Friday, August 30, 2013

How to buy black 2013 !!!

Ok, if you read the blog, you know we try to buy Black when ever we can. But there are few black businesses.  So we have developed some other strategies around employing black people, supporting black communities,  supporting progressive causes and treating employee fairly.

If you read Our Black Year, you realize how hard it is to support black business even in a wealthy, segregated black area like Chicago.

I recently had to buy a computer software package (Microsoft Access) for a job I am doing. Obviously, nobody black wrote Microsoft Access and yet I had to have the package.  The going price was $110.  So we can assume the all in cost to Microsoft is about $25.00 (R&D, software development, overhead). Microsoft probably keeps $100 dollars ($75 dollars) profit and flips the office supply store $10 dollars to carry the product.

So, I had to decided where to buy the product and what I would pay.
Here is the prce menu.
Microsoft $110 - Electronic Download
Staples $109
Office Max $109

So, I decided, I would do the next best thing.  I would buy it from the place that employed the most black people.  So that not microsoft.  Instead it's a place like best buy, staples or office depot.

Staples founder has criticized Obama and Staples was run by Bain Capital -- probably internally very conservative.

Meanwhile Office Depot (OD) sponsored lady gaga. OD has a "diversity",a "community involvement," and a women in business" button on it's home page - probably relatively moderate

Office Max - No information found but did merge with office depot. A conservatice strategy that usually reduces competition and lays people off. OM has a "Environmental" button on webpage.  Conservative

So I ended up buying the software from Office Deport.  I then check to see if their is a store near by since a retail business creates more jobs and found one.  So I made the purchase at the local retail store for $110 and taxes.


Sunday, August 11, 2013

May, 2013 Jobs Report Review

The economy add 175,000 new jobs added in May, 2013

The May jobs report from BLS showed slow, consistant growth in the workforce. The labor market added 175,000 jobs in May.  The private sector added 178,000 jobs while government lost -3,000 jobs. The national unemployment rate stayed at 7.6%, the black unemployment rate stood at 13.5%, and the total unemployed persons was 11.8 million.  There were 4.4 million people classified as long-term unemployed (out of work for 26 weeks or longer and looking). Matching last month, about 7.9 million people were underemployed (working part time but wanted full time work) which is the same as last month. About 19.7 million workers are unemployed or underemployed. That is about 12.6% of the workforce.

The unemployment rate for women declined to 6.5% while the rates for other groups remained unchanged: men (7.2%), teenagers (24.5%), whites (6.7%), blacks (13.5%) and Hispanics (9.1%) were not significantly changed. Black teenage unemployment was 43%.

The number of people working as measured by the labor force participation rate was 63.4%. The employment to population ratio also did not change(58.6%).

The Big Story

On the day the report was released, the Dow Jones Industrial Average broke 15,000 for the first time before sliding back.  Later in the week, the index made a strong move over 15,000 and stayed there. In political news, Alan Kruger, Chairman of the Presidents Council of Economic Advisers issued a standard statement welcoming the news while criticizing the government cuts led by Congress known as the sequester.

Second big story is that no construction or manufacturing jobs were created. One hundrend percent of the new jobs were in the service sector.

Business Employment 

Non Farm Payroll increased by 175,000 which is just above the 12 month average of 170K jobs created.   All of the private sector growth was in the service sector. Retail trade added 28,000 postions, business services jumped 57,000, healthcare increased by 26K and leisure services jobs jumped 43,000. Government lost -3,000 jobs.

Black Unemployment

The black unemployment rate was set at 13.5%. The number of black people holding jobs grew by 35,000 while the labor force grew by 106,000 causing a 0.3% increase in the unemployment rate. The 12 month average black unemployment rate is 13.75%

The chart below shows the slow decline in the national unemployment rate(U-3) and the recent flattening of the black unemployment rate.

Household Survey Details for May

The household data survey reported that the total labor force expanded by 420,000 people while the number of people working expanded by 319,000. 

The long-term unemployed (27 weeks or more) was 4.4 million people which represents 37% of the unemployed.  The median duration of unemployment was 17.3  weeks  while the average duration was 36.9 weeks.  A drop in the mediam duration of unemployment (half above/ half below) means people are finding jobs slightly faster.

The “work part-time, wants full-time,” number stayed 7.9 million.  This is a measure of excess labor in the marketplace. About 2.1 million workers were marginally attached to the labor pool.  They have looked for work in the last 12 months but not in the last four weeks.  It seems as if people are either dropping out of the labor market or finding some work.  The report estimated that there were 780K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.  This statistic has also dropped recently.

There are some small but good signs in the report: the numbers of both marginally attached and discouraged workers have been dropping for several months.

Establishment Survey Results for February

Non-Farm Payrolls rose by 175,000 positions in May. All of the new job growth came in services. The jobs were in business services, temp help, retail trade, healthcare and leisure. Construction added 7,000 while Manufacturing lost -8,000 and government lost -3,000.  

Below is chart of steady job growth which on average is about 170,000 jobs  each month. 

The following chart show the increase in jobs for the month split into different sectors. High wage sectors like construction, manufacturing and federal government had employment decreases during the month.  

Note: Starting this month we are splitting out temporary help workers.  Many temporary help employee are really permenant replacement employees working for shell companies helping large companies reduce pay and benefits.

Non-Farm Payroll Revision

March was revised upwards(+4K)  from +138K to +142K and April was revised downwards(-16K) from +165K to +149K. The total downward revision was -12,000 jobs.

The average work week decreased to 34.5 hours and wages added 1 cent in April 2013.

Note: Reporting the average wage increase is always a jokes because it has not changed on inflation adjusted basis for 30-years.  If anything, it is has gone down.


ADP reported an increase in private payrolls of 135,000 positions for May.  Small business (1-49 headcount) added 58,000 jobs; medium size (50-499) added 39,000 and large companies (500+) increased workers by 39,000.

The breakdown is important because large business are more productive than small and medium size businesses. Because of the productivity defference, large businesses tend to add fewer jobs and pay more in wages and benefits. However, large businesses, with better systems and processes, also squeeze out small and medium size business who create more jobs and have lower profits, resulting in fewer good jobs in the economy. 

Sunday, August 4, 2013

Fast food company profits could support higher wages

Looknig at the profits for companies in the fast food industry, there seems to be plenty of money to pay workers $15 dollars an hour.  Macdonalds is doing incredibly well as are starbucks and Yum Brands(taco bell, KFC and Pizza Hut). 

Operating surplus for eating and drinking establishments increased by 3%.

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