Profiles of 11 Long Term Unemployed People---How do we solve this problem?

We JUST talked about this in class yesterday. The ranks of those classified as Long Term Unemployed are growing.   How do we begin solving the problems of the long-term unemployed in the SHORT TERM?  I believe this question is not as easy to answer as it is made out to be.  Read the stories (very short) at the link below and tell me what you think.
The Truth About Long-Term Unemployment In America
Here is a graph showing illustrating the long term unemployment issue (Presence of "Discouraged Workers"):



Source of graph and paragraph below

This graph shows the number of workers unemployed for 27 weeks or more.
According to the BLS, there are 5.518 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 5.588 million in November. This is very high, but this is the lowest number since September 2009. Long term unemployment remains a serious problem.

Why does a Salad cost more than a Big Mac? I am glad you asked---the answer within...

Here is an excellent example of how subsidies can distort markets. Subsidies tend to (1) lower the cost of production, hence more supply of  a good and/or (2) lowers the price of the good for the consumer, hence more demand for a good. More supply, more demand, more market quantity.  Notice I have not said anything about the societal value of the good in question.

 Below is the US Dept of Agriculture's "Food Plate" replacement of the traditonal  "food pyramid" many of us old-timers grew up learning.  It is simply suggested serving sizes/portions of various foods that promote good health in the long run.

Below that is the proportion of subsidy money (read that tax money) that is provided mainly to suppliers of various agricultural products.  Notice an imbalance? Fruits and Vegtables occupy approx half of the plate but receive a fraction of the subsidy money--Meat and Dairy occupy less than half but receive well over half the subsidy money.  Grains are just about right (however, I wonder if that includes corn for ethanol subsidies)...

Source: PCRM

Remember, it is the SAME agency, The Dept of Agriculture that is responsible for BOTH of these programs! 

"Show me the Spending!" Nice interactive illustrating the requested spending in the Presidents latest budget proposal

(HT: David Mayer for the link)

The NYTIMES has a terrific interactive breakdown of the spending side of  Presidents budget proposal for Fiscal Year 2013.  I encourage you to go HERE and look at all four graphics. If you click on a "bubble" you will see the category or spending, how much is proposed, and if it is increasing or decreasing.

Source: NYTIMES interactives

This graphic above shows Mandatory (on left) vs Discretionary (on right) spending.  You can't see it here, but if you go to the website and click on the LARGEST circles on the left you will see they represent Social Security, Medicare, Medicaid, and Interest Paid on the National Debt.  Those three things pale in comparison to any other part of mandatory spending.

National Defense is considered discretionary spending and is represented by the THREE largest  bubbles on the right.

All these programs are the "third rail" of politics---don't touch or you will die (politically).

So, you can easily see the mandatory programs are the "elephants in the budget room".  Instead of addressing the elephants, the political class of both parties seem to just fighting over who is going to (and not going to) run between the legs of the elephants to save the tiny budget mice. 

Wouldn't it be better to get the elephant under control and not wreak so much havoc on the poor little "budget mice" to give them a break?...Just sayin'....

Note: I add one more of the graphs below showing the breakdown of spending by major category.  The issues are obvious. How much conversation do you hear about this?

If you buy roses to give tomorrow don't talk to them. They won't understand a word you say anyway...See here why...



If you receive roses for Valentines Day and believe talking to them will extend their shelf life then you will have to learn Spanish.

Ninety percent (yes 90%) of the roses sold by Tuesday are imported and approx 82% of those imports come from Columbia primarily and Ecuador secondarily.  Why so many imports? California normally supplies a perponderance ofdomestically grown roses, but it is out of season for roses now.  February is simply the wrong time of year for domestic producers to significantly benefit from the "holiday".  

Need a graphic for a Valentines Day sentiment for that person who just LOVES economics? Check out these graphs---Love is in the air (and in equilibrium too!)

Nice graph showing the historical relationship between wages and productivity and 3 reasons why wages are/may be stagnating

Historically, worker wages have been closely tied to worker productivity--the more you (on average) produce, the more you earn (on average).  This direct relationship is represented in the graph below.

Source: Tim Taylor at The Conversable Economist

However, the tight relationship starts to sever around 1980 and productivity begins to increase faster than wages .  Professor Taylor at The Conversable Economist narrows the culprits down to 3 factors (he reverses the order from a source he cites at the link above):

1.  Technological change connected with improvements in information and communication technologies, which has raised the marginal productivity and return to capital relative to labor.

2. Increased globalization and trade openness, with the resulting migration of relatively more labor-intensive sectors from advanced economies to emerging economies. As a consequence, the sectors remaining in the advanced economies are relatively less labor-intensive, and the average share of labor income is lower.

3. Decrease in the bargaining power of labor, due to changing labor market policies and a decline of the more unionized sectors.

Numbers 2 and 3 have lots of politics mixed in with them.  If you think about the news you watch or read these ARE the major focus in some form and are easily exploited by politicians.

Number 1 not so much, if any, politics. 

Output is derived from a combination of Labor and Capital (machines, tools, processes, infrastructure, etc)--People using the latest available technology to make "stuff".  The value of that output over time is increasingly coming from the Captial side of the equation and is eroding the overall contribution that Labor adds to the good/service. 

Three things seem to result from this:

1. Workers at the margin are squeezed out of an industry altogether because they are adding little to overall productivity that the employment of capital and technology creates.  Not saying this is right or wrong, just the way it is...

2.  A subset of semi-skilled/low(er) educated workers that are still employed in the industry are not seeing wage gains, perhaps because they are more remote from the gains created through the use of capital/technology.

3.  A subset of skilled/high(er) educated workers who are directly involved in the gains created through the use of capital/technology are going to benefit the most from the gains in productivity.

Not a perfect list but I think it is a good outline...Any comments?

Nice Infographic an how promotions in corporations are REALLY earned. Cognitive Dissonance rules the day...

These are the results of a survey of executives who inevitably make promotion decisions within a corporation.  While favoritism does not necessarily trump competency (or does it?), I think they go hand in hand. Complements as opposed to substitutes, to put an economics spin on it.

I am fascinated by the section below "What Role Does Favoritism Play?"...A vast majority conceded favoritism in promotions exists all around them BUTat the same time they deny it is a  factor in their own promotion decisions.  Curious...

Source: Business Insider

Greece seems to have a negative Keynesian Multiplier...This will not end well for them...See chart here

Source: Spegiel via Chartporn

Greece has borrowed a considerable sum of money (relative to their National Income (GDP)) but their output (GDP) has suffered a significant decline.  If you borrow money and your GDP remains stable or increases marginally, then you can/could claim that the borrowing helped.

But if you (Greece) borrow and your GDP continues a steep decline, then you are in trouble...

Map of Meth Labs in the US. Before looking, which State do you think has the MOST meth labs (by a BIG margin)?

Dept of Justice via Megan McCardle

That would be Missouri by quite a margin...

Go HERE to see a series of maps just like these dating back to 2004. See how the numbers dramatically decreased but are starting to creep back up. 

Anthropologists usually study great societies from the past. Isn't this ironic?

This morning there is an article in the NYTIMES about the recruitment of International students to the University of Washington (the State of Washingtion), mainly from Asian countries and specifically China. International students pay up to 3 times as much in tuition than resident students. 
Critics suggest the University is stepping up the admissions of international students at the expense of in-state students solely for budgetary reasons.

Most of these international students are majoring in STEM (Science, Technology, Engineering, Math) subjects and will take that expertise home with them.

I wondered what major was popular at the U. of Washington:

""Undoubtedly all of you have heard about the significant cuts facing higher education in Washington State. The squeeze is particularly tight for our deparment, since anthropology remains the fastest growing major in our college, with nearly 6oo undergraduate majors."" (Source HERE)

Nothing wrong with Anthropology! (Really, I think it is awesome).  However, in a context of a global economy undergoing massive transition deep into this century, do we need....Ok, I am going to stop there.

On the page I found the above quote, I also found this record achievement they were touting on the homepage:

Source: University of Washington Anthropology Dept

Well, I suppose the last one has some relevance in this case...Just sayin'...

A short lesson on where our oil comes from to meet our domestic needs. You will be surprised by these numbers!! Take a look...

This chart shows total crude oil imports to the US from the Top 20 source countries in the year 2010. From these 20 courtries, we imported a total of  3,259,534,000 Billion barrels of oil to help meet our domestic energy needs (the unit of measure for oil is in barrels. One barrel equals 42 US gallons of oil),  From Canada and Mexico alone we get 22% and 13%, respectively, for a total of 35% of imports from the Top 20.

 

There is a common misperception that we get "all our oil" from the Middle East.  If you look at the countries in the Top 20 that are Middle Eastern countries (Persian Gulf area) you will find only Saudi Arabia, Iraq and Kuwait.

Combined, these three countries supplied the US with 617,831,000 million barrels of oil, or 19% of the total from the Top 20.

Of this amount imported from the region, Saudi Arabia represents 64% of the total.  Saudi Arabia's imports to the US represent only 12% of the total from the Top 20. 

Since total oil imports are approx 50% (a little less in actuality) of our overall domestic oil use, you can cut all those percentages in half to get a rough estimate of how dependent we are on these foreign sources of oil.

Note: the TOTAL amount of crude oil (JUST crude oil) imported to the US from ALL sources in 2010 was 3,362,856.  The Top 20 countries above provided 97% the total amount imported.  While my calculations are not exact, you can see they will be in pretty close proximity. 

Very cool "Facebook at Night" map they included in their filing to sell their stock to the public. Worth a look!!

Below is a map similar to my favorite map---"The Map of the World at Night" (shown below too). This one was provided by Facebook in their legal filing to go public with their stock (HT: MoneyBox).  It shows the flow of interaction between users around the world.  Look at the dearth of "light" (hence, Facebook penetration) on the Eurasian continent.  Compare the two maps. Amazingly consistent.  BUT I do see a couple of areas in the world where the maps are at odds with each other. Can you see them???

Source: Mattew Yglesias at MoneyBox

Nice chart showing where the projected jobs in the next 10 years will be...Are you prepared?

Healthcare is the place to be for short to medium range employment prospects by a substantial margin.  The waves of late baby-boomers (early to mid 50's) are going to require more care.  Read more HERE.

Source: Economix

Google is known for its tough interview questions/scenarios---I think IKEA has them beat. How would YOU do with this one?

(HT: Mike Fladlein) I would not fair well in this interview. Having just relocated from the Dallas/Ft Worth area to the Chicago area, I have purchased and assembled furniture from IKEA in the past month.

Source: Mike Fladlien

Observations: the quality of "assemble yourself" furniture has improved tremendously in the last 10-15 years or so.  Gone are the days of putting in a screw and it coming out the side if you did not put it in perfectly straight.  The engineering has rendered this almost impossible to do. 

Second, with all the advancements it STILL takes me 2 to 3 times longer to put a piece together.  I underestimate my opportunity costs everytime! 

We had to hire a handyman for a couple of jobs as well.  He told me a good part of his business is FINISHING the assembly of  IKEA furniture that people started and could not finish.  Opportunity Costs...