Immigrants Benefit U.S. Economy Now as Ever.

http://articles.latimes.com/2005/jul/03/business/fi-flan3

Immigrants Benefit U.S. Economy Now as Ever.

 Although the U.S does not have jobs for unskilled immigrants, the author points out Mexican immigrants progressing in education even faster than earlier generations. Many economists are doubt if the immigrants make the U.S economy better and there is jobs for immigrants, even though the labor unemployment is historically high. However, statistically speaking, immigrant’s children gets a better education and better work than their parents and grandparents. The problem about immigrant workers is always that they are low skilled worker. If they were high skilled worker, they can certainly contribute the U.S economy and nobody complains about them. Now, Japanese government thinks about admitting more immigrants from the other Asian countries such as China, Thailand, and Philippine because Japanese population is decreasing, meaning the worker is also decreased. In short term, they can fulfill the labor market of Japan, but I wonder if it makes Japanese worker difficult to get a job in long term. As the article says, limiting the ability for immigrants is very important for the economy. Nowadays, Big immigrants countries are suffer from immigrants themselves so, Japan have to learn about the case of U.S, meaning   it is risky to admit many low skilled worker from foreign countries.

Closing the Gap

http://www.economist.com/news/finance-and-economics/21596529-americas-labour-market-has-suffered-permanent-harm-closing-gap

There was great optimism that American economy was healing and recovering but when job growth slowed sharply in December there was little optimism left.  Although the unemployment rate says something different.  Unemployment rate dropped to 6.6% in January from 7%  and could soon hit the 6.5% threshold the Fed has.  The Fed and other researchers have downplayed these numbers and say the unemployment rate is not a good example of how the economy is going.  Some say the unemployment rate is significant and it is saying that American labor market is permanently stunted and the economy is operating at closer to its potential.  The labor participation rate is also down.  Policy makers will need to put more effort into making the long term unemployed employable again.

China Bettering the Consumer
http://www.economist.com/news/business/21599006-chinas-new-consumer-law-has-local-and-foreign-firms-worried-true-meaning-san-yao-wu


China plans to benefit consumers on March 15th with a new consumer law. This is probably one of the biggest reforms in the consumption sector in 20 years. Mainly it attempts to give a big advantage to consumer protection. Consumer protection is critical when it comes to a consumer purchasing because when a consumer knows a company is reliable, they will continue to make purchases from that company. This new reform states that consumers are able to take back purchases of goods within seven days of the purchase date. Even if the purchase came from an online retailer, the consumer has the right to send the company back the product for absolutely no reason at all. This reform in effect will cause an explosion in the consumption sector because consumers feel more safe making purchases then ever before.

With this new reform being put into place, consumer data will also be protected from misuse. They plan to accomplish this by permission will have to be sought out and purchased from the retailer for any commercial use of consumer data. Class-action lawsuits before this time were rare in China. These class-action lawsuits will become much easier to file protecting the consumer even more. The motivations for the law seem sincere towards expanding consumption. The government is more than ready to shift China's economy towards consumption-driven growth. Regulations protecting consumers should help improve their trust in retialers. A legal firm in China Max Xin Gu of K&L Gates also believes the law “is timed to come hand-in-hand with the anti-corruption campaign” presented by the President Xi Jinping. Both are aimed to help ordinary people benefit from the reform.

 China is finally beginning to catch up with the European Union’s standards of consumer rights. Pressure from Chinese citizens ignited the government to tighten standards. These standards greatly help the general population of China. Bettering pollution measures have also given edge to firms with the most advanced technology. This allows publicly owed firms to gain an advantage over privately owned firms. Many privately owned firms grow increasingly worried. An executive of grumbles states, “it’s a boatload of work and internal co-ordination to hit compliance.” The high risk of prosecution associated with this reform may cause entrepreneurs not to start new firms because they are unable to compete with established ones. In conclusion many privately owned foreign firms are just not ready for this reform.

Is Russia Pulling Money Out of U.S. for Safekeeping?

http://www.businessweek.com/articles/2014-03-14/is-russia-pulling-money-out-of-u-dot-s-dot-for-safekeeping#r=nav-r-story

There’s circumstantial evidence that Russia may have yanked tens of billions of dollars in assets out of a custodial account at the U.S. Federal Reserve, possibly to keep it from being frozen by U.S. authorities in case of heightened conflict in Ukraine. The Federal Reserve holds U.S. Treasury securities in custody on behalf of foreign central banks and other official institutions. It’s a decline of $105 billion, or 3.5 percent, from March 5 to March 12. Marc Chandler, global head of currency strategy at Brown Brothers Harriman, suspects Russia accounts for a big share of the draw-down. “It’s just to avoid being frozen,” Chandler says, not a protest against the U.S. He adds, ”You don’t let your politics dictate these decisions.” In a note to clients, Chandler wrote, “The logic now is that Russia is bracing for the next round of sanctions.” He pointed out that this has happened before. In 1957, Russia shifted dollars from the U.S. to London, he said, fearing the U.S. would punish Russia financially for its invasion of Hungary.

The Once and Future Currency

http://www.economist.com/news/finance-and-economics/21598651-new-book-examines-worlds-love-hate-relationship-dollar-once-and

          The article talks about the dark days in 2008 and Tim Geithner, the head of the New York Federal Reserve at the time, describing the need for dollars in emerging economies as lumpy, unpredictable and potentially large. “The Dollar Trap”, a new book by Eswar Prasad of Cornell University, shares the world’s ambivalence towards the currency. People expected the ’08 crisis might have eroded the dollar’s global prominence but Prasad argues, claiming it cemented it. During the final four months of 2008, America attracted net capital inflows of half a trillion dollars. The ’08 slump forced the Fed to ease monetary policy, so central banks in emerging economies bought dollars to stop their own currencies rising too fast. Swap lines are less costly alternatives to rampant reserve accumulation and serve as good business in countries like India, Indonesia, the Dominican Republic and Peru.

            Size and sophistication do not always go together. America is not only the world’s biggest economy, but also among the most sophisticated. America’s sophistication is reflected in the depth of its financial markets. We have a big external balance-sheet, an obvious strong one. Its foreign liabilities exceed its overseas assets. This might be a worry but conceals a saving grace: its foreign assets are unusually adventurous and lucrative while its liabilities are largely liquid, safe and low-yielding. So with that, America earns more on its foreign assets than it pays on its foreign liabilities. Along with its economic maturity, America also has an ageing population. This is a source of economic weakness. Prasad argues differently, claiming it may be another reason for the dollar’s global appeal.

            The dollar’s depreciation over this period is, of course, bad for anyone holding American assets. But the dollar is not merely a store of value. The dollar has become a popular “funding” currency. Banks and multinational firms borrow in dollars. Holding a role of a funding currency, the dollar tends to strengthen in times of crisis; this explains why emerging countries feel a lumpy, unpredictable need for dollars. America’s currency may not hold its value against others, but in times of stress, the appeal of a dollar asset is that it always holds its value against a dollar debt. 

Fed Sends $79.6 Billion in Profit to Treasury

http://blogs.wsj.com/economics/2014/03/14/fed-sends-79-6-billion-in-profit-to-treasury/

The Federal Reserve released financial statements on Friday that show a $4 trillion balance sheet as of the end of 2013, a $1.1 trillion increase from the previous year. The asset holdings produced $90.4 billion of interest income over the year. Of this $90.4 billion of interest income, $76.9 billion was paid to the U.S. Treasury. The Federal Reserves program of asset purchases is expected to be reduced to $55 billion next week, which will lead to lower growth of the balance sheet moving forward. The program is designed to stimulate the economy by, "lowering long-term interest rates to boost growth and lower unemployment." But as the unemployment backed up to 6.7% last week I question whether now is the right time to reduce the quantity of asset purchases. My initial fear of the massive asset purchase program was that it would inflate equity markets and that the first sign of a tapper would carry the market lower. This clearly has not been the case. That said, why rush to scale back asset purchases?

Teens face toughest job market on record

Over the recent years, employment opportunities for teens to early 20-somethings have fallen. In 2011, only 26% of teens between the ages 16 to 19 are employed, which 45% less than employment in 2000. This is the lowest rate on record since post-World War II era.
The Brookings Reports show that non-hispanics whites and young people who come from higher income families are more likely to find jobs than others. The report also showed that young women were more likely to be hired than young men.
High school is a key steps in a children's education, but many employed don't see high school as nearly enough to prepare students for a job. Students who completely high school in 2012 and did not attend go straight into college, 70% tried to get a job but less than half were successful. This is the lowest number on record.
The Brookings reports blames this all time low number on the education system. Stating that high school should better prepare students for college coursework. The reports also state that two-year degrees and apprenticeships should be a bigger priority in coming years for those who don't make to a four year college.

http://money.cnn.com/2014/03/14/news/economy/youth-employment/index.html?iid=SF_E_Lead

For Nonprofits, a Bigger Share of the Economy

In the article “Nonprofit, a Bigger Share of the Economy,” by Anna Bernasek talked about how nonprofit originations have grown faster than profit business. According to Bernasek the reason why nonprofit organizations have been able to outgrow business is due to the population ages. There is a greater demand for health care services which result in an increase growth in hospitals and health care organizations many which are nonprofits. Also, according to Bernasek, charities focused organizations for poorer American’s demand have also increased after the Great Recession.  “In addition, family foundations have grown in popularity, providing a convenient repository for untaxed wealth that often remains under the control of the donor,” Bernasek says.

From 2001 to 2011, nonprofit organization grew 25% and accounted 5% of GDP. Nonprofit organization are exempt from corporate taxes as a result are able to hire workers more quickly, pay better wages, and contribute to gross domestic product according to the Urban Institute.  I think this is the reason why nonprofit originations have been able to outgrow business in terms of demands. I predict that in the future nonprofit originations will account for more than 5% of GDP and play a greater role in the economy.

http://www.nytimes.com/2014/03/09/business/for-nonprofits-a-bigger-share-of-the-economy.html

Technology and the minimum wage

we live in a modern world and theres no doubt about that. The advent of technology in the past decade or so has been absolutely immense considering where we were and where we are now. With technology we also see a conflict. It is now actually the era of machine vs man as far as working space is considered. lets take this into context,  a century ago laborers would have been high in demand for traditional factory jobs and work of a manual kind (the kind of work that in this day and age would earn you the minimum wage) and in this century, as technology more productively (and cheaply) makes available to entrepreneurs higher profit margins, why would they hire minimum wage workers.
for example, if a machine can do the same work a worker does but say the machine costs 5 dollars an hour while the worker costs 7.95 dollars (minimum wage in ohio) would a sensible entrepreneur not prefer the machine over the worker?Granted human effort cannot be substituted completely and the human mind in this day and age will triumph over the artificial one, is technology progressing to the point where soon AI might overtake humans as a whole?what will be the result?what will happen if laborers as a whole went out of existence?Technology actually is a double edged sword when it comes to long term economic consequences (potentially speaking)

http://www.cnn.com/2014/03/03/tech/web/kickstarter-billion-dollars/index.html

As crowd funding becomes prevalent in the entrepreneur market space, Kickstarter has finally hit the Billion dollar mark with its unique service. To be able to think of a small idea and execute it without having to invest your own money was almost impossible a decade back but now if other people like what you have to offer, they'll pay for it before you can even produce it. Services like Kickstarter will soon start to disrupt the retail market in terms of innovative and unique products. As people get more creative with their ideas and find the support they need, we could see many successful campaigns becoming proper businesses. This could also give existing small businesses an investor platform without going to banks or other financial institutions. Even though the scale of this service is extremely small it will only grow in the future and might also add monetary returns on some types of contributions which would enable it to disrupt the investment market space. 

How States Are Shifting College Costs to Students

http://www.businessweek.com/articles/2014-03-03/how-states-are-shifting-college-costs-on-to-students

Through recent years, it has become a must for someone to go to college in order to get a well paying job. The demand for unskilled workers has dropped dramatically due to the increase in technology and a machine's higher productivity than a human's. The jobs that are out there, mainly service-based, require some sort of degree. With demand for college increasing, these prices for higher education have increased dramatically.

As we have discussed in class, allowing more of a population to invest in higher education leaves everyone better off in society. However, state governments have been lowering the funding for public universities all over the nation. Some costs to the schools are no longer covered due to this, meaning more money is required from a student in order for him/her to study there. With these higher costs to students, many can no longer afford a higher education, leaving them to fight for the jobs that do not require a degree.

This is not the end of this trend, however. This article highlights the fact that some states may stop funding public institutes as soon as 2022. If this were to happen, it would become extremely difficult for many people to receive the higher education that is required to compete with the rest of the world today.

If there were a way to give more aid to those studying at universities, it would help educate the population more so that more can have a better chance at finding high paying jobs. While this may get expensive, education is certainly a requirement nowadays rather than a luxury.

Frictional Unemployment Profile: Veterans

http://online.wsj.com/news/articles/SB10001424052702304360704579417083381640004?mod=Your_Money_newsreel_2

The article discusses the disconnect in skills (hard and soft) veterans encounter in returning to the domestic labor market. The programs available to veterans, however, greatly decreases their difficulties. I would be interested to hear what others think about this article, which I found insightful.

A tale of 2 US employment surveys, at a glance

175,000 jobs were added to the U.S. economy in February, yet the unemployment rate rose from 6.6% to 6.7%. These numbers don't seem to make much sense. If more jobs were added to the economy, shouldn't the unemployment rate decrease?
The reason for these conflicting numbers is that the government conducts one survey to learn how many jobs were created and another to determine the unemployment rate. These two surveys can at times produce different results. One of the surveys asks mostly large companies and government agencies how many people they employed during the month. This is called the payroll survey. It tells us how many jobs were created or lost. In this case, it told us that 175,000 jobs were created.
The other survey that is used asks whether the adults in a household have a job and if not, if they're looking for one. This survey tells us how many people are considered unemployed, as well as how many people are in the labor force. These two figures are used to calculate the unemployment rate. In February, 264,000 Americans began looking for jobs. Many of them were not able to immediately find jobs, resulting in a rise in the unemployment rate.