Must Reads: Canada's Mark Carney, a governor of the Bank of England, took on the banking industry and made waves with this speech, arguing that "unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself." In MotherJones, Josh Harkinson examines the activist nature of Dr. Bonners, a profitable company that refuses to be carried by Walmart and has a CEO pay cap of just five times that of the lowest paid factory worker. This New York Times article from Ann Carrns looks at alternatives to traditional payday lenders.
We will start with this cartoon from Adam Zyglis:
Guess what baby boomers, your kids and grand-kids, aka Millennials, will comprise as much as 75 percent of the workforce by 2025 and are going to challenge corporate America through their choices, according to a new Brookings report. Check out what the National Journal's Nancy Cook had to say:
Perhaps, the biggest takeaway from the Brookings report is that the look and feel of work will undergo a dramatic makeover under the millennial generation. Businesses' usual tricks of keeping employees happy and productive simply will not fly by the year 2025. "The desire on the part of millennials for their daily work to reflect and be part of their societal concerns will make it impossible for corporate chieftains to motivate millennial employees simply by extolling profits, or return on investment for their shareholders, or even employee salaries," the authors write. It makes you wonder if the corporate chieftains are listening.
But the Harvard Business Review's Walter Frick says not so fast, these young people look a bit less idealistic than reported:
The tension between Millennials’ hope and their cynicism often gets expressed as pragmatism. They aren’t particularly ideological, but they are attuned to global instability and injustice, economic and otherwise. As the authors put it, “The desire of Millennials for pragmatic action that brings results will overtake today’s emphasis on ideology and polarization as Boomers finally fade from the scene.” Millennials ditched their parents’ ideology but kept their insistence on a better world. That means prioritizing social goals at work, of course — the paper cites a 2012 survey noting that two thirds of millennial workers said they want their employer to contribute to social or ethical causes. But they want to change the system from within: the organizations Millennials most want to work for include tech giants like Google, Apple, and Facebook, or the government — hard to get more establishment than that. When they are attracted to social impact organizations, they’re those that are designed to be short-term commitments, like Teach for America or the Peace Corps.
Check out this infographic looking at how Millennials view themselves versus how hiring professionals view them:
The downgrade is external capital looking at the utility business model, and seeing not just a small threat, but a serious, industry wide threat. Catalyzing what many utilities already saw as a threat will only add fuel to what was still at least a simmering discord. The direct impact of the threat of solar on utility borrowing costs makes the threat real, dangerous and costly. Expect to see renewed efforts by some utilities to frame solar and other point of use energy solutions as destabilizing and dangerous to the electric system.
The Clean Energy Institute's Mark Denin says jobs are the number-one issue environmental advocates should be using to make inroads:
Clean energy advocates have become too comfortable with the current “jobs vs. environment” framework. A Sierra Club internal memo leaked to the Daily Caller instructed allies not to overemphasize potential green jobs, and many groups, like NextGen Climate and 350.org are focusing on fighting projects whose proponents say create jobs, like building the Keystone XL pipeline and expanding natural gas fracking... Choosing clean energy means choosing jobs. Clean energy generated nearly 80,000 jobs in 2013, despite regulatory uncertainty around the expiration of the wind Production Tax Credit (PTC). Supporting initiatives like the PTC will only increase the amount of jobs clean energy creates.
What's the biggest employer for car manufacturing in California? Grist reports that Tesla has overtaken Toyota for most auto workers in the state. Good news, robots, and, um, maybe robot engineers ... Amazon is adding 10,000 robotics workers to its warehouses by the end of the year, reports the Motley Fool's Leo Sun, who wonders how many other companies may begin addressing labor issues via technology. If you are feeling super wonky, you might want to take a gander at this 2012 Bureau of Labor Statistics' report on job trends through 2020.
The Economic Policy Institute's Larry Mishel has a new snapshot for wage growth showing 1 percenters' wages grew a whopping 153 percent since 1972, compared with just 17 percent for bottom 90 percentile. Check out his video: http://youtu.be/q-Z5pKXlFyM The Wall Street Journal reports on the way in which weak wages are depressing the entire economy; check out this chart from the Journal looking at the minimum salary a company can pay to avoid federal overtime requirements:
It is clear that if we accurately applied Mollie Orshansky’s approach to measuring poverty, much higher thresholds would result, and many more households and people would be categorized as living in poverty. In 2012, the median income level for all US households was $51,017. If $58,771 (7.8 times the Thrifty Food Plan for a family of four in 2012) were the basic poverty threshold, more than half the households in the US would be classified as being in poverty...When something affects half of the nation’s households, it becomes the problem of many more leaders, at all levels of government and society, forcing a recognition that poverty really was never about “them”, it is truly about “us”.
You also may want to check out the Center for American Progress' TalkPoverty blog on regular basis for good reads on the issue. The Ford Foundation's Barbara Raab reports on recent poverty "pitch slam" held by NBC for journalists and says poverty doesn't get enough attention from the media:
The pitch slam coincided with the 50th anniversary of the launch of President Johnson’s “war on poverty,” which generated a flurry of big-media press coverage of poverty, an issue, as Dan Froomkin pointed out last year in an essay for Nieman Reports, that the “mainstream” media tend to mostly ignore...On the January anniversary of LBJ’s speech, however, the Washington Post, for example, presented everything we presumably need to know about the war on poverty, and The New York Times judged the war on poverty a “mixed bag.” Most of the coverage binge, as FAIR’s radio program, “Counterspin,” pointed out, focused on either methodology – how we count poverty and whether it has gone up or down over the last half-century – or on the deep political and philosophical divide that exists over how to attack poverty in this country. What it didn’t really focus on was the people, like Amy, who can tell the very real stories of what it is like to be poor, and to want to be not-poor, and how hard it is in America 50 years after LBJ’s speech to do what he pledged: to replace despair with opportunity.
Check out this cartoon from Chappette:
If we look at those at the top, they are not those who have made the major innovations that have transformed our economy and society; they are not the discoverers of DNA, the laser, the transistor; not the brilliant individuals who made the discoveries without which we would not have had the modern computer. Disproportionately, they are those who have excelled in rent seeking, in wealth appropriation, in figuring out how to get a larger share of the nation’s pie, rather than enhancing the size of that pie. (Such rent seeking activity typically actually results in the size of the economic pie shrinking from what it otherwise would be.) Among the most notable of these are, of course, those in the financial sector, who made their wealth by market manipulation, by engaging in abusive credit card practices, predatory lending, moving money from the bottom and middle of the income pyramid to the top. So too, a monopolist makes his money by contracting output from what it otherwise would be, not by expanding it.
MIT's David Autor argues in a new paper that more concerning than inequality via the 1 percent and everyone else is the growing inequality amongst the 99 percent:
Here’s a concrete way to see it: The earnings gap between the median college-educated two-income family and the median high school-educated two-income family rose by $28,000 between 1979 and 2012. This [shift] — which excludes the top 1 percent, since we’re focusing on medians — is four times as large as the redistribution that has taken place from the bottom 99 percent to the top 1 percent of households in the same period...The single most important factor is the rising return on postsecondary education. That explains a lot of the growth and variance, and that is pretty well explained by supply and demand factors.
But Slate's Jordan Weissmann says it seems strange to focus on college as a means to combat inequality:
[F]looding the job market with graduates, as Autor seems to advocate, has always struck me as an odd and maybe counterproductive approach to tackling inequality as a broad economic issue...[R]ecent research suggests that corporate America’s hunger for brain power—or “cognitive skills,” as economists like to put it—began to decline around the time of the dot-com bust. College graduates aren’t quite the hot commodities they were during the Reagan and Clinton years. Going to school is still, on average, a very good deal. But as Autor’s own graphs show, wages have flat-lined for bachelor’s degree holders, even as they’ve continue to climb for Americans with advanced degrees. And while the extent of underemployment among college graduates is often exaggerated, the Federal Reserve Bank of New York has found that a growing percentage of them are working in jobs that don’t require their degree and pay less than $45,000 a year. To make a long story short, unless the overall job market is booming, simply churning out more college graduates risks making everybody a bit poorer.
Meanwhile, UC Berkley's David Kirp in the New York Times discusses the academic benefits for poor kids who attend economically mixed preschools.
In the New Yorker, Elizabeth Kolbert revisits Keynes' economic theories about economic possibilities and says that though we might seem richer, we seem poorer in terms of leisure time. The Philanthropy Digest reports that an estimated $59 trillion will be transferred from estates by 2061 with roughly $6 trillion of it expected to go directly to charity. What the heck is a social enterprise, you might wonder? The Nonprofit Quarterly's Rick Cohen and Ruth McCambridge report on the struggle to parse the term into something truly definable. Harvard's David Isenberg attempts to better define the entrepreneurship ecosystem and says jobs are never going to be a primary motivator.