Saturday, May 5, 2012

What does a Rocket Scientist have in common with a High School Drop-out? More than you think after seeing this unemployment graphic...

The RED bar shows the unemployment rate for different education levels.  It is pretty obvious the more education you have the less likely you are to be unemployed today. There is a nice stair-step correlation. 

The BLUE bar represents "Long Term Unemployment" which is defined as being without a job for one year or longer.  If you take that total unemployed for over a year and divide it into the number of long term unemployed in each of the education categories you find that long term unemployment does not discriminate by education level.  It is pretty democratic!

Source: Pew Center via Business Insider
One lesson I see here is that while education has many residual benefits, a major one is that if you lose your job you are more likely to find one within a year. 

However, if you don't, you are not much better off than a High School graduate.  Yikes!

Friday, May 4, 2012

Nice graphic showing the Generational Divide in Jobs. This is an underlying "problem" in the labor markets that can't be solved by policy--only mortality....

Macabre, I know....This chart uses the "Employment-to-Population" ratio for select age groups to illustrate the change in work status for these age groups since the start of The Great Recession.  It is simply the number of workers employed in the age group divided by the total population of the US (multiplied by 100). 

Notice the baseline "0%".  The employment-to-population ratio for workers aged 55 and up has remained remarkably steady. The drop in the other two age groups has been rather dramatic. 

Source: Investor Daily
One explanation is older people are holding onto their jobs longer because a portion of their retirement savings was wiped out in 2007-08.  The longer they work passed traditional retirement age fewer jobs open up for the age group behind them.  Another explanation is the 55 and over demographic is growing and the mid-point for the other two age groups actually shows a decline in numbers (see link article HERE for more on this). 

There certainly are other explanations I have not covered.  Can you think of any?  Suggestions welcome.

Secretary of Agriculture makes statement on Ethanol. See here how I edited it to reflect the bankrupt thinking on this issue...

Approximately 40% of our domestic corn production goes to the production of ethanol, primarily a gasoline additive.  The most recent Farm Bill calls for an increase in the amount of ethanol MANDATED/Required to be produced and used in this manner.  Using food for fuel is universally condemned by those on the Left AND Right of the political spectrum. The only ones who love it are the Farm Lobby, The Ethanol Lobby and the Senators from the farm belt States. 

Below is a quote from the head of the Agriculture Department. I cross out some of his words and insert my own in parenthesis to show this policy can work just as well in the inverse.

Vilsack Makes the Case for Renewable Energy

"When we get to 36 billion gallons (of ethanol), that's going to be mean that we will be importing exporting fewer barrels bushels of oil corn ," says Vilsack. "That means that the wealth that we are currently transferring into from those countries that don't necessarily agree with us and are from an unstable part of the world are our friends/allies/customers can  cannot be redirected into creating rural opportunities and jobs."

It is all perspective....

Latest jobs report just out! A quick look as to where the jobs were gained/lost last month

Click on image to see it more clearly or go HERE for the actual report just released.  Total jobs created in April (far right column) was 115,000 (Total Nonfarm).  This number is derived from taking Total Private (130,000) minus Government (at bottom -15,000). 

Looking through the numbers, the I continue to see an education gap.  "Professional and Business Services" and "Health care and Social Assistance" are the job growth leaders. These categories generally contain people with advanced education beyond High School and  have shown the most strength since last April 2011 (left-most column). 

Government employment--this is at local, state and federal level, clearly is a drag on the overall number over time. 

(Add 3 Zeroes to the end of the numbers you see to get the proper scope---"in thousands")

Tuesday, May 1, 2012

Chinese Tire Tariffs (2009) re-visited...Policy success or failure? More Unseen here than Seen--F. Bastiat lives....

This analysis by The Conversable Economist of tariffs imposed on Chinese-made tires (2009) should be required reading for populist politicians who cater to narrow special interests AND want appear to be a champion of workers and "American Jobs".  It is not long and you will learn A LOT about basic economic principles within the context of "the seen and the unseen".  Most excellent.

Tire Tariffs: Saving Jobs at $900,000 Apiece
In September 2009, President Obama approved a special tariff on imports of tires from China. In his 2012 State of the Union address, he stated that the policy had saved "over a thousand" jobs. Gary Clyde Hufbauer and Sean Lowry look at what happened in "US Tire Tariffs: Saving Few Jobs at High Cost," written as an April 2012 "Policy Brief" for the Peterson Institute for International Economics.
The basic economic lessons here are the same as ever. There's never been any question that imposing tariffs on foreign competition could dissuade imports, and thus allow U.S. manufacturers to keep production and prices higher than they would otherwise be. As a result, U.S. consumers pay more, the firms make higher profits--and workers for those firms get some crumbs from the table. In this case, Hufbauer and Lowry estimate that consumers paid $1.1 billion in higher prices for tires in 2011. This saved a maximum of 1,200 jobs, so the average cost of the tariff was $900,000 per job saved. But of course, the worker didn't receive that $900,000; instead, most of it went to the tire companies. And in an especially odd twist, most of it contributed to profits earned by non-U.S. producers.

Sunday, April 29, 2012

You can't escape it--Wind Farms contribute to global warming by warming the air around them...TANSTAAFL

Large Wind Farms Increase Temperatures Near Ground
Large wind farms slightly increase temperatures near the ground as the turbines' rotor blades pull down warm air, according to researchers who analyzed nine years of satellite readings around four of the world's biggest wind farms.
The study showed for the first time that wind farms of a certain scale, while producing clean, renewable energy, do have some long-term effect on the immediate environment.
Using sensors aboard a NASA satellite, researchers at the University at Albany-State University of New York, and the University of Illinois systematically tracked a cluster of wind farms in central Texas as the installations grew from a few dozen turbines in 2003 to more than 2,350 by 2011.
On average, the nighttime air around the wind farms became about 0.72 degree Celsius warmer over that time, compared with the surrounding area, the scientists reported Sunday in the peer-reviewed journal Nature Climate Change.

I finally put into words my 3 "easy" steps to reduce the cost of college. YES, they do (ok, CAN) apply to you!

Here are my suggestions for cutting college costs while you wait (forever) for politicians to "do something" about the cost of college.  This advice is not for everyone (actually it is, but some of you will find reasons why it does not apply to you or think it "unrealistic").  I think taken together it is pretty solid advice.

1.  Take AP classes and AP tests at the end of the year.  If in your high school career you take and pass just 5 tests in core subjects you will have 1 semesters worth of classes out of the way.  Additional savings come in the form of no college textbooks to purchase and ONE LESS SEMESTER of living expenses.  You get to be employed (hopefully) 1 semester earlier.  You become a net earner as opposed to net spender (debtor) sooner. I wrote more about the value of AP Credits HERE.

(Note: you can take CLEP tests and accomplish the same objective above.  I know, those tests are HARD, but so is paying back thousands in student loans!)

2.  Use the community college system intelligently.  Take classes at your local C.C that DO NOT directly impact your intended major, i.e. if you are a math major take your basic English or Social Studies classes at a Community College.  Vice versa if you are an English major.  Would it be nice and convenient to take all your classes at "Full-Price University" so you get to have the full campus experience? Yes, but if you, or your parents, need to worry about cost it is SMART to strategically plan where to take your classes.  Swallow your pride and be financially responsible!

3.  Apply for scholarships and keep the following in mind.  How long does it take to apply for the average scholarship from start to finish--including writing the essay?  Let's assume 5 hours (reasonable?). 

If you apply for a $1,000 scholarship and it takes you 5 hours of "labor" to fill out the application.  Assume you get said scholarship. This means on an hourly basis your "earned" $200.00 per hour ($1,000/5hrs).  Where can you get that kind of part-time pay with your present skills?

OK, so you don't get first one.  Say you apply for a second $1,000 scholarship and it takes you 5 hours to apply for that one. Total so far you have spent 10 hrs maximum on applications for a $1,000 scholarship.  Assume you get this one.  You will have spent 10 hours to get $1,000.  That's $100.00 per hour for your time filling out applications.  Again, I ask the same question that ended the last paragraph.

How many applications do you have to fill out until you get to an hourly wage that you could reasonably expect to get paid in a "real" part-time job? Fill out applications at least until that point (MB=MC!).  The odds are in your favor! 

If you are waiting around for the powers that be to generate the inertia to decrease the cost of college for you, then you will be in debt up to your ears before you know it. 

These relatively simple steps can save you thousands (10's of thousands?).  Where am I going wrong, if I am?  Please think before responding and be constructive.  Thank you.
View My Stats