Minimum Wage vs Liveable Wage

[Johnathan Clayborn]

Today there were protests in 150 cities across the country from fast food workers who are demanding that the $7.25/hour minimum wage be raised, more than doubled, to $15/hour. The basis of their argument is that it is not possible in today's economy to support a family on minimum wage. While I may be empathetic to their argument, I am not sympathetic to their cause. Raising the minimum wage would be a terrible idea, for a number of reasons that I will try to illustrate.

In the United States the legalization and establishment of a minimum wage occurred in 1938 by President Franklin D. Roosevelt. It was originally $0.25/hour when the law was first enacted. Adjusting for inflation, that would have been approximately $4.08/hour by today's standards. In 1939 the Federal Minimum Wage was increased to $0.30/hour, or $4.97/hour after inflation. By 1950 Minimum Wage had risen to $0.75/hour, which is $7.16 after inflation adjustments. The rate has been fairly consistent since then. The primary reason that the Federal Minimum Wage Act was passed was to prevent people who were desperate for work coming off the heels of the Great Depression from being unfairly exploited by business owners looking to save some cash. (You can see historical minimum wage rates here). 16 US States currently have minimum wage laws higher than the Federal standard.

Let's take a moment to talk about how economics work. In the most basic sense there is a production of goods or services, then those goods or services are exchanged to consumers who trade them for monetary units. This has been the basic rule of economics for centuries. Keeping this in mind, people can only spend what they earn, and much of their income goes to things like food, shelter, transportation, personal insurance, and healthcare. According to the US Wage and Labor Department, the median household income in the US is $51,000. In fact, according to an analysis by CNN Money the average spending for households in this median bracket is 69% of their budget on those items. That leaves only 30% of their budge for discretionary spending on items such as entertainment, clothing, and miscellaneous items.

Before I continue further, let's talk a moment about how the wealth is distributed within the US. By now everyone has heard of the "Occupy Movement" and the unfair distribution of wealth among the "1%". The chart below illustrates that concept, but it also illustrates something more important to this discussion. The Median Income, as I mentioned, is $51,000. This means that half of all US Households make less than that annually. As you can see from the chart, the distribution of wealth does not follow a bell curve. In fact, the vast majority of the population is clustered near the bottom end of the spectrum; less than $33,000 annually.


Let's revisit that financial analysis again, but this time with a household in that $33,000 income bracket. Looking at Food, Housing, Transportation, Personal Insurance, and Health expenses this income bracket expends 80% of their budget on these items. That only leaves 20% of their budge for discretionary spending.

Now that we have that background out of the way, let's talk about this $15 minimum wage push. One of the biggest mistakes of this logic is what it will do the economy itself. The logic seems to benefit the individual at the expense of the economy as a whole. While more than doubling the worker's income would certainly do more to increase their discretionary spending, it actually will hurt businesses. In order for restaurants to be successful they have to maintain certain budgetary ratios. For Fast food the employee wages should typically not exceed 25% of the overall budget, for sit-down restaurants it should not exceed 35%. Assuming that they keep the same amount of staff, this means that an increase in wages by 200% would push their employee costs up to around 50% of their overall budget, which would sink even fine dining establishments. Some businesses are already legally challenging this decision in Seattle by filing a lawsuit claiming that impedes their ability to compete in a free market economy. In the meantime some businesses are trying to offset this increase in cost by taking measures such as doing away with company sponsored benefits such as sick time, pensions, retirement, and medical insurance. Some companies have even taken to charging their employees for previously-free conveniences such as parking on the property. In the end though the business owners are left with only two main options; reduce the number of staff or increase the prices of their goods.

If companies reduce the number of staff then there will be fewer people working and spending money, which means that businesses as a whole make less money and are forced to take cost-saving measures such as layoffs of price hikes. Some McDonalds stores have already floated the idea of eliminating cashiers and replacing them with kiosks in the lobby. This would spill over into retail establishments who would soon be forced to follow suit with either price hikes or layoffs, or both. The Self-Checkout lanes would almost completely replace cashiers.

If companies try to offset the cost by increasing the cost of items, effectively passing that cost on to the consumers directly, then that means that people will not be able to spend as much money, they will spend less, buy less and companies will lose their profit margins. This will result in either staff layoffs or price hikes to compensate, which further exasperates the issue. In either case, the end result is the same; a Kobyashi Maru that serves no purpose other than to destroy the base level of the economy.

Let's examine another less obvious side effect; what this does to non-minimum wage jobs. Increasing minimum wage to $15/hour would make their annual salary $31,200. According to the Bureau of Labor Statistics people with an Associates Degree earn an average of $40,820 annually. Bachelor's Degree holders earn an average of $53,000 annually. To put this into a different perspective, a teacher needs to have a 4 year degree plus certifications in order teach in any state in the US. In Arizona the average starting salary is $31,689. Raising the minimum wage to $15/hour doesn't automatically increase the wages of everyone else. So this devalues the educated middle class. We would essentially be saying that a job that requires no skill and just a few hours of training that literally anyone could do is worth the same value as someone who requires a minimum of 4 years of training to do their job. This logic is folly.

Going back to the main part of the argument; that people cannot support a family on minimum wage salary; it is not intended for that. Minimum wage jobs are intended for students and unskilled or barely skilled workers to fill the entry-level positions in the job market. This push for a higher minimum wage, more than anything, smacks of the lack of ambition and determination that seems to permeate our society of late. If you don't like how much money you make, improve your situation; go to school, get a different skill set, move up in your company. Don't be content with doing nothing with your life and then complain that you can't support yourself. Anyone can improve their situation with enough drive and desire to do so.

Further Reading:
http://www.bls.gov/opub/mlr/2014/article/measuring-the-distribution-of-wages-in-the-united-states-from-1996-through-2010-using-the-occupational-employment-survey-1.htm

http://www.ibtimes.com/fast-food-strike-september-2014-workers-seek-15-minimum-wage-right-unionize-1678354

http://thehill.com/business-a-lobbying/business-a-lobbying/216594-fast-food-workers-take-to-the-streets-for-15-minimum

http://www.thv11.com/story/news/local/little-rock/2014/09/04/minimum-wage-demonstration-downtown-little-rock/15061201/

http://dailysignal.com/2014/09/04/chart-much-fast-food-prices-rise-employes-paid-15-hour/

http://losangeles.cbslocal.com/2014/09/04/fast-food-workers-to-strike-in-campaign-to-raise-minimum-wage-to-15-an-hour/

http://smallbusiness.chron.com/common-food-labor-cost-percentages-14700.html

Choosing a Graduate School

[Johnathan Clayborn]
Now that I am in the home stretch for my undergraduate degree I’ve been giving a lot of thought recently to which graduate school I would like to attend. The school that I am at currently does offer degrees in the field I wish to study, so I’ll consider them as a last resort, but I’m very fed up with the administration and support teams at the school, so it’s time to shop around. This seemed like a perfect opportunity to write about my methodology.

Choosing a graduate school is no simple task, and certainly not one that you should make impulsively. Graduate degrees can be lengthy programs and they can be quite expensive. You could easily buy a house (in some parts of the country) for what you will spend on schooling. And the last thing that you want is to end up with a degree that will be laughed at or disregarded by potential employers. So how does one go about choosing a school?

There are literally dozens and dozens of schools that offer Masters and Doctorate degrees. One of the first questions that I start with is “what is my schedule like?” Can I physically be present in a class on-campus? Or are the constraints of work and family life going to make that scenario an impossibility? Also, are you expecting any significant life-changes in the next few years? If you are moving, starting a new job, getting married or divorced, etc., then you may want to give consideration to your schooling. If you are in the job market it might not be a good idea to commit to a program that requires you to be present during the day, especially if you are trying to make a good impression on your new boss.

In this particular case, like so many millions of other working adults, I find that attending a ground campus is not a pragmatic choice at this point in my life. So, that narrows my search parameters to an online school. But there are still quite a few online schools to pick from. Now, searching and comparing all of those schools would not be a pragmatic way to spend your time, so you will need to narrow your search parameter even further. For me, this was by selecting only schools that offered a degree that specialized in my area of study. For example, there are quite literally dozens of schools that offer doctorate degrees in psychology, but there is only a handful that offers a specialized doctorate in educational psychology specifically. By focusing on my degree specialization this made my particular list of potential schools much more manageable.

So, for me the next step was probably one of the most obvious; Cost analysis. How much is it going to cost me for this degree? Pretty much everyone takes a look at the cost per credit hour, but for many graduate degrees there are other costs as well, especially at the doctoral level. There are often residencies, seminars, colloquia, or in some cases, certification testing that may be required. These costs are often not included in the tuition quote that you receive. Many of these require travel expenses on top of the fee to attend. Find out from the schools that you are interested in; how much they cost, where they are at, how many you are required to attend, and how often they occur. This will give you a much more realistic idea of cost as well preventing any unpleasant surprises.

Next, also consider the length of the program. How many credits do you need? What is the average time to complete the program? Knowing this information will give you a much more realistic sense of what you are in for in terms of length of time before your graduation.

Another thing to consider, start at the end and work backward. What I mean by that is this; plan to where you want to end up academically and work your where back to where you are now. For example; I plan on pursuing a doctorate of educational psychology. So, when deciding which grad school I wanted to attend I started by researching the doctoral programs. From there I knew which master’s level programs would feed into that doctoral program. In my particular case the school that I’m leaning towards also offers a specialized master’s degree in educational psychology as well. This can streamline your length of time in your graduate studies by keeping you from taking any unnecessary classes. Additionally if you can find a school that offers both the masters and the doctoral degree that you want, then it will make transitioning from one degree to another much easier.

By this point you still probably have about a half-dozen schools to consider. The next logical step is to check their accreditation. This is a very important step and will keep you from falling into the “degree mill” trap. Degree mills, for those of you who are not aware, operate much like the so-called “bucket-shops” in the genealogy field. With a degree mill you simply mail them a check, in some cases you’ll do some fictitious coursework and then a very short time later they mail you the degree that you want. The biggest problem with these degree mills are the fact that the degrees are not worth the paper that they are printed on. No employer will take them seriously and you will have wasted a considerable amount of money for the degree. If you find yourself saying “this seems too good to be true!” then it probably is.

So, how do you tell if a graduate school is accredited? First, check their website. See what institutions they list as being accredited by. Trust me, every college will have this. If you can’t find it on their web page, resort to Google. Type the school’s name and then accreditation. This will almost always pull up exactly what you are looking for. The trick here is not to take this information at face value. Some degree mills list accreditations that they do not actually have. Other degree mills are more ambitious and will make up a fake accreditation institution that sounds legitimate in order to trick you. If you want to know for sure if a school is accredited or not, check here: http://www.ope.ed.gov/accreditation/Search.aspx  If the school is not listed then I would strongly encourage you to look at another school, no matter how enticing they sound. After all, that’s kind of the point of a scam.

Okay, so now you have a half-dozen legitimate, accredited schools on your list. Another thing I like to do is take a look at the reviews. I typically start with www.ripoffreport.com .  This is a website that people  go to when they believe that they are being scammed by a business or institution. In my particular case, the school that I am currently going to had three dozen entries, all of them recent (which would explain why I’m fed up with them). The two graduate schools that I am considering, one of them had 12 entries, the other one had 4. This gives me an idea of the credibility of the school in the eyes of the public. But don’t stop there. If the school has a page on Facebook (or whatever social networking site you use) hit it up and ask people what they think of the school, good, bad, or otherwise. I also head over to http://www.studentsreview.com/ and see what other students have had to say.  On this site students can rate the school in a number of areas. If you go here I strongly encourage you to go into the detailed reviews left by students for your degree level and take notes on some of the comments that people are complaining about. Jot these notes down and hold onto them.

After that, let’s see what the business world thinks of the schools. I like to evaluate where the school stands on certain rankings. There dozens of rankings out there, so pick carefully. One that is widely respected is the US News Ranking. The biggest drawback to this site is that they typically do not rank any of the “for-profit” colleges, so most of your online-based schools will not be listed by default.  Another excellent source of information is the Online Education Database. (http://oedb.org) . This site is independently run and provides a fairly accurate portrayal of the overall school based on different areas. The “for-profit” colleges are listed and ranked on this site so it may give you a better idea of where they stack up when compared to each other.  Follow that up with a trip over to the National Center for Education Statistics (http://nces.ed.gov/). This is a site run by the US Department of Education.  This site does not rank the schools, but it does give you a general idea of some of the cold, hard facts about the school. You can see what the school’s acceptance rate is, what their graduation rate is, etc. You should note however that some of this data may be skewed. For example, if you are trying to see how many people graduate out of a specific program, this is not the place to do it. This just gives your overall information for the school as a whole.

With regards to business, also look into any professional organizations in the field that you are studying. Do they recommend any one school over the others? Do they have a list of schools that they endorse? etc. This can be a crucial piece of information for you.

One tip; something to avoid: do not search “top online colleges” or something like that in Google. You will get a plethora of sites that return matches, however these are decidedly less than useful. Some of these sites are false-fronts run by the parent corporations of the schools that they represent.  Others are marketing sites that get paid by the schools each time a student fills out a “request more info” thing. They are not interested in providing you with actual, useful data, instead they just want to sell you the school. The Apollo Group is one large company that owns several online colleges including the University of Phoenix, Western International University and others. The Career Education Corporation is also a huge conglomerate company that operates more than 80 online schools. These companies both make use of sites like these to garner admissions for their schools.

Next, contact the Better Business Bureau of the state that these schools are headquartered in and see how many complaints have been filed against the school. After that, contact the accreditation agencies that the school is registered with and do the same. No school is perfect so expect to find some complaints. But, what you should be looking for is the overall number of claims as well as the time period of those claims. If they are recent it may be a sign that the school has some issues. If they are all older claims it’s possible that the school has resolved whatever issues were generating those claims in the first place.

Now, you’re probably down to two or three schools. Contact an enrollment advisor for each school, but do not give them your social security number! (Some over-zealous enrollment counselors will start signing you up and will being processing your FAFSA for their school. If you decide to go elsewhere it may create extra hoops to jump through in order to get this reversed).  And certainly do not let them pressure you into enrolling right now.  Ask them questions about the program, listen to their spiel. Bear this in mind however, 90% of these online schools are classified by the Department of Education as a “for-profit” school. This doesn’t necessarily mean that the degree is any less valid than a “public school” as the school is accredited, however it means that the school has one goal in mind: to make money. The bottom line for these schools is the bottom dollar, preferably your dollar. Understand that these “enrollment advisors” are also wearing another hat; “sales agent”. Their job is to convince you to enroll in their school. Remember that list of questions you jotted down earlier from Student Review? This is the perfect time to bring those up. Many of these sales reps are trained to go over specific information with you. When you start asking questions that they aren’t expecting it throws them off of their game and you are far more likely to get truthful answers (but still take them with a grain of salt nonetheless). Also be sure to ask about those extra costs, such as the seminars, residencies, etc. Ask about perks, too. One school that I talked to gives students a discount automatically if they are alumni of the school and taking additional classes or pursuing a higher degree.  

Next, more and more colleges are offering a “free online course”. Take advantage of this. It’s usually some bullshit course about how to be good college student, or some other garbage, and they’ll usually apply it to your degree if you go to that school. But, it will give you an idea of how their online portal works, what bugs there may be, etc. Also, be sure to ask questions of the teacher in order to gauge teacher response time. Do this for each school that you are considering attending. It doesn’t cost you anything but time.

Finally, as a last step, go into the ProQuest database. If you are a current undergrad student you should have free access to this through your school library. If not, many public libraries have access to this. Select the Dissertations and Thesis Database. Find dissertations in your field of study (by entering the text into the “keyword search”) and then also filter those results to the specific school that you are interested in. Download some of these (they are .pdf files). Read through them. This will give you a very good idea of what is expected of you in order to complete your thesis or dissertation. And, since you searched for something that was relevant to your area of study, you may even be able to use that data in your own dissertation as well, so in essence you are killing two birds with one stone.

 Is this a lot of work? Yes, of course. But it’s worth it in the end. Your choice of Graduate school will follow you for the rest of your life. If you are going to spend the time and money and energy to go that far with your education at least be sure that you are getting what you pay for and not ending up with a worthless degree. And, be sure that your school administration is competent enough to get you through the program without any academic or financial snafus. If you drop the program or get kicked out because you lose your funding the lenders will not care. You are still obligated to pay that loan pay (unless you can convince a judge to wipe it out in a bankruptcy. Despite popular misconception it is possible in theory it’s just extremely difficult to do). In the end you are the one who is responsible for your education. You will certainly have others to help you along the way, but if you rush into that kind of decision and it doesn’t turn out well, then ultimately the blame falls back on you for not doing your due diligence.

I hope that you have found this particular article useful. I felt compelled to write about this instead of my other topic I had planned because this was so fresh in my mind and I often get questions about this. There are also some other useful sites in the references as well. Enjoy!

Sources:

http://www.ope.ed.gov/accreditation/InstAccrDetails.aspx?756e697469643d3130373034342663616d70757349643d30267264743d31312f32392f323031312031323a31393a313020504d

http://www.ripoffreport.com/

http://www.studentsreview.com/

http://www.usnews.com/rankings

http://oedb.org

http://en.wikipedia.org/wiki/Apollo_Group

http://en.wikipedia.org/wiki/Career_Education_Corporation

http://www.getreadyforcollege.org/gPg.cfm?pageID=879&1534-D83A_1933715A=bc8c40840e1dd385b77a538035994920763c444a

http://www.getreadyforcollege.org/gPg.cfm?pageID=907

http://www.chea.org/degreemills/frmStates.htm

Excess Commercialism II

[Johnathan Clayborn]
With Thanksgiving weekend just behind us I couldn’t help but take a moment to reflect on how driven by greed our society has become. Many years ago I used to work for Wal-Mart as an overnight stocker. I had the misfortune of working a Black Friday sale once, and that once was more than enough.

For those of you who are reading this internationally allow me to explain Black Friday; essentially it’s the one day of the year where every store has every item that you’ve ever wanted to buy marked down to ridiculously low prices for sale…the catch is that there is only about 50 or 100 of these items and there are thousands of shoppers who want them…thousands of shoppers who have completely devolved back into their most basic animal instincts.

When I worked that one Black Friday back in the early 2000’s, 2002 I believe it was, it was an experience I’ll never forget. There was pushing, there was shoving, There was a 78 year old woman ramming other shoppers with her cart when they wouldn’t get out of the way fast enough. And let’s not forget the fist fight that erupted in electronics. This was the year that the $50 Apex DVD player first entered the market and our store had 3,000 of them. Plenty to go around. And yet, a fist fight ensued. But, mind you, these customers were not fighting over whether or not they were going to get one, they were fighting over who was going to get them first.

Now, I love Christmas. It’s my favorite holiday (I blame my Irish roots for that). And I like Christmas Music (after Thanksgiving). But I hate, absolutely hate Christmas Shopping. While the Christmas season brings out some of the best traits of humanity; a giving spirit, kindness, charity, etc. , it tends to bring out the absolute worst in people as individuals. At any point during the Christmas season a trip to the local mall will include; people honking at each other and driving like jerks, cars jockeying for that last parking space, people being rude to one another, long lines and short patience, rude sales workers who have dealt with more than enough rude customers, and generally pushy people trying to make sure that they get everything on their list no matter the cost. Black Friday takes all of those things and amplifies it a million fold. It’s the one day of the year where people revert back to the psychology of primates and compassion or kindness toward fellow man is a foreign concept.

But again, don’t take my word for it. Let’s take a look at some of the headlines over the weekend:

The New York Times reported a story that happened in Los Angeles. A woman wanted a new X-Box to put under the Christmas tree. Right on. I like the X-Box console, it’s a very good choice. And at a half-price sale, who wouldn’t? But, when this particular woman felt that the crowd was threatening her grip on her X-Box how did she respond? With pepper spray, of course. In the end she sprayed about 20 people, including small children. And once all of the other customers were writhing in agony she went to the front, paid the clerk and went home. She did turn herself over to Police on Saturday, but they have not decided if they will be pressing charges.  Also, according to one witness who talked to the press, this particular woman used this tactic over and over throughout the store to get “quick access” to her list of items.

But, that’s just one crazed lunatic, right? Sadly, no. In North Carolina another shopper, this one a former police officer himself, also released a puff of pepper spray into the crowd in order to “calm them down”.  And elsewhere in California another shopper pepper sprayed other shoppers who tried to cut her in line. This woman injured 15 people with her pepper spraying and it is unknown if she will be facing charges.

And then, of course, there’s Kinston, North Carolina, where customers were fighting over cell phones that were marked down $165. An off-duty Kinston police officer ended up pepper spraying the fighting shoppers to subdue them.

Okay, so maybe you think that pepper spray is no big deal. I beg to differ. To get a good explanation of how it works and what you would go through, watch this video here: http://www.youtube.com/watch?v=xHqK-hGuSMc

Now, keep in mind, these boys did this as part of a training exercise and they had professionals there to guide them through the process and to wash the pepper spray off. Now imagine that same thing happening in a closed store with no professionals and no water and little kids. It would be pretty unbearable. Imagine that you’re talking to your spouse and then suddenly you have a face full of pepper spray.  That’s not my idea of a good time.

But, sadly, the pepper spray was just the beginning. In San Leandro, California a group of thieves thought that they would partake on the Black Friday deals by simply robbing the shoppers on their way out of the store with their wares. One man refused to give up his purchases so the thieves shot him for them. Fortunately, this man survived and even held down one of the thieves until police could apprehend him. Police are looking for the other thieves now and the man is recovering in the hospital.

The shootings didn’t end there either. A 55 year old woman, Tonia Robbins, was shot in the foot outside of a Myrtle Beach, South Carolina Wal-Mart as thieves stole her purse. The suspects fled after Tonia’s sister, 58 year old Anne, pulled out a .38 caliber revolver and fired three warning shots into the air.

In Kissimmee, Florida two men had a fist fight over a jewelry sale. The police in this case were planning on just letting the men go with a warning, but one of the men resisted police when they tried to escort him out of the store so he was arrested instead.

And then there’s Rome, New York, where two men got into a fight just moments after the store opened. In this case the police didn’t have to get involved right away. The men beat each other up so badly that they were both hospitalized. And, remarkably, in a different part of the same store another fight erupted in a line of shoppers where the police arrested one man and charged him with disorderly conduct.

It’s not just the big cities that are effected either. Even in small towns like Fruitport Township, Michigan the violence and chaos ensues. Fruitport Township is a sleepy little town of 12,500 people. This is less than half the size of the sleepy little town that I reside in. And yet, this small town is not immune. In the local Wal-Mart a 15 year old girl was overcome by the crowd and pushed to the floor where she was trampled on by several people. She was hospitalized for her injuries. In the same town at the local mall an 86-year old woman was also pushed by the crowds in the Bed, Bath & Beyond. She fell and hit her head and was treated by paramedics at the scene. Authorities in the area say that no less than 8 stores received bomb threats on Friday.

When it comes to electronics customers get crazy. In Milford, Connecticut a shopper got into a fight with another customer. The shopper, Brian Shellnutt, allegedly punched the other shopper in the face over a video game at which point police tazered him and took him into custody.

And it seems that shoppers aren’t the only ones who are affected by the craze either, it also spills over onto those we expect to protect us. One of the more disturbing stories comes out of Buckeye, AZ, a suburb just south of my house. A 54-year old grandpa, Jared Allen Newman was assaulted by police and ended up with a broken face. Here’s what went down, according to eye witnesses on the scene; the crowd in electronics was getting crazy, and they knocked Jared’s grandson to the ground. Jared put a video game in the waist band of his pants so that he had both hands free to pick his grandson off the floor. The police interpreted this as intent to steal the game. He was being cuffed by one officer was cooperative and compliant. Then, out of nowhere, another officer tripped him and body-slammed him into the ground. His face broke his fall. He lost consciousness and began bleeding profusely from the nose.  The particularly disturbing part of this story is one that’s often left out. Mr. Newman wasn’t just there for the game. He also had more than $600 of merchandise in his shopping cart. Why steal a $40 game when you’re about to pay for more than $600? The over-zealous police claim that Mr. Newman was resisting arrest and flailing his arms about screaming “I don’t want to go to jail!”.  Of course not, neither would I, Mr. Newman. I could be wrong, but I’ve worked retail before, and I’ve worked in several different retail chains. It’s typically standard practice not to charge someone with shoplifting until they try to leave the store without paying for the item. This was even the case at the big-name electronics store that my ex-wife used to work for. Just because a customer puts something in their pocket or in their waistband doesn’t mean that they are going to steal it. They have to show intent to steal; by making for the exit. They could have pulled it out of their pocket and paid at the register, or they could have pulled it out of their pocket and set it down anywhere in the store prior to leaving the property. It’s not shoplifting if the item doesn’t leave the property.  In this case, as a result of the police department’s over-zealous protection of the American Economy, not only did Mr. Newman receive a shattered face, but his grandson also got trampled anyway. As the local news reported; both are getting a personalized set of bloody towels for Christmas this year. If you watch the video of the aftermath (which is graphic due to the large amount of blood and can be seen here: http://www.youtube.com/watch?v=XIg1GemU99Y ) one bystander asks police “why did you have to throw him down so hard?” The worst part about it, once the police injured him they didn’t even know how to administer first aid for the wounds that they caused and a bystander with some medical training came forward to tend to the man. At least in this one example the crowd seemed to unite against the police and defend Mr. Newman, who was still arrested and charged with shoplifting and resisting arrest. To me, it just sounds like a lame excuse by the police department to cover up their own misconduct.  

One article that makes my point perfectly, is also one of the saddest. 61 year old Walter Vance was shopping at Target in Logan County, West Virginia. He had a history of heart problems. He became ill while shopping for Christmas decorations for his store. He collapsed onto the ground and the rest of the shoppers ignored him and continued on with their shopping. When Walter was in their way they simply walked around him, or just simply stepped over him. Ultimately a nurse happened upon him and called him an ambulance, but he passed away shortly after arriving at the hospital. Walter’s co-workers asked reporters “Where is the good Samaritan side of people? How could you not notice that someone was in trouble? I just don’t understand if people didn’t help what their reason was, other than greed because of a good sale.”

I have to ask myself “is it really worth it?” I don’t think so; the extra stress, tension, the pushing and the shoving and the violence. Not to mention waiting around in line for hours and hours. I have better, more important things to do with my time. Sadly, it doesn’t seem like this crazed mentality will come to an end any time soon either, especially when typically respected sites like MSN Money are urging people to “plan their Black Friday assault”. In light of all of the violence that surrounds that day I can’t help but wonder if that’s really the best choice of headlines.

It may be just my perception of things, but it seems as though Thanksgiving has lost all real meaning anymore. It seems as though it is just there to serve as a reminder for when Black Friday happens. And the Christmas Spirit? Well, that’s just summed up by three little words. Peace on Earth? No. Very Merry Christmas? No. Goodwill to men? No. In these days it’s “Cold Hard Cash”. Christmas is becoming less and less about kindness and charity, peace or goodwill and more and more about how much money you can save and how many people you can trample or maim in the process.

Sources:

http://mediadecoder.blogs.nytimes.com/2011/11/28/on-black-friday-pepper-spray-carried-the-day/

http://abcnews.go.com/blogs/business/2011/11/woman-pepper-sprays-shoppers-at-l-a-walmart/

http://usnews.msnbc.msn.com/_news/2011/11/26/9035999-report-shoppers-unfazed-as-man-dies- at-target

http://latimesblogs.latimes.com/money_co/2011/11/black-friday-wal-mart-san-leandro-shooting.html

http://www.fruitporttownship-mi.gov/visitors/25-the-township/20-our-story.html

http://www.woodtv.com/dpp/news/local/muskegon_county/girl-stepped-on-in-black-friday-rush

http://www.amny.com/urbanite-1.812039/roundup-violence-pepper-spray-abound-on-this-year-s-black-friday-1.3349983

http://www.shoppingblog.com/blog/112620111

http://www.usatoday.com/money/industries/retail/story/2011-11-25/black-friday-walmart/51399030/1

http://articles.moneycentral.msn.com/SavingandDebt/FindDealsOnline/PlanYourBlackFridayAssault.aspx

Understanding Unemployment

[Johnathan Clayborn]
There are some things that I read, and then later I have one of those "hey, wait a minute" moments. A few weeks ago I read an article in the Arizona Republic newspaper and then I had one of those moments. In summary the article said that in terms of job loss over a 3 year span, Phoenix was the third highest ranked city in the country.

What caused me to have the “wait a minute” moment was that I had recalled reading a different article a few weeks prior to that stating that Phoenix was one of the fastest growing cities in the country during that same time frame. This got me thinking; did we actually really lose jobs, or did we just not create enough jobs to meet the demands of the increased population? Those are two very different situations. Naturally, I decided to find out for myself.

One of the first questions that I had was about the population they were measuring. The article said that Phoenix was the 3^rd highest ranked city in terms of Job loss. Did they mean Phoenix, only Phoenix and nothing but Phoenix, or did they mean the “Valley Metro Area” as it is known locally? The article wasn’t clear so I decided to investigate both.

The second question that I had was about the unemployment rate itself. The article gave no indication which unemployment rate they were going from, or where they had obtained that figure from.

First, I wanted to clarify “unemployment”. According to the Bureau of Labor Statistics there are actually six different classifications of unemployment numbers. These are categorized as U-1 through U-6. When calculating employment and unemployment ratings they take the population and look at the people aged 16-65. This number constitutes the labor force, the total number of people who are of working age. For Arizona as a state for 2010 these numbers range from 6.3% unemployment (U1) up to 18.4% unemployment (U6).

There is a system that the Bureau of Labor Statistics has adapted to dividing and sorting people into each category. For the most part the “standard” unemployment number is the U3 category. One thing that I found very interesting between U3 and U4 is that if an employed person becomes discouraged and stops actively looking for work, then they are no longer counted as part of the U3 bracket. So, how does one qualify as a “discouraged worker” according to the BLS? They did not fill out a job application for four weeks. So, if someone is laid off, gets fired, etc. and does not fill out a job application for 4 weeks or longer, the BLS no longer includes them in their unemployment calculations.

In terms of population I decided to start with just Phoenix alone. I went back to 2000 and gathered population data until 2010. From 2000 to 2003 the population increased by at least 10,000 people every year. From 2003 to 2006 the population increased at least 20,000 people each year. In 2008 it only increased 9,000 people. 2009 saw an increase of roughly 150 people, and then in 2010 the population fell approximately 10,000 people.

There are a number of reasons why the population of Phoenix has stagnated and declined. Most experts attribute the largest bulk to the poor housing market. As so many people are finding themselves ridiculously upside down on their housing costs and owing two or three times what their home is now worth many are electing to walk away from their homes. One article in the Arizona Republic covered this very topic. As evidenced they offered the following facts; foreclosure numbers have skyrocketed, water hookups are down, trash collection has slowed, crime has dropped throughout the city, the number of calls to the police department has also declined. This is surely an indication that the people are gone, but does that mean that they have really left forever?

As any native knows, it’s not smart to do an analysis of Phoenix without also including the rest of the Valley in your figures as well. As a prime example, I work in Phoenix, but I live in El Mirage. Last year I lived in Glendale prior to moving out west. My primary motivation for moving? Economics. The housing was cheaper, and the crime rate was lower. Although Phoenix may be experiencing a slow in population, the West Valley certainly is not. A comparison of data from the 2000 census to the 2010 census shows that West Valley cities are booming. El Mirage, for example, exploded from a sleepy town of 7,600 people in 2000 to a busting town of 31,800. The population of Avondale more than doubled in that same time frame. The population of Goodyear more than tripled. The city of Peoria increased by 50%. And the small town of Surprise almost quadrupled in size. This seems to support evidence of a “reshuffling” of people in addition to general growth. Examinations of the population estimates from the Arizona Workforce Informer also seem to support that as well. Avondale showed a steady climb in population increase, but El Mirage did not. There were large spikes in 2001, 2002, and 2010. Peoria showed a spike in 2006. Surprise was another town that showed large population spikes from 2003-2007. To show that this phenomenon is not normal population expansion let us consider some of the other valley towns. During this same time frame the city if Tempe started at 158,600 in 2000 and reported 161,200 in 2010. Fountain Hills only showed a 2,000 person increase during the same time frame. Apache Junction only increased by 21 people. Cave Creek only increased by 1,287 people. The City of Glendale only reported a net growth of just shy of 8,000 people. Litchfield Park increased 1,666 people. Carefree increased only by 436 people.

Based on these numbers, clearly not every city within the valley was growing. Of towns sized between 2,500 people and 10,000 people only Buckeye, El Mirage and Queen Creek showed incredible growth. The town of Maricopa, which is officially in Pinal County, is another spot that people of Phoenix have flocked to. In 2000 that town was not even incorporated. By 2010 they had a population of 43,500. These towns are further away from the main city area and housing demand was low, so houses were inexpensive. They still are inexpensive by comparison today. Houses in my neighborhood have going rates of around $50 per square foot. Meanwhile houses in the neighbor around my work in downtown Phoenix are selling for around $120 per square foot.

Now that we understand a little more about the population situation, let’s go back to the original article again. The article says that the Phoenix area was one of the worst in a comparison of 50 metropolitan areas in terms of number of jobs from 2008 to 2010. By “Phoenix area” I can only assume that they mean the Phoenix-Mesa-Glendale Metropolitan Statistical Area (MSA) as that the term used by the Census Bureau and the Bureau of Labor Statistics. Looking at the entire area, yes, there does seem to be a hit. According to the U3 unemployment category, numbers for this MSA have jumped from 5.3% unemployment to 9.2% unemployment. There was physical loss of about 70,000 jobs. But that’s not the whole story. From 2008 to 2009 the loss of 70,000 jobs occurred, in that one year alone. The next year, despite creating almost 9,000 jobs, our unemployment rate still continued to climb and we had an additional 5,000 more that were unemployed. To me, this speaks that the problem is two-fold. 1) Some companies that are providing jobs for the valley are leaving, closing down, or outsourcing jobs. 2) Not enough new jobs are being created to meet the demand of the increase in population.

It seems as though most of the news articles we read about unemployment are only reporting part of the problem. They throw vague numbers and figures out there that people don’t understand in an effort to get people to watch the news. It’s something I see all of the time “Is your water hazardous to your health? We tested Valley water supplies for a harmful chemical and we have the results, tonight at ten!” And then, of course, that’s the last story they show you and it turns out that there’s nothing to be afraid of after all. Do yourselves a favor, double check the facts for yourself. You don’t have to take everything you read or hear or see at face value. Too many people read something online and pass it along as “truth”. Wild conspiracies get started, outright absurd ideas (like shape-shifting aliens that have taken over the governments of the world) and just out and out lies. Not to mention those annoying “pass this email on” messages. Just because the news reports something doesn’t make it accurate.  

As always, don’t just take my word for it. Here are my sources:

http://www.azcentral.com/news/articles/2011/09/22/20110922phoenix-area-among-worst-unemployed.html http://data.workforce.az.gov/cgi/dataanalysis/cesReport.asp?menuchoice=ces
http://www.workforce.az.gov/unemployment-data.aspx
http://data.workforce.az.gov/cgi/dataanalysis/labForceReport.asp?menuchoice=LABFORCE
http://www.bls.gov/lau/stalt10q4.htm
http://www.usnews.com/news/articles/2011/04/06/10-metro-areas-with-the-largest-population-growth
http://www.azcentral.com/news/election/azelections/articles/2011/03/10/20110310census-arizona-new-2010-numbers-brk10-ON.html
http://www.azcentral.com/news/articles/2009/01/12/20090112phxpopulation0107.html
http://www.azcentral.com/news/articles/2011/03/13/20110313phoenix-6th-largest-city-philadelphia.html

http://www.zillow.com/homes/85012_rb/#/homes/for_sale/Alahambra-Phoenix-AZ-85012/94728_rid/33.548602

Precious Metals: Doom or Failsafe?

[Johnathan Clayborn]
There is a lot of talking going around right now. People are scared, stressed out, and unsure of their future. Individuals like Harold Camping are constantly predicating the end of the world. Others, who are somewhat less pessimistic, are heralding the complete and total collapse of the US economy.

The majority of the population, me included, is just unsure. Sure, the US economy is bad, but it can recover. Of course, our unemployment rates are at an all-time high (more on that in a later blog), so it could just burst completely. The burst of the housing bubble forced hundreds of thousands of home owners to walk away from their homes, saddling them with a debt that they cannot repay. Many of these people elect bankruptcy as an option, which prohibits the banks and other lenders from recovering their cash. As a result the economy is just taking a beating, and the hits keep on coming.

But, this particular entry isn't so much about the state of the economy in the country as it is about social psychology. For the most part the people who believe that the system will completely collapse in on itself fall into one of two major categories; the hoarder, and the spender. Both seem to think that they have a "foolproof" plan to allow them to survive any disaster situation, a possible economic collapse included.

The "hoarder" personality typically makes some pretty egregious oversights in their plan, but that's a discussion for another time. I want to really talk about the "spender". There are a number of commercials that I've seen recently on TV that are targeting this crowd. The basic concept here is "dump all of your money into Gold or Silver (or other precious metals) and you'll be guaranteed a safe investment and a secure future! I just have to shake my head when I see this, or I hear of people talking about this. It's folly.

In a stable market with good economic measures an investment in gold or silver may not be a bad idea. Buy it when it's cheap, sit in on it for a while, split your investment, watch it grow, and sell while it's high. Yes, you can come out on top financially if you are prudent. However, let's examine some of these follies.

1. Several of these "buy precious metals" programs don’t actually send you the gold. Instead you get a certificate "voucher" that says that you own the gold. If there really is some economic catastrophe, what good is it going to do to have a piece of paper that says that you own gold 5 states away?

2. Okay, so you physically have gold in your house. Now what? Let's be completely pragmatic for a moment. According to data from the USDA, many US households are "food insecure". In fact most households only have enough food on hand to last 3 weeks or less. So, hypothetically speaking, there is a total breakdown of the economic system. Money is suddenly worthless. Crowds will panic and rioting and looting will ensue. But that's okay, you have gold, you’re safe. Except, that of the 3 weeks of food you have saved up, probably at least half of that is in your freezer. And if you lose power? Okay, so you have some canned goods left. But the problem is that you can't eat gold. Data from the IRS shows that people spend between 55%-60% of their income on food. And if you don’t have any food and there is no food to go around, you can expect that food will be the valuable commodity, not gold (which is where the hoarders get into trouble). The point that I'm trying to make here is that instead of buying food, you've bought a chunk of metal.

3. Many of these "spenders" assume that they'll magically be able to buy exactly what they need with their gold and therefore, there's nothing to worry about. How wrong they are. There is no reason to believe that after a week or two Gold will still retain its value. Gold is an arbitrary thing. It only has value because we, as a society, have assigned it a value. There is no guarantee that it will continue to have value after an economic collapse. Money has not always been based on gold. In ancient Japan money was based on rice, and in ancient Mesopotamia it was based on barley. Other systems throughout the world have had money backed by; salt, tobacco, stones, steel, cigarettes, and other items. It seems likely to me, that in a metropolis area of over 3 million people facing a complete economic collapse, then the primary focus is going to be on food and water. There are not nearly enough farms nearby to feed everyone. Try to use gold to buy food when there are 3 million starving people roaming the streets, let me know how effective that is for you.

Another thing that the "spenders" fail to realize; even if gold does retain its value, what's to guarantee that you'll get to keep it or use it as intended? Suppose you find someone willing to trade goods for gold. You hand over your gold and he tells you to take a hike. Now what? Are you going to call the cops on him? Good luck with that. Are you going to take it back from him? I doubt it. These types of situations tend to evoke the worst in people. What's to stop them from just killing you and taking it from your cold, dead fingers?

These types of situation tend to bring out the worst in people. Don’t fall victim to the hype. Save your money. Many of these companies are just predators who are looking to make a quick buck by capitalizing on your fears. If you really want to survive a disaster situation make smart choices; vegetable seeds, hand tools, firearms and ammo, medical supplies, water purification tablets, etc. Basically, just gather the materials that you would gather if you were being dropped on the shore of a deserted island and you only had what you brought with you. Obviously, one would hope that it never comes to that....but if you are going to worry about the "end of the world" and the like, at least make smart choices about it.



Sources:
http://www.irs.gov/businesses/small/article/0,,id=104627,00.html
http://www.fns.usda.gov/fsec/files/fsguide.pdf
http://www.xat.org/xat/moneyhistory.html
http://library.thinkquest.org/28718/history.html

http://www.netplaces.com/economics/the-story-of-money/money-throughout-history.htm