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Information for you in this issue of Progress Through Business
October 2014 Vol 51
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In This Issue

By Jerald Adam Long

 

As the recession climaxed in 2011, unemployment in the United States peaked at 9.8%. It seems that better days are now ahead of us with an unemployment rate below 6 percent and tens of thousands of jobs being added to the economy weekly. While many of us are catching the strong economic wave bringing us back to lives of prosperity, we forget that many of our fellow Americans are not so lucky.

 

 Americans commonly respond to research on the topic of poverty in America by questioning: "there is poverty in America?", "so you must be writing about New York City and Los Angeles...", or "shouldn't you research somewhere like Mexico where poverty exists?" Too often when we think of poverty we think of starving children in Africa or masses of people in Bangladesh, ignoring the notable footprint that poverty has left in our own backyard. In 2010, the US Census Bureau showed that 14.9 percent of the US population lives in poverty, totaling to more than 47 million Americans. How can so few of us notice the problem that poverty poses in our society? 


Who and where are these stranded Americans? Surprisingly, the racial group which increased in proportion most over the recession was Caucasians, raising from 11.3 percent in 2000 to 20.3 percent of that racial group in 2010 in areas that were considered poverty zones. Thirty-five percent of poverty area inhabitants obtained higher education, showing that individuals from many backgrounds are being influenced by poverty.

The 47 million impoverished in our society commonly cluster in neighborhoods across the nation which are defined by having 20 percent or more of the inhabitants living in poverty. Poverty areas are not restricted to major cities as only 51 percent of those living in poverty areas live in metropolitan regions. In the past decade, the number of Americans living within impoverished areas increased by 54 percent, reaching a total of 25.7 percent of Americans or over 77 million of our population.

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One Educational System Does Not Fit All
 

By Maren McInnes

 

In economics, individuals act based on the idea that the benefits of their actions will outweigh the costs. An individual will forgo one option for another and the benefits he or she could have received are called the opportunity costs.

 

A prime example of this can be seen in students' decisions to pursue higher education.

Instead of working and making money, students take time to study and spend money to get an education.

 

One of the forces driving students pursuing higher education at colleges and universities is the hope that the high cost of schooling will eventually be outweighed by the benefit of high paying jobs students will land after graduation.

 

Unfortunately, in order to graduate, students are accumulating, on average, $29,400 of student loan debt. Of the graduates who obtain jobs, about half don't even need the degrees they just spent four years obtaining. Furthermore, although 96 percent of chief academic officers at traditional institutions think they are preparing students for the work force, only 11 percent of business leaders agree, according to the Clayton Christensen Institute. And then there are some students who go to college without a plan for their future career and, by graduation, they still are unsure and consequently, jobless.

 

So there is a problem. Education doesn't equal employment in the ways some individuals hope.

 

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Poverty is present all over the world. The United States is not immune to poverty - more than one in 10 Americans have an income below the poverty level. Although there is no consensus as to the cause of poverty, there are certain variables that are associated with it. For instance, a recent study published through Johns Hopkins University found that children born into poverty are more likely to live in poverty as adults. That is, poverty seems to perpetuate poverty.

 

One disadvantage to growing up in poverty is a lack of access to valuable skills. For instance, children who are raised in higher income families benefit from the economic knowledge of their parents. These children generally grow up in an environment that teaches them how to be economically successful, including information on how to obtain education, prepare resumes and interview for higher-paying jobs. Children raised in lower-income families are often unaware of opportunities and skills necessary to obtain a high salary position.

 

Despite these disadvantages, a child's destiny is not determined solely by the child's circumstances. A child born in poverty is not destined to stay in poverty (nor are wealthy families guaranteed to produce wealthy children). In an effort to help those in poverty, the United States has provided programs to help individuals obtain valuable work skills and job placement (e.g. Employment Training Administration). While some of these programs are useful for adults, other strategies focus on better preparing young people for the workforce.

 

A growing consensus in the literature has highlighted mentoring as a strategy for helping disadvantaged children escape the long shadow of familial poverty.

   

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By Richard Payne

 

Business leaders and American citizens view the importance of a college degree very differently. Approximately 70 percent of Americans believe that having a bachelor's degree remains essential for getting a good job. Unfortunately, business leaders are not so optimistic: only 33 percent believe that U.S. colleges provide graduating students with the skills their businesses need. Considering the average college graduate amasses over $25,000 in debt and the unemployment rate for graduates stays consistently over 10 percent (compared to the national six percent), it is time to reevaluate the worth of a college degree.

 

To clarify, it is a very good thing that Americans value education so highly, and individuals with college degrees are a vital part of a strong economy. Nevertheless, a bachelor's degree is not the only way to gain valuable skills and education. Vocational education proves a good alternative to a four-year degree as it generally provides individuals with timely and affordable skill acquisition.

 

While companies struggle to find qualified individuals, college graduates struggle to find employment. A recent survey estimates approximately 30 percent of U.S. companies have positions that remain unfilled for at least six months due to a lack of qualified applicants. An apparent discrepancy exists between the skills students are acquiring and the skills businesses need.

 

Many of the jobs in high demand are various types of vocational employment. These jobs are generally skills-based, such as dental assistants, lab technicians, air traffic controllers, welders and mechanics. Many vocational jobs require only one to two years of training (typically at a community or junior college) and pay competitive salaries.

   

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By Mario Mercado

 

According to 2012 data from the U.S. Bureau of the Census, about 26 percent of families are headed by single mothers. What is more, the data show that 47 percent of children are born to unmarried women.

 

Clearly, family structures are changing and a woman's role in our society is also transforming. It is no secret that women are starting to have fewer children; the fertility rate is hitting a record low of about 1.8 children, down from 3.7 during the baby-boom. Also, while it may not feel this way to many, the country's economy is now characterized as a provider of better opportunities for study and work for women. Consequently, men have become more dispensable and women have become more independent.

 

Now, let's look at single-motherhood data by examining what happens when we split the percentage of single mothers by ethnicity. The percentages of female householders with children under 18 for white mothers is 21; for African-American mothers, it is 52; for Hispanic mothers, it is 30; and for Asian mothers, it is only 13.

 

Previous disparities around these statistics, as measured across different ethnicities, were very large. But, what is most troubling is that it continues to be the case that single mothers and their children are very prone to live in poverty. Considering all races, about 40 percent of households led by single mothers live in poverty. This implies that almost half of single mothers have an annual income of less than $25,000; their median income is one third that of married couples. Although this situation is bad, it is better as compared to the early 1960's when similar household poverty levels were as high as 60 percent.

 

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By Ben Young

 

On April 18, 1949, bells and celebrations erupted in Ireland. Thirty-three years after the beginning of the Easter Rebellion, the Republic of Ireland Act came into force, severing the last constitutional link to England and the British monarchy. This was followed by the Ireland Act of 1949, in which Britain conceded its former role and acknowledged the independent state of Ireland.

 

Sept. 19, 2014, was supposed to have seen a similar result. Scottish separatists were poised to celebrate the creation of an independent nation, dissolving a union that had lasted for over 300 years. However, despite a surge in polls leading up to the vote, the independence movement was rejected; Scotland's people chose to remain part of the United Kingdom.

After the referendum failed, a collective sigh of relief was noticeable across the United Kingdom. Politicians returned to London; the leader of the Scottish National Party (SNP) announced his resignation, signaling acceptance and a peaceful resolution; and markets rallied as investors were quick to return after withdrawing due to fears of instability and confrontation.

 

And yet, even with the prospect of an independent Scotland gone, the question remains: what next? Notwithstanding the political victory, it is still important for politicians in the United Kingdom to realize that 45 percent of Scots, more than 1.6 million people, voted to leave the union. To put that in perspective, if the same percentage of Americans voted for independence, it would total almost 145 million people wanting to separate from the country. These voices demonstrate a powerful set of interests and opinions that need to be considered in the coming years.

 

A first crucial step for the United Kingdom, and the government in London, will be to follow through on promises made to the people of Scotland. Promises of devolution, more autonomy from the central government, and greater distinction between English and Scottish legislation, must be kept to maintain legitimacy in the aftermath of the vote.

 

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Mexico was a relatively peaceful country before it became a drug-related war zone, where executions, kidnappings, extortions and beheadings became normal in some cities. Although it is true that many drug lords were arrested and many tons of narcotics were seized during the drug war, more than 100,000 Mexicans died during this time, and cartels are actually more powerful than prior to the war.

 

According to the Mexican magazine, Proceso, before the war in Mexico the country was having the most peaceful moment in its history, with only eight murders per every 100,000 people. This compares to a world mean of 8.5 during 2007. Yet, in the war's worst period, this rate reached 25 murders per every 100,000 and in cities like Ciudad Juarez, the murder rate reached 200 per 100,000 people. Actually, Ciudad Juarez was declared the most violent city on earth.

 

Also, before the war, cartels weren�t so much of a problem for Mexicans. In general, they did their business without hurting locals. In reality, drug lords were eager to forge an image of being the people�s benefactors: they built churches, clinics, hospitals, schools and roads. Consequently, drug lords were not necessarily seen as evil by many.

 

Although cartels were not so problematic for Mexicans, they were for Americans. According to the Drug Enforcement Agency, Mexico is one of America�s main drug providers. It is the largest supplier of methamphetamine and marijuana, and up to 90 percent of cocaine travels through Mexico. Also, Mexico became more powerful with the demise of Colombian cartels. Once Colombia started to fall, Mexican cartels seized the opportunity to become the new kings.

 

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