What Year Is It In Economic Times?

In the recent article Lost Economic Time, The Economist argues that the economic clock went back several years in terms of the economy for several developed countries.

While few would argue with the economic back-tracking of Greece, Ireland, Portugal and Spain, many would be reluctant to admit that the US economy has gone substantially backward. Yet The Economist data show that US is third worst.


This prodded me to do some basic analysis of my economic situation relative to the cost of living. I was further surprised to realize that this was also true for me!

I thought I was doing quite well in my professional and professorial career, but a reduction in my university salary, a drop in consulting (I wonder why nobody hires me to do work for the rail...) and the ever advancing Consumer Price Index or CPI have taken their toll. Indeed my CPI adjusted income average for the last three years took me back to ... 2001.



Time to redouble our efforts and claw ourselves out of our economic 9-11.

Notes: (1) The income trend in the graph is based on my federal tax adjusted gross income or AGI at the bottom of the first page of my annual tax return. (2) The CPI trend is from the annual average tabulated by the U.S. Bureau of Labor Statistics. (3) Both trends are normalized to start at 100 in 1994.

Dear FTA ...

... a little less pork will be good for you!

Anti Rail Plaintiffs to Federal Transit Administration: City Rail Project is Fundamentally Flawed, Based on Weak Financial Plan

Solar Paint

It is understood that by the end of the century the use of fossil fuels will be substantially reduced either because we have largely exhausted them or because we regulated their use to a minimum.

What's next is unclear because at the present time, other than nuclear energy, nothing comes close to the energy density and portability of fossil fuels.

However, disruptive technologies are in the horizon that may change the way we make power. One such technology that recently crossed my radar screen is solar paint developed at the University of Notre Dame in Indiana.

Called “Sun-Believable,” the paint is still a ways from being commercially available. But its development could ultimately lead to a new generation of inexpensive power generation.

Once able to be produced at a reasonable cost this paint would combine well with neighborhood large battery storage for 24 hour power supply.

The Seven Rules of Bureaucracy

The Seven Rules of Bureaucracy by Loyd S. Pettegrew and Carol A. Vance presents an insightful and succinct list of routine actions by "successful" bureaucracies. Their article provides many examples. Most of these are directly applicable to the education and traffic congestion problems in Hawaii. Both come with huge bureaucracies that lie about the issues and maintain poor performance.

Although politicians of all colors and persuasions have used these one time or another, the rules also read like the manifesto of a major political party in the US, don't they?

1. Maintain the problem at all costs! The problem is the basis of power, perks, privileges, and security.
2. Use crisis and perceived crisis to increase your power and control. Force 11th-hour decisions, threaten the loss of options and opportunities, and limit the opposition’s opportunity to review and critique.
3. If there are not enough crises, manufacture them, even from nature, where none exist.
4. Control the flow and release of information while feigning openness. Deny, delay, obfuscate, spin, and lie.
5. Maximize public-relations exposure by creating a cover story that appeals to the universal need to help people.
6. Create vested support groups by distributing concentrated benefits and/or entitlements to these special interests, while distributing the costs broadly to one’s political opponents.
7. Demonize the truth tellers who have the temerity to say, “The emperor has no clothes.”

HART's Job Estimates Are Wrong

Back in 2009, UHERO provided some rail jobs estimates that said employment will start with 300 jobs, and at the peak of construction, there may be 2,000 jobs, but at that time UHERO did not know that a $1.4 billion contract to build the rail cars would go to Ansaldo Breda in Italy.*

However HART testified at City Council that the rail will create 4,000 to 17,000 jobs. These estimates are flat out wrong if people believe that these are Hawaii-based jobs. Here is why:

• Material costs are not jobs and most materials like steel, concrete and glass will be imported, thus those jobs are not local.
• Finance charges are not jobs.
• Equipment and outside purchases are not jobs in Hawaii. These will be a huge portion from trains, escalators and elevators to ticket machines, tickets, bolts and nails.
• Also many large and "linear" infrastructure projects like the rail are of a "copy-paste" nature, that is, the people who build the first mile will also build the second mile, etc. There are no 10 groups of workers building 10 separate miles.
  

In sum, a very large portion of the $5.3 Billion pie is not labor related. The part that is labor is not very large for Hawaii because (1) a portion of the labor is outside Hawaii or imported expertise, and (2) Linear infrastructure does not need a large number of workers. Therefore UHERO's estimate that the maximum likely number of jobs is around 2,000 is the best answer. This makes Rail smaller in terms of jobs than Hilton Hawaiian Village. Of course the Village is a sustainable job supplier, whereas Rail is not.

It is also a fact that tax-based infrastructure development causes major job losses because the taxes taken from people to build the rail were not spent elsewhere in the economy.

If infrastructure projects can be made with all-local materials and labor, then the projects simply circulate monies in the same market (Oahu in this case) but they do not create real growth. This circulation also has "parasitic losses" due to the bureaucracies involved and, on occasion, lawsuits and other penalties.

Rail, unfortunately, uses so many imported components and expertise that local taxes will be exported in the billions of dollars, so its net effect will be strongly recessionary.

Two years ago based on UHERO's 2009 estimates of rail jobs I wrote the article
Proposed Rail Creates 1,000 Local Jobs and Destroys 4,000 Jobs (the bold part is UHERO assessments):

UHERO estimates that first year rail construction job count will be about 360 jobs and only in peak years the construction job estimate will reach about 2,000 jobs. But most of them will be unsuitable for carpenters that are suffering the brunt of construction sector unemployment now. Also almost all of the rail construction materials and technology comes from off-island sources, so at best 1,000 of these jobs are local. The City estimates for rail jobs are false. They are advocacy estimates.

More on this in Malia Zimmerman's article Honolulu Rail Sold to City Council, Public, on Jobs Boost, But Will the Promise Hold Up? in the Hawaii Reporter.

Public Education Systems. There is Hope, but not in Hawaii. Yet.

"Nevada and New Mexico are among a growing number of states that are looking to Florida and Mr Bush’s time in office for inspiration on school reform. Many of these, such as Indiana, New Jersey, Oklahoma, Louisiana and Arizona, have Republican governors, while others, such as Colorado, have Democratic governors but influential Republican education leaders. Many are also known for mediocre schools. That, indeed, was Florida’s situation: its schools were among the nation’s worst in 1999 and are now among the best."

So there is hope in Hawaii, but another set of players will be required.

The quote above is from a great article in The Economist last month: The Floridian school of thought.

HART's Misrepresentations Are Intolerable!

Yesterday HART issued an email blast. My brief response to HART's selective misrepresentations is as follows. (Sent to Gov. Legislature and City Council.)

HART: Rail provides congestion free transportation

1) Rail is station to station transportation. Hardly anybody resides in or near stations, particularly the stations that HART is developing in the middle of nowhere and next to stadia and big box retailers. So future riders will drive or ride buses thus will be exposed to congestion and delays. And searching for the scant park and ride parking will waste a lot of their time.

2) While on the train you do not have traffic congestion, but you do have a very slow ride. See Chapter One of a recent national report for US for urban trips: Commuter rail, the fastest form of rail with far spaced stations, averages 14.1 mph. Car travel averages 33.2 mph.

3) For the next 30 years Kapolei to UH, Waikiki and beyond will be far faster by car than with any combo that includes rail.

4) The less fudged Alternatives Analysis and DEIS clearly showed that rail is not travel time competitive anywhere east of Aiea.

HART: When rail is built, it will eliminate 40,000 vehicle trips from Oahu's roadways each weekday

Firstly, one has to believe the city's ridership numbers. This is not a good idea; like in San Juan Puerto Rico, where Parsons Brinkerhoff predicted 80,000 riders per day, then FTA approved it. But they got only 25,000. By the way, San Juan is over 3,000,000 people. What does PB predict for the opening year in the tiny corridor of maybe 500,000 people in Honolulu? 97,000 !

Secondly, rail will eliminate 40,000 car trips out of 3.9 Million daily trips on Oahu. How would you like to pay $5 Billion for 1% reduction in trips? Would you like to repeat this with our water mains and sewer line improvements?

Did you try to make the division of $5 Billion by 40,000? It yields a cost of $125,000 for each car-trip saved. That's nuts!

What was the cost per student-trip from the DOE budget that state plans to cut as "unaffordable"? Taken for a Ride: Hawaii Lawmakers Still Plan To Cut School Bus Funding, http://www.civilbeat.com/articles/2012/03/13/15146-taken-for-a-ride-hawaii-lawmakers-still-plan-to-cut-school-bus-funding/


==============================
Yesteray's email blast from HART

A recent HonoluluTraffic.com commentary contained incorrect information about the Honolulu Rail Transit Project. Here are the facts from HART:

• Rail provides a congestion-free transportation choice. Passengers who choose rail will have zero congestion - and that's a fact. The elevated line will be free from traffic delays and accidents on congested streets and highways. Rail will allow riders to bypass the gridlock and reach their destination reliably and on time.

• When rail is built, it will eliminate 40,000 vehicle trips from Oahu's roadways each weekday - that's tangible traffic relief.

Hawaii's 2nd Energy Update... or Waste Update?

DBEDT has just issued the 2nd edition of Hawaii's Energy Update. See it here:
http://energy.hawaii.gov/wp-content/uploads/2011/08/DBEDT-Energy-Update-Edition-2-March-2012.pdf

When a government glossy brochure is 99% about benefits and 1% about costs, and when the (suspect) jobs created, may of them part-time, cost the taxpayer $92,000 per year each, then it's easy to realize what kind of green they are really talking about...

Spending taxpayer money to apply expensive, inferior solutions for "creating jobs" is ineffective and unsustainable. The ARRA taught us this lesson recently. Fewer than expected jobs were created, the nation now co-owns car manufacturers and collectively we owe $6 Trillion of added debt.

Take a look at this "Hawaii Energy" brochure. It's all about jobs and expenditures. How much of the electricity used daily in Hawaii did we get for all this? About 1% if there's stiff wind and no clouds. How does this agree with the opening sentence of the brochure? Clean energy is a matter of energy security... Not!

Germany's Solar Failure is a Big Lesson for Hawaii

Bjørn Lomborg recently exposed Germany’s Sunshine Daydream. It's the same daydream that Governor Abercrombie, PUC Chair Mina Morita and the local pseudo-greens have put in motion for Hawaii.

Like Germany, our results will be pathetic and the costs will be very high. Here are some highlights of Germany's failed solar initiative:

• Despite the massive investment of $130 Billion, solar power accounts for only about 0.3% of Germany’s total energy.
• Germany is paying about $1,000 per ton of CO2 reduced. The current CO2 price in Europe is $8.
• Defenders of Germany’s solar subsidies also claim that they have helped to create “green jobs”. In China where the panels are made.
• German citizens now pay the second-highest price for electricity in the developed world.
• Denmark citizens now pay the highest price for electricity because they are the “world wind-energy champion.”

Hawaii's energy plan is focused on solar and wind, so we clearly know what the energy supply and cost future will be for Hawaii.

Hawaii citizens pay the same rate as Germany now, three (3) times the US average and if the current plan continues, Hawaii's price for electricity will be five (5) times higher that mainland US.

However, this may be the least of Hawaii's problem. Since wind and solar are intermittent, we will need to maintain archaic, oil burning generators for ever. In contrast, Denmark import electricity from the hydroelectric plants of Scandinavia when wind dies down and Germany imports electricity from France's nuclear power plants. Hawaii has no such options so the outcome will be brown outs and explosive KWh cost. A true lose-lose plan is now in the works.

If you doubt me, just read this: Keahole Solar Power, HECO sign power-purchase agreement and compare it with this (same company): Solar Power Plant on Oahu Does not Pass Muster.

If you thought that Hawaii has perfectly sunny conditions for solar, you'd be wrong. It has good conditions but far from perfect due to frequent cloudiness. Compare the Nevada desert clean solar pattern with Keahole Point on Oahu cloudy profile.

Let's not forget that at best we get 8 to 10 hours of solar power per day, so with solar we need oil 60% to 70% of the time on a clear sunny day. For this reason, solar energy has a capacity factor of 25%. This means that a 100 MW solar photovoltaic plant is equivalent to a 25 MW oil or hydroelectric plant. A similar "capacity factor" applies to wind.

Solar thermal like the Keahole Solar Power that HECO agreed to buy energy from (and PUC is likely to rubber stamp) is defunct technology abandoned in Spain and by Google. (There is also a HECO-Sopogy link: HECO's past CEO is now a Sopogy board member.)

Google cans solar energy project

Even when you have all the money of Google, you should spend it wisely. The search giant, which invests heavily in renewable energy initiatives, backed off of at least one of them yesterday.

Google said it is dropping development of “solar thermal” electricity because solar thermal cannot keep pace with the rapid price decline of another solar technology – photovoltaics.

On November 29, 2011, I sent the article about Google's decision to PUC chair Mina Morita, Governor and State Legislature. Apparently, unlike Google, they did not care to spend money wisely.

HECO is in a position of technological and cost-effectiveness indifference caused by mandates. It agreed to a power purchase at 33.5 cents per KWh from hyper-expensive and under-performing Sopogy technology. Note that's 33.5 cents at the production site. It will reach residences at over 50 cents per KWh, or five times US mainland average. So the exorbitant pricing future I was talking about before... is here already!

PUC chair Mina Morita, Governor and State Legislature received this article on March 16, 2012.
----------
March 19 Addendum. Hawaii's current renewables plan relies heavily on wind power, which I oppose when applied in large numbers as expensive, unreliable and intrusive. The following passage's from Washington Post's United Technologies to sell wind businesses article are relevant:

• Chief Financial Officer Greg Hayes that selling Clipper was not a difficult decision because the alternative energy business has stalled. “We’ve gone into this business with the thought that there was going be a renewable energy mandate in this country and there has not been one.”
• Alternative energy has stagnated with booming natural gas exploration. The nation’s supplies are bulging and natural gas is cheap. By comparison wind power is less economical than many thought it would be two years ago, he said.
  

Honolulu’s Money Train

Wendell Cox summarizes the reasons why the proposed Honolulu Rail is such a bad idea for the 99% who are not in it for the money in Honolulu’s Money Train.

Hawaii Jobs: Outlook for Jobs in Education, Government, Military and Tourism

There are basically four main industries in Hawaii: Education, Government, Military and Tourism. And a fifth large one serving these four is Services. In round numbers, education (DOE, UH system and private) employed 63,000 people in 2010, civilian federal, state and county government employed 77,000 people, the hospitality industry including entertainment, restaurants and bars employed 90,000 people, the armed forces employed 50,000 people, and professional, business and other services employed 100,000 people. These five types of industries employ 60% of Hawaii's people.

While we have been inundated about a need for "construction jobs," the construction industry typically employs less than 5% of the workforce as the detailed breakdown below indicates.(1)


This article presents a brief analysis of Hawaii’s four main industries and assesses their growth potential.

Education
At roughly $15,000 per pupil, the annual expenditure Hawaii’s state based education system is among the highest in the nation. This level of expenditure all by itself indicates that this is certainly not an area of future growth.

Part of the Education industry but separate from the state DOE is the UH system which has become administratively bloated in the last two decades and its diversity of campuses has added more to its costs as a system. UH-Manoa is one of the top pork-barrel research funding recipient universities in the nation which is unsustainable past the retirement of Senator Daniel Inouye. Several units will continue to excel, but the UH as a whole is not a promising locus for job growth in Hawaii.

Private education will continue to hold its own but escalating tuition costs place a ceiling on the potential for large expansion unless citizens receive the choice of having education vouchers. Given the poor outcomes of Hawaii’s public education system, this opportunity may arrive sooner than it is currently thought to be possible.

Civilian Government
The table above suggests that Government provides 21% of the jobs in Hawaii but the table below suggests that if public education and US DOD are taken aside, then the share of the rest of the government’s shrinks to 10%. (The percentage shown is out of the total civilian employment in 2010.)


Over several decades Government has been a “growth industry.” Hawaii had 125,200 civilian government workers in 2010 of which 57% in state government, 28% in federal government and 15% in local government. This is an area that will experience reductions in the next few decades as city and state budgets come under heavy stress from necessary infrastructure investments, consent decrees, and pension and health fund liabilities vis-à-vis the actuarial reality of long-living baby boomers. Even larger pressure will be on federal employment.

In 1960 the ratio of government employment to the population in Hawaii was 7.8%, that is, there were 8 government workers for every 100 Hawaii residents. This ratio reached a high of 9.5% in 2000 and dropped to 9.2% in 2010. In 1960, the federal civilian employment was large at 4.3% but it reduced to 2.6% in 2010. State employment went the opposite way: From 2.3% in 1960 to 5.3% in 2010. State employment doubled from 1960 to 1970, and it doubled again between 1970 and 1990. County employment was 1.2% in 1960 and 1.4% in 2010.

It is clear that there has been no bloating in county employment and a reduction has occurred in federal employment. So the bulk of anticipated future government employment cuts will be from state ranks and from the education portion of it in particular.

Military
The explosive economic and military growth in Asia is a strong force behind stability and expansion of military in Hawaii. This is one area that the retirement of Senator Inouye may have relatively little negative effect. The geopolitical placement of Hawaii is highly advantageous. However, shifts may occur that may be less desirable for Hawaii resident employment: Military personnel numbers may increase but local civilian jobs may be reduced as Hawaii becomes more of an action-ready base rather than a storage and maintenance base. The existing Navy shipyard may be too costly and too limited to maintain at its current size.

In the past three decades the ratio of armed force personnel to Hawaii’s population has dropped from 5.3% in 1960, to 4.5% in 2000, and all the way down to 2.9% in 2010 in part because of deployments to wars. Defense cuts and vastly improved automation in military operations may result in keeping armed force employment in Hawaii below the 4% mark.

Tourism
Tourism is long regarded as the economic engine of Hawaii by capitalizing on the trifecta of natural beauty, warm climate and Hawaiian culture supported by the political and economic might of the US.

Although 2012 is expected to be a “banner year” for Hawaii tourism more dark rather than rosy clouds are in the horizon. The fundamental problems are neither market size nor marketing. It is cost.

Hawaii cannot be moved 200 miles off of the US mainland or 200 miles off of Asia. As a result, 8 million tourists have to fly to it. Fuel is roughly 25% of an airline’s cost when oil is just under $100 per barrel. If oil price grows to $200 per barrel, fuel cost will be roughly 50% of an airline’s cost and airfares will be adjusted upward accordingly. Necessarily, the market will shrink. So here is a summary of positive (+) and negative (-) forces on Hawaii tourism which, in turn will affect its job count in the hospitality industry and its supporters such as the food, culture, entertainment and transportation industries.

(-) While in the next decade there will be large changes in energy innovation and a reduction in electric power production from oil, there are no foreseeable fixes for transportation fuels, particularly when it comes to air and marine transportation, both of which are Hawaii’s only lifelines. Hawaii’s sensitivity to oil prices will only worsen.

(+) Vast improvements in personal wealth in China, Russia and other developing Asian nations combined with possible relaxation of visa requirement bodes well for tourist arrivals from Asia.

(-) There will be a long-term reduction of arrivals from Japan not only because it is a mature market but also because it’s becoming an aging, less populous and heavily indebted country with somewhat slowed ability to innovate and outsourced production of most of its consumer and industrial products.

(+) Korea has almost 40% as many people as Japan and it’s a growth market for Hawaii.

(+) Hawaii has the ability to follow the American tradition of innovation by continuously developing niche tourist markets (adventure, ecotourism, fishing, LGBT, wedding, etc.)

(+) The large national debt is forcing a progressive devaluation of the dollar which makes foreign visitation to Hawaii more attractive. This may also boost arrivals from the mainland because foreign destinations become more expensive for Americans.

(-) Development of the proposed Honolulu rail with its debilitating multi-year construction, and the resultant non-improvement of traffic congestion and eyesore guideway will cause a prolonged tourism loss on Oahu, some of it made up by the other islands.

(-) Unless city and state budgets are re-aligned with emphasis on infrastructure improvement and maintenance, the resultant traffic congestion, potholed roads, sewer spills, water main breaks, poor park condition and homeless camps will cause a prolonged loss of tourism for Oahu. Eventually the disproportionally large budget allocations to outer islands will shrink to avert the collapse of Oahu.

While tourism and related occupations account for one fifth of the jobs in Hawaii, this is actually a fairly fragile industry that is heavily dependent on strong forces beyond its control. This is apparently lost on Hawaii legislators who on every downturn turn up the taxation scale for the tourism industry. Mismanagement in Hawaii and Washington, D.C. can easily affect Hawaii’s tourism and its related job count. So far Washington has no path to managing the national debt and Hawaii has no path to managing its looming infrastructure and energy crisis. So the dark clouds clearly overtake the rosy ones.

Summary
Oahu already had a net 50,000 out-migration from Honolulu County to other US or Hawaii counties. This will expand to all of Hawaii in the next two decades. State and federal government jobs, and DOE and UH jobs will be cut back. If local government improves its priorities there will be thousands of private local jobs for needed infrastructure replacement and maintenance, as well as productive energy projects. In the next couple decades, the job count in Hawaii will remain stable but several sectors in the economy will experience large changes.

(1) Source: State of Hawaii employment data is 2010 State of Hawaii Data Book.

Automated and Driverless Cars: Great for Safety, Not So Much for Congestion.

Can automated cars "cure" crashes and congestion? Renown (ex) Stanford University professor Sebastian Thrun who's team won ARPA's $2,000,000 driveless car challenge a few years ago thinks so as he presents the Google driverless Toyota Prius in this TED video.

This is an area where I believe that lawyers and politicians have more impact than engineers and technologists. The US had a fully developed and tested AHS or Automated Highway System in the mid-1990s as the sample article Whatever Happened to Automated Highway Systems? reminds us.

For those of us involved with intelligent transportation systems (ITS) the image below of eight large Buicks developed by California's Partners for Advanced Traffic and Highways (PATH) remains etched in memory. Observe the 0.2 second clearance between the AHS Buicks at 60 mph and the typical 2.0 second clearance in regular traffic.

When success was fully demonstrated, the government cut AHS funding because the issue became liability not technology. However, many of the technologies trickled down to piecemeal applications, some of which I summarize below.

Greyhound buses in the mainland have vibrating steering wheel (modeled after the aviation stick shaker to warn of impending stall) activated by radars if the bus tries to change onto a lane that is occupied by a vehicle. This also serves as an alarm if the drivers becomes drowsy. Daimler has introduced this to Mercedes cars but the system is not available in the US (due to liability.)

Since 2005 one can purchase many luxury vehicles with intelligent cruise control that can follow the car ahead. Some of them will bring a car to a complete stop automatically if the leader car comes to a stop. Some companies brand it as Adaptive Cruise Control and here is a demonstration dating to back 2008 at about 90 mph by a motorist on an autobahn.

In Europe higher priced BMWs will soon be offered with a system that if its driver becomes incapacitated, the car will maneuver itself, at German autobahn speeds, all the way from the fast lane to the right side shoulder, stop and send an SOS.


Many inexpensive cars in Europe in the $20,000 bracket have optical sensors on the bottom side of their exterior mirrors that follow the lane markings. They issue a "lane departure" warning to their driver. A handful of cars brought in the US in 2012 have this option too.

The US federal government has a major research initiative called http://www.its.dot.gov/press/2010/vii2intellidrive.htmIntelliDrive to further boost these efforts.

And now for the conclusion and why AHS was terminated as a capacity enhancement: On a busy highway most drivers follow each other at a headway of about 1.5 seconds. As a result, the maximum sustained capacity of a freeway lane is 3600 seconds in one hour divided by 1.5 second headway equals 2400 vehicles per hour.

If car technology takes over, this headway can be reduced to 0.5 seconds which triples the capacity of the same freeway lane. So one lane could carry as many cars as an entire 3-lane section of the H-1 Freeway! This is clearly a bargain for our highway infrastructure.

However, if this was ever launched, it would require the presence of a largely empty lane next to the AHS lane (such as a bus-only lane with large gaps between the buses) so that vehicles can be merged in and out the tight AHS platoon; see the empty lane next to the platoon of fast moving Buicks in the picture above.) Only professional race drivers can routinely cope with 0.5 second headways (and they fail almost at every NASCAR race.)

With the press of the AHS button, merging into the tight lane, traveling at 60 mph and exiting the AHS lane will be done entirely by the computer, sensors and servos of the car in dense traffic. Now visuallize such a car with mommy, daddy and two kids in the back on a dusty, rainy or dark environment which may affect sensor performance and image recognition. There is clear risk and because of the tightness of the platoon, one mishap will likely cause large losses. Who is liable? The feds wanted none of this on the federal interstate system.

AHS has a tremendous promise for safety bust much less promise for direct congestion reduction. However, crash reduction does help traffic congestion because by most accounts 30% to 60% of the annual traffic congestion in a metro area is caused by accidents that block traffic lanes. Intelligent systems minimize driver error and accidents, so lanes become closed less often.

Mid-March 2012 update: The Economist publishes Self-driving cars. Safer at any speed? "Another headache will be lawsuits from motorists blaming their car for crashes. Honda is already being sued in America over the collision-avoidance system on its top-end Acura models. Pim van der Jagt, a research chief at Ford, says new laws will be needed to deal with such issues—and cars may need black boxes to record what went wrong in accidents."

Honolulu Rail: Designed to Fail

Randal O'Toole, economist and author of several books on transportation and urban planning was in Honolulu last week where he spoke on two distinguished panels in Kapolei and in Honolulu (see notes 1,2.)

He summarized his opinion about Honolulu's rail in this eye-opening Designed to Fail article.

A few highlights:

• Honolulu rail ... will have the high costs of heavy rail and the capacity limits of light rail.
• Honolulu rail ... has too few seats so bus riders question whether people will be willing to stand for 20-minute trips.
• Honolulu rail ... was planned to go to Kapolei, which has about 35,000 people, but the city decided it didn’t have enough money to go that far. Between East Kapolei and Honolulu the rail line will pass through Waipahu (33,000 people), Pearl City (48,000 people), and by Pearl Harbor Naval Base (its 20,000 people work right on the base). The rest of the rail line goes through light industrial and commercial areas. So the rail line will serve, at most, about 15% of the residents of Oahu and probably no more than 20% of the jobs. That means no more than about 3% of workers will both live and work on the rail line.
• Honolulu rail ... ridership projections are questionable and average at 110 passengers on board the two-car trains at any given time. US light-rail cars carry an average of 24 people, and the most crowded in San Diego carry just 37 people, 110 is highly optimistic.
• Honolulu rail ... proponents argue that the project will relieve congestion, but even the final environmental impact statement says that, at every place evaluated, congestion will be worse in 2030 with the project than without it (see page 3-51).
• Honolulu rail ... will not save energy: at 2,020 BTUs per passenger mile, Honolulu’s bus system already uses less energy than almost every other light-rail and heavy-rail line outside of New York City. By 2030, under the Obama fuel economy standards, the average car on the road will also use only about 2,000 BTUs per passenger mile, and cars in Hawaii (where gas prices are higher than the rest of the U.S.) will probably use even less.

Finally speaking about deficient (low) capacity, O'Toole calculates this:
With 64 seats, the two-car trains supposedly have room for 254 standing passengers. But that’s at “crush capacity,” which is far more crowded than Americans are willing to accept. Assuming the city increases the seating to 76 seats, actual loads are likely to be limited to a total of about 150 to 200 people per train. At a maximum of 20 trains an hour in each direction, the line will be able to move about 3,000 to 4,000 people per hour inbound in the morning and a similar number outbound in the afternoon. By comparison, a highway lane can easily move 600 buses per hour, and at 40 seats per bus that represents 24,000 people per hour, none of them having to stand.

Overall O'Toole observes that in order to pay for this and other rail contracts, Honolulu’s city manager quietly “suspended” the city’s debt limit without consulting the city council or, apparently, the mayor. As Wendell Cox points out, the city faces billions of dollars in expenses fixing its sewer, water, and other infrastructure, and spending $5.3 billion on rail, which at best is a luxury (and at worst a curse) will make it harder to do anything else.

Notes: (1) West Oahu Development: Meat and Potatoes or Gravy Train? (2) Sustainable Growth for Hawaii

Opposition to Honolulu Rail Grows to 55%

February 12, 2012 poll by HawaiiNewsNow and Honolulu Advertiser: 53% oppose rail



March 5, 2012 poll by Civil Beat: 55% oppose rail

Energy, Power, Storage, Distribution, Management

These five words, Energy, Power, Storage, Distribution, Management encapsulate almost all of what's involved with powering up our daily life, production and industry.

First, we need to make an important distinction between Energy and Power. We’ve got lots of Energy. We are getting short on Power.

Roughly speaking, if we could capture 100% of one day of sunlight energy, store it and distribute it as electric power, this would cover the entire needs of today’s world for a full year.

On the other hand, Bill Gates on GatesNotes on Energy states that "All the batteries on Earth can store 10 minutes of the world's electric needs." We are very short on storage.

We’ve got enough geothermal energy in Hawaii to make us self sufficient for centuries including the production of fuels for transportation.

Two big problems are: (1) We do not have sufficient infrastructure to take Energy and make Power, and (2) once we make power, we have no means to store it for later use. The second problem makes wind, solar and other intermittent power generation methods tertiary in terms of power production.

Smart grid distribution with connected electric car batteries, capacitors and intelligent management make the incorporation of renewable intermittent power more possible, but the existing capability in terms of storage and management is limited.

Unfortunately modern high capacity batteries in hybrid and plug-in vehicles require "exotic" materials in their composition. These make them very expensive and the potential for large price reductions and very high production numbers is limited.

A fairly recent development is large liquid batteries: "MIT team makes progress toward goal of inexpensive grid-scale batteries that could help make intermittent renewable energy sources viable." The resultant spinoff company, Liquid Metal Battery Corp. has benefited from funding from the Gates Foundation.

These batteries depend on molten metal at temperatures higher than 500 C (930 F), so I was a little sceptical that large amounts of energy would be wasted in keeping the metals molten. However the authors have accounted for this in their journal publication*: "At some larger scale, the action of electric current flowing through the electrolyte could generate enough Joule heat to keep the components molten, thereby obviating the need for external heaters, as is the case with electrolytic cells producing aluminum on a commercial scale"

(*) Magnesium−Antimony Liquid Metal Battery for Stationary, Energy Storage, David J. Bradwell, Hojong Kim, Aislinn H. C. Sirk, and Donald R. Sadoway, J.Am.Chem.Soc. 2012, 134, 1895−1897.

Fiscal Prudence of a City Budget: Carlisle Edition

This list would make a great joke if it was not so costly for Honolulu residents and their descendants:

(1) Carlisle put the $5 billion sewer consent decree on the back burner (have you seen any major construction?) and made the $5 billion rail the only budget priority.

(2) Carlisle’s delaying tactics for the lawsuit filed by Cayetano et al. postponed the final hearing from November 2011 to August 2012 at a much higher cost to taxpayers. His delaying tactics will incur construction and repair costs of over $200 million.

(3) Carlisle decides to spend hundreds of millions on construction that will have to be torn down when the city loses in court. If that's not a waste of money, what is it?

(4) Carlisle claims ignorance to the fact that his city manager appointee recklessly and unilaterally suspended the city's debt ceiling of 20% even before rail had any cost overruns.

(5) Carlisle's procurement process selected Ansaldo instead of Bombardier or Sumitomo although Ansaldo offered a $241 million more costly bid. Worse yet, spare parts and know-how won't be coming from neighboring Canada or Japan (who also are good tourist customers,) but from bankrupt Italy which is literally as far away on the northern hemisphere one can get from Hawaii.

(6) Carlisle insists on starting heavy construction although the Feds have not approved a dime of construction monies and the funding agreement with the Federal Transit Administration cannot be done before October or November this year.

And to conclude Carlisle's baker's half dozen of irresponsibility:

(7) Who can forget his remark in the 2010 elections that HART "will cost us nothing?" HART's new executive director alone costs us $1 million over three years!

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EDIT: A couple hours after I logged this post John Pritchett published his Friday Cartoon (note, Chin is the City Manager.)

West Oahu Development: Meat and Potatoes or Gravy Train?

Use this link to load or print a PDF version of this announcement.

US Financial Crisis and Globalization

In the coming years US may suffer greatly by the very pattern that it advocated: Globalization. The US is substantially dependent on outside sources to supply industrial products, consumer products, food and energy. So far this has worked well, but the table is about to turn around.

First let's summarize the fiscal crisis in a few bullets:

• This is the fourth straight year that the US borrowed more than $1 trillion to support its federal government. US budget deficit will top $1.3 trillion, 8.7% of GDP. Only two European countries, Greece and Ireland, have larger budget deficits as a percent of GDP.
• US national debt now exceeds $15.3 trillion, or 102% of GDP. Only four European countries have larger national debts than US: Greece, Ireland, Portugal and Italy.
• If one adds the unfunded liabilities of Social Security and Medicare to the US official national debt, the US debt is $72 trillion, by Obama administration projections. This is more than 480% of GDP. France, the second most insolvent nation in Europe, owes 549% of GDP.
• Under more realistic projections, the US official national debt is $137 trillion or 911% of GDP. Counting both official debt and unfunded pension and health care liabilities, the most indebted nation in Europe is Greece, which owes 875% of GDP.
• 48 of 50 states have annual deficits and large long term debt. Several states have insolvent employee pension and health care trusts. Of course Hawaii is one of them.
• Many US cities are in deficit, some are at or near bankruptcy and all face major infrastructure backlogs as well as their own employee retirement shortfalls.
• Unlike the huge debt of Japan or France that is owed mostly by their own citizens, US is more like Greece. Most of its debt owned by foreign countries and external lenders.

Why is the US not at the same position as Greece? The reasons are many and they include US' vastly larger economy, vast ability to innovate, vast natural resources compared to most EU countries, vast dependency of many countries on the US consumer to buy the things they make, vast military capability, and having the US dollar as the world's main reserve currency.

This reserve currency is also US' main tool for controlling a quick financial collapse. The devaluation of the dollar would slash the debt owned to foreign interests. At the same time globalization will come back and bite the US consumer since all imports will become 30% more expensive if the greenback is devalued by 30%, resulting in internal hyperinflation and market instability. Messy!

At the same time, this devaluation will cause substantial losses to US' global partners. For example, BMWs will be 30% more expensive in the US and Chryslers will be 30% less expensive in Italy, causing compounded losses in the demand of consumer products in the EU. Messy!

What caused all this mess? Policies and actions focused on the negative side of Capitalism and the negative side of Socialism. Capitalism focused on price and profit, not on sustainable production. Socialism focused on ever increasing and unsupportable entitlements instead of basic and sustainable security.

The path to the abyss is clear.

Greece is there but the US is near.

Do politicians hear?

Traffic Signal Optimization

4,114 Stoplights in Los Angeles and the Intricate Network that Keeps Traffic Moving is a simple and informative article of some of the advances in moving heavy traffic in congested cities.

I note that the City of Los Angeles has placed major priority on this city function not only by developing their sophisticated control system called ATSAC but also by staffing its operation ... "Yu and his team of 35 ­engineers and 20 operators."

HONOLULU needs about 1/4 of this level of staffing. It has 1/10.

In general, traffic signal optimization is among the "low hanging fruit" in mitigating some of the traffic congestion in urban areas. But it needs funding and staffing because this is a 24x7 operations with ever changing flows and congestion spots.

Honolulu Can Do Much Better!

On President’s Day Senator Daniel Inouye called a press conference at his local office and made three recommendations for Honolulu. Build the rail, elect Mazie Hirono for Senator and elect Kirk Caldwell for mayor. Rail, Hirono and Kirk is the best trio for Honolulu’s future? I have a graphic answer ;)

US Debt: Remove 8 Zeros. Get an Understanding.

I could not resist copying here this simple chain email message.

• U.S. Tax revenue: $2,170,000,000,000
• Fed budget: $3,820,000,000,000
• New debt: $1,650,000,000,000
• National debt: $14,271,000,000,000
• Recent budget cuts: $38,500,000,000

Let's now remove 8 zeros and pretend it's a household budget:

• Annual family income: $21,700
• Money the family spent: $38,200
• New debt on the credit card: $16,500
• Outstanding balance on the credit card: $142,710
• Total budget cuts: $385

And I add this...

Revised family plan: Raise the credit card limit to $160,000

Obviously the parents are nuts. Pity the children.

Sustainable Growth for Hawaii -- Expert Panel Program

Use this link to load or print a PDF version of this announcement.

Ban the Ban of Plastic Bags

Dear Council Members,

I conducted a poll on the proposal on banning plastic bags. My list of emails is large and diverse and I chose a random sample of 600 recipients to receive the survey link. Still, this is not a scientific survey. However, it is indicative that after 50 responses the results did not change by more than 2%. In other words, the public' sentiment is quite clear.

The poll results screen capture below reflects 112 responses.


Only 25% answered yes to the statement Plastic bags are a serious threat to our environment.

John Pritchett's cartoon at the very bottom concludes this presentation.

I'd say that you may safely proceed with bigger and better things.

Aloha,
Panos

Jobs: Fundamental Trends – 2000 to 2050. How Did We Get Here and What’s in Store?

There are three fundamental trends at play in this half century:

• Aging of both population and infrastructure;
• Advanced economies cannot absorb unskilled and low skilled laborers; and,
• Too many crises in one decade took our eye off the ball.

The first trend affects the US more than other nations. Baby-boomers have started reaching the age of retirement and the age when health maintenance expenses increase. As a result many state pension and health funds are under substantial stress and their situation is likely to rapidly worsen as more workers age and fewer workers find high paying jobs that pay high enough taxes to sustain pension and health expenses. One of the proposals toward retirement fund solvency is to raise the age of retirement from the typical of 65 year of age to 70.

Along with the baby boom in the US also came the second infrastructure boom (the first one was during the Great Depression.) The second boom focused mostly on transportation and the road and air modes in particular, along with a misguided urban rail renaissance* of the late 1970s till the 1990s. For example, BART in San Francisco and Metro in Washington. DC are facing work backlogs in the order of tens of billions of dollars for required refurbishment and rehabilitation to bring those systems to a top operational condition. The bills are in the billions for bridges and elevated highway sections, and for the strengthening and restoration of millions of lane-miles of roadways.

While infrastructure presents a great opportunity for boosting the job count, a lot of the work is both highly technical and very expensive. The former implies that unskilled labor is unsuitable, and the latter implies that a lot of infrastructure projects may be unaffordable. The existing gasoline taxes which have been constant for almost 20 years at the federal level have lost value and are insufficient to cover highway maintenance. In addition about 20% of these funds is re-purposed to pay for loss-making transit systems.

Electric and other non-fossil fuel powered vehicles are not visiting the gas pump regularly (or ever), thus no tax for their road usage is collected. The highway tax system needs both a tax rate update and modernization. This will create new jobs, but again, the expertise will vary from technician to engineer; no need for unskilled labor.

This segways us to the second trend which is the progressive evolution of advanced technologies out of labor intensive jobs. Agriculture, construction and manufacturing are increasingly automated. They require fewer and more skilled staff. A good example is driverless trains in France. They replace approximately 100 motormen with two dozen rail engineers and train management technicians in a control room. This cuts the job count by 75% and costs by 50%. Fewer, more comfortable and better paid jobs is what advanced economies provide.

Retailing absorbs low skill labor. But there are many changes that reduce the unskilled job count in retailing such as Internet retailing, big box store retailing and upscale retailing, all of which require fewer and better skilled workers.

The transportation sector employees roughly 5% to 15% of a region’s workers (the count is higher in highly urbanized areas). This sector is dominated by federal and state regulations as well as unions. Both regulations and unions make the absorption of low skill labor more difficult.

The third trend is actually a series of calamities that caused stress to the economy and inattention to its drifting into deep losses. I list eight major ones:

1. Global Warming related regulations leading to various stresses on energy production and pricing.
2. The September 11, 2001 attacks in the US and the subsequent wars in Afghanistan and Iraq.
3. Hurricane Katrina in New Orleans which, among other things, caused a fuel price escalation.
4. Drought in Texas with major impacts on jobs and food prices.
5. Huge losses in wind and solar projects, and erratic US energy policy.
6. Rapid increase in commodity and energy prices due in part to rising demand in Asia.
7. The sub-prime lending melt down.
8. Euro crisis, weakening US dollar, and Chinese RMB strengthening are causing various currency instabilities.

How did we get here? The discussion above suggests that large losses in the count of jobs in 2009 and 2010 can be explained by natural trends (aging), structural trends (modernization) and calamities (man and nature-made losses).

What’s in store? Prognostication is both fun and faulty. One thing that is certain is that the BAU model, that is, Business As Usual will bring more of the same.

If Congress remains dysfunctional, if state and federal administrations focus on government expansion and business regulation, if unions stress demands for perks instead of modernization and productivity improvements, if US energy policy continues to be an assortment of mostly special-interest ideas and incentives, then job count and quality of life will certainly deteriorate.

It does not have to be this way. Upcoming articles look into ways for more sustainable jobs.

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(*) Rail Transit: Are we creating new life or resuscitating a dinosaur? This was the title of an 1980s article by Northwestern University’s Joseph Schofer, a distinguished professor of transportation at the McCormick School of Engineering and its Associate Dean.

ECONOMY Survey -- The Economist and Hawaii Results

I like people, global and local issues, and numbers ... so I present a mini-series of surveys on major issues which have been debated at The Economist. Obviously the results only represent people with at least a basic level of computer and Internet savvy. However, the results may be sufficiently indicative because most questions along with the careful wording of questions lead to a straightforward answer: Agree, Disagree or Do Not Know. The Economist has received a few thousand responses to each of their questions. I post results only when Hawaii surveys exceed 100 responses.

ECONOMY Survey Results (click to take the survey, part 1, and economy survey part 2.)

The results are summarized in the Table and discussed below.


The first three issues shown in the table results in solid agreement for both Economist and Hawaii respondents.

• Brand AMERICA will regain its shine, although some may question whether brand AMERICA has lost its shine in the first place.
  
• People do not have much faith in corporations to take measures towards sustainability. Although one might argue that it is people who force corporations to make "cheap" choices since they demand inexpensive products. You can't run an operation on solar power at current costs and expect to have a cost similar to a competitor using coal or hydro-electric power.
• 75% of both Economist and Hawaii respondents agree that workers do not get enough sleep. This has important implication on weight gain, diabetes, productivity at work, safety in traffic and personal relations. How much of this is due to electronic gaming and social media engagement is an open question.

The next four issues show a solid disagreement between Economist and Hawaii respondents.

• Almost 75% believe that China's currency won't be a reserve currency any time soon. Currently the basket of reserve currencies include the US Dollar, the Euro and the British Pound but dollar super dominated the basket accounting for 890-100% of most reserve applications.
• A woman's place is at work is a controversial statement; it is the only statement for which I received complaining emails. Recall that The Economist has developed all these statements. Economist respondents give a slim margin of disagreement to this, but two thirds of Hawaii respondents do not agree that a woman's place is at work.
• Almost 75% believe that senior company executives are not worth what they are paid. No surprise here and both the perception of the respondents and the reality are so, in my opinion.
• The clear majority of the respondents do not agree that sustainable development is unsustainable. In other words, they believe that we can continue to develop but in a sustainable, Earth-friendly manner. Sure, but only up to a point. There will likely be too many challenges to overcome one Earth's population approaches 10 billion people. This bring up the divisive issue of population. (See below.)
  

The remaining four issues reveal opposing views between Economist and Hawaii responses.

• 80% of Economist responses believe that the world would be better off with fewer people, but only 42% of "spirit of aloha" Hawaii respondents think so. Are we seeing the result of Western selfish culture and Hawaii's more accepting multi-ethnic culture?
• Who should pay for higher education? Almost 80% of socialist-minded European respondents of the Economist want the state to pay. Free market minded Hawaii respondents make this an individual pocket-book and career choice.
• Economist respondents come from industrial nations so it's no surprise that 78% feel that an economy cannot succeed without a big manufacturing base. In Hawaii with its sparse and light industrial base the response is about 50-50.
• Again socialist-minded European respondents are split about 50-50 on the effect of government regulation of business finance, but Hawaii respondents are resoundingly against multi-billion bailouts and the ropes (not strings) that come attached to them.

Chrysler's Super Bowl Ad with Clint Eastwood

Half Time in America: Chrysler's 2-minute long TV commercial with Clint Eastwood during the 46th Super Bowl was a strong political statement. It was likely washed down too quickly with beer, pizza and nachos, but it did generate a lot of media coverage.

What did Clint's message say to people in Hawaii? My small sample survey reveals the following:

78% of the respondents agree that Clint is talking about American patriotism, Detroit rebounding, union jobs or all of these.

The majority opinion is that this commercial has nothing to do with Chrysler cars or cars in general, but 43% think that Clint is also talking about the importance of the car industry for America. See details below.


75% of the respondents feel that Clint is raising an alarm about the condition of our country, the upcoming elections and the future of America or all of these.

Clint himself stated that he is not in agreement with the president's policies but he did not think that this commercial was about Obama. 43% of Hawaii respondents agree, but 49% responded that the ad support Obama policies. Only 8% responded that the ad goes against Obama policies. See details below.



Kudos to Chrysler for developing a thought provoking ad which some have labelled as a payback to Obama administration for arranging the auto industry bailouts.

The 60% Lie: Less than 6% of Oahu's people live within walking distance of the proposed rail!

Dennis Callan, planner and rail aficionado says this:

"The city claims that more than 60% of Oahu residents, some 600,000 people, live along the rail route, but in reality less than 6% of Oahu's population resides within walking distance of the proposed train stations.

"Such misleading inflated numbers from our city government are part of their ongoing propaganda campaign, which has distorted most aspects of the rail system in their attempt to sell it to the public with rosy projections. They would like you to think the rail is very accessible and useful, but it is not."

Callan's video Who Will Ride Honolulu's Train has the analysis and numbers that proves the city's exaggeration and illustrates the continuous dishonesty of HART members who support the wrong facts in the media.

Jobs. Jobs. Jobs.

Seth Godin, marketing guru, ex-VP at Yahoo! and author of 13 books, believes that “the current recession is a forever recession” because the industrial age has ended and this means that the days when people were able to get above average pay for average work are over. Self-improvement, continuous learning and investment on oneself are key to employment otherwise “never mind the race to the top, you'll be racing to the bottom.”

While this is useful advice for those currently employed, the pressing problem is unemployment and under-employment. The Bureau of Labor Statistics (BLS) calculates the official unemployment rate by looking at those who are employed or who have actively looked for work within the last four weeks. As a result, the official rate excludes workers who have decided to drop out of the labor market altogether. The official rate also ignores those who settle for part-time work since they are unable to find a full-time job.

Recognizing this shortcoming, the BLS also reports the U-6 rate, which includes those who have sought a job sometime in the last 12 months and those who have accepted part-time jobs but would prefer full time. The U-6 rate is a better representation of the ability of the economy to provide jobs. Let's take a look at the numbers as summarized in NCPA's Tracking the Unreported Unemployed:

• The 1948-2007 unemployment average is 5.6%.
• The unemployment rate moved from 5% in January 2008 to a high of 10.1% in October 2009, and a current rate of 8.6%.
• The U-6 rate moved from 8.8% in December 2007 to 17.4% in October 2009 and 15.6% in November 2011.
• U-6 rate is almost twice as high as the official unemployment rate. It explains the increasing pressure for economic improvement and jobs.
  
• By the end of 2011, 43% of all unemployed have been unemployed for more than 27 weeks. Besides being jobless, their skills deteriorate, which worsens their employment prospects.
  

Without doubt the unemployment challenge is serious. What causes a high unemployment rate? There are several causes. Here is a big one: The disconnect between supply and demand for jobs. There is a glut of low skill laborer supply. There is demand for high skill, specialized jobs. Unemployed carpenters. Engineers wanted.

The problem of turning 500 unemployed carpenters to 500 engineers is impossible to legislate. In general, turning thousands of low skilled workers to thousands of high skilled workers is very difficult to solve. We need to understand and address the root causes of the problem some of which have deep cultural roots such as over-emphasis in sports instead of scholarly achievement, under-performing public education systems, and stereotypes based on race and gender. Another part of the problem is government regulations and union rules. I’ll cover most of these in a series of articles.

Instead of addressing the root causes of unemployment, politicians in the recent past responded to the cries for “jobs, jobs, jobs!” in two wrong ways: (1) They approved “make work” projects for low skill and construction labor, and (2) they “incentivized” new high tech industries.

“Make work” projects is the use of taxpayer funds to develop unnecessary or low effectiveness infrastructure projects, typically show-off projects or transit projects. These provide some jobs for low skill labor but in reality the unemployment problem is postponed for a few years while the tax hole becomes bigger. “Make work” policies are unsustainable. They develop dangerous dependencies for thousands of low skill laborers instead of providing opportunities for advancement and job diversification.

The current genre of “high tech incentives” is the green industry. Incentives are typically taxpayer handouts to targeted groups, e.g., relating to solar panels and electric cars. People and industry respond to incentives. While accounting in Hawaii is poor, it is much better in the UK where the conclusion in Worth The Candle? The Economic Impact of Renewable Energy Policy the UK was that “for every job created in the UK in renewable energy, 3.7 jobs are lost.” In Hawaii, misguided policies will likely result in more solar guys than nurses per 1,000 people; and a deeper tax hole. Such outcomes are unsustainable and undesirable.

Politically expedient solutions to unemployment are both costly and ineffective. We can’t talk about solutions until we are able to wrap our brain around the issue of “jobs.” What are some of the many facets of employment and unemployment?

Unemployment varies widely by level of education. The Chronicle of Higher Education reports this: The overall unemployment rate for recent Bachelors degree recipients is 8.9%, compared with 22.9% for recent high-school graduates and 31.5% for recent high-school dropouts. It also varies by fields: Unemployment is higher among recent graduates with nontechnical fields of study, such as the arts (11.1%) and humanities and liberal arts (9.4%), but it is only 5.4% for graduates who studied health or education.

College pays off: The Los Angeles Times reports that the average take-home pay of college graduates is $38,950, compared with $21,500 for high school graduates. A college graduate's earnings would exceed a high school graduate's by more than $1 million over 40 years.

Gender makes a difference. The Economist published detailed analysis which I’ll summarize elsewhere but the bottom line of "The Cashier and The Carpenter" is that men and women do different work for different pay. For example, by working shorter paid hours, women are managing to achieve a reasonable balance in their lives. The Economist cites results that show that work-life balance dissatisfaction is about 18% for women and 27% for men in Europe.

The New York Times reports that in the two and a half years since the recovery officially began, men age 16 to 24 have gained 178,000 jobs, and women have lost 255,000 positions. “Apparently discouraged by scant openings, 412,000 young women have dropped out of the labor force entirely in the last two and a half years, meaning they are not looking for work. Young women in their late teens and early 20’s view today’s economic lull as an opportunity to upgrade their skills, their male counterparts are more likely to take whatever job they can find.” As a result, the next generation of women may have a significant advantage over their male counterparts in the near future.

The NYT article continues to say that many of the occupations expected to have the most growth, like nurses, home health aides and dental hygienists, have traditionally been filled by women. Jobs in male-dominated industries such as manufacturing and construction have been in decline. Manual labor careers can also be hard to maintain indefinitely because youthful strength eventually fades. The pension coverage of construction and manufacturing workers is also lagging which presents a challenge for males as they age.

Knowledge and understanding of the true causes of a problem are the right foundation for crafting solutions. My series of summary articles on “jobs” throws light onto the employment and unemployment challenges. Stay tuned!



1. Jobs. Jobs. Jobs. This article.

2. Jobs: Fundamental Trends – 2000 to 2050. How Did We Get Here and What’s in Store?

3. Jobs Hawaii: Outlook for Jobs in Education, Government, Military and Tourism

4. Jobs: The Young and Unskilled

5. Jobs: What Women Want

6. Top Jobs: 10 Hot Careers for 2012

7. The Right Job: Sustainable, Desirable Employment