Younger Americans Seeking A Life Abroad

ExpatriateAn increasing number of Americans are seeking life abroad, according to U.S. News and World Reports. Independent organizations estimate that between 4 and 7 million non-government employed U.S. citizens are living outside the United States. (The U.S. Census Bureau doesn’t keep track for apparent budgetary and security reasons.) The article states that “recent Zogby polls commissioned by New Global Initiatives, a consulting firm, yielded surprising results: 1.6 million U.S. households had already determined to relocate abroad; an additional 1.8 million households were seriously considering such a move, while 7.7 million more were ‘somewhat seriously’ contemplating it.” Given these figures, it can be estimated that roughly 3 million Americans are relocating abroad each year.

In addition to the growing trend of Americans moving abroad, one of the most surprising aspects of the new wave of expatriates is that an increasing number of these émigrés are not retirees, but a younger, more computer literate group of Americans between the ages of 25 and 34. Unlike Hemingway’s fabled “Lost Generation,” today’s younger generation of expatriates is not motivated to relocate because of political dissatisfaction or the desire to write the great American novel (from a café in Paris, of course). They are more often than not entrepreneurs, emboldened and liberated by the conveniences of the Internet. Having grown up in a world of cell phones, e-mail, instant messenger and Facebook, keeping in contact with friends and family, in say New York, is just as easy having relocated to Panama City (in this respect), as it would be moving to Los Angeles (and in fact, less of a time difference). Thanks to the marvels of the Internet, for all you know, unsuspecting reader, I could be writing this blog from beach in Belize, aboard an arctic icebreaker, or in an office above a collision center in a ubiquitous American suburb (I’ll never tell).

As a member of the demographic group in question, I have witnessed this movement abroad within my own group of friends (several of whom are currently living outside of the country), and will be interested to see if the trend continues, given the current position of the dollar and the rising costs of fuel. The Internet has certainly made the process easier, and advancements in telecommuting technology will only help to generate more options for adventurous Americans looking for a new life abroad.

Federal Minimum Wage Increased To $6.55 An Hour In July

Minimum_WageWhile everyone on Wall Street continues to sweat over the souring economy, minimum wage employees had something to look forward to this month: a mandatory raise, in the form of a seventy-cent increase in the federal minimum wage. The increase raises the minimum wage to $6.55, the second step in an incremental three-step minimum wage increase that will put the wage at $7.25 next summer. According to a report on NPR, while this incremental minimum wage increase is the first in a decade, the rate is still lagging behind inflation, and is far from the high minimum wages workers enjoyed in the 1960s and 1970s.

So who will be affected by the wage increase? Nearly one quarter of the people receiving minimum wage are teenagers. About half of minimum wage workers are working full time. Many seniors take minimum wage jobs as well, reports NPR, often as a supplement to Social Security checks and pensions. Seniors working minimum wage jobs are likely to reap the most benefit from the wage increase, as many are in need of extra salary to offset healthcare costs.

Some fear that the wage increases come at an inopportune time for small business owners, given the current uncertainty in the economy, and that the increase may reflect in job losses among the nation’s lowest income bracket. Despite the opposition from some business leaders, the wage increase comes at a time when low income employees are particularly hard hit by inflation and high energy prices, pressure that should hopefully be alleviated somewhat by the mandatory wage increase. Even with the increased minimum wage, working full time at that salary is only yields $13,624 a year, still $8,000 below the federal poverty line for a family of four.


Why Are More Women Leaving The Workforce? It’s The Economy, Stupid

A recent study from the United States department of labor indicates that women are dropping out of the workforce for the same reasons as men: the poor economy and declining wages. According to an article in the New York Times, this decade has shown the first drop in the percentage of women in the workplace during a period of economic expansion since the start of the women’s rights movement. The number of women in the workplace had been steadily increasing since 1960 and peaked with 74.9 percent of women between the ages of 25 and 59 being employed in the year 2000 (the peak for men was in 1953 at 96.0 percent; the rate is now at 86.4 percent) . Since then, that number has been steadily declining, and is expected to accelerate as the nation faces recession.

For the past few years the conventional wisdom explaining the decline of women in the workplace was that women left their jobs for different reasons than men, such as to stay home with their children. As quoted in the New York Times, “When we saw women starting to drop out in the early part of this decade, we thought it was the motherhood movement, women staying home to raise their kids,” says Heather Boushey, a senior economist at the Joint Economic Committee of Congress, “We did not think it was the economy, but when we looked into it, we realized that it was.”

The congressional study seems to point that women are leaving the workforce for the same reasons as men: layoffs, pay cuts and the threat of outsourcing. While it does not seem all that surprising that women leave jobs for the same reason as men do, it does reveal the continuing disparities between men and women and the workplace, and the (often incorrect) assumptions that are often made on why certain groups people behave in the ways they do.


Baseball Stats, Demographics, And Political Predictions

Election-predictionsAs the 2008 general election approaches, politicians, pundits and citizens alike will all be looking to the polls to gain insight into the outcome of this year’s historic election. Yet one of the most accurate predictors during the recent primary season was not any of the prominent U.S. polling institutions, or any of the major media outlets or television news networks. Instead, it was from an unlikely source: an anonymous blogger writing under the name Poblano (which is a mild chili pepper), who later revealed himself as Nate Silver, a young statistical guru in the world of baseball stats.

According to Newsweek, Silver pioneered what is now considered to be one of the most accurate statistical methods for predicting outcomes in baseball. The 30-year-old developed his algorithm as a hobby while working as a consultant out of college (it helped having access to powerful analytical software). After attaining fame for his novel technique, he began leveraging his predictive prowess by starting his own sports statistics company, called Baseball Prospectus. Using the same approaches he used in predicting baseball games--that utilizing the right historic data could help predict outcomes in the future-- he started applying these concepts to politics in his (formerly) anonymous blog, FiveThirtyEight.

Silver’s approach to parsing election data is based in regression analysis, a statistical method commonly employed by economists to tease out single variables from complicated data sets. Rather than taking current polling data at face value, Silver used demographic information along with prior election results to determine his predictions. For instance, to forecast the election results in a particular city, he would use demographic parameters such as age, sex and race to find the results of demographically similar congressional districts that had already held elections. His results were astonishing; according to Newsweek, he came within 20 delegates (out of a total of 1,700) in predicting the results of Super Tuesday, and had a solid record for predicting the other primaries held in March (although he did underestimate Clinton’s performances in Kentucky and South Dakota).

Silver’s results are significant, not just in the world of politics and baseball, but because it demonstrates the power of using demographic data to explain and predict the things going on in the world. For investors this may mean taking new approaches to looking at devastating events such as the foreclosure crisis, and determining what, if any, variables can be pulled out. While it is true that this type of analysis has long been used in market analysis, Silver’s novel approaches are sure to bring some much-needed fresh air into the stodgy world of statistics and demographics.


Why Is Gas So Much Cheaper In Tucson Than Phoenix?

West-coast-gas-pricesTucson, Arizona currently has some of the cheapest gasoline in the nation. As of July 25th, it is a bargain (relatively speaking, of course) at $3.78 per gallon, according to Yet only a two-hour drive away in Phoenix, the average price is nearly 20 cents higher, averaging $3.96 per gallon, which is on par with the national average. Initially transportation costs seems like it could explain the differences; perhaps Tucson is connected to some main petroleum artery that crisscrosses the United States, while Phoenix is still relying on some derivative of the Pony Express. Yet this is not the case. The two cities are served by the same pipeline, and have sufficient holding tanks to keep demand under control. So how could two cities that are demographically similar and located in the same state have such different gas prices?

It turns out that geography plays a major role in determining gasoline prices. According to NPR, Phoenix suffers from much worse air quality than Tucson, a malady largely attributed to its geographical situation and compounded by the sheer size of the city (which in the 1990s became the fifth largest in the country). Because of this, the city is required by the EPA to sell a cleaner-burning fuel, which happens to be more expensive. Tucson, on the other hand, doesn’t suffer the same pollution problems as Phoenix, and as a result is allowed to sell the cheapest (and dirtiest) gasoline on the market. Mixing this fuel with government-subsidized ethanol helps to further lower the price of gasoline in the city.

The gas prices in Tucson and Phoenix demonstrate how demographics and geography can interplay in often surprising ways. In this case, Phoenix drivers pay a 20 cent per gallon premium at the pump because of a combination of environmental factors, a situation I’m sure the residents of Phoenix weren’t anticipating when the region first began to grow. As for me, living in a city where regular old unleaded gasoline is currently being hawked at $4.45, I think I'll just take the bus.


High Corn And Soybean Prices Force Mississippi Delta Catfish Farmers Out Of Business

Catfish-farmThe rising prices of corn and soybeans, which have put a major strain on American farmers this season, may be claiming its first casualty: the Mississippi River Delta catfish farm. According to the New York Times, the input costs for feeding farm-raised catfish has become so exorbitant that farmers across the region are being forced to empty their ponds.

Several years ago, catfish farming was still a $462 million industry. Catfish farms were not only the most successful farmed fish product in the United States, but also the most environmentally friendly. Unlike other farmed fish, catfish ponds have a relatively small impact on the environment, making American farmed catfish one of the most ecologically sound fish on the market. The decline of the catfish industry began to accelerate once cheap Asian fish flooded the market, effectively putting a cap on prices. As the price of the feed for the fish increased, catfish farmers became unable to compete on the global market under these tight constraints.

Unfortunately, these poor economic conditions can’t be completely blamed for the demise of the catfish industry. Always considered to be a local specialty (a slimy, pond dwelling, local specialty to boot), there was a failure to market catfish on the broader United States market. Chilean sea bass, on the other hand, has become a popular dish despite the negative environmental consequences and even less appetizing official name: the Patagonian toothfish.

Now if only someone had the foresight several years ago to rebrand ‘farm-raised catfish’ as ‘southern pond salmon’ or even ‘Mississippi eco-deliciousfish,’ perhaps there still would be a viable industry for them in this country…


Headaches At The Census Bureau: Wireless Devices Scrapped For Old Fashioned Pen and Paper

A scrapped plan to incorporate the use of wireless handheld devices in recording the 2010 U.S. Census has many politicians and independent demographers worried about the accuracy of the upcoming census, according to a recent Washington Post article. The handheld devices, which in the original Census Bureau budget had been projected to be used in recording data for follow-up visits to households that had failed to return mail-in questionnaires, suffered from technical problems that forced the Bureau to revert back to the old-fashioned method of collecting the data: pen and paper.

The decision to conduct the surveys without the use of the new electronic devices may have far-reaching implications. The change, which was made official in April, will not only put pressure on the agency to have the census completed by the December 31, 2010 deadline, but will also put the U.S. Census $2 to 3 billion over budget, as using the electronic devices would have been considerably less expensive and much more efficient than using pen and paper to record the data.

Even more troubling than the budgetary problems associated with the recent changes is the potential for under-representing low-income and minority groups in the census. “Minorities, immigrants and poor people are more likely to lack fixed addresses and to find census forms confusing or suspicious and therefore are less likely to return them by mail….Following up with home visits is crucial to ensuring that they are tallied,” according to the Washington Post.

Fairly representing these groups is one of the most important tasks of the U.S. Census Bureau. The official census data are used to determine the number of congressional representatives each state is allotted, to establish the boundaries of congressional districts and to help form policy at both the federal and state levels. Undercounting these segments of the population in the U.S. Census could potentially disenfranchise those who are often most in need of fair representation.


Community Supported Agriculture: Good For You, And The Farmer Too

Fresh, healthy and locally grown food has long been a mainstay of the environmental movement and has manifested itself in the increasing popularity of organic foods in the supermarket, as well as the prevalence of farmer's markets in many parts of the United States. In a growing trend, many environmentally conscious consumers are beginning to take this notion one step further by purchasing shares of local farms in what is known as "community-supported agriculture" (or CSAs). Under this system, people pay an upfront fee to a local farm before the season starts, and in return receive weekly or biweekly packages of fresh produce as the various crops become available.

Community-supported agriculture was first put into practice in Europe and Asia during the 1980s, but didn't gain popularity in the United States until the more recently. The Internet has greatly helped many of the programs get off the ground, as online communities discuss the benefits of local agriculture and can to readily organize CSAs. According to a recent article in the New York Times, "there were fewer than 100 such farms in the early 1990s, but in the last several years the numbers have grown to close to 1,500."

CSA programs have been successful at eliminating many of the barriers associated with operating small sustainable farms. Paying an upfront fee, which on average is between $500 and $800 per season, eliminates the need for a middleman, in turn bringing more revenue to the farmer. In addition to this, receiving payment before the crops have been harvested can help to alleviate the pain of having a bad season, effectively splitting the burden between the farmer and the customer. Unfortunately, this does come at a cost for the consumer, many of whom admit they pay a premium for participating in a CSA, according to the New York Times.

Yet most participants agree that the advantages of eating locally and sustainably produced food far outweigh the disadvantages. People appreciate the environmental and health benefits of eating local organic food, particularly in the reduction of waste and energy associated with transportation and packaging. By receiving packages of different harvests every week, customers also gain a better understanding of the natural cycles that dictate agriculture, something that is lost to the vast majority of customers shopping in supermarkets.

While it is unlikely that community-supported agriculture will completely replace commercial agriculture (there will always be a demand for imported fresh fruit in the winter, at least in the foreseeable future), it does represent an interesting model which could potentially be replicated in other sectors. In addition to produce and meat, some farms also include fresh cut flowers as part of their CSA program. A group in Vermont has been experimenting with using a similar model to supply sustainably harvested firewood to Vermonters as a source of fuel. As a large segment of the population becomes increasingly concerned with the benefits of decreasing their ecological footprint, it is likely that community-supported agriculture, and other similar programs, will continue to gain popularity.

Labels: ,

Retired Baby Boomers Becoming Part Time Entrepreneurs

Many older baby boomers have been choosing an earlier retirement as a means to pursue hobbies and other interests as part-time small businesses. Carl Boast, for example, a former neuroscientist in the pharmaceutical industry, quit his job at age 55 to pursue his interest in nature photography, according to the New York Times. That interest eventually morphed into a small business; he began to market his photographs at craft shows sponsored by Wyeth, his former employer. While Boast’s nature photography business has not been particularly profitable, as with most other baby boomers taking part in this growing trend, profit tends not to be the primary motivation.

“Carl Boast, owner of Peaceable Kingdom Photos in Moneta, Va., was making a hefty salary in New Jersey as a neuroscientist in the pharmaceutical industry when he decided he ‘wasn’t a fan of working for a living’ and began plotting his departure,” according to the New York Times. And this doesn’t appear to be just an isolated trend. “Ty Freyvogel, a small-business consultant and investor in Pittsburgh, predicts that the ranks of early retirement dabblers will swell as they discover they have too much time and not quite enough money. ‘If they do the proper research and can get started without putting a significant amount of capital behind them initially, these types of small start-ups can get going with little risk,’ he said.”

These baby boomer micro-businesses are particularly interesting as profitability tends not to be the top priority for most participants, allowing people to be more creative in pursuing personal hobbies and quirky business ideas. As an increasing number of baby boomers begin to take on these types of low risk endeavors, this growing pool of entrepreneurial partial retirees may provide unforeseen opportunities to investors.


The 100K House: Green Building On A Budget

There has been much press recently about the changes occurring in American suburbs in response to rising energy prices and the foreclosure crisis. The New York Times has discussed the downfall of “exurbs,” commuter suburbs that are built a significant distance from any urban core, and Christopher Leinberger of the Atlantic Monthly has gone as far as to draw comparison to the “white flight” of the 1960s, arguing that suburban subdivisions will become the urban slum of the future. For more on changes in the suburbs, read NuWire’s take on the death of suburbia. While the changes may not be quite that drastic, there is a wellspring of demographic data to suggest that consumer preferences are beginning to shift away from the suburbs and back toward high density, walkable urban areas.

For nearly 60 years the prevailing trend in the United States has been away from urban areas. Cheap energy and the American passion for the automobile made suburban living an easy and appealing alternative to living in the overcrowded and polluted cities of post-World War II America. Yet the high prices of energy have exposed the glaring inadequacies ("What do you mean it costs $75 to fill my Buick?") of a suburban infrastructure built for the car. Consumer preferences are already beginning to lean toward greener and more energy efficient products; just try finding a Prius right now.

Demographics will also play a major role in shifting to a more urban future. As Christopher Leinberger in his Atlantic Monthly article said:

“When the Baby Boomers were young, families with children made up more than half of all households; by 2000, they were only a third of households; and by 2025, they will be closer to a quarter. Young people are starting families later than earlier generations did, and having fewer children. The Boomers themselves are becoming empty-nesters, and many have voiced a preference for urban living. By 2025, the U.S. will contain about as many single-person households as families with children.”

Because the population is growing, families with children will still grow in absolute number—according to U.S. Census data, there will be about 4 million more households with children in 2025 than there were in 2000. But more than 10 million new single-family homes have already been built since 2000, most of them in the suburbs.”

With an obvious oversupply of suburban developments, and a high demand for urban locales, it is likely that many developers will begin to shift their priorities to building higher density developments that conform to more stringent environmental standards closer to urban centers. One team of developers in Philadelphia is taking this idea in an interesting direction. The 100K House project is an experiment in urban design aiming to create a modern “green” house for less than $100,000 in construction costs.

According to the developer’s website and blog, the 100K House is to be built as urban infill in a rising Philadelphia neighborhood. Wedged between two houses in an 18 x 60 foot plot, the house will be LEED certified and utilize novel approaches to maximize energy efficiency. For instance, rather than installing air conditioners, which are costly both in upfront and energy costs, the developers are looking into alternative solutions to make the house livable during Philly’s relatively short, yet uncomfortably sticky summers. One possible solution they came up with is to couple a passive cooling system (composed of an 11-point system that includes energy-efficient windows and a white roof to deflect heat) with an electric dehumidifier to control that “I can’t breathe because I feel like I’m underwater” type of humidity.

The 100K House demonstrates that there are many opportunities for development outside of the traditional residential subdivision and big box commercial area mindset, and that building “green” can be accomplished on a budget. As the demographics continue to shift in favor of urban areas, it will be interesting to see how this is manifested in new investment opportunities. The field is wide open (or, as the case may be, sandwiched between two row homes) for innovation and entrepreneurship.

Labels: , ,


© 2012 NuWire Investor and NuWire, Inc. All Rights Reserved.