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	<title>Tom Abate</title>
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	<link>http://www.tomabate.com</link>
	<description>Public Editor-at-Large</description>
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		<title>Fear of the Unknown Justified or Not?</title>
		<link>http://www.tomabate.com/fear-of-the-unknown-justified-or-not/</link>
		<comments>http://www.tomabate.com/fear-of-the-unknown-justified-or-not/#comments</comments>
		<pubDate>Mon, 22 Aug 2011 16:50:42 +0000</pubDate>
		<dc:creator>Tom Abate</dc:creator>
				<category><![CDATA[Culture]]></category>

		<guid isPermaLink="false">http://www.tomabate.com/?p=443</guid>
		<description><![CDATA[I&#8217;ve  always been a science fiction fan and none too discriminating in my tastes, which range from the classic Star Trek to the edgy Babylon 5 and the preposterous StarGate series. Now a NASA study suggests humankind might not rush &#8230; <a class="more-link" href="http://www.tomabate.com/fear-of-the-unknown-justified-or-not/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>I&#8217;ve  always been a science fiction fan and none too discriminating in my tastes, which range from the classic Star Trek to the edgy Babylon 5 and the preposterous StarGate series. Now a NASA study suggests humankind might not rush to boldly go where none have gone before.</p>
<p><span id="more-443"></span>The study, &#8220;Would Contact with Extraterrestrials Benefit or Harm Humanity?&#8221; was written by scientists at NASA and Pennsylvania State University and published a few months ago in the journal Acta Astronautica. Recent <a href="http://www.ibtimes.com/articles/201200/20110821/would-et-come-in-peace-or-to-destroy-humanity-aliens-civilization.htm">media reports</a> brought it to light.</p>
<p>As befits the topic, the study strikes an ambivalent note. Alien species could decide we are dangerous and wipe us out. Or they could aid us with technology and urge us along. We&#8217;ll have to roll the dice when that historic day occurs.</p>
<p>Meanwhile there may be a way to put this bit of whimsy to use in our own lives.</p>
<p>Fight or flight is wired into our makeup. Our inner animal is boiling with hormones that tense our muscles to spring into action when confronted with a threat. And since saber tooth tigers are extinct, the question often confronting us is how we react to the unknown. Are we the curious who linger to explore or the cautious who regard the novel as a risk?</p>
<p>The healthiest choice may be to assume that the world is, by and large, lovely and miraculous. Maybe not quite a Garden of Eden but certainly a rich realm of possibilities which we owe it to ourselves to explore &#8212; whether boldly or not being a matter of individual preference.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
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		<title>Food tax equals shotgun vegetables</title>
		<link>http://www.tomabate.com/food-tax-equals-shotgun-vegetables/</link>
		<comments>http://www.tomabate.com/food-tax-equals-shotgun-vegetables/#comments</comments>
		<pubDate>Mon, 25 Jul 2011 16:24:54 +0000</pubDate>
		<dc:creator>Tom Abate</dc:creator>
				<category><![CDATA[Taxes]]></category>

		<guid isPermaLink="false">http://www.tomabate.com/?p=425</guid>
		<description><![CDATA[Some people want to tax junk food just as California taxes cigarettes to discourage consumption. Without wishing to defend either trans fats or tobacco I oppose using taxes as a punishment. Taxes should be about raising revenue fairly. A junk &#8230; <a class="more-link" href="http://www.tomabate.com/food-tax-equals-shotgun-vegetables/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>Some people want to tax junk food just as <a href="http://articles.sfgate.com/1998-11-12/news/17735430_1_tobacco-industry-california-election-proposition">California taxes cigarettes</a> to discourage consumption. Without wishing to defend either trans fats or tobacco I oppose using taxes as a punishment. Taxes should be about raising revenue fairly. A junk food tax, like the cigarette levy, would hurt the poor.</p>
<p><span id="more-425"></span>What set me off on junk food was an op-ed in Sunday&#8217;s New York Times titled, &#8220;Bad Food? Tax it and subsidize vegetables.&#8221; That article cited the 50-cent per pack  surcharge that California voters approved in 1998. Promoted by actor and producer Rob Reiner, the measure had <a href="http://articles.sfgate.com/1998-10-22/news/17734259_1_tobacco-tax-reiner-initiative-nation-s-tobacco-industry">Hollywood support</a>. It promised to use the money raised for early <a href="http://ballotpedia.org/wiki/index.php/California_Proposition_10,_%22First_5%22_Early_Childhood_Cigarette_Tax_%281998%29">childhood development programs</a>.</p>
<p>How has it worked? A California Department of Public Health <a href="http://www.cdph.ca.gov/programs/tobacco/Documents/CTCPConsumption05.pdf">report</a> says cigarette use has fallen faster in the state than the nation. That&#8217;s good. But it has fallen fastest among the the affluent. Californians lower on the income ladder smoke fewer cigarettes than before but more than their economic betters. And they pay more for their habit. I&#8217;m not sure how early childhood development is faring in the state but I do not get the sense that California has become a playground for young kids from families of limited means.</p>
<p>Good nutrition is essential. But the urban poor have more pressing problems than learning the food triangle. Their jobs opportunities are shrinking. Their friends get shot.  Working class families are a little better off but those lucky enough to have two incomes face time and cost pressures when it comes to shopping and cooking.</p>
<p>Taxing junk food to decrease consumption would punish the victims of an industry that advertises its products as affordable luxuries.  If the products are unhealthy use public policy to force the products to change. When we use tax policy to drive explicit social behavior we hand ammunition to anti-tax zealots who oppose fairer measures like progressive income taxes that support a broad range of public services. It is not up to affluent foodies and Hollywood to tell the poor and working class to eat their veggies or else.</p>
<p>&nbsp;</p>
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		<title>Help small biz by not favoring big biz</title>
		<link>http://www.tomabate.com/help-small-biz-by-not-favoring-big-biz/</link>
		<comments>http://www.tomabate.com/help-small-biz-by-not-favoring-big-biz/#comments</comments>
		<pubDate>Tue, 12 Jul 2011 08:00:05 +0000</pubDate>
		<dc:creator>Tom Abate</dc:creator>
				<category><![CDATA[Small Business]]></category>

		<guid isPermaLink="false">http://www.tomabate.com/?p=414</guid>
		<description><![CDATA[What is small business and what can government do to help? An analysis by small business trackers Carolyn Ockels and Steve King of Emergent Research  suggests that current policies are skewed toward Silicon Valley startups rather than Main Street bootstrappers. &#8230; <a class="more-link" href="http://www.tomabate.com/help-small-biz-by-not-favoring-big-biz/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>What is small business and what can government do to help? An analysis by small business trackers Carolyn Ockels and Steve King of Emergent Research  suggests that current policies are skewed toward Silicon Valley startups rather than Main Street bootstrappers.</p>
<p><span id="more-414"></span></p>
<p>&#8220;We think policy makers need a better understanding of not just  high-growth firms and their founders, but also the less glamorous  businesses and business owners that make up the vast majority of small  businesses in the U.S. economy,&#8221; they recently <a href="http://www.smallbizlabs.com/2011/06/comparing-small-business-owners-and-high-growth-entrepreneurs.html">wrote</a>.</p>
<p>Agreed. But what policies might emerge from such a better understanding?</p>
<p>Since their blog entry was silent on that point  so let me suggest that one way to even the score is already underway &#8212; California and other states  are starting to require online merchants to collect sales taxes just like their Main Street counterparts.</p>
<p>I don&#8217;t like the sales tax. I have collected it and I do not think it&#8217;s the fairest levy in the land. But I do think it&#8217;s absurd to give online giants like Amazon a free ride while forcing corner merchants to become revenue agents.</p>
<p>And it is absolutely ludicrous for online vendors to argue that they can&#8217;t figure out how to collect sales taxes when they&#8217;ve made an art out of tracking purchasing patterns and up-to-the minute locations in order to  sell consumers more stuff.</p>
<p>Populous states like California have some incentive to stand up to online vendors and level the sales tax playing field for brick and mortar merchants within their borders.</p>
<p>But Congress has become a lobbyists&#8217; playground. The Senate is dominated by big empty states that have few consumers and are less reliant on sales taxes in any case.</p>
<p>Let us be alert for a move at the national level to preempt state laws regarding Internet sales tax collection &#8212; and if there is, hope that Republican lawmakers adhere to their states-rights beliefs and let California try to even the score for local merchants.</p>
<p>&nbsp;</p>
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		<title>Lesson in job stats: get better, not bitter</title>
		<link>http://www.tomabate.com/lesson-in-job-stats-get-better-not-bitter/</link>
		<comments>http://www.tomabate.com/lesson-in-job-stats-get-better-not-bitter/#comments</comments>
		<pubDate>Fri, 08 Jul 2011 16:01:57 +0000</pubDate>
		<dc:creator>Tom Abate</dc:creator>
				<category><![CDATA[Thinking Out Loud]]></category>

		<guid isPermaLink="false">http://www.tomabate.com/?p=401</guid>
		<description><![CDATA[Today&#8217;s  national unemployment report is grim: jobs flat, unemployment at 9.2 percent, millions job-hunting more than a year. Bay Area commentator Dick Lepre probes a bit deeper. Zeroing in on  journalism, a recent report says the number of  scribes working &#8230; <a class="more-link" href="http://www.tomabate.com/lesson-in-job-stats-get-better-not-bitter/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>Today&#8217;s  national unemployment <a href="http://www.bls.gov/news.release/pdf/empsit.pdf">report</a> is grim: jobs flat, unemployment at 9.2 percent, millions job-hunting more than a year. Bay Area commentator Dick Lepre <a href="http://economy.typepad.com/mortgages/2011/07/jobs-the-bls-employment-situation-report-was-much-worse-than-expectation-the-headline-is-18000-jobs-by-comparison-pri.html">probes</a> a bit deeper. Zeroing in on  journalism, a recent <a href="http://journalistcensus.org/2011/04/19/final-report-sf-bay-area-journalist-census/">report</a> says the number of  scribes working in the Bay Area declined 43 percent over the last decade. When and what turns things up?</p>
<p><span id="more-401"></span>Patience, persistence,  low overhead, lowered expectations, a renewed commitment to hard work and faith &#8212; could be your vision, your family, your God &#8212; these are the virtues demanded by the times. It should be obvious that this is not like other post-World War II recessions &#8212; even the tough years of 1980-82 when I foolishly started a business.</p>
<p>That business succeeded, incidentally, thanks to the aforementioned characteristics and some luck of the sort that favors the prepared mind.</p>
<p>Over the Fourth of July weekend I was reminded of the value of persistence when I met <a href="http://adrielhampton.wordpress.com/">Adriel Hampton</a>, a former journalist who is now the evangelist for <a href="http://nationbuilder.com/">NationBuilder.com</a>, which creates online platforms to empower civic and political activists.</p>
<p>While chatting at a party thrown by  social media pioneers Chris Heuer and Kristie Wells, Adriel told how he landed the gig: by two years of blogging and podcasting on the topic, essentially creating the opportunity.</p>
<p>Not everyone will have to campaign for two years to find work. Millions of jobs get filled every month and if you&#8217;re looking may you get one.</p>
<p>But if not, attitude and behavior are the variables you can control. The journalism report I cited alluded to this: &#8220;A good start would be a 12-step program for recovering journalists.&#8221; OK, well maybe that&#8217;s gallows humor but the future is not going to be like the past, and recognizing that is the start to finding the next opportunity.</p>
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		<title>Is balance a smarter goal than growth?</title>
		<link>http://www.tomabate.com/is-balance-a-smarter-goal-than-growth/</link>
		<comments>http://www.tomabate.com/is-balance-a-smarter-goal-than-growth/#comments</comments>
		<pubDate>Thu, 07 Jul 2011 19:12:05 +0000</pubDate>
		<dc:creator>Tom Abate</dc:creator>
				<category><![CDATA[Culture]]></category>

		<guid isPermaLink="false">http://www.tomabate.com/?p=390</guid>
		<description><![CDATA[Vigorous growth is today considered synonymous with economic health but ecological economist Richard Norgaard of UC Berkeley say a life-work balance may be a better goal. Crazy? Perhaps. But so is the fact that Communist China is the world&#8217;s most &#8230; <a class="more-link" href="http://www.tomabate.com/is-balance-a-smarter-goal-than-growth/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>Vigorous growth is today considered synonymous with economic health but ecological economist Richard Norgaard of UC Berkeley say a life-work balance may be a better goal. Crazy? Perhaps. But so is the fact that Communist China is the world&#8217;s most successful capitalist country.</p>
<p><span id="more-390"></span>In a 2009 <a href="http://alumni.berkeley.edu/news/california-magazine/winter-2009-food-thought/toward-common-wealth">profile</a> Norgaard makes the case that the growth mantra taken for granted today is a fixation that arose as a consequence of U.S.-Soviet competition during the Cold War. He cited former Soviet Premier Nikita Khrushchev&#8217;s infamous boast, &#8220;We will bury you.&#8221;</p>
<p>Events proved the Soviet&#8217;s wrong but today what we once called Red China is growing at such a phenomenal rate that <a href="http://www.marketwatch.com/story/imf-bombshell-age-of-america-about-to-end-2011-04-25">some projections suggest</a> it could surpass the U.S. economy in just a few years. And if it does, China will have &#8220;buried us&#8221; with a planned economic strategy &#8212; a notion that should rattle the cages of U.S. free market fundamentalists.</p>
<p>As Norgaard said in the profile: &#8220;We’ve been getting <em>more</em> for decades, and it doesn’t make us any happier.”</p>
<p>That resonates with me but who knows. Perhaps we just haven&#8217;t reached the tipping point at which we will experience the consumer equivalent nirvana  derived from our growth-driven economics.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
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		<title>Can manufacturing return to U.S., California?</title>
		<link>http://www.tomabate.com/can-manufacturing-return-to-u-s-california/</link>
		<comments>http://www.tomabate.com/can-manufacturing-return-to-u-s-california/#comments</comments>
		<pubDate>Wed, 06 Jul 2011 15:53:58 +0000</pubDate>
		<dc:creator>Tom Abate</dc:creator>
				<category><![CDATA[Globalism]]></category>
		<category><![CDATA[Manufacturing]]></category>

		<guid isPermaLink="false">http://www.tomabate.com/?p=373</guid>
		<description><![CDATA[The rise of Chinese manufacturing has defined the past decade but are conditions now ripe for a revival of made-in-America? Possibly, for low-volume, high-ticket goods made in low-cost states,  says a Boston Consulting Group report.  But my beloved California will &#8230; <a class="more-link" href="http://www.tomabate.com/can-manufacturing-return-to-u-s-california/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>The rise of Chinese manufacturing has defined the past decade but are conditions now ripe for a revival of made-in-America? Possibly, for low-volume, high-ticket goods made in low-cost states,  says a Boston Consulting Group <a href="http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-75973">report</a>.  But my beloved California will have to work harder to get in on the action.</p>
<p><span id="more-373"></span></p>
<p>The BCG report notes that labor costs are rising rapidly in China and the value of China&#8217;s yuan is creeping up relative to the dollar. Those factors, coupled with the challenges in communications and the costs of shipping and logistics, are making Chinese manufactures relatively more expensive.</p>
<p>The BCG report, which I noticed via an AllBusiness.com <a href="http://www.allbusiness.com/small-business-manufacturing/15747708-1.html">article</a>, cited some instances of onshoring: Caterpillar bringing work to a plant in Texas and NCR making ATM machines in Georgia.</p>
<p>Those are Southern states with pro-business reputations, but even out here on the Left Coast, I caught a whiff of this phenomenon in a 2009 <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/26/BUHB172VF0.DTL">article</a> that used plastics manufacturers as the case in point. The dynamics were simple: for small batches, the challenge of distance made China uneconomic. But that is a small part of the universe of manufactured goods.</p>
<p>The U.S. must revive manufacturing. Too many livelihoods depend on production for us to throw in the towel and resign ourselves to an economy based on non-exportable services. The BCG report suggests that unions are realistic about wages, and that some states and locales have made concessions to help.</p>
<p>Can states and communities avoid a race to the bottom in the face of inexorable and global competition? And how can California leverage its position between the rising Far East and the struggling West?</p>
<p>So far California has little to boast. A couple of years ago, a state-local-labor coalition tried but failed to preserve California&#8217;s last car-making plant, New United Motors Manufacturing or Nummi. Toyota, which behaved like a great corporate citizen compared to its feckless American partner, General Motors, <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/04/02/MNO01COP4O.DTL">ultimately decided</a> to move production to low-cost Texas.</p>
<p>Now the governor who led that effort is gone, and California is mired in new crises around its shrinking budget and high unemployment. Even preoccupied with my own employment challenges I see empty warehouses and manufacturing sites around the great port of San Francisco and think: if we had the will, could we find the ways to enable Northern California to benefit from onshoring?</p>
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		<title>UC Berkeley imports students like coal</title>
		<link>http://www.tomabate.com/uc-berkeley-imports-students-like-coal/</link>
		<comments>http://www.tomabate.com/uc-berkeley-imports-students-like-coal/#comments</comments>
		<pubDate>Tue, 05 Jul 2011 16:01:20 +0000</pubDate>
		<dc:creator>Tom Abate</dc:creator>
				<category><![CDATA[Culture]]></category>
		<category><![CDATA[Thinking Out Loud]]></category>

		<guid isPermaLink="false">http://www.tomabate.com/?p=361</guid>
		<description><![CDATA[We live in a knowledge economy. Good jobs require college degrees. So why is UC Berkeley now enrolling nearly one-in-four students from out-of-state? As the SF Chronicle explains , non-residents pay higher tuition. Between budget cuts in Sacramento and institutional &#8230; <a class="more-link" href="http://www.tomabate.com/uc-berkeley-imports-students-like-coal/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>We live in a knowledge economy. Good jobs require college degrees. So why is UC Berkeley now enrolling nearly one-in-four students from out-of-state? As the SF Chronicle <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/07/01/MNCN1K4RTP.DTL">explains</a> , non-residents pay higher tuition. Between budget cuts in Sacramento and institutional self-interest at UC, we are hurting our children and killing the California dream.</p>
<p><span id="more-361"></span></p>
<p>I am the father of three young Californians. I&#8217;d like them to have the same, if not better, opportunities than me. I graduated Berkeley when its policies were more in tune with the mission of providing a low-cost public education. I supported myself on the GI Bill and part-time work and went from college to marriage debt-free.</p>
<p>Is that possible today?</p>
<p>Lack of access to higher education hurts the economy. As I wrote in one <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/02/27/BU1E1C7S61.DTL">newspaper article</a>,  based ironically on a UC Berkeley study: &#8220;two decades ago the United States had the highest college graduation  rate of any country in the Organization for Economic Cooperation and  Development, a group of 30 top industrialized nations. Today it ranks  19th.&#8221;</p>
<p>It&#8217;s not just the college-bound who are getting hurt by the breakdown of any consensus over what state investments are necessary and how to pay for them.</p>
<p>Laid off workers with high school diplomas and new immigrants are <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/20/BUFF1A6FAI.DTL">suffering from cuts</a> in adult education. We are told that we should be lifelong learners. Should the state not help?</p>
<p>So we drift downward from the California that was once envied, to the state that imports students, like coal, to fuel its universities and high-tech economy. And our children get shortchanged, unless they are the very cream of the crop or have parents who can pay for college, or perhaps both.</p>
<p>&nbsp;</p>
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		<title>Soap bubbles and the Zynga IPO</title>
		<link>http://www.tomabate.com/soap-bubbles-and-the-zynga-ipo/</link>
		<comments>http://www.tomabate.com/soap-bubbles-and-the-zynga-ipo/#comments</comments>
		<pubDate>Mon, 04 Jul 2011 16:16:18 +0000</pubDate>
		<dc:creator>Tom Abate</dc:creator>
				<category><![CDATA[Culture]]></category>

		<guid isPermaLink="false">http://www.tomabate.com/?p=342</guid>
		<description><![CDATA[Zynga is a San Francisco firm that has prospered (says NYTimes) by selling digital items, like tractors, to players of its online  games like FarmVille. Less substantial than soap bubbles, its products are more in tune with the times than &#8230; <a class="more-link" href="http://www.tomabate.com/soap-bubbles-and-the-zynga-ipo/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>Zynga is a San Francisco firm that has prospered (<a href="http://www.nytimes.com/2010/07/25/business/25zynga.html">says NYTimes</a>) by selling digital items, like tractors, to players of its online  games like FarmVille. Less substantial than soap bubbles, its products are more in tune with the times than other ephemeral wares like movies. What Zynga teaches us is that interaction is the message of modern digital media.</p>
<p><span id="more-342"></span></p>
<p>My soap bubble reference is not a knock on Zynga&#8217;s initial public offering, though I hope it is obvious that the company&#8217;s revenues, which &#8220;<a href="http://dealbook.nytimes.com/2011/07/01/zynga-files-for-1-billion-i-p-o/">roughly quadrupled</a>&#8221; last year, cannot continue at pace forever, lest all the cash in the universe be drawn to San Francisco and create a fiscal black hole.</p>
<p>Soap bubbles simply allude to the childlike playfulness of Zynga&#8217;s games, which turn some adages on their head &#8212; for instance, when the going gets tough, the tough amuse themselves. That&#8217;s what digital games are: brief, nervous distractions from the normal grind that allow players to create some illusion of accomplishment or get a tiny dose of satisfaction.</p>
<p>In a sense Zynga hearkens back to the movie makers of the 1930s, who thrived by offering flickers of romance and heroism at 24 frames per second. As <a href="http://www.digitalhistory.uh.edu/historyonline/hollywood_great_depression.cfm">history records it</a>: &#8220;Hollywood played a valuable psychological and ideological role, providing reassurance and hope to a demoralized nation.&#8221;</p>
<p>Fortunately, given our need for spirit-boosting,  technology has shrunk what used to be the big screen. We now carry them in our pockets or purses, or if we need a distraction at our desks, white collar types can just open another window on their computers.</p>
<p>But it is not technology but sociology that is Zynga&#8217;s genius &#8212; its games <em>engage</em> the player. They are not mere spectators waiting for Rhett Butler to dump Scarlet O&#8217;Hara. They can roll up their sleeves and replant Tara. Moreover, they can share their success with Facebook friends &#8212; just like when, as kids, they blew a large or colorful bubble, and said, &#8220;Look!&#8221;</p>
<p>Thank you, Zynga, for enabling us to create and share these illusions. May your IPO be oversubscribed.</p>
<p>&nbsp;</p>
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		<title>Small business suffers as global biz booms</title>
		<link>http://www.tomabate.com/small-business-suffers-as-global-biz-booms/</link>
		<comments>http://www.tomabate.com/small-business-suffers-as-global-biz-booms/#comments</comments>
		<pubDate>Sun, 03 Jul 2011 16:48:07 +0000</pubDate>
		<dc:creator>Tom Abate</dc:creator>
				<category><![CDATA[Small Business]]></category>

		<guid isPermaLink="false">http://www.tomabate.com/?p=326</guid>
		<description><![CDATA[One statistic in an Associated Press story helps explain why the U.S. economy lolls in the doldrums: wages and benefits have sunk to 57.5 percent of GDP, down from a longstanding 64 percent while &#8220;a big chunk of the economy&#8217;s &#8230; <a class="more-link" href="http://www.tomabate.com/small-business-suffers-as-global-biz-booms/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>One statistic in an Associated Press <a href="http://www.lvrj.com/news/the-economic-recovery-turns-2-feel-better-yet-124894619.html">story</a> helps explain why the U.S. economy lolls in the doldrums: wages and benefits have sunk to 57.5 percent of GDP, down from a longstanding 64 percent while &#8220;a big chunk of the economy&#8217;s gains has gone to investors in the form of higher corporate profits.&#8221;</p>
<p><span id="more-326"></span></p>
<p>&#8220;Corporation&#8221; is a loaded word. It describes the increasingly rare private practice physician who attempts to shield his or her home from loss in the event of malpractice lawsuit or the auto dealers who are the big wheels in local chambers of commerce.</p>
<p>But these are not the business owners described in the AP statistic. As big as they may seem to the ordinary wage earner, these local economic leaders are small fries in the greater scheme of things.</p>
<p>Here&#8217;s another fact to put things in perspective. The Small Business Administration <a href="http://www.sba.gov/advocacy/7495/8420">tells us that</a> the firms in its universe comprise 99.7 percent of all employers. Taken as a whole, small businesses employ just over half of all U.S. private sector workers and have created nearly two-thirds of all the new jobs over the last 15 years.</p>
<p>But think about the flip side. A handful of huge companies &#8212; comprising just 0.3 percent of all U.S. firms &#8212; employ the other half of the workforce. Moreover these global players and household brands also pay the best wages and benefits.  As the SBA reports, the small firms noted above employ just over half of all workers but pay just 44 percent of private sector wages.</p>
<p>Global companies are booming because they can shift their focus more easily to the booming parts of the world, like China, and/or take advantage of low cost labor, materials and manufacturing. They also have such a huge impact that their lobbyists can pressure Congress for all sorts of help.  No wonder their profits soar and their investors and employees do well.</p>
<p>Meanwhile the Main Street economy, thousands upon thousands of small employers and millions upon millions workers, continues to suffer. Most local businesses serve only local markets<em></em>. Many of their customers cannot escape the incredible downward wage pressure captured in the AP statistic.</p>
<p>Remember that small firms have been the engine of job creation. Main Street is hurtin&#8217; for certain. And as long as it is, the job market will remain stalled, no matter how well global companies perform.</p>
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		<title>The Theology of the Minimum Wage</title>
		<link>http://www.tomabate.com/the-theology-of-the-minimum-wage/</link>
		<comments>http://www.tomabate.com/the-theology-of-the-minimum-wage/#comments</comments>
		<pubDate>Wed, 29 Jun 2011 18:20:02 +0000</pubDate>
		<dc:creator>Tom Abate</dc:creator>
				<category><![CDATA[Globalism]]></category>
		<category><![CDATA[Small Business]]></category>

		<guid isPermaLink="false">http://www.tomabate.com/?p=310</guid>
		<description><![CDATA[During my newspaper career I covered technology, biotechnology and other mind-expanding fields, but economics proved my most challenging beat. Behind a shroud of statistics, economists argued views that could not be proven but which nevertheless influenced lives and fortunes. One &#8230; <a class="more-link" href="http://www.tomabate.com/the-theology-of-the-minimum-wage/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>During my newspaper career I covered technology, biotechnology and other mind-expanding fields, but economics proved my most challenging beat. Behind a shroud of statistics, economists argued views that could not be proven but which nevertheless influenced lives and fortunes. One eddy in this theological swirl has been whether minimum wages stabilize pay or depress employment.</p>
<p><span id="more-310"></span>As far as I can tell the answer is yes. In some circumstances both effects occur. Minimums put a floor under wages and help folks at the bottom. But propping up wages gives employers all the more incentives to automate or eliminate entry level jobs.</p>
<p>I found two articles that touch on these issues; one is a labor-backed study asserting that a floor on wages is one way to <a href="http://laborcenter.berkeley.edu/press/sfchronicle_may04.shtml">reduce taxpayer-supported social welfare costs</a>; a second piece announces a proposal by former California Gov. Arnold Schwarzenegger for <a href="http://articles.sfgate.com/2006-01-07/business/17279521_1_minimum-wage-schwarzenegger-s-proposal-statewide-increase">a further raise in the state minimum</a>, already then higher than the federal floor.</p>
<p>Forget the statistical arguments. I was a minimum wage restaurant worker before I went in the Navy (and I earned <a href="http://www.tomabate.com/learning-to-work-the-streets-part-three/#more-296">sub-minimum wages</a> before that). And in the 1980s, when I ran a typesetting business, I hired a local teenager for minimum wage, and justified the expense by having him make deliveries on his skateboard.</p>
<p>As a minimum wage teen I competed with immigrant adults. No one asked then whether they were undocumented. As an employer I got a warm and fuzzy feeling for helping out a young fellow. When he left me to work for a local screen printer I got a &#8220;thanks&#8221; from his new employer. My young charge had learned the essential soft skills &#8212; show up, listen and work. But I was secretly glad he left. Our shop didn&#8217;t make enough deliveries to keep his skateboard wheels spinning.</p>
<p>There should be a common ground in this debate &#8212; wage stability does concern government in a consumer economy because them as ain&#8217;t getting paid ain&#8217;t shopping. But since U.S. employers don&#8217;t compete in a vacuum it isn&#8217;t fair to make them prop up wages when they have no way to prop up prices for their goods or services.</p>
<p>Wage erosion is a subjective, almost invisible phenomenon. But that doesn&#8217;t absolve public policy from playing a role. When the swine flu threatened to reach pandemic levels, we didn&#8217;t throw up our hands and say, &#8220;Oh, it comes from China, what can we do?&#8221; or &#8220;We can&#8217;s seal the borders.&#8221; We did what we could. And we got lucky.</p>
<p>We can&#8217;t be paralyzed by globalism. We have to be logical rather than ideological. Setting, enforcing (<a href="http://articles.sfgate.com/2010-09-17/business/24008513_1_wage-chinatown-restaurants-restaurant-worker">there are evaders</a>) and strengthening minimums creates a ladder into the workforce for young people and a cushion for the working poor. We need to figure out businesslike ways to accomplish these social goods.</p>
<p>&nbsp;</p>
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