Denim has long been referred to as the fabric of American lives, and Levi Strauss & Company’s plan to become publicly traded once again in early 2019 merely reinforces that point.

Although the brand Levi Strauss & Co. was hugely popular throughout the mid to late 20^th century, the denim maker’s clothing started to decline in popularity in the late 1990s, causing the company to go private. Today, however, Levi’s has experienced a full comeback, with the iconic label clearly pronounced on the jeans and jean jackets of many Americans as well as consumers across the globe.

Thanks to the return of Levi’s products to mainstream fashion, the company is well-situated financially to return to public markets. In its most recent quarter, revenue grew 11%, with the entire brand delivering 12% growth over the quarter. Furthermore, the company’s women’s business grew for the 13^th straight quarter. The most recent earnings report also boasted strength in the direct-to-consumer area, thanks in part to the fact that the chain opened 65 new stores over the course of the last year.

 

Levi Strauss & Co.’s 2017 annual report also demonstrated its strong financial position. In addition to strong net revenue, gross margin, earnings before income taxes, and free cash flow, the company reported having its lowest net debt since 2000. Source: 2017 Annual Report

But what propelled Levi Strauss to go from America’s forgotten brand to being set to issue an IPO in 2019 that will purportedly raise between $600 and $800 million, and value the company at $5 billion? First, denim’s fashionableness seems to be back, with jean jackets and bell bottom jeans being worn by many once again. In fact, the denim market is expected to reach $79 million by 2023, thanks in part to the growth and transformation of the Asian retail clothing industry. For Levi’s in particular, however, the money that the company invested in a research and development center in the early 2010s, called Eureka Innovation Lab, seems to be paying off. Levi’s recently unveiled new technology that allows it to automate new parts of the denim-making process, ranging from design to manufacturing, which not only saves time and effort, but also creates less waste and thus is more sustainable.

Levi’s now uses lasers to distress its jeans, not people. Source: Wall Street Journal

Levi’s also diversified its products by expanding its women’s wear recently, causing sales for women’s clothing to rise from $800 million a year in 2015 to over $1 billion in 2018. On top of all of those factors, it certainly helps that celebrities have come to love Levi’s, with the Kardashian family all wearing different pairs of Levi’s in their 2017 Christmas card.

 

The company continues to diversify its products, focusing less on men’s wear and pants. Source: Quartzy

But beyond those factors, something that has undoubtedly attracted consumers to Levi Strauss & Co. products over those of their competitors has been the company’s values. Self-described as “values-driven,” the CEO of Levi’s, Chip Bergh, has been an outspoken supporter of various highly politicized and relevant issues. In November 2016, he wrote an open letter asking gun owners not to bring their weapons into Levi’s stores after a customer was accidentally shot. Bergh has since defended the company’s gun policy and asked other business leaders to stand up against gun violence, while also taking a variety of steps including establishing the Safer Tomorrow Fund earlier this year which directs money to support nonprofits working to end gun violence. The company has also partnered with like-minded clothing maker Patagonia to create MakeTimeToVote.org, an initiative that gave employees time off to vote in the recent midterm elections also encouraged other large corporations to follow in suit. Furthermore, in late summer of 2018, the company announced its 2025 Climate Action Strategy, an aggressive and detailed plan that includes achieving 100% renewable electricity and a 90% reduction in greenhouse gas emissions at all of its factories in less than a decade.

At a time when consumers care not just about how their clothes look but also about how they were made, where the materials were sourced from, and what the seller believes in, Levi’s has managed to cultivate an ethically-minded fashion brand supported by aggressive values-driven initiatives. At the same time, the company has found increased cultural relevance, and has willingly taken the plunge into the world of automation in order to improve its processes and create better products. While other companies fear mechanization or stagnate as they try to figure out how meaningfully decrease environmental impact, Levi’s has forged a unique path for itself by embracing the current challenges posed to businesses in the modern economy. Given their carefully-devised and multi-faceted approach, it seems highly likely that Levi’s will easily raise its projected $600 million—and perhaps even more—when the time comes in 2019.

With the $1.8 billion donation from the former New York City Mayor Michael Bloomberg, students at Johns Hopkins University could enjoy greater access to financial-aid packages and scholarships starting next fall. This billion dollar’s worth of gift would allow the University to permanently adopt a “need-blind admission”, meaning that the admission board will not take into consideration students’ financial ability during the selection process, a report from Bloomberg says.

Even though the contribution has marked a record high in the U.S. education realm, it only accounts for a tiny share in the overall amount of student debt in the country when we look at the bigger picture. According to the 2018 student loan debt statistics from Make Lemonade, a free personal finance website, student debt has ballooned to more than $1.5 trillion with over 44 million borrowers in the U.S.

Source: The New York Times

Students in the Class of 2017 owe an average of $40,000 in student loan debt, up from $37,172 for the Class of 2016. It has become the second-largest consumer debt, following mortgages. At the same time, more than 10 percent of the mounting student loans were at least 90 days overdue.

Students have borne the brunt of the drop in house values, as it becomes tougher for parents to take out mortgages to pay for their children’s education, an article published by The New York Times says. Students have no choice but to shoulder the financial burden in exchange for a college degree.

So is this borrowing sign pointing to a grim picture of the future economy, or is it reminiscent of the decade-old financial crisis?

While the student loan market is smaller and less complicated than the mortgage market, it is less likely to create ripple effects across the world as the mortgage market did 10 years ago. The housing crisis in 2008 was unstoppable because a slew of financial institutions was involved in the mortgage world, with fledging crackdown on lending activities. As the federal government is the biggest lender of student debt, it gives people more confidence that the student loan market is better shielded from a debt explosion.

Although the speculation about the next economic recession is in gradual crescendo, the student debt market is expected to have limited impacts on the overall economy.

On July 6^th, 2018, Donald Trump challenged Chinese President Xi to an economic chess match. Trump, however, may have underestimated Xi when he decided to make the first move. Both sides have made considerable dents in each other’s key industries. Engaging in tit-for-tat trade disputes may seem like it will yield results, but in the long-term, it damages crucial relationships that could hurt America’s biggest industries. For the U.S, soybeans are what’s at stake.

 

The United States’ biggest export is food, beverage, and feed according to a U.S Commerce report in 2017. Soybeans make up the largest part of that industry, and 60% of them were exported to China last year. The Asian country typically buys around 7-10 million tons from the U.S annually. Last Friday, November 2^nd, soybean prices even fell to around $448 a ton, which is the lowest it’s been in 6 years.

Though China is the U.S soybean producer’s biggest buyer, it may not be that way for long. The economic impact of tariffs on U.S. exports and a protectionist trade policy may damage the Chinese economy in the short term, but will eventually just push China to find alternative ways to avoid importing such high amounts of this product from America.

China does receive most of its soybeans from the United States, but it also gets them from Brazil. South America may be Xi’s best option if Trump doesn’t step down.

Though Brazil consistently runs out of soybeans at the end of each cycle, it could likely ramp up production efforts if need be. In the last 20 years, the country has increased its soybean production by 266%, whereas the United States’ production has only increased by 63%. However, production costs for Brazilian farmers may end up being too high to keep up with Chinese demand.

Another option would be for Chinese investors to buy and develop land to produce soybeans in a country with the same comparative advantage, even Brazil. Some experts say Brazil is not reaching its full potential, and has a lot of untapped land. Again, if this is a viable option in the long term, it could take away China’s need to rely on American soybean farmers.

President Xi’s Belt and Road Initiative (BRI) is also a key player in reducing reliance on U.S agriculture throughout this trade war. The Initiative is an effort to connect Asia, Africa, and Europe for mutually beneficial economic opportunities. China wants a “belt” of overland corridors and a “road” of shipping lanes between 71 countries. That means the BRI streamlines trade between half of the world’s population and a fourth of the global GDP.

The BRI brings an increased level of economic interaction to China, making it that much easier to locate untapped areas equipped to produce soybeans other than the United States.

If China resorts to any of these options, U.S soybean farmers are going to take a long-term hit. While America can refocus its efforts to shipping out the product to other countries, if China manages to get Brazil to ramp up production levels or invests in agricultural land in other countries, it would lower the need for U.S trade partners to exclusively import soybeans from America.

 

China is now taking short term measures to deal with Trump’s tariffs. The China Feed Industry Association proposed in September to ration out soybean feed to pigs. The Xi administration is also maintaining a positive attitude by looking to increase domestic soybean production.

“Unilateralism and trade protectionism are rising, forcing us to adopt a self-reliant approach. This is not a bad thing,” Xi said in September.

In a retaliatory statement, the Vice Agriculture Minister Han Jun warned that Trump is playing with fire.

“Many countries have the willingness and they totally have the capacity to take over the market share the U.S. is enjoying in China. If other countries become reliable suppliers for China, it will be very difficult for the U.S. to regain the market,” Han Jun told the Xinhua news agency in August.

Soybean producers in China are already benefiting from the conflict. Yang Guiyin, the sales manager of an agricultural company in the Heilongjiang Province, said that soybean profits are on the rise.

“Our farmers really hope that China will import less soybeans so that domestic soybean production and soybean-related businesses will flourish,” Guiyin told NBC News in July.

The Chinese Government is pushing its domestic agenda even further as it aims to add $1.6 million acres of land to its existing soybean production. It is also subsidizing $190 to $320 per acre instead of the previous $150.

 

Looking ahead, the future of U.S soybean farmers will be determined by conversation between Trump and Xi. The world leaders have planned to meet on several occasions, but due to rising tensions, have not been ready to negotiate quite yet. The White House decided recently to move forward with conversation. Trump and Xi are planning to discuss the escalating situation at the Group of 20 leaders’ summit in Buenos Aires at the end of November.

For the Trump administration, the pressure is on. President Xi purposely targeted the soybean industry because the farmers primarily reside in states that elected Trump to office. China is looking to hit his weak spots. If Trump’s support system loses faith, it could have detrimental effects for republicans come November’s elections.

Iowa, Minnesota, Nebraska, North Dakota, and Indiana are all major soybean producing states and all voted for Trump in 2016.

In any trade war, just like in real wars, people are hurt. Trump stands by his belief that the United States will beat China, but if Xi continues to match Trump’s level of tariffs, it could get very ugly. Americans have no choice but to wait and see if Trump is correct in tweeting that “we win big.”

 

 

 

 

There are about 6.6 million job openings in the United States right now, according to the Bureau of Labor Statistics. Despite these opportunities, however, an increasing number of individuals are moving towards the “gig economy.” 42 million workers are anticipated to be self-employed by 2020. More than 36% of the workforce currently works freelance, latest estimates project. This trend towards an increasingly independent workforce, a workforce not tied to any employer restraints or benefits, presents promising opportunities in industries that need the most innovation.

With the healthcare industry constantly under scrutiny for excessive costs, mismanagement, and poor patient outcomes, this new trend in labor preference may prove to be a promising opportunity for providers to cut costs. The United States currently faces a dramatic shortages of healthcare workers from the home care level to the operating room, and the country is currently on track to face a shortage of between 40,000 to 104,000 physicians by 2030.

By connecting the gig economy to the healthcare industry, the result appears to be win-win. Workers have more flexibility, can negotiate their own contracts, and can select opportunities most appealing to them. Employers, like hospitals, can dramatically reduce costs and more nimbly respond to varying demand. In an industry that is the poster-child for egregious costs, treating health aids and doctors like Uber drivers starts to look appealing for the bottom line, particularly when labor accounts for 60% of spending.

Before we quickly begin allocating freelance workers into the healthcare (or any other) industry, we must consider the broader implications of incentivizing such volatile jobs. The irony of suggesting that freelancers, members of the gig economy, enter the healthcare workforce is that one central tenant of working project-to-project, operation-to-operation, is that employers do not offer healthcare benefits to these temporary workers. As Reuters points out, freelancers’ income is constantly in flux, making coverage options ever-changing as well. This makes finding health insurance a particularly perplexing problem. “If you are a freelancer facing the pure retail cost of healthcare, then it is horrifying,” notes Kathy Hempstead, senior advisor of the Robert Wood Johnson Foundation.

This dilemma affects more than just freelancers, however. Without a critical mass of individuals insured through traditional insurance plans, we may face a new problem of not having enough enrolled individuals to pool risk, making our health insurance program obsolete. While programs like the Affordable Care Act has attempted to address this growing problem, legislation is too slow and resistance too large to address the evolving problem’s rapid growth.

While we should be finding ways to innovate the labor market as we innovate industry, we must also be futurists, considering not merely the short-term benefits of our actions, but also long-term implications. The main problem with this employment shift may be, like so many others, not the evolution itself, but the rate at which it is occurring.

The U.S. economy is witnessing a tightening labor market as unemployment rate fell to a 49-year low of 3.7 percent in Oct. 2018, according to the U.S. Bureau of Labor Statistics. However, the labor force participation rate, which measures the percent of prime-age workers (aged 25-54) who are employed or actively seeking work, remained relatively low at 62.9 percent in Oct. 2018.

The U.S. Bureau of Labor Statistics estimated that the number of employed American aged 65 to 74 will rise 4.5 percent, while the participation rate for people aged 16 to 24 will drop 1.4 percent over the 2014-2024 decade. By 2024, the labor force ages 65 or older is expected to grow about 13 million people.

Source: U.S. Bureau of Labor Statistics

When it becomes harder for fast-food chains to recruit young people, restaurants like McDonald’s and Bob Evans are shifting their hiring focus to senior citizens – who are willing to work even part-time to earn some extra income in retirement.

Restaurants are actively posting recruitment ads at centers, churches and websites targeting senior citizens. This fast-food employment trend is the consequence of a tight labor market and the ageing population.

With their years of experience in the job market and purpose of work, seniors are competitive in these workplaces, a report from Bloomberg said.

The industry’s median hourly wage is $9.81 in 2017, according to the U.S. Bureau of Labor Statistics. With the same labor cost, chains could run their businesses by hiring seasoned workers who have spent decades in the job market. The senior workforce tends to possess well-developed interpersonal skills compared to the younger generation – a boon to employers as this could help reduce workplace conflicts.

The longer life expectancy and the elderly’s propensity to work would alter the employment landscape going forward. With the holiday season around the corner, the job market is expected to see a growing presence of senior workers.

Source:
https://www.bls.gov/careeroutlook/2017/article/older-workers.htm
https://www.bloomberg.com/news/articles/2018-11-05/senior-citizens-are-replacing-teenagers-at-fast-food-joints

If you were to ask me a year ago what I thought would be trending a year later, plastic straws definitely would not have been on my list.

I’d like to consider myself an advocate for sustainability: I’m vegan, I recycle and I try to repurpose items. Until recently, I had never considered that plastic straws — a commodity that’s unquestionably been available since the 1960s — placed any strain on the environment, businesses or the economy at large.

Well, turns out the impact of plastic straws, though present, is not nearly as severe as many hyped it up to be. With eight millions tons of plastic streaming into the ocean annually, straws only comprise 0.025 percent of that waste, according to National Geographic. The small-scale issue went mainstream this summer when Seattle — home of Starbucks and its famous plastic green straws — announced a ban on plastic straws and utensils at all food service businesses.

From there, the issue blew up on social media, with many claiming to be dedicated environmentalists because they now abstained from plastic straws. As Greenpeace has pointed out, however, 40 percent of plastics in the ocean are from single-use plastics, with plastic straws only making up a tiny fraction. According to Vox, The World Economic Forum reported that there are 150 million metric tons of plastic in the ocean, and scientists predict that by staying with this trend, there will be more plastic than fish in the ocean by 2050. As someone who comes from a coastal area where seafood is a huge market, that doesn’t sound like the best situation to be in.

Where plastic pollution sources from. Source: EcoWatch

So why focus on plastic straws at all? In the Business Insider video “Why plastic straws suck,” chief scientist for the Ocean Conservancy George Leonard notes how plastic straws are only the beginning.

“I think straws are a bit of a poster child here for the bigger question of society’s kind of over-reliance on single-use plastics and the fact that a lot of the stuff is ending up in our marine environment,”  Leonard said.

Biodegradable paper straws, which are slightly more expensive, have been introduced as an eco-friendly alternative to plastic straws, which can take 500 years to decompose, according to The Independent. Aardvark Straws, a paper straw manufacturer, has been a key player with introducing this change. When pulling up the company’s website, a banner at the top reads that overwhelming demand for paper straws has delayed shipping times, illustrating how consumers are eager to change their plastic usage. David Rhodes, Aardvark Straws’ global business director, told National Geographic that the economic value of paper versus plastic straws extends beyond business expenses.

“There’s no getting around that a paper straw will cost about a penny more than a plastic straw,” Rhodes said. “For large corporations, that equals hundreds of millions of dollars, but the cost to the marine environment, you can’t put a price on that.”

Aardvark Straws at work. Source: Imbibe

CNBC reported that paper straws cost 2 ½ cents each, as opposed to half-cent for plastic straws.

“You go from something that is very, very, very cheap, to something that is still actually cheap,” said Adam Merran, CEO of PacknWood, a food service products company, to CNBC.

That’s where the economics of plastic straws come in to play: changing drinking straw habits may affect business expenses, but the ultimate economic value comes with protecting the priceless marine environment in the long run.

According to the World Wildlife Fund, the direct output from coral reefs, seagrass, mangroves and marine fisheries is valued at $6.9 trillion U.S. dollars. Clearly, investing in eco-friendly habits now — even if they come at a higher cost — will allow natural resources to maintain (or potentially increase) their value in the future, which is beneficial to everyone.

Source: The World Wildlife Fund

Remember: plastic straws are only the beginning to revolutionizing consumers’ environmental and economic goals.

In the final days of October, news came out that President Trump wanted to use executive order to end birthright citizenship in the U.S. In an interview with Axios, President Trump said the United States is “the only country in the world where a person comes in and has a baby, and the baby is essentially a citizen of the United States for 85 years with all of those benefits”. Sticking to “America First”, he has been pushing hardline immigration policies to immigration issues.  

Although the news has aroused controversy in the U.S. and critics say President Trump has no rights to end birthright citizenship supported by the 14th Amendment, the news has still brought an anxiety to a group of people related to “birth tourism”.

Birth tourism gives pregnant women an opportunity traveling to and giving birth in another country for the purpose of obtaining citizenship for the child in a country with birthright citizenship. The United States is a popular destination for birth tourists. As long as pregnant women don’t lie on immigration or insurance paperwork, this practice is legal and protected by the 14th Amendment, which says anyone born on American soil is automatically a citizen. According to the Migration Policy Institute, more than 4 million children have the citizenship of the U.S. at birth.

Chinese pregnant women account for the majority of birth tourism group. According to Asian Americans and Pacific Islander Data, the total number of birth tourists from around the world to be about 36,000 per year, while other sources indicate the annual number of Chinese birth tourists to be around 20,000. Estimates by All America Mother Services Management Center in 2013 projected 60,000 Chinese births in 2016, more than 14 times as many as 2008, the first year Chinese people could apply for a U.S. Visitor Visa for tourism. the number of pregnant women coming to the U.S. has reached over 80,000, according to a Chinese research institution.

The reason that Chinese pregnant women choose to give birth in the U.S. has in common. The U.S. citizenship can allow their babies to enjoy advanced medical technology, good environment with clean air and water, advanced education resources and less-pressured course pressure. However, without the birthright citizenship supported by the U.S. Constitution, they would lose a way to give their babies a better life. There is no doubt that Trump’s opposition to birthright citizenship has brought them much anxiety.

Other than chinses pregnant women who want to give birth in the U.S., Trump’s proposition will also affect maternity hotel owners, who have been living in the U.S.

Maternity hotels sprang up over 30 years ago when Taiwanese chose to give birth in America to protect their children from mandatory military service. At first, these pregnant women lived with their relatives or friends waiting to give birth. However, as increasing numbers of pregnant Taiwanese women followed, the experienced in housing pregnant women sensed a fortune could be made. To accommodate the increasing number of pregnant women flocking to the U.S., maternity hotels offering comprehensive services for pregnant women sprang up. Los Angeles is the most popular destination for them. And when the U.S. Visitor Visa for tourism opened to Chinese citizens in 2008, the industry began an unprecedented boom.

Maternity hotels’ services include housing, cooking meals, appointing obstetricians, personal care by matrons, and driving. A large number of maternity hotels can produce many job opportunities and positions, for example, housekeepers, drivers, matrons, babysitters and obstetricians. According to a report of All America Mother Services Management Center, the maternity hotel industry chain in Los Angeles can support almost 10,000 people to make a living. However, if Trump succeeds in ending birthright citizenship, the whole industry will be affected.

While no one can predict the policy in immigration policies, the birth tourism and maternity hotel industry have an unsure future. The settled part is that Trump’s hardline attitudes toward immigration issues may have cracked down the industry.