Saturday, July 28, 2007

Brookings on Poverty in Kentucky

Kentucky's working families frequently pay a premium for everyday necessities. Lower-income workers in Kentucky are more likely to pay double-digit interest rates for auto loans; more likely to pay hundreds of dollars more for car insurance; and more likely to pay a higher sticker price for their car compared to their higher income counterparts.

Additionally, lower-income workers are twice as likely to have purchased a high-cost mortgage compared to their higher income neighbors and are more likely to use alternative financial service providers, costing untold extra dollars for basic financial transactions and the purchase of home goods.

However, new innovative and practical initiatives are being implemented and improving the prices of key necessities for lower-income families around the country. Public and private leaders in Kentucky can follow suit and also reduce these higher costs of living, and do so in ways that defy the substantial budgetary, economic, and partisan pressures that limit so many efforts to grow the middle class. Through a combination of initiatives that bring down business costs, curb unscrupulous behavior, and boost consumer knowledge, public and private leaders can bring down these prices, creating up to thousands of dollars in extra family spending power.

Get the study here.

Friday, July 27, 2007

Early Childhood Education Pays Off

“Although education and the acquisition of skills is a lifelong process, starting early in life is crucial. Recent research—some sponsored by the Federal Reserve Bank of Minneapolis in collaboration with the University of Minnesota—has documented the high returns that early childhood programs can pay in terms of subsequent educational attainment and in lower rates of social problems, such as teenage pregnancy and welfare dependency.”

Read more here.

Thursday, July 26, 2007

Latest on the Texas Economy

The Texas economy expanded moderately in June. The Dallas Fed's Texas Business-Cycle Index, an aggregate measure of the region's current economic activity, rose at an annualized rate of 3.4 percent. Year-to-date, the index has increased an annualized 3.5 percent, suggesting a deceleration in growth from last year's 4.2 percent pace.

State payroll employment rose by 15,100 workers in June—for annualized growth of 1.8 percent, according to data released by the Texas Workforce Commission and seasonally adjusted by the Dallas Fed (see table). The labor market remained tight during the month—the Texas unemployment rate stayed at a record low of 4.1 percent.

Read more here.

Wednesday, July 25, 2007

International Trade's Role in the Economy

During the past four decades, international trade has grown from a relatively insignificant slice to nearly a third of U.S. domestic economic activity. To cater to the global economy's palate, U.S. manufacturers and service industries have specialized and become more efficient in producing goods and services that suit the international menu.

The U.S. external sector—the sum of all imported and exported goods and services—is currently equivalent to 30 percent of overall domestic economic activity, or gross domestic product (GDP). Just four decades ago, however, the share of foreign trade represented a mere 10 percent of GDP. To grow as a share of GDP during the past 40 years of significant U.S. economic prosperity, the external sector had to expand more than the overall economy did. Imports, increasing at an average rate of nearly 11 percent each year, led the external-sector expansion, while exports grew at an average rate of more than 9 percent per year.

In addition, U.S. goods-producing industries have become increasingly more dependent on international markets. Almost two-fifth of the revenues earned by U.S. manufacturers now come from sales abroad compared with less than 15 percent 40 years ago.

Read more here.

Tuesday, July 24, 2007

Sports and the Economy

Looking for a good resource on sports and its impact on economic activity. Check out the Boston Federal Reserve Bank's resource on this subject.

For example: Why Do We Spend So Much Time and Money on Sports?

We spend a lot of time and money watching games. We pay premium prices for team jerseys and caps. Some of us camp out for the chance to fork over a fistful of cash for playoff tickets; or we spend an entire Sunday munching snack food and watching the NFL on TV. Why do we do it?
Economists approach the question through the concept of utility: We choose to spend our money on a product or service because we get a certain amount of use, pleasure, or satisfaction from consuming it.

Utility can be very practical. For example, we might decide to buy a generic baseball cap to corral our wild hair or keep the sun out of our eyes.

But then there are purchases that deliver a greater sense of psychic satisfaction. Sometimes we choose to pay twice as much for a different cap simply because it carries the logo of our favorite team.
The motivation for each purchase is different, but each involves personal choice, and we derive a certain amount of utility—use, pleasure, or fulfillment—from it.

Monday, July 23, 2007

ED LEADER NEWSLETTER #21

Most of Us Drive to Work Alone

Despite rising fuel costs, commuters continued to drive their cars in 2005, according to a new U.S. Census Bureau analysis of data from the American Community Survey. The survey, gathered over the course of the year, found that driving to work was the favored means of commute of nearly nine out of 10 workers (87.7 percent), with most people (77 percent) driving alone.

In contrast, 4.7 percent of commuters used public transportation to travel to work in 2005, an increase of about 0.1 percent over 2000 levels.

About half of the nation’s public transportation commuters can be found in 10 of the nation’s 50 cities with the most workers age 16 or over: Baltimore, Boston, Chicago, Houston, Los Angeles, New York, Philadelphia, San Francisco, Seattle and Washington, D.C. These cities account for 2.9 million of the nation’s 6.2 million users of public transportation (see detailed tables).

Beyond the total number of public transportation users, these cities also had relatively high rates of public transportation use. However, Los Angeles and Houston, with rates of 10.3 percent and 5.1 percent, respectively, had lower rates than many other smaller cities, including Minneapolis (12.5 percent); Oakland, Calif. (16.5 percent); Portland, Ore. (13.3 percent) and Seattle (17 percent).

Read more here.

Sunday, July 22, 2007

Russian Steel Company Looks at Ohio Investment

The Russian steel company that has been negotiating with the state to build a steel mill is considering a location in Scioto County near the Sun Coke plant, The Ironton Tribune has learned.

A source close to the situation, who spoke on the condition of anonymity, said the company — Magnitogorsk Iron and Steel Works — is considering a roughly $2 billion investment in Haverhill that would include a mill that would produce automobile body sheets and employ between 1,000 and 1,400 workers.

Not a done deal yet. Other locations are also being considered.

Read more here.