Tuesday, December 31, 2013

Tax Scam Charity or Corporate Welfare ??: The Taskforce for Global Health is #3 on Forbes charity list (opps)

I was looking for a charity that helps people get jobs.  The only large charity in US who's mission is to help people find jobs is Goodwill Industries. So I made a donation.   I used the Forbes large US charity list to find Goodwill Industries.

Note: In general I believe charities are regressive: they steal tax money from the poor and give to rich charities like operas. 

I then proceeded to review the list a little closer. Goodwill Industries is on the list. #6. OK. Respectable. Then I looked the list over. I recognized almost every name as a well established charity except #3. What the heck is the The Taskforce on Global Health(TFGH) ? Never heard of them. And they are number three. Something is suspicious.

As a US Charity, they are ranked #3 at $1.7 Billion. And they are located in a medium sized house in Decatur, GA at 325 Swanton Way, Decatur, Georgia, close to Emory University. I have been to Decatur.  I have waited to transfer from the bus to Marta there. It is a surprising place to find a charity that gave away $1.7 billion dollars.

When you look at their operating budget, it's only about $30 million dollars. The Taskforce on Global Health receives 100% of it's donations as goods or so-called in-kind donations. The goods never pass though Decatur; other the title. The US pharm companies ship the goods directly from their warehouses to the over seas charities.

When you read about the charity(on Wikipedia and through google), it looks like some Emory University doctors/professors want to develop vaccines for unique/obscure diseases in developing countries. But the program has grown immensely since the start. It has far exceeds it original scope.  And it's seems to be driven by US pharmaceutical companies looking for a tax break.

In summary, what was original a good idea, getting drug companies to donate medicines for under treated diseases in developing countries has expanded into a tax write off or corporate subsidy for $1.7 billion dollars.

There are three other big problems that are immediately apparent

1) Do the donated medicines have actual value in developing countries.  Is a facial acne cream or and ED pill need by some fighting malaria ?

2) What basis are they using to record the donation and reduce their tax bill ?  US pharm prices are the highest in the world while prices overseas for the same drug are regulated.  Do the pharm companies receive the full US cost/selling price for medicines that are worth much less ?

3) Do the medicines have a limited life span ? Most medicines are donated toward the end of their expiration date.  Do they sit in charity warehouses until after they have expired ? Note: While it may be illegal, many medicine retain their efficacy long after expiration.


Goodwill Industries: The only large US charity dedicated to getting prople jobs

Goodwill Indstries is in the only large charity in the US dedicated to helping people get jobs.  The work on creating jobs, training people for jobs, and getting employers to hire people.

Goodwill Industries

How amazing is that ?  Of the top 50 charities in the United States, only one is dedicated to getting people jobs.

Forbes List of top 50 US Charities

Sadly, it also looks like there is a scam on the list.  Number 3, Taskforce for Global Health, Decatur, GA which received $1.7 billion in donated medicines. Looks like the US pharmaceutial industry is dumping inflated high priced medicines for a tax break.

Friday, December 27, 2013

Ver.Di: German Service Workers Union protests Amazon's policies

We were reading about VER.DI, the German service workers union protest against Amazon not paying the prevailing wage in German warehouses. Amazon calls it's employees logistic workers rather than catalog or internet fulfillment workers and can thus pay a lower wage.

Members of Ver.Di were on hand to picket the Amazon headquarters in December.

Here is the story from Internet Retailer about Amazon's tactic.

Arthur Brooks in the NYT: Work Makes you Happy

A New York Times Opinion by Arthur C. Brooks called "A Formula for Happiness" discusses the contribution work can make toward happineess.  The author believes that happiness is determined by genes, life circumstance and work.

About 48% of your happiness is determine by your inherited traits.

About 40% is short and medium term rewards such as buying stuff, family events, or graduating high school. The effect wears off quickly.

The remaining 12% are discrenary activities that include faith, family, freinds and work.  Friends and family are obvious, but work is the most interesting. Meaningful and fulfilling work can deliver personal happiness and financial reward.

The American Enterprise Institute calls this happiness effect "Earned Success".  The times editorial is light on the AEI philosopy but you can get a bigger dose on YouTube. Arthur Brooks: The secret to happiness.

The video on youtube discusses happiness and the it's AEI pro entrepreneurship (pro business) philosophy. The AEI promotes free enterprise as a "moral goal."

Here is another reseacher, Dan Gilbert talking about synthentic versus real happiness. Ted Talks: Dan Gilbert, the surprising science of happiness.

There are two issues we have with the reseach: 1) The low value given to work as a generator of happiness, 2) second is the twist the American Enterprise Insititue gives the reseach at the end to support their position.

First, we can't believe work contributes only part of the overal all 12% happiness.  For many of us the work is also closely entertwined with self esteem, financial empowerment and health.

Second, the reseach all makes sense up until when the AEI tries to slip in it's economic message.  Work has a value above it's financial return. Work in all forms is valuable: private, public and non-profit.

Thursday, December 26, 2013

Bloomberg: Fraternity Affirmative Action or Meritocracy Not

Fraternity members have their own secret affarmative action program.  Bloomberg has the details in a piece called "Secret Handshakes Greet Frat Brothers on Wall Street". The new film "Wolf of Wall Street" publicizes the male dominated culture of the financial industry.

We have long known networks constitute a form of affirmative action for the powerful and their off spring.

What is most disappointing is how privilage networks are described as meritoracies when so many are excluded.

Sunday, December 22, 2013

InterActiveCorp (owner of BlackPeopleMeet.com) executive fired for racist tweet

InterActiveCorp public relations executive Justine Sacco was fired for making a racist tweet beforing flying to South Africa. IAC is owner of the popular black dating website: BlackPeopleMeet.com. IAC is headed by media executive Barry Diller. IAC is a media congolomerate which owns several promonent brands including...

Ask.com and About.Com

BlackPeopleMeet.com is the largest African-American dating site. The web site was owned by People Media, Inc before acquisition by IAC. People Media, Inc. Reported total revenues of $1.2 billion in 2009.

BlackPeopleMeet also previously worked with the Steve Harvey morning show to arange on-the-air dates. There is no mention of the Steve Harvey Show on BlackPeopleMeet.com nor is there a mention of BlackPeopleMeet.com on the SteveHarvey.com website. However, the press release contains a reference to http://www.blackpeoplemeet.com/steve-harvey.  The link is no longer active.

Here is an old PR news release on PRNews.com. "#1 Black Dating site, BlackPeopleMeet.com and Steve Harvey Morning show team up to launch Radio Date Segment"

Sunday, December 1, 2013

Pavlina Tchemeva - Government fiscal policy must directly create jobs and promote full employment

Economist Pavlina Tchemeva from Bard College is a long time advocate for full employment. What's interesting is that she believes Keynes was too.  She has said that Keynes original intent on employment was reduced to simply "using fiscal stimulus to increase aggragate demand during a recession." Instead Keynes was advocating something closer to full emploument.

She is also is a critic of "trickle-down" economics saying it's never quite works.

Here is a you tube interview at Institute for New Economic Thinking.

Her web page is here.

She has also published papers on using non-profits to create jobs. Full Employment through Social Entrepreneurship.

Another interesting paper is on creating aggrate demand though bottom up employment: Keyne's approach to Full Employment: Aggregate or Targeted Demand.

October Unemployment Wrap-Up: US adds 204K job, Labor force and Employment down due to government shutdown

The US economy added 204,000 job in October, 2013 

The October jobs report from the BLS showed a surprising "pop" in October. Analysts expected a lower number due to the government shutdown, but it seems to have had no effect. The national unemployment rate was unchanged at 7.3% which means there were 11.3 million unemployed workers out of a potential labor force of 142 million. There were postive revisions in the previous months NFP numbers.

The civilian labor force dropped by -720,000 people while the number of people employed decreased by -735,000 in October, however and estimated 448,000 workers were temporily furloghed from the federal government.  The labor force participation rate was 62.8% and the employment to population ratio was 58.3%.

The private sector added 212,000 jobs while the government lost -8,000 jobs. While the national unemployment rate stayed at 7.3%, the black unemployment rate increased slightly to 13.1%.  There were 4.1 million people classified as long-term unemployed (out of work for 26 weeks or longer).  About 8.0 million people who were underemployed (working part time but wanted full time work). A total of 19.3 million workers were unemployed or underemployed (14.5% of the workforce).

The unemployment rate for women was calculated at 6.4% while the rates for other groups remained largely unchanged: men (7.0%), teenagers (22.2%), whites (6.3%), blacks (13.1%) and Hispanics (9.1%). Black teenage unemployment was 36%.

The Dow Jones Industrial Average jumped on the strong employment number reaching near 16,000.

In political economy news, the nation was distracted by issues with the healthcare.gove web site and JP Morgan reach the largest legal settlement ever recorded ($11B) over selling packaged fraudulet mortgages to investors.

The Big Story

The big story is the record number of people who are dropping out of the labor force. In October,according to the household survey, -720K people left the labor force.  These numbers are still large even after you subtract the 450,000 forloughed government employees. The average for the past 12 months was a decline of -49,000.  Huge numbers of whites and black are no longer participating in the labor force. Hispanic participation was steady by contrast.

Close to  -250K white men , -218K white women, and -122K black men said they were no longer participting in the workforce. A very large decrease. In contrast, an additional 21,000 black women joined the labor force.

Black Unemployment

The black unemployment rate was set at 13.1%. The number of black people holding jobs shrank by -184,000 while the labor force was reduced by -158K  causing a 0.3% increase in the unemployment rate. The 12 month average black unemployment rate was 13.3%

The chart below shows the slow decline in the national unemployment rate(U-3) and the recent flattening of the black unemployment rate at 13.1%. The chart also include an estimate of Black U-6 rate which represents everyone who wants to work or wants more hours if they were available.

Household Survey Details for October

As previously mention, there were huge drops in the labor force and the number of people working.  The total labor force declined by 420,000 people while the number of people working was reduced by -735,000.  

The long-term unemployed (27 weeks or more) was 4.1 million people which represents 36% of the unemployed.  The median duration of unemployment was 16.3  weeks  while the average duration was 36.1 weeks.  

The “work part-time, wants full-time,” rose to 8.1 million.  This is a measure of excess labor in the marketplace. About 2.3 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.    The report estimated that there were 815K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.

Both marginally attached and discouraged workers have been flat recently. 

Establishment(Business) Survey Results for February

Non Farm Payroll increased by 204,000 which is well above the 12 month average of 170K jobs created.   All of the private sector growth was in the service sector. Retail trade added 44,000 postions, business services jumped 44,000, healthcare increased by 18K and leisure services jobs jumped 53,000. Government lost -8,000 jobs. Construction added 11,000 while Manufacturing jump 19,000 and Temp Help only 3K.   

Below is a chart of steady job growth which on average is about 170,000 jobs per month for the past year and 204,000 for October. 

Below is a chart of the job gains in the non farm payroll categories. Temp help increased only 3K.

Non-Farm Payroll Revision

There were large upward revisions in the August and September NFP numbers. August shot up by +45K  from +193K to +238K and September went from 148K to 163K and increase of +15K. The job market show little effect from the government shutdown.

The average work week was unchanged to 34.4 hours and average wages added 2 cent in October 2013 to $24.10..


ADP reported an increase in private payrolls of 130,000 positions for October.  Small business (1-49 headcount) added 37,000 jobs; medium size (50-499) added 13,000 and large companies (500+) increased workers by 81,000.

It is economically unclear which types for firms create the "best" jobs for the overal US economy.

Blog Archive