There’s has been a big debate lately about whether or not raising the minimum wage is a good thing for the overall economic health of America.
On one side, those in favor say that putting more disposable income into the pockets of consumers would mean that they purchase more stuff, increasing sales and profits for businesses.
On the other side, those opposed mainly argue that raising the minimum wage will increase costs for employers, forcing them to lay off workers to avoid having to increase how much they spend on wages.
Well, new data released by the Department of Labor just dealt a blow to that opposing argument.
The report, released on Friday, found that the 13 states that recently increased their minimum wages saw an average job growth of 0.85% for the first six months of 2014. The 37 states that didn’t raise the minimum wage saw job growth of only 0.61%.
Though the data has a small sample size (only 6 months) and doesn’t necessarily establish cause and effect between higher minimum wages and job growth, it definitely pokes a big hole into the idea that raising the minimum wage leads to a disaster in the job market.
The Economist also points out that the U.S. minimum wage is relatively low compared to other developed countries around the world.
Draper is the son and grandson of successful venture capitalists. His father founded the Draper & Johnson Investment Company in 1962 and served as both chairman and president of the U.S. Export-Import Bank.
His grandfather founded Draper, Gaither and Anderson, one of the U.S.’s first venture capital firms in 1958.
Timothy attended Stanford University, where he earned an electrical engineering degree before going on to get his MBA from Harvard Business School.
After spending a year at Alex, Brown & Sons (the oldest investment bank in the U.S., founded in 1800), Draper left to start his own venture capital firm with Jon Fisher and Steve Jurvetson.
Draper and Jurvetson are credited with coming up with the idea of advertising at the bottom of Hotmail messages, and the firm, DJF, owned 10% of Skype when it sold to eBay for $4.1 billion in 2005.
Early this year, Draper proposed an initiative to divide California into 6 separate states.
In support of his plan, he argues that the state is too big to be representative of its citizens or to be competitive economically:
“With six, you do get a good sense that you can drive 45 minutes in any direction and maybe be part of a different state and it keeps those states on their toes,”
he said while speaking at the Commonwealth Club in San Francisco. If his plan is approved, each of the six states would have its own government, with it’s own elected officials and Congressional representatives.
Draper recently used Twitter to announce that he had submitted a petition with 1.3 million signatures to put his 6-state initiative up to a popular vote.
The plan definitely has its opponents though. Steve Maviglio is the spokesman for the OneCalifornia committee:
“This is a colossal and divisive waste of time, energy, and money that will hurt the California brand, our ability to attract business and jobs, and move our state forward together,”
he told the San Jose Mercury News. Many opponents also point out that even if Californians vote in favor of the plan, carrying it out would require an act by Congress.
Draper also has plans to expand the use of digital currencies. On June 27th, he won an auction to buy 30,000 bitcoins (worth an estimated $19 million) that were confiscated from the dark web’s illicit marketplace Silk Road by U.S. Marshalls.
He plans to use the bitcoins to help start-up bitcoin exchange Varuum increase the use of dgital currency:
“With the help of Vaurum and this newly purchased Bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies,”
Draper said through a statement from Varuum.
As for the six state initiative, the signatures on the petition are currently being verified before an official date for the vote is announced.
Poverty is often thought of as a predominantly urban problem. The inner city tends to be the most impoverished with wealth generally increasing as you get further and further out into the surrounding suburbs.
However, this trend may be reversing. In the decade between 2000 and 2010, poverty in the suburbs rose a whopping 25% while poverty in cities only rose 5.6%.
The infographic below shows how poverty rates changes in the urban areas and the suburbs of the largest U.S. cities during that time period (click to enlarge):
The figures in the infographic above are from a Brookings Institute study released in 2010. A year later, the Institute released another study, this time estimating that suburban poverty rose by 64% between 2000 and 2011.
There are a number of reasons for this trend. The first is simply that more people are moving from the cities to the suburbs.
The suburbs, particularly in the South, having been growing much faster than the urban areas. With growing suburbs come businesses like retail and restaurants, which employ primarily lower-wage workers.
With these new businesses requiring more and more low wage work, more affordable housing options have been emerging in the suburbs as well.
As a result, many of the poorer people living in the cities have migrated to the suburbs. The 2000s were the first time the suburban population surpassed the urban population in the U.S.
Another big factor was the recession of 2008, which hit the manufacturing and construction industries especially hard. Both of those industries are based primarily in suburban areas, further increasing suburban poverty rates.
To read more about the increasing trend of poverty in the suburbs and learn more about the Brookings Institute’s 2011 report, check out this Washington Post piece from last year.
Russia’s Federal Drug Control Service announced some chilling statistics on Russian drug use this past Monday.
The most frightening data was on the number of fatal drug overdoses per year in the country. Last year, that number climbed over 100,000, making it nearly three times higher than it was in 2012.
The Service also announced that of the 108,700 people convicted of drug-related crimes last year, 66% were between the ages of 19-29, and another 2% were minors.
Russia has the highest population of injecting drug users (IDUs) in the world at 1.8 million. A third of these IDUs are HIV positive and a whopping 90% have Hepatitis C.
To make the problem worse, Russia’s drug treatment programs are woefully inadequate. Many people open businesses masquerading as treatment center while using arcane “treatments” like flogging, starvation, and electric shock among others.
Russia’s Federal Drug Control Service has also admitted that more than 90% of Russians who check into a treatment center are using drugs again within a year.
A large portion of the intravenous drug users are addicted to heroin or other opioids. These drugs are derived from the poppy plant.
One factor that has contributed to the increasing use of these drugs is an increase in poppy production in Afghanistan.
Cultivating poppies that can be processed into opium or heroin has been a lucrative business in Afghanistan since the 90s. But when the Taliban took power in 2001, the militant group outlawed the growing of poppies, reducing production to almost zero.
Since the U.S. invasion however, there has been a rapid resurgence of opium production in Afghanistan. Last year saw the highest poppy production in Afghanistan in the past 20 years. The level of production was nearly 3 times higher than the average levels before the Taliban’s time in power.
This flood of poppies means cheaper prices for opium and heroin manufacturers and consequently cheaper prices for users, not to speak of the increase in availability.
About a quarter of the heroin manufactured in Afghanistan in 2010 ended up in Russia, and that percentage has only been rising in the past 3 years.
Heroin use has actually been on the rise in Russia since the early 90s, when the fall of the Soviet Union left high levels of unemployment and poverty across the country.
In the decade between 1994 and 2004, the total number of drug users in Russia rose an astounding 900%. The war in Afghanistan and the subsequent boom in the poppy supply has only poured gasoline on a problem that was already burning out of control.
Read the original story from RBTH here. Read more about drug abuse in Russia from DrugWarFacts.org here.
This Fourth of July weekend saw joy, laughter, fellowship and fun. It also saw another rash of murders in the streets of Chicago.
The 3-day weekend starting on the 4th saw eight murders in Chicago. Two more have already been reported for today.
While this weekend was slightly more violent than others, it is definitely not an aberration. Easter weekend this year saw 45 separate shootings in Chicago. The weekend before that, there were 35 shootings in 36 hours.
In recent years, Chicago’s violence has the nickname “Chiraq”. Since the start of this year, the city has has seen 196 murders. That’s more than four times as many American fatalities as the 46 so far in Afghanistan and Iraq this year.
The homicides this weekend were a result of multiple shootings at Independence Day celebrations around the city which left another 60 people injured.
Murder totals in Chicago actually peaked at 943 in 1992, and steadily declined in the decade that followed. But that number spiked again in 2012, which saw 521 murders. The majority of these murders were related to gang activity and the increasingly lucrative drug trade in Chicago.
To combat the rise in violence, Chicago dispatched hundreds of extra police into particularly dangerous neighborhoods, and reached out to community leaders for support.
“We will keep building on our strategy, putting more officers on the street in summer months, proactively intervening in gang conflicts, partnering with community leaders,”
said Police Superintendent Garry McCarthy said in a recent statement.
It seems to be working. Last year, Chicago tallied 415 murders, the lowest that number has been since 1965. And as of June 30, Chicago had experienced nine fewer homicides than in that same period last year.
But these rates are still much higher than most cities. By comparison, New York City (which has three times more residents than Chicago) only had 350 murders in 2013.
So why is the murder rate so high? Many people would point to high rates of poverty, but Chicago actually has lower poverty rates than other major cities like New York, Los Angeles and Miami.
Poor schools also play a major part in the crime, but Chicago actually has a higher percentage of high school graduates over the age of 25 than New York City, Los Angeles or Houston.
There is no one reason for the violence in Chicago, but there are a few other major factors that have contributed to it. One of these factors is depopulation and gang fragmentation.
In the 80s and early 90s, the majority of the homicides in Chicago centered around low-income government-subsidized housing projects like Cabrini-Green and the Robert Taylor Homes.
Starting in the late 90s, the city carried out an aggressive campaign to demolish these high-rises as part of a plan to reduce crime. However, this just displaced tens of thousands of residents, exacerbating the issues of poverty they faced while simply spreading the criminals who had been sharing the buildings with them out to new neighborhoods.
The demolition of these centralized crime hubs has also led to a fragmentation of the gangs in Chicago. During the early 90s, much of the drug trade was controlled by Larry Hoover, who was head of the Gangster’s Disciples street gang.
This gang (which controlled a number of Chicago’s subsidized high-rises) was no stranger to violence, but it also had a very strict hierarchy that maintained unity and order amongst its gang members.
The arrest of drug lords like Hoover and the destruction of their headquarters created a power vacuum that broke Chicago’s gangs into countless smaller “sets”, which now battle amongst themselves for turf, power and money.
But maybe the biggest reason for Chicago’s high crime rates is the lack of jobs. Despite the fact that Chicago has higher levels of education than other large cities like New York, Houston and Los Angeles, it still has a much higher rate of unemployment (13.7%) than these other cities.
The gang violence exacerbates this problem by driving potential employers out of the inner cities, leaving only a handful of low-paying jobs to the residents who remain. This de-population also reduces property values which in turn further limits the public funds (ie. taxes) available to help fight crime and improve conditions.
Whatever the reasons are, the reality is inarguable: Chicago has a serious violence problem, and the fact that it doesn’t get the media airtime that Iraq, Al Qaeda ad ISIS do won’t change the fact that for every soldier we have lost overseas this year, we’ve lost another four youth in Chicago.
The world we live in today is very much absorbed in the here-and-now.
Modern technology has given us access to a virtually infinite amount of information, and social media allows us to keep up with all the latest news in realtime.
To compensate for this overwhelming amount of information, we’ve drastically reduced our attention spans. Driven by the fear of missing out on some amazing video or juicy piece of gossip, we skip over people who post long statuses and skim over headlines instead of reading full reports.
Twitter based their entire business model off of this phenomenon, creating a service that forces people to express themselves in 140 characters or less. Our unwillingness to to be patient on the internet is causing an increasing number of very real problems.
The biggest value of the internet is that it gives us access to unprecedented amounts of information. But ironically, our predictability and quick emotions have created a growing industry of misinformation.
The trend is also affecting the so called “reputable” news agencies, which have rapidly degenerated to a point not too far above sleaziest of tabloids. The key word here is sensationalize. It’s so important I’ll give you the full definition (courtesy of my MacBook dictionary):
sensationalize |senˈsā sh ənlˌīz| ; verb: (esp. of a newspaper) present information about (something) in a way that provokes public interest and excitement, at the expense of accuracy
So what are the two best ways to “provoke public interest and excitement” in our society today?
The first is pop culture. There’s an army of paparazzi all across the country just waiting for an athlete, musician, actor or other public figure to do something crazy, or dumb, or funny, or ya know… whatever honestly.
Reality TV has made us obsessed with these people, to the point where many people have to know what’s going on with their favorite celebs all the time. Hell, Samsung even made an entire app just for people to follow around Lebron James, who has a promotion agreement with the company.
The second way to “provoke public interest and excitement” is, unfortunately, anger. This anger is typically fueled by politically-poisoned social issues.
See, politicians have also realized that we’re not willing to put in the time to do any real research into what they’ve actually voted for and against in the past (to be fair, it’s tough for the average working person to keep up with), so their best tactic to get your vote is to get you mad.
Once the primary is won the real fun starts, because the candidates get to make you mad about stuff the things you’re most sensitive about: social issues. Guns, abortion, religion and education, gay people getting married. Most people have very strong views about these things, and these views are almost always closely entwined with our emotions.
Most people don’t vote for someone because they particularly like that candidate, they do it because they dislike or distrust the other guy even more. Get people mad about something that the other guy did some time in the past, and you win yourself votes.
Rather than basing our vote off of candidate’s long-term record, we base it off some random 30-second sound bite. And we wonder why Congress is so ineffective…
The media is complicit in this farce, because they know that discussing the issues that make us emotional will get them more viewers, so the news industry has become political polarized, with the major stations becoming more and more biased one way or the other.
Meanwhile, both parties are quietly screwing us all. Do you remember when we bailed out Wall Street after the housing bubble burst causing the recession in 2008? Well after that happened, legislation was passed letting investment banks know that the government would no longer bail them out for any risky investments they made (like the derivatives which bankrupted so many of them).
Well, late last year, the House of Representatives quietly repealed this provision, allowing banks to move their riskiest assets back into government-insured accounts. A few people reported it, but it went widely unnoticed for the most part.
Why didn’t it spark the outrage it should have? Because legislation, provisions and the general proceedings of Congress are on almost everyone’s filter of things not to read as we fly down our news feeds.
Need another example? How about the USA FREEDOM Act, which was passed by Congress after the Snowden revelations to end the NSA’s practice of mass collection of American’s phone records.
Well at least that’s what we were told it would do. But by the time it actually passed, the legislation was so watered down that it is virtually powerless to stop the mass collection of phone data.
Or how about our entire economic system, which is based off of the constant accumulation of debt?
When central banks set their interest rates super low, everyone borrows and spends a lot of money.
But when everyone realizes that most of the money being spent is money people don’t actually have, the bottom falls out.
That’s what happened in 2008. A piece of legislation designed to give more people access to housing ended up just making it very easy to give out home loans, even to people who banks knew couldn’t afford the payments.
But they gave out the loans anyways. Why? Because the government promised to pay them back for any losses. Banks went crazy giving out these toxic loans, and everyone started buying houses with money they didn’t have, slowly inflating the housing bubble.
Then one day, somebody realized the emperor had no clothes, and the housing bubble burst, dragging the economy down into a recession which screwed the average American pretty hard.
The banks, on the other hand, got bailed out to the tune of $1 trillion. The rich got richer, the poor got poorer. And this was definitely not the first time something like that happened. In fact, just 8 years before the housing bubble burst, we went through a similar downturn when the dotcom bubble burst.
This constant accumulation of debt causes cycles of inflation and deflation, but they happen over a number of years, so most people are unaware of the cycles, preferring to discuss only how the market has performed in the past few months .
The European Union has gotten so desperate to get people to spend money that their central bank recently set the standard interest rate for banks to -0.1% (yes that’s a negative sign), meaning that banks will actually lose money if they try to hold onto their cash instead of loaning it out.
The bottom line is that history repeats itself because we allow ourselves to be so consumed in the present that we forget about the past.
We’re so obsessed with staying “current” that we have blinded ourselves to the long-term trends which are really hurting us the most.
It’s basically a massive societal drug addiction: we opiate ourselves with material things to help us avoid confronting the serious problems that we all face together these days.
Rather than trying to do something about these problems, we get drunk off retail and high off social media, feeding the cancers of our world, rather than treating them.
We need a collective awakening to these issues. Otherwise, one day very soon, we’re going to reach a point when these cancers are no longer treatable, no matter how much we pray for recovery.
Last night, T-Mobile CEO John Legere had some harsh words for rival companies Verizon and AT&T at a company press event.
Legere has a reputation for speaking pretty loosely at these type of events, but last night his words were particularly sharp. Speaking about T-Mobile’s two biggest rivals (who are the two largest cellular carriers in the country by far), Legere said:
“These high and mighty duopolists that are raping you for every penny you have … the f—— hate you.”
You can check out some of the crazier highlights of Legere’s speech in this video put together by The Verge:
“I don’t walk closely up against the line. I ignore it. It’s who I am… I may be a little rough and crude, but I’m much more like my customers and employees than I am an executive. I think employees relate to the way I speak, customers relate to exactly the way I think and talk. And it’s who I am.”
His outspoken ways are working though. In the year and a half since he took over T-Mobile (which was on the verge of being broken up and sold off), Legere has turned the company around. It is now growing faster than any of its competitors in terms of revenue and subscribers.
Somserset is a small town in southern Kentucky. Residents of the town have long complained of Somerset’s high gas prices.
“It’s a lot higher than the rest of the places that are 25 to 30 miles from here,”
says Jimmy Goggins, who lives in Somerset. Jenny Collier, who commutes to Somerset from out of town says that gas prices there are, “about 20 cents higher a gallon…or more.”
So Somerset decided to take a bold step: opening up the gas station that is currently used to fuel city-owned vehicles to the public, and selling the gas to Somerset citizens.
“They’re just simply ripping off the public, and they’re doing it because of greed,”
said Somerset Mayor Eddie Girdler. The city will be purchasing their gasoline from a local refinery, pricing it 15-20 lower than what the local stations are charging now.
“We’re going to set a price, and if the companies want to equal that or go lower than that, we’ve achieved our objective… It is our economy, and we can’t allow anybody to continue to gouge us and take money away from us,”
continued Girdler. He also added that profit wasn’t the point, and that the city would likely only break even on the gas sales.
Somerset residents are predictably happy about the announcement. However, there are some who aren’t happy at all. A few days after the announcement, the Kentucky Association of Grocers and Convenience Stores spoke out against the move.
They argue that Somerset’s government is being economically anti-competitive, and also says they are out of line using public facilities to try to compete with the private sector.
For me, the integral question here is this: why are Somerset’s gas prices so high? I tried to look into this question, but so far only local Kentucky news stations have covered this story, and none of them go into detail about this question.
I did however find this comment from reddit user Bitvapors, who claims to be from Somerset:
“This is my town. They haven’t started yet, I don’t think, but gas prices around here are well over $.25/gal higher than surrounding towns and counties, so it’s a big deal.
All the shell stations around here are owned by one man and most of the other stations are serviced by his tankers, so he can pretty much charge whatever he wants.
We’ve been gouged for years, so I hope like hell he’s foaming at the mouth over this.”