8/30/06

CENSUS REPORT ON POVERTY IN THE UNITED STATES

37 Million People Living Below Poverty Level in 2005

In 2005, the poor accounted for 12.6% of the population, roughly the same as in 2004.  The only racial group that saw any improvement in their poverty rate over the year before was non-Hispanic whites - going from 8.7% to 8.3% living below the poverty line.

The nation's median household income rose slightly faster than inflation last year for the first time in 6 years.  The rise, however, had little to do with bigger paychecks - in fact, both men and women earned less in 2005 than 2004.  The increase was due to more family members taking jobs to make ends meet, and some people made more money from investments and other sources beyond wages.

As defined by the Office of Management and Budget, the average poverty threshold for a family of four in 2005 was $19,971; for a family of three, $15,577; for a family of two, $12,755; and for unrelated individuals, $9,973. The average person living in poverty earned $3,236 less than the poverty line - $19,971 for a household of 4 in 2005, the highest such gap ever measured by the Census Bureau.  And 43% of the poor earned less than half of the poverty limit.

New Jersey had the highest median household income and Mississippi had the lowest.  

While the economy has been strong for the past several years, its benefits have not translated into improvements in the standard of living for many people. 

Nationally, the 1.1%  increase in median household income was not enough to offset a longer term drop in median household income - the annual income at which half of the country's households make more and half make less.

The figure fell 5.9% between the 2000 census and 2005, to $46,242 from $49,133, according to an analysis of the data conducted for The New York Times by the sociology department of Queens College.  The difference was so sharp, in part, because the 2000 census measured 1999 income, which was at the height of the dot-com bubble.

The number of people living below the poverty line held steady in 2005 after 4 consecutive annual increases 

The poverty rate in 2005 for children under 18 (17.6 percent) remained higher than that of 18-to-64-year olds (11.1 percent) and that of people 65 and older (10.1 percent). For all three groups, the rate was statistically unchanged from 2004.

The number of people living without health insurance climbed for the sixth straight year to 46.6M, an increase of 1.3M in one year and an increase from 15.6% to 15.9% without coverage,

After recent decreases in numbers of children without healthcare, this data showed an increase from 10.8% of those under 18 to 11.2%.

Slightly more than half of the nation's income was going to the top 20% of wage earners at the same time that the number of people living in poverty remained unchanged, at about 37M people.  

This is further evidence that the nation's economic recovery has had very limited reach, with many low and medium income families not sharing the benefits.

Those in the top fifth in income were more likely to live in Metropolitan areas - 90.8%.(61.5% in suburbs; 29.3% in dominant city limits):

• 79% were married and living in single family homes
• 81.2% were non-Hispanic white
• 76.3% had 2 or more wage earners

Those living in the bottom fifth in income, below the poverty level, were more likely to live in rural areas 

•  21.2% lived in rural areas compared to 9.2% for the wealthy
• 59% lived in non-family households compared to 12.5% of the wealthy
• Children in rural areas were particularly hard hit, with the percentage living in poverty in 41 states higher in 2005 than it was 5 years ago
•  20.6% were blacks compared to 5.8% of those in the top 5th
• 13.4% were Hispanics compared to 5.9% of those in the top 5th 

8/11/06

TAX DEDUCTIONS AVAILABLE WHEN MOVING FOR JOB

Frequent job changing is fast becoming the norm in today's economy.  Young people can expect to change employers several times during their careers and sometimes move clear across the country, or even abroad.  That can get expensive, so be sure you claim the maximum tax deductions if you are moving to a new job.  you can deduct moving expenses as long as you are moving to take a job (it can't be your first job out of school) and the distance to your new home minus your current commute to work must be more than 50 miles.

You can itemize deductions, including the expense of finding a new job as long as you remain in the same occupation.  Postage and supplies for sending out your resumes, phone calls, and travel for interviews can all be deducted.

Use Schedule A of IRS 1040 but only if your miscellaneous tax deductions exceed 2 percent of your adjusted gross income (if you are self-employed there is no minimum).

7/1/06

JOB STRESS WORSE FOR MEN

Workers who are under constant stress may start to show it in their blood pressure readings.  In a study that followed 6,719 white-collar workers for 7.5 years, Canadian researchers found:

• Those with high job demands and reported low levels of social support in the office, tended to have higher blood pressure than other workers.
• The relationship was stronger among men than among women.
• Men and women who said they got little or no support from their bosses and co-workers seem particularly vulnerable to the blood pressure effects of job strain.

Previously studies have indicated that work with high psychological demands, but with little independence and decision-making authority are more likely to develop heart disease.

The current findings support the notion that curbing job strain could make a difference in some workers' blood pressure.

Studies are being conducted to see if giving workers more support or more say in how they accomplish their tasks, loosening up deadline pressures, or offering more chances for learning and growth could make a difference in blood pressure readings.

5/21/06

TEN HOTTEST CITIES FOR JOB GROWTH

Sources:  Global Insight; state and regional government agencies, U.S. Department of Housing and Development, Fiserv CSW, National Association of Realtors

5/21/06 

JOB MARKET SHIFTS IN JOB SEEKERS FAVOR

Recent newspaper headlines don't do much to convey the fact the job market is coming to a boil.  Unlike previous job booms, this one is not being driven primarily by the creation of new jobs.  Instead, it is the ever-growing number of people quitting their jobs -- to retire, or increasingly, to seek out new opportunities -- that has created openings which managers need to fill.

At the same time, productivity growth has stalled, making it harder for bosses to squeeze more work out of existing employees -- and hiring a more urgent matter.

The result?  Unemployment among college graduates has sunk to a level that the economy has not seen in years, and the labor market is on fire.

4/20/06

AMERICANS ARE LEAVING BIG CITIES

Americans are leaving the big cities in search of cheaper homes and more open spaces farther out.  

Nearly every large metropolitan area had more people move out than move in from 2000 to 2004, with a few exceptions in the South and Southwest, according to a report by the U.S. Census Bureau:

• Northeasterners are moving South and West
• West Coast residents are moving inland
•  Midwesterners are chasing better job markets
• Everywhere, people are escaping to the outer suburbs known as exburbs

It is a case of middle class flight for housing affordability.

The states that attracted the most new residents:

• Florida
• Arizona
• Nevada

The states that lost the most residents:

• New York
• California
• Illinois

The cities that lost the most residents to domestic moves:

• New York
• Los Angeles
• Chicago

The New York City area had a loss of more than 210,000 residents a year from 2000 to 2004.

Smaller, wealthier households are replacing larger families in many big metropolitan areas.  That drives up housing prices even as the population shrinks, chasing away even more members of the middle class.  

Areas attracting new residents, include:

• Riverside, California - known as the Inland Empire attracted the most new residents from the Los Angeles area.  This area includes San Bernardino and Ontario and had a net gain of 81,000 people a year from 2000 to 2004.  It has grown to become the 13th largest metropolitan area in the nation.  The median price of a home is $374,200 compared to Los Angeles which is $529,000.
• Phoenix, Arizona
• Tampa-St. Petersburg, Florida
• Atlanta, Georgia
• Dallas-Fort Worth, Texas

4/08/06

MARCH JOBLESS RATE LOWEST IN 4 1/2 YEARS - 4.7%

Employers hired 211,000 workers in March, suggesting that a strengthening economic expansion is putting companies in the hiring mood and brightening prospects for job seekers.

Hiring gains were seen in industries, including:

• Education and Healthcare - 30,000
• Retail - 29,000
• Government - 24,000
• Financial - 16,000
• Construction - 7,0000

Hiring losses were seen in industries, including:

• Transportation and Warehousing - 7,600
• Manufacturing - 5,000

Overall employment was stronger in March than the expected 190,000 new jobs.

Analysts believe the economy emerged from an end-of-year funk and grew at an annual rate of 4.5% during the first 3 months of 2006.

4/08/06

RETIREMENT PLANNING

As more and more companies eliminate or reduce retirement benefits plans, it becomes imperative that workers prepare for their own retirement.  A recent study by the Employee Benefit Research Institute found that about 68% of workers are confident about having adequate funds for a comfortable retirement.  

At the same time, more than half of workers day they have saved less than $25,000 toward retirement.  Even among workers 55 and older, more than 4 in 10 have retirement savings under $25,000.

Poor savings performance is particularly troubling as more and more employers are eliminating or greatly reducing retirement benefits, defined benefit plans, pensions and forcing employees to assume responsibility for their own retirement planning.

Workers report the following savings::

• $25,000 to $49,999 - 12%
• $50,000 to $99,999 - 11%
• $100,000 to 249,999 - 11%
• $250,000 or more - 12%

One expert estimated that workers should aim at saving enough to replace 85% of their pre-retirement income when they stop working.

A 25 year old entering the work force today who immediately starts saving 15% of his or her income will be able to retire at age 60 with enough savings.

3/14/06 

FORTUNE'S MOST ADMIRED COMPANIES - 2006

3/14/06

LIKEABLE EMPLOYEES MAY HAVE MORE SUCCESS ON THE JOB

A study in the Harvard Business Review found that personal feelings toward an employee play a more important role in forming work relationships than commonly acknowledged.  It is even more important than how competent an employee is seen to be.

The Likeability Factor by Tim Sanders explores how having an appealing personality can positively influence life and careers.  An appealing personality can positively influence life and careers.

Likeability is the ability to produce a positive emotional experience in someone else, making co-workers feel good about themselves.

LIKEABLE EMPLOYEES ARE FAVORED BY CO-WORKERS

• The Harvard Business Review study found that employees don't want to work with someone who is disliked, and it almost doesn't matter how skilled they are.  
• There is growing recognition that job effectiveness can be undone if an employee is competent but not likeable. Being proficient at job tasks is of little comfort to an organization if an employee alienates clients or other staff.

HOW LIKEABLE AN EMPLOYEE IS CAN INFLUENCE CUSTOMERS

• Research has found customers' perceptions of the employees they deal with can influence their overall feelings toward a company.
• Nearly 60% of customers say that, when faced with rudeness, they take their business elsewhere, even if it means going out of their way or paying higher prices.

LIKEABILITY CAN HELP CAREER ADVANCEMENT

•  Likable employees are more likely to get bigger pay raises and promotions.  Employees with skills in relationship building are often seen as valuable to an organization.
• Some employees say their pleasant personalities have helped them get ahead.

A COLLABORATIVE WORKPLACE

• Co-workers who work with a likeable colleague are more comfortable with them, so work tends to be more collaborative.
• Some employers say likeable employees are so important that they won't hire anyone they think may have an attitude.

NEGATIVE ASPECTS OF LIKEABILITY

• However, likeable employees who like skills or are seen as pushovers can lose out on management opportunities or can be seen as a liability.
• Managers who are too likable can get too sociable with subordinates, blurring the line between boss and friend.
• Younger Generation X or Generation Y employees can try so hard to be liked that they come across as overly enthusiastic.  Being too enthusiastic can irritate management.
• Those who have a tendency to say 'yes' all the time in an effort to please can get pushed around.  They get assigned too many tasks.

THE BOTTOM LINE

• Many employers indicate that although they do not hire just because someone is nice, personality is key.  
• Personality and likeability can help employees keep their jobs when performance is lacking.
• Likeability is more important to some employers than specific skills or experience because you can provide training to compensate for missing skills, but it is almost impossible to compensate for personality.

2/23/06

STUDY SAYS TECH HIRING GROWS

Demand for technology workers in the United States continues to grow in spite of American companies shifting more technology work overseas, according to a new study.

The Association for Computing Machinery, a professional development organization that includes academic, government, and industry officials from the information technology field, released a study Thursday that said that shifting IT jobs to countries like India and China is not nearly the threat to workers here that is commonly believed.  The study indicates:

• Between 2-3% of IT jobs will be lost annually to lower-wage developing countries through the process of offshoring.
• The U.S. IT sector's overall growth should outpace the loss of jobs, expanding opportunities for those trained in fields such as architecture, product design, project management, and IT consulting
• Despite losses of IT jobs to India and China, the size of the IT employment market in the U.S. is higher today than it was at the height of the dot.com boom
• Information technology appears as though it will be a growth area for at least the coming decade
• The U.S. government projects that several IT occupations will be among the fastest growing occupations in the coming decade
• The lower wages in India and China are not pushing down pay for U.S. IT workers - average annual wages have seen steady gains for different fields in the sector of between 2 and 5% per year

The study suggests that there are several factors in the continued growth in demand for IT workers in the U.S.:

• Use of offshoring, including start-up forms, to limit their costs and grow their businesses, creating more opportunities here even as an increasing amount of work is done overseas
• Companies in a variety of sectors in the economy continue to discover greater efficiency and more competitive operations through investment in IT leading to continued demand for IT as underserved fields such as healthcare, retail trade, construction, and certain services make greater investment in technology
• The need for even those companies outsourcing to India and China to keep some IT jobs at home to manage job processes that are not routine or need to have face-to-face interaction for a specific job.

One of the greater threats to IT growth in the United States is the belief by many parents and young people that the field does not have good job prospects, which has resulted in a decline in students choosing to study various IT fields.  It also sees tighter visa restrictions forcing more IT work offshore because fewer foreign students will be able to come here to study and provide the skilled workers companies are looking for,

2/23/06

JOBLESS CLAIMS DECLINE MORE THAN EXPECTED

The number of Americans filing initial claims for unemployment benefits unexpectedly fell 20,000 last week, a government report showed, emphasizing a vigorous job market.

First-time claims for state unemployment dropped to 278,000 in the week ended February 18th from an upwardly revised 298,00 the prior week.

The four-week moving average of initial claims fell to 281,750 from 283,250.

The number of unemployed who remained on the benefit rolls after an initial week of aid rose 41,000 to 2.5 million in the week of February 11th, the latest period which figures are available.

A return to winter weather after an unusually warm January could tamp down opportunities for finding work.

"So despite the indicator today, the report for February might not be quite as strong as this is suggesting."

2/21/06

WORLDWIDE TALENT SHORTAGE SEEN BY EMPLOYERS

Employers are having difficulty finding the right people to fill jobs despite high unemployment in Europe and the United States, a survey by U.S. based staffing firm Manpower showed.  The survey conducted late in January showed that nearly 40% of nearly 33,000 employers in 23 countries across the world are struggling to find qualified job candidates.

Across North America and Asia, the top 3 talent shortages are identical:

1. Sales Representatives
2. Engineers
3. Technicians

Employers are looking for experienced sales representatives who know their industries and can drive revenues. According to the CEO of Manpower, in 10 years many businesses will fail because they have not planned ahead for the talent shortage and will be unable to find the people they need to run their businesses.  "This is not a cyclical trend, as we have seen in the past, this time the talent crunch is for real, and it's going to last for decades."

Recruitment firms have benefited from global trends such as outsourcing and better economic growth worldwide.

2/16/06

MOST LUCRATIVE COLLEGE DEGREES IN 2006

So far this academic year, college seniors in most majors are experiencing and increase in starting salary offers, according to a quarterly survey published by the National Association of Colleges and Employers' (NACE).

Topping the list of the highest paid majors were:

Economics / Finance and Accounting experienced the largest growth.

According to this survey, employers planned to hire 14.5% more college grads this year compared to last year.

2/16/06

JOB OPPORTUNITIES GROW IN 2006

The national unemployment rate doesn't predict the future but it is at 4.7% now.  In 2005, the national rate averaged about 5%.  According to some economists, the strong job growth will be in the first half of the year and then it will taper off.

• Economy.com predicts an average of 183,000 new jobs each month in 2006, compared with 174,000 in 2005.  In 5 years ending in 2000, the average monthly job gain was 241,000.
• Some economists project that the job market will slow in 2007.

Where the jobs will be

The most jobs will be added in:

• Restaurants (341,000 jobs)
• Industrial Services - including car, uniform, equipment rental agencies, and temp agencies (336,400 jobs)
• Medical Services / Healthcare - including hospitals, nursing homes, and physicians' offices (315,800)
• Mining - including oil and gas extraction will increase 9.7%
• Internet - Google, Yahoo, E-Bay, and Amazon.com - are expected to increase payrolls by 8.2%
• Finance companies will grow 5.6% though that growth is not likely to be in the mortgage lending arena
• Computer Software and Services will increase by 5.3%
• New home building construction jobs will decline by 3.7%  but growth in commercial construction as well as reconstruction jobs in hurricane effected areas

WHERE IS THE GREATEST JOB GROWTH

In percentages:

• Nevada - 3.6%
• Arizona - 3.5%
• Florida - 3.4%
• Utah - 2.8%
• Washington - 2.6%

In absolute numbers the leaders are:

• Florida
• California
• Texas
• Virginia

COLLEGE DEGREES PAY OFF

Young Americans wondering which career to focus on should first focus on college.  

"The best advice you can give anyone is if you don't have a college degree, go get one, because the demand isn't going to go away.  If you have a college degree you are part of the productivity improvement generation.  That's what everybody wants to do so we can be globally competitive.

The unemployment rate for those with Bachelor's degrees, in January, was 2.1%, vs 4.4% for those with high school diplomas, and 7% for those without a high school diploma, according to the Bureau of Labor Statistics.

2/11/06

IS BIG PHARMA IN BIG TROUBLE?

This article is from an interview with Shereen El Feki in The Economist, titled "Prescription for Change"

The global pharmaceutical industry consists of thousands of companies, including biotech firms, generic drugmakers, contract research organizations, wholesalers, and retailers.  On top of them sits "Big Pharma" - a dozen or so multinational firms with headquarters in Europe and America.  Their sales account for roughly half of the world's $550B retail drug market.  But the pharmaceutical industry is relatively fragmented, with the biggest company, Pfizer, holding less than 10% of the global market. 

On the face of it, Big Pharma firms are in a business to die for. Populations in rich countries—and increasingly developing ones too—are getting older, and many people suffer from chronic conditions. Global drug sales have almost doubled since 1997, and will rise to more than $700 billion by 2008. By the standards of other industries, most big pharmaceutical companies are hugely profitable: operating margins are more than 25%, against 15% or so for consumer goods.

But behind the healthy glow, a more worrying picture emerges. In the past few years large drug companies have had trouble with:

• Getting new drugs out of their pipelines and into the market  
• Several high-profile medicines being withdrawn because of safety concerns  
• Recently, a whole group of drugs, anti-inflammatory medicines both old and new, have run into trouble 
• Several firms suffering manufacturing problems

Many so-called "blockbuster" drugs - those with more than $1B in global annual sales - have had their patients, their market share, challenged by cheaper generic rivals.  Over the next 5 years, a record $70B-worth of drugs will face generic competition in America alone.  Drug company sales, which increased 10%-15% a year for most of the 1990s, have slowed to single-digit growth.  As a result, investors have shifted their attentions away from pharmaceutical firms, particularly in America, where drugmakers are currently in a worse state than their European peers. 

The drug market in the United States is the largest in the world, accounting for 40% of global sales. American drug prices are largely set by the market, which has prompted pharma firms to invest there on a large scale.  As a result, they have become a highly visible target for criticism.  Europeans care far less about the industry, in part because their drug bills are paid for mainly by their governments, and in part they are shielded from pharmaceutical marketing.  

Last year, healthcare spending in America reached an estimated $1.8 trillion, more than 15% of the GDP.  Some $200B of that went on prescription drugs.  Despite the enormous expenditure, large numbers of Americans are becoming increasing frustrated about the state of healthcare in their country.  Many elderly people struggle to pay for their drugs, big companies complain about their medical bills, and 45M people lack health insurance.  Over the years, this frustration has in turn been vented on doctors, managed care companies, and hospitals, now it is the drug companies' turn, their public standing having fallen as precipitously as their share price.

Why this anger at companies in the business of making life-enhancing medicines?  The following is an excerpt from congressional hearings that summarizes the case against and for Big Pharma,  It has been argued that the drug industry / pharmaceutical companies:

• Derived a higher rate of return on investment than other American industries
• At times have exaggerated their claims for the therapeutic value of certain drugs
• Have spent unreasonable portions of their budgets to indoctrinate doctors so that they would prescribe high-priced trademarked products

Americans blame high drug prices on Big Pharmas appetite for profits.  Senator Edward Kennedy, a long-time critic of the industry, has a simple formula for categorizing drug firms: 

• A third of them have the public interest at heart
• A third are motivated by greed
• A third are somewhere in-between 

This is nothing new.  The debate over pharma profits and practices has taken place since the 1960s.  In the 60s and 70s, the first wave of blockbuster drugs for ulcers and high blood pressure came to market, drugs that treat -- or even prevent -- chronic conditions and are therefore taken for years,  This was a fundamental change from an earlier generation of drugs that tackled acute ailments such as bacterial infections.  The 1980s brought more new pharmaceuticals, for depression, cancer, and nasty viruses, such as HIV.

By the early 1990s, the prospect of healthcare reform and price controls in America brought gloomy predictions for the industry, but they turned out to be spectacularly wrong.  Drugs that had been seen as modest earners, such as cholesterol-lowering statins, became multi-billion dollar blockbusters.  Massive marketing campaigns lifted sales, and investors piled in as share prices rose ever higher.  Firms flirted with all sorts of businesses before honing in on patented pharmaceuticals as the model for modern big drugmakers.  The launch of a few high profile drugs such as Viagra and Lipitor, created a sense of an industry always on the verge of great scientific breakthroughs.  And the growth of employer-sponsored health insurance provided a lot more money to pay for it all.

At the same time, white coats started to give away to dark suits in the boardroom as a new generation of CEOs from the commercial side of the business took over from the scientists and doctors.  Firms started to concentrate on hitting quarterly earnings forecasts, and mergers became a popular way to cut costs.  Drugmakers began to spin out patients to stretch their sales, and became staunch advocates of strong intellectual property rights at home and abroad.  Existing drugs were tried out on different diseases, and more drugs of the same feather -- so called "me too" medicines -- poured out of the pipelines.

Much of the mess some of the big pharmaceutical companies have found themselves in over the past few years is a consequence of those heady days.  The fruits of new science, such as informatics and genomics, are only now starting to appear, later, as usual, than scientists had hoped for, and size has not helped the big pharmaceutical firms to excel at discovering new drugs.

Marketing practices are now under scrutiny, and drug companies stand accused of rushing drugs to market on the back of inadequate studies and withholding information about their drawbacks from patients and physicians.  Drug companies have been slow to recognize that the traditional relationship between experts and the public has changed.  Much of the public trust drugmakers enjoyed derived from the doctor-patient relationship, which is central to medicine.  Yet that relationship, too, has changed over the past decade.  If patients are prepared to question their doctors -- sometimes prompted by pharmaceutical advertising -- they are bound to start questioning the suppliers of those medicines too.

Some critics of the drug industry argue that drugmaking should be taken out of private hands and put in the public domain; after all, many of the basic discoveries that drug companies develop and profit come from universities and government institutes in the first place.  But there is little evidence that governments or universities are any better than the private sector at bringing new drugs to market.  The public may not like the way drug firms choose to spend their R&D dollars, or how they go about promoting their wares, but at least they have a record of bringing them to market in the first place.

Pressure from investors, buyers, regulators, doctors, and patients is already forcing the world's leading drugmakers to question the way they do business.  "The industry was living a little fat and happy," says Sidney Taurel, Eli Lilly's boss.  Many firms are now busy cutting costs.  Some are diversifying away from primary care to specialist drugs, vaccines, generics, or diagnostics.  Some smaller companies may find themselves in mergers over the next few years.  Some of the biggest firms might get smaller as they spin off come of their operations, perhaps even their core R&D.  It will be harder to tar the whole industry with a Big Pharma brush.

2/11/06

JOB CUTS 

Job cuts and outsourcing plans announced recently include:

AUTOMOTIVE

• Volkswagen - 20,000
• Ford - 25,000 to 30,000 in North America and closing of 14 plants in the United States, Mexico, and Canada in the next 6 years
• General Motors - 28,000 by 2008

COMPUTER

• Oracle - 2,000 to boost profits after $5.8B takeover of Siebel Systems Inc.
• Dell will open its 4th call center in India, adding 5,000 jobs in India over the next to years and increasing its workforce to 15,000; it will also double the jobs, adding 300 at its testing center in Bangalore,  Dell currently has 9 plants, 6 of them outside the United States

FOOD

• Kraft Foods - 8,000 in addition to 5,500 in the past 2 years, closings of 19 plants, and sales of unwanted units, including Life Savers, Altoids, and Stella D'oro resulting at least in part from higher costs for ingredients like coffee and nuts, packaging, and energy

PHARMACEUTICAL

• Job cuts approached 29,000 in 2005, the most since at least 1993 - a sign that big Pharma is in trouble
• Merck - 7,000