Category: Economics


 I just saw this and had to share it with my fellow economists courtesy fosslien.com. Hope you enjoy a good laugh!

Another good one

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The New-Graduate Paradox

Getting your first job out of college is extremely difficult and frustrating. But, its up to you to differentiate yourself from other candidates and stand out in a crowd of hungry job seekers.

Being a recent-college graduate, I have discovered there is a new-graduate paradox.

No employer will hire you without experience, but you can’t get experience without getting hired. Well that’s just wonderful since I myself am a recent college graduate and have worked during college in retail, but have yet to get a “real” full-time job relevant to my economics degree.

During my job search, I have discovered that entry-level doesn’t mean having a college degree and little experience.

Entry level really means at least 1 to 2 years prior relevant work experience when you read the whole description. How many college graduates really have at least 1 year relevant work experience to the jobs they seek out?

Entry-level jobs no longer mean what they used to. Employers are taking advantage of the current economic downturn and adding new requirements (additional experience) to entry-level jobs. Two years ago, it seemed that there was a high demand for entry-level workers right out of college. There was a huge market for recent graduates. Employers hired many full-time employees straight out of college. Two years ago the economy was improving and unemployment was low. But then the housing bubble burst, the financial markets began to fail and for those of us graduating in 2009 into the present got screwed over.

Reasons for the New-Graduate Paradox:

  • High unemployment. The combination of layoffs, financial market crashes and foreclosures flood the job market with experienced workers that are unemployed or looking for a higher paying job. Recent graduates have little chance of getting hired when the market is full with workers who have racked up many years of experience. Basically there is less demand for young unexperienced workers in today’s job market.
  • Employers think experts get the job done. Employers don’t want to “take a chance” on new and creative minds.

Solutions:

  • Employers should take advantage of unexperienced workers. New-graduates are willing to work longer hours for less money than experienced workers. Employees that have many years of experience racked up also have bills to pay, mortgages, kids and additional responsibilities that demand higher incomes. Recent-graduates have student loans, but little variable costs. Employers should hire recent graduates because they are enthusiastic about starting their career, will bring new insights to the job and will accept less in compensation.
  • Get an internship. Even though internships typically don’t typically last longer than 6 months, it will give you some great on-the-job experience and show that you are worth the money. Be indispensable and turn your internship into a full-time paid position. If you show your ambition, hard work ethic and creative ideas during your internship, chances are they won’t let you go.
  • Volunteer. You won’t get paid, but you will get some hands on experience and add skills to your resume. Plus, your ambition and dedication to work for free shows you are a self-starter and will be a valuable employee.
  • Blog or make your own website. Show off your writing skills and get blogging. Sharing your ideas and creating a discussion is a great way to use the skills you learned in college. Don’t let all those years in school go to waste. Keep up your professional writing skills and blog in your spare time. If you are more of a technical person, make your own website to include in your portfolio. Don’t know what type of website to design? Advertise your skills on Twitter or social networking sites and start a contest to design a free website for some very lucky person and build your portfolio.
  • Have a business degree? Make a mock business plan. After graduation you can either use what you learned during all those years or lose it. My advice: use your writing, analytical and creative skills to draft a business plan for an existing business or one you create yourself. This is a great way to show your ambition and take action. Employers will love your ambition and self-motivation. Who knows? Maybe showing them who you are and what you are capable of will get you a job. It could happen, so go for it!

My Journey:

Since there’s this new-graduate paradox, I am currently on the job search looking for the right opportunity to come my way. So I’m taking my own advice. I started a blog. I volunteer as a data ninja with People for Puget Sound (environmental non-profit) and I’m applying for internships to gain hands-on experience. I’m also in brainstorming ideas for my business plan. Wish me luck!

Hope this post helped  and inspired those recent college and unemployed graduates out there.

What’s your story? How did you land your first job? Any other advice for recent college grads to gain experience? Comments and discussion are always welcome!

How Much is Enough?

For many years we have all heard about the threat of peak oil, energy security, climate change and pollution.

These global problems are just symptoms of a larger, overshadowing problem and all the symptoms can be solved with one solution.

The Overshadowing Problem:  Materialism and Conspicuous Consumption in America

We have become obsessed with lavish spending on goods and services acquired mainly for the purpose of displaying wealth and status. But material things do not bring anyone happiness in the long run. We should rediscover that happiness doesn’t come from what you own, but what you do.

The Solution: Minimalism

Not to the extreme meaning of the word, just living within your means. Create a lifestyle that brings you happiness and purpose. Maintain a life where satisfaction and success are measured by the things you do, not what you own. Between the combination of credit cards, conspicuous consumption and the accessibility of home loans, we have created the idea that happiness and success come from material things. But the truth is, it doesn’t.

Think about all the things we buy that give us instant satisfaction, but these things do not contribute to our happiness in the long run.

Former president Jimmy Carter once said during his ‘Crisis of Confidence’ speech in 1979, “Human identity is no longer defined by what one does, but by what one owns.”

Effects of Minimalism:

  • Energy and Resource Conservation. If we only demand and buy goods that improve our standard of living and quality of life, less energy and resources will be used in the production process. If we bought what we needed and not what we wanted, energy would be conserved. This would have a huge impact on the energy crisis, energy security and climate change. Resource conservation can directly reduce deforestation and depletion of natural resources.
  • Address Climate Change. With less energy and resources used in the production of goods, carbon emissions will decrease.
  • Switch from Manufacturing to Services. Some might suggest that with less manufacturing, jobs will be lost. I propose that jobs in manufacturing switch to the service and technology industries. Yes, people in manufacturing will loose their jobs, but training programs and placement should be provided in the switch to technology and service industries. Economists call this restructuring of the economy creative destruction. Restructuring of the economy will occur and the economy will be stronger and robust in the long run. Careers will be created to solve today’s problems and discover innovative solutions. These workers will be extremely valuable and will provide a new wave of indispensable workers in America.
  • Waste Reduction. If we consume what we need instead of what we want, fewer goods will be produced and ultimately less waste will be produced. We can significantly reduce the amount of waste that ends up in landfills, water bodies and the environment.

Why should you care?

Be part of the solution, not the problem. Think about your lifestyle and what makes you happy.

Is it material things or spending time with family and helping others?

What are you contributing to your neighborhood, city, nation and world?

My Advice:

  • Do what makes you happy. Volunteer, cook with your family, write a book, start a blog.
  • Consume what you need, not what you want. Buy things that improve the quality of your life, not just instant satisfaction from material things.
  • Have a purpose. Create a life that helps others, the environment and reap the benefits of happiness and satisfaction throughout your life.

Many of us know eating fresh fruits, vegetables and staying away from processed fatty foods are part of a healthy lifestyle. So why do Americans maintain unhealthy eating habits?

People make choices based on their preferences and typically select the choice that derives the highest amount of satisfaction. Economists call this satisfaction utility. If we assume all people are rational, then people will select the choice that maximizes utility. When it comes to food, its hard to give up the cheeseburger for a healthy alternative.

Let’s face it. Fatty, salty and sugar filled foods just taste better. Our taste buds have developed over many decades to crave the fat, salt and sugar in our diet. Since we enjoyed it so much and it gave us instant satisfaction, unhealthy yet tasty food became the center of our diets.

Fast food is well…fast and easy. Today Americans work longer hours and have little time to prepare and cook food. So the simple solution is to eat processed and packaged food. For many of us, time is money. We sacrifice maintaining healthy diets for quick and easy meals. Sometimes these meals come in the form of a drive-up window or a frozen pizza.

Low quality processed food is cheaper. Buying poor quality processed food costs less money than buying fresh produce. Less time is spent on food preparation and cooking.

With these reasons, its no surprise why Americans have unhealthy eating habits.

But eating processed and unhealthy foods have huge costs. There is a tradeoff between eating unhealthy foods and adverse health effects that range from diabetes to cancer.

Here are the Stats:

According to a new study, mortality from obesity eventually “may result in a decline in future life expectancy.”

The Center for Disease Control and Prevention (CDC) states that 18 % of teenagers are overweight.

Overweight adolescents have a 70 percent chance of becoming overweight adults.

The percentages jump significantly higher for adults.

According to the CDC, 67 % of adults are overweight or obese.

Ultimately, the food choices we make every day are leading to adverse health effects and eventually decreasing life expectancy. For the first time, parents may have higher life expectancies than their children if the obesity trend continues.

These stats signify the immediate need for a food revolution to not only eat healthy foods but to save lives.

Jamie Oliver has started the food revolution to educate and Americans about food and cooking. The first step in the food revolution is to serve healthy and unprocessed foods at all schools in America.

Sign the petition to keep processed foods out of America’s schools.

Food Revolution Solutions:

Where does your food come from? Many people, including myself cannot always answer this question. Knowing where our food comes from is both informational and will lead to healthier eating habits. People are usually afraid of things, ideas and foods that are unfamiliar. If Americans grew some of their own produce or at least knew where it came from and how it was produced, we would most likely eat better quality food and fresh produce.

If we were more connected with our food, we would appreciate the process and environmental systems that are involved with food production. We would have a greater appreciation for the food we eat and the environment.

The potential positive side effects of the food revolution might possibly be renewed environmentalism in America.

Become a chef. Cooking your own meals is healthy for your whole family and usually saves money in the long run. Many processed and prepared meals at the grocery store cost a lot more than making it at home. For example, ever seen the frozen pasta dishes in the freezer isle. You can make the same pasta and other dishes at home for a fraction of the cost, calories and fat. Cooking Light Magazine shares recipes that feed 4 for under 10$.

According to Jamie Oliver, “Switching from processed to fresh food will not only make you feel better but it will add years to your life.”

For those of you reading this, I urge you to take a second look at the food you eat. Next time at the grocery store take the time to choose unprocessed and healthy foods. Make your first stop the produce section. Read ingredient labels.

Rediscover food culture. Many Americans do not associate dinner and food with spending time with loved ones. We are a country of immigrants and behind every family is a history of food culture. If we value family time then preparing, cooking and sharing dinner with family could rediscover our unique food culture.

This weekend take the time to cook your own meals and eat them at the table with your family. Don’t know what to cook? Cooking Light has 20 easy recipes that take 20 minutes or less to make. So what are you waiting for? Get cooking!

Bright Future in Kanji

Are you currently unemployed or recently graduated from college but have not found a job yet? Then this post is for you! For those of us (including myself) who are just starting a career, this is the first time in our lives that we have no obligations. Hence, no more school or classes to attend. We are completely free to make our own decisions about what we do every day. This situation may be overwhelming, frustrating or exhilarating to you. This blog post will help you think about your unemployment economically and enable you to make informed decisions. Here are some key points to keep in mind while you are looking for your next job, changing careers or just enjoying the time between college life and entering the adult world of full-time employment.

First of all, time is scarce. Use your time, a scarce resource in the most productive and effective way. Spend your time in a way that either gives you the most satisfaction or minimizes the costs of the chosen action. Whether you get the most satisfaction from writing a blog post (like myself), reading a book, applying for jobs or catching up with friends, keep in mind that there are only 24 hours in each day. Use them wisely.

Tradeoffs. Every decision you make to choose an action involves an opportunity cost. Every time you choose to take action and make a decision, you are giving up the opportunity to do something else. Keep tradeoffs in mind when you make important decisions about the choices you make. For example, every time you apply for a mediocre job that you don’t exactly like, you are giving up the opportunity to search for another job. Be smart about the jobs you apply for and the ones that you let go.

Maximize satisfaction and net benefits. Each person has a difference preferences for the types of careers or jobs they want to pursue. If you don’t know what career path to pursue, take some time and do your research.   Choose the career path that gives you the highest amount of satisfaction; maximize net utility. If you choose the career that maximizes your overall utility and gives you the highest net benefits, 30 years from now you will be thankful you made that choice.

Invest in yourself. Every day take the time to do something that makes you happy. Ultimately if you invest in yourself it will pay off. You will be inspired and will make a good impression during the next job interview and land the job. During your career if you invest in yourself, you will increase productivity, happiness and overall be a valuable employee.

Below are a few ideas to invest in yourself:

Read a book.

Start a blog

Volunteer

Find a new hobby or redevelop your love for a past hobby

Comments and discussion are welcome!

On Friday April 16th, Western Washington University’s Economics Association will be hosting a comedy show featuring Yoram Bauman, the world’s first and only stand-up economist. If you want to learn more check out his website at www.standupeconomist.com.

Last year during my environmental economics course at Western Washington University, I had the opportunity to attend Bauman’s comedy show. If you enjoy economics and comedy, I truly recommend attending the show, but if you can’t watch this video instead. Enjoy!

When: Friday April 16th 8pm
Where: Western Washington University (Bellingham, WA) CF 115
Why: It’s FREE! Attend the show to maximize your utility while minimizing costs.

Yesterday, while at Savannah Technical College, President Obama shared more details for the “HOMESTAR” program. The program is designed to boost investment in energy saving home improvements and create green jobs in the process.

Current unemployment in the construction sector is near 25% and this new program will increase demand for installation services and energy efficient products.

Key Elements to the HOMESTAR Program:

  • Direct rebates to consumers. Consumers will receive direct rebates from vendors when they invest in energy saving home improvements. These rebates will be given to consumers at the time of sale and will be reimbursed by the federal government. This part of the program will work much like “Cash for Clunkers” program.
  • $1,000 – $1,500 Silver Star Rebates. Investments in insulation, duct sealing, water heaters, HVAC units, windows, roofing and doors will be eligeble for 50% rebates, up to $1,000 – $1,500. These are minor upgrades, but will make a significant difference in energy consumption.
  • $3000 Gold Star Rebates. For more extensive upgrades, homeowners can receive a $3,000 rebate. To qualify, households would undergo an energy audit and achieve 20% energy savings. Energy savings over 20% would qualify for additional rebates.
  • Certification and Oversight. Contractors must be certified to perform energy efficient installations.
  • Financing Support. State and local governments will provide financing options for energy efficient investments. This will make investments in energy efficiency more affordable.

The White House states the program will create, “Tens of thousands of jobs while achieving substantial reductions in energy use – the equivalent of the entire output of three coal-fired power plants each year.”

On average, homeowners should expect to save $200 to $500 in energy savings per year.

Given the current state of the U.S. economy with a 9.7 % unemployment rate in January, it is uncertain when the recession will end. Americans have cut back, businesses have scaled down production and the once rapid growth of the U.S. economy has stumbled. In the midst of the current environmental movement, many people voice that given the recession, now is not the time to spend money on green infrastructure. This post will present a cost-benefit and economic analysis of building green. My goal for this post is to positively add to the decision making process of individuals and businesses contemplating to build, buy and design green.

(Photo by Andre Movseyan/DeMaria Design)

THE BENEFITS:

Positive Return on Investment

According to a recent study, green homes in the Pacific Northwest are outselling their competition in the real estate market. Green certified homes in Seattle sold for 8.5 % more per square foot and were on the market 22% less time than other homes in the same area. This study shows that building green can result in positive net benefits. The study focused on new home sales between September 2007 and December 2009. Despite the recession, it seems that building green certified homes resulted in positive returns to the seller. But, what does the buyer gain from purchasing a green home?

Since green certified homes sold for 8.5 % more than other homes, buyers greatly value the environmental benefits of certified homes. Homebuyers paid a premium for certified homes that encompass renewable energy, eco-friendly materials and energy efficiency. Buyers of green homes believe that the purchase is a healthy and environmentally responsible choice for their family and are willing to pay a premium for these benefits. The value- added non-market environmental benefits of a green certified home are reflected in the higher price.

Save Money on Energy Bill

Photo: Flickr.com

Green certified building use energy efficient lighting. Energy Star compact fluorescent light bulbs (CFLs) use 75 percent less energy and last 10 times longer than traditional light bulbs. In addition, CFLs save money. According to the U.S. Department of Energy, One CFL will save about $30 over its lifetime and pay for itself in about 6 months.” There is proof that Americans use CFLs. The Sylvania Socket Survey discovered, Almost three quarters (74%) say they have switched a light bulb for more energy efficiency in 2009.”

Photo: Green Over Gray

Healthy Living

Green certification checklists, such as LEED incorporate building materials and finishes with low volatile organic compounds (VOCs). LEED stands for Leadership in Energy and Environmental Design.LEED is an internationally recognized green building certification system,  providing third-party verification that a building or community was designed and built using strategies aimed at improving performance across all the metrics that matter most: energy savings, water efficiency, CO2 emissions reduction, improved indoor environmental quality, and stewardship of resources and sensitivity to their impacts.”

According to the U.S. Environmental Protection (EPA), VOCs are emitted as gases from certain solids or liquids. VOCs include a variety of household chemicals that cause adverse health effects. VOCs are found in higher concentrations indoors than outdoors (up to ten times higher). Designing, building and buying a LEED certified house will guarantee that you will have less exposure to harmful VOCs. Ultimately, indoor air quality will be improved.

Photo: Flickr.com

Conserve Finite Resources and Climate Change

The picture  above of the Redondo Beach home was made out of eight recycled steel shipping containers. Seventy percent of the building was efficiently assembled in a shop, saving time, money and resources.

LEED certified buildings incorporate recycled and renewable materials along with water conservation and energy efficiency design techniques. Choosing to incorporate Forest Stewardship Council (FSC) certified wood and recycled materials will help conserve the world’s finite resources, reduce deforestation and address climate change. Incorporating low flow shower heads, faucets and Energy Star dishwashers will conserve water. Energy efficient appliances, lighting, water heaters  and insulation will help conserve energy and reduce the use of resources.

THE COSTS:

Price/Money/Funding

Green certified buildings have higher upfront fixed costs. The building materials in certified buildings are of higher quality, therefore cost more than conventional materials. Sustainable, renewable and low VOC materials have many environmental benefits and their value is reflected in the higher retail price. Energy efficient appliances usually cost more than conventional appliances, but the amount of energy savings over the lifetime of the appliance might actually be less for an energy efficient model.

The U.S. economy has struggled during this recession and many budgets are being scaled back. Less funding may be available to build green. Priorities are being reconsidered, and for many Americans, putting food on the table is a higher priority in the current economic climate.  Currently, Americans might not value the environment as they once did in times of growth and prosperity.

To achieve LEED certification, the developer must submit an application documenting compliance with the requirements of the rating system as well as paying registration and certification fees. These additional fees add costs to the green building process.

Time

Designing LEED certified buildings may take more time than traditional buildings because there are many details involved to meet certification criteria. Also, the higher LEED certification of gold versus silver will need additional time in the planning process. The strict requirements equate more energy and time will be absorbed during the planning process. To achieve LEED certification status, developers might have to jump through additional hoops compared to the traditional proposal process. There is an opportunity cost of building green. Spending time researching, planning and designing green means there will be less time for other activities and projects. Each individual and company should consider if the time spend on building green creates more benefits than any other activity. Is building green the best use of time, money and resources?

Availability of Certified Materials

Abundant supply of building materials to meet LEED and green building certification might not exist. During the planning process, it may take more time to research and compile the materials needed to meet certification. Local Seattle sustainable design companies, for example, One Earth One Design, provide wholesale materials along with consulting services.

THE CONCLUSION:

According to Environmental Building News, “Even with a tight budget, many green building measures can be incorporated with minimal or zero increased up-front costs and they can yield enormous savings.”

In the end, green certified buildings have high upfront fixed costs, but have lower variable operating costs over the lifetime of the building. Life cycle cost analysis can be done for each project to address the upfront expenditure. “Studies have suggested that an initial up-front investment of 2% extra will yield over ten times the initial investment over the life cycle of the building.”

For existing buildings LEED has developed LEED-EB. Recent research has demonstrated that buildings which can achieve LEED-EB equivalencies can generate a tremendous Return on Investment (ROI). LEED-EB certified buildings achieved superior operating cost savings in 63% of the buildings surveyed ranging from $4.94 to $15.59 per square foot of floor space.

But a problem exists in the cost-benefit analysis.

Calculating project upfront costs can be determined with accuracy, but the environmental benefits of LEED certified buildings can not be monetized. This means that a dollar value can not be easily determined for green buildings. This is the reason for the disagreement to build green. The choice to build green is an individual one. Every person places a different value on environmental benefits. Therefore each cost-benefit analysis will have different results and outcomes. Whether you are making a personal or business decision to build, buy and design green, hopefully these concepts and ideas within this post provide a useful framework.

Here is a trailer for the series Design e².

“e² is a critically acclaimed, multipart PBS series about the innovators and pioneers who envision a better quality of life on earth: socially, culturally, economically and ecologically.”

Watch the season one first episode “The Green Apple”

The first episode begins in New York, a city that is leading the charge to green its industrial skyline with several groundbreaking projects. New York combats the urban myth of the bustling city as a “concrete jungle.” “The Green Apple” explores some of Manhattan’s most prominent and technologically advanced structures like One Bryant Park and The Solaire, as well as the innovative minds behind them. The episode illustrates how the ubiquitous skyscraper can surprisingly be a model of environmental responsibility.

How Many People Really Use Twitter?

Did you ever wonder how many people are actually on Twitter? Twitter was first introduced in 2006 and since then has attracted around 18 million people. That’s roughly 3.8 % of adult Internet users. In 2008, the estimate of Twitter users was only 6 million people and since then has increased by 200 % over the 2008 statistics. Is this growth rate sustainable? What is the long-run capacity of Twitter users? These questions lead to the economic principle of supply and demand. Twitter is flooded every day with the tremendous supply of new users and their tweets. These new users demand additional capacity for tweets every day, but the capacity of infrastructure remains constant in the short term. What is the demand of capacity by Tweeters? Can Twitter use continue to grow exponentially without server problems?

Demand (Tweets) and Supply of Capacity

If the growth rate of new Twitter users continues at the same rate, there is the possibility of seeing the whale and bird image more often. More users equals more tweets and the possibility of server overload. One potential problem is lack of infrastructure.

Despite the high demand of capacity by Twitter users, the retention rate is about 40%. This means 60% of new Twitter users abandon their accounts within the first month. Even though new users are rapidly joining every day, after the first month only 40% of dedicated Twitter users will remain. The estimated Twitter growth rate may be significantly inflated. This may be good news for committed Twitter users who wish to avoid over capacity server problems.

Who Uses Twitter Anyway?

Young adults in the 18-34 age range made up roughly half of 2009 Twitter users. As our generation relies more and more on the Internet and social networks, Twitter and other social networks will continue to exponentially grow. Will there be enough capacity in the future? Nobody knows what’s in store for on-line technology, but creative and innovative minds will be needed.

The Future for Twitter

By the end of 2010, Twitter is projected to have 26 million users; equivalent to 15.5% of adult Internet users. Not currently on Twitter? Well now is the time to join.