Category: Economics

Workers May Prefer to Have More Workcations than Fewer Vacations

(p. B6) . . . for various reasons, people might choose or need to work from remote destinations, and logging in from the beach may be more relaxing than clocking into the office.
Adds Kenneth Matos, senior director of research at the Families and Work Institute: “Is the workcation detracting from the vacation you were going to have, or is it enabling the vacation you otherwise wouldn’t have had?”
. . .
For Bill Raymond, Disney World proved an ideal workcation destination. In February, Mr. Raymond and his wife flew from their suburban Boston home to Orlando, where they spent a couple of days touring the theme park.
For the next two days, Mr. Raymond, a solutions architect at enterprise search firm Voyager Search, clocked full workdays from the Orlando resort, hunkering down with his laptop and taking sales calls by the pool.
Mr. Raymond even wrote a post on his personal blog with tips on how to be a productive “workcationer” at Disney, pinpointing locations at the resort that offer fewer distractions. (Among his top picks were the pool at the Disney Port Orleans French Quarter resort, which he says wasn’t “overrun with kids being kids.”)
Brian Goldin, Voyager’s chief executive and Mr. Raymond’s boss, was “totally fine” with the arrangement. “The idea of the traditional office environment doesn’t really exist that much,” Mr. Goldin says.
. . .
The working vacation kept Ms. Granzella Larssen, 32 years old, current with her email; she also felt more productive in a tropical setting because she wasn’t being pulled into impromptu meetings. And despite being by the beach, “I felt completely plugged in.”

For the full commentary, see:
RACHEL EMMA SILVERMAN. “This Summer, How About a Workcation?” The Wall Street Journal (Weds., June 24, 2015): B1 & B6.
(Note: ellipses added.)
(Note: the online version of the commentary has the date June 23, 2015, has the title “This Summer, How About a Workcation?”)

Affluent Are More Likely to Work During Retirement

That the affluent are more than twice as likely to work past retirement, may be a sign that the better paying jobs are also the more satisfying jobs.

(p. B9) But retirement isn’t for everyone. Affluent individuals are more than twice as likely as other people to keep working in retirement, according to a July survey by Bank of America’s Merrill Lynch and Age Wave, a research firm based in Emeryville, Calif., that specializes in aging populations.

Some 33% of retirees with $1 million to $5 million in assets are working, as are 29% of those with more than $5 million. Most say they do so because they want to, not because they have to, according to the survey.
Half of affluent working retirees have shifted to a different line of work, most often because of greater flexibility of scheduling, the opportunity to experience new things, and the pursuit of a passion or interest, the survey found.
The results show how important it is to consider what you will do with your time and to think hard about whether that will be satisfying.

For the full commentary, see:
LIZ MOYER. “Can You Afford to Retire Early?” The Wall Street Journal (Sat., Aug. 2, 2014): B7 & B9.
(Note: the online version of the commentary has the date Aug. 1, 2014.)

“We Embrace New Technology”

(p. 2D) . . . , the first digital images created by the earliest digital cameras “were terrible,” Rockbrook’s Chuck Fortina said. “These were real chunky images made by big, clunky cameras.”
Viewing those results, some retailers dismissed the new digital technology and clung doggedly to film. But Rockbrook Camera began stocking digital cameras alongside models that used film, Fortina said.
“Film sales were great, but we just knew digital was going to take over,” Fortina said. As those cameras and their images improved, the retailer saw a huge opportunity. ”Instead of thinking this is going to kill our business, we were thinking people are going to have to buy all new gear,” Fortina said of the switch from analog to digital.
“By 2000, film was over,” he said. Companies that didn’t refocus their business found themselves struggling or forced to close their doors.
Today, Rockbrook Camera is constantly scouring the Internet, attending trade shows and quizzing customers and employees in search of new technologies, Fortina said. “We embrace new technology,” he said.

For the full story, see:
Janice Podsada. “More Ready than Not for Tech Shifts; How 3 Omaha-area businesses altered course and thrived amid technological changes.” Omaha World-Herald (SUNDAY, SEPTEMBER 27, 2015 ): 1D-2D.
(Note: ellipsis added.)
(Note: the online version of the story has the title “How 3 Omaha-area businesses altered course and thrived amid technological changes.”)

French Billionaire Entrepreneur Starts Small and Cuts Costs

On Mon., October 13, 2014, Iliad dropped its bid for T-Mobile, after lack of interest from some of the T-Mobile board and from the majority owner, Deutsche Telekom AG.

(p. B1) Iliad wants to improve T-Mobile US’s cost structure by applying its own ultraslim cost base, under which it has kept costs to a minimum in everything from IT services to back office to equipment purchases. Iliad estimates it will be able to save about $2 billion annually by cutting out costs such as sending paper bills, and savings on equipment and IT systems, Mr. Niel said.
. . .
(p. B4) . . . before Mr. Niel can execute his American dream, Iliad has to win over T-Mobile US’s board, which could prove a formidable challenge.
. . .
He says he is sticking to the same principle that has guided his ascent from a teenage computer programmer in a working class Paris suburb to one of France’s richest men.
“I always follow the same idea: Start small and disrupt to create something big,” he said.

For the full story, see:
RUTH BENDER. “Will This Billionaire Bring $3-a-Month Phone Plans to U.S.?” The Wall Street Journal (Sat., Aug. 2, 2014): B1 & B4.
(Note: ellipses added.)
(Note: the online version of the story says it was updated on Aug. 4, 2014.)

Feds Constrain Startups

(p. A15) Virtually every state has suffered a drop in startups, which suggests that this is a national, and not a regional or state, problem.
. . .
If history is any indication, many of today’s economic heavyweights will ultimately decline as new businesses take their place. Research by the Kaufman Foundation shows that only about half of the 1995 Fortune 500 firms remained on the list in 2010.
Startups also have declined in high technology. John Haltiwanger of the University of Maryland reports that there are fewer startups in high technology and information-processing since 2000, as well as fewer high-growth startups–annual employment growth of more than 25%–across all sectors. Even more troubling is that the smaller number of high-growth startups is not growing as quickly as in the past.
. . .
Surveys by John Dearie and Courtney Gerduldig, authors of “Where the Jobs Are: Entrepreneurship and the Soul of the American Economy” (2013), show that entrepreneurs report being hamstrung by difficulties in finding skilled workers, by a complex tax code that penalizes small business, by regulations that raise the costs of doing business, and by difficulties in obtaining financing that have worsened since 2008.

For the full story, see:
EDWARD C. PRESCOTT and LEE E. OHANIAN. “Behind the Productivity Plunge: Fewer Startups; New businesses were created at a 30% lower rate in 2012 than the annual average rate in the 1980s.” The Wall Street Journal (Thurs., June 26, 2014): A15.
(Note: ellipses added.)
(Note: the online version of the story has the date June 25, 2014.)

Smugglers Respond to Putin’s Ban on Cheese

(p. A4) When the Russian government banned dairy products from a host of nations, including the United States and members of the European Union, last year in response to Western economic sanctions imposed over Russia’s military meddling in Ukraine, President Vladimir V. Putin said the restrictions would create a profitable opportunity for domestic industries.
Instead they appear to have created an opening for forgers and smugglers. The “cheese ring” was busted with an estimated $30 million worth of the stuff, nearly 500 tons, according to the Interior Ministry police.

For the full story, see:
NEIL MacFARQUHAR. “A Crackdown in Russia on a Creamy Contraband.” The New York Times (Weds., AUG. 19, 2015): A4.
(Note: the online version of the story has the date AUG. 18, 2015, and has the title “Russian Police Get Tough on Illicit Cheese.”)

Bicycles Emancipated Women

BicycleWomanIn1890s.jpg

“A portrait from the 1890s at the Smithsonian Institution’s National Museum of American History. Susan B. Anthony said cycling did more to emancipate women than anything else in the world.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. D1) . . . , Twain promoted the new sport of cycling with characteristic rhubarb tartness. “Get a bicycle,” he urged readers. “You will not regret it, if you live.”
. . .
The full-bore bicycle fever was brief, and by the early 20th century it had given way to fascination with the automobile. Yet, as a new exhibit at the Smithsonian Institution’s National Museum of American History makes clear, the impact of the bicycle on the nation’s industrial, cultural, emotional and even moral landscape has been deep and long lasting.
In addition to air-filled rubber tires, we can thank the bicycle for essential technologies like ball bearings, originally devised to reduce friction in the bicycle’s axle and steering column; for wire spokes and wire spinning generally; for differential gears that allow connected wheels to spin at different speeds.
And where would our airplanes, tent poles and lawn furniture be without the metal tubing developed to serve as the bicycle frame? “The hollow steel tube is a great form,” said Jim Papadopoulos, an assistant teaching professor of mechanical and industrial engineering at Northeastern University in Boston. “It’s tremendously structurally efficient, light and strong, and it came into being for the bicycle.”
. . .
(p. D4) Bicycles also gave birth to our national highway system, as cyclists outside major cities grew weary of rutted mud paths and began lobbying for the construction of paved roads. The car connection goes further still: Many of the bicycle repair shops that sprang up to service the wheeling masses were later converted to automobile filling stations, and a number of pioneers in the auto industry, including Henry Ford and Charles Duryea, started out as bicycle mechanics. So, too, did the Wright brothers.
“The pre-story is so important,” said Eric S. Hintz, a historian with the Smithsonian’s Lemelson Center for the Study of Invention and Innovation. “You don’t get automobiles unless you first have bikes.”
. . .
By the mid-1890s, some 300 American companies were churning out well over a million bicycles a year, making the safety bike one of the first mass-produced items in history. Among the most exuberant customers were women, who discovered in the bicycle a sense of freedom they had rarely experienced before.
. . .
Bicycles allowed young men and women to tool around the countryside unsupervised, and relationships between the sexes grew more casual and spontaneous. With a bicycle at her disposal, a young woman could also venture forth in search of work.
Small wonder that Susan B. Anthony said of cycling, “I think it has done more to emancipate women than any one thing in the world.”

For the full story, see:
NATALIE ANGIER. “Basics; A Ride to Freedom.” The New York Times (Tues., JULY 14, 2015): D1 & D4.
(Note: ellipses added.)
(Note: the online version of the story has the date JULY 13, 2015, and has the title “Basics; The Bicycle and the Ride to Modern America.”)

Analyst Conflict of Interest in Predicting Tesla Stock Price

(p. A1) Just like the Internet stocks of yore, Tesla has its own Wall Street cheerleader: Adam Jonas, Morgan Stanley’s auto analyst. Jonas could not be less interested in mundane factors like earnings per share; indeed, he has had to lower his 2015 earnings estimates several times; he now predicts the company will lose $2.70 a share. But never mind: In the future that he envisions, Tesla will be the most important car company on earth.
Just a few weeks ago, in fact, Jonas raised his share price target for Tesla from $280 to $465, which would make Tesla more valuable than General Motors or Ford. Had anything fundamental changed for Tesla? Of course not!
Jonas based his new target on something he labeled Tesla Mobility, which he describes as “an app based, on-demand mobility service.” Where did he learn about Tesla Mobility? Who knows? Tesla, a company hardly averse to hype, has never acknowledged its existence.
And that’s not the worst of it. No, the worst is the timing of his call. It came days after Tesla announced that it would be issuing stock to raise yet more money — and that Morgan Stanley was among the underwriters. (The company raised close to $800 million.)

For the full commentary, see:
Joe Nocera. “The Tesla Cheerleader.” The New York Times (Sat., AUG. 29, 2015): A1 & A19.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date AUG. 28, 2015.)

Belgian Government Mandates Mayo to Be No Less than 80% Fat

(p. A1) BRUSSELS–Mayonnaise here is a sauce celebre, so important that a 60-year-old royal decree governs what goes in it.
. . .
Belgian mayonnaise must contain at least 80% fat and 7.5% egg yolk. European rivals are permitted to sell mayo with a mere 70% fat and 5% egg yolk.

For the full story, see:
TOM FAIRLESS. “No Yolk, Belgian Food Producers Fed Up with Mayonnaise Rules; But effort to relax royal recipe doesn’t go down well with chefs; yellow peas.” The Wall Street Journal (Mon., Sept. 20, 2015): A1 & A10.
(Note: ellipsis added.)
(Note: the online version of the story has the date Sept. 20, 2015 and the title “In Belgium, Mayonnaise Makers Want a New Recipe; But effort to relax royal recipe doesn’t go down well with chefs; yell;ow peas.”)

Recent Job Losses from City Minimum Wage Hikes

(p. A13) The city councils in Seattle, San Francisco and Los Angeles have already voted to increase their minimum wage to $15 an hour over several years. For large employers in Seattle, the first increase to $11 from $9.47 took effect in April. In San Francisco a hike to $12.25 from $10.74 began in May. Los Angeles rolled out a minimum wage for hotel workers of $15.37 in July.
It’s still early to know how the hikes are affecting the job market, but the preliminary data aren’t good. Mark Perry of the American Enterprise Institute, Adam Ozimek of Moody’s Analytics and Stephen Bronars of Edgewood Economics reported last month that the restaurant and hotel industries have lost jobs in all three cities. Mr. Bronars crunched the numbers and discovered that the “first wave of minimum wage increases appears to have led to the loss of over 1,100 food service jobs in the Seattle metro division and over 2,500 restaurant jobs in the San Francisco metro division.” That is a conservative estimate, he notes, as the data include areas outside city limits, where the minimum wage didn’t increase.
This comes as no surprise. In 2014 the Congressional Budget Office found that increasing the minimum wage to $10.10 an hour would result in employment falling by 500,000 jobs nationally. By the way, less than 20% of the earning benefits would flow to people living below the poverty line, as University of California-Irvine economist David Neumark has pointed out.

For the full commentary, see:
ANDY PUZDER. “A Post-Labor Day, Minimum-Wage Hangover; The evidence is already coming in: Mandatory increases in Los Angeles, San Francisco and Seattle have cost thousands of jobs.” The Wall Street Journal (Tues., Sept. 8, 2015): A13.
(Note: the online version of the commentary has the date Sept. 7, 2015.)