Category Archives: Economics

Rebuilding with Retraining: Ideas for Rebuilding after Hurricane Harvey

America has been watching the devastation of Hurricane Harvey, and all of us are wondering what happens next. Obviously, people will need to find ways to get their lives back together, but how do you even begin to do that when everything you own has been damaged beyond repair?

Experts are already estimating how much money it will cost to start the rebuilding process, but it’s not just a matter of fixing homes. We’re talking about billions of dollars to shelter and feed victims, build temporary housing, rebuild damaged housing, fix infrastructure problems (including roadways, bridges, trains, levees, etc.), and not to mention rebuilding all of the businesses, schools, churches, community spaces, and everything else that was brutalized by the storm.

The rebuilding process requires a multitude of steps. More importantly, rebuilding requires people, businesses, and the government to all work together, and I personally think that may be one of the biggest obstacles to overcome.

What Helps and What Hinders

I don’t think it’s a matter of people having a difficult time working together. We have seen and continue to see the love and kindness pouring out as regular citizens all over the country are going out of their ways to go and help the victims of Hurricane Harvey. Even radio stations up here in Portland, Oregon, 2,500+ miles away from the disaster, are promoting stories about Portland citizens gathering truckloads of donations to drive down to help those in need. 

People help people, no doubt about it!

8887539_600x338

Many businesses are also helping, including those down in the Houston area. Jim McIngvale, more lovingly known as “Matress Mack,” (pictured above), opened his giant furniture stores to the victims of Hurricane Harvey. He’s giving victims a place to stay, a place to sleep, and food to eat. Nobody asked him to do it – he just did it, because it was the right thing to do.

Businesses are made of people, and business owners have more power to help a greater number of people. Matress Mack is only one of many business owners reaching out to help the victims.

While I would like to be optimistic, I do not have a lot of hope that our government will be as quick to aid those most in need. It’s not that they don’t want to help. Our government is made of people, and these are people who care about the safety of their constituents. Unfortunately, the lack of efficient systems and infrastructure in our government, as well as budgetary issues, will tie up the works.

Since helping people in need is often a political point of contention – oddly so, since most of the main political parties believe in helping their fellow citizens, they just disagree on the methodology – it remains to be seen if the government can stop worrying about party politics and instead do what they need to do to get the rebuilding process in full swing.

Sadder still, despite the amazing outpour of support through donations and volunteers, most of the rebuilding process will be slowed down by financial concerns and the lack of a suitable workforce.

Who Will Rebuild the Gulf Coast?

Articles on CBS news and The Washington Post, as well as articles from newspapers published within the state of Texas, including My San Antonio and The Dallas Morning News, all cite how Texas has been experiencing one of its largest labor shortages in the field of construction. Before Harvey hit, there were already major delays with building new homes, simply because contractors could not find enough skilled workers.

CC_SkilledWorkforceDecrease

There are also issues related to immigration, as it is not an uncommon practice for contractors to supplement their workforce with undocumented workers. Like other industries, the construction industry also pursues the option of legally sponsoring foreigners to work in America to supplement the workforce; however, sponsoring foreign workers often involves government regulation and paying workers equal wages. Some employers would rather cut corners by paying undocumented workers under the table, and, if these workers are deported, it further depletes the workforce.

Although, as Patrick Sisson might argue, it’s not just a matter of cutting corners and paying undocumented workers under the table – it’s the fact that there simply aren’t any other construction workers available. In his article, “Construction boom exposes labor shortage threatening homebuilding,” Sisson points out that in Texas, (and across the nation, for that matter), not enough young people are entering the skilled trade fields, especially in the construction industry. He notes that there is a “greying shrinking pool” of qualified workers, which he attributes to vocational trades being ignored in the education system.

There is a major social disconnect, as Sisson points out, between young people’s perception of career success and the reality of the job market. Students believe they have to earn college degrees to get good paying jobs. There is also a massive amount of stigma associated with those who choose vocational programs over traditional degree programs, as the majority of vocational jobs are still looked at as lesser than non-vocational positions.

Sadly, high schools, and colleges for that matter, have become so wrapped up in this, “you can be anything,” mentality that they have neglected to teach students certain facts, including the following:

  • College isn’t for everyone. As of 2015, the National Center for Education Statistics reported that 41% of full-time students pursuing a bachelor’s degree did not succeed.
  • Not all good-paying jobs require bachelor’s degrees.
  • Many vocational programs can be completed in less than two years, as compared to the 4+ years it takes to get a bachelor’s degree.
  • The majority of vocational programs have built-in internships and apprenticeship programs resulting in almost immediate employment, whereas most bachelor’s degree programs only have optional internships that may or may not lead to full-time employment after graduation.

Young people also believe that skilled trade jobs in the construction industry don’t pay reasonable salaries. Again, this is due to a complete lack of the education system preparing students for the real world, as administrators tend to be more obsessed with test scores versus life skills training.

According to the Bureau of Labor Statistics (BLS), (a government run organization that monitors the salaries of a multitude of vocations), there is clear evidence that skilled trade workers earn desirable salaries. The data below reflects the average annual salaries of various construction trade workers, as reported by the BLS in 2016:

  • Brick masons = $53,440
  • Carpenters = $48,340
  • Carpet installers = $44,310
  • Cement masons = $43,720
  • Construction equipment operators = $50,560
  • Dry wall and ceiling tile installers = $47,400
  • Electricians = $56,650
  • Plumbers = $56,030
  • Rail track laying and maintenance operators = $52,810
  • Structural iron and steel workers = $56,040
  • Tile and marble setters = $44,770

As young people have been steered away from vocational jobs for over a decade, or as they have simply been allowed to believe that vocational jobs are not as respectable as nonvocational ones, Texas, among many states in the nation, are facing serious problems with finding a suitable workforce. In terms of rebuilding after one of the biggest natural disasters, this lack of a workforce will prove increasingly problematic in the days to come for the rebuilding process of all areas affected by Hurricane Harvey.

Idea to Increase the Workforce for the Rebuilding Process

I know that there are an unbelievable amount of problems to solve with the rebuilding process from this point on, including funding for the housing and sheltering of victims. Likewise, as explained above, there is the added problem of the lack of a suitable workforce.

497054780

Idea!

Instead of bringing in workers from around the country, or bringing workers from out of the country, if any are available, why not use that money to create a modified apprenticeship program that focuses on utilizing the displaced victims as a newly trained workforce?

The following explanation will obviously be oversimplified, but as a general idea, hear me out.

We have people who have been displaced, because of the floods. Many of their places of employment have also been eliminated due to flood damage. These people face the real problems of no jobs, no possessions, nowhere to go locally, and no income. Most likely, as proven by what happened after Hurricane Katrina in 2005 , these displaced victims will simply leave the region to find employment and new places to live.

If they had the option to work, be trained in a new career, and have suitable housing, would they stay?

If we created this apprenticeship program that trained an entire new workforce, giving these people job skills they could use during and after the rebuilding process, it could motivate a large percentage of the victims to stay and reclaim their communities.

Ok, but would this idea save money?

Right now we will have to pay to house the victims, feed them, payout insurance claims, etc. We will also have to pay for construction workers to come in and rebuild. Basic facts and figures.

What if a sizable percentage of the money we plan to use to house and feed the victims could simultaneously pay for workforce?

That’s what I’m talking about by this apprenticeship program. Instead of paying to house and feed the victims AND paying strangers to come in and rebuild, we could save some of that money and invest it in the people to become the new workforce we need.

The modified apprenticeship program I’m imagining would provide on-the-job training, allowing people to learn a trade, to work, and participate in the rebuilding process. For a period of time, their salary would be the cost of their housing and the cost of basic food and toiletries.

Essentially, instead of paying the teams of contractors, we would be using that money to supplement what we need to pay to house and feed those displaced from the floods. As an added bonus, we would be working to solve part of the diminishing workforce problem in the coastal regions of Texas and Louisiana.

As I said above, this is a rough idea, but it’s an out-of-the-box idea that I think has merit.

Not only could we build and pay for a workforce at the same time, but we could also be preparing a workforce that could be used to deal with the massive infrastructure problems that contributed to the flooding itself, such as badly designed drainage systems, the levies and dams in disrepair, and other related issues.

A public works vocational apprenticeship training program such as this would give the victims reasons to stay in the area, which would avoid an economic collapse that would only further devastate the region. Likewise, those who currently feel lost after losing everything could gain a sense of pride, hope, and a real sense of community if they go through this program and participate in the rebuilding process. Furthermore, utilizing people who are already there can help offset costs, and the program would also serve to address some of the major vocational problems our country is facing with a dwindling pool of skilled trade workers.

Yes, this idea needs work – it’s still rough. We would still have to pay people to come in and train the workforce, and we would need to hire some more experienced construction workers to get things started.

That aside, we have to think of solutions that address a multitude of issues – what to do with those who’ve been displaced by the floods, how to rebuild, how to prevent this from happening again, budgetary concerns, maintaining economic stability, etc. Solutions to a problem of this magnitude will not be simple, but that does not mean the problem cannot be solved.

Advertisements

Pay a Writer AND Get Money

invest-money-to-start-businessHow can you get more money by paying your money to someone else? Easy – hire a writer with a background in marketing and funding proposals.

The old business adage that you have to spend money to make money couldn’t be more accurate when it comes to finding ways to acquire more money and support for your organization. After all, the one thing all businesses need is capital.

What Exactly Is Capital?

As stated on both Investopedia and BusinessDictionary.com, the term capital has many definitions. The simplest definition usually denotes capital as your assets, including money or the actual value of the organization and equipment. According to most economists, the term capital can also describe the “factors of production,” including everything used by an organization to provide the services and/or goods available, (e.g., personnel, equipment, marketing, distribution).

Before you start a business, or if you want to expand your business, you need a certain amount of capital to get moving. Typical ways for acquiring capital include:

  • Loans
  • Grants
  • Investors
  • Mergers

Proceeding with any of these listed methods requires having a written proposal, but the proposal itself tends to be the stumbling block that keeps many entrepreneurs from acquiring the capital they need to be more successful.

Why Do Business Owners Struggle with Proposals?

For starters, the word “proposal” is a fairly ambiguous concept, and proposal requirements vary significantly. As an example, consider bank loans. Many banks often want proposals that are accompanied with a full-length business plan, 5-year business strategy, budget projections, and other financial documents. Grantors, as another example, may only require an application and an essay proposal that explains what the money will be used for and why the applicant deserves the grant.

So why are proposal requirements so different? Well, it’s all about audience.

Slide1That’s right – think back to your writing classes. At some point, your teacher probably told you that you always have to consider your audience. Why is this so essential? Let’s face it – a proposal is a piece of persuasive writing. You’re trying to persuade someone to give you money, and that someone is your audience. If you want to persuade them into giving you the money, then you will have to know everything about your audience first to be successful.

Since you are approaching different audiences with your funding proposals, you have to accept that the rules will change every time, because the needs and goals change from audience to audience. Banks ask for more documentation to accommodate their need to measure risk assessment, since they want to make sure you can pay back any money you borrow. In contrast, grantors never expect to be paid back – that’s the whole point of a grant – so their level of risk is very low, which is why they ask for less paperwork.

Many business owners understand that there is a different process involved with applying for a loan versus applying for a grant or approaching investors. Nevertheless, most individuals still struggle with their proposals, because they only go half-way through the process. They are willing to fill out the different paperwork associated with each different group, but most entrepreneurs fail to understand how to change up the content in their proposal to target each specific audience.

How Paying a Writer Can Get You Money

While you know that you need better proposals, you still might be on the fence about hiring a writer. Allow me to elaborate on what you get when you hire a writer like me. After you understand the benefits of hiring a writer, you will no doubt see how hiring a writer can get you more money.

Audience Expert

Before I ever start writing a project, I do my best to get into the mindset of my intended audience. Whether that’s a banker, investor, or grant committee, I figure out what they want, what motivates them, and what gets their attention. I also conduct thorough research to make sure I know as much about them as possible. I take all of this into consideration when I write your funding proposals, because I want to make sure your proposals stands out amongst the rest.

Years of Experience Writing Persuasive Copy

Remember that the main goal of funding proposals is to make the audience want to give you their money, so whatever I write has to sell your organization. I know how to present your organization in the best light possible. I can maintain your branding, point out your best features, and identify how additional funding will make your profits skyrocket.

Outsider’s Perspective

I’ve seen it happen too many times – clients are in love with their businesses, and they only see it through rose-colored glasses. That makes my clients passionate, but it doesn’t always make them realistic. Investors and lenders don’t care about how much you love your business. As a third party, I can look at your business the way that investors and lenders would look at it. Instead of poking at the holes, though, it would be my job to redirect the attention of lenders and investors and get them focused on the best parts of your business, making them more likely to give you money.

If the only thing stopping you from getting more money for your business is writing better funding proposals, then why wouldn’t you invest in a skilled writer? After all, if your teeth hurt, you go to a dentist. If you need to remodel a home, you talk to a contractor. We hire professionals because they have years of experience and know exactly what to do to get the job done. That’s why you want to hire me, L. Rigdon, as your funding proposal writer.

Should you participate in this buyer’s market?

 

Even after the bailout, the economy still has a long way to go and quite a struggle head. Out of this down spiral, however, there have been some moderately positive outcomes. For one thing, the housing market has definitely become a buyer’s market.

 

As a result of either foreclosures or people desperate to sell, real estate is at an all-time low across the nation. For those who have the additional funds, investing in new property now would be a wise decision. As the market will, eventually, go skyrocketing back up, investors will make one phenomenal profit when they sell.

 

Many of us, however, are not into the dangerous life of house flipping, and in fact are just looking for a different property to fit our means. Unfortunately, with the market as it is, some homeowners cannot buy new homes unless they sell their current home — the old catch-22.

 

There are some homeowners who, when the market was up and booming, felt that they would never be able to afford a new home, and instead put money away for remodeling. Although their money is safe and secure in a bank, it is difficult to say if remodeling now is the best way to invest.

 

Sure, there are some definite bonuses to remodeling over purchasing a new home:

·                Eliminates all the hassles of moving to a new location.

·                You can design exactly what you want.

·                You add substantial value to your present home.

 

As wonderful as those bonuses are, don’t assume that remodeling comes without hassles:

·                Researching and interviewing contractors to find a legitimate person/company.

·                Having your house in disarray for months during construction.

·                Constantly stressing over your budget.

 

As homeowners have different remodeling needs, it really does come down to a case-by-case decision of whether the bonuses of remodeling outweigh the hassles.

 

Ultimately, the properties you own are investments, and thus the money you spend should be used to increase the value of your investments as much as possible. With the present state of the market, however, perhaps there is a third option for homeowners who have put aside some extra money.

 

With real estate at such a low price, passing up these great deals may be considered rather foolish. However, you as a homeowner know that you couldn’t possibly sell your house in today’s market. You have set aside a good amount of money that would more than cover the down payment on a new home, but the idea of two mortgages puts you into a financial frenzy. What should you do? Simple — rent out your old home.

 

While your old home may be too small for you and your family, renters would find it to be more than adequate space. They could be covering the cost of the mortgage, or at least the majority of the mortgage. Plus, renting gives you the option of holding on to your older property until the market improves.

 

Before anyone goes for this option, however, a slight reality check may be in order.

 

First of all, you will need to assess your current home and decide whether any improvements need to be made before you rent. Keep in mind that if you make this home into a rental property that you need not have every single improvement made to attract renters. Also, your budget is most likely low, so a streamlined list of budget friendly basic improvements is the best way to go.

 

Also, finding responsible renters is no walk in the park. If you take on the responsibility yourself, it involves a lot of interviews and phone calls that take up a lot of time. Remember, time spent with no renter is money out of your pocket to cover the mortgage. Always having additional funds sitting in a savings account to cover the mortgage of your rental property for at least six months is a smart idea to accommodate for the times your rental property is not occupied. There are companies that manage rental properties, but their fees may be too costly if you only own one additional property.

 

Understanding how investments work in the big picture will help you protect your finances. Rental properties have always been considered a good investment, but they do come with some headaches. Purchasing new real estate can satisfy the needs of your situation, and buying when the market is low is always the best time to buy. Today’s homeowner has a lot of choices to make, and investing in the current buyer’s market could be the first step towards a more financially secure future.

 

Economics Not Making Sense

After the 778 point drop in the Dow yesterday, perhaps the US government and citizens will start to accept just what kind of financial crises we are heading toward.

 

            While this instability in our market is unsettling enough, the effect seems to be moving outward into a global phenomenon, per economists. From my own observations, there are certain basic economic facts that are just not working.

 

            During my trip to the UK and Europe this past summer, I paid careful attention to the conversion rate because nearly $2 were equivalent to one British pound, and $1.50 was equivalent to one euro (although rates recently have improved in favor of the US dollar). In other words, we as Americans were paying double or nearly double for every pound or euro we spent abroad this summer.

 

            Now I understand the basis of monetary conversions. Whatever it costs for someone in the states to buy a loaf of bread, for example, is compared to what it costs for someone in another country to buy the same or similar product. Therefore if it cost me $2 to buy a loaf of bread here, and that same loaf of bread would cost 1.12 British pounds or 1.41 euros abroad, the spending capacity of my money becomes a particular ratio to the money of other countries. Simple enough, or so I thought.

 

            When I was purchasing items or services abroad, all the numbers were the same. For a hypothetical example to illustrate my point: a cup of Starbucks coffee here cost $2.99, but in the UK it cost £ 2.99. Now if you take away the monetary symbols, the numbers are the same, true, but that’s not how economics is supposed to work. When you are purchasing an item in the states for $2.99, with the current ratio of what the dollar is to the pound, then a cup of the same Starbucks coffee should be £1.67.

 

            Granted, I am not an economist, but I am fairly well educated on understanding how logical equations are designed to work. This simple observation I noticed while on holiday is just one symptom of a worldwide epidemic.

 

There are no quick and easy solutions to our economic problems, regardless of what any political party member or candidate is saying, (remember this is an election year here in the states, so delegates may feel a little more boisterous with making their statements). These problems have been building for decades, and for the most part politicians have taken steps to treat the symptoms but not cure the disease.

 

Is there indeed a cure? The optimist in me wants to believe that there is, but with such a multifaceted problem that is interlaced with a polarized political system, international concerns, military agendas, etc., I’m not sure if there is a single cure that will guarantee that the state of our economy will rapidly improve.

 

Please do not misunderstand me. I do not mean to say these words to encourage that we should do nothing. On the contrary — I think the citizens of the US and the world need to become active in understanding what their governments are doing and why such things as simple economic logic is not being applied.

 

For those of us who live in countries where governments are supposed to represent the people, we as a people should have the right to know what’s going on and what’s being done about it. Although we can’t expect change overnight, we should be able to visualize and discuss just how severe the problem is without any political spin or governmental red tape. From that information we should then create contingency plans to help us get out of this economic and political turmoil. We need to start the steps of improvement now so that our children will continue taking the steps we’ve created as well as creating new steps to improve for the future generations to come.