Saturday, March 31, 2012

Technical Topics Blog

Well, we have launched another Blog. This one is for technical topic we have encountered during the economic research. Topics include mathematical formulas, algorthims and technical concepts.

The Blog is called Evil Black Economist technical topics. Here is the link.

Saturday, March 24, 2012

Watch out for companies dropping health coverage

The Affordable Care Act really starts working in 2014. Under the law, major provision of which go into effect, in 2014, employers can drop coverage for employees and pay a penalty (tax). The tax is used by the government to provide health insurance on private exchanges. The government currently subsidizes employer plans by letting companies deduct healthcare expenses.

However, many employers are still weighing the cost of paying for employees health coverage or paying the tax penalty. The tax penalty is between $2000 to $3000 dollars per employee. Large companies would not be affected but smaller companies with expensive health plans may consider dropping coverage.

Large companies typically offer premium health coverage to attract higher quality employees. They must also worry about their reputations as good places to work. However, premium health plans offered to executive will be taxes under the ACA.

Minimum sized and small companies offer health coverage for a variety of reasons: to attract and retain employees, reasons on loyalty, fairness and equality, and social norms and low costs. Now the costs are overwhelming all the other reasons.

The costs of healthcare are forcing everyone's hands a cost skyrockets. When employers drop coverage, workers do not look for a private solution, they ask government for protection. It makes people think that the best solution one, universal government program.

I think many Republicans an

Sunday, March 18, 2012

Weekly Initial Unemployment Claims

Weekly Initial Unemployment Claims - 4 week moving average.

Economists love the weekly initial unemployment claims figure. The number one reason: it is an an actual, real number representing real people which is gathered from state employment offices. It is not an estimate, nor a forecast or a guess. It is the real number of people who applied for the first time unemployment benefits. Second, it is weekly. Weekly is a very frequent release in the world of economics. Compare that to the GDP which comes out once a quarter then get's revised. Or the national unemployment rate which is produced monthly. CPI-U, also monthly. And all three are estimates based on samples. Look at how the reported Black unemployment rate has been jumping around the past three months. A number should not depend on who was answering the telephone that day.

Employment is a lagging indicator but weekly initial unemployment claims responds quickly to economic changes. A lot of forecasting models use weekly unemployment claims number. And if you ever want to know what the coming unemployment rate for next month then just look at the week claims for the previous three months.

Note: the rate is currently close to or below 350,000 claims per month. Below 350K, economists believe the economy adds enough jobs to reduce the national unemployment rate.


Monday, March 12, 2012

The Creamy Layer

If you read our other blogs, you know we have been looking closely at Affirmative Action in India. In India, there is a rigid system of quotas for Scheduled Class(SC), Scheduled Tribes(ST) and Other Backward Classes(OBC) for job openings. Traditionally disadvantaged groups compete against each other for set aside jobs in a fixed quota and then compete against the total population for non Affirmative Account positions. Advantaged groups cannot compete in the set-aside area.

For example, here is internet post for positions at the Food Corporation of India. FCI is a government run corporation that distributes farm commodities to poor Indians. FCI is responsbile for food secuirty in a country that used to have famine on a regular basis.

You can from the first recruitment advertisement that for Management Trainees: 23 positions are set aside for Scheduled Class and 12 for Scheduled Tribes. Example #1. Example #2 and Example #3.

India's strong commitment to Affirmative Action has helped many poor people who were stuck in poverty because of their caste or tribe. Many lower caste members have benefit greatly from affirmative action. They and their children have moved into the middle class.

The issue is their children who are now educated and middle class. Many of the children of protected classes have become highly placed government officials, movie stars, sports figures or military officers. They are called "the creamy layer". The creamy layer used to apply only to OBC (Other Backward Classes) but has come to mean any "rich" child of affirmative action.

When applying under an affirmative action program , participants must produce a non-creamy layer certificate. As India has prospered, the country has found it must exclude young people in the creamy layer to make sure affirmative action benefits those who are truly in need.


Sunday, March 11, 2012

Judge order $128 Million payment for Discrimination in NYC Firefighter Test

Judge Nicholas Garufis ordered New York City to pay $128 million in compensation to New York City firefighter applicants who were denied position based on a discriminatory test that the city had the power to fix. The Judge also order the FDNY to hire approximately 300 Black and Latino test takers.

The lawsuit, by the Federal Government and the Black Firefighters association (the Vulcans), charged that the test had little to do with actual firefighting and instead focus on memorization, test taking and reading. White candidates with an extensive network of existing and former firefighter "coaches" consistently passed while black candidates failed.

The New York City has a black population of about 26% while the FDNY is only 3% black.

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