Category Archives: Business and Economy

How to file 3 lawsuits an hour

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The New York Times is reporting that the recession is causing a boom for some lawyers:

As millions of Americans have fallen behind on paying their bills, debt collection law firms have been clogging courtrooms with lawsuits seeking repayment.
Few have been as prolific as Cohen & Slamowitz, a Woodbury, N.Y., firm that has specialized in debt collection for nearly two decades. The firm has been filing roughly 80,000 lawsuits a year.
With just 14 lawyers on staff, that works out to more than 5,700 cases per lawyer.
While reporter Andrew Martin makes much of the shock value of the numbers and implies that there is no way such large-scale suing could be done responsibly, these numbers don’t strike me as inherently extreme.  While I am sure that abuse can and does happen in debt collection, consider the following:
  1. 5,700 cases per lawyer works out to just under 3 cases per billable hour (assuming a 2000-hour working year).
  2. Collecting a debt is not like proving that someone committed a crime.  It’s not like creditors have to prove to a jury that debtors owe money beyond a reasonable doubt.
  3. These lawyers are using automation software.
  4. These lawyers have a large support staff (who presumably handle most of the clerical work).

Unemployment and the millennials

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The New York Times reprints some unemployment figures:

For young adults, the prospects in the workplace, even for the college-educated, have rarely been so bleak. Apart from the 14 percent who are unemployed and seeking work…23 percent are not even seeking a job, according to data from the Bureau of Labor Statistics. The total, 37 percent, is the highest in more than three decades and a rate reminiscent of the 1930s.

…and fleshes out those figures with the anecdote of Scott Nicholson, a 2008 college graduate who is still looking for work:

The daily routine seldom varied. Mr. Nicholson, 24, a graduate of Colgate University, winner of a dean’s award for academic excellence, spent his mornings searching corporate Web sites for suitable job openings. When he found one, he mailed off a résumé and cover letter — four or five a week, week after week.

I think what makes this story so interesting is its intergenerational comparison of Scott, his father, and his grandfather and the opportunities available to each.  Louis Uchitelle makes a strong case that fundamental opportunities have shifted, that the millennials’ equivalent of “go West, young man” means leaving the U.S.–and its moribund economy–entirely.

The high costs of living in suburbia

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Via Yahoo! Finance, the New York Times looks at the costs of living in the suburbs vs. living in the city. The verdict: unless a family is sending kids to private school (particularly at middle-school age and above), the suburban life costs about 18% more.

The basis for the analysis – and Manhattan is not part of the figures:

While our analysis was by no means scientific, our goal was to recreate the type of decision a hypothetical family of four earning $175,000 a year might encounter. We chose an upper-middle-class income because that’s generally what our family needs to earn, conservatively, to afford a median-price home in Park Slope, a section of Brooklyn that is family-friendly, has good schools and is generally more affordable than Manhattan.

The two-bedroom, one-bathroom co-operative apartment that we’re using as a model in Park Slope is listed at $675,000, close to the median price for the neighborhood, as calculated by Zillow.com.

We stacked that against a four-bedroom, two-and-a-half bathroom home in South Orange, N.J., just a 30-minute train ride from Manhattan, where the two parents work. The house is selling for $595,000.

Some experts have been talking a long time about the hidden costs of suburbia due to more driving and sprawl. Homes may be cheaper (and bigger) but there are added costs from lower density living.

If homeowners were presented with this sort of evidence (assuming it would hold up across cities), would they chose the suburbs in lesser numbers? Or would people still be willing to pay a premium for the amenities that suburbia can offer?

Morning people viewed more positively

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According to biology professor Christoph Randler, morning people are viewed more positively. Through surveying 367 college students, Randler found that “The problem is that those with the genetic gift of “morning-ness” tend to be more highly rewarded. Morning-ness is perceived as a sign of activity and zest, whereas evening-ness implies laziness and loafing.”

As the story discusses briefly, this seems to be a cultural issue. In certain arenas, traits associated with being “up and ready” in the morning are prized. Being peppy and ready to go in the morning can indicate a person is efficient and in control.

How about a study that examines perceptions of people who accomplish roughly the same amount of work but who are opposites in terms of being morning or evening people. Do people and/or institutions place a higher value on being ready to go in the morning even if the work gets done by the end of the day?

A battle over replacing a bridge

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The Ambassador Bridge linking Detroit and Windsor, Ontario has drawn attention as public officials discuss building a new bridge instead of undertaking costly repairs. The twist: the existing bridge is privately owned. Both the private owner and public officials are discussing where they might build a new bridge – the private owner wanting one under his control, the public officials wanting one under their control.

Another proposal for Internet sales taxes

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Many American consumers can purchase goods online without paying a state sales tax. That may change in the future. While this article specifically references a proposed bill from a Massachusetts House member, it has some interesting background on the legal issues behind gathering state sales taxes from Internet purchases.

Searching for skilled factory workers

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The New York Times reports on a problem for some factories: finding workers that have enough skills to operate more complicated machinery. An anecdote from a company outside Cleveland illustrates the issue:

All candidates at Ben Venue must pass a basic skills test showing they can read and understand math at a ninth-grade level. A significant portion of recent applicants failed, and the company has been disappointed by the quality of graduates from local training programs. It is now struggling to fill 100 positions.

“You would think in tough economic times that you would have your pick of people,” said Thomas J. Murphy, chief executive of Ben Venue.

Many factory jobs today aren’t just manual labor jobs. An education is not just for office jobs; it is helpful or required for most sectors of the economy.

California town outsources all work to contractors

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On the final day of the fiscal year, Maywood, California laid off all of its staff (96 employees) and is now outsourcing all city duties to contractors. The city, with roughly 30,000 residents and about 8 miles from downtown Los Angeles, is keeping its elected officials and some of the former employees will remain on the job as contractors.

From the story:

Maywood is billing itself as the first American city to outsource all of its city services. In an odd twist, officials say it can provide even better services because the shift will help it save money and close a $450,000 shortfall in its $10 million general fund budget.

This bears watching as many municipalities face budget shortfalls. While the cost savings speak for themselves, it remains to be seen how residents feel.

Learning from the country’s largest urban solar plant

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The Chicago Tribune reports on a 40 acre solar power plant on the south side of Chicago, the largest urban solar plant in the United States. While the plant is not very big (generating 10 megawatts), some things I learned that shed light on the broader issue of clean energy:

-Benefits of a plant this size: “The solar plant generates enough electricity to power about 1,500 homes, and its clean power means less greenhouse gases are emitted, the equivalent of taking 2,500 cars off the road each year.”

-Perhaps Chicago is not a bad place to build solar facilities: “The sun in Illinois is more intense than in Japan or Germany, the world’s two largest solar markets.”

-On a national level: “Nationwide, there are more than 22,000 megawatts of large-scale solar projects under development, or enough to power 4.4 million homes.”

-“Green jobs” generated by building solar plants do not necessarily last over time: “Exelon’s West Pullman plant, for example, created about 200 jobs, but only during the six months of construction, he said. “It certainly wasn’t something that went on for years,” Lynch said.”

-Wind power is the main green energy for the near-future in Illinois: “Power companies in the state must get at least 25 percent of their electricity from green sources by 2025. Of that amount, 75 percent must come from wind, while only 6 percent must come from solar”

Summary: this plant has some clear benefits including cleaner energy and construction jobs. But there is a long way to go before solar plants, particularly in urban areas, can generate enough electricity at a reasonable price.