Father Knows Best, Coda

One thing I wish I had thought to include in the original Father Knows Best post is that my dad was a conservative Republican and I was a liberal Democrat for pretty much all of our adult lives (he died in 2008). This wonderful conservative man taught me to buy local and to value community. We did not agree on our political parties, but we found common ground. Sometimes we foundered, but we always gave each other leeway, and we often agreed on issues of finance.

I would often start out with a “What do you think of ______” kind of question. You can almost always find common ground if you ask a few open-ended questions. Dad and I did.

Oh my, I do miss my father. I think we would have a bit more in common politically (and economically) today, and I would certainly welcome his take on the Great Recession from a conservative perspective. One thing my father and I agreed on is that you have to work together if you want to get things done. Compromise. Respect. Honesty.

These are Republican values. These are Democratic values.

One of Paul Roberts’s talking points in The Impulse Society is that our political parties have become branded, and as a result, both have pulled away from center (I would also blame gerrymandering and our political processes in general—most especially the caucusing process). While the two parties become increasingly opposed to agreeing on anything, on principle, the country shuts down.

It’s not just politicians. Several of my friends make blanket comments about Republicans. About how they’re ruining this and that. They hark back to Reagonomics and the war in Iraq.

But Clinton was responsible for overturning Glass-Steagall—the regulatory bill put in place after the Great Depression, to prevent another Great Depression. So instead we had the Great Recession, with the government bailing out banks because they’re too big to fail (TBTF), because if they did, they would take down the entire national—or global—economy.

I was super pissed about the government bailing out the banks. It seemed so unethical. I had surprise company in my anger. A lot of Republicans were pissed about government interfering in the free market and using tax dollars to do it. We’ve become so polarized, we can’t even find common ground when we have common ground!

Since the Great Recession, the TBTFs have become even bigger. They are engaging in similar schemes to increase profits and shareholder value. The crucial thing to note here is that they have not changed their behavior except perhaps to increase the risk factor. It does not take a rocket scientist, or even an economist, to conclude that this is not a good thing for the economy.

Here’s some potential common ground for moving beyond our current political polarization:

MoneyFinancial reform: According to Roberts, “It’s worth noting that some of the loudest voices calling for financial reform are conservative. Likewise, when the Obama administration failed to break up the TBTF banks or to restrict their capacity to make high-risk gambles, the failure outraged not only liberals but many on the right as well.” The implicit promise of another bailout is, to many Republicans, a market-distorting government subsidy that allows big banks to take government-guaranteed risks that smaller banks have to avoid. There’s even been some bipartisan movement here: In 2013, Republican David Vitter (staunch Louisiana conservative) joined the very liberal Sherrod Brown of Ohio on a bill to force the big banks to dramatically cut the amount of debt they take on. The bill was stalled by the banking lobby. (Why is that even legal?)

spending_banCampaign finance reform: Between 2000 and 2012, spending on presidential campaigns more than quadrupled—to more than $2 billion. Two billion dollars! Since the Supreme Court ruling in Citizens United, hundreds of millions of dollars have flowed into politics. A lot of rich people love it, but the average person—even the average Republican—is not in favor. Roberts reports that 7 of 10 Republicans favor an amendment that would exclude corporations, unions, and other organizations from free speech protections for large campaign donations.

It makes me feel hopeful that there’s such strong common ground. I agree that these are good—and important—starting places. And I’m pretty sure my dad would as well.

Father Knows Best

bikeI grew up in a small town. When I was in sixth grade or so, I wanted a new bicycle (having pretty much outgrown my little bike with the banana seat). I had my eye on a fancy new 10-speed and wanted to go to “the cities” (as Minneapolis-St. Paul is still called in greater Minnesota) and pick from the cream of the crop. Nope, my dad said. I could have any bicycle I wanted, but I had to buy it in town. My hometown of about 1,500 had two hardware stores (three grocery stores, a general store, two furniture stores, a movie theater, a bowling alley, and a roller rink) so it’s not like I didn’t have options, but I whined. Usually I could wrangle my way with my dad.

Not this time. He didn’t even remotely budge. Hometown purchase it was. He was a small business owner (one of those furniture stores). He knew the value of social relations. He was instilling in me a number of values here that I didn’t realize for years: the importance of social relations, the value of buying local, and the difference between being a customer and a consumer.

ImpulseI had not particularly marked the customer/consumer difference until reading The Impulse Society: America in the Age of Instant Gratification, by Paul Roberts. Shopping used to entail a social obligation. The person that owns the grocery store is my neighbor. You say hello, you have a little chat. They see what you buy, you talk about your leaky roof, her dog, your sore back. Historically, economic relations have been completely intertwined with social relationships. Buying meant being a customer, “a socially constructed, socially constrained role that required us to engage in an often complicated and time-consuming social interaction every time we made a purchase.”

And then came the big-box stores. According to Roberts, “The genius of the big-box retail stores, for example, wasn’t just their low, low prices, but the depersonalized, one-stop format that let us minimize shopping’s social obligations.” (Well and wasn’t that a welcome thing for many of those small-town people who didn’t actually WANT the person behind the drugstore counter to see what they were purchasing, but that’s a topic for a different blog.)

But my dad knew what he was talking about. My argument that the bicycle would be cheaper in the cities held no weight with him. He knew people could find cheaper furniture, too, if they were willing to obviate their social obligations. And then where would our small town be? Main Street would be empty, which it pretty much is today—in my hometown and many like it throughout the midwest. Roberts cites research on the big-box phenomenon and its impact on small towns:

closedWithin two years of a new Walmart coming to town, local shops within a twenty-mile radius see sales decline by 25-60%. These kinds of losses lead to the closing of small-town stores, leaving residents with fewer shopping options. The success of a big-box store can substantially increase the distance people have to drive for groceries. My hometown now has only one grocery store, but they are lucky. Many small towns don’t have any grocery stores at all anymore.

Not only have they lost their local shopping options, they’ve lost a large chunk of their supportive infrastructure: Local merchants provide more stable work environments, are more supportive of local social programs, initiatives, and community affairs in general.

So it happened. Most of Main Street went away, to the detriment of the local residents both in terms of convenience and livelihood. Why do we do this? According to Roberts, it has a lot to do with intertemporal decision making. In short, immediate desire often trumps delayed gratification. Less and less are we willing to put off until tomorrow what we can have today, even if we can’t afford it (that’s what credit is for). I’m giving it short shrift—there’s so much more there.

The Impulse Society is fascinating reading, looking at our increasing self-preoccupation and its relation to marketing, economics, culture, politics, digital technology, friendship networks, and power (a mere starter list). I expect I’ll fill you in more as I continue. It’s that kind of book. In the meantime, I’m going to work towards being more of a customer, and less of a consumer.

The Devolving Job Market

The new Minnesota Job Vacancy Survey is out, and while the bigpicture news seems pretty good, the data are actually quite grim.

Good news first: Jobs are becoming plentiful, at least in Minnesota. In fact, the job vacancy rate hit a 13-year high in the second quarter of 2014. There were 1.6 unemployed people per job vacancy in the second quarter compared to 2.1 a year prior.  To give you a little perspective on how good that is, there were 7.9 job seekers per vacancy second quarter 2009.

The bad news: Wages are going down. The median wage per job opening in the second quarter was $12.05 an hour, down from $12.50 a year ago. Median (or midpoint) means that half pay more, half pay less. At $12.05/hour, a full-time job earns $25,064 a year. And half of the currently available Minnesota jobs pay less than that.

More bad news—42% of job openings are part time. This is not atypical. I tracked back a bit, and the percentage of part-time jobs got as low as 38% (2011) and as high as 45% (2013). The reason I consider 42% of vacant jobs bad news is that with the low prevailing median wage, more than 4 in 10 of open jobs won’t even earn that full-time annual wage of $25,064.

A closer look at the data. The largest number of job vacancies come in six occupations: sales, food prep/serving, healthcare support, office/admin support, transportation, and healthcare practitioners and techs. These six occupations make up more than half (55.9%) of job openings.

The single largest occupation with open jobs is sales (and related occupations), with a median wage of $9.99/hr. If you work full time at the median wage, you will earn just over $20,000 a year. But that probably won’t happen because 61% of the jobs are part time. The next most available occupation would be food prep and serving, with a median wage of only $8/hr (annual wage of $16,640 full time). I was surprised to see that 88% of the jobs in this category were for full-time work.

Most of the top six open occupations pay relatively low median wages, with only one coming in over $20/hour (healthcare practitioners and techs—$26.08/hr). Likely not coincidentally, it is also at the bottom of the top six in terms of open jobs. The runner up would be transportation ($13.15/hour).

Another rather grim statistic: Only 36% of the open jobs require any education beyond high school, meaning that about two-thirds (64%) of Minnesota’s job vacancies require only a high school diploma. At a time when higher education is vaunted as the pathway to opportunity, and student loan debt has reached astronomical highs, more college graduates are fighting for a smaller piece of the pie.

High-wage job opportunities in Minnesota are shrinking. Job openings are down for management, computer/math, architecture/engineering, and legal occupations. We are downsizing (and sometimes outsourcing) our high-wage jobs. We are devolving into a low-wage economy.

This is not all bad. Lower wages mean less consumption which is good for planet earth. Maybe not so much for the economy, but I would rather have my trees and lakes than rich bankers and oil magnates.

Over the next 10 years, I anticipate a lot of angry young adults who have pursued education but can’t find jobs that require said education. Bumpy ride.

Hot, Soon to be Hotter

Hot BookI’m reading the book Hot, by Mark Hertsgaard. It’s about climate change. I thought it was going to be a bit of a slog, but in fact it’s readable and compelling, and even with a personal slant (Hertsgaard has a young daughter, and he is particularly concerned about climate change as it will affect her life and world).

Here’s something amazing I learned: white roofs and white pavement. White roofs and pavement reflect more sunlight away from the earth’s surface. (Okay, I did know about the white reflecting while black absorbs which is why we wear white in the summertime.) Here’swhite roofs what I found amazing: “Retrofitting all urban roofs and pavements in the world would yield emissions reductions equivalent to taking all the world’s cars off the road for eighteen years.”

Hello, white roofs and white pavement: That sounds really easy. The retrofitting part is expensive, but why in the world are not all roofs and pavements going forward increasingly (or even exclusively) white?

I’m about a third of the way through the book, and this morning I’m reading about the Climate Change Action Plans of various cities: Seattle, Chicago, New York. I got to wondering if Minneapolis has one. So I went online and sure enough, there it was: Minneapolis Climate Action Plan.

I am going to read it tonight. Then I got to thinking, though: Minneapolis is only a small part of the larger Twin Cities Metropolitan Area, so I went to the Met Council website to see if they had anything. Met Council is the planning body for the 7-county metro area. Their mission is “to foster efficient and economic growth for a prosperous metropolitan region.” That sure seems like it would need to include climate change, but I couldn’t find anything. But I didn’t dig very deep before I emailed them to ask. Sometimes it’s nice just to be direct.

One thing I learned at the outset of the book was a bit about terminology. I had thought that “climate change” was the new and more accurate descriptor and replaced “global warming.” Not quite. Global warming refers to the man-made rise in temperatures caused by excessive amounts of carbon dioxide, methane, and other greenhouse gases in the atmosphere. Climate change refers to the effects these higher temperatures have on the earth’s natural systems, resulting in stronger storms, deeper droughts, more flooding, and a rising sea level (among other things).

I also learned about the difference between mitigation (reducing greenhouse gas emissions) and adaptation (taking action to address the impact of climate change). Apparently adaptation was a major bone of contention in (at least some) environmental circles: They feared if adaptation was included in climate change plans, mitigation would get pushed to the back burner. (And, in fact, according to Hertsgaard, they were right—most particularly in the United States: “Beginning in the early 1990s, government officials, corporate spokespersons, and academic critics, especially in the United States, did invoke adaptation to fend off calls for mitigation.”)

But now we have no choice. Now we must do both. tree

Some things are both adaptations and mitigations. In Chicago, they planted more trees to increase canopy cover in residential areas as well as in empty lots. This provides much-needed shade in the increasingly hot summers (adaptation) and the trees reduce greenhouse gases (mitigation). There have got to be many more things that mitigate and adapt at the same time. I will probably run across more as I continue the book.

Hot is not bleak. It provides hope. The climate crisis is potentially “the greatest opportunity our society and world has ever faced. If we do what it takes to reduce greenhouse gas emissions to safe levels and prepare for the impacts we see are under way, we will transform the economic foundation of modern civilization.”

I already have an idea. You know how golf is on the decline and some golf courses are closing? (Two, right here in Minneapolis!) They could be turned into urban farms. Using the right methods, farming enriches the soil, and the plants will help reduce carbon. And of course it increases the local food supply and reduces the food carbon footprint. School kids could visit the farms and learn how food grows. Or the kids could work on the farm. What a great learning experience from so many perspectives!

Future Urban Farm?

Future Urban Farm?

Or the golf courses could be planted with trees, which would be a great mitigator (and a lovely wooded area in the city). Or if appropriate, it could go to prairie (which would also sequester a lot of carbon). But it seems to me this trend of declining interest in golf could be a very good opportunity for both adaptation and mitigation.

So tonight I will read the city plan, and then I will read the older (and more technical) state plan, and then I will read the most recent (2014) Intergovernmental Panel on Climate Change (IPCC) reports. (There are two of them, one on mitigation and one on adaptation.) Once I’ve better educated myself, I’ll see where I might fit in to be able to help.

Job Vacancy Survey

I keep running across reports saying how education beyond high school is more and more important.

For example, the Governor’s Workforce Development Council put together this report, All Hands On Deck (originally published in 2010 and reissued in 2012) that states that 70% of Minnesota jobs will require education beyond high school by 2018 (p. 4).

So far, the data are not supporting that projection. At least according to the most recent job vacancy survey published by the Minnesota Department of Employment and Economic Development (DEED).

The job vacancy survey is a goldmine of information (published twice a year) and the most recent report (for 4th quarter 2013) shows the Minnesota economy continuing to improve. The 4th quarter saw 2.1 unemployed people for each job vacancy. This is down from 2.6 one year ago, and a huge improvement from 4th quarter 2009, when there were 8.2 unemployed persons for every available job. The median wage offered for these jobs is $13/hour. (The median is the midpoint, meaning that half of the jobs pay less than $13/hour.) A full-time job at $13/hour pays an annual wage of $27,040. But nearly 4 out of 10 (39%) of the available jobs are part time and 14% are temporary or seasonal.

job vacancies

But one of the most interesting facts is that only 38% of the jobs require education beyond high school. Hmmm. Let’s dig a little deeper. Perhaps that’s not surprising, when one looks at the occupations with the largest number of job vacancies:

  • Food prep and serving-related (median $8.01/hour; 73% part time)
  • Sales and related occupations (median $9.53/hour; 49% part time)
  • Office and admin support (median $10.96/hour; 41% part time)
  • Transportation and material moving (median $14.65/hour; 38% part time)

These four occupations account for more than one-third (36%) of Minnesota’s job vacancies. The educational requirements for all four occupations are low. They are highest for the office/admin jobs, but even there only 15% require education beyond a high school diploma or GED.

One of the great things about the job vacancy survey data site is that you can slice and dice the data, and get historical data as well. So I can get trend data on educational requirements. What I find is that for the last 12 years, the proportion of jobs requiring more than a GED or high school diploma has ranged from 38% to 45%. That is not a huge range. So here we are in 2014 (albeit with 2013 data), and just over one-third of jobs (38%) require any education beyond high school—the very same percentage that required higher education in 2002.

I’m having a really hard time seeing how that 38% is going to increase to 70% in four years after such remarkable stability over the last 12 years. Statistically speaking, it seems quite improbable.

Where in the world would such a misleading statistic come from? Oh. The report was sponsored by higher education.

Poverty and the Minimum Wage

There was an excellent article in MinnPost today about raising Minnesota’s minimum wage. Minnesota is an embarrassment on the minimum-wage front, one of only four states in the union with a minimum wage below the federal minimum wage of $7.15/hour. (We keep company with Georgia, Arkansas, and Wyoming on this.) The Minnesota minimum wage is $6.15/hour, except for small employers who have to pay only $5.25.

Let’s do some quick math here. A full-time job at the federal minimum wage will bring home just under $15,000 a year ($14,872). In Minnesota, if you earn minimum wage under one of these small employers, you will bring home under $11,000 ($10,920). In Minnesota, you can work a full-time job—the hallmark of responsibility—and still be under the poverty level.

And about that poverty level: It’s a little out of date too. Originally developed by Molly Orshansky in 1963, poverty levels are based on food costs. Why food? Because, according to Orshansky, “there is no generally accepted standard of adequacy for essentials of living except food.” When Orshansky developed the poverty standard, food constituted one-third of the average household budget. Poverty thresholds were calculated by multiplying the cost of the thrifty food plan by three, reflecting the economy of the early 1960s. (This is horribly simplified. Get much deeper and more accurate information here and here.)

But food doesn’t take up one-third of the average household budget anymore (thanks to major subsidies to agribusiness, which keep food costs artificially low; and huge cost increases in housing, health care, and child care). These days, food is about 13% of the average household budget. Applying Orshansky’s logic to our new reality would give us a poverty threshold of $29,923 for a household of one. Well that’s a bit of a different world, isn’t it?

But we’re with the 1963 economy in our poverty guidelines, so the poverty level for a household of one is $11,670. And poverty is increasing—as it has pretty much continued to do since the Great Recession. A recent report from the Census Bureau looking at poverty over time found that nearly one-third of American households (31.6%) fell into poverty for at least two months in the 2009-2011 period. That’s up from 27.1% for the 2005-2007 period. That may not seem like a huge increase, but it’s gone from more like a quarter to more like a third.

Back to Minnesota. Let’s look at the job market and see what’s going on. The Minnesota Department of Employment and Economic Development does a job-vacancy survey twice a year. Fascinating data. The 4th quarter 2013 report will be out soon, but for now we are stuck with 2nd quarter data. Statewide, the median offer on available jobs was $12.50. The median is the midpoint, meaning that half of them pay less than $12.50/hr while half pay more. A full-time job at $12.50/hr will bring home $26,000 a year.

So that doesn’t seem so bad, right? But only 55% of the jobs are full-time. And the largest numbers of jobs are in sales (at $8.79/hr) and food prep/serving (at $7.50). And most of these available jobs are only part-time—a whopping 82% in food prep and serving. And a lot of part-time jobs don’t offer healthcare benefits.

So—should Minnesota increase the minimum wage? Absolutely yes. This is money that will stay right in the community.

Barbara Ehrenreich examines this issue from the female perspective in a recent Atlantic article, “It’s Expensive to Be Poor.” She concludes:

We need to wake up to the fact that the underpaid women who clean our homes and offices, prepare and serve our meals , and care for our elderly—earning wages that do not provide enough to live on—are the true philanthropists of our society.

Yes, there are some men as well. But the world still rests on the backs of female turtles. Not only do we need a higher minimum wage, we need hugely more respect for people who are working their asses off and still can’t pay for the phone bill AND childcare. You try to make it on $7.15 an hour.

Part-time.

Got kids?