Squeezing the working class

Raleigh is growing, but not in all categories.  As the article below notes,  there was an increase of 4,500 residents with four year degrees, and 1,600 with advanced degrees.  But those with less than a full four year degree are moving out.

 

As college grads flood Raleigh, city's less educated may be headed for higher ground

Meredith Hamrick, Business Journal, 18 June 2014

Raleigh may be a growing hub of opportunity for the young, professional set – it’s earned accolades as a great city for recent grads and a best city for job seekers, to name a few. But the picture hasn’t been so bright for Raleigh’s less educated, who have been fleeing the area, according to data featured Monday on The Atlantic’s City Lab site.

The Raleigh-Cary area lost a net of more than 1,300 of its residents with less education than a bachelor’s degree from 2011 to 2012 alone, despite the area’s overall net influx of nearly 5,000 residents during that same time period.

Raleigh is not particularly expensive by national standards, but it is expensive by Southeastern U.S. standards.  My guess is that some are moving to surrounding counties where they can either work in one of the light manufacturing jobs that have been pushed out of the main urban areas, with some family members doing a long distance commute.  And others simply have chosen to be poor, somewhere where it is less expensive.

 

There is a certain meme within apocalyptic fiction that all the advanced degrees and what not that folks have accumulated become useless after the EMP-zombie strike.  While there is some logic to that, in a slow collapse scenario, you have to make it to the collapse.  Notice how many stories get around this problem by either having the protagonists luck into some sort of hide away, or they are yuppie-types who can afford whatever sort of gear that they want. 

Water squeeze

One assumption that I think some folks make is that as the world population increases, there will be an intensification of the effort to produce food.

 

But more people, means more people wanting water, and urban folk usually "out vote" rural interests, even if the long term interests of the rural folk would (somewhat) be beneficial to the urban folk.

Water war bubbling up between California and Arizona

Michael Hiltzik, Los Angeles Times, 20 June 2014 (hat tip: NC)

Another assumption being challenged is the primacy of agriculture's claim on water. The solution is to buy farmers out, trading cash for their water rights to keep supplies flowing to urban areas. The MWD is working to develop a plan to pay growers to fallow their land to raise the water level of Lake Mead. "But we really don't know what the response will be to a cash offer to take land out of production," Kightlinger says.

The reason I say "somewhat" beneficial, is that in a global market, the water used by agriculture will not necessarily go toward local use.

Calculating gasoline prices

 

A long time ago I did a calculation on how much the price of a barrel of oil effected the price of gasoline.  Great minds think alike, or something like that, and James Hamilton at Econbrowser has come up with a slightly different way to do the calculus.

 

I did a bottom up number crunch, and he instead looked at how the historical prices correlated:

 

Gasoline Price Calculator

James Hamilton, Econbrowser, 21 June 2014 (hat tip: NC)

The relation implies that a $10 increase in the price of a barrel of Brent crude oil is typically associated with a 25 cent increase in the average U.S. retail price of a gallon of gasoline

 

Note, this type of estimate is generally much more accurate than a build it up from the pieces, detailed approach.  It will miss major changes in the dynamics of the situation, but most micro-approaches will do that as well.

 

What I find interesting is that if you put $222/barrel into their calculator, you get a gasoline price of $6.39/gallon.  When I did the calculation in 2011, I came up with a price of $6.16/gallon.  Given the number of assumptions I had to make, and stated, that seems pretty good to me.

Disease resistant drumbeat continues

It is interesting, once you become aware of the reality of an issue to see the slow devolution toward collapse.  It works at the small scale level (business level) the medium scale (corporate systems and government) and the large scale (world systems).

 

I think this one is a large scale one.

 

Antibiotic-resistant superbugs are officially a global threat

Lindsay Abrams, Salon, 30 April 2014 (hat tip: NC)

A dangerous “superbug” has made its way into the North American food supply for the first time, Canadian researchers announced Wednesday. Routine testing of raw squid, imported from South Korea, revealed a strain of bacteria resistant to carbapenems, a class of antibiotics used to treat life-threatening infections.

 

Now all we have to do is cross train it with a super- rabies of some sort and we would have ourselves the start of a wonderful zombie epic. 

Utility downgrade

Since I have spent some time working with solar panels I thought this was an interesting story.

Barclays Just Threw Gasoline on the Fire that is the Battle Between Utilities and the Solar Industry
Alias Hinkley, Energy Trends Insider, 28 May 2014

Barclays Sees Technology Winning – Soon 

The rationale for the downgrade is stark with Barclays expecting more than 20% of U.S. electric consumers to live in states where solar combined with electric storage will be as cheap or cheaper than utilities can deliver power to those same consumers within 4 years.  Conceptually the idea that new technology would change the way we generate and source electricity has always been part of (if only on the periphery) the energy conversation.  This is different.  Barclays has articulated a very real and present risk – new technology will replace the 100 year old model in which fuel is burned in a central location, converted to electricity and sent across wires to the various points of use. It is not a risk the utilities are reacting to fast enough.

The storage is an awfully iffy proposition. 

 

On top of that, the electronics in the systems go bad about as quickly as you would expect them to.  So they are not maintenance free.  At the residential level, with the huge diversity of systems out there, that makes these systems even harder to maintain inexpensively as the mixed bag that makes up the home "emergency" generator market.  But maybe the mass-lease-your-roof-space folks can make it work.  That set up is not legal in North Carolina, so we won't see it here.

Whiskey apocalypse

I will grant you that I would be a little more worried if they were talking about beer, but still, some will be concerned.

The US Might Be Running Out Of Whiskey
The Daily Caller, 4 June 2014 (hat tip: TMP)

The Tennessean reports distillers and industry observers are predicting an upcoming whiskey shortage as the market has risen 10.2 percent in the past year. David Ozgo of the Distilled Spirits Council told The Tennessean there’s been an “explosion internationally” of exports for bourbon as countries like China, Australia and South Korea have opened their doors to whiskey imports.

I am not sure if whiskey exports will be enough to generate a deep recovery, but I guess it is a start.

So much for white collar work

I saw something online that asked if a college degree was still with it.  At the 538 site that answered: "Yes, if you graduate (link)".

A lot of this has to do with the fact that a lot of students go into severe non-bankruptable debt to go to college.  Of course a sub-story is that some of these degrees don't lead to obvious areas of employment.

But esoteric degrees have been around for a while now.  But it didn't used to matter so much.  There was work to be done, and history, or philosophy majors were thought of as being trainable enough to get a lot of jobs done. 

One little secret is that there just isn't a lot of "smarts" works to go around.  So the competition is greater.

The Declining Fortunes of the Young since 2000
Beaudry, Paul, David A. Green, and Benjamin M. Sand, American Economic Review, 2014 (hat tip: MR)

The data reveal a clear break in 2000.  Between 1992 and 2000, each successive entry cohort has a higher share in cognitive occupations at the outset of their working lives, with the proportion increasing by 0.1 between the 1994 and 1998 cohorts.  After 2000, with the exception of the difference between the 2004 and 2006 entry cohorts, each successive cohort has a lower share in these occupations, with the share at entry for the 2010 cohort being approximately the same as for the 1990 cohort.  Given all the attention that has been paid to growing demand for cognitive skills, this complete reversal is striking.