Real Estate, The Economy, and News: Employment Rates

Showing posts with label Employment Rates. Show all posts

Friday, April 15, 2016

Millennials Better at Saving Than Previously Assumed

Millennials are often stereotyped as being bad with money. Many people view those 20-something-year-olds as frivolous spenders, more concerned with the here and now than with the future. However, according to recent research, Millennials don't actually deserve this classification. According to Jonnelle Marte's L.A. Times article, they are saving much more aggressively than in past years, and in some cases are saving more than their middle-aged counterparts.

In the study, "Millennials" were defined as consumers between the ages of 18 and 29, and the results blew away many assumptions previously made about their age group. About 62% of Millennials are saving more than 5% of their income for retirement, emergencies, or other future financial goals. This is a significant improvement from last year when only about 42% of Millennials put the same portion of their pay toward savings. Comparatively, it was found that about 50% of consumers between the ages of 30 and 49 were putting as much into savings.

Analysts believe that Millennials' interest in saving money for a rainy day may come from personal experience or what they saw family members go through. Many, especially those straight out of college, struggled to get a job during the recession. Others, even if unaffected themselves, watched as family members were hit by layoffs and saw how hard it was for parents or even grandparents to recover. Likely because of this, 40% of Millennials are putting their savings aside for an emergency, rather than for retirement or something else that would matter the most in the distant future. They know how hard it can be to survive if they unexpectedly lose their job, and as such, want to be sufficiently prepared.

How are Millennials able to save more money now than in previous years? Some are cutting their spending, realizing that instant gratification isn't worth potential financial struggles in the future. Others are getting better jobs or being promoted to better-paying positions in the recovering company, and therefore are earning more money and are more able to put some of it toward savings. Some went back to school when they found that they couldn't find work during the recession and are putting their degrees to use in getting jobs now.

Not all Millennials are choosing to put their money aside for emergencies. Many are saving in order to be able to afford big purchases in the near future. About 27% are saving for a future home, 26% are saving for a car, and 36% are saving to go on vacation. No matter what they are saving for, researchers agree that Millennials have come to understand the value of saving, often more than their older counterparts. When asked about their major goals, the majority chose "saving", while smaller, but still significant, portions chose "leading a healthy lifestyle" or "paying down debt." Saving money can have a positive impact on anyone's life, so it's a good thing that more individuals have come to realize the value of saving over spending.

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Friday, December 11, 2015

Faraday Future to Break Ground on Billion Dollar Nevada Plant in 2016

Like its competitor, Tesla Motors, electric car start-up Faraday Future has decided to open up shop in Nevada. Faraday Future, a new, relatively small rival to the other electric car producers, was debating among California, Nevada, Louisiana, and Georgia for their billion dollar production facility, but eventually made their decision and will start construction in the beginning of 2016. a main factor influencing Faraday's decision was an offered package of over $300 million in tax incentives by Nevada legislators, According to company executives, this wasn't the only reason, though, and a more detailed analysis of the choice is made in Chris Kirkham's and Ivan Penn's L.A. Times article.

Faraday Future, which is branded as an electric car company, has not yet produced an electric car. One of the company's founders and primary backers is Chinese media mogul, Jia Yueting, who has a net worth of several billion dollars and is ranked as China's 17th-richest person. Many of Faraday Future's top executives previously worked for Tesla and luxury car companies like BMW and Porsche. As such, they have quite a bit of experience with electric vehicles and the selling points behind them. The market for electric vehicles, while it is still undetermined based on Tesla's sales over the past decade, has the potential to grow larger, especially as people become more environmentally conscious and try to find ways to be more energy efficient.

Nevada legislature offered similar perks to Tesla Motors a year ago. With the help of $1.3 billion in tax abatements, Tesla began work on a $5 billion factory outside of Reno. While Faraday only received a $335 million deal, that is still nothing to scoff at, and will go a long way toward creating more jobs in Nevada and producing vehicles that rely more on renewable energy sources rather than fossil fuels. These deals, which might look to some like a waste of money on the part of legislators, can actually be quite beneficial to the state as a whole due to the production of jobs and the increase in goods for export to other states and other countries. The money in tax incentives that Nevada is providing to these companies can be earned back many times over by increased productivity over the long-term future.

Faraday's business model must be pretty sound for the state to take a risk and invest in them and in the hope of domestic growth in the future. Faraday doesn't just get the $335 million immediately; they have to prove that their company is moving forward. According to legislators, Faraday will not receive all of the tax abatements and other promised perks until it has invested at least $1 billion toward construction of the plant. Even without help from the tax incentives, Faraday's investment could pay off very well in the long run. As gas prices stay low, more individuals are going back to larger SUVs, since they can better afford to fill up the tanks of such automobiles. However, if and when gas prices rise again, people will be more interested in the fuel efficiency of electric vehicles and hybrids. So, as companies like Faraday and Tesla start getting ready now, they may be able to have their production running smoothly by the time demand for electric vehicles increases again.

While the tax incentives helped Faraday to make their final decision of Nevada, there were aspects of the other potential states that could have made them better choices. California, Louisiana, and Georgia all have direct ocean access, which means that they have ports and, therefore, make shipping and receiving of products and parts much simpler. Between California and Nevada, the latter has more wide-open spaces in which to build large factories. All in all, Nevada, which lacked direct access to seaports, still provided close enough access to make shipping of parts not too much of a nightmare in transportation. Highway 15 provides Nevada an almost direct route to the West Coast's ports, which, when combined with the tax incentives, made Nevada a better choice for Faraday's base of production. While we don't know whether California's legislature offered similar tax incentives to convince Faraday to choose the Golden State, in the end, Faraday made its choice, taking the best deal for itself while also benefiting the state of Nevada.

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Friday, November 13, 2015

Roofers and Contractors Overbooked in Preparation for El Nino Winter

After months of drought conditions throughout California, homeowners are rushing to get their houses prepared to withstand the expected onslaught of the upcoming year of El Nino weather. Many of these homeowners are coming to realize that their roofs should be patched up or replaced before the "above-average" rainfall begins. The National Weather Service predicted that the Los Angeles and San Diego areas this winter will have about a 60-69% chance of "above-normal precipitation," which is a huge wake-up call for Californians who have experienced very little rain over the past couple of years. Ronald White, in his L.A. Times article, investigates the current rush to get ready for the winter season and the strain it has been putting on various businesses.

While many people are seeking roofers for long-overdue work on their roofs, other workers, like gutter repairers and tree trimmers, have also reported that 10 times the number of requests for their services have been made this year than the last. while the increased demand is great for business, many have been unable to keep up with demand, leaving property owners disappointed. Many homeowners have even reported difficulty getting an estimate for potential work, let alone getting contractors to their home to get the work done. Many roofing and construction companies have full waiting lists through March, but an appointment that late won't really help a homeowner trying to prepare for the El Nino winter.

Even arborists and tree services have full schedules, booked by homeowners and others worried about whether draught-stressed trees fall in the winter, potentially injuring people and destroying property. Companies like the Your Way Tree Service go out and check trees for health, as many are already dead due to disease, wood rot, or lack of water. The tree service determines whether trees are healthy enough to withstand the winter, and, if not, they fell them safely so that rough winds won't do it later.

Finally, there are those people who plan to use the rainfall later, when El Nino is over. Even they have been having trouble finding experts to install rainwater storage systems on their properties. Not only are some of these specialists booked, many others are unwilling to start work in L.A. until the demand has died down somewhat. However, they still encourage homeowners to keep calling. Eventually, they will be able to get through to a professional who is able to help them. Everyone right now has to turn away business because they simply don't have enough manpower or hours in the week to get work done for everyone.

Steve Lang, of the Roofer Contracting Association, warns homeowners against desperation. He assures them that they will eventually be able to get an appointment with a professional who knows what he/she is doing. His warning is this: hiring an unknown contractor or roofer to do work on your home could end up costing you much more in the long run, usually due to shoddy work by an inexperienced roofer or other kind of worker. He reminds homeowners to look for licensed professionals. Just because someone claims to be a roofer doesn't mean that their work will protect your home from the coming winter's rain. It is far safer and more cost-effective to be patient and wait for someone who knows what they are doing.

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Tuesday, May 19, 2015

Longshore Unions Provide Rich Benefits for Members

3/20/15 - If you were asked to list some types of people with jobs that pay over $100,000 per year, you might mention doctors, lawyers, and software engineers. Would you think to name dock workers? While many transit employees throughout the West Coast have been laid off or have seen their wages cut due to a recent increase in global trade, longshoremen (the laborers who move goods from the ship to the shore) have generally been able to protect their wages. In their article, Chris Kirkham and Andrew Khouri investigate the ways by which half of longshoremen on the West Coast make over $100,000 per year.

Not only do these many of these longshoremen make about $20 per hour on the low end, they earn even more on overtime and night shifts. It all comes down to the power of the International Longshore and Warehouse Union. As witnessed during last month's shutdowns up and down the West Coast, those who control the ports seem to control international trade. Even now that contract negotiations have been completed and the ports are open once again, it is predicted that the docks won't be back to normal for up to three months, and many businesses may never get back the money they lost during the port closure.

Although many members of the longshoremen union make well over $100,000 and all members receive free healthcare benefits, union spokesman Craig Merrilees claims that there are thousands of “casual workers” who are unable to get full-time work and don't get the benefits provided for union members. Merrilees states that these workers often spend years, without such benefits, trying to become a member of the union. Unfortunately, the Pacific Maritime Association, through which the wage statistics for union longshoremen were received, refused Kirkham's and Khouri's requests for the wage statistics of non-members, so Merrilees' assertions could be neither confirmed nor denied.

Longshoremen and the ILWU have a kind of monopoly on the ports. Not only did the port union leaders successfully create a contract in 1930 that linked most of the West Coast ports together, the unions have over the years been able to negotiate for better pay and benefits in the midst of technological improvements. Even the advent of such innovations as shipping containers, which require far fewer workers to transport, have led to better pensions and richer buyouts for those workers who are laid off due to the new technology.

The ILWU knows how to work the system. That appears to be how longshoremen are making so much money in a field where most workers make $10 - $11 per hour. When billions of dollars worth of goods pass through a set of ports each year, those people working the ports control the goods. The unions seem to be able to negotiate whatever contract they want, because companies need the ports in order to have any kind of international trade.

Slowly but surely, the unions may be losing their control. As computers systems and machines come in and replace employees, especially those doing clerical work, the unions may have trouble keeping benefits and high wages. While goods can be produced in other countries, and manufacturing can be easily outsourced, ports are a constant, unable to be moved somewhere with lower wages. Despite this, Kirkham's and Khouri's sources are confident that the high wages in the current low-wage transportation industry will not last. It's only a matter of time before technology and innovation force a change.

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Wal-Mart To Increase Minimum Wage to $9 Per Hour

3/13/15 - Statistics show that six out of ten Americans believe that the federal minimum wage should be raised. Many believe the raise is necessary, as a wage of $7.25 per hour is not necessarily enough to live on, especially for individuals trying to support their family. Others believe that if the minimum wage is raised, companies will be forced to lay off some workers, or raise prices on goods, in order to compensate for the extra money being payed to employees. In their L.A. Times articlerticle, Jim Puzzanghera, Shan Li, and Sarah Parvini discuss a recent decision by Wal-Mart to raise their minimum wage and what this decision means for them and their workers in the long run.

After facing intense protests and rallies led by labor groups and increases in state minimum wages throughout the country, Wal-Mart decided to protect its public image and raise its minimum wage to $9 per hour, $1.75 per hour above the federal minimum wage, for around 40% of its employees, starting in April. This will provide about 500,000 Wal-Mart employees a substantial pay increase, and the company plans to raise the minimum wage even more, to $10 per hour, by February 2016.

According to Doug McMillon, a Chief Executive at Wal-Mart, these changes are to help build a stronger business while also providing for the needs of their employees. While the pay raises do place the company in a better light, prevent the federal government from having to propose higher minimum wages, and lower costs incurred by having to continuously train new hires, they will also cost over $1 billion in extra costs during this fiscal year. Shares in Wal-Mart fell 3.2% since the beginning of the fiscal year, but economist Justin Wolfers is confident that the benefits will far outweigh the added costs.

By Wolfers' argument, as an employee's salary increases, so does their productivity. Several companies, including Costco, Trader Joe's, and the Gap, have illustrated this point of view, showing a correlation between happy customers and employee wages well above the federal minimum. Could this just be a matter of correlation versus causation, however?

It makes financial sense for Wal-Mart to increase their wages, and some believe that this may force similar businesses like Target, Safeway, and Kroger to raise wages or risk losing employees. Craig Johnson, president of Consumer Growth Partners, believes that Wal-Mart's changes may convince Target employees to change teams, but he doubts that others will give up good jobs at other stores to join Wal-Mart.

For some, the wage increases are not enough. “Ten dollars is pocket change,” says Sanders Mosley, a current Wal-Mart employee. Many feel that companies can afford to and should pay their employees $15 per hour, rather than the ten to thirteen dollar per hour wages on the high end of the spectrum. Is $10 enough to live on, with the rising cost of living and the improving economy? Maybe, maybe not. Can companies really afford to a minimum of $15 per hour and still keep workers employed and shareholders happy? Probably not. While Wal-Mart and many others are raising their wages, they are careful not to go too far, and thus make sure that happy employees are a benefit, not a net financial loss.

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Each Year, Thousands Mistakenly Declared Dead

1/23/15 - How would you feel if the Social Security Administration and the world's top credit reporting companies proclaim you dead? Well, about 1,000 people per month are mistakenly declared dead by such organizations, leading to a great amount of stress and wasted time in order to reverse such decisions. In his L.A. Times article, David Lazarus describes the tale of George Sledge, a 58-year-old man who has been forced to file a lawsuit in an attempt to force the credit reporting companies to bring him back to life.

While many of the mistakenly listed individuals on Social Security Administration's “Death Master File” are there due to typographical mistakes and other such human errors, a sizable number could be avoided by simple fact-checking on the part of the credit reporting companies. Besides the amount of time you might spend convincing and arguing that you're is still alive, there are much worse consequences.

One such consequence is in regards to your credit score. When anyone is marked as dead, their credit score is automatically set to zero. While this helps to prevent identity theft, it also makes it impossible for a someone like Sledge to get a loan or sign up for a credit card, or even, in some cases, get a job. Furthermore, credit reporting companies have databases full of information that they sell or share with other companies. When someone has been declared dead in one database, it is almost as if they have been simultaneously declared dead in all other databases.

So, even if a person like Sledge were able to get a single company to take him off of the “Death Master File,” all of the other companies would still have him marked as dead. To go through the same rigorous process with every possible company would be straining, if not completely impossible. So, what could an individual in Sledge's position do?

Lazarus suggests that everyone should keep a close eye on their credit information. There are ways to report incorrect information, and if such information is found, you should take care of it sooner rather than later. Most of all, though, Lazarus states that these errors would happen much less often if companies would do their due diligence. A simple phone call might be enough to prevent a living person from being mistakenly marked as deceased, and that could make all the difference.

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Where Have All the Workers Gone?

1/16/15 - Unemployment rates have been found to be decreasing throughout the country. The labor force participation rate, on the other hand, which shows the number of people working or not working, rather than just those classified as “unemployed,” has also been shown to be on a downward slope. So, what causes the seeming paradox between these two measurements. According to Michael Hiltzik, in his Los Angeles Times article, this discrepancy is due to a significant number of “missing” workers: those workers who are not working, and at the same time are not considered “unemployed.” Where have these so-called “missing workers” really gone?

How is it possible for both participation rates and unemployment rates to go down? Some economists believe that this phenomenon is due to a lack of effectiveness in current governmental policies meant to create and fill necessary jobs. Such economists theorize that the extreme difficulty many people are having in finding work has led them to stop searching altogether, to drop out of the labor force completely. Hiltzik, on the other hand, disagrees with this conclusion, preferring an alternative explanation.

Hiltzik presents sources in the article that seem to show that up to three-quarters of the perceived decline in participation rate is actually due to such factors as the retirement of baby boomers and the enrollment of workers in universities and other institutions of higher learning, both of which have little to do with the state of the economy. Over the past few decades, participation rates have been steadily declining, for both men and women. Statistics show that as the economy improves, the participation rate should improve as well.

Whatever the reason for the current employment trends, it is evident that the economy needs to get better. Hiltzik concludes his article as such: while the participation rate is declining, there is still room for it to recover. Workers may be out of the labor force due to the Great Recession, or lowering wages, or a variety of other possible reasons, but as the economy improves, workers should return.

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Holiday Shioppers Spending Confidently

1/2/15 - According to a retail analytics firm called ShopperTrak, the biggest shopping day of the year is the Saturday before Christmas. But, what is the second-biggest shopping day? Statistics show, at least for 2014, that the second-biggest shopping day of the year is not Black Friday, as some might expect, but rather the Friday following Christmas. As stated in an article by Tiffany Hsu, Andrew Khouri, and Ronald D. White, of the Los Angeles Times, a combination of post-Christmas sales, optimism regarding the slowly-recovering economy, and even the calendar's placement of Christmas on a Thursday, come together to make the day after Christmas the perfect time to shop.

Christmas falling on a Thursday can have quite an impact on retail sales. For many, this turns into a four-day weekend, which could give consumers a full three days to shop. Such a “blockbuster” weekend could end the year with a bang, ensuring the National Retail Federation's prediction that this season's revenue would pull in approximately $616.9 billion.

Even more effective than the holiday's placement on the calendar, though, is the slowly-returning faith of the general population in our local and national economies. With a lowering of gas prices and a slow increase in employment, people find that they have more money to spend on those items they want, not just what they need. Consumers are beginning to have more faith in the continuity of their employment; they feel a good degree of job security. With that sense of job security comes increased spending, as consumers are more willing to make purchases when they feel sure of a steady income.

Retail stores have done well in predicting the amount of inventory they need this year. Instead of purchasing too little inventory and running out, or purchasing too much and having to cut into their bottom lines, it appears that the retailers have done well with their inventory, thus maximizing revenue. Online retailers have improved their on-time deliveries, compared with previous years, thus giving consumers more confidence in ordering gifts through the internet.

The days following Christmas are great for gift card redemption. Knowing this, retailers provide extra discounts, hoping that such gift cards will be used to purchase excess inventory. Store prices are down after Christmas, and wallets tend to be fatter, both of which prod consumers to spend. People seem to be happier with the current direction of the economy, and that is helping the economy even more.

While current discounts will certainly bleed over to the next year, retailers are accepting it as a positive trade-off. The first quarter of the coming year may not bring in as much money as retailers would like, but sources show that the second and third quarters are quite likely to bring great improvement for the economy in the coming year.

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Labor Force Participation Rates Declining

12/19/14 - To the average observer, it would appear that California’s economy is steadily recovering. Unemployment rates are down, and new jobs are being introduced at a constant pace. Yet, in Tiffany Hsu’s L.A. Times article, it is revealed that the labor force is much smaller than it may seem.

Unemployment rates are measured based on the number of people receiving unemployment benefits from the government, not necessarily based on the number of people actually without work. Once someone has given up and stopped looking for work altogether, they are no longer considered “unemployed,” since they no longer qualify for unemployment benefits. So, “unemployment rates” tend to be quite misleading.

According to Hsu’s sources, the more accurate measurement of the labor force’s stability is the “labor force participation rate” – the number of people working or actively looking for work in proportion to the number of working-age individuals in the population. This, compared to the “unemployment rate” is more accurate in that it takes into account individuals who have given up on finding employment. The currently falling labor force participation rate has dramatic implications on the state of the economy.

A drop in the participation rate could mean that the jobs available are not the jobs people need. For many with college degrees and experience in well-paying fields, a plethora of jobs in the fast food industry means very little. Even for those who are willing to “lower their standards” and accept jobs for which they are “overqualified,” like a barista or salesperson, such positions have so much competition that the odds of gaining employment are slight. In the end, many individuals simply prefer to stay unemployed rather than risk losing such government benefits as Supplemental Security Income or Social Security Disability Insurance.

No matter what the reason, a decrease in the participation rate can’t be a good thing. With more seniors continuing to work well into their sixties and seventies, and new graduates looking for work straight out of school, only so many positions are available to recently laid-off workers. If higher-paying positions are unavailable in California, job-seekers will look elsewhere for employment, and that can have consequences.

While a decline in unemployment rates may seem like a positive sign, Hsu shows why this positive impact is limited. Statistics are misleading, but the bottom line is this: we need to get people back into the labor force. The state has been creating new jobs, but mainly in lower-paying fields. Workers, especially those with college degrees, want to work in jobs “worthy” of their skills. Thus, to bring the workers back in, the creation of better jobs must be a priority.

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Low-Paying Jobs Filling the Southland

12/5/14 - According to recent data, job creation in the Southland has steadily been making its way back to higher levels. However, this data can be misleading. While new jobs are being created, thus allowing more unemployed workers back into the labor force, most of these jobs are in food service and retail sales. Such low-paying jobs, while better than nothing, don't provide the kind of increased domestic productivity that our economy so desperately needs. In his L.A. Times article, Chris Kirkham looks into the effects that this trend may have on the ongoing economic recovery.

Kirkham's sources point to two possibilities for this trend: 1) a decrease in the availability of jobs in higher-paying industries; or the more likely option 2) a lack of individuals with advanced education forces such industries to look elsewhere for employees. As Kirkham points out, many of the industries that once provided the opportunity to advance, manufacturing and construction in particular, have gone through changes that allow for a decrease in the amount of necessary employees. New technology, while helpful to society as a whole, removes the necessity of several positions in the industries, thus lessening the availability of such industrial jobs.

More than just the influx of new technology, though, is the fact that most higher-paying jobs require that those holding the jobs have some form of higher education. The bare minimum for these positions is usually a bachelor's degree, but some require further knowledge as gained in graduate school or beyond. The main problem, it seems, is that only 30% of workers in the Southland, compared to over 40% in the Bay Area, have a bachelor's degree, and that just isn't enough to fill the growing need for skilled employees. Without workers to fill these positions, many companies are forced to move elsewhere to find employees.

With a trend toward lower-paying jobs comes a marked decrease in median household income. Just as the Southland has more individuals lacking college degrees, nearly 18% of families in Southern California fall below the poverty line, a dramatic difference from the Bay Area's 11%. According to experts, the way to boost income levels in the Southland is to get more of the population into post-secondary schooling options.

A variety of high-paying jobs are indeed available in Southern California. From healthcare to construction, and everything in between, there are plenty of job opportunities for those with the necessary skills. All we need now is for people to gain those skills.

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G-20 Leaders Present Ideas For Economic Reform

11/28/14 - A group composed of the leaders of twenty of the world's largest economies, also called the G-20, held a meeting in Brisbane, Australia, recently, to discuss ways in which each country could contribute to a future restoration of the global economy. An article, by Don Lee of the L.A. Times, summarizes each of the issues addressed by the members of this group, and their plans for change around the world.

The leaders of the G-20 have long been criticized for being slow and ineffective; but, their newest proposition, including over 800 projects designed to add new jobs, may actually cause some positive stimulation to the currently sluggish economies found in most major countries. Sure, these projects may not be perfect, and they will require political support in their respective countries to be enacted, but some plan is better than nothing. The G-20's current plan aims to increase global output by 2% - over $2 trillion and millions of jobs – over the next five years, a hefty goal in and of itself.

While the main focus of this year's G-20 summit was the aforementioned 2% increase in global productivity, several other topics were broached that are usually viewed as less important to the economy, such as anti-corruption legislation, health issues, and climate change. This year's summit in particular made sure to address the fact that there is more to the economy than just jobs and productivity.

The leaders agreed to work on limiting greenhouse gases and other such pollution, while also making commitments to help contain the current Ebola outbreak, both of which have devastating effects on various economies around the world. Tensions at the G-20 summit were stretched thin, as leaders verbally butted heads based on their differing viewpoints regarding such “unrelated” economic principles.

Altogether, though, the G-20 summit seemed to be successful, to a point. No, most of the proposals will not have a dramatic effect on the global economy immediately, but such projects as those suggested at the meeting will definitely have a major effect on the economy of the future. Only these countries and their political leaders can really determine how far away that future lies.

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Low Supply + High Demand = Price Increase

10/31/14 - Southern California rental costs are on the rise, and there's nothing we can do about it. According to a recent study cited in Tim Logan's L.A. Times article, rent prices throughout the Southland are poised to rise over 8% in the next two years. This is due partially to a surge in job growth as well as a shift from home ownership to rental.

While Southern California has long had issues in providing enough rental housing, the recent rise in demand is far surpassing the rate of new construction. The study shows that vacancies remain roughly the same, since the higher rent prices, combined with roughly unchanged income, make for a situation in which renters can't afford the cost of renting.

This trend, predicts the study, will lead to the mass exit of industrial jobs from Southern California. Without affordable housing, businesses can't afford to remain open or open new factories in the Southland. Logan's source even compares California's current stance to that of Detroit in its heyday: a strong housing market, which could fail as soon as industrial jobs move elsewhere.

As Logan discusses in the article, this future failure could be prevented with the right policy initiatives. From lowering restrictive and costly requirements on new construction to speeding up the approval of building permits, Logan presents evidence that shows how policy-makers could make housing more affordable and, at the same time, keep jobs close at hand.

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Los Angeles: A Leader in Technology

10/8/14 - When many people think about the relationship between California and technology, Silicon Valley tends to be the first connection to jump into their minds. Santa Clara County, home to Silicon Valley, does indeed have plenty of technology-based jobs, but is it really Number One? According to Tim Logan's article in the L.A. Times, the real leader, at least in sheer numbers, is Los Angeles County.

A study performed by Los Angeles County Economic Development Corporation produced results showing that L.A. has over 368,000 jobs in the technology sector, more than both Santa Clara's 313,000 and Boston's 361,000. While Los Angeles was once a powerhouse for careers in entertainment, jobs involving technology, including aerospace, architecture, engineering, and software design, have become much more common in the Los Angeles of today.

Not only is the number of jobs in technology growing; the pay rate for these careers is on the rise as well. Jobs in the high tech industry can pay approximately $87,000 per year, a difference of over $30,000 compared to the lower-paying jobs in non-technological industries. As Logan's article states, while 9% of the country's jobs are in high-tech industries, 17% of all wages in the country go to those employees in such industries.

In summation, Los Angeles is in the midst of a technological boom. With the push for faster production, in a world of instant gratification, technology is the way of the future. As people need the creation of newer innovations, high-tech industries will continue to grow. With the evolution of newer technologies and better jobs, this trend may, in the long run, have a dramatic effect on the economy as a whole, not just for those individuals in the high-tech industries.

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EB-5 Investment Visas in High Demand

10/3/14 - Some foreigners visit and/or live in America on a student visa, others on a work visa, and still others through diplomatic pathways. However, there is another way, not so well known: investment visas. According to an article by Frank Shyong, of the L.A. Times, Chinese citizens that holds a majority of these visas, which are awarded to those investors who put anywhere between $500,000 and $1 million into various United States businesses.

These visas, called EB-5 visas, which allow wealthy foreigners to immigrate into the United States in exchange for a hefty investment, are unfortunately being stretched too thin. According to Shyong, so many of these visas have been claimed in recent times that they have all but run out. While this program has been around for 24 years, this is the first time in its history that investors had to be turned away, simply because there weren't any of the EB-5 visas left to grant. Even after the beginning of the 2015 fiscal year with new visas available, changes to the system could make the application process much longer, and thus drive away potential investors.

Shyong's statistics show that 85% of EB-5 investors come from China, likely pursuing such immigration opportunities due to economic and environmental downturn in their home country. California, where approximately 25% of such investments are carried out, is filling up with new projects that both contribute millions of dollars into the economy and create jobs for many of our unemployed workers.

While EB-5 visas are helpful, both for the investor and for the American economy, the new restrictions being placed on such visas will have quite an opposite effect. Wealthy investors would be forced to wait up to three years for paperwork to be completed, and even then not know whether they would get the visa or not. Those American businesses relying on EB-5 funds would have to grind to a halt, unable to continue work without the investment money they need. Many politicians are pushing for decreased restrictions in the granting of EB-5 visas, due to the incredible amount of good these investments due for the American economy. While bills have been submitted for approval, all we can really do is wait and hope: Americans, hoping for continued investment in our economy, and Chinese investors, hoping to make it off the waiting list and finally be allowed to hold a visa.

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Downtown Properties Undergoing Revitalization

8/29/14 - Over the last several years, many of downtown Los Angeles' old buildings have been revitalized by investors looking to breathe some life back into the surrounding community, to produce better job opportunities as well as new shops, apartments, and restaurants. One of the largest of such projects to be undertaken involves the former May Co. department store on Broadway, more well known as the “Broadway Trade Center.” A recent article by Roger Vincent of the L.A. Times discusses the implications that this renovation may have on continued development of the downtown area.

Seemingly following the same approach used on New York's Chelsea Market, these investors are looking to bring the old, run-down building back to its former glory. The renovation of such a large building could provide space for new apartments, office buildings, shops, and markets, all of which could be put to good use in the populous downtown area.

With over 1 million square feet of space to fill, Waterbridge Capital and real estate developer Jack Jangana, who acquired the six-story building for about $130 million, are looking for tenants in the realm of technology. While they may also want to devote the first few floors to retail uses, such as restaurants and stores, the rental of upstairs space to a major technology company could draw in “creative” jobs historically present mainly in the Santa Monica and Hollywood areas.

Such introduction of creative and technology-based companies could lead to the addition of new, well-paying jobs to an area currently being filled with new homes and restaurants. According to Vincent, even the addition of technology companies to the Broadway Trade Center may not be enough to fill its enormous potential. Such other possibilities include a grocery store, roof garden, or post office, among a plethora of other ways to fill retail space in the massive building. While it may take as long as 24 months for planned renovations to be completed, this project by New York investors holds great potential to benefit downtown Los Angeles and the surrounding community.

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Saving Versus Spending: The Ultimate Conundrum

8/8/14 - In times of financial hardship, it is quite common for individuals to build a wall around their finances, to save rather than invest, and statistics show that consumers have been squirreling away any extra cash on hand, ever since the Great Recession first hit. With low interest rates on savings accounts and constant fluctuation of the stock market, it appears that, at this point in time, consumers have little choice but to pad their checking accounts rather than risk losing their savings. An article by E. Scott Reckard of the L.A. Times discusses the economic implications of this phenomenon of consumer saving as opposed to spending and investing.

Before the Great Recession hit, the average American was known for extravagant spending, for commonly over-drafting his/her checking account, and for holding very little savings in a “just in case” account. After we were hit hard by the economic downturn, it seems as if consumer saving has gone into overdrive, as if to compensate for their previous lax attitude toward their finances. While this new development in consumer saving is helping individuals to ride out the ups and downs of economic recovery, this situation does not bode well for continued economic stabilization.

According to Reckard, about two-thirds of economic recovery is represented by consumer spending. Thus, if consumers are saving rather than spending, the recovery is doomed to slow, maybe even halt altogether. With more individuals holding onto money rather than funneling it back into the economy, businesses have less capital on hand to hire new employees. While employment-to-active-searcher rates have improved markedly in past months, the so-called employment-to-population rates are still suffering, and these high rates of unemployment make people want to save even more, in fear that one day their employment might also be terminated.

Thus, while this new development is helping consumers to pay off debt and to learn to keep a “rainy day” fund, this cautious practice of high saving and low spending is not having such a great effect on the economy as a whole. However, as Reckard states, with inflation going down and income going up, it may just be a matter of time before consumers decide to invest once again. All in all, the main message is this: consumers have turned their manner of economic thinking on its head. While these sudden increases in responsible spending and lower rates of overdraft should be celebrated on the individual level, the economy now needs to find some other way to help its recovery.

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Unemployment Rates: Going Down?

7/28/14 - A main indication of a recovering economy is a lowering of unemployment rates, and, according to an article by Jim Puzzanghera of the L.A. Times, the American economy may be seeing precisely that trend. According to current statistics, Puzzanghera states, the number of people filing for first-time unemployment benefits is at its lowest since February 2006.

Of course, this only measures first-time claims for unemployment benefits, not continuing claims nor claims from individuals laid off more than once in the term. Thus, all that these statistics really measure is how many individuals have been laid off for the first time and have filed for unemployment benefits. That being said, Puzzanghera also presents statistics to show that the total number of individuals receiving unemployment benefits has dropped to 2.5 million, the lowest since June 2007.

These numbers, however, can also be skewed, as they measure only individuals receiving benefits, not necessarily the number of individuals actually unemployed. The Labor Department doesn't count individuals who are still unemployed but whose benefits have run out, nor does it count individuals who have quit the job search altogether.

While it is true that statistics can be warped, so as to present the data in a more favorable way, it seems that even when such changes have been accounted for, the number of jobless individuals has indeed been going down in recent weeks. The numbers are looking up for the labor force and the American economy, and this may just be the beginning of our ascent from the seemingly bottomless pit into which we were dropped when the Great Recession first hit.

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Lowering Interest Rates: A Continuing Trend?

7/14/14 - Interest rates are a large part of measuring an economy's strength, stability, and ability to recover. For the average American, there is no ideal interest rate; it all depends on one's status. For older Americans, relying on the interest accrued from a pension fund or savings account, low interest rates can be devastating, helping very little to increase their principal investment. On the other hand, low interest rates can mean lower mortgage rates, more affordable loans, and improvement of the stock market. In his article, Tom Petruno of the Los Angeles Times investigates interest rates, their effect on the economy, and predictions of future changes.

In most countries, the interest rates are controlled by a main federal banking organization: the Federal Reserve, the European Central Bank, or the Bank of Japan, to name just a few. These organizations command changes in the short-term interest rate, and as of recently, have been holding them as low as possible, in an attempt to stimulate economic growth in the form of real estate, corporate loans, and stock market investment.

Although the Federal Reserve publicly predicts interest rates to be up to 2.5% by 2016, several members of the policy committee remain skeptical as to the magnitude of this rate increase. While they disagree as to the amount, they seem to concur as to one main idea: America of the post-Great Recession era will take quite a while to regain its previous economic stature. Of the many sources Petruno cites in this article, one message stands out: don't rely on a return to “normal” interest rates, for the economy still has a ways to go.

While central banks control short-term interest rates, such long-term rates as on bonds are affected more by the principle of supply and demand. As demand for bonds decreases, the banks offer higher interest rates as an incentive to increase demand, and as demand increases, banks have more leeway to lower interest rates without affecting sales too drastically. Thus, the interest rates on bonds have been falling lower and lower due to increased consumer demand for such “safer” investments.

According to Petruno, even though interest rates have been at all-time lows, inflation could reverse this trend. As prices and wages increase, long-term interest rates could be driven up markedly by bond investors. According to the Federal Reserve, the current national inflation rate is at target levels, around 2%. While some analysts believe that the inflation rate will continue to increase, in the long run, it appears to remain steady, especially given that wages aren't increasing along with the costs of goods and services. Due to high unemployment, and a dramatic shift to more part-time work, the current rise in prices is predicted to decrease, given that lower wages can't fuel a sustained increase in costs.

In concluding the article, Petruno brings up the following point: while the funneling of money into central banks has not, as of yet, triggered a dramatic improvement in the national economy, such an improvement due to this money could have negative consequences, namely high inflation. It seems like the solution to fixing the American economy relies mainly on time and patience. Interest rates are slowly climbing, and the economy appears to be healing, albeit slowly. Thus, all we can really do is watch and wait.

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The Economy: Looking Up?

7/7/14 - Looking around, seeing homes facing foreclosure, businesses having to shut their doors, and unemployment rates through the roof, one might think that the American economy is struggling as much as ever. However, according to a recent article by Don Lee of the Los Angeles Times, things may not be quite as bad as they seem.

Sure, America may have a 6% average unemployment rate and recent college graduates may have trouble finding work, but, compared to most other countries, we seem to be doing well. The average income of an American citizen far exceeds that of a Chinese citizen, and even with the recession taking its tolls, the United States leads the world in labor force growth. More and more individuals enter the workforce every day, and with them comes the promise of increased production, and effectively, economic stimulation.

Lee's statistics show that while job opportunities have decreased dramatically in such middle-of-the-road fields as manufacturing and construction, employment has risen markedly in positions of both unskilled labor (restaurants, retail outlets) and highly skilled work (computer design, healthcare). In summation, Lee implies that one of the greatest factors in assisting the American economy back to its future glory is the ever-continuing addition of young adults, recent college graduates, into the labor force. It is those young adults who innovate, who expand the diversity of the workforce, who invest in capital such as real estate, and thus, it makes sense that these individuals are the “missing ingredient” in America's future economic recovery.

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