Generational Delay in Leadership

A few entries ago I wrote about a movie called Waiting For Superman. Today I learned that Jeff Skoll is the man behind it. He funds movies with an angle beyond entertainment; his movies inform, potentially leading to social activism. His films include: Good Night, and Good Luck, North Country, Syriana, An Inconvient Truth, Murderball, Fast Food Nation, The Kite Runner, and Charlie Wilson’s War.

He can fund all these movies because he was the first President of eBay. In 2002, he cashed out for a take of $2 Billion. He was 31 years old when he became the lead of the internet auction house. In his 20s he took some entrepreneurial risks, those successes earned him the eBay opportunity and he is credited with forming the business model the company uses.

Fortune.com is running a theme about leaders under the age of 40. They have a 40 Under 40 piece and a 20 Highest Paid Under 40 section going currently. These people are featured because they are leaders. They are changing the world. And they are young.

As much as the 6.2 million long term unemployed are a long term economic problem for the US, the slowing of the ascension of next generation leaders is as well. There are Pew Research Studies showing a delay in independence  in 20 somethings in the US. Here are some stats:

  • In 2010, 85% of college seniors planned to move back home with their parents after graduation.
  • In 2006, 67% of college seniors planned to move back home.
  • In 1970, the age of someone who is not college educated to get married was 22 years old. For the college educated, it was 23 years old.
  • In 2008, the age of someone who is not college educated to get married was 28 years old. Same for college educated.

This is important for a variety of reasons, but the two main ones are: it delays leadership chances and it stunts income potential. A study was performed by Columbia University called Elites Research Network. The point of the work was to understand how, or what, made someone elite financially. The seminal finding was most of the people were put in early career opportunities, the type that makes the person a generalist and not a specialist. This advantage, more than privilege or inheritance, is the key to lasting success.

So what does it mean for the US that 85% of college grads are living at home post graduation? Or that marriage on average is 6 years later than it was in 1970? Is 40 the new 30? And if so, without the compounding interest of 401k or pensions does that mean 75 is the new 65?

Lulled Into a Sense of Ever Improving Job Prospects

Autumn begins at Wednesday September 22, 2010 at 11:09 PM ET, but I’ve already felt it. I recently sat at a family friend’s bare dining room table. I looked out the window to avoid seeing the pain in his eyes. The setting sun created an epilogue hue – uneasy and fated.

My friend was mentally torn down. He said “I don’t know what to do? I’m 51 years old and without a job.” I slowly nodded my support. “I wish I had known.” His words trailed off and a deep breath was taken.

He’s a divorced father of two: a boy who’s six and a daughter all of nine. He has debts from the divorce, but mostly he has fears for the future. His daughter is a sufferer of a rare childhood disease. It isn’t life threatening, but it’s life altering. And it’s costly.

I don’t know what he wish he had known. I think it’s about his decision making over the last 15 years. But I think it’s less about the decisions made as it is about the opportunities missed. He was lulled into a sense of ever improving job prospects. He was a senior member at a medium sized company. The Vice President was a friend of his. All things seemed good. He did his job day and day out without any hiccups until 2008 came. His company, like many others, had to make some tough choices and he was given a severance package.

In my eyes he became too good at his job. He could do it half asleep. He didn’t challenge himself and take classes or training that would push him out of his comfort zone. He became as memorable as a Tuesday morning commute. That is one moral of this recession – constantly improve your skills, think about how you think, and shake things up.

Teachers Often Go the Extra Mile for Their Students – There’s a Means to Help Them Get There

It’s back to school time. Parents have spent precious dollars getting their kids backpacks, notebooks, new clothes, and other supplies. But I’ve observed first hand that many teachers also spend getting ready for school. Often times there’s the perfect lesson that needs this or that to be perfect. Or there’s a student or two who are hurting financially, so a few extra supplies are made available to them. All this adds up though. For instance, Kathy Casaday of Gardendale Elementary in Alabama spent $400 for her class room. CNNMoney.com has 5 other examples of teachers, who aren’t getting big pay increases, contributing to the learning environment. These are passionate people, people who are rewarded by the epiphanies of kids.

It’s a good time to think about helping teachers make those ah-ha moments happen. Donorschoose.org is a great place to review different teaching lessons that teachers have planned. It’s personalized, so if you like rockets, then Dr. Y of Lakewood High School in Salemburg, North Carolina has a project for you. Not near you? That’s OK, there’s nearly 50 other similar Rocket related projects to choose from. Perhaps theatre is your favorite. Mr. B of Endeavour Middle School in Lancaster, California (South) has a project requiring two speakers so the actors can be heard. It’s $272 away from meeting the goal.

The point is that teachers go the extra mile for the kids, but sometimes they need someone to help them.

Also, there’s a movie coming out called Waiting for Superman . I don’t completely agree with the methods of Mr. Canada, but getting more attention to the matter is important either way. Check it out:

[youtube=http://www.youtube.com/watch?v=ZKTfaro96dg&w=640&h=385]


Working Thoughts 9/9/08
What is promised to Wall St and what is promised to the CEO are not the same

August 2010 Jobs Report and Wages

Here are the job market and compensation numbers for August 2010 (based on the job report):


Net loss
of 54,000 jobs in the month
(revised to a loss of 57,000 workers)

  • Census workers accounted for a loss of 114,000 jobs as they rolled off the federal payrolls (143,000 census workers were released last month)
  • Private sector payrolls increased by 67,000 (71,000 last month)
  • Analysts expected an overall loss of 120,000
  • One year ago the US lost 211,000 jobs
  • June was revised to a loss of 175,000 from a revised 221,000 jobs and an original reading of a loss of 125,000
  • July was revised to a loss of 66,000 from an updated read of a loss of 54,000 jobs and an original reading of 131,000 lost jobs
  • 6.2 million people have been jobless for more than 6 months (long term unemployed) – an improvement by 323,000 jobs

    • 42.0% of the unemployed are long term unemployed, a drop from 44.9%*
  • Businesses (private sector) have now added 763,000 jobs since the start of 2010, after cutting 8.5 million in 2008 and 2009 combined

Unemployment rate rose to 9.6%

  • Analysts predicted it would be 9.6%
  • The employment to population ratio is 58.5%. It’s been a year since it’s been over 59% and two years since it’s been above 62%
  • The U-6 report, which is a broader group to count, rose to 16.7% from 16.5% (it had held steady for a few months)
  • PMI, a measure of manufacturing pace, is 56.3 from 55.5% last month and the 16th consecutive month of readings over 50 percent. Anything above 50% means the machines are running
    • A sub-index, which measures the proportion of manufacturers that say they are hiring, rather than reducing jobs, came in at 60.4. This is the highest number since November of 1983 (perhaps signaling the wait and see period is over in manufacturing)

  • The number of job openings has risen by 704,000 (30 percent) since the most recent series low of 2.3 million in July 2009
    • A person without a job is averaging 19.9 weeks to find work. Down from 22.2 weeks
    • There are currently 5 applications for every 1 job opening. In November, 2009 there were 6.2 and in September 2003 there were 2.8

Specific Segment Job numbers:

  • Manufacturing lost 27,000 jobs (expected to be a seasonal loss)
  • Construction added 19,000 jobs
  • Retailers lost 4,900 jobs
  • Leisure and Hospitality Services grew by 13,000 jobs
  • Government sector lost 121,000, Federal losses were 111,000
    • State and Local Government losses have moderated their losses

  • Education and Health Services grew by 45,000 jobs
    • Health Care and Social Assistance grew by 40,200

  • Professional and Business Services grew by 20,000

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $639.18 – an increase
  • The average hourly earning (seasonally adjusted) is $19.08 – a three penny increase
  • Average weekly hours and overtime of production and nonsupervisory employees on private nonfarm payrolls by industry sector, seasonally adjusted is 33.5 hours – a increase of 0.1 hours

Bureau of Labor Statistics

Job Report Stats Summary

He Quit His Job and the World Got Richer – The Khan Academy

There are 1440 minutes in a day. That’s 120 opportunities, in one day, to consume a video from Salman Khan. He’s a game changer for education. He started The Khan Academy , a video tutorial service using only Youtube and his knowledge base. There are 1600+ videos and each one usually runs a little more than 11 minutes.

I often rebuke the notion we are failing at math and science. We can improve, that is for sure, but testing memorization isn’t really learning. Videos like Khan’s help students get their feet on the ground. They can rewatch it, ask questions of their teachers, and cross reference it with Google, Wikipedia, and other traditional resources.

Bill Gates has taken notice as well. The reason is because the teaching methods are simplistic. And because of that, the distribution can go wide. The relative cost and investment is so low that it creates a novel not-for-profit business.

I’m curious about the net positive effect of this type of education. The aggregate benefit of short videos for tutorials, video games for problem solving, music for creativity, and blogs and twitter for cleverness is immense. The structure of learning is not only a class room.

[youtube=http://www.youtube.com/watch?v=p6l8-1kHUsA&w=591&h=385][youtube=http://www.youtube.com/watch?v=dsFQ9kM1qDs&w=640&h=385]

Billions of Dollars: Giving, Spending, Fighting, Accumulating, Owing, Losing, and Earning

The smart people over to Informationisbeautiful.net created something called a The Billion Dollar-o-Gram . Its a Treemap. I don’t visually get why its called that, but it’s the method for displaying heirarchical data by using nested rectangles.

What I like about it is the relationships. Understanding proportions when talking about big numbers is difficult, so an illustration like the one below helps immensely, especially when people mention a few billion spent on this or a few billion going on that.

I suggest checking out a book by them as well. It’s called The Visual Miscellaneum and it’s $17.81 over at Amazon.com .

One more item about their work, they provide a link to all their supporting data .

Wealth Distribution and Taxes: What’s Fair?

There’s a lot in the news lately about the George W. Bush tax cuts that are set to expire. These cuts were part of a larger tax cut program Bush put into place during the years 2001 through 2003. The only part of the tax cuts that is still up for debate is the tax rate for the top income bracket. It is 35% and is set to go back to 39.6%.

Opinions, interestingly, are coming from all sorts. For instance, billionaire Wilbur Ross said he was OK with his taxes rising, as long as the tax income goes to something worthwhile like R&D. And plenty of uber rich people have pledged their income to causes they support , like the Bill Melinda Gates Foundation or other charities. Alan Greenspan, once an advocate for the tax cuts, is expressing the need to let them run their course. $700 Billion in revenue is too great a haul for the US to ignore, especially since it comes from a small portion of citizens.

Or at least you think it does. The tax code is fairly arbitrary in how it separates out income brackets. As James Surowiecki points out in his New Yorker article titled Soak The Very, Very Rich , the top bracket is 3% of the US population and that tier starts at  two hundred thousand dollars a year as an individual or two hundred and fifty thousand dollars a year as a household. This number encapsulates many small business owners and people who live in expensive geographies like NYC or San Fransisco. I don’t agree with increasing the tax burden of these people. Small business can be a hiring machine in the right environment, so sapping income isn’t a good idea. Plus, there’s a big difference between $250,000, $1,000,000, and $10,000,000.

Here are some stats from James Surowiecki’s article:

  • Top tier tax bracket starts at $200,000 for an individual and $250,000 for a household
  • $250,000 is the top 3% of American households
  • $250,000 is four times the national median
  • In a place like Manhattan, an apartment can cost $900,000
  • Between 2002 and 2007
    • The bottom 99% of incomes grew 1.3 % a year in real terms
    • Incomes of the top 1% grew 10% a year
      • That 1% accounted for two-thirds of all income growth in those years
    • People in the 95th to the 99th percentiles of income have represented a fairly constant share of the national income for 25 years now
      • But in that period the top 1% has seen its share of national income double
      • In 2007, it captured 23% of the nation’s total income
      • Even within the top 1%, income is getting more concentrated: the top 0.1% of earners have seen their share of national income triple over the same period
      • All by themselves, they now earn as much as the bottom 120 million people

So at the same time that the rich have been pulling away from the middle class, the very rich have been pulling away from the pretty rich, and the very, very rich have been pulling away from the very rich.

Just to be clear, I don’t necessarily want to increase the tax rate for the super wealthy per se. They already pay a huge portion of the tax income for the US (35% of a lot of money equals a lot of money). What I do want though is to consider the unequal distribution rate of the top 1%. From the years 1995 to 2004, the most wealthy in the US went from being 3.68 times more wealthy than the average person to 4.81 times. Here is a graphic and stats :

Net Worth Measure

1995

1998

2001

2004

Change

% Change

Median

70.8

83.1

91.7

93.1

22.3

31%

Mean

260.8

327.5

421.5

448.2

187.4

72%

Mean/Median

3.68

3.94

4.6

4.81

 

 

  • 1980 – the top 1% richest Americans accounted for 8% of total national income
  • 2008 – the top 1% richest Americans account for 20% of total national income
  • The last time the top 1% accounted for 20% of total national income was 1928

Another chart I created a couple of years ago shows how the richest 400 people in the US has the same amount of wealth as the first 51% of the US population. 400 people have more wealth than over 50% of the population combined.

The question is about sustainability. Can the top 0.1% continue to grow their wealth and is it at the expense of the rest of the US population? If so, then taxing them a variable amount based on income distribution rates is a better idea.

Working Thoughts 8/9/07
Other Work Related Blogs

Working Thoughts 8/9/08
Cost of Living Driving Executives

July 2010 Jobs Report and Wages

Here are the job market and compensation numbers for July 2010 (based on the job report):


Net loss
of 131,000 jobs in the month
(revised to a loss of 66,000 jobs)

  • Census workers accounted for a loss of 143,000 jobs as they rolled off the federal payrolls
  • Private sector payrolls increased by 71,000
  • Analysts expected an overall loss of 65,000
  • One year ago the US lost 346,000 jobs
  • June was revised to a loss of 221,000 jobs from an original reading of a loss of 125,000
  • May was revised to gain of 432,000
  • 6.8 million people have been jobless for more than 6 months (long term unemployed) – unchanged from June

    • 44.9% of the unemployed are long term unemployed, a drop from 44.5%
  • Businesses (private sector) have now added 630,000 jobs since the start of 2010, after cutting 8.5 million in 2008 and 2009 combined (90,000 a month)

Unemployment rate held at 9.5%

  • Analysts predicted it would be 9.6%
  • The unemployment population is 58.4% – virtually unchanged
  • The U-6 report, which is a broader group to count, stayed at 16.5%
  • PMI, a measure of manufacturing pace, is 55.5 from 56.2% last month and 59.7% the month before. Anything above 50% means the machines are running
  • Economic growth will be by sector. The strongest component of economic growth is business investment in office buildings, equipment and software, growing at 17% during the second quarter
    • Job postings on Dice.com, a technology and engineering job Web site, are up 36 percent in the year through Aug. 1
    • Postings on efinancialcareers.com, which serves as an online clearinghouse for finance positions, are up 31 percent

Specific Segment Job numbers:

  • Manufacturing added 36,000 jobs
  • Construction loss 11,000 jobs
  • Retailers gained 6,700 jobs
  • Leisure and Hospitality Services grew by 6,000 jobs
  • Government sector lost 202,000, Federal losses were 154,000
  • Education and Health Services grew by 30,000 jobs
    • Health Care and Social Assistance grew by 27,800

  • Professional and Business Services lost 13,000

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $637.84 – an increase
  • The average hourly earning (seasonally adjusted) is $19.04 – two penny increase
  • The average hourly work week is 33.5 hours – a increase of 0.1 hours

Bureau of Labor Statistics

Job Report Stats Summary

Showing the Economy Through Illustrations

The above illustration shows the ramping up of volume of trades on the FSTE starting in late 1997. There is an economic purpose for these markets, but at that volume is it really weeding out the wheat from the chaff which is the point?

But I really wanted to call out the blog Visualizing Economics . It, like Flowing Data , shows stats in an illustrative way. It helps tell the story of the stats.

Working Thoughts 8/2/07
Using Fables

Honest Reflection on a Job Change

We are social animals. Culture and norms nudge our behaviors toward being part of a team or at least not disrupting the herd too much. But one of the most important times to be selfish is during a job change. It’s vital to maximize these changes for every market value dollar out there. It’s so uncomfortable though. It’d be better if this really was a free agent nation.

With that said, a friend of mine, we’ll call him Jason Peters, was nice enough to answer a few questions about his job change.
I’d like to make this interview format a running segment on the blog, so if others want to email in their answers, please feel free.



Now that the process is over, how satisfied are you? Is there anything you felt you left on the table?
-I think I got what I deserved and I’m very satisfied with my decision.  Granted it’s only been 3 weeks.
 
What about the process was something you never considered or thought about?
-I went to a direct competitor which makes everything more difficult.  No 2 week notice, they want you gone that day.  It’s touchy discussing specifics even though you feel you have an obligation to explain your decision.  It was also difficult because my former employer wanted to counter offer and my future employer wanted me to sign on the dotted line.  Luckily I had a little time but that was very nerve racking.
 
How long did it take from start to finish?
-From first call to hire it took nearly 1 1/2 months.
 
How many interviews (formal and informal)?
-2 with the the recruiting firm, 1 on the phone with my direct manager, 1 in person with my direct manager, 1 with VP of Sales, 1 with President of Sales and Marketing.  
 
Were you close to leaving before?
-Not really.  I was always causally looking and had a few interviews here and there.
 
How long were you at your previous job?
-4 1/2 years
 
What is the  ideal length to be in a role for a job (2 years, 5 years, …)?
– I think that depends on the overall satisfaction of your job.  Although i think it’s probably healthy for most people to alter/change jobs every 3 years or so, there’s 3 area’s in which I focus on primarily to answer that question.
1. Am I making the money I deserve?
2. Do I enjoy what I do?
3. Do I have a good work/life balance?
 
What was the main reason for leaving – money, change, career advancement?
– Hands down, money.
 
What about the negotiation process was interesting?
– I liked the fact that I had a recruiter negotiating/relaying my requests.  It’s never healthy to haggle over salary/vacation with your soon to be employer.
 
What did you learn for next time?
-Aim even higher!
 
What type of monetary increase did you expect and get (in relation to your market value)?
-I think I did really well.  My salary increased 35%  and I should easily increase my bonuses by 300%!
 
What about the human element of this process? Are there people you’re going to miss and are there hard feelings about the departure?
– Absolutely.  I had great relationships with my coworkers.  Since I moved to a competitor I may even lose a good friend over it.
 
What necessitated your departure? Timeliness? Advancement in qualifications (schooling/certification)? Someone blocking your advancement?
Well, because of the timing of departure of a predecessor, and completion of my MBA, I was ready to move on.  I was very unsatisfied with my compensation and felt like I couldn’t afford to work there anymore.  I was also getting bored.