Socially Responsible City

Made in Oregon

On Thursday, May 15, the city of Portland got rid of $9 million, or 25 percent, of its investments in Walmart. This marks the beginning of a divestment program that will purge Portland’s investment portfolio of $36 million in Walmart bonds by 2016, according to a press release. The divestment plan is part of the city’s responsible investment initiative, introduced by City Commissioner Steve Novick, and adopted in October 2013. The initiative also prohibits the city from purchasing Walmart bonds in the future.

During a press conference on May 15, Commissioner Novick encouraged other cities to adopt similar initiatives:

From what I can tell, no other U.S. city has looked at socially responsible investing in quite the same way as Portland. I’m hopeful other cities and states take note and adopt similar investment principles to hold companies accountable and align our investment policies with our values.

Meanwhile, the company’s net income fell 5 percent, and shares fell 2 percent, in the first quarter of 2014, failing to meet Wall Street’s expectations for the third time in five quarters.

Walmart blamed its poor performance on bad weather.

Portland is not only discontinuing its investments in Walmart, but has set up a committee to advise it on making socially responsible investments in the future. The committee will address issues like abusive labor practices, corruption, and health concerns, among other things.

Laura Garcia and Molly Rusk wrote this article for YES! Magazine

 

 

Can We Keep the Internet Free?

Is it just not that important to Americans? The Pew Research Center reports, “net neutrality is not likely to be the topic of dinner conversations. Outside of the many blogs and trade media that have covered the issue, two-thirds of the mainstream coverage has been made by just 6 newspapers, not counting the Wall Street Journal. TV coverage has been even more limited.”

Article by Candace Clements @candacejeanne

The Internet is no longer just a “virtual” public square—it’s the actual one. We debate critical issues online. We launch social movements with tweets. Independent media sites and citizen journalists have outposts in every part of the Web. Stories break all the time, from a range of sources. Advocacy groups collect data and blast information to their activists. Social media provides news scoops ahead of press releases.

World Future Internet

And right now there’s a war on over the future of the Internet.

On one side are the Internet service providers (ISPs)—the AT&Ts, Comcasts, and Verizons of the world. They’ve got millions of dollars to spend on lobbying. And they have direct lines into our homes and businesses.

On the other side is everyone else—Internet users like you and me, content companies, and online platforms like Netflix and reddit. To put it simply: If you’re not an ISP, you should be standing on this side of the line.

Right now, the question is: On which side of the line will the Federal Communications Commission (FCC) make its stand? Because this agency will determine the fate of the greatest communications network ever created.

FCC

FCC Chairman Tom Wheeler has a big task. In January, a federal court ruled the FCC could not enforce its Net neutrality rules as written (more on that below). Those rules required ISPs to treat all content and applications equally—if things were running slowly, they ran slowly for everyone.

Now Wheeler and his fellow commissioners have to make a choice. Protect the Internet we know and love—or surrender it to the ISPs.

In late April, Wheeler made his first move, releasing a proposed rewrite of the rules the court tossed out. According to early reports from FCC sources speaking to the press, these rules would give ISPs the ability to pick winners and losers and to discriminate online. ISPs would be permitted to slow down traffic from companies that don’t pay special fees. Put another way, if you can afford to pay up, you can be assured that your content is delivered the way Internet users are accustomed to getting it. If you can’t pay, welcome to the slow lane.

These rules would also give ISPs the freedom to favor their own offerings over those of their competitors. That would be a financial boon if, for example, you happen to be an ISP like Comcast, which owns NBCUniversal and its many content providers.

If you can’t pay, welcome to the slow lane.

“This is what one might call a net-discrimination rule, and, if enacted, it will profoundly change the Internet as a platform for free speech and small-scale innovation,” writes Columbia Law School professor Tim Wu, who coined the term “Net neutrality.” “It threatens to make the Internet just like everything else in American society: unequal in a way that deeply threatens our long-term prosperity.”

A (very) brief history of the internet.Internet BeginningThe two-way, networked communication style fostered by the World Wide Web has begun supplanting the old, one-way mediums—broadcasting, print, and cable. It’s not about one company or one wire or one tower sending us information. It’s about all of us communicating directly with each other.

What has made the Internet so powerful—and so unlike its predecessors—is its very architecture. The Internet originally used telephone lines—a “common carrier” network. The concept of common carriage applies to many industries, but particularly transportation systems such as railroads, highways, and airlines—as well as our long-distance telephone and cellular networks.

In the early days of the Internet, owners of the physical infrastructure could not discriminate based on content. The government’s role was to ensure that anyone who wanted to access the networks could use them, without a gatekeeper in the way.

So for startups, independent media, and corporations alike, network owners were not allowed to speed up or slow down access to websites and applications. This is what allowed for so much innovation and competition online.

Time Magazine Cover

But the phone and cable companies were looking for a cut of all the economic activity on their networks. They flooded the FCC’s offices with pricey lobbyists—and the strategy worked.

The FCC began dismantling the regulatory structure that protected common carriage on these networks. In 2002, the agency caved to the cable industry’s bizarre argument: that if you were accessing the Internet over a cable line, instead of a phone line, it was somehow different and shouldn’t be subject to common-carrier protections. In 2005, the FCC decided this same approach should apply to all other platforms (including the phone lines) used to access the Internet. When the public revolted at the loss of all common-carrier protections, the agency adopted a new set of openness principles.

But principles aren’t the same as enforceable rules, so in 2010 the FCC said it would codify the idea of Net neutrality into law by passing the Open Internet Order. This watered-down version of Net neutrality failed even to cover wireless networks, but Verizon, a major wireless network, sued anyway, claiming the agency lacked the authority to create and enforce its rules. In January 2014, a federal court agreed with Verizon and overturned the FCC order.

But the court didn’t comment on the merits of Net neutrality. Instead, it simply said if the FCC wanted to write rules that would pass legal scrutiny, it would first need to reclassify broadband as a telecommunications service. This would allow the FCC to once again treat network owners as common carriers.

All Eyes On Wheeler

Enter Chairman Wheeler, center stage.

FCC Chairman Tom Wheeler

Credit: Pando.com January’s court decision opened the door for the FCC to right the wrongs of previous administrations. If the FCC wants Net neutrality, it must reclassify broadband as a telecommunications service, which would restore common-carrier protections. All signs, unfortunately, suggest Wheeler plans to weaken, or even eliminate, Net neutrality.

January’s court decision opened the door for the FCC to right the wrongs of previous administrations. If the FCC wants Net neutrality, it must reclassify broadband as a telecommunications service, which would restore common-carrier protections. All signs, unfortunately, suggest Wheeler plans to weaken, or even eliminate, Net neutrality.

Reports of the FCC’s newest proposal on Net neutrality confirm that the agency is leaning toward a weak approach that stands little chance of holding up in court. The plan doesn’t actually address the problem—and many say it’s just a clever means of legal deferment. By proposing convoluted rules that don’t stand a chance of survival, Wheeler is attempting to get the best of both worlds: He’s paying lip service to the concept of Net neutrality while doing nothing to enforce it.

The uproar from those of us standing across the dividing line started as soon as the proposal leaked. The day after the FCC’s plan was reported in the press, The New York Times editorialized:

In this new world, smaller content providers and startups that could not pay for preferential treatment might not be able to compete because their delivery speeds would be much slower. And consumers would have to pay more because any company that agrees to strike deals with phone and cable companies would undoubtedly pass on those costs to their users.

Yet this isn’t just about the big video and content companies. As Stanford Law School professor Barbara van Schewick explains, the FCC’s proposal would seriously disadvantage those lacking the resources of an already established corporate entity.

Photo:Daniel Wolf/ flckr

Photo:Daniel Wolf/ Flickr

“Today, individuals and nonprofits can put their content online at low cost, and when it travels across the network, that content receives the same service from the network as commercial content,” writes van Schewick. “By contrast, access fees would create two classes of speakers—those who can pay to receive better treatment (e.g., large, established companies or wealthy individuals) and those who cannot afford to do so—often individuals and groups with unpopular or new viewpoints, like activists and artists.”

Net neutrality activists expected the FCC to release full details of its proposal at its May 15 meeting and began mobilizing in April, calling on the FCC and Congress to fully ensure a free Internet. Once the FCC releases its official proposal, the floodgates will open for public comment. If the initial reaction is any indicator, millions of people will weigh in.

The five FCC commissioners have the power to protect or destroy the Internet as we know it. Unless everyone on this side of the line speaks up, Comcast and Verizon will get the last word. To save the Internet, Americans have to speak up now.

Candace Clement wrote this article for The Power of Story, the Summer 2014 issue of YES! Magazine. Candace is Field Director for Free Press, a national, nonpartisan organization fighting for your right to connect and communicate.

 

 

Advice to Graduates

Yesterday as I traveled through our small town I saw a multitude of graduates, in caps and gowns, gathered with family and friends taking group pictures, selfies and generally congratulating each other for having survived four years of “education.”  The university in our area is part of the SUNY system – State University of New York at _________________, fill in location blank as there a multitude of SUNY’s across NY. In fact it is the largest comprehensive university system in the United States.

Today, the bittersweet vision of U-hauls filled with the possessions of our temporary residents were scattered all about town. These graduates full of hope and promise in anticipation of the real start of their lives.

To salute these graduates I share an article that was in the Spring issue of Our USA Magazine. Bill Watterson who gave this speech in 1995 at Kenyon College, concluded it by echoing Rilke: “Your preparation for the real world is not in the answers you’ve learned, but in the questions you’ve learned how to ask yourself.” (Click on images to enlarge).

Advice to Graduates #1

Advice to Graduates #2

This is from a speech delivered at a commencement at Kenyon college in 1995, by artist Bill Watterson, creator of Calvin & Hobbs. The cartoon is actually a tribute by cartoonist Gavin Aung Than.

Help give Americans a fair shot at getting out from under the burden of student loan debt.”

The American Middle Class Is No Longer the World’s Richest

Suburban Growth

By David Leonhardt and Kevin Quealy

The American middle class, long the most affluent in the world, has lost that distinction.

While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.

After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.

The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality.

PA state archives - Harrisburgh

The struggles of the poor in the United States are even starker than those of the middle class. A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true.

LIS counts after-tax cash income from salaries, interest and stock dividends, among other sources, as well as direct government benefits such as tax credits.

The findings are striking because the most commonly cited economic statistics — such as per capita gross domestic product — continue to show that the United States has maintained its lead as the world’s richest large country. But those numbers are averages, which do not capture the distribution of income. With a big share of recent income gains in this country flowing to a relatively small slice of high-earning households, most Americans are not keeping pace with their counterparts around the world.

“The idea that the median American has so much more income than the middle class in all other parts of the world is not true these days,” said Lawrence Katz, a Harvard economist who is not associated with LIS. “In 1960, we were massively richer than anyone else. In 1980, we were richer. In the 1990s, we were still richer.”

That is no longer the case, Professor Katz added. Continue reading

Nebraska Was the Good Life…

Nebraska was the good life

Art and Helen and their family on the farm. (Photo by Mary Anne Andrei / Bold Nebraska)

This article from Farm Aid profiles one of our neighbors from Nebraska. My daughter and  her husband live in the great state of Nebraska, and I have been to the beautiful Ogallala Aquifer. Are you for or against the Keystone XL Pipeline?

When Art Tanderup and his wife Helen envisioned their retirement, they saw themselves living a quiet, peaceful life on the 160 acres of Nebraska farmland passed down through three generations of Helen’s family. They wanted to tend to their corn, soybeans and rye, to be good stewards of their land, and to have something to leave their children and grandchildren. Then TransCanada Corporation arrived at the farm to tell the Tanderups the Keystone XL pipeline would run through their property. That’s when Art became a rabble-rouser.

Though Art grew up on farms and ranches, he didn’t think he’d become a farmer. He says, “My father was a poor farmer, and his operation wasn’t big enough to support both of us. So I went to college and followed in my mother’s footsteps as a teacher.” After a rewarding career as a teacher of English, journalism and speech, a library media specialist, and board member of the Nebraska National Education Association, Art “retired” to become a farmer. For fifteen years now, he and Helen have been farming near Neligh, Nebraska, on land that has been in Helen’s family for 100 years.

The Tanderups raise corn, soybeans and rye on their 160 acres. They use many conservation methods to protect the soil and water, including no-till farming, cover crops, and planting many trees. “Oftentimes, I compare the teaching and the farming as kind of the same. I like to see things grow, whether it’s kids or crops,” Art says as he describes his love for nurturing the land. “You try to do everything you can to protect it and make sure that it is well taken care of.”

That’s why Art is opposed to the 1,179 mile pipeline that would carry tar sands oil from Alberta, Canada to the Gulf of Mexico, crossing farms and ranches and lying above the Ogallala Aquifer, an essential water resource for the High Plains, both for drinking and irrigation water. “We try to be good stewards of the land,” Art says. “Allowing this pipeline would not make us good stewards.”

Standing in the Water

Wizipan Little Elk, of the Rosebud Sioux, and Art Tanderup risk arrest by standing in the Washington Monument Reflecting Pool in D.C. to protest TransCanada’s proposed Keystone XL pipeline. (Photo by Garth Lenz / iLCP)

Art was in the field planting soybeans when a TransCanada representative showed up at the farm to deliver the devastating news that the proposed pipeline would cross Art and Helen’s property, a mere 500 feet from their house and 600 feet from their well.

“When they came, they told us this is going to be a wonderful thing for us and if you don’t just jump on this bandwagon, you’re unpatriotic,” recalls Art. “That was kind of the feeling you were getting. You needed to help lower fuel prices, you needed to get people jobs, you needed to make this happen and you needed to step up and do your part by letting them put it on your land.”

The Tanderups told TransCanada they needed time before making a decision and then sprang into action. Relying on his library experience, Art began researching the pipeline and went back to TransCanada with questions. When he asked what they would do in the event of an oil leak into the aquifer, he found they don’t have a cleanup plan. Art explains, “The pipeline can leak up to 2% of its daily volume before their detection system even detects it, meaning 400,000 gallons of tars sand oil could leak per day before anyone knows.”

Art is also concerned about what the pipeline will carry, which is not conventional oil, but diluted bitumen, a material that will sink to the bottom of a body of water, mixing with sediment and organic matter, making the oil difficult to find and recover.

“They say it’s the safest pipeline ever built but we all know what happened to the safest ship that was ever built,” says Art. Throughout the process of trying to save his land, Art has become an unlikely activist and hero for those who oppose the pipeline. “I get referred to around the community as ‘that crazy pipeline guy,'” laughs Art.

Crop Art Protesting KXLIn his fight, Art has done everything he can, from joining Bold Nebraska and connecting with the Nebraska Easement Action Team, to testifying at hearings and trying to get local zoning regulations for his community. He provided his land for the artist John Quigley to create the world’s largest crop art installation as a way to get out in the media the feelings of America’s heartland. Seen from the sky, the crop art states loud and clear where Art and the fellow fighters stand (and Art got to drive the tractor that made that statement!)

A crop art image protesting the proposed Keystone XL pipeline covers an 80 acre corn field on Art’s farm. (Photo by Lou Dematteis and Bold Nebraska)

Their values around land stewardship, combined with the fact that the planned pipeline will come so close to their home and well, made Art and Helen’s decision a no-brainer. For others, the pipeline won’t come nearly as close to their homes or water supply. Many landowners have agreed to offers from TransCanada while others have fought to protect their land. The end result, Art reflects, is that neighbors are fighting, communities are divided and families are being torn apart over disagreements.

“There are families that have gotten along for years and years and now all of a sudden one of them decides that it’s okay to take the money and pay off the tractor or the combine and the other one says no,” says Art. “It’s difficult to be in that ‘no’ position.” While Art understands why some farmers have settled (“We all have bills to pay,” he says), he reflects that those fighting are typically small farmers like himself—the ones who have the least money to fight. “And all the money in the world is fighting us,” he admits.

Last week, Art traveled to Washington, D.C. with other farmers, ranchers and Native Americans to protest the pipeline as a unified front dubbed the Cowboy Indian Alliance. The six-day “Reject + Protect” event called attention to the real people impacted by the pipeline with a clear call to President Obama to reject the Keystone XL. During the week, the Cowboy Indian Alliance raised tipis on the National Mall, led peaceful marches, held rallies, shared their stories, and met with White House officials. Reject + Protect culminated with a march attended by thousands, including Farm Aid’s own Neil Young.

Art with Neil Young

Neil Young and Art Tanderup stand up for the land in Washington, D.C. (Photo by Bold Nebraska)

“It’s important to be part of the people here, out on the front lines of this situation and try to show that these are real people and they actually know what’s going on out there,” says Art. “We are not a bunch of radicals. We are real people with concerns and it’s important that President Obama and Secretary Kerry can see that.”

Because the pipeline crosses an international border, the U.S. State Department must approve it. An announcement was expected after a public comment period closed on March 7, resulting in an unprecedented 2.5 million public comments. But in an unexpected win for those opposing the pipeline, President Obama extended the comment period and pushed back the decision.

President Obama’s delay is in large part based on a recent court decision in Nebraska that found that it was unconstitutional for TransCanada to acquire land for the pipeline through eminent domain, in which the government forces a landowner to allow development on their private property if it is believed to be in the public’s benefit. The ruling was important, not just for the delay, but for the real issue at the heart of the fight against the pipeline. As Art puts it, “How can the government give a foreign corporation the right to come in and take your land for their profit? It’s not for your profit; it’s not for the common good. It’s for their profit and it puts everything at risk.”

If the pipeline is ultimately approved, the permeability of the ground and the location of the Ogallala Aquifer along the current proposed route may require that it to be moved to another location. But the bottom line for Art is this: “The pipeline doesn’t need to be any place. It doesn’t need to be built at all.” When asked what it would mean to win this battle, Art replies, “It means we can feel good about leaving this land to our children and grandchildren. Like you take care of your kids, you take care of your land and water.”

The Cowboy Alliance at Art's Farm

Members of the Cowboy Indian Alliance at Art’s farm. (Photo by Mary Anne Andrei / Bold Nebraska) 

Vanishing Americana

Mottvile, NY Post OfficeResident Pat Spillmann checks her post office box at the post office inside the Mottville Emporium in Mottville, N.Y., Monday, April 28, 2014.

Photos and Article By Kevin Rivoli | krivoli@syracuse.com

PHOTOGRAPHER’S JOURNAL

Across rural America small town post offices are being closed in an effort by the U.S. Postal Service to stop mounting revenue losses.

Being an independent branch of the federal government, the postal service is mostly subsidized by postal fees. The fact that more people are paying bills and communicating online instead of mailing letters has forced the postal service to make deep cuts.

Many of the old brick-and-mortar post offices, slated for closure, could be morphed into village post offices. A village post office is one that is run by a small business owner as part of their retail operation offering limited postal services like selling stamps, PO boxes, or package services

-2a3ade7a10bff7e2Postal clerk Deb Holbein chats with Pat spillmann, right, and Maureen Bishop at the post office inside the Mottville Emporium in Mottville, N.Y. Holbein is also the owner of the Emporium.

Enter Deb Holbein, owner and operator of the Mottville Emporium. The Emporium offers consignment furniture, antiques, dry-cleaning and, of course, a post office, of which she is the clerk.

Mottville, a tiny hamlet in the town of Skaneateles, is made up of the fire department and a single two-story red building that is home to the Emporium and Tea and Treasures General Store.

That’s it. Blink while your driving and you miss it.

“Having a post office means we get to keep our zip code,” says Holbein. She’s quick to note that Mottville has had a post office since the late 1800’s. “We love our post office.”

-3b470a24df724eaePostal clerk Deb HolBein works in the post office at the Mottville Emporium in Mottville, N.Y. Holbein is also the owner of the Emporium.

Mottville resident Pat Spillmann agrees.

Spillmann makes her way through the small cramped overstocked shop to the back corner designated as the post office. She drops an envelope in the mail slot on the countertop, next to the greeting cards and bracelets, and then checks her post office box for the day’s mail. “I like to come in to chat and catch up on what’s going on around town,” she says.

The rural post office is an important fiber in the fabric of the community it serves, no matter how small. Like the 1980’s television sitcom Cheers – it’s a place where everyone knows your name.

-7ace04c55b93a896Mary Buttolph steps outside of the Mottville Emporium which houses the Mottville Post Office in Mottville, N.Y.

-7b4e1d275428835dThe Mottville post office shares space with the Mottville Emporium and Tea and Treasures General Store in Mottville, N.Y.

-6400045ea76176f4Owner and postal clerk Deb Holbein takes care of customer Ruth Klimek at the post office inside the Mottville Emporium in Mottville, N.Y.

This article first appeared in the April 30th edition of Syracuse.com America’s #1 Newspaper Website

 

 

The Middle Class Is Steadily Eroding. Just Ask the Business World.

Capital Grille, Scottsdale, AZ

Capital Grille, Scottsdale, AZ

In Manhattan, the upscale clothing retailer Barneys will replace the bankrupt discounter Loehmann’s, whose Chelsea store closes in a few weeks. Across the country, Olive Garden and Red Lobster restaurants are struggling, while fine-dining chains like Capital Grille are thriving. And at General Electric, the increase in demand for high-end dishwashers and refrigerators dwarfs sales growth of mass-market models.

As politicians and pundits in Washington continue to spar over whether economic inequality is in fact deepening, in corporate America there really is no debate at all. The post-recession reality is that the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls even further away.

If there is any doubt, the speed at which companies are adapting to the new consumer landscape serves as very convincing evidence. Within top consulting firms and among Wall Street analysts, the shift is being described with a frankness more often associated with left-wing academics than business experts.

More at the Top“Those consumers who have capital like real estate and stocks and are in the top 20 percent are feeling pretty good,” said John G. Maxwell, head of the global retail and consumer practice at PricewaterhouseCoopers.

In response to the upward shift in spending, PricewaterhouseCoopers clients like big stores and restaurants are chasing richer customers with a wider offering of high-end goods and services, or focusing on rock-bottom prices to attract the expanding ranks of penny-pinching consumers.

“As a retailer or restaurant chain, if you’re not at the really high level or the low level, that’s a tough place to be,” Mr. Maxwell said. “You don’t want to be stuck in the middle.”

Although data on consumption is less readily available than figures that show a comparable split in income gains, new research by the economists Steven Fazzari, of Washington University in St. Louis, and Barry Cynamon, of the Federal Reserve Bank of St. Louis, backs up what is already apparent in the marketplace.

In 2012, the top 5 percent of earners were responsible for 38 percent of domestic consumption, up from 28 percent in 1995, the researchers found.

Even more striking, the current recovery has been driven almost entirely by the upper crust, according to Mr. Fazzari and Mr. Cynamon. Since 2009, the year the recession ended, inflation-adjusted spending by this top echelon has risen 17 percent, compared with just 1 percent among the bottom 95 percent.

More broadly, about 90 percent of the overall increase in inflation-adjusted consumption between 2009 and 2012 was generated by the top 20 percent of households in terms of income, according to the study, which was sponsored by the Institute for New Economic Thinking, a research group in New York.

The effects of this phenomenon are now rippling through one sector after another in the American economy, from retailers and restaurants to hotels, casinos and even appliance makers.

For example, luxury gambling properties like Wynn and the Venetian in Las Vegas are booming, drawing in more high rollers than regional casinos in Atlantic City, upstate New York and Connecticut, which attract a less affluent clientele who are not betting as much, said Steven Kent, an analyst at Goldman Sachs.

Among hotels, revenue per room in the high-end category, which includes brands like the Four Seasons and St. Regis, grew 7.5 percent in 2013, compared with a 4.1 percent gain for midscale properties like Best Western, according to Smith Travel Research.

While spending among the most affluent consumers has managed to propel the economy forward, the sharpening divide is worrying, Mr. Fazzari said.

Dollar General“It’s going to be hard to maintain strong economic growth with such a large proportion of the population falling behind,” he said. “We might be able to muddle along — but can we really recover?”

Mr. Fazzari also said that depending on a relatively small but affluent slice of the population to drive demand makes the economy more volatile, because this group does more discretionary spending that can rise and fall with the stock market, or track seesawing housing prices. The run-up on Wall Street in recent years has only heightened these trends, said Guy Berger, an economist at RBS, who estimates that 50 percent of Americans have no effective participation in the surging stock market, even counting retirement accounts.

Regardless, affluent shoppers like Mitchell Goldberg, an independent investment manager in Dix Hills, N.Y., say the rising stock market has encouraged people to open their wallets and purses more.

“Opulence isn’t back, but we’re spending a little more comfortably,” Mr. Goldberg said. He recently replaced his old Nike golf clubs with Callaway drivers and Adams irons, bought a Samsung tablet for work and traded in his minivan for a sport utility vehicle.

And while the superrich garner much of the attention, most companies are building their business strategies around a broader slice of affluent consumers.

At G.E. Appliances, for example, the fastest-growing brand is the Café line, which is aimed at the top quarter of the market, with refrigerators typically retailing for $1,700 to $3,000.

“This is a person who is willing to pay for features, like a double-oven range or a refrigerator with hot water,” said Brian McWaters, a general manager in G.E.’s Appliance division.

The  Café line

The Café line of refrigerators and other appliances, which is directed at the high end of the market. Credit Angela Shoemaker for The New York Times

At street level, the divide is even more stark.

Sears and J. C. Penney, retailers whose wares are aimed squarely at middle-class Americans, are both in dire straits. Last month, Sears said it would shutter its flagship store on State Street in downtown Chicago, and J. C. Penney announced the closings of 33 stores and 2,000 layoffs.

Loehmann’s, where generations of middle-class shoppers hunted for marked-down designer labels in the famed Back Room, is now being liquidated after three trips to bankruptcy court since 1999.

The Loehmann’s store in Chelsea, like all 39 Loehmann’s outlets nationwide, will go dark as soon as the last items sell. Barneys New York, which started in the same location in 1923 before moving to a more luxurious spot on Madison Avenue two decades ago, plans to reopen a store on the site in 2017.

Investors have taken notice of the shrinking middle. Shares of Sears and J. C. Penney have fallen more than 50 percent since the end of 2009, even as upper-end stores like Nordstrom and bargain-basement chains like Dollar Tree and Family Dollar Stores have more than doubled in value over the same period.

Endangered Species

Competition from online giants like Amazon has only added to the problems faced by old-line retailers, of course. But changes in the restaurant business show that the effects of rising inequality are widespread.

A shift at Darden, which calls itself the world’s largest full-service restaurant owner, encapsulates the trend. Foot traffic at midtier, casual dining properties like Red Lobster and Olive Garden has dropped in every quarter but one since 2005, according to John Glass, a restaurant industry analyst at Morgan Stanley.

With diners paying an average tab of $16.50 a person at Olive Garden, Mr. Glass said, “The customers are middle class. They’re not rich. They’re not poor.” With income growth stagnant and prices for necessities like health care and education on the rise, he said, “They are cutting back.” On the other hand, at the Capital Grille, an upscale Darden chain where the average check per person is about $71, spending is up by an average of 5 percent annually over the last three years.

LongHorn Steakhouse, another Darden chain, has been reworked to target a slightly more affluent crowd than Olive Garden, with décor intended to evoke a cattleman’s ranch instead of an Old West theme.

Now, hedge fund investors are pressuring Darden’s management to break up the company and spin out the more upscale properties into a separate entity.

“A separation could make sense from a strategic perspective,” Mr. Glass said. “Generally, the specialty restaurant group is more attractive demographically.”

A version of this article appears in print on February 3, 2014, on page A1 of the New York edition with the headline: The Middle Class Is Steadily Eroding. Just Ask the Business World

 

 

The Aging Population of U.S. Manufacturing

America’s supply of skilled workers is running low and growing old. Blogger Frances Brunelle, at Accelerated Buy Sell Blog gives an interesting perspective on why the trough is not being replenished. Her words echo those of Eric Hanushek, in his book “Endangering Prosperity: A Global View of the American School” and why dramatic changes need to be made to the American school system in order to salvage the country’s economic future.

U.S. Machinist

Post by Frances Brunelle

Last week I attended the quarterly meeting of the New Jersey Tooling & Manufacturing Association. The new president of the association, Mr. Alan Haveson, asked the audience by a show of hands, how many were in need of skilled workers. Almost every hand in the room went up. As I looked around the room, I noticed that a majority of the business owners were sporting grey, salt & pepper or white hair. Mr. Haveson went on to talk about the responsibility to transfer knowledge to the next generation before it’s too late. That night I enjoyed catching up with some of my long time customers. They all talked about how hard it is to find good qualified machinists. For a few seconds I wondered how the industry got itself into this position. I answered my own question in my head because I’ve read enough books, authored enough articles and been entrenched in the industry long enough to know.

This didn’t happen over night. It was slow and steady. It happened one student at a time, being told that manufacturing was not a worthy profession. It happened in almost every high school across the country, as guidance counselors encouraged other types of careers.

We, as a society, allowed the image of US manufacturing to be tarnished.

We didn’t speak up. We didn’t allow our voices to be heard. We allowed our collective paradigm to shift away from the idea that making things here at home is a good and worthy profession. When did graduating college with a mountain of debt and a degree for something for which one can’t find a job become the norm?

Skilled WorkerThe whole situation reminds me of the story of how DeBeers altered the way many nations looked at diamond engagement rings over the course of a generation. In 1967 only about 5% of Japanese women sported a diamond engagement ring. In 1981 the figure rose to about 60%. How did DeBeers accomplish this? The same way they did in every other country, through advertising. Through relentless advertising over multiple media, the rare became the norm and a new paradigm was created for the furtherance of the company’s bottom line.

Are you asking what diamonds have to do with a generation of US students rejecting manufacturing as a viable career? Was this rejection the paradigm of generations past? Of course not! It was slow and steady encouragement and “advertising,” by an industry that would make more money based on student’s choices. Before I inspire a bunch of hate mail, I am NOT saying that traditional four-year colleges are bad. What I’m saying is that we all must keep in mind that the secondary education system is a business that seeks its own perpetuation. Colleges are a business just like DeBeers that have a vested interest in an entire population viewing what they provide as an absolute must. I think that it’s smart to question the “norms” in society. Don’t think so? Where are the jobs today? How many folks do you know have their adult children living with them, because they can’t find employment after college? How fast would these kids find a job if they knew how to program a CNC machining center?

Manufacturing Workers

So how do we fix this? We didn’t get here over night, and this won’t be fixed overnight. But it can be a slow and steady storm. An army of people who work in manufacturing and supporting industries speaking, writing, advertising and advocating for the industry. It starts with people like Al Haveson challenging the membership of a State Manufacturing Association to do their part to pass the baton to the next generation. It starts with folks like Anthony LaMastra, former president of the same association, working hard to get a regional manufacturing training center in our state. It starts with apprenticeship programs around the country. It starts with people like Gene Haas making generous donations of machining centers to manufacturing educational programs throughout the country. It starts with other machine tool builders following Mr. Haas’s lead. It starts with people like you going to your son or daughters school to talk about how cool it is to MAKE things

So many MILLIONS of great minds within the manufacturing community will retire in the next 10-20 years. What can you do to give back after you retire? Will you be a volunteer, a mentor or a writer? How will you help champion the industry once you retire? What would result if this conversation happens at EVERY state manufacturing association? What if it happens at a national level?.

What happens if we go “DeBeers” on an entire generation of young people to champion US manufacturing?

We wouldn’t just save our industry; we’d save our economy and perhaps our nation. I will do my part….will you?

Original Post

Why Lent Makes People Happy (and Netflix Doesn’t)

by Jason Marsh, Rob Willer

Image for LentThis article originally appeared in Greater Good, and Yes magazine. 

 

Three weeks of Lent under our belts, and another three to go. Though the article is less about Lent and more about what really makes us happy, I found it really interesting and thought you might also. ~Cher

Like a lot of TV viewers these days, we binge-watch our favorite shows on Netflix, consuming two, three, or more episodes—sometimes entire seasons—at a time.

But little do we realize, bingers like us are cheating ourselves out of happiness.

That’s the lesson from new research in the field of positive psychology. What this research shows is that indulging in life’s pleasures in smaller doses, or even giving them up for stretches of time, helps us enjoy them significantly more.

In one new study, published in the journal Social Psychological and Personality Science, researchers Jordi Quoidbach and Elizabeth Dunn had 55 people eat a piece of chocolate and report how they felt. Then the researchers instructed some of those people to abstain from chocolate for a week, told others to eat as much chocolate as they wanted, and gave a third group no special instructions

Chocolate

When all 55 people ate another piece of chocolate at the end of the week, the people who had abstained from chocolate reported significantly greater happiness than either the bingers or the people left to their own devices.

In fact, the bingers reported feeling less happy after their end-of-week chocolate than they’d felt after eating their piece at the start of the week.

While this is the first study to find that temporarily giving up something pleasurable may be good for our happiness, it builds on years of similar results. One study found that people enjoyed an episode of the old sitcom “Taxi” more if it included commercials than if it did not. In another recent paper, people said they took greater enjoyment from positive experiences (sitting in a massage chair, listening to Japanese hip-hop) when those experiences were briefly interrupted.

As it turns out, people tend to get used to sources of joy and pleasure very quickly, soon taking them for granted. And when you have more of something pleasurable, it becomes easier to take it for granted, and harder to savor it. The result is a psychic numbing to the good things in life.

And it gets worse. While that numbing effect may sound obvious, we’re generally unaware of it in our own lives: Studies show that people (mistakenly) think that getting more of the things they value will make them happier.

At the same time, we tend to underestimate how consuming in moderation might boost our enjoyment—and happiness—in the long run: Participants in the “Taxi,” massage chair, and Japanese hip hop studies all thought the experience would be more enjoyable without interruptions. They were wrong.

Do Disturb

Indeed, so much of our everyday behavior is driven by the misconception that more is better. We celebrate our most important holidays by cooking twice as much food as we need, then scarfing it down. We work hard to get a promotion—then after getting it, start thinking about how to get the next one. We stay up all night tearing through “House of Cards” or the latest season of “Mad Men.”

What’s more, this same misconception about happiness leads many people to covet wealth and material things. Research suggests that more money can bring us more happiness, but only until we earn up to about $75,000/year. After that, there seems to be a negligible increase in happiness from making more money, meaning that many of us waste a lot of time pursuing a happiness we’ll never reach. Or worse, our single-minded pursuit of wealth stresses us out, compromises our values, and strains our relationships—without bringing that elusive boost in happiness.

Happy Road

All of this research points to a paradox of happiness: It’s not tied to abundance but to recognizing and appreciating what we do have. Once we meet our basic needs, our lives become more satisfying if we can savor and be grateful for the good that’s already around us, before we strive for more.

 

This can be easier said than done. But coincidentally, millions of Americans have been getting a jumpstart on moderation over the past month with their observance of Lent.

For Christians, this is supposed to be a period of repentance and self-denial, of course, a time to give up meat, chocolate, sex, and other indulgences as a way to atone for sins. But Quoidbach and Dunn’s research suggests it may carry some other benefits: Temporarily denying themselves certain pleasures for 40 days may ultimately make people happier than consistently indulging in them. In other words, a religious ritual of renunciation might actually feel pretty good in the end.

At a time when science and religion are often seen as at odds with one another, it’s encouraging to see them both validate a basic, counter-intuitive message: Sometimes we get a lot from giving stuff up.

Vitruvian Man

Jason Marsh is the editor in chief of Greater Good, the online magazine of UC Berkeley’s Greater Good Science Center, where this article originally appeared.

Encore Entrepreneurs

Come In We're Open

Someone, somewhere, has coined older entrepreneurs as “Encore Entrepreneurs,” has a ring to it don’t you think? Lately there have been many discussions and quite a bit of press about this phenomenon, from the Boston Globe, to The Guardian, to the BBC. The U.S. Small Business Administration even has a site dedicated to it. A 2011 study by Encore.org and Metlife showed that 9 million people, or 9 percent of all those ages 44 to 70, are in encore careers and no less than 31 million Americans ages 44 to 77 are interested in pursuing encore careers. What is the reason behind it, why are Boomers not retiring, but instead starting a Second Act. Got me to thinking that we would love to hear your story and to feature it in Our USA.

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