Archive for November 5, 2012

Baby Not on Board: PEW Study Reveals That US Birthrates Are at an All Time Low

Kids/20-Something bloggers can be so cruel

Times are tough.  People are looking for jobs, families are having to cut back, and now it looks like we’re so broke that we can’t even reproduce.  Everybody knows of the infamous baby boom that took place during the years after WWII.  Our country had just earned its “superpower” title and our economy was experiencing unheard of levels and growth.  It’s only natural that after spending time abroad kicking Nazi ass our men came home ready to start a family and get started on the whole American dream thing.

Right now we’re kind of experiencing the opposite of that.  Our economy has experienced some growth, but overall many Americans are still struggling to find jobs that pay a decent wage.  There’s also the issue of the newest generation of Americans who are deeply in debt and unable to find work because of the poor job market.  On top of being involved in long, bloody, and complicated military conflicts that lack Nazis, people aren’t really itching to have kids right now.

According to the Pew Research Center US birth rates were at a record low in 2011, the lowest we’ve seen since 1920 (just before the age of jazz, illegal booze, and dames and macs fleecing each other).  The country’s birthrate fell 8% overall from 2007 to 2010.  For US born women the rate dropped 6%, and for foreign born women it dropped by 14%.

A drop in birth rates isn’t the only problem Pew detected.  The same report that contained the information on birth rates also stressed the vulnerability of Medicare and Social Security.  Those two crucial social welfare programs are funded by payroll taxes from working adults, and with less jobs available there’s less money going into the programs.

All of these factors form a recipe for a potential economic disaster.  As more baby boomers reach retirement age, the younger generation will be forced to try to pick up the economic slack.  It’s estimated that by 2035 the ratio of workers and retirees will be 2:1 with 186 million workers paying for 91 million retirees.  People are counting on an increase of jobs that pay livable wages, but if we look at current trends that doesn’t look very likely.  It’s time to toss out your birth control and focus on some baby making people!  If you really cared about the future of this country, you would be participating in risky copulation.

 

Share

Hostess Executives Granted $1.8 Million in Bonuses, Possible Bird Flip to Employees to Follow

By now I’m sure the majority of people reading this know about Hostess’ bankruptcy.  After contract disputes between the union and owners the company threatened to close its doors.  A meeting between the two parties failed to bring about any changes, and now it looks like the company is closing for good.

At first people were furious over the possibility of losing their favorite oddly chewy bread and hostess cakes that are filled with some kind of sweetened shaving cream.  Some are still mourning their food loss, but others are far more outraged at the bonuses executives feel entitled to.  I could just do a thorough write up of the issues, but I think that this picture that has been floating around internet forums sums it up the best:

As you can see, Hostess executives have already gotten far more bonuses than they could ever deserve.  So when they requested that their bankruptcy judge, Judge Robert Drain, to grant approval for $1.8 million in executive bonuses people were disgusted.  That disgust turned into a full blown rage vomit after news hit that the judge actually granted their request.

If Judge Dredd had been ruling the case, we would have seen a very different and spine-ripping outcome

When people learned about the Internet was flooded with articles wondering why on earth Judge Drain could have allowed this decision to happen.  Some people theorize that he may have some kind of deal worked out with Hostess executives, others think that this may be a part of some economic conspiracy.  I’m not even going to try to explain the convoluted reason Hostess’ spokesman Lance Ignon gave in favor of executives getting their bonuses, so you can just read it on Forbes (WARNING: reading this article may cause you to have a rage aneurism and notice a distinct smell of fecal matter).

The short form answer Ignon gave is that Hostess owes a lot of money to their former employees and investors, and somehow giving out bonuses will help them pay what they owe.  Even if his answer does make sense to some it angers many others.  It seems like many people think that Hostess executives should deal with the mess they created, and that any bonus money should be given to employees.  Regardless of what people think the execs already have their money, so seeing any change is unlikely.

Share

Thanksgiving By the Numbers

Poor Thanksgiving, because of its simplistic nature and low-profit potential its quickly becoming a ho-hum holiday.  Christmas, Halloween, and even Easter rake in more profits than turkey day can ever hope to, and with Christmas coming earlier and earlier each year some wonder if the holiday is buying the turnkey farm.  Thanksgiving may not be as profitable as other holidays, but that doesn’t mean that it has no affect on the economy.  Thanks to the US Census Bureau and the Fiscal Times, we can learn more about Thanksgiving’s economic impact.

$12.1 million: The value of U.S. imports of live turkeys from January through July of 2012

$21.57: The average price for a whole turkey in the US

$212: The average amount of money people will pay for their Thanksgiving week flights this year

20%: The price increase of plane tickets since last year

$3.25-$3.40: The average price for a gallon of gas Thanksgiving week

43.6 million: The estimated amount of people that will be traveling by car this year

$172 million: The estimated amount of money Ocean Spray will earn for their cranberry sauce sales

$117 million: The estimated amount of revenue the pumpkin industry can expect by the end of the year

And for those interested in other numerical Thanksgiving amounts, I have some estimates of my own

$57.60: The average amount of money Americans will spend on booze in order to get through Thanksgiving dinner

$663.40: The average amount for the hospital bill that families will be stuck with after the inevitable political throw-downs during/after Thanksgiving dinner

$150+: The amount of money you’ll have to spend on your significant other’s Christmas present after you say something to embarrass them in front of their family during Thanksgiving dinner (add at least $75 if the embarrassing remark was sexual or racist)

$250 + $15 fees for classes: The amount of money people will waste on gym memberships after the holidays, only to stop going around the time MLK day rolls around

Share

Black Friday Origins

It’s that magical time of year again!  American citizens come together to reflect on their good fortune, celebrate with their loved ones, and rip out a woman’s weave who dared to put her hands on the last PS3 in the store.  Black Friday can be stressful and exhilarating for consumers, and among business owners it’s viewed as a sacred holiday that has the ability to turn their economic future around.  There is one popular theory about how the day after Thanksgiving got its namesake, stores that have been in the red all year have a chance of printing in black ink again.  But how did Black Friday become an American consumer holiday?  Most people think that it’s always been an anticipated shopping event, but its history is a little more complicated than that.

The words “Black Friday” didn’t always refer to a frenzied shopping marathon, the first usage of the phrase was in 1869 in reference to “minor” economic meltdown because of the gold market.  Black Friday as we know it today was started where many other great American traditions got their beginnings, the city of Philadelphia in the 1960s.  People didn’t need a media frenzy or insane sales to go shopping the Friday after Thanksgiving, there was always a shopping rush the day after Thanksgiving.  The multitudes of shoppers that flooded Philly streets and stores were hardly viewed as blessing, both business owners and residents hated the traffic jams, long lines, and occasional brawls.  A scathing PR newsletter dubbed the day Black Friday because of the negative impacts people’s aggressive shopping caused.  Black Friday didn’t begin as a term endearment from business owners, it was an extremely negative “holiday” that most people dreaded.

For a while Black Friday was strictly a regional term.  People in Philadelphia’s tri-state area knew what the term Black Friday meant, but people in Chicago and LA would have been stumped if you asked them how their Black Friday was.   Throughout the 70s and early 80s the term slowly spread around the country, and by the time the mid-80s rolled around it was well known.  It was around this time that business owners tried to get the blackest of all Fridays to shed its negative image.  They argued that Black Friday was a savior for struggling businesses, the day ushered in record profits for stores and they believed that the extra money would eventually trickle down to benefit consumers, workers, and American citizens (it was the Reagan years, please forgive them).

After big business owners started to give Black Friday some lip service the media jumped on the term Black Friday.  By the 1990s everybody knew what Black Friday was, and they were more than eager to participate.  It seems like we can’t get enough of the shopping day, now we have Black/Gray Thursday, Cyber Friday, and Cyber Monday.  We’ve come quite a long way since that snarky 1960s news story.  When you’re out at 5am this Friday punching a man’s teeth down his throat for the last Bratz doll, take time to remember the history of one of the first modern consumer holidays.

Share

The Battle of Black Friday

It’s official, retailer workers are 100% sick of Black Friday (although there was never really a doubt that they liked it in the first place).  In the past retail employees had to look forward to an early Thanksgiving meal and an abnormally long and early work day, but this year it has gotten far worse.  Because of all the shopping frenzy that happens around this time of the year almost every major retail chain has decided to start their sales early on Thanksgiving.  Many people have been forced to not celebrate the holiday with their loved ones because they’ll be busy stocking the electronics shelves at WalMart, but somehow missing a major family holiday isn’t even the worst part of Black Friday for retail workers.

Every year the post Thanksgiving shopping sprees manage to get more out of control and occasionally violent.  We’ve all heard stories of employees being pinned up against boxes and windows because of a large crowd of shoppers, but an uncomfortable and squeezed meeting with a display window is the best these people can hope for.  Employees have been forced to break up fights with aggressive customers and occasionally they have to defend themselves from aggressive customers.  People have been sprayed with mace, stabbed, and in some gruesome cases trampled to death during Black Friday sales.  Retail employees are tired of missing their Thanksgiving to act as a criminally underpaid riot control force, and they’re taking a stand against it.

Last year there were many online petitions circulating that called to an end of Black Friday because of the unfair strain it puts on retailers, by the end of the holiday there were around 150 in total. Right now there are almost 100 petitions on Change.org that have workers from Target, Toys R Us, WalMart, and other big retailers demanding an end to their unfair Black Friday treatment, and many believe that by the end of week that they’ll surpass last year’s amount.  Because of WalMart’s strict anti-union policies people never thought they’d see the day WalMart employees would revolt, but we may very well see it happen this upcoming Friday.  To be fair their protest is more about having living wages, benefits, and being treated like they’re people, but the fact that they’re planning a big walk out on the biggest shopping day of the year is pretty poignant.

Even if you don’t look at the anti-Black Friday stance from a moral perspective, putting an end to the Black Friday rush in stores makes a lot of sense.  Every year more and more people choose to avoid the in-store insanity and just shop online.  Choosing to shop for the holidays online isn’t just less stressful, it can also be a lot cheaper since the discounts people get from shopping online can eclipse what people are getting in store.  Brick and mortar stores have been fighting an uphill battle with e-tail giants like Amazon and Ebay, and stores will keep having to come up with unbelievable sales to compete with the online shopping world.

It seems like overall people are just getting plain sick of Black Friday.  They’re missing Thanksgiving with their loved ones because they have to work, and some of them are literally risking their lives to compete with thousands of shoppers who are eager to get the same big ticket items.  Do yourself and retail employees a favor this year, skip the frenzy, shop online, and join the 21st century by not valuing a slightly cheaper Wii U over human happiness.

Share

Hostess is Going Out of Business (NEW DEVELOPMENT: J/K No They Aren’t NEWER DEVELOPLMENT: Nevermind Yeah They Are)

Good night sweet cream filled prince.  May overly sweetened and nutrition devoid angles fly thee to thy rest

There is a crisis today that’s on the minds of almost every good American citizen.  It isn’t the upcoming Black Friday labor strikes, domestic political upheaval, nor is it the quickly escalating violence between Israel and Palestine.

On November 16th 2012, the Hostess company declared that they would have to lay off their 18,500 workers and shut down their business.  No longer will people be able to eat chewy and vaguely chalky bread, savor cream filled pastries, nor eat half their weight in fruit pies.  Their announcement briefly cause a Twinkie panic on Friday and people went into a Twinkie buying frenzy.  Boxes of the snack cake were being sold on Ebay for hundreds of dollars, and people were hoping to make a solid investment in cake instead of stocks and bonds.

People will probably be a little disappointed when they learn that their cakes will be worthless.  Aside from the many knock off Twinkie brands you can find in super markets (I know, I know, it isn’t the same), there’s no doubt that some business will come along and buy whatever is left of the company.  The biggest question isn’t what will happen to the snack cakes, it’s how this situation started in the first place.

Some business experts are blaming unions along with the Hostess company.  They’re claiming that unreasonable union demands were what caused the company to collapse, and even some people are claiming that union members advised AGAINST the demands made in the workers new contracts.  Others are blaming the bankruptcy on the incompetence of the Hostess CEOs.  Going through 6 CEOs and a little under 10 years is pretty awful, and some workers are claiming that the owners were stuffing their pockets while they were digging the company’s grave.

Regardless of what the cause was, it looks like the company may be saved after all.  Judge Robert Drain of the U.S. Bankruptcy Court is attempting to get Hostess and the Confectionery, Tobacco Workers and Grain Millers International union to negotiate and start acting like big boys.  It can only be assumed that juice and cookies will be served after the meeting, and will be followed by a short nap.

UPDATE

Late last night Hostess made an announcement that mediation between the company and the union didn’t work out.  My millennial cynicism and skepticism has caught up to me, I guess Hostess really is going out of business.

Share

The Kmart Kurse

Poor K-mart, nothing has been going right the world’s third largest retail chain for past 20 years.  Retailers have had a difficult time competing with online venders, but Kmart seems to be cursed with some anti-profit spell.  After their 100+ store shut down in 1994 the company thought they had prevented an economic disaster, but in 2002 the company was forced to file for Chapter 11 bankruptcy.  After some allegations about misleading investors, the company chairman Chuck Conaway was forced to step down.  When all was said and done 300 stores permanently shut their doors and 34,000 people lost their jobs.  People were hopeful and convinced that a Kmart comeback was due after they merged with Sears in 2005, but despite numerous in-store redesigns and marketing campaigns the store never got back its old glory days.

After last year’s December holidays past Kmart saw dismal earnings over the holiday season and announced that 100-120 of their Sears/Kmart stores would be closing.  You didn’t have to be psychic to see that 2012 wasn’t going to be a good year for the retailer.  In 2012 there were a little over 1,300 Kmarts open in the U.S. and abroad, 800 fewer than just ten years ago when the store first declared bankruptcy.  This past February Kmart posted its biggest quarterly loss in nine years, and it managed to lose $132 million in July’s quarter.

Some people blame Kmart’s decline on the emergence of online retailers, but that would be a rather simplified view of the situation.  Ebay and Amazon have hurt retailers across the board, but the top two brick and mortar retailers have something very important that Kmart doesn’t have: a diverse product selection.  Kmart has a major electronics problem, they don’t sell any whatsoever.  Lacking LCD TVs, video games, cell phones, and other hot electronic products has made the store almost obsolete in the eyes of consumers, especially since its main competitors WalMart and Target offer such a wide electronics selection.  Kmart also doesn’t have a grocery store section, something that has helped make Target and WalMart even more popular and profitable.

It’s latest earnings report is due out today, and financial forecasters are expecting another dismal loss.  Investors are praying for a Christmas miracle and hoping that their profits will surge when people start shopping for the holidays,  but since the store doesn’t carry popular presents (any kind of electronics because it’s 2012) it’s looking grim.

UPDATE: Wow, a net loss of $500 million.  Kmart you gotta get it together

Share

Deals of the Damned: The Groupon Problem

There are two things that every true American loves: freedom and sweet shopping deals.  The past few years have seen a noticeable trend in the popularity of sales and discounts.  Websites like Groupon and LivingSocial bring unbelievable deals to the in-boxes of millions of people each day, and people can’t get enough of them.  Heck we even have a show that’s devoted to people who obsessively snip coupons to ensure that they get extreme deals.  This consumer paradise seems like it has no possible downsides, businesses get more customers and consumers in a brutal economy can still maintain their standard of living with insane deals.

JCPenny’s Just Say No to the Status Quo marketing campaign may have been a bit of a flop, but its message is still rather topical.  We’ve been buried in a never end avalanche of door buster sales, 75% off coupons, and unbelievably low prices for quite some time now.  There’s only so much money people can spend on these goods and products and services companies can give discounts on.  A few well-placed fantastic sales can do a business a lot of good, but an over saturation of 50%-90% deals can eventually exhaust a business.

Some people believe that extreme deals can only benefit businesses because of the amount of customers they attract, but others aren’t so sure.  Utpal Dholakia, a marketing professor at Rice University, was interested in the affect our deal crazy society has had on businesses, and how much these deals are really benefiting them.  Dholakia surveyed 150 small businesses who ran Groupon promotions from June 2009 to August 2010.  Even though the promotions were profitable for 66% of the businesses surveyed, 32% of the businesses surveyed didn’t see any profit to speak of.  Out of the 150 businesses surveyed, 40% said that they weren’t going to run an extreme deal promotion again.

A recent Manta survey asked 1,087 small businesses if they were participating in any daily deal promotions this holiday season, and a whopping 82% responded that they weren’t planning on it.  Only 3% of those surveys said that past extreme deal campaigns attracted repeat customers, and an equal amount said that they actually lost money from them.  It isn’t exactly shocking news that small businesses don’t benefit as much from daily deal promotions, but the affect they’re having is still important.  If you want to help your favorite small businesses this holiday season, cancel your Groupon subscription and pay full price the next time you shop.

 

Share

Businesses Try to Pick Up the Pieces After Sandy

(This post was written Wednesday November 7th, I’m sorry I’m awful with proper updating)

It has only been seven days since Hurricane Sandy finished her destruction in the northeast, and the areas that were hit the hardest are now trying to deal with a nor’easter.  Despite inaccurate weather reports (NJ was only supposed to get rain, and today my office is letting everybody out early because of the currently falling ice and snow) people don’t think this system will cause a significant amount of damage.  The last thing rescue workers and residents need is another catastrophe, but regardless of what happens it’s certain that people will be dealing with Sandy’s damage for quite sometime.

In my initial blog post about Sandy people were estimating that it would cost $50 billion to completely fix all of the damage the storm caused.  Most corporations and large business owners will feel the effects of Sandy’s cost in their bank accounts, but small businesses will be much worse off.  Big businesses have the money to purchase extensive insurance coverage and hire workers to rebuild, but small businesses don’t.  There have been a lot of bittersweet stories about small business owners who are struggling to rebuild after such an unexpected disaster, and many more were shocked when they learned about how little their insurance companies will help them.  Things look bleak, but some of the suffering owners may soon see a little relief from the government.

Chris Christie has been working hard over the past week to protect New Jersey’s “economic interests” by giving aid to small businesses.   The New Jersey Business Action Service is currently giving out loans to every business in the state that needs money after sandy.  Before the loan was only offered to people living in 12 counties, but now businesses throughout the state can apply.  Disaster unemployment assistance is also being extended to everybody in the state of New Jersey.  The federal government is stepping in to help displaced residents around the country.  $200 million in federal funds is being used to help people who need to relocate after Sandy.

 

 

Share

NYC’s Supervillan Gold Vault Escaped Sandy’s Wrath

Scrooge McDuck was unavailable for comment

People aren’t perfect.  We make mistakes, we (hopefully) admit our faults, and we try to learn from every situation in our daily lives.  Hurricane Sandy has caused a lot of people to re-think their business strategies, and the location of their businesses.  Citigroup’s building at 111 Wall St. will take months of work before it can be used again, and TWO of Verizon’s crucial facilities were significantly damaged from flood waters.

When some businessmen saw the destruction Hurricane Sandy unleashed, some of them thought, “Oh *#&! Is the gold I had in the city safe?!”  Some people believe that the bulk of the nation’s gold is held in the heartland in Fort Knox, but that’s just what they (aka-the man) want you to think.  There are over 15 million pounds of gold stored in the New York Fed, and when those who knew about it learned about the hurricane they had a justified freaked out.

Miraculously the gold bullion stayed safe and dry during NYC’s great flood.  The Fed won’t be telling us any time soon how they were able to keep everything safe, but it may have something to do with the way the building was built.  America’s gold bullion isn’t stored in some rinky-dink above ground facility, it’s 80 feet below the street level, 50 feet below sea level, and it all sits safely on Manhattan’s famous underground bedrock.  The underground construction isn’t the only thing that the kept the bullion safe.  The vault is airtight and water sealed, it would take a lot of destruction to even make a nick in the vault’s casing.

Share