Impact of Holiday Travel on the Economy

Travel is frequently an indicator of the health of the economy. It is often viewed as a luxury or an unnecessary expense and when times are tough, people generally sacrifice their travel to have some extra cash for other expenditures. However, with lower travel costs combined with a growing economy, travel may be placed higher on families’ priority lists. With the holiday season quickly approaching, travel is expected to increase dramatically for the remainder of 2017.

This year, AAA expects nearly 51 million Americans to travel 50 miles or more away from their home for Thanksgiving alone. This number is the highest volume of travelers since 2005 and is a 3.3% increase over last year’s travel numbers.While gas prices generally dip prior to Thanksgiving, this year the prices have continued to rise as the oil and gas industry still works on normalizing post-hurricanes. Even with the increased prices at the pump (as they hit the highest Thanksgiving period prices since 2014) travelers are willing to pay a bit more to visit family and friends for the holiday. Americans are expected to spend $800 million more on fuel for holiday travel this year compared to last year. In South Carolina alone, the price of gasoline is 32.5 cents higher per gallon this year than it was last year at the same time.

While the price of traveling by car has increased this year, the price of travel by air isn’t inexpensive either. The average cost of a Thanksgiving flight is $385 if booked by the end of October. The most congested cities for Thanksgiving travel are expected to be Los Angeles, New York, San Francisco, Atlanta and Miami.

Regardless of the high gas prices, projected travel numbers remain higher than they have been in years. AAA’s senior vice president, Bill Sutherland, credits the strong year for the travel industry to a strong economy and labor market that has fueled higher incomes and consumer confidence.

With this massive increase in holiday travel and spending in 2017, the country’s economy as a whole is bound to reap the rewards as well. The World Travel & Tourism Council noted that travel and tourism directly contributed to GDP growth by 3.1% in 2016. This growth was faster than the economy as a whole, which grew at 2.5% the same year.In addition to GDP growth, travel and tourism contributed to employment growth of 1.8% in 2016, which totals almost 2 million jobs. Looking ahead to 2017, travel and tourism’s contribution to the economy’s GDP is expected to grow even more by 3.5%. Much of that growth will more than likely come from this year’s holiday travel numbers.

Would the Increase in Automation at Ports Help or Hurt?

As time goes on, technological advancements are to be expected. For many industries, the growth of technology is a great thing, as it helps innovate new products in electronics, medicine, and more. But for workers at ports across the world, increases in automation, technology and robotics threaten local workers’ jobs.

This debate hits especially close to home, as the ports in California alone handle 40 percent of U.S. container traffic. With the ports of Los Angeles and Long Beach being the two biggest ports in America, they are also one of the main employers of the region. Between port operations and commerce, the Port of Los Angeles supplies over 133,000 jobs in the LA area. The Port of Long Beach accounts for over 30,000 jobs in Long Beach alone through its 20 divisions.

If the ports went completely automated, would all these people be out of work?

Of course, the answer is more complicated than a simple yes or no. While not every single employee at each respective port would be out of a job, certain jobs like terminal operators may be at the most risk.

The most recent automation update at ports is in the yard cranes. According to Port Technology, several ports around the world like Singapore, Germany and Holland have already adopted automatic crane use, and local ports have installed a few as well. The technology installed in these cranes allows for precise automatic pick-up of containers, drop-off, and perfect stacking.

Naturally, there are both advantages and disadvantages to adopting automation in the ports. One advantage is the efficiency and accuracy by which robots are able to do work. Automation would allow for a greater amount of goods and containers to get through ports and it would make the transaction turnarounds even quicker.

One terminal in the Los Angeles port that has already adopted automation has seen time spent loading and unloading the ship be cut in half since the switch. This not only creates higher profits for the terminal operators, but it gets trucks and drivers back on the road faster. Additionally, the electric- and hybrid-powered automated machines significantly cut down on carbon emissions, which is better for the environment.

However, with the adoption of automation could also come a huge loss of jobs across the country. As history has shown, when the standardized shipping container was first introduced, over 90 percent of dock workers lost their jobs within 15 years. Of course, current port workers are concerned that history will repeat itself and automation will completely eliminate their current jobs.

While the Port of Los Angeles, in particular, has partially adopted automation, their solution seems to be to keep it that way for now in the hopes that no jobs will be lost. Full automation at a port would take a lot of time and money, but it seems to be where the future is headed. Perhaps in 10 or 20 years, ports across the world will all be fully automated.

How Military Spouses Play a Large Role in the Imperfect Labor Market

By: Libby Hewitt

 

There are many factors that go into unemployment. However, for one section of the population, unemployment essentially comes with the territory: the spouses of the nation’s military personnel.

The military spouse unemployment rate is a huge problem that is not being given the attention it deserves. Not only do military spouses feel the effects on their families personally when they are unable to find work or make an income, but there are societal impacts on the economy as a whole as well. Military spouses are a huge reason that many of our nation’s most respected individuals are able to fight for our country’s freedom. Without the support and help of their spouses, many of them would not be able to fulfill deployments and other responsibilities that come with being a service member.

A survey from Hiring Our Heroes, a US Chamber of Commerce foundation, found that of all military spouses, of which there are over 226,000, 92 percent are female. The unemployment rate for these people is 16 percent, which is four times the rate for all adult women in this country. Of the military spouses that are employed, 14 percent are working part-time jobs, and half of that group wishes to be working full-time. Even those military spouses with a bachelor’s degree who do find work often make 40 percent less than their civilian counterparts.

Source

Many factors that make it harder for military spouses to find steady work, the main one being the frequency of moving that takes place for a military family.

Nan McCarthy, the spouse of a former Marine Colonel, spoke about her experience with the job market when her husband’s job took them to Japan in 1983.

“I was extremely lucky to find a job in Okinawa at a magazine,” said McCarthy. “The job needed someone who could speak English, so I had an advantage there, even though I was competing with a lot of other military spouses for the job.”

While she enjoyed her time working and was able to put her college degree in advertising to some use, McCarthy said her salary was nothing to write home about.

“The magazine job in Okinawa was great experience, but I was severely underpaid,” she said. I earned 500 Yen per month (the equivalent of $6,000 per year at the time), which was still practically nothing, even back then.”

When the McCarthys made their next move to Quantico, Virginia, in 1986, Nan found part-time work as both a daycare center assistant during the day, and a clerk at a Hallmark store during the evenings. She faced similar difficulties in both workplaces.

“I remember specifically talking with the owner of a clothing store next to the Hallmark card store where I worked,” she said. “He expressed interest in hiring me, but once he found out I was a military spouse he said he wasn’t hiring. I could not find full time work.”

Even though the numbers and prejudice business owners have against this population is alarming, the huge economic impact these unemployment rates are making should be paving the way for change in the future. This problem needs more attention from policy makers, employers and other civilian workers in general in order to make any progress moving forward.

In 2011, Michelle Obama and Jill Biden started The Joining Forces and the Military Spouse Employment Partnership, organizations that helped push through legislation allowing military spouses in fields requiring licenses like teaching, nursing and law to transfer those licenses easily from state to state as they move. This effort has created about 15,000 jobs available near military bases. According to Government Executive, companies involved in this new program include Hilton Hotel call centers, customer service positions at places like Arise Virtual Solutions, and other marketing and communications companies like Agility Marketing that allow work-from-home employees. The Joining Forces initiative has made over 54,000 jobs available to military spouses to date.

Additionally, further pushes for a fair labor market have been set in motion with sites like usajobs.gov, which helps military spouses in applying for federal jobs. While these initiatives are helping move this issue in the right direction, it seems as though further programs could be put in place to help military spouses by utilizing technological advancements like the internet, apps, and more that offer work-from-home options.

Apart from just improving this group’s quality of life and ability to provide for their families, it seems obvious that the benefits would outweigh the costs of tackling this unemployment problem for the country as a whole.

The unemployment issue with military spouses is affecting not just those individuals and their families, but also the U.S. economy altogether. In fact, a study commissioned by the nonprofit Blue Star Families determined that the economy is losing between $710 million and $1 billion each year because of military spouse unemployment. This number is mainly made up of the loss of income tax that spouses would have paid, totaling between $578 and $763 million, but this is only part of the loss the economy would suffer. If all of the over 200,000 military spouses were being properly utilized in the labor market, the economic losses would be much less severe.

Many military spouses are on a constant hunt to find a remedy to their unemployment problem. Some have even found that the best solution is to start their own business, whether that be utilizing their personal talents like art, writing, etc. or starting an online store selling jewelry, clothes and more. Many military spouses are looking for ways to incorporate their personal knowledge from their degree into the work force wherever their spouse has been stationed.

“Tons of military spouses are taking matters into their own hands by starting their own companies and hiring other military spouses,” said McCarthy, referencing companies like R. Riveter, which was founded by two military spouses and remotely employs other military spouses across the country to create custom handbags – some of which are made from repurposed military uniforms.

It took years of frustration, lack of employment resources and low pay for McCarthy to discover that the best way for her to become most effective in the labor market was to be self-employed. McCarthy launched her own publishing company, Rainwater Press, in 1992 and has since written, edited and published several novels.

“Being self-employed is an excellent solution for military spouses,” she said. “As a self-employed writer/editor I could do my job from any location and moving around didn’t impact my ability to work, other than requiring me to take time off to manage the moving process each time we moved.”

However, as ideal as it would be for every military spouse to have a personal talent or hobby that could garner a full-time business and income, that notion is simply unrealistic for many military spouses. This is where a large part of the problem lies. The work-from-home jobs and increase in military spouse-friendly companies are helpful, but there are even more difficulties military families face when moving so frequently, like the loss of so much potentially billable time.

As McCarthy mentioned, managing the moving process of each new location took more time and is an additional hardship that civilian families do not have to face.

“Every time a military family moves, someone needs to spend at least two months on each end of the process preparing for the move and then settling into the new location,” she explained. “And that someone is almost always the military spouse because the service member is either deployed or otherwise unavailable to help due to his or her job.”

These transitions into and out of locations cost not just time, but money as well.

“I’ve calculated that each of our moves cost me about 4 months of income,” McCarthy said. “So out of the 7 times we’ve moved, that’s at least 28 months of not earning outside income.”

Obviously, this problem is far from solved. However, with more and more companies willing to hire military spouses, the introduction of policies that are helping this population find jobs and maintain their licensing, plus the overall awareness of the country about the issue, the military spouse unemployment problem will hopefully be lessened in the coming years.

As for suggestions moving forward in reference to military spouses, McCarthy says:

“People just need to continue raising awareness of military spouse underemployment and compensation inequalities. They need to be educated that the breadth and variety of experience of military spouses is a positive thing, rather than a negative. People need to understand that by supporting military spouses, they are supporting our military.”

What Would the End of DACA Mean for the Economy?

The health of the United States’ economy is largely determined by the actions of the President and those appointed by him. Ever since Donald Trump’s presidency began, the country has held its breath watching the decisions he has made on behalf the U.S. people, hoping for the best.

Most recently, one of President Trump’s decisions is putting the country at risk of a huge economic decline. A few weeks ago, Trump chose to end the Deferred Action for Child Arrivals (DACA) program, which was put in place by Barack Obama to protect the children of immigrants who came illegally, from being deported. This decision would affect about 800,000 “dreamers” in the U.S.

While the DACA program’s future is still not officially decided, if no supplemental program is put into effect, the loss of all those jobs plus the government expenses could be detrimental to the economy. A study conducted by the CATO Institute concluded that the cost the federal government alone would suffer from deportation efforts over the next 10 years would total at least $60 billion. The overall economic impact would be over $200 billion.

In addition to the governmental costs that the end of DACA would bring, the U.S. GDP would also take a hit. The Center for American Progress conducted a study finding that without the DACA workers, the GDP would decline by $433 billion over the next 10 years.

This decline would be felt in certain parts of the country more than others. California, for example, employs about 188,000 DACA workers. If the program was terminated, the GDP in California alone would suffer a loss of $11.3 billion a year. Texas would lose $6.1 billion per year, and North Carolina would lose $1.9 billion a year.

FWD, a pro-immigration reform group, conducted a study finding that 91% of DACA recipients are employed. Many employers of Fortune 500 companies have been stepping forward defending the DACA program and advocating for Congress to put a stop to Trump’s movement. As Microsoft President, Brad Smith stated via a blog post, “These employees, along with other DREAMers, should continue to have the opportunity to make meaningful contributions to our country’s strength and prosperity.” He admitted that Microsoft knows of at least 27 employees who are DACA beneficiaries, including engineers, finance professionals and sales associates.

The White House has enacted a six-month delay to the end of the program to give Congress time to act and hopefully come up with another solution. Until then, dreamers will continue to protest, advocate and fight to keep their rights and avoid the eventual economic decline that would come from the end of DACA.

What Does the Fall of Retail Mean for the Country’s GDP?

It is no secret that consumer spending has shifted in the recent economic climate. Brick-and-mortar retailers are suffering under the pressure from e-commerce sites like Amazon. In the past year alone, there have been countless stories of Big Box retailers like Macy’s, JCPenny and more closing stores in an effort to remain profitable.

But does the fall of retail spending mean the fall of consumer spending altogether? Will the country’s GDP will be affected? While these are valid questions, the answer, in short, is probably not. Unfortunately, if the economy were that easy to predict, we probably wouldn’t have had the economic recessions that we have in recent years.

According to AP, consumer spending in the U.S. rose 0.1 percent in April, 0.2 percent in May and June, and 0.3 percent in July. These increases occurred in tandem with a 0.4 percent increase in incomes in June and a 0.5 percent rise in wages and salaries in July. Though these increases in consumer spending have been slight, the addition of the increases in income and wages is another good sign for the overall GDP of the country.

In 2017, the GDP has been rising consistently overall. According to Reuters, there was a 1.2 percent growth pace from January-March. With the increased consumer spending in the following months, GDP increased at a 3.0 percent rate from April-June.

Even with the growth of both consumer spending and the GDP in the US, some people are still concerned about the country’s economic activity overall. Consumer spending alone accounts for about 70 percent of the country’s overall GDP, according to economists, and those who are skeptical about the small growth numbers say it is not enough to evoke enough confidence for the future.

While consumers may not be spending their money on retail like they once were, the fact is they’re still spending that money somewhere. Some say healthcare spending has taken the place of retail spending for many, while some say the shift is in millennials wanting to spend their money on experiences, rather than material goods.

Regardless of the exact cause of the recent fall of the retail industry, consumers are still finding things to spend their money on, and that is the most important thing to maintain the health of the economy. As long as the overall GDP continues to rise and consumer spending is a contributor to that, the country is on a path to continue growing and prospering.