Published July 27, 2015
I know, I know … the blogosphere is so big that it's next to impossible to separate the nutritious stuff from the empty calories. But you owe yourself a look at the Milken Institute's Currency of Ideas for a sense of what’s happening at the Institute. Here’s an hors d’oeuvre of posts from staff and fellows that might just tempt you to become a regular diner.
Let My People Grow
While Israel has grown more rapidly than other advanced economies, with 10 percent of the workforce in the high tech sector generating over 50 percent of industrial exports, the disturbing transformation of its income distribution and society has made Israel one of the most unequal societies in the world. … The share of Israel's population living on less than half the country's median income has more than doubled since 1992, from 10.2 percent to 20.5 percent. Even more disturbingly, the share of children living in poverty quadrupled over the same period, from 7.8 percent to 27 percent. … The need for a bridge to the middle class for young people has become glaringly obvious, with housing prices having increased more than 68 percent over the past nine years, and an astounding 70 percent of workers earning below the average wage rate.
Apple Pay and Pay and Pay
A Washington Post story describes an observed elevated rate of fraud on Apple Pay, with one analyst, Cherian Abraham, placing the rate at about 6 percent – which, as the Post points out, is about 60 times the rate of swipe transactions. … Have hackers infiltrated Cupertino? Are people stealing iPhones and defeating the fingerprint check (or worse, cutting off fingers)? No, it is much simpler than that. Criminals are buying payment credentials online, loading them onto iPhones, and then using Apple Pay to buy things with the stolen card. There is a fiendish brilliance to it: the thief doesn't need to have the card, which means the card isn't missing, which means the card's actual owner may not know the card was compromised until the statement arrives (if they even read the statement).
Despite being saddled with criticism ranging from narcissism to laziness, many millennials have stuck with the plan. You know the plan: work hard in school, go to college and maybe grad school, and you will end up with a well-paying job and a home of your own. Somewhere along the line this plan became more of a fantasy, especially in California. … Compared to other states, California home prices appear untethered to the incomes actually earned by residents. The lack of affordable housing has caused California to lose some of its best young talent. … In the past 20 years, California has seen an exodus of almost 4 million people to other U.S. states. Most of those leaving were young families, the group most likely to become first-time homebuyers.
—Matt Horton and Kristen Keough
Delphi on the Potomac
As is often the case when central bankers speak, those on the receiving end parse every word, and interpretations vary. The Federal Reserve chair, Janet Yellen, gave analysts and market participants much to ponder in her recent testimony before committees of Congress. Although her remarks offered insight on the FOMC's view of economic conditions, she did not provide a clear timeline for the course of monetary policy. Or did she?
The Fed chief stated, "The FOMC's assessment that it can be patient in beginning to normalize policy means that the Committee considers it unlikely that economic conditions will warrant an increase in the target range for the federal funds rate for at least the next couple of FOMC meetings."
In my view, this implies that the Federal Open Market Committee, or FOMC, will raise the federal funds rate as early as mid-June.
Think Global, Act San Joaquin Valley
When it comes to bridging the skills gap, collaboration is the new competition. … In the past, companies harvesting fruit or drilling for oil may not have needed to invest heavily in human capital. Many jobs in natural resource--rich economies typically required low-skill, low-wage labor. Yet innovations in plant science and the mechanization of labor-intensive processes have led to increased productivity, and with it, an increasing need for more skilled workers, especially in the STEM fields (science, technology, engineering and mathematics). Agricultural companies in Kern County and the greater San Joaquin Valley are collaborating with each other and with local educational institutions to leverage public, private and philanthropic funds. … Not only are the programs focused on high-skill agriculture occupations with jobs connected to them, they also provide students with a head-start on getting an advanced degree.
—Priscilla Hamilton and Minoli Ratnatunga
Sunshine for the Golden State
California is known for technological innovation. Netflix, Google and Apple (among hundreds of other pioneering companies) were founded here, and the state consistently ranks among the top-five in the Milken Institute's State Technology and Science Index. So why, then, does it find itself looking up at many other states when it comes to creating a cohesive open-data policy? … At present, each individual state agency follows its own standards for publishing data, and the lack of a streamlined policy threatens to create confusion and mixed signals. To maximize ease of use for both users and agencies, the state must develop a uniform strategy that dictates how and when machine-readable data are published by its agencies.