Sunday, January 15, 2017

New Black Business Lists from Maggie Anderson ("Our Black Year") and South Florida Black Businesses


There are two new Black Business Directories.  Both have just been released. They are in "Beta" development where all the features may not work. They also have limited listing since they are still gathering businesses for their directory.

Maggie's list by Maggie Anderson is a new Black Business Website.  It lists business plus Black business news and financial planning articles. Maggie Anderson is famous for "Our Black Year" when she purchased items from Black business only for one year.

Maggie's List
Maggie Anderson website

South Florida Black Business Directory

South Florida Black Business Directory
SFBBD facebook page

Saturday, January 14, 2017

Amazon is creating 100,000 jobs. Who loses ?


USA Today has a story about Amazon creating 100,00 jobs and the consequences. The story is here.

The list of Amazon open positions is amazing

https://www.amazon.jobs/


Thursday, January 12, 2017

December Unemployment Review: Black Unemployment below 8% in Obama's last labor report


December Labor Report

The Bureau of Labor Statistics (sp) released the December unemployment report on Jan. 6th, 2017.  It was last unemployment report that will be released during president Obama's term of office. While the public directly credits or blames the president for the state of the economy, most economists know the president has little direct power over the economy. Even over the long term. Given that, a significant milestone was achieved when the Black unemployment rate fell below 8% for the first time since February 2001. More on this topic later.

Summary

The December report showed a small increase in US unemployment to 4.7% while the Labor Force Participation rate remained flat at 62.7%. Non Farm Payrolls (NFP) by 156,000 jobs including 63,000 in healthcare. Healthcare has added over half a million jobs this year (514K). Average wages increased by 10 cents after a surprise 2 cent drop in November. The number of unemployed workers increase by 120,000 to 7.5 million people.  There were large increases in health care hiring (+63,000), trade and transportation and hospitality and leisure. Manufacturing was also up(+17,000).




NFPs continue moderate growth, increasing by 199,000 jobs on average each month since September 2010. September 2010, at the end of the recession, was the last payroll reduction.




All of the major indexes of labor employment and unemployment where unchanged. The indicators have not budged in roughly a year. We are nearing full employment and the true end of the recession. Now the focus will shift back to larger structural problems such as wage stagnation, income inequality and wealth inequality.


The Big Story

The big story is the Black unemployment rate fell to 7.8% in December. The last time the rate was below 8% was sixteen years ago (in February 2001). Damn. Black men have an unemployment rate of 7.6% while Black women have a rate of 6.7%. The Black teenage rate is 26% vs. 14% for whites.






The U-6 (please define) rate show continued improvement dropping to 9.2%.  U-6 include all unemployed, people working part time who want full time work, and marginally attached workers (basically everyone who is available to work)

The Black U-6 rate fell by a half of one percent to 12.3%. This rate captures the real unemployment rate among Blacks who want to work.  The Black U-6 rate was as high as 24% in April 2010.





Here you can see a comparison between Black, White and Hispanic/Latino unemployment rates below.



The Business Survey showed moderate employment growth. 



The healthcare sector was the big winner.






ADP reported 153,000 NFP jobs were created.  The jobs were split among small businesses (+18K), medium sized businesses (+71K) and large businesses (+63K).  According to ADP goods producing business shed -16K jobs while services hired 169K workers. Manufacturing lost -9K jobs.

Paychex small business jobs index was up slightly at 100.62 in December after 3 months of declines.

Tuesday, January 10, 2017

Wait, am I being manipulated by advertising targeting Black consumers ?



Just found this on the web.

Which of the eleven Black consumer groups do you fall in? Maybe "Black is Better" or "Connected Black Teens." How about "Faith Fulfills" or "Stretched Black Straddlers"? A 2008 Radio One / Yankelovich Black Market Segmentation Study can tell you which consumer group you belong to. 

In June of 2008, Radio One and Yankelovich conducted a marketing segment study of American Blacks.  Marketing segment studies are common in the advertising world. They are also kept secret and usually never made public. For example, Phillip Morris and Lorillard targeted Black consumers with menthol cigarettes which were considered "cool" based on marketing studies.

Segmentation studies are used tailor advertising messages to appeal to different groups.  They are also used to target ad spending to generate the best results. For example, you don't want to spend money on ads targeting people who hate your product and believe it causes impotence . You want to spend money on people who will give you their last dollar with a little motivation. Verizon is always running feel good ads on Black shows.

What's rare is to have a comprehensive and detailed study fully published on the internet. Especially a study about what Black People think, feel and believe. Some of the appeals to emotions and beliefs in the study are a little creepy. But, hey, my beliefs are my own, right? Wait am I being manipulated ?

Anyway, it's kind of interesting


Wednesday, January 4, 2017

Trump and Jobs: Trump makes it look easy


Obama

We can't believe how fast some of these corporations folded when confronted by Trump over jobs. If it was this easy to get companies to create US job, why didn't Obama do it. 

Obama blew a golden opportunity. After his jobs summit, he could have seized the moment. Instead he got distracted by other issues.  He was blocked by the Republicans. And never really returned to jobs.

It seems the president's education and training caused him to be overly analytic and cerebral regarding jobs. Jobs are the most emotional issue of all. Instead, he listened to his economic advisers who said recovery is just around the corner. But someone who has lost their job does not want to hear statistics and reports. They want Bill Clinton saying "I feel your pain". Obama should have been hammering home the jobs issue and pounding the "do-nothing congress." . 

Trump 

Regardless of how many actual jobs he saves, Trump has won because it appears like he is doing something for the working man. Donald Trump cares about me.

We progressives know something is going on with these big corporations.  But we just can't figure it out. 

Why are these companies caving so fast to Trump ?

1) Are they afraid of bad press ?
2) Are they afraid of alienating crazy Trump and his supporters ? 
3) Could they carry out a successful boycott that progressives could not ? 
4) Are corporate CEOs just great big suck ups?

Our money is on #4.  CEOs have gotten to the top by sucking up to people in power. They have spent their whole careers kissing the right cheeks.  So when trump comes along they only do what comes naturally. 

Anyway, here are the stories on Trumps jobs saving activities. Wish we could find a story called "Obama saved my job" but we can't. 



Tuesday, January 3, 2017

President Obama's 2017 Economic Report. Average to Good Results but Hillary still lost the election



President Obama's Council of Economic Advisers released the 2017 economic report on Dec. 15th, 2016. Overall the economy is in great shape compared to the 2007-2009 recession. We are also doing well compared to other developed countries (EU and Japan) . The economy is finally and completely out of the recession, jobs creation is consistently about 150K per month, the financial system is stabilized and 20 million additional Americans have healthcare. Even wages are rising slightly.

Hillary Lost and Trump is Inheriting a Great Economy

The best economic indicator, however, is Hillary's loss in the election. Obama and his economic wizards were unable to elect Hillary.  The people who compiled the report, the people who helped Obama steer the economy, the people got 20 million Americans health insurance are now the very same people out of a job. So either the economic advice was not that good or their political skills were not that good.

Longer Term Problems

The report also shows a couple other worrisome points: 1) in the face of an incredibly slow recovery, they gave up on any kind of fiscal stimulus after being repeated blocked by the Republicans and 2) how tight the administration was with corporations who donate money but also suppress wages and export jobs. Overall it looks the the administration was too close to big corporations who destroyed millions of jobs during the recession.

However big, long term structural problems remain. Wages for the bottom 50% of earners have been dropping through the recession. They have been flat since about 1980.  The economy is creating a surplus of jobs but lots of low wage jobs. Income and wealth inequality continue to increase. College costs continue to rise while wages for new graduates are flat. (Nearly 25% of college graduates opted for income based repayment). Finally, incomes for the 1% continued to rise.

Funny Report Highlights

The are also some funny moments in the report if you look closely. Income and wealth inequality continue to increase. But the inequality chart in the report includes ACA taxes, transfers and benefits allowing writers to conclude that Obama reduced inequality. Another interesting point is highlighting the pitifull 1.3% wage growth during Obama years as compare to 0% during the prior 30 years. Its sad when wage rose at 1.3%  rate and it's a positive development.

You can read the report here.

2017 Economic Report of the President webpage

Saturday, December 31, 2016

Ujamaa - Cooperative Economics


I was looking for Kwanzaa resources on the web especially relating to economics.

Fifty years ago, Dr. Maulana Karenga created Kwanzaa as a holiday to build African American culture and community. The secular, cultural holiday has seven days.  We, of course, are interested in the fourth day known as Ujamaa - Cooperative Economics.

According to Dr. Karenga the purpose if Ujamaa is "To build and maintain our own stores, shops and other businesses and to profit from them together."

However, there are few actual sources on the internet related to Black or Kwanzaa cooperative economics.

The official Kwanzaa guide has the best details of the fourth day of Kwanzaa: Ujamaa from the Official Kwanzaa Website

Ajowa Nzinga Ifateyo offers 21 economic proposals that capture the spirit of Ujamaa on the GEO:Grassroots Economic Organizing website.

One United Bank has a Kwanaa Ujamaa promotion

Here is a general guide to Kwanzaa
Kwanzaa Guide

Here are some historical resources related to concepts in Kwanzaa.

Ujamaa - Economic brotherhood. A political and economic program of Julius Nyerere

Harambee - Pull together

Saturday, December 24, 2016

Beth Macy covered the loss of Furniture Jobs in Factory Man


We know the corporate press does a terrible job of covering unemployment and poverty in the Black community.  Sadly, the press has done the same poor job covering economic issues that effect poor and working class people. Regardless of race. Way to go, press.

So it's refreshing to see a reporter, who covers the issues in detail, and still gets ignored.

Beth Macy worked for the Roanoke Times. She has become a noted speaker and writer on the impact of furniture imports on small, rural towns.

In Factory Man, Beth Macy writes about life in the Basset Furniture factory and the effect of the Chinese import shock.

Here is an article from the Roanoke Times about Bassett Furniture.

From 2013, A Factory town with no more Factories.

In 2012, John Bassett, 3rd tries to offer some advice for staying competitive after the furniture industry was crushed. Furniture magnate Bassett offers 5 keys to remaining competitive.

Here is Beth Macy at the Columbia Journalism School discussing why the important story was missed. Dart Center Interview with Beth Macy about Journalism and Trauma.

But even Beth Macy came to the story late.  Here is an opinion piece about TPP in the NY times.

Friday, December 23, 2016

Black Lives Matter announces Black Business Directory. Here are some others.

Backing Black Business

The Black Lives Matter(BLM) movement supports economic justice.  During the election they released a comprehensive economic justice proposal. You can read the BLM economic and political policies at "The Movement for Black Lives: Economic Justice". Now they have released a Black Business Directory called Backing Black Business.

To further support Black economic justice they are launching a Black Business Directory website. You can visit the site at Backing Black Business.  The site is very limited compared to current Black business directories. But it could potentially create a large national Black business list that encourages spending within the Black Community.

It will be interesting to see if the BLM "Brand" has the recognition to drive the business directory forward.

Adweek has a story on BLMs work with J Walter Thompson. The ad and creative industries centered in NY and LA, are notoriously White and non-diverse.  Over the years they have shifted to a higher percentage of female staff.

Here are some existing Black Business Directories.

Name                                                             Home base

Black Mall                                                     Chicago
Black Trade Lines                                          Los Angles
Buying Black                                                 Columbus, OH
National Back Guides                                    Delaware
   Delaware Black Guide                                                             
   Afro Philly Black Guide
                                                                           
I Am Black Business                                    Atlanta
St. Louis Black Business                              St. Louis              
DC, MD and VA Black Business                 DC, Maryland and Virginia
Izania                                           
Support Black Owned                                  National               
Black Owned Business                        
Maggie's List                                                Chicago, National
South Florida Black Business Directory      South Florida


                            

Crowd funding websites

BBnomics crowdfunding                         Black crowd funding site

Apps

Several of the directories also have apps for mobile Black business directory use.


v4

Tuesday, December 20, 2016

"China Shock" is one of the best economics papers of the year

"China Shock: Learning from Labor Market Adjustment to Large Changes in Trade" is a great economics paper.  The authors develop a model to predict the labor market effect of the large increase in trade with China between 1991 and 2011. They look at the devastating effect of the concentrated loss of good paying manufacturing jobs on communities.

Three well-known economists David Autor(MIT),  David Dorn(U of Zurich) and Gordon Hanson(UCSD), analyzed the effect of Chinese imports at the industry sector and county level in the US. They show that Chinese imports contributed to major and concentrated  drops in employment and income in hard hit areas as whole industries were wiped out.

The authors split the period of analysis into three periods: Pre-WTO (1991-1999, WTO (1999-2007), and Recession (2007-2011). China joined the World Trade Organization in December 2001. The pace of Chinese imports started slow in the pre-WTO period, accelerated after China joined the WTO and peaked during the last recession.

Findings

For each manufacturing job lost to import competition in a community, there was also a reduction in wages and incomes and an increase in government support.  The shock is felt through out the supply chain (suppliers) and in local dependent businesses (the coffee shop and auto repair). The authors were able to construct a model showing the effect of import exposure on manufacturing communities. They show the down side effects of trade with China are concentrated and sustained.

The authors estimate that about 10% of the total job losses were due to Chinese imports. That’s about 560,000 jobs from 1999 to 2011. Actual US manufacturing declined by 5.8 million during that period.

However, industries are linked to each other in buyer-supplier relationships.  These upstream suppliers also get hit. So the overall manufacturing job losses direct and in related industries are estimated at 985,000 jobs and 2 million total jobs in the whole economy.

Finally, workers who lose jobs cut their spending and consumption.  Some of those workers may find replacement jobs but at lower wages. So the total jobs losses, direct and indirect, are 2.4 million.

The authors also show that the workers who lost jobs due to imports relied on social security, unemployment and government medical programs for support.  They received little help from TAA – Trade Adjustment Assistance Act.

The October 2016 trade deficit with China was -$29 billion and -$289 billion year to date. It was -$308 billion Y-T-D in 2015. 

Discussion

The paper is also important for many other reasons. First, the rise of Chinese imports may have shifted key swings states to the Republicans. A common reason people gave for voting for Donald Trump was economic suffering. A separate analysis by the authors shows that the Democrats would have won several key swing states if there were a lower level of Chinese imports. You can read the election paper here:  "The effect of trade exposure on the 2016 presidential election"

Second, it seems like the economics profession is waking up to the idea that trade is not always good. The benefits are diffuse but the costs are concentrated. The authors show that certain US counties lost huge numbers of jobs during the Chinese import period.  The counties then shifted to a large increase in government aid such as such as Social Security, Unemployment Insurance and government medical benefits.

Third, the article refutes some of the basic beliefs about trade: that trade is always good for both parties.  Economists are finally recognizing what everyone else already knew: trade that destroys good paying manufacturing jobs is bad for the United States.

Economic trade theory supports free trade. The theory says the more trade the better for overall society. In economic trade theory, countries specialize in goods and services where they have a comparative advantage. Both trading parties are made better off by exchanging goods. The benefits from a larger number of people being able to afford more lower priced goods exceeds the economic losses from local job cuts and lost corporate income. These principles are summed up in David Ricardo idea of trade and comparative advantage.

For example, everyone has a smart phone and flat screen TV.  But to keep the price low. they might have to work in a hospital for $20.00 an hour instead of a machine shop for $30.00 an hour.  If they kept the machine shop job, the smart phone would cost $1200 and a flat screen $1000. Ricardo said overall we would be better off as a society.

There are a couple big assumptions: 1) No country has an absolute and permanent comparative advantage.  Time will correct the imbalance. 2) Workers can move to other equally well paying jobs. Workers will relocate geographically.  Workers can quick learn new skills. And firms can find other lucrative investments. 3)
Benefits, while diffuse out weigh the costs.

Finally, the authors note, China's comparative advantage in labor cost, technology, and government policy may be coming to an end.  US imports from China are down for the first time in 20 years. This paper may mark the end of the China Shock.

In the end, politicians and government should have done more to counter the effects of Chinese trade with the US.

The authors have also set-up a web site with links to the papers and data sets. Chinashock.info


The chart below shows the loss of jobs in the furniture industry around Hickory, NC. Manufacturing employment dropped from 80,000 to 40,000 during 2000-2010.



Recent trade figures with China show a step decrease in 2016 after a huge increase. In 2015, the trade deficit with China was -$367 billion. The 2016 trade deficit is forecasted at -$320-$330 billion.





Blog Archive