charts contain the latest data available, and they are shown in no particular order. I've discussed all of these in recent posts, so for long-time readers this just a recap of how I see things today. ...

The post goes on to give 20 charts illustrating his key points.

Growing Poverty and Inequality?

One of the most persistent claims I repeatedly hear is about the injustice of growing global poverty and inequality. I've linked some of the graphs below before, but I thought it might be good to remind us of what has happened over the past forty years. From Parametric estimations of the world distribution of income.

World poverty is falling. This column presents new estimates of the world’s income distribution and suggests that world poverty is disappearing faster than previously thought. From 1970 to 2006, poverty fell by 86% in South Asia, 73% in Latin America, 39% in the Middle East, and 20% in Africa. Barring a catastrophe, there will never be more than a billion people in poverty in the future history of the world.

Four important graphs:

For the second and third charts, the violet line at the top is the world number, and the other lines are for various world regions. For an explanation of the GINI Coefficient in the fourth chart, click here. The lower the number, the less the inequality.

'Rational Optimist' Matt Ridley Answers Your Questions

PBS: 'Rational Optimist' Matt Ridley Answers Your Questions

Editor's Note: Last week, Paul Solman talked to "rational optimist" Matt Ridley about why he believes that life on earth for humans is getting better and better. Ridley agreed to answer some of your questions -- his replies are below. ...

... Question:

Alan

Long an admirer of Mr. Ridley's science writing, I picked up the "Rational Optimist" tome. While well composed as writing, the arguments were not entirely persuasive. It would be enlightening to hear his thoughts on any or all of the following issues:

1. The Gini index showing increasing inequality, and is it a proxy for the degradation of social and political life.

2. The fact that neither the U.S. nor U.K. made it in the top 10 countries rankings of human development (UN Development) nor the WHO rankings pertaining to health. Why not? Seems like we're moving retrograde.

3. The fact that, say, the Economist Intelligence unit has put quality of life rankings in the U.S. and U.K. below the top 10. Why so if we're evolving toward prosperity?

4. If the Flynn effect pertaining to average intelligence increases is to be believed (it widely is), then why principally in the 'anglosphere' nations aren't people happier today than, say, in the 1950s? In other words if we're collectively smarter on average, more rational, if you will, then why aren't we on average happier?

5. Could one not also have been a fully credible 'rational optimist' in, say, spring and summer of 1914? How can one be optimistic without robustified institutions?

6. If there is one thing we have learned or should have learned from the 20th century, what is your best suggestions? Some rational and clear-eyed academics, e.g., the late Mr. Judt, asserted that it's as if the 20th century never happened in terms of our neo-Edwardian, rosy view toward globalisation.

7. Final thought: Isn't the hedonic treadmill of consumption a misleading proxy for well being, a veritable red queen phenomenon in itself--akways running, but only to stand still?

Regrets for the verbosity. Thanks for your time.

Matt Ridley:

1. This is not true globally. In the world as a whole, the Gini coefficient is falling. You can see the graph from Pinkovskiy and Sala-i-Martin in Figure 3 on this page.

2. Only relatively. In absolute terms, human development indicators are still improving in the U.S. and U.K.

3. Again this is a relative measure. The falling of the U.S. and the U.K. tells you that poorer countries are catching up, which is good news for them.

4. Short answer: We are! The latest research shows that happiness does improve with income both within and between countries and within individual lifespans. I discuss this in my book. The decline in happiness with wealth is a myth. Here's a link to the work of one researcher. Mind you, the very, very rich do seem to generally be unhappy, but this then makes the rest of us happy! (joke)

5. Sure, and I say in my book that all sorts of things will still go wrong. But remember by 1940 the average citizen of the world was much richer than in 1914, health outcomes were better, technology was more advanced etc etc. It had been a very bad three decades for many people, but nonetheless a steadily improving one for the average person.
   
   Institutions matter, yes, and I discuss this in my book especially with respect to Africa - why Botswana is richer than Tanzania, for example.

6. The one thing I would learn from the twentieth century? Never give any government too much power. Democracy may be messy and imperfect and even inefficient at times. But it's better than Hitler, Stalin, Franco, Mao, Pol Pot, Kim-il-Sung, Duvalier, Amin and Mugabe. Yes, we may find we are walking towards war as the Edwardians were. I hope not. Who knows if Edwardian globalization had had another ten years, it might have got to the point where war became less likely?

7. Yes! I do agree with this (I'd have to having written a whole book about the Red Queen effect!). To some extent. Just as today we moan about poor cell phone signals, so in 2100 we will moan about how useless the intergalactic internet is at dispatching dematerialized humans beyond 5,000 light years without delays, or something. We will take things for granted and forget how lucky we are. But, as I said above, despite this we DO get happier -- a bit. Can you imagine facing the inevitable loss of some of your children and returning to happiness? Many fewer people now face that fate. Child mortality is down by two-thirds in my lifetime.
   
   I like Gregg Easterbrook's line:

Researching this book, and thinking about the alternatives, has caused me to begin whispering a regular prayer of thanks. Thank you that I and five hundred million others are well-housed, well-supplied, over-fed, free and not content; because we might be starving, wretched, locked under tyranny, and equally not content. ...

I'm not targeting Alan here (who asks legitimate questions), but it has always been fascinating how open and receptive people are to the slightest hint that things are getting worse and the idea that we are ever tiptoeing near the precipice of doom. Any discussion of the stunning improvements to human existence in recent generations must immediately be qualified by all the evil things happening ... that utopia is not here (as though acknowledging significant improvement somehow is to be equated with being utopian.) Yet presentations of apocalyptic doom are let by with no mention of the remarkable positive developments. What is it in the human psyche that craves gloom and anxiety?

Improvements in Energy Efficiency and Consumption

From Carpe Diem

  



The first chart shows a straight downward slope for BTUs per GDP, while the second show a sharp decline in total energy consumption. That tells me that the total energy decline is almost entirely due to the recession. However, starting about 1996, you see a slight flattening of the rate of increase. Seeing how this plays out in the coming years will be interesting.

Why Coffee Is Getting More Expensive

NPR: Why Coffee Is Getting More Expensive

The price of coffee beans hit a 12-year high today. I thought there might be some kind of reclusive-hedge-fund-guy-corners-coffee-market story, like we saw with cocoa earlier this summer.

But the main driver of coffee prices right now is more prosaic: Colombia has had a few years of weak coffee harvests because of too much rain, which has reduced the global supply. And coffee drinkers keep buying coffee, even as prices rise (in other words, demand is inelastic).

The higher price of beans — up about 40 percent since March — means higher prices for the coffee you buy by the pound. But it probably won't affect the fancy coffee you buy by the cup.

Smuckers, which sells Folgers and Millstone coffees, recently said it was raising its prices because of the higher cost of beans. Starbucks, on the other hand, said it would absorb the higher cost of beans without raising prices.

"You see it much more in the grocery store because the raw materials are a big component of cost," Jose Sette of the International Coffee Organization told me. "In a coffee shop, your big expenses are rent and labor. ...

(HT: Victor Claar)

U.S. Debt Is Staying, for a Change, in U.S.

New York Times: U.S. Debt Is Staying, for a Change, in U.S.

NEARLY a decade ago, when budget deficits ballooned in the United States, it was widely said that Washington — like Blanche DuBois in “A Streetcar Named Desire” — “depended on the kindness of strangers.” In Washington’s case, foreigners — mostly foreign governments — stepped in to buy most of the new Treasury securities being issued.

Budget deficits have ballooned again, but the story is different this time. Americans are buying most of the new Treasuries being issued. Foreign governments, whose purchases were once critical, were net sellers of Treasury securities in the first half of 2010, according to figures released this week.

That buying has reduced the Treasury’s need to attract foreign capital and has helped to keep interest rates very low....

Contest of the Century: China and India

The Economist: Contest of the Century: China and India

As China and India rise in tandem, their relationship will shape world politics. Shame they do not get on better.

A HUNDRED years ago it was perhaps already possible to discern the rising powers whose interaction and competition would shape the 20th century. The sun that shone on the British empire had passed midday. Vigorous new forces were flexing their muscles on the global stage, notably America, Japan and Germany. Their emergence brought undreamed-of prosperity; but also carnage on a scale hitherto unimaginable.

Now digest the main historical event of this week: China has officially become the world’s second-biggest economy, overtaking Japan. In the West this has prompted concerns about China overtaking the United States sooner than previously thought. But stand back a little farther, apply a more Asian perspective, and China’s longer-term contest is with that other recovering economic behemoth: India. These two Asian giants, which until 1800 used to make up half the world economy, are not, like Japan and Germany, mere nation states. In terms of size and population, each is a continent—and for all the glittering growth rates, a poor one....

... Globally, the rules-based system that the West set up in the second half of the 20th century brought huge benefits to emerging powers. But it reflects an out-of-date world order, not the current global balance, let alone a future one. China and India should be playing a bigger role in shaping the rules that will govern the 21st century. That requires concessions from the West. But it also requires commitment to a rules-based international order from China and India. A serious effort to solve their own disagreements is a good place to start.

A History of World GDP

The Economist: Hello America

Emerging markets no longer need the US consumer

Christian Science Monitor: Emerging markets no longer need the US consumer

Emerging markets blossomed because the US consumer (and others) went into debt to buy their goods. Now, they're booming. The US is not.

Want to know how to make money in this economy? You do it by selling things to markets that are growing. Exporting, in other words. China’s growing. India’s growing. Brazil is growing. Dozens of other countries are growing. Sales in the US aren’t likely to go up. But sales to China? Sales to Brazil? That’s where the money is.

And here’s something interesting – these growth economies are now largely ‘de-coupled’ from the US. They don’t need us anymore. We’ve done our part. Thanks to clever management by the feds, Americans went deeply in debt so that these emerging market economies could grow. They put up factories. We bought their output. They logged a sale. We added a debt.

And now, we can’t continue. We’ve taken on all the debt we can handle. They’ve got their factories, their capital and their skilled labor. We’ve got debts, debts and more debts.

And now they don’t need us. Because they can sell to their own emerging middle classes. China can sell gizmos to Brazil’s new consumers. Russia can sell energy to China’s thriving cities. Brazil can sell soybeans to Indonesia’s new factory workers.

Emerging markets are growing fast. The US and the UK are barely growing at all.

Some manufacturing heads back to USA

USA Today: Some manufacturing heads back to USA

Faced with rising costs, General Electric is moving production of its new energy-efficient water heater halfway around the world. The country it's leaving? China. The one it's bringing 400 jobs and a newly renovated factory? The United States.

A small but growing band of U.S. manufacturers — including giants such as General Electric (GE), NCR (NCR) and Caterpillar (CAT)— are turning the seemingly inexorable offshoring movement on its head, bringing some production to the U.S. from far-flung locations such as China. Others that were buying components overseas are switching to U.S. suppliers.

Ford Motor said Wednesday that it's bringing nearly 2,000 jobs to its U.S. plants by 2012 from suppliers, including those in Japan, Mexico and India.

Experts say the initiatives could moderate job losses that have dramatically shrunk the U.S. manufacturing industry. "I think we're going to start to see a slowing of lost jobs, and we'll see some jobs coming back," says Simon Ellis, an analyst for IDC Manufacturing Insights. "At some point, it will balance out, and we'll reach an equilibrium."

There are myriad reasons for the shifts, often called "onshoring" or "reshoring." Chinese wages and shipping costs have risen sharply in the past few years while U.S. salaries have stayed flat, or in some cases, fallen in the recession. Meanwhile, U.S. manufacturers have been frustrated by the sometimes poor quality of goods made by foreign contractors, theft of their intellectual property and long product-delivery cycles that make them less responsive to customer demand.

Several cite the drawbacks of tying up valuable capital in huge overseas shipments, and want to bring assembly closer to engineers, suppliers and customers, concerns that mounted as makers slashed costs in the downturn. Others are simply weary of midnight phone calls — and multiple annual trips — to Asia.

"A lot of companies who have gone there to take advantage of cheap labor are starting to tell us that if you (calculate) total ... cost and don't just look at wages, it's actually not worth it," says Jeremy Leonard, consultant for Manufacturers Alliance/MAPI, an industry-funded research group....

Consumers Resetting, Not Recovering

Media Post News: Consumers Resetting, Not Recovering

An extensive new study from NPD Group finds that no matter what's going on with the economy, people aren't so much recovering as they are resetting.

"Overall, consumers have reached this new equilibrium of spending and making decisions about things like groceries and apparel and electronics and automotive," Dee Warmath, SVP/Retail Insights for NPD, tells Marketing Daily. "The pie has shrunk, so each category is competing with another. So while there is a roving release of pent-up demand, there's not an overall increase in spending."

The Port Washington, N.Y.-based market research company interviewed some 71,000 consumers across eight categories, reviewing about 60 retailers and 75 brands per category. The new Retail & Brand Landscape Report then ranks each in terms of shopper engagement, shopper priorities, and shopper impressions.

And it found that while the recession changed shopping habits a little, in terms of store choice -- for example, people typically have about 4% more retailers in their consideration set than they did before the economy tanked -- it changed brand perception a lot. Consumers now typically have 20% more brands they will consider buying in any category, she says.

And above all, the recession sharpened their focus on value. "If consumers learned anything," she says, "it's that I can walk out of the store not buying something, and it will be okay." She says that even prior to the recession, there was clear evidence in consumers' losing trust in retailers. ...

China 'leapfrogs US to become biggest energy user'

BBC: China 'leapfrogs US to become biggest energy user'

China has overtaken the United States to become the world's top energy consumer for the first time, a new report says.

Provisional figures from the International Energy Agency indicate that China's energy demand has doubled in a decade.

The IEA said China had taken first place because it was hit less hard than the US by the global financial crisis.

China challenged the report's findings, saying its figures were unreliable.

The US has been the biggest consumer of energy for more than 100 years. But China's rapid economic growth in the past two decades has pushed it into top spot, according to Tuesday's report.

The surge in demand for energy in China was further fuelled by its rising population.

Median Duration of Unemployment

Greg Mankiw's Blog: Median Duration of Unemployment

The U.S. ranks 23rd in belief in trade

Ranking America: The U.S. ranks 23rd in belief in trade

Why a pay raise for workers signals key shift for China's economy

Christian Science Monitor: Why a pay raise for workers signals key shift for China's economy

Workers at Foxconn and Honda won hefty pay raises this week. Higher wages will help Beijing move China's economy away from relying on masses of unskilled workers and toward higher-value manufacturing.

When two giant employers in southern China  offered their workers big wage increases this week, their goal was to dampen labor unrest. But the hikes do more than soothe factory floor anger; they signal huge changes in the way “the workshop of the world” is feeding global consumers.

Rising salaries, say economists and labor experts here, are sounding the death knell for the production system that has fueled much of China’s phenomenal economic growth for the past three decades. Instead of relying on huge numbers of workers making miserable wages at unskilled jobs, and churning out cheap exports, the government is keen on moving up the value chain.

At the same time, rising incomes are laying the foundation for another seismic shift in China’s development model, as the government seeks to base economic growth more on domestic consumption and less on exports. ...

Why Wal-Mart's sales should have everyone worried

CNN: Why Wal-Mart's sales should have everyone worried

(Fortune) -- It certainly looks like happy days are here again. Many of the nation's biggest retailers, including Saks, Hewlett-Packard, Home Depot, and Target have released cheery sales reports. April's jobs reports showing a slight increase in the workweek and pay for workers, and more hiring across the board.

And then there is Wal-Mart, whose happy yellow face switched to a grimace when it released first quarter sales on Tuesday. Although international growth helped push revenues up 6%, sales at U.S. stores fell 1.4% from the same period last year. And the company had no one to blame but its shoppers. "More than ever, our customers are living paycheck to paycheck," said Tom Schoewe, the chief financial officer.

So who are you supposed to believe? In this case, Bentonville. When Wal-Mart (WMT, Fortune 500), an economic bellwether, notes that customers can't afford the gas to get to the stores and that they're increasingly using food stamps when they get there, things are bad.

True, other consumer-dependent companies are doing better, but by how much? Hewlett-Packard (HPQ, Fortune 500) made its numbers by selling hardware to corporations, not consumers. Home Depot (HD, Fortune 500) was pulled forward by do-it-yourselfers buying small items and by homeowners making one-off summer purchases of new landscaping tools and grills; big ticket items are still sitting collecting dust, while the contractor business remains weak. Saks (SKS)' results were impressive, but it sells luxury goods to a sliver of the American demographic, one that benefitted most from the psychologically important stock market rise earlier this year.

The problem is that both the economy and consumer sentiment remain shaky. Even Target (TGT, Fortune 500), which reported better than expected results yesterday, was forced to concede that. While touting his company's success, Chief Executive Gregg Steinhafel, noted that "We believe that both are still somewhat unstable and fragile and will likely continue to experience occasional setbacks as the year progresses," he said. ...

The Welfare State's Death Spiral

RealClearPolitics: The Welfare State's Death Spiral

WASHINGTON -- What we're seeing in Greece is the death spiral of the welfare state. This isn't Greece's problem alone, and that's why its crisis has rattled global stock markets and threatens economic recovery. Virtually every advanced nation, including the United States, faces the same prospect. Aging populations have been promised huge health and retirement benefits, which countries haven't fully covered with taxes. The reckoning has arrived in Greece, but it awaits most wealthy societies. ...

...The welfare state's death spiral is this: Almost anything governments might do with their budgets threatens to make matters worse by slowing the economy or triggering a recession. By allowing deficits to balloon, they risk a financial crisis as investors one day -- no one knows when -- doubt governments' ability to service their debts and, as with Greece, refuse to lend except at exorbitant rates. Cutting welfare benefits or raising taxes all would, at least temporarily, weaken the economy. Perversely, that would make paying the remaining benefits harder.

Greece illustrates the bind. To gain loans from other European countries and the International Monetary Fund, it embraced budget austerity. Average pension benefits will be cut 11 percent; wages for government workers will be cut 14 percent; the basic rate for the value added tax will rise from 21 percent to 23 percent. These measures will plunge Greece into a deep recession. In 2009, unemployment was about 9 percent; some economists expect it to peak near 19 percent.

If only a few countries faced these problems, the solution would be easy. Unlucky countries would trim budgets and resume growth by exporting to healthier nations. But developed countries represent about half the world economy; most have overcommitted welfare states. They might defuse the dangers by gradually trimming future benefits in a way that reassured financial markets. In practice, they haven't done that; indeed, President Obama's health program expands benefits. What happens if all these countries are thrust into Greece's situation? One answer -- another worldwide economic collapse -- explains why dawdling is so risky.

2009: Most Energy-Efficient Economy in History

Carpe Diem: 2009: Most Energy-Efficient Economy in History

...Amazingly, the EIA report also showed that total U.S. energy consumption in 2009 (94.66 quadrillion BTUs) was less than the total energy consumed 12 years ago  in 1997 (94.76 quadrillion BTUs), even though we produced almost 32 percent more output last year than in 1997, the U.S. population has increased by 34.5 million people in the last 12 years, and traffic volume (miles driven) was 17.5 percent higher last year than in 1997 (see bottom chart above)! ...

The US Misery Index - 1948 to 2009

Scot McKnight had a post about the Misery Index. Below is an expanded version of it. 

Source

As I note at Jesus Creed, "What this tells me is that things really were much worse when I graduated from college in 1981. I can go on telling twenty-somethings how much I truly suffered ... unemployment, inflation, walking to classes through 5 feet of snow, uphill both ways. :)"

Leading Economic Indicators Index rises 1.4% in March

Los Angeles Times: Leading Economic Indicators Index rises 1.4% in March

The index of U.S. leading indicators rose in March by the most in 10 months, a sign the economy will keep growing into the second half of the year.

The 1.4 percent increase in the New York-based Conference Board's measure of the outlook for three to six months was more than anticipated and followed a revised 0.4 percent gain in February.

Manufacturers are ratcheting up production and factory workers are putting in longer hours as companies rebuild inventories and ship more goods overseas. Further improvement in the job market will help sustain the economy's recovery from the worst recession since the 1930s. ...

Africa's banking laws shut out the poor: Yunus

Reuters: Africa's banking laws shut out the poor: Yunus

NAIROBI (Reuters) - Lack of microcredit laws in many African countries is denying millions of the continent's poor access to loans, a Nobel Prize winner Mohammad Yunus, said on Tuesday.

Yunus, who won a Nobel Prize in 2006 for championing Microcredit, tiny loans to the poor in Bangladesh, is now pioneering an idea he calls "social business" as a way to fight poverty around the world -- business not for profit but to solve social problems.

"To create a new kind of bank, which works with the poor people, we need new legislation but in most of the countries in Africa that legislation has not taken place, so we have left microcredit scenario to the NGOs," Yunus told Reuters in an interview.

Nicknamed the "banker to the poor," Yunus started his movement 30 years ago with a $27 loan to women in Chittagong, Bangladesh.

It has mushroomed and delivered millions of tiny loans to poor people who do not have access to mainstream banking.

"People are ready in Africa there is no problem with the people it's a question of institutional and conceptual arrangement and microcredit could be wonderful social business," he said. ...

Not So Pretty in Pink: Are Girls' Toys Too Girly?

Time: Not So Pretty in Pink: Are Girls' Toys Too Girly?

Twin sisters Abi and Emma Moore noticed a few years ago how different their south London houses looked as Abi's started filling up with her sons' toy dinosaurs and trains and Emma's turned pink and girly with her daughters' playthings. Already frustrated by the barrage of pretty princesses and sparkly fairies marketed to girls, Emma says she reached a breaking point when she watched her daughter open a huge haul of presents at her sixth birthday party. Out of 40 gifts, Emma recalls, only three were items not designed solely for girls — two games and a set of colored pencils. Much of the rest, including several Barbies and a play-makeup set, ended up at a local charity shop, but the shock Emma felt stayed with her.

Not long afterward, she felt compelled to do something about it. In 2008, she and Abi, both 38, started an advocacy group called Pinkstinks, which they hope will spark a shift in a popular culture that they say puts girls "into a pretty little box" from birth, offering them toys that emphasize the importance of looking good and being feminine, while the boys are allowed to go exploring and get dirty. The sisters have launched campaigns to pressure retailers to move away from such stereotypes, like their recent effort to help persuade the British supermarket chain Sainsbury's to repackage a doctor costume that was labeled for boys and a nurse's outfit labeled for girls.

The list of products that pigeonhole girls in the clothes and makeup category goes on and on. Disney sells pink vanity tables for girls as young as 3, for example, and the European retailer Primark stocks a T-shirt in a 2-year-old size that's emblazoned with the motto "S is for Super, Shopaholic, Soon-to-be-Supermodel." Even old classics now offer girls' versions, such as an all-pink Monopoly game in which the houses and hotels have been replaced by boutiques and malls, and a "Designer's Edition" Scrabble that has letters on the front of the box spelling out fashion. It wasn't always this way. A couple of decades ago, children's clothing mostly came in primary colors and princesses were confined to the occasional film or Halloween costume. But as marketing to children has burgeoned into a multibillion-dollar industry, and our consumerist ethos has saddled kids with mountains of stuff, the gender divide has grown wider. ...

The first thing that hit me in this story was 40 gifts for a six year old! Holy cow! But the proliferation of pink everything is something else I've noticed as well. Some time back I remember reading that as more women have had more financial independence we have seen an accentuation of what has been considered feminine consumerism, not a melding toward men and women purchasing similar goods. So is this "everything pink" for girls just an extension of that?

Tough Times Boost Wal-Mart's Allure

Wall Street Journal: Tough Times Boost Wal-Mart's Allure

CHICAGO—Wal-Mart Stores Inc. has won the support of dozens of church ministers in its long-running battle to expand in Chicago, a sign of how the recession has softened skepticism of the retailer in a community desperate for jobs.

The ministers, most of them African-Americans together representing thousands of congregants, are pressuring the city council to grant approval for a Wal-Mart "supercenter"—a store with a full grocery that also sells general merchandise—on the city's South Side.

Some of the same ministers as recently as last year opposed bringing the discount giant to the South Side, concerned that the company's pay was inadequate and that the store would hurt nearby businesses. But the need for jobs and tax dollars in the recession—along with a big push by Wal-Mart—has changed their minds.

The shift sets up a showdown between the ministers and another community group, largely financed by unions, that opposes the proposal, which remains stalled in the city council.

The proposed store would employ about 400 in a middle-class, largely African-American neighborhood at a development called Chatham Market. The 50-acre site is home to a Lowe's home-improvement store, a sandwich shop, two vacant multi-tenant buildings and clumps of chest-high weeds.

"The reality of the day…is that there's no other retailer willing to come to the community," said Alderman Howard Brookins, a Democrat whose ward includes the development. "The [Chatham] Market is dying. We've got to do something." ...

Related: Progressives Declare -No Jobs- are Good Enough For South-Side Residents

Cheap Thrills (Do Without Projects)

Time: Cheap Thrills

Christopher Greenslate and Kerri Leonard, high school teachers outside San Diego, were griping about the rising cost of groceries when they decided to see what life is like for the billion people on earth who spend $1 a day on food. The couple's blog took off, and their book, On a Dollar a Day, hit stores in February. They're part of a growing population of consumers chronicling their efforts to do without, swearing off such things as riding in cars and buying clothes — or buying anything new at all. And they're not making these vows simply to save money. For some, the goal is spiritual cleansing. For others, it's to raise awareness of big issues like the environment. It's also a cheap way to gather good material. If a book deal comes out of it, so much the better.

High-profile books like last year's No Impact Man, which details one New Yorker's attempt to spend a year without having a negative impact on the environment, may be particularly popular now because of the Great Recession. It is no longer fashionable to flash bling. Today's monklike experimenters are flaunting what they don't have. (See how Americans are spending now.)

"It's like everyone is doing their own version of Lent," says A.J. Jacobs, the virtuoso of this self-as-guinea-pig genre. He has written about such odd and intermittently enlightening challenges as living strictly according to the Bible for a year, during which he followed the Ten Commandments as well as lesser-known rules like the ones prohibiting the shaving of beards and wearing clothing of mixed fibers. ...

Social Security to See Payout Exceed Pay-In This Year

New York Times: Social Security to See Payout Exceed Pay-In This Year

The bursting of the real estate bubble and the ensuing recession  have hurt jobs, home prices and now Social Security.

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax. ...

Healthcare, Tradeoffs, and the Road Ahead

Greg Mankiw: Healthcare, Tradeoffs, and the Road Ahead

Well, it appears certain that the healthcare reform bill will become law. One thing I have been struck by in watching this debate is how strident it has been, among both proponents and opponents of the legislation. As a weak-willed eclectic, I can see arguments on both sides. Life is full of tradeoffs, and so most issues strike me as involving shades of grey rather than being black and white. As a result, I find it hard to envision the people I disagree with as demons.

Arthur Okun said the big tradeoff in economics is between equality and efficiency. The health reform bill offers more equality (expanded insurance, more redistribution) and less efficiency (higher marginal tax rates). Whether you think this is a good or bad choice to make, it should not be hard to see the other point of view.

I like to think of the big tradeoff as being between community and liberty. From this perspective, the health reform bill offers more community (all Americans get health insurance, regulated by a centralized authority) and less liberty (insurance mandates, higher taxes). Once again, regardless of whether you are more communitarian or libertarian, a reasonable person should be able to understand the opposite vantagepoint.

In the end, while I understood the arguments in favor of the bill, I could not support it. In part, that is because I am generally more of a libertarian than a communitarian. In addition, I could not help but fear that the legislation will add to the fiscal burden we are leaving to future generations. Some economists (such as my Harvard colleague David Cutler) think there are great cost savings in the bill. I hope he is right, but I am skeptical. Some people say the Congressional Budget Office gave the legislation a clean bill of health regarding its fiscal impact. I believe that is completely wrong, for several reasons (click here, here, and here). My judgment is that this health bill adds significantly to our long-term fiscal problems.

The Obama administration's political philosophy is more egalitarian and more communitarian than mine. Their spending programs require much higher taxes than we have now and, indeed, much higher taxes than they have had the temerity to propose. Here is the question I have been wondering about: How long can the President wait before he comes clean with the American people and explains how high taxes needs to rise to pay for his vision of government?

Amen! This sums it up for me very well.

Food Security Index

Maplecroft: Maplecroft Food Security Index

The Gender Wage Gap, Around the World

Economix: The Gender Wage Gap, Around the World

... Across industrialized countries, men’s median, full-time earnings were 17.6 percent higher than women’s. The biggest gender wage gap was in South Korea and Japan, where men earn wages more than 30 percent higher than women, and was smallest in Belgium, where the gap is 9.3 percent.

In the United States, the typical full-time female worker earns 19 percent less than the typical full-time male worker.

Much of this gap can be explained by the types of jobs women choose to go into (or, perhaps, the types of jobs that are available to them).

How is Africa actually doing?

Free Exchange: How is Africa actually doing?

HERE'S a toy version of what most people would recognise as the received wisdom on sub-Saharan Africa's economic performance in recent years:

Some countries have had a pretty sustained period of high growth rates. But growth has been fairly concentrated in some resource-rich countries; most of the benefits of that growth have gone to the rich. In any case, a rising population means that per capita income growth has been unspectacular. All this together means that the recent period of relatively good growth has not made much of a dent on poverty rates.

Two recent papers attempting to revisit the "How has Africa actually fared" question use different methods to answer the question. Interestingly, while these methods are, in some ways, at odds with one another, they both reach the conclusion that the conventional wisdom on Africa's economic performance understates its economic success. ...

Millennials value time off, pay more than Gen X

MSNBC: Millennials value time off, pay more than Gen X

Expectations hitting workplace reality of tepid growth in salary, benefits.

Millennials want more vacation and time for themselves away from the job than young people did 30 years ago, and they also value compensation more, according to a recent study.

That may be setting them up for intense disappointments in today's labor market.

Those born starting in the early 1980s put a bigger emphasis on time away from work than previous generations, like Gen X. They're slightly less likely to say that work should be "a very central part" of one's life, and tend to value a job more for salary and advancement opportunities rather than as a source of friends or an avenue to learn new skills.

Millennials, the youngest generation in American workplaces, may see time off as necessary because of how hard they saw their parents work, said San Diego State University psychology professor Jean Twenge. She has a study analyzing generational differences in attitudes toward work in an upcoming issue of the Journal of Management.

But as unemployment has grown for young people, their expectations for money, job promotion and leisure time are encountering workplace reality. In today's world, that means tepid growth in salaries and benefits, and heavy competition for positions.

The Conference Board, a private research group, said in January that job satisfaction for those under 25 was at a record low in 2009. ...

The Jobs Of Yesteryear: Obsolete Occupations

NPR: The Jobs Of Yesteryear: Obsolete Occupations

As computers and automated systems increasingly take the jobs humans once held, entire professions are now extinct. Click through the gallery below to see examples of endangered professions, from milkman to telegrapher, and hear from people who once filled those oft-forgotten jobs.

 

Click on the link to see the slide show.

Favorability Ratings of Labor Unions Fall Sharply

Pew Research: Favorability Ratings of Labor Unions Fall Sharply

Favorable views of labor unions have plummeted since 2007, amid growing public skepticism about unions' purpose and power. Currently, 41% say they have a favorable opinion of labor unions while about as many (42%) express an unfavorable opinion. In January 2007, a clear majority (58%) had a favorable view of unions while just 31% had an unfavorable impression.

The latest nationwide survey by the Pew Research Center for the People & the Press, conducted Feb. 3-9 among 1,383 adults reached on cell phones and landlines, finds that favorable opinions of unions have fallen across demographic and partisan groups. Still, far more Democrats have favorable views of unions (56%) than do independents (38%) or Republicans (29%). ...

 

Rapid global trade recovery continues

Financial Times: Rapid global trade recovery continues

Global trade in goods has continued to bounce back rapidly from its huge fall a year ago, with an authoritative index recording the fastest monthly increase in December in its 19-year history.

Data from the Bureau for Economic Policy Analysis, a Dutch research institute, suggest that little permanent damage has been done to the world trading system by the financial crisis.

The bureau’s widely watched composite index said that the volume of goods trade worldwide rose at 4.8 per cent in December.

The less volatile three-monthly measure also rose by a record rate in the fourth quarter of last year, finishing 6 per cent higher than in the third quarter.

Richard Baldwin, professor of international economics at the Graduate Institute in Geneva, said that the rapid recovery suggested that it was largely a fall in demand that had caused trade to contract.

“A large part of the fall was the shock to expectations – the ‘Oh my God’ factor,” he said. “Anything postponable largely got postponed.”

In the aftermath of the banking crisis, Prof Baldwin said, consumers cut back sharply on consumer durables and businesses put investments on ice. He calculates that those “postponable” goods make up 60-70 per cent of global trade. When those purchases resumed from mid-2009 and buyers sought to make up lost ground, the fall in trade was rapidly reversed. ...

"African Poverty is Falling...Much Faster Than You Think!" - Xavier Sala-i-Martin, Maxim Pinkovskiy

National Bureau of Economic Research: African Poverty is Falling...Much Faster Than You Think!

Abstract

The conventional wisdom that Africa is not reducing poverty is wrong. Using the methodology of Pinkovskiy and Sala-i-Martin (2009), we estimate income distributions, poverty rates, and inequality and welfare indices for African countries for the period 1970-2006. We show that: (1) African poverty is falling and is falling rapidly; (2) if present trends continue, the poverty Millennium Development Goal of halving the proportion of people with incomes less than one dollar a day will be achieved on time; (3) the growth spurt that began in 1995 decreased African income inequality instead of increasing it; (4) African poverty reduction is remarkably general: it cannot be explained by a large country, or even by a single set of countries possessing some beneficial geographical or historical characteristic. All classes of countries, including those with disadvantageous geography and history, experience reductions in poverty. In particular, poverty fell for both landlocked as well as coastal countries; for mineral-rich as well as mineral-poor countries; for countries with favorable or with unfavorable agriculture; for countries regardless of colonial origin; and for countries with below- or above-median slave exports per capita during the African slave trade.

Here are two key charts from the article:

 

Conclusion:

Our main conclusion is that Africa is reducing poverty, and doing it much faster than we thought. The growth from the period 1995-2006, far from benefiting only the elites, has been sufficiently widely spread that both total African inequality and African within-country inequality actually declined over this period. In particular, the speed at which Africa has reduced poverty since 1995 puts it on track to achieve the Millennium Development Goal of halving poverty relative to 1990 by 2015 on time or, at worst, a couple of years late. If Congo-Zaire converges to Africa once it is stabilized, the MDG will be achieved by 2012, three years before the target date. These results are qualitatively robust to changes in our methodology, including using different data sources and assumptions for what happens to inequality when inequality data is not available.

We also find that the African poverty reduction is remarkably general: it cannot be explained by a large country, or even by a single set of countries possessing some beneficial geographical or historical characteristic. All classes of countries, including those with disadvantageous geography and history, experience reductions in poverty. In particular, poverty fell for both landlocked as well as coastal countries; for mineral-rich as well as mineral-poor countries; for countries with favorable or with unfavorable agriculture; for countries regardless of colonial origin; and for countries with below- or above-median slave exports per capita during the African slave trade. This observation is particularly important because it shows that poor geography and history have not posed insurmountable obstacles to poverty reduction. The lesson we draw is largely optimistic: even the most troubled parts of the poorest continent can set themselves firmly on the trend of limiting and even eradicating poverty within the space of a decade.

Parents Train Young Consumers

Marketing Charts: Parents Train Young Consumers

Marketers who target the youth market may be dealing with savvier consumers than they anticipated, according to the latest American Express Spending & Saving Tracker. Seventy-one percent of parents with children ages six to 16 say their children understand the US is in a recession, and 91% say they plan on teaching their children financial responsibility in 2010.

Top Three Savings Lessons Parents Teach Kids

The 91% of parents who plan to teach their kids financial responsibility this year rated the following three as the most important, in order of how many respondents mentioned a particular lesson:

• Understanding debt and its impact on saving and spending (30%).
• Teaching the value of a dollar through an award system like an allowance (25%).
• Basic teaching of how money is earned and used in everyday life (21%).

Kids Become Cost-conscious

Despite the reputation of kids as being selfish and not listening to what they are told, Spending & Saving Tracker results indicate that at least some American kids are hearing what their parents tell them about financial responsibility. One in five children (20%) has indicated to a parent that “maybe we shouldn’t buy that due to the recession.” Interestingly, kids of the affluent were most apt (31%) to suggest that a parent hold back on a particular purchase.

Allowances Represent Spending Opportunity

Marketers of toys, candy and other kid-friendly goods have an opportunity to capture allowance spending, according to the following figures regarding allowance habits of U.S. consumers:

• Sixty-two percent of parents in the general population give their kids a weekly allowance.
• Among the general population giving an allowance, the average amount is $12 a week, or $48 a month.
• Almost half (47%) of the general population giving an allowance expects it to be spent, rather than saved.
• Twenty-three percent of the general population giving an allowance places no restriction on how it is spent.
• Thirteen percent of the general population giving an allowance permits it to be used for non-essentials such as toys, movie tickets and games.
• Ten percent of the general population giving an allowance permits it to be used for essentials such as gas and lunch money. ...

When I was in early grade school, I got an allowance contingent upon doing certain chores. One of those chores was keeping books and recording my income and expenses (using broad categories.) I had to present those books to get my allowance. That didn't continue into my teen years, but long enough to get into the habit of watching finances and understanding cash flow. I think I was about ten when my folks opened a savings account in my name where I could deposit or withdraw my savings.

What training did you have as a kid? What are you doing to teach financial responsibility to your children?

Leading Economic Index Rises

Carpe Diem

Parametric estimations of the world distribution of income

Vox: Parametric estimations of the world distribution of income

You can purchase the article the linked post reviews from the National Bureau of Economic Research for $5. Maxim Pinkovskiy, Xavier Sala-i-Martin, Parametric estimations of the world distribution of income.

World poverty is falling. This column presents new estimates of the world’s income distribution and suggests that world poverty is disappearing faster than previously thought. From 1970 to 2006, poverty fell by 86% in South Asia, 73% in Latin America, 39% in the Middle East, and 20% in Africa. Barring a catastrophe, there will never be more than a billion people in poverty in the future history of the world.

World poverty is falling. Between 1970 and 2006, the global poverty rate has been cut by nearly three quarters. The percentage of the world population living on less than $1 a day (in PPP-adjusted 2000 dollars) went from 26.8% in 1970 to 5.4% in 2006 (Figure 1).

Figure 1. World poverty rates [Y axis is percent in poverty]

Although world population has increased by about 80% over this time (World Bank 2009), the number of people below the $1 a day poverty line has shrunk by nearly 64%, from 967 million in 1970 to 350 million in 2006. In the past 36 years, there has never been a moment with more than 1 billion people in poverty, and barring a catastrophe, there will never be such a moment in the future history of the world.

The starting and ending numbers are about ten percentage points lower than I've seen with some U.N. data, but the general effect is identical. The article also includes these interesting graphs.

Figure 2. World distribution of income: 1970 and 2006

 

Figure 3. World gini inequality

Check out the post for background on the data.

Strike Off (Union Decline)

Economist: Strike off

The days of union power are long gone in America.

STRIKES and employer-initiated lockouts in America last year were at their lowest since records began, according to new figures published by the Bureau of Labour Statistics. Only five work stoppages involved 1,000 or more workers last year. The number of working days lost, 124,000, was trifling compared with the tens of millions of days lost annually when national union membership was strong. Fewer strikes and weaker unions may help to explain why workers are claiming a smaller share of national income than they once did, but a more flexible labour force should be a boon to the economy in the long run. In 2009 only 15.3m workers belonged to a union, or 12.3% of all employed.

Don't know that it is accurate to say that union power is gone. Recently I posted the top campaign donors over the past 20 years. Eight of the top twelve were unions. While the private sector has less unionization, government unionization continues to rise. I believe about 35% of government workers are union. Unions aren't dead.

ADP employment report: Midsize firms start hiring again

Christian Science Monitor: ADP employment report: Midsize firms start hiring again

Private midsize firms hired 9,000 workers in January, the first gain in two years, according to the ADP employment report.

Medium-sized businesses are back in hiring mode.

After leading the charge in laying off workers during most of the recession, they added a net 9,000 workers last month, the ADP National Employment Report said Wednesday. That's the first employment growth among companies with 50 to 499 workers in two years.

Overall, the economy still lost 22,000 jobs between December and January, according to the ADP report. But that was the smallest decline since February 2008. ...