Category Archives: Business and Economy

The continuing image battle between Walmart and Target

Posted on by

Two articles from CBS illustrate the image battle being waged between Target and Walmart. While the stories are supposedly about what you should and should not buy at each place, here are the opening paragraphs about the relationship between the two retailers. The first story focuses on Target:

In the battle for public opinion, Target has shellacked its larger competitor, Walmart. Whether it’s environmentalists attacking the very concept of big-box retail or workers’ rights advocates lambasting the chain’s treatment of employees, Walmart has become the poster boy for the excesses of capitalism. Target, meanwhile, has built a reputation for cheap chic, pairing with Liberty of London and Michael Graves to churn out high-design at low prices. Walmart gets blamed for putting mom and pop stores out of business, while Target recently opened its first store in Manhattan, a market Walmart has yet to crack.

Recently, however, Target has looked vulnerable, suffering more in the economic downturn than Walmart did, and committing a rare public relations gaffe by making a political contribution that angered gay groups.

The companion piece examines Walmart:

Despite (or perhaps because of) the fact that Walmart is the nation’s largest retailer, there are plenty of people who wouldn’t be caught dead in one. To these folks, Walmart conjures images of a rapacious juggernaut of stadium-sized stores offering low-quality merchandise, spotty service, and mistreating employees and the environment — while driving small local retailers out of business.

But many of those misgivings are starting to fade, partly as a result of some well-timed improvements to the company’s product line-up and its environmental record. What’s more, there’s nothing like the worst recession in 80 years to nudge “low prices” a little higher on the collective priority list. And while Walmart may not be making its employees rich, the chain handed out very few pink slips in the downturn and remains the country’s largest private employer.

To be sure, there are plenty of reasons to remain wary of the retail behemoth. Whether you are concerned about the threat to a downtown business district, object to the retail culture, or just have a mental picture of the Walmart shopper that you can’t square with your own self image, it may not be for you. But it’s worth keeping in mind that, when it leverages its enormous scale for good, Walmart can make a difference in a hurry. It’s one thing when a boutique sells fair-trade coffee, but when Walmart gets into the game, a lot of sustainable farmers benefit. Here are five product categories where you can comparison shop in good conscience at the nation’s “low-price leader.”

These openings are illustrative of how brand image matters in our world. The Walmart article opening begrudgingly admits that Walmart could contain some good for shoppers and shoppers could benefit if they are “in a hurry.” The real meat of the story is supposed to be the good deals (and not so good deals) each store offers compared to other retailers but this gets buried behind this editorializing about the image of each place. There could be a lot of interesting work done on examining how exactly Target has crafted a different kind of image and what markets each store serves.

Even with the negative publicity, surveys suggest Americans feel fairly favorably toward the Walmart. According to Rasmussen data from the summer of 2009, only 33% view Walmart unfavorably and only 26% “rarely or never shop at the store.”

An interactive look at job loss by sector

Posted on by

The Wall Street Journal features an interactive timeline that shows job growth and loss by sector for each month since December 2007. The big losers: construction, manufacturing, retail, and business services. The winners (and only three sectors experienced job growth): health care, education, and federal and state government.

h/t Instapundit

Untangling the effects of income on happiness

Posted on by

Examining the relationship between income and happiness can be tricky. A recent research study, conducted by two Princeton researchers and summarized by LiveScience, is illustrative of some of the issues in this research field:

-The researchers were working with a large dataset that is built around a daily survey of Americans: “they analyzed more than 450,000 responses to the Gallup-Healthways Well-Being Index, a daily survey of 1,000 U.S. residents conducted by the Gallup Organization.”

-Changes in income were measured in terms of percentages rather than absolute numbers. This was done to reflect the fact that a percentage change in income would be better for comparisons across income types. As the researchers note: ““In the context of income, a $100 raise does not have the same significance for a financial services executive as for an individual earning the minimum wage, but a doubling of their respective incomes might have a similar impact on both.”

-Survey respondents answered questions related to two measures of happiness: overall life satisfaction and what their emotions were the day before. According to the LiveScience article: “For life evaluation, participants indicated on a scale from zero to 10, from worst to best possible, how they would rate their lives. For emotional well-being, participants answered yes/no questions about whether they had experienced various positive and negative emotions a lot during the prior day.” Having both of these dimensions is critical as a general question about happiness might be interpreted differently (do the reseachers mean happy right now or overall?) by respondents.

-Some of the findings: having a “Low income seemed to magnify the emotional pain of life’s misfortunes, including divorce, illness and loneliness.” However, there was a tipping point of $75,000 where having more money didn’t help improve one’s well-being:

The researchers suggest that making anything more than $75,000 no longer improves a person’s ability to spend time with friends, avoid pain and disease and enjoy leisure time – all factors involved in emotional well-being.

“It also is likely that when income rises beyond this value, the increased ability to purchase positive experiences is balanced, on average, by some negative effects,” they write. For instance, a past study revealed a link between high income and a reduced ability to savor small pleasures, the researchers noted.

This tipping point of $75,000 is above the median income in the United States. I would be curious to know if individuals feel this tipping point when their income does rise to this level – are they cognizant of this point? Or once they reach $75,000, are they still locked into a mindset that having more money will lead to increasing levels of well-being?

Also, this $75,000 point could be quite fluid. Over time, this point would change based on economic conditions and cultural understandings of what is a “good income.”

Job outlook: either high-paying or low-paying, few in between

Posted on by

Perhaps adding to the bleak economic outlook, some economists are suggesting that future jobs will fall into two categories: high-paying or low-paying with few jobs in the middle.

This would have implications for the size of different classes within the United States. To have a high-paying job, employees will generally need higher-education or specialized degrees. Having a service job means struggling to make ends meet. In this scenario, what kinds of industries or sectors might provide more middle-class jobs?

Male/female wage gap reversed for “unmarried, childless women under 30 who live in cities”

Posted on by

The gap between male and female earnings has been a persistent feature in American society for decades. However, recent research suggests that a certain group of women are now outearning men:

[A]ccording to a new analysis of 2,000 communities by a market research company, in 147 out of 150 of the biggest cities in the U.S., the median full-time salaries of young women are 8% higher than those of the guys in their peer group. In two cities, Atlanta and Memphis, those women are making about 20% more. This squares with earlier research from Queens College, New York, that had suggested that this was happening in major metropolises.

Here’s the slightly deflating caveat: this reverse gender gap, as it’s known, applies only to unmarried, childless women under 30 who live in cities. The rest of working women — even those of the same age, but who are married or don’t live in a major metropolitan area — are still on the less scenic side of the wage divide.
The article discusses the main causal factors identified by authors: “a growing knowledge-based economy, the decline of a manufacturing base and an increasing minority population.”
At first glance, this may not be that surprising considering the number of women enrolling in and earning degrees at college. Additionally, the restructuring of the American economy away from manufacturing jobs and toward a service/knowledge economy has hit male dominated fields hard.
This bears watching.

Decrease in illegal immigration between 2007 and 2009

Posted on by

Based on data from the US Census Bureau, a new report from the Pew Hispanic Center says illegal immigration has recently dropped with a 67% decrease for the years 2007 and 2009 (about 300,000 people a year) compared to the years 2000 to 2005 (about 850,000 people a year).

A Washington Post piece explores the reasons for the decline:

Douglas Massey, a Princeton University sociologist who studies migration, said the recession and lack of jobs are major factors in the decline of those entering the country illegally.

The unemployment rate for unauthorized immigrants is 10.4 percent higher than that of either U.S.-born residents or legal immigrants, the Pew report said.

Massey said other likely reasons for the decline include an increase in law enforcement and deportations, and enactment of stricter legislation against illegal immigrants. He also pointed to more guest-worker spots, from 104,000 in 2000 to 302,000 in 2009 — allowing more immigrants to come to the United States legally.

While these results are open to some interpretation (the article includes several perspectives), the economic situation has to play a big role. For all immigrants, a weaker American economy likely has a big impact on decisions about whether to come to the United States. Without plentiful jobs, the “land of opportunity” has less to offer.

One way to help assess the impact of economics on illegal immigration would be to see whether immigration of all kinds is down over this same time period.

Shopping malls and noise devices to discourage loitering

Posted on by

A shopping mall in Washington D.C. has installed a noise device, the Mosquito, to discourage loitering:

The owners of the Gallery Place commercial strip have installed an anti-loitering noise device — one to discourage any loiterers, not just teens. Gallery Place has further urged the D.C. Council to pass an anti-loitering ordinance, something the city currently lacks.

Youths in particular are said to be sensitive to a greater range of high-pitch sounds. But Gallery Place Partners, LLC, insists they did not install the “state-of-the-art safety feature” to target teens alone. According to Gallery Place, the Mosquito installed in the Metro plaza is set to a tone that can be heard by people of all ages.

I recall reading that prior attempts to install such devices were accused of being targeted at teenagers because they can better hear and are therefore more annoyed with high-pitched noise-making devices. It sounds like this shopping center is pitching the device as a boon for all users – but are teenagers still the main target?

But this is also a reminder that shopping malls are not public spaces. Even though they are often function as such as place with crowds gathering just to hang out, they are privately owned and the owners are ultimately interested in making money.

Bonus: a link at the bottom of the news story to that takes you to the makers of the Mosquito where you can then find how annoying you find the Mosquito!

What to do with those extra years of life

Posted on by

Virginia Postrel addresses how American society can move beyond seeing age 65 or retirement as the end of a career or life (“Floridization”):

It’s to change the pictures in our heads, to give up the images that “Floridization” evokes, as either a warning or an implicit ideal. People do not automatically become crotchety, backward-looking, and idle when they reach their 60s.

But changing that picture means exchanging today’s architectural metaphor, “building a career,” for another one: adaptive reuse. This is the human-capital equivalent of turning industrial lofts into apartments, factories into medical schools, power plants into art museums, or saw mills into shopping centers. Your original career may be economically obsolete, or you may just want a change, but your knowledge and experience still have their charms. Instead of equating success with a steady progression of better-paying jobs, each related to the previous one, this model emphasizes taking on new challenges and making new contributions, even if that means going back to school, taking a pay cut, or starting as a trainee when you’re middle-aged.

One version of this idea is the “encore career” advocated by Marc Freedman, who has made one of the most prominent attempts to think what how longer, healthier lives should mean for Americans’ careers.

This is an important topic to be discussing with longer life spans, limited funds for government retirement programs, and economic times that may require citizens to work to an older age. Those with more years have plenty to contribute to society and to simply write them off as past their time is foolish: it is not good for these individuals, their families and communities, and society.

Implicit in this discussion is an American emphasis on youth. Postrel cites one journalist who seems to suggest that youth equals progress and that being older automatically leads to loneliness. This may only appear to be the case because our society doesn’t leave much productive space for those who have retired. As I recently discussed, being older can lead to increased happiness and wisdom, two traits out society could use.

h/t Instapundit

Identifying four types of Evangelical leaders

Posted on by

A new sociological study examines how Evangelical business leaders mix faith and business:

A new study based on interviews with hundreds of American leaders who are evangelical Christians (including CEOs, presidents, and chairs of large businesses and their equivalents in government and politics, nonprofits, arts, entertainment, the media, and sports) finds enormous variety in how leaders engage their personal faith in workplace decision-making.

“While everyone in the workplace has to make decisions—whether they’re the janitor or the manager—the most consequential decisions are made at the top, and we wanted to look at how they affect their businesses,” says D. Michael Lindsay, a sociologist at Rice University.

Lindsay found that most evangelical leaders fit into one of four decision-making categories: pragmatic, heroic, circumspect, and brazen.

Read about the four types in the rest of the article. The study suggests that Evangelicals live out their faith in a variety of ways. What predicts which type people fall into? And then how does acting as this type as a business leader affect their organization?

Of course, one could always ask if there is a more correct type…

Companies come, companies go: Blockbuster edition

Posted on by

Blockbuster has been on the economic edge for a while now and is apparently close to filing for bankruptcy.

Perhaps Blockbuster is a microcosm of the economic situation in America over the last 25 years: it quickly grew in size to fill a market niche, expanded to what too turned out to be too many locations, and then eventually has reached a point where it needs to seriously regroup due to technological change and some other reasons. I remember seeing them sprout in the Chicago area. Within a few years, we went from no nearby stores to numerous locations within 5 miles (and even more of its type if we were to count businesses like Hollywood Video). They were everywhere, including suburban downtown locations and strip malls.

I would be interested in reading a sociological study about how this company expanded but then had trouble adapting to the changing market for movies and video games. How did they successfully find customers early on and then lose those customers later on? How did Blockbuster’s growth accompany general suburban growth, housing patterns, and growth of other important retailers?