Disagreement about unemployment figures between government and Gallup

Gallup suggests that the unemployment figures to be released by the federal government at the end of this week are underestimates. While the government figures are expected to be around 9.6-9.8%, Gallup says the unemployment is really closer to 10.1%.

The main issue seems to be that Gallup is measuring through the end of September while the government figures are based on data that ended in mid-September. And Gallup found that unemployment increased quite a bit in the last few weeks of September.

More poor people now in suburbia

American suburbs are often imagined as homes to primarily the middle and upper classes. However, new figures from the US Census suggests the number of poor people living in suburbs continues to grow:

The analyses of census data released Thursday show that since 2000, the number of poor people in the suburbs jumped by 37.4 percent to 13.7 million. That’s faster than the national growth rate of 26.5 percent and more than double the city rate of 16.7 percent…

Cities still have higher poverty rates — about 19.5 percent, compared to 10.4 percent in the suburbs. But the gap has been steadily narrowing. In a reversal from 2000, the number of poor people living in the suburbs now exceeds those in cities by roughly 1.6 million.

Analysts attribute the shift largely to years of middle-class flight and substantial shares of minorities and immigrants leaving cities in the early part of the decade for affordable housing and job opportunities in the suburbs. After the housing bust, their fortunes changed, throwing millions of people out of work.

To recap: in terms of absolute numbers, there are more poor people living in suburbs than in large cities. As a proportion of the population, cities have higher percentages of poor people compared to suburbs. And the number of poor people in suburbs has grown more since 2000 than the number of poor people in cities.

On one hand, these figures should challenge the typical images of suburbia as a wealthy paradise. On the other hand, there have always been some poor and working-class people in suburbs – this is nothing new, suggesting the typical image has always been somewhat wrong.

What will be interesting to watch is how suburban municipalities respond to the growing number of poor people.

Wanting to fit in leads to interesting behavior

A new study in the Journal of Consumer Research finds that people are willing to alter their behavior in a quest to try to fit in:

“Social exclusion is a very painful experience, which makes it a strong motivator,” explains Tyler Stillman, a visiting sociology professor at Southern Utah University, who is one of the study’s co-authors.

In one experiment, researchers paired study participants with a partner who left midway through the study. Some of the participants believed their partners left because they didn’t like them — and those people were more easily talked into buying a silly school spirit trinket. In another study, people who felt excluded were more likely to say they were willing to try cocaine. Researchers say their findings could have real-life implications.

Interesting results. If these results are all based on lab experiments, how much more willing would people be to change their behavior to fit in when confronted with real people?

I would be curious to find if the study looked at different age groups. If lab experiments were only conducted with undergraduate students, might the results change if the same experiments were done with older adults?

How technology might contribute to being late

A writer at the Wall Street Journal argues that technology has contributed to more people being willing to be late to appointments:

Now, thanks to cellphones, BlackBerrys and other gadgets, too many of us have become blasé about being late. We have so many ways to relay a message that we’re going to be tardy that we no longer feel guilty about it.

And lateness is contagious. Once one person is tardy, others feel they can be late as well. It becomes beneficial to be the last one in a group to show up, because your wait will be the shortest.

The writer admits that lateness is not caused by technology since lateness has existed for a long time. Yet at the same time, I can see how this might work: because the late person is still able to maintain contact with the person who is waiting for them, the late person could feel that it is less of a problem that they are late. After all, at least they let the other person they were going to be late.

Defining “green” products

When a consumer goes shopping, there are many products that claim to be “green.” Unfortunately, what exactly this means is unclear and may be just plain wrong. This process, which has come to be known as “greenwashing,” might be limited once the Federal Trade Commission develops new guidelines:

The guides originally were developed in 1992 and last updated in 1998. For the past two years the FTC has worked to revise them to account for consumers’ increased interest in environmentally conscious products and product-makers’ increasingly noisy marketing claims, a practice that’s come to be known as “greenwashing.”…

Some companies have complained in the past that the government did not strictly enforce the existing Green Guides, leading to more consumer confusion. So the more specific rules are welcome.

If these new guidelines are enacted soon, consumers may discover fewer “green” products on the shelves.

While it may not be the most ethical activity, is it a surprise that numerous companies have claimed to have “green” products when these sorts of items draw extra attention from some consumers?

The home states of military personnel

Richard Florida uses some data to flesh out Defense Secretary Robert Gates recent comment that there is a growing gap between American civilians and the military. Florida suggests part of the issue is the origin of the military personnel: they tend to come from two particular parts of the country.

Aside from relatively high concentrations in Alaska, Hawaii, Washington state, and North Dakota, the military is overwhelmingly concentrated in two distinctive areas of the Sunbelt: The southeast running from Virgina and North Carolina through Kentucky and down through South Carolina, Georgia and Mississippi; and the corridor fromTexas through Oklahoma, New Mexico, Colorado, Kansas and Wyoming. Texas and California now drop out. The upper mid-west and the northeast, especially New England, which tend to be more liberal and left-leaning than the rest of the nation, have very low concentrations of military personnel.

A couple of thoughts:

1. I don’t think this is terribly surprising (though it is helpful to see it in map form).

2. A question: does the military think it might be worthwhile to try to even out these geographic distributions? If so, how could this be done?

3. Are these differences only due to political views (conservatives vs. liberals) or is this really due to social class?

4. I’m glad Florida added data that accounts for differences in population size – the initial map simply showed more military personnel come from more populous states.

h/t Instapundit

Middle class cuts spending on alcohol, clothes, eating out

In these troubled economic times, new data suggests the middle-class is cutting back spending in certain areas:

Households in the middle fifth of the population sliced their average annual spending to $41,150 in 2009, the Labor Department said Tuesday in its annual spending breakdown. That was down 3.1% from 2007 and 3.5% from 2008, the steepest one-year drop since records began in 1984. The drop came even as those households’ after-tax income remained relatively stable over the two years, at an average $45,199.

Middle-class households reined in spending mainly on discretionary items. On average, from 2007 to 2009, they cut spending 20.1% on alcoholic beverages, 15.2% on clothing, and 9.5% on restaurants and other food away from home. They also spent less on some groceries, cutting back on items such as fresh milk and cream, as well as seafood.

Some of the change in spending could reflect a shift to cheaper alternatives, such as picking McDonald’s over sushi.

So when middle-class families need to cut back on spending, this is where they limit their spending: alcohol, clothing, and eating out. Presumably, more positive economic climates lead to more spending in these areas.

This is interesting in that it provides some indication of what the middle class considers “luxury items.” These are not generally big-ticket things but having the ability to drink more alcohol, buy more clothing, and eat out more may be the height of middle-class enjoyment. To reach the middle class may mean that one is able to spend in these areas without worrying too much about the budget.

More on the study of happiness: the role of priorities

Measuring happiness is a small industry among researchers. A new study suggests another important factor: the priorities that people set for their life affects long-term happiness.

Most of us have thought, ‘If only I could win the lottery, then I’d be happy forever.’ But according to one of the first studies to look at long-term happiness, major life events, like a sudden cash windfall, are not what make us happy, rather, it’s the priorities we set in life.

“The main thing that’s surprising about these results is that it challenges this whole field,” said lead author Melbourne University sociologist Bruce Headey. “This study goes against the prevailing wisdom that happiness is fixed.” The study was published Monday in the Proceedings of the National Academy of Sciences.

Previous studies suggest that happiness is predetermined by genetics and early upbringing, and that we eventually revert back to the same level of happiness regardless of changes in our lives. Looking at data from about 60,000 Germans for up to 25 years, however, Headey found that the more people decided to prioritize goals such as good relationships and good health, the happier they were, regardless of major life events.

While there are some critiques of this study (for example, it measures long-term happiness rather than daily satisfaction), it suggests again that the topic of happiness is a complex one to research with many possible factors influencing outcomes.

So should people set easier-to-reach priorities to be happy? What happens to people who set good priorities but aren’t able to reach them?

This also seems to be an interesting dataset with 60,000 people being tracked over the last two and a half decades.

(I’m also curious about the lead author saying that the study challenges “the prevailing wisdom that happiness is fixed.”)

Michael Gerson: Obama’s faith-based campaigning has lost steam

Michael Gerson, President Bush’s head speechwriter for most of his time in office, argues that while President Obama successfully courted religious voters during his campaign, those same voters have now turned against him. Here are Gerson’s reasons for why this has happened:

There are a number of reasons for the believers’ remorse. Social issues blurred during a campaign naturally become more vivid and divisive in the process of governing. Obama’s campaign appeal to reconciliation — which impressed many religious voters — has dissolved into prickly partisanship.

But the failure of Obama’s religious appeal is also ideological. It is true that evangelicals are generally not libertarian. They admit a place for government in encouraging values and caring for the needy. Yet they do not believe that governmental elites share their values or have their best interests at heart. Among conservative Christians, government is often viewed as a force of secularization — a source of both bureaucratic regulation and moral deregulation. By identifying with expanded government, Obama fed long-standing evangelical fears of the aggressive, secular state.

It sounds then like the issue may be that while voters liked what they were hearing, they don’t particularly like the way this was to be carried out through an increased role for government. Putting these values from the campaign into practice has proven to be a difficult task.

But it is interesting to note that Gerson concludes that religious voters, a good number of whom are conservative, cannot break from their views on the size of government to support Obama’s faith plans. Gerson suggests that many of these voters have been pushed by Obama into an ideological choice: big government or faith concerns. Why do these two concerns have to be so linked? This is a bigger issue that Gerson touches on by suggesting that “There are a range of options between government as the first resort and government as the enemy — options that few in our political debate seem willing to offer.”

Symbolic punishment? Fraudulent French trader ordered to pay $6.7 billion

The economic crisis has raised interesting questions about who is responsible. In the United States, much blame has been placed on the large financial institutions, investment firms and banks, who played a role (though others have also argued that the government and consumers share the blame).

But in the courts, blame could be assigned to any of these parties. In a recent decision in France, a trader who worked for France’s second largest bank was ordered to pay the bank $6.7 billion in damages for fradulent activity linked to the economic crisis. Here is a quick summary of the case’s outcome:

The court rejected defense arguments that the 33-year-old trader was a scapegoat for a financial system gone haywire with greed and the pursuit of profit at any cost — a decision sure to take some pressure off the beleaguered banking system overall.

By ordering a tough sentence for a lone trader, the ruling marked a startling departure from the general atmosphere of hostility and suspicion about big banks in an era of financial turmoil. It was a huge victory for Kerviel’s former employer Societe Generale SA, France’s second-biggest bank, which long had a reputation for cutting-edge financial engineering and has put in place tougher risk controls since the scandal broke in 2008.

Kerviel maintained that the bank and his bosses tolerated his massive risk-taking as long as it made money — a claim the bank strongly denied.

The story goes on to say that both sides, the trader and the bank, admitted to mistakes along the way. But the court ruling suggests that the trader was the culpable party.

The assignment of blame after large traumatic events is a fascinating phenomenon to observe. Who is eventually seen as the responsible party can depend on a number of factors including national culture, time in history, court cases, public opinion, and other particularities. Whoever becomes the scapegoat can often become the symbol of the traumatic incident, forever linking that person or party to phenomenon that are often quite complex.