279 (24 August 2016)

Welcome to week 279!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(16 August 2016): “As Coal Industry Sputters, Some Miners Are Moving On” (http://www.bloomberg.com/news/articles/2016-08-16/as-coal-industry-sputters-some-miners-are-moving-on)

——–A new study by “the Federal Reserve Bank of Cleveland finds laid-off coal miners are beginning to bow to the inevitable and train for jobs in other industries.  The study . . . says a program called Hiring Our Miners Everyday [HOME] . . . has had success in moving coal miners into new jobs, although not in big numbers yet. . . . ‘As of March 2016, the HOME program has enrolled more than 3,000 laid-off coal miners and their spouses.  Of those enrolled, 1,449 have received support while training for new careers.  More than 1,100 have obtained new employment, while 90 participated in internships through the HOME program.’”  Employers have been enthusiastic about the retrained miners: “Ex-coal miners have a reputation for being safety-conscious and dependable.”

********The article goes to note that “Coal-mining employment in eastern Kentucky has fallen from 67,000 in 1950 to 7,000 in 2014.”  The study notes, though, that “helping coal miners move on isn’t easy . . . because ‘the job of a coal miner is much more than just a job: It’s an identity.’”  The link to the study is provided in the article.  Click on Case Study 5 “Transitioning Workers from Coal to Other Careers: Hiring Our Miners Everyday.”  The case study is 12 pages long.

********While we are on the topic of exit, it is noteworthy that the National Mining Association and the American Coalition for Clean Coal Electricity are losing members, including some of the largest energy utilities in the United States.  You can learn more in the article “Coal Lobbying Groups Losing Members as Industry Tumbles (https://insideclimatenews.org/news/23082016/coal-lobbying-groups-losing-members-industry-tumbles).

(17 August 2016): “Walmart’s Out-of-Control Crime Problem Is Driving Police Crazy” (https://www.bloomberg.com/features/2016-walmart-crime/)

——–“Police reports from dozens of stores suggest the number of petty crimes committed on Walmart properties nationwide this year will be in the hundreds of thousands.  But people dashing out the door with merchandise is the least troubling part of Walmart’s crime problem.  More than 200 violent crimes, including attempted kidnappings and multiple stabbings, shootings, and murders, have occurred at the nation’s 4,500 Walmarts this year, or about one a day, according to an analysis of media reports.”  All this is happening “more than a year into a corporate campaign to bring down crime—a campaign Walmart says is succeeding. . . . [But police] chiefs and their officers on the ground says that’s just not so.”  At a Walmart in Tulsa, Oklahoma, police sergeant Robert Rohloff “says there’s nothing funny about Walmart’s impact on public safety.  He can’t believe . . . that a multibillion-dollar corporation isn’t doing more to stop crime.  Instead, he says, it offloads the job to the police at taxpayers’ expense.”  Rohloff notes: “I may have half my squad there for hours.”  The current level of crime is “the direct, if unintended, result of corporate policy.”  Cost-cutting stemming back to 2000 removed greeters, “taking away a deterrent to theft at the porous entrances and exits” and “Self-checkout scanners replaced many cashiers.”

********As the article points out, the amount of crime is not inevitable.  Store size, location, hours of operation, and the observable presence of security guards can and do make a difference, as the experience of Target shows.  Crime at Walmart can be reduced, of course, but it will require the hiring of additional employees that may well reduce profitability.  Consequently, the public safety officers in Tulsa and elsewhere provide those services instead.

********The article includes links to an 11-minute radio broadcast and a four-minute video with the reporter of the story.

(18 August 2016): “Big Alcohol Tries to Go on a Health Kick” (http://www.bloomberg.com/news/articles/2016-08-18/beverage-makers-go-after-the-athleisure-set)

——–“Alcoholic beverage companies have steered clear of the health-and-fitness trend that’s overtaken virtually every consumer category from food to clothing.  Now that’s changing as millennials, especially women, obsess over everything they ingest.  Big alcohol players, including Diageo and MillerCoors, are trying to cater to the so-called athleisure-wearing customer.  Their challenge: to give fitness-chic stat to a product more associated with binge drinking and addiction.”  As a result, new products are being marketed.  “MillerCoors is releasing two alcoholic drinks with healthy-sounding names.”  Easy Tea, a “refined, brisk and less sweet iced tea” and Zumbida Mango, “the first of several fruit-flavored fermented drinks.”  Diageo will “soon sell a Smirnoff Spiked Sparkling Seltzer line.”  Even Boston Beer, the producer of Sam Adams, is getting in on the action.

********The world of beverages containing alcohol is in a state of flux.  As the article notes, the characteristics of the beverages are changing, but so are the packages in which the products are contained.  Witness the expanded use of cans for craft beer (http://www.citizen-times.com/story/news/local/2016/08/18/canned-craft-beer-conquering-asheville/88515008/) and the increased sale of wine in cans (http://www.usatoday.com/story/life/people/2016/08/19/canned-wine-trend/88868790/).  Clearly the delivery systems for alcohol are changing.  Perhaps they must.  In addition to the desire for companies to expand sales, there is a lingering—some producers sense a growing—concern of losing sales.  This is addressed directly in “With Moderate Drinking Under Fire, Alcohol Companies Go on Offensive” [SR](http://www.wsj.com/articles/with-moderate-drinking-under-fire-alcohol-companies-go-on-offensive-1471889160).  At a spring brewers’ conference, the managing director of the American Beverage Institute, Sarah Longwell, told the attendees that “The industry . . . was in danger of losing its ‘health halo.’” as “policy officials around the world scrutinize their previous advice in the light of research pointing to possible cancer risks.”  If there is the possibility of losing the health halo, perhaps an extra dose of something perceived to be health will restore it.

(20 August 2016): “Game theory: Prison breakthrough” (http://www.economist.com/news/economics-brief/21705308-fifth-our-series-seminal-economic-ideas-looks-nash-equilibrium-prison)

********This is the fifth of six briefs on economics.  It focuses on game theory, in particular John Nash’s Nobel Prize-winning idea of Nash equilibrium.  In its exposition the familiar two-by-two matrix of the Prisoner’s Dilemma is discussed.  As the article shows, the game theory that was the original brain child of John von Neumann and Oskar Morgenstern had to undergo significant development in order to reach its current position in economics and other disciplines, including political science, management, even biology.

********John Nash will be known to many from the movie “A Beautiful Mind” and possibly Sylvia Nasar’s book of the same name (https://www.amazon.com/Beautiful-Mind-Sylvia-Nasar/dp/1451628420).  You can learn more about Nash and his work at: http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1994/nash-facts.html.

(22 August 2016): “Rent-to-Own Homes: A Win-Win for Landlords, a Risk for Struggling Tenants” (http://www.nytimes.com/2016/08/22/business/dealbook/rent-to-own-homes-a-win-win-for-landlords-a-risk-for-struggling-tenants.html)

——–Vision Property Management is one of a growing number of companies that are blurring “the line between what it means to be a renter and a homeowner.  These companies do not offer regular leases or mortgages—they offer ‘rent to own’ contracts on homes that require tenants to make all repairs, no matter how big or small.”  According to Vision’s Alex Szkaradek, the firm is “bringing the dream of homeownership to Americans who lack good credit or are too poor to qualify for mortgages. . . . But these rent-to-own agreements reside in a gray area of the law. . . . interviews with housing lawyers and more than a dozen of Vision’s customers across the country, found that these deals are risky, lack consumer protections and may not be enforceable in some states.”

********As the article points out, it is not unusual for customers to make substantial property repairs only to end up with nothing.  Concerns such as these have led seven U.S. Senators to write to the new Consumer Financial Protection Bureau regarding “the lack of protections for low-income home buyers.  The article includes a three-minute video and a copy of the rent-to-own documents of a Vision customer.  You can learn more about Vision at: https://vpm3.com/.  It appears that VPM does not have houses in North Carolina, but it does in Georgia, Kentucky, South Carolina, Tennessee, and Virginia.\

(23 August 2016): “The Nation’s First Soda Tax Is Working.  Can Its Success Last?” (http://www.bloomberg.com/news/articles/2016-08-23/the-nation-s-first-soda-tax-is-working-can-its-success-last)

——–According to a study just published in the American Journal of Public Health, “Minority and low-income residents of Berkeley, Calif., drank 21 percent less of the sugary stuff after the city implemented an excise tax . . . Researchers compared sugary drink sales in Berkeley from the four-month period of April 2014 through July 2014 to a five-month period the next year, just after the tax went into effect.  During that same period, soda sales in San Francisco and Oakland to minorities and low-income residents . . . ticked up 4 percent.”  The tax, which was implemented in March 2015, “charges distributors an additional penny per ounce of sugar-sweetened beverages such as soda, sports drinks, and sweet teas.”  It has been estimated that “Nearly 70 percent of that cost is then passed on to consumers.”

********This is a clear example of the impact of the invisible foot—legal and political forces—on consumption behavior.  Evidently the imposition of an excise tax such as this tend to be accompanied by campaigns that “inform people of the dangers of soda.”  The source article appears to be “Higher Retail Prices of Sugar-Sweetened Beverages 3 Months After Implementation of an Excise Tax in Berkeley, California.”  You can learn more at: http://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2015.302881.

May you have a good week!

Bruce

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