Stay in school kids. It is more important than ever. MUST SEE GRAPHICS that support this view. Ignore at your own peril!

The Pew Research Center has a nice report on the importance of education as a source of personal economic stability.
The Rising Cost of Not Going to College

"...On virtually every measure of economic well-being and career attainment—from personal earnings to job satisfaction to the share employed full time—young college graduates are outperforming their peers with less education. And when today’s young adults are compared with previous generations, the disparity in economic outcomes between college graduates and those with a high school diploma or less formal schooling has never been greater in the modern era...."

The underlining is my emphasis.  Read that again!

Here are a couple of graphics that support this view. There are more at the link above and an extensive discussion of the subject. I encourage you to take a look at it.

CVS's decided to stop selling cigarettes....OR DID THEY?

CVS, the large pharmacy and other dry goods chain, recently announced that it would cease selling cigarettes and all other related tobacco products. However, in that they did not include Electronic Cigarettes or "E-Cigarettes" in that decision.  Here is an article in TIME that goes into more detail.

Regular tobacco based cigarette smoking has been on a downward decline for some time now.  But the sale of e-cigarettes have grown significantly.

Perhaps it was a stroke of public relations genius on CVS's part to cease selling a product that they believe is on the long term decline but leave open the possibility of selling a similar product that is on the rise.

It will be interesting to see what they do.

50 years ago today the Beetles played their first concert in the US. How much do you suppose a ticket cost? See it here and how a minimum wage worker is 64' could get a ticket with little effort.

Here is an print advertisement for the first appearance of the Beetles in the US.

The RED circle marks the price of a ticket to this epic event exactly 50 years ago today.

In 1964 the minimum wage was $1.15 (increased to $1.25 in Sept 1964), so it would take 5.2 hours for a working stiff to buy himself and his significant other two medium priced tickets to the concert.

Usually at this point I would take today's minimum wage and divide it into the price of a similar concert in scale and scope in order to compare the purchasing power of the minimum wage in each time period.  However, I think it is not necessary in this case. It would take far more hours of work to buy a mid-priced ticket to a big time, one of a kind concert today.

The minimum wage worker in 1964 wins.  Hope they had a good time.

Edit: Here is the ticket for the Final Concert for the group.

It cost $6.50 in 1966.  The minimum wage in 1966 was $1.25.  It would have taken 10.4 hours to earn enough for two tickets. (note: not sure if this ticket is comparable to the one above in location or quality).

To purchase 2 of the expensive tickets ($4.00) for the first concert at the 1964 minimum wage of $1.15 it would have required 7 hours of labor.  In terms of Beetles concerts, the minimum wage still had more purchasing power in 1964.  However, the quality of the show in 1966 may have been better and it was in the middle of the hippie years in San Francisco.  I am guessing fun quotient was much higher so that might compensate for some of the decline in actual purchasing power.  :)

"The Sky is Falling (on low wage jobs)!!". Chicken-Little should now. She has seen it happening down at the processing plant..

If you are teaching or learning about how the adoption of technology by industry is changing the labor force, here is a short article that nicely illustrates the point.  It stretches far and deep.  Even in the chicken raisin' business.
Technology aiding poultry industry

"Technology has changed the way the processing plants work just as much as it's affected the live operations side of the industry. Mike Tirrell, vice president of human resources and business services for Mountaire, remembers in the early 1980s, when the processing of a chicken was done entirely by hand. Today, machines handle the work that was once done by employees. 

Burly workers no longer stack boxes onto pallets — machines do. Low-level laborers don't wrap the yellow trays of chicken in plastic — machines do. The job of processing plant employees these days is to supervise and assist those machines. Tirrell says that has enabled the company to grow without adding many employees. 

That has helped keep the price of chicken down for the consumer, he said. 

"The price of chicken is static," Tirrell said. "That's the result of efficiency in business."

I underlined the key parts as it applies to labor. This trend is a silent killer of jobs on the low skill/low end of the labor market. While I fully understand this process creates jobs elsewhere in the economy, the workers in the chicken killin' business are not likely to be the designers and producers of the technology that replaced them.

The hope is their children will someday.

Stay in school, kids.  Some jobs are just destined to fly the coop....Thank God.  :)

Read more here: http://www.modbee.com/2014/02/08/3177314/technology-aiding-poultry-industry.html#storylink=cpy

Nice resource on trade balance in the US. Or I should say trade imbalance.

If you are teaching or learning about trade here is a nice concise resource for the year 2013.

It shows the dollar values of exports and imports from and to the US.  It also shows the general categories of goods that the US trades in with the rest of the world.

I highlighted Exports in yellow, Imports in red and the overall trade numbers in green.

The US had a merchandise (this DOES not include trade in services) trade deficit $650.857 Billion with the rest of the world. In other words, we bought $650.857 Billion dollars more in "stuff" than we sold to the rest of the world.

We love foreign made stuff!  Is this a good thing, bad thing, or just a thing?

We all know "education pays" in terms of income but it also pays in employment consistency. Interesting graphs here that make this important point.

It is clear that "education pays" in terms of absolute income people earn over their lifetime---the more you learn the more you earn.

But another benefit of more education is the likely-hood of having gainful employment on a continual basis.  If you lose your job you are more likely to find another one in a relatively short period of time.

This graph from the Census Bureaus American Community Survey illustrates this nicely.

I inserted a RED line at the age of 60 to show the difference between years of work experience a person would have at the various levels of education.

You can see clearly someone with less than a high school diploma fares the worst by far with only about 27 years of work experience on average. Those with a college degree (or more) and those with some college trend together with 40 years of experience.  High school graduates lag by less than 5 years.

Stay in school, kids...

For more support here is a graph from the same American Community Survey that shows median monthly income by education level and years of experience.  I put a RED line at the end of the data lines at 35+ years of experience. Dramatic, is it not?

I repeat. Stay in school, kids!

Inflation is not a boring topic. It is a thief in the night and the root cause of rebellion around the world. Can't get more exciting than that! See here why...

When I introduce the concept of  inflation in class I teach it from two angles. 

I tell students it is like a thief in the night.  It does not actually take money away from you but it makes the money in your pocket worth less (not to be confused with worthless) than it was worth yesterday.

Example:  A bottle of water costs $1.00 today.  I exchange one dollar for the water. Assume tomorrow the water is $2.00.  We certainly can say that the price has increased by a dollar, but I think it is more powerful and meaningful to say yesterdays dollar is worth half of what it was 24 hours earlier. I now have to give up two one dollar bills to get the bottle of water OR I can only buy half a bottle!

Another point I like to make is inflation creates social instability, especially for people in poorer, developing countries where a higher proportion of cash money is spent on "needs"---food, water, shelter, etc.

In many places where social instability or outright rebellion is happening if you rewind the events to the root cause it often started with rising prices on basic staples in the marketplace.

You can get students and other young people to protest in the streets for "democracy, freedom, etc" BUT you can get moms, dads and grandparents to join them if prices rise unexpectedly.  Movies are made about fights for freedom from oppression. Not so much about the real cause--loss of purchasing power due to inflation.

Do the research.  I think you will find this is true.  Look for it going forward.

Oh, wait, you don't have to!  Just read about this VERY THING here in the WSJ:

Inflation may lead to social unrest in developing countries because rising prices are especially painful for households that rely heavily on cash as a store of wealth, according to recent research from the Federal Reserve Bank of St. Louis. 

Yi Wen, an assistant vice president in the St. Louis Fed’s research division, wrote in a new working paper that in developing nations, “liquid money [cash and checking accounts] is the major form of household financial wealth and a vital tool of self-insurance [precautionary saving] to buffer idiosyncratic shocks because of the lack of the well-developed financial system.” 

Mr. Wen also noted “historical evidence” that “moderate inflation [around 10% to 20% a year] may be significant enough to cause widespread social and political unrest in developing countries.”

My salute to "Multiple Job Holders" in the US. Their numbers have increased significantly over the last year. This can't be good, can it??

The monthly jobs report has a lot of interesting data on employment/unemployment that is seldom reported on in the general media.

Here is one I find interesting: "Multiple Jobholders".

Highlighted in YELLOW are people whose primary and secondary jobs are BOTH part time.  There are 1.892million of them in January 2014.  That is a 6% increase over January of 2013.

Highlighted in RED are people whose primary and secondary jobs are BOTH full-time! There are 236,000 of them.  That is a 12% increase over January of 2013.

This means over the past 12 months there are 131,000 more people who gained at least one additional job (or both of them).  That is equivalent to the number of jobs created in the month of March of 2013.

Payin' the bills....

Your first look at January's Jobs Report. 113,000 new jobs created. Way below estimates from Left AND Right economists. Tepid at best.

Businesses created a total of 113,000 new jobs in January.  This is way below the general consensus of economists on the Left AND Right that about 185,000 were expected.

Highlighted in YELLOW are the areas where the jobs created in January 2014 were above the past two months level and higher than one year ago (Jan 2013).

Highlighted in RED are the areas where the the jobs created are below the past two month level and lower than one year ago.]

Highlighted in GREEN are the total for the overall "Goods Producing" sector which is higher than in prior periods, and "Private Service Producing" sector which is much lower than in prior periods.

"Government" at the bottom is down significantly.  This category includes Federal, State and Local employment.  The BLS reports that 9,000 of the job losses come from the US Postal service alone.

Source: BLS

US Gross State Product vs a Nations Gross Domestic Product.

A neat map that matches a US States Gross State Product (GSP) with the Gross Domestic Product (GDP) of country that with a similar dollar value of the production of goods and services.

For instance, the dollar value of output produced by Texas alone is roughly the same as the dollar value of output produced by ALL of Canada.

A nice perspective on the just how the US is STILL a powerhouse in producing "stuff".

If educated people marry other educated people and it makes income inequality worse is it a problem that needs a solution? Nice graph here that illustrates one piece of the income inequality puzzle

When the government collects and reports data on "Household Income" it includes the income of all the people living in a particular household.  Two people living separately will be counted as two household units and their income counted separately.

However, if they marry (or co-habitat) then they will have one combined household income. Half the households, double the income on a per household basis (no more total income, however).

As households are formed over time their characteristics based on several factors will affect total household income.

Education is one such variable that has been identified as one of the primary drivers of income inequality. Not the only one but significant enough to note

New data provided by the Census Bureau and interpreted by the Pew Research Center (graph below) shows that the rate of household formation by marriage has decreased overall since 2008 by an average of 11.4%.  However, the decrease is not evenly spread over educational attainment levels.

As you can see, those with a college degree get married at a higher rate than people with lower levels of educational attainment, and even though they have decreased they have decreased at a slower rate than the other categories (7.8% is significantly below the average).

Additionally, those with a degree have seen an uptick from 2011 to 2012 (brown bars to the extreme right) in family formation by marriage.

If income gains are going to those with more education and educated people are pairing up at a higher rate than other groups, then income inequality as measured by "Household Income" can only get wider.

I don't know how to fix this.  I just thought it was interesting and I don't think it is something that is talked enough about at a policy making level.

Should it???

My encounter with a "Snow Roller". You won't believe what happened next.

I live just north of Columbus, Ohio.  We had a unique weather event the night before last that produced a "Snow Roller". These are "natural" snowballs of various sizes that were formed with just the right conditions, temperature and wind.  I have never seen them before and apparently they are a rare occurrence.   A large soccer complex I live near has hundreds of them.  They have a very unique "swirl" pattern to them in the center.

Here is my daughter holding one just to give you a idea of the scale and scope of one.

Here is me holding one AND wearing it as a hat.  The kid in me required I do this.

It is difficult to see but this is the soccer field that is covered with them.  It is amazing to see these.  Glad I got the opportunity.  :)

Incentives: How much the Long Term unemployed used to earn when they worked and how much they now receive in cash benefits. This is difficult but numbers don't lie (or do they?)

I used this graph in a prior posting to ask why are the bulk of the long term unemployed in industries that have been employing the MOST people since the official end of the recession in June of 2009 (except manufacturing and construction)

I was curious as to what might be lost wages from work were and how much in cash (unemployment compensation) and near cash (SNAP, or "food stamps" benefits).

I used BLS data (see that below) for the average weekly wages, which I inserted in the graphic for the appropriate job category.

I used the national average for unemployment compensation and SNAP Benefits. Note there will be differences State by State in terms of unemployment compensation amounts--some higher, some lower.

The total in cash and near cash benefits an eligible unemployed worker is eligible for is $832.00 per week.
That is combing the two benefits and assuming for SNAP benefits a family of 4. So, the total could be more or less depending on the number of family members.

Compare the total in eligible weekly benefits to the total in average weekly earnings in each job category.

I believe economists would look at this and see---Incentive(s).

I am neutral on this. What do you think?

Source: NPR

Note: Here is where I found the average weekly wages. I used Dec 2013 weekly wage.

Source: BLS

The President spoke of the Long Term unemployed in the SOTU address but did he tell you what these people used to do for work? No? Ok, I will here...

What particular part of the economy did the currently Long Term Unemployed separate from when they lost their job?

I have to tell you I am VERY shocked by this. I assumed they would be part of an industry segment that was lagging in new job creation so there would be little opportunity to find work doing what they did before.

I would have expected Manufacturing and Construction to have much higher rates of long term unemployed as these industries have been disproportionately negatively impacted by the recession and are still lagging.

Source: NPR

The Top 3 and the 4th one are areas where job growth has been notably strong since the US officially exited the recession in June of 2010.

These job categories, except for "Professional and Business Services"(for the most part) are predominantly lower wage, lower skilled positions.

How do these people with no significant long term skills (just being honest) get absorbed back into the economy in a meaningful way?

What possible SPECIFIC policies can target these folks for gainful employment?

I am guessing the Minimum Wage will be mentioned as well.

So, we have lots of low skilled, low wage workers (don't look at me, look at the graph) on long term unemployment and the solution is to increase the cost of hiring these people (if they can get hired)?

Help me out with this, please...

Video (with sound inserted) of San Francisco 4 Days before the earthquake of 1906. So many historical, sociological, economic, and cultural observations one can glean from this.

Here is a great video that is chocked full of learning possibilities.  It is actual video footage taken 4 days before the 1906 Earthquake that leveled San Francisco.  Of course it did not originally have sound BUT someone edited it and insert sounds that would be typical of the activity taking place.

So cool. Not to be missed!!

You MUST watch to the end when they insert photos of the SAME street in the aftermath of the quake. Chilling.

Source: Gizmodo