Drinking at work causes lack of production? This is an outrage!

A few hundred workers at the Danish Brewing Company, Carlesberg, are outraged by a change in their working conditions. The factory workers and delivery men believe that the company has pulled a significant portion of their benefit package by LIMITING BEER CONSUMPTION TO ONLY LUNCH HOURS.

http://www.reuters.com/article/idUSTRE6374BH20100408

Workers are outraged that the plentiful free beer located throughout the factory has been stripped. The company will only provide beer during the employees lunch hour. Factory workers feel they have been stripped of their workplace rights.

As many as 800 angry, and very sober, workers walked out on strike last week.

The truck DRIVERS feel they have witnessed an even greater outrage. The company has allowed the drivers to take three beers with them to go from the canteen because they often do not eat lunch in the factory. Police should fear the increase in sober truck drivers!

This represents one of the greatest outrages in workplace history! The entire world should rally around the pain this has caused the worker.

The lesson: do not keep a Danish man from his beer.

Charlie Gentles

Tabloids, Magazines, and the Economy

At the gym the other day, I was browsing a copy of Star magazine, the one with the headline “Explosive Showdown” with an article discussing the infidelity of Jesse James. And then I started thinking, why exactly do I care about these people? What contribution do magazines like this, detailing the lives of celebrities, make for the country’s economy?

To some, tabloids are basically placed in the same category as newspapers when it comes to sales figures since they are sold in the same venues. In 2009, newspaper sales were down. But tabloid The Sun enjoyed an increase in sales during this time? Why??

I think it has a lot to do with the economic climate at that time. We were only beginning our climb out of the global recession of 2008 and people were looking to entertainment to calm their minds. I mean really, reading about someone else going to rehab or getting and ninth DUI is much more interesting than thinking about your mortgage or debt.

Recently, however, magazine sales have been down. Conde Nast Publications, the owner of magazine brands such as Vogue and Lucky, announced in October that they were closing Gourmet (a magazine that my dad definitely had a subscription to). Now that people are more optimistic about the economy and consumer confidence is up, people are spending less money on light reading material. Subscriptions are especially down.

For me, magazines are about light-hearted fun. Especially publications like Star or Vouge. These types of magazines are now experiencing sales drops, which to me, signifies a better economic outlook. I love magazines (even a tabloid now and again) but I’m glad to see people are using their time doing other things besides obsessing over Jesse James and Sandra Bullock.

-Claire McCandless

Caffeinated Queries

"The powers of a man's mind are directly proportioned to the quantity of coffee he drinks."

- Sir James Mackintosh

Coffee is a staple component of many individuals’ daily existence. For some it is the force of habit which gets them buying or brewing every morning, afternoon, and night. For others, it’s a necessity. As a non-economist I tend to pay attention to those market issues which pertain to my practical existence – Valentine’s Day in February, lipstick on Fancy Dress. Now, as I launch into the throes of exam week, the focus is on the product which will shortly become my lifeline.

An interesting fact I found on The Heritage Coffee Company’s website is that coffee is the item traded second most worldwide behind petroleum. I suppose it sort of make sense – petroleum fuels machines and coffee fuels… people? In all seriousness though, that is a staggering thought – that coffee is SO high in demand by THAT many different people in places around the world.

To address the international relations issues generated by the extensive coffee traffic worldwide, the United Nations created the International Coffee Organization in 1963. The organization is based in London and for more extensive statistics regarding coffee prices, importing, exporting, and historical data, you can check out their website.

One of the most controversial things about coffee, besides the level of ethical and environmental conscientiousness with which it is acquired, is its effect on the drinker’s well-being. Do the adverse effects of caffeine outweigh the health benefits associated with the bean? This article from Harvard Health Publications indicates it’s probably like most other things in life – best in moderation.

If you are interested in how coffee made its way into the economies of the different continents, check out this page from National Geographic which tracks the product’s trek across the globe. This page also features an interactive map indicating highly saturated growing locations by country.

I’ve done a bit of travelling in my time at school and while I’ve wondered about water quality or whether or not I’d get enough ice in my beverage, I’ve never had a problem locating decent coffee in my wanderings. And whether nor not drinking it makes me a citizen of the world, if it’s going to enhance my “powers of mind” then bring on the java! It’s time to study.

~ Elizabeth Micci

Hitting the Job Market

Seniors spring has hit and the soon-to-be grads are all out on the job hunt.



The following website shows that the course work we have been taking is relevant to finding jobs. The article lists organizations seeking those who claim to be business journalists.



http://businessjournalism.org/2010/04/02/business-journalism-continues-to-see-job-opportunities/



Well what exactly is business journalism you might ask? Even though this course teaches the subject matter many are unfamiliar with what the responsibilities are.



http://bizjournalism.history.org/



This is a comprehensive website explaining in detail what exactly the responsibilities of a business journalist are.



Outside of the direct working world there are also many opportunities for people interested in business journalism to further their education.



http://journalism.nyu.edu/prospectivestudents/coursesofstudy/ber/



NYU offers a program and argues for the significant competitive advantages to attending post graduate programs before the job world.



In contrast time magazine ran a story last year that business journalism is actually something of the past.



http://time.com/business/article/0,8599,1911239,00.html



The article argues that educated consumer reads such as business week are struggling to get add revenue as the American public is searching for pop culture and infotainment. The article states that this is actually going to be the end of the business journalist.



The bing blog offers a remedy on how to save business journalism.



http://stanleybing.blogs.fortune.cnn.com/2009/11/02/how-to-save-business-journalism/



Overall the field of journalism is ever changing and many believe that business journalism is thriving while others think it to be dying.



Charlie Gentles

Pink Lips Save Greenbacks

As a non-economist, it is not surprising that I find the most interesting economic indicators to be the ones that sound the least technical. Gross Domestic Product, the Consumer Price Index and New Home Sales are all extremely useful. But it probably does not surprise my fellow non-economists that when I first heard the term "The Lipstick Effect" in class, it was the one that got me thinking.

I’m not a huge cosmetics person myself. I mean, I do wear make-up and am pretty familiar with the semantics, but I’m not what you would call an aficionado per se. But I like wandering and testing in Sephora as much as the next girl and so I understand why people who write about the lipstick effect refer to the purchase of lipstick as a small indulgence.

Supposedly this perception of make-up dates back to the Great Depression when, according to Nancy Upton, a professor of marketing who focuses on consumer sentiments: “What we saw was a consumer trying to make themselves feel better through small, indulgent, hedonic consumption.” This idea gained support with the spike of lipstick sales after 9/11.

Eve Pearl discusses the concept in her commentary on the Huffington Post entitled The Lipstick Effect of 2009. According to Pearl, lipstick isn’t enough to get women through the current crisis. It will take more than a new shade of the pink to get you making the green – maybe a wardrobe upgrade or a change in skin regimen? Whatever it takes to make you stand out in the applicant pool, she asserts.

While I can’t imagine that lipstick purchased will repair all of the negative sentiments associate with the current recession, there is something to be said for simple pleasures that satisfy the crave to shop and make you feel prettier at the same time. And who knows? Maybe it’s times like these when even the smallest items feel like a real treat that keeps us remember how fortunate we are when everything is great.

On that note… Ruby Red? Sweet Peach? Light Plum? Which do you think looks best?

~ Elizabeth Micci

Sam's Story x 11 million

Today is the “March for America” immigration reform rally in Washington D.C. and it got me thinking (as a non-economist) about the economic effect of immigration on our country.

I was listening to Marketplace on Friday and heard this story of Sam, an undocumented immigrant who was brought to Indiana from Mexico when he was 4. Now he's in college--a jazz prodigy--but has come to realize that upon graduation, he won't be able to work.

Sam wants to stay in America--as he says, he grew up with Barney and Power Rangers just like we did. He's not a citizen and has had to hide that part of his life for years.

Sam might be forced to get a job that pays under the table because employers won't (or shouldn't) hire illegal immigrants.

The Congressional Budget Office found that 50 to 75 percent of undocumented immigrants pay federal, state and local taxes. And they contribute about $7 billion per year to Social Security.

Desperate to find work, countless undocumented workers in this country are paid less than the minimum wage—effectively putting millions of people into poverty so that we can reap the benefit of cheap labor.

Multiply that by millions of Sams, and that’s a big impact on the economy.

The cost of cheap labor is greater than the price—and when the market fails to right this inequality, government intervention must occur.

Chances are Sam won't live up to the earning potential that his college degree got him. Isn’t that why we all go to college in the first place? To help us become who we want to be--part of that, undoubtedly being making enough money to live our dreams and support our families?

It’s a heated debate, and I don’t want to get political. But there’s got to be a point where economics and humanity meet. And that’s where the right choice will be.

--Stephanie Hardiman

Fashionomics

I don’t know any girl that doesn’t shop at Forever 21. And why wouldn’t they? It has key trendy pieces for every season for (basically) dirt-cheap prices. But I have been hearing reports over the past year about “fashion copycatting,” or taking runway looks and turning them into cheaper, more consumer-friendly products.

Freakonomics posted a blog entry about this phenomenon, saying that it is actually good for the economy and the fashion industry as a whole. It gets average consumers excited about fashion, seeing as they can now afford the looks they saw on the runways of Proenza Schouler or Alexander Wang. Stores like Zara and H&M take these looks and use cheaper labor and fabrics to turn them into clothing that won’t break the bank.

For me, I think fashion copycatting is the perfect way for consumers to be exposed to fashion. After all, if people are spending, the economy is improving. But I don’t think I like what it does to the industry itself. Fashion has always been about innovation. Anyone who has ever seen Project Runway knows that. So the question I’m asking is, where is the innovation in a chain strap quilted bag that is eerily reminiscent of the now infamous Chanel version? Where is the creativity in the iconic Birkin bag hanging in Zara under a completely different label? What is this copycatting doing to these fashion houses?

Also, when it comes to bags, something else has come to my attention. It is the selling of fake designer bags and clothing. Louis Vuitton won a lawsuit against eBay this year for "harm[ing] the image of luxury-brand Louis Vuitton after the online auctioneer paid to have Internet searches directed to its site that included misspellings sometimes used to sell counterfeit goods." People are making money off of the ideas of others everywhere. On the web, at the mall, on streetcorners.

While the writers of the Freakonomics blog favor “fashion copycatting” for the good of the economy, I, as a non-economist, just can’t, at least for designers themselves. For me, fashion should always be about innovation and finding inspiration in others, but not blatantly copying. Fashion history does repeat itself, but it shouldn’t be seen on the runways of New York Fashion Week one day and be on the shelves of Forever 21 the next.

-Claire McCandless

Move Yo Money!

If you're a Lexington-ite, you'll notice that on Financial Corner (what I've now dubbed the intersection of Nelson and Main Streets because of the location of both Wachovia and Suntrust Banks), CornerStone Bank broke ground last week.

It's been in a trailer (yes, a trailer) by Donny T's for the last year or so, but it looks like they're finally getting a brick and mortar structure.

Amidst the economic downturn and a year when many banks ended up closing shop (R.I.P. WaMu), CornerStone was one of the few banks nationally that opened its doors last year.

But what's more interesting to me, as a non-economist, is this movement from national to local banks.

Arianna Huffington, creator of the Huffington Post, in particular has been pushing the movement (dubbed "Move Your Money"). Basically she thinks it's crazy for Americans to keep supporting banks that not only got us into this bad situation, but then rewarded the wrongdoing company leaders with exorbitant salaries paid out of the national coffer. Local banks are looking out for the local economy and local people--not some big-shot in a corner office hundreds of miles away.

And Linda Hooks, Washington and Lee University professor of economics, told Rockbridge Reporter Alex Scaggs last year that local banks probably have a better handle on what's going on with their customers than national banks do--no surprise there.

"Economic theory says that banks work by gathering information and monitoring what’s going on with, say, a business they've lent money,” said Hooks. “The best way they can gather information and do that monitoring is by being right there on the scene. So a local bank probably knows more about a local business."

This was confirmed by Bank of Botetourt Senior Vice President Duaine Fitzgerald, who alluded that his bank is probably more likely to work with customers in a tough situation than a large corporate entity would be. For the record, Fitzgerald's bank wasn't involved in the risky lending that got many banks in trouble, and the bank therefore didn't have to take any TARP money.

Maybe, just maybe, by moving our money to local banks we can keep the focus on people, service and honesty. But maybe it'll just mean paying more ATM fees too.

--Stephanie Hardiman

Is it time to rejoice?

As a non-economist, I read a lot of different articles to research for this entry. I found myself mostly looking at blogs and news articles about consumer spending, something that our economy needs. As the recession comes to a close, consumer spending has risen 0.2% since December.

According to Planet Money’s Caitlin Kenney(www.npr.org/blogs/money):

Consumer spending rose just 0.2 percent in December, after increasing 0.7 percent in November. It was the third straight increase in as many months but significantly smaller than the increases in October and November.

While this increase is significantly smaller than in the past few months, it is still a rise. But should we rejoice? I think that we need to wait until the spring to look at these numbers with any real meaning.

Also, the Washington Post published an article stating that sales of cheap liquor have risen over the past few months. Apparently, liquor stores’ sales have risen while restaurants’ sales have lowered. This got me wondering about the sales of these establishments in Lexington. I can probably guess pretty accurately that these numbers would be around the same here. With snow days and formals coming up, college students will be flocking to the ABC Store to get some Burnett’s Sweet Tea Vodka (the cheap version of Firefly) instead of making a reservation for two at the Southern Inn. In Lexington, I wonder if this a boost to the local economy?

I have a lot of questions about the economy and hopefully, in my next entry, I will be able to have them answered.

-Claire McCandless

The market value of Valentine's Day

I will admit that I am sometimes plagued by my own illiteracy when it comes to reading articles about the economy. My favorite economic discussions tend to stem from topics that I might think about outside the realm of a business class. So here’s a topic that might be interesting to my fellow non-economists, especially this week: the market value of Valentine’s Day.

Let’s start at the very beginning. I’m a history buff and like background info. Here’s a post from the History Channel’s website if you’re interested in the origins of the greeting card holiday. It’s a quick read and pretty interesting.

http://www.history.com/content/valentine/history-of-valentine-s-day

The article touches on the economic significance of the holiday: “According to the Greeting Card Association, an estimated one billion valentine cards are sent every year, making Valentine’s Day the second largest card-sending holiday of the year.”

This doesn’t include, of course, the zillions people spend on gifts, candy, jewelry, and dates. The following article from the National Retail Federation forecasts trends in consumer spending this Valentine’s Day and links them with the current economic climate:

http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=887

Rather than not spend at all, the trend seems to be spreading the wealth among the people closest to you. Rather than cut back on the number of people give valentines to, the NRF insinuates consumers will spend a bit less on their significant other and put that money toward gifts for family and close friends. So this week, whether you view the approach of Valentine’s Day with excitement or a sense of impending doom, consider some of the cultural economic semantics that contribute to the popularity of the lovers’ holiday.

From,
Your Valentine

~ Elizabeth Micci

Does the Olympics Help the Local Economy?

While much of the Eastern United States has been snowed in the last few weeks, the world has turned their eyes towards the Winter Olympics in Canada. When addressing the economic conditions of an Olympics it is imperative to note that not all cities benefit from the three week spotlight. Matt Yglesias states that even though there is fierce competition with regards to hosting the games, most cities reap a major financial windfall associated with the post games affect.
http://yglesias.thinkprogress.org/archives/2009/04/a_better_way_for_the_olympics.php
Ryan Avent believes that the games benefit the local economy:
“The games often get cities to undertake massive infrastructure investments, many of which have been in limbo for decades. London's program of transit expansion in advance of the 2012 games is well documented for instance. Now, London may lose money on the games themselves, and it may end up throwing some money away investing in soon-to-be underused natatoria, but the new transit capacity will be around forever, boosting the local economy. Hard to see how that expansion doesn't easily pay for the games in just a few years.”
http://www.ryanavent.com/blog/?p=1984
A third opinion by Andrew Rose states: "We conclude that the Olympic effect on trade is attributable to the signal a country sends when bidding to host the games, rather than the act of actually holding a mega-event."
http://papers.nber.org/papers/w14854
When the world removes their eyes from Vancouver in a few short weeks it will be interested to see which one of these economists have properly predicted the post Olympic economic outlook.

Charlie Gentles

I am not an economist

I am not an economist. I know—shocking. In fact, not many people are economists. There were only 14,600 of them 2008 (about a tenth of the “writers” population), according to the Bureau of Labor Statistics (as a point of interest, the BLS Web site says the average economist employed by the government made $108,010 last year—more than twice the average salary of us “writers.” Prof. Luecke, you’re my advisor: is it too late to change my major?).

But seeing as so few of us are economists (and are now kicking ourselves) and actually understand financial markets and what happened over the last 18 months, there’s a new phenomenon I’d like to highlight: YouTube. Now anyone with Internet access can call themselves a novice economist. These guys break it down simply, humorously and (often) with song. And everyone likes a good song. Call it Schoolhouse Rock for the new generation. Here’s my top three picks:

"Bailout"
Meet “Merle Hazard,” a real-life financial advisor from Nashville. Like any good Nashvillian, he’s also a musician, but not one who leaves his day job at the office at 5 p.m. Here he breaks down the bailout with a country twang.

"The Financial Crisis...Simplified"
Unsure what happened over the past few years? This guy (Hank) breaks down the sub-prime mortgage crisis for us. It’s straightforward, cynical and involves many hats—all keys to greatness in my opinion.

"'Fear the Boom and Bust' a Hayek vs. Keynes Rap Anthem"
This one was recently on NPR’s “All Things Considered” so I can’t take credit for finding it. In a style reminiscent of The Lonely Island, George Mason University economist Russ Roberts and Spike TV (yes, that man channel) producer John Papola rap about the “boom and bust” of the economy as economists John Maynard Keynes and F. A. Hayek. It got the OK from Ke$ha, so it’s OK in my book too.

"Walkin' on Wall Street"
And one more just because I referenced Schoolhouse Rock. It’s necessary to have this one on the list. Here’s a very elementary look at stocks. YouTube: Because us laypeople deserve to know about economics too.

--Stephanie Hardiman