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Auto profits rebound, but wages aren't following

Mon, 2015-01-05 11:58

For generations of Americans, the manufacturing sector has been the gateway to the middle class. That idea persists today, even as that gate has been closing for years now.

Take Ford Motor Company for example. Like other carmakers, Ford has been through some rough times, but is now riding high amid decreased costs, increased sales, and a sexy new product with the new aluminum F-150 trucks.

All this should be good news for the middle-class, but many auto industry jobs still aren’t delivering on the wages front.

Darryl Steele takes his morning coffee in the mid-afternoon. That’s the time he stops by this Tim Hortons before heading out for the night shift at Ford’s River Rouge Assembly Plant, in Dearborn, Michigan.

“I swing a hammer and a chisel and I also carry a bar,” Steele says. He works as a body-shop fitter, attaching doors and hoods to the new Ford trucks.

“It’s the type of job you have to finesse that job and sometimes you forget and then you feel it at the end of the day,” he says as he sips his coffee.

Steele has been with Ford since 2000, he’s what they call a “legacy employee.” Someone who is exempt from the wage and benefit cuts the UAW accepted following the 2010 auto crisis.

With an hourly wage north of $25 per hour, Steele says he and his co-workers are far from wealthy, and many haven’t seen a pay increase in over ten years.

“Basically it’s a job where you make enough money to support a normal-sized family, maybe have a nice house, possibly save money — it's basically a middle-class job,” says Steele. 

Legacy employees are a shrinking majority in the auto industry. New hires making the so-called “tier-two” wage are paid considerably less than previous generations, all while Ford is bring in billions of dollars in profits.

But Ford says these profits are making it back into the pockets of workers. 

“You know, we've shared a lot of that profit growth with our employees,” says Joe Hinrichs, Ford’s President of the Americas. “The last couple years our employees have had record profit-sharing checks, last year averaging $8,000 for all our UAW employees.” 

Hinrichs maintains that the tier-two wage is directly responsible for a hiring boom of 14,000 U.S. workers since 2011.

“A big portion of these new employees have been an insourcing of work, based on the competitiveness of the entry-level wage," he says. "So, we don't want to lose sight of the benefits collectively that Ford and the UAW have had from that."

Hinrichs says even at the lower starting wage, around $16 per hour, there is still a path forward for workers, including profit sharing and a 401K retirement plan.

“So, it's like 'Ride this merry-go-round long enough and you'll get the golden ring,'” says Kristin Dziczek with the Center for Automotive Research.

Dziczek agrees that without the UAW’s wage concessions, many of these new Ford jobs wouldn’t be there. But in the future, companies like Ford, GM and Chrysler, will face a lot more competition for workers from other sectors.

“This was the cream of the crop of a blue-collar job and now they're competing with suppliers, they may be competing with service sector jobs,” notes Dziczek.

But even at the lower wage, many employees at Ford are simply glad to have a job, especially one with union representation and good benefits.

“There's not many jobs starting off at the $15 and change per hour that they have at Ford or across the big three,” says Jermaine Harris.

At 6-foot-9 and 400 pounds, it’s as if Harris was born for a manufacturing job. He started at Ford in 2012, where his job is to run a hoist dropping engines into Ford Focuses and the new C-Max cars. Like him, many of his co-workers came in on the lower tier-two wage.

“I work on a line that has 23 people on it,” says Harris, “Out of the 23 people, three of them are legacy workers and 20 are entry level. Each one of them have families, a couple of them are single mothers, a couple people that are in their 50's that are starting over."

Growing up he Harris says he saw entire families supported on the basis of one job like the one he has now. He holds down another part-time job to make ends meet.

“I would love to just get by on the one job. I mean, basically I work every day. You know, I have a two-year-old, I'd like to spend more time with him,” Harris says.

The UAW says improving the lot of guys like Harris will be a key part of next year’s contract negotiations with the Detroit Three. As UAW ranks swell with more tier 2 workers, their votes will be increasingly necessary to ratify any new contract, and while Harris says he happy to have his job he will vote against any contract that doesn’t do something for entry-level workers.

Greece could be headed for eurozone exit

Mon, 2015-01-05 11:53

The euro is not having a happy new year.

The currency crashed to a nine-year low against the U.S. dollar, partly due to a warning from Germany. The German government reportedly said that if Greece’s anti-austerity Syriza party wins this month’s snap election, and reneges on some of the conditions of the country’s bailout, Greece could face default and be forced out of the euro.

Is that such a bad thing? Germans apparently believe that the eurozone could now cope with a Greek exit. Unlike at the height of the crisis three years ago, the European Central Bank will now buy unlimited amounts of the government bonds of a eurozone country that comes under speculative attack. That move should prevent the contagion spreading to other member states.

Some analysts are skeptical and point to the danger of political contagion. If, with International Monetary Fund help, Greece leaves the eurozone, throws off the shackles of austerity and starts to grow strongly again, would other heavily indebted and austerity-weary eurozone states be tempted follow suit?

Meet Belty, a smart belt that expands with your waist

Mon, 2015-01-05 11:07

You'll hear much in the coming days, here and elsewhere, about the consumer electronics show going on in Las Vegas this week.

Among the gizmos and gadgets is – and I am not making this up – a smart belt that adjusts throughout the day to your changing waistline.

Belty, as the belt is called, is part of the wearable tech trend, but whether anyone will actually wear it is another matter. Its creator, French firm Emiota, aims to start selling it in March for around $130, according to Bloomberg.

 

Are low oil prices an opening for a carbon tax?

Mon, 2015-01-05 11:00

Former Treasury Secretary Larry Summers, now an economist at Harvard University, argued today in the Washington Post and the Financial Times that the case for a carbon tax is “overwhelming” given the low price of gasoline. The average price per gallon in the U.S. is $2.20. Adding a $.25 tax would take it to $2.45.

 

“Doing that against a backdrop where gas prices have declined $1.50, it’s a very rare opportunity,” says energy and environment economist Michael Greenstone, the Milton Friedman professor at the University of Chicago. Even at the University of Chicago, a shrine to free-market theories, taxing carbon is a mainstream concept, Greenstone says.

 

“Drawing from the far right of the economics profession all the way to the far left, this is not a political issue,” Greenstone says. “This is blackboard economics.”

 

His point: The price of gasoline today is wrong. It does not include the cost of carbon-dioxide pollution from burning it. This is the baseline case for taxing carbon emissions.

 

Even if it’s good economics, it’s dismal politics. Republicans now control both houses of Congress. Still, former GOP Congressman Bob Inglis sees an opportunity: A carbon tax would bring in money, to cut other taxes. Say, corporate income taxes.

 

“This is an opportunity to change what we tax,” Inglis says. “To get off of income, and to get the tax on emissions. It certainly fits with what we as conservatives believe.”

 

  

 

 

Training urban teachers who stay

Mon, 2015-01-05 10:50

Cheyandria Monks is getting ready to teach a phonics lesson to a class of first graders. Monks, 29, is not a teacher – yet. She’s a resident at Liberty Elementary in Baltimore. Basically, she's an apprentice. Her host teacher, Angela Guidera, walks her through the lesson.

Urban Teacher Center resident Cheyandria Monks, left, talks with her host teacher, Angela Guidera.

Monks listens to a recording of a song about a train “clickety-clacking” down a track. “Read it first,” Guidera suggests, “because the song goes pretty fast.”

Monks’ residency is part of a program at Urban Teacher Center, a nonprofit based in Baltimore. It’s built on the idea that, like doctors and chefs, teachers should train side-by-side with pros before they take charge of their own classrooms. In a traditional school, teachers-in-training might spend six or eight weeks – maybe a semester – as student teachers. The Urban Teacher Center residency lasts 15 months.

“They are learning what good teaching looks like and feels like, so that by the time they become the classroom teacher, there’s no surprises,” says Jennifer Green, the center's co-founder and CEO.

The schedule is demanding. Monks co-teaches most days, then heads off to her own master's classes at night. When she finally gets home, she might spend a few minutes with her baby daughter before tackling homework and lesson plans. She gets five or six hours of sleep.

The residency is meant to be hard, Green says. “We often hear that the first year of teaching is the hardest year of someone’s life.” One aim of the residency, she says, “is to make sure that our residents are up for the grueling nature of the task.”

If they’re not, they can drop out without leaving a class of students teacherless. Nationally, half of new teachers leave the profession within five years. In urban districts, turnover is even higher. Residencies are catching on as one way to produce teachers who know what they’re getting into. At the Urban Teacher Center, more than 20 percent of residents either quit or are asked to leave each year. Some don't return after the winter break.

“I think sometimes it’s unnecessarily brutal,” says Joseph Manko, principal of Liberty Elementary. “This is their first experience with the profession, and you want to prepare people. You also don’t want to scare them away.”

For the last three years, Manko has hosted a crop of residents at his school, which pays about 40 percent of the cost of their training. For now, philanthropy covers the rest. In return, Manko gets extra help in his classrooms and a school year to check out potential teachers. He hired one of last year’s residents for a permanent job. “He’s the first first-year teacher that we’ve hired in five years, but I’m happy to say he is far and away the best first-year teacher I’ve ever seen,” Manko says.

That teacher, Kevin Chandler, is still with the program at Urban Teacher Center. Now a fellow, he continues to take courses and work with a coach, but he’s in charge of a second-grade class. “The residency is the hardest part of this program,” Chandler says. “If you can make it through that year, you will be set.”

Monks is still getting through it. After lunch, she’s ready to teach that first-grade phonics lesson. The kids sit cross-legged on the carpet, each student on a colored square with an individual small whiteboard. They start out reading the train poem. “Clickety-clickety, clack clack clack,” they read in unison.

Then they try to find the words that start with the “cl” sound and write them on their boards. Before long, the kids start to fidget, then drift from their squares. Some scribble on their whiteboards.

Monks finds herself up against one of the hardest lessons for new teachers: classroom management. After a while, the official teacher, Guidera, steps in.

“Class, class, class,” she chants. “Yes, yes, yes!” the kids shout back.

Later, resident and mentor debrief. “How did you feel?” Guidera asks Monks. “I think I had them on the carpet way too long, so the whole group got really off task,” Monks says.

Guidera gives her some tips for moving through the lesson more quickly, and for holding the interest of restless kids. Monks will have another chance to get it right – she’s leading class all week.

Now, though, it’s time to put on her student hat.  She heads downtown for a class on teaching ratios and percentages with the other residents. There are 112 this year.

As class gets underway, Monks spreads out her dinner – a hot dog, yogurt and some coconut water from 7-Eleven – on her desk. Sometimes she’ll throw in a Red Bull to stay awake. If she gets through this year, Baltimore may have another effective teacher who actually sticks around. After the residency, fellows commit to teaching in a Baltimore or Washington, D.C. school for three years. The first class of fellows just finished that commitment. About three-quarters stayed on.

Training urban teachers who stay

Mon, 2015-01-05 10:50

Cheyandria Monks is getting ready to teach a phonics lesson to a class of first graders. Monks, 29, is not a teacher – yet. She’s a resident at Liberty Elementary in Baltimore. Basically, sh'es an apprentice. Her host teacher, Angela Guidera, walks her through the lesson.

Urban Teacher Center resident Cheyandria Monks, left, talks with her host teacher, Angela Guidera.

Monks listens to a recording of a song about a train “clickety-clacking” down a track. “Read it first,” Guidera suggests, “because the song goes pretty fast.”

Monks’ residency is part of a program at Urban Teacher Center, a nonprofit based in Baltimore. It’s built on the idea that, like doctors and chefs, teachers should train side-by-side with pros before they take charge of their own classrooms. In a traditional school, teachers-in-training might spend six or eight weeks – maybe a semester – as student teachers. The Urban Teacher Center residency lasts 15 months.

“They are learning what good teaching looks like and feels like, so that by the time they become the classroom teacher, there’s no surprises,” says Jennifer Green, the center's co-founder and CEO.

The schedule is demanding. Monks co-teaches most days, then heads off to her own master's classes at night. When she finally gets home, she might spend a few minutes with her baby daughter before tackling homework and lesson plans. She gets five or six hours of sleep.

The residency is meant to be hard, Green says. “We often hear that the first year of teaching is the hardest year of someone’s life.” One aim of the residency, she says, “is to make sure that our residents are up for the grueling nature of the task.”

If they’re not, they can drop out without leaving a class of students teacherless. Nationally, half of new teachers leave the profession within five years. In urban districts, turnover is even higher. Residencies are catching on as one way to produce teachers who know what they’re getting into. At the Urban Teacher Center, more than 20 percent of residents either quit or are asked to leave each year. Some don't return after the winter break.

“I think sometimes it’s unnecessarily brutal,” says Joseph Manko, principal of Liberty Elementary. “This is their first experience with the profession, and you want to prepare people. You also don’t want to scare them away.”

For the last three years, Manko has hosted a crop of residents at his school, which pays about 40 percent of the cost of their training. For now, philanthropy covers the rest. In return, Manko gets extra help in his classrooms and a school year to check out potential teachers. He hired one of last year’s residents for a permanent job. “He’s the first first-year teacher that we’ve hired in five years, but I’m happy to say he is far and away the best first-year teacher I’ve ever seen,” Manko says.

That teacher, Kevin Chandler, is still with the program at Urban Teacher Center. Now a fellow, he continues to take courses and work with a coach, but he’s in charge of a second-grade class. “The residency is the hardest part of this program,” Chandler says. “If you can make it through that year, you will be set.”

Monks is still getting through it. After lunch, she’s ready to teach that first-grade phonics lesson. The kids sit cross-legged on the carpet, each student on a colored square with an individual small whiteboard. They start out reading the train poem. “Clickety-clickety, clack clack clack,” they read in unison.

Then they try to find the words that start with the “cl” sound and write them on their boards. Before long, the kids start to fidget, then drift from their squares. Some scribble on their whiteboards.

Monks finds herself up against one of the hardest lessons for new teachers: classroom management. After a while, the official teacher, Guidera, steps in.

“Class, class, class,” she chants. “Yes, yes, yes!” the kids shout back.

Later, resident and mentor debrief. “How did you feel?” Guidera asks Monks. “I think I had them on the carpet way too long, so the whole group got really off task,” Monks says.

Guidera gives her some tips for moving through the lesson more quickly, and for holding the interest of restless kids. Monks will have another chance to get it right – she’s leading class all week.

Now, though, it’s time to put on her student hat.  She heads downtown for a class on teaching ratios and percentages with the other residents. There are 112 this year.

As class gets underway, Monks spreads out her dinner – a hot dog, yogurt and some coconut water from 7-Eleven – on her desk. Sometimes she’ll throw in a Red Bull to stay awake. If she gets through this year, Baltimore may have another effective teacher who actually sticks around. After the residency, fellows commit to teaching in a Baltimore or Washington, D.C. school for three years. The first class of fellows just finished that commitment. About three-quarters stayed on.

Why chicken wings cost more this time of year

Mon, 2015-01-05 10:04

The chicken industry did quite well in 2014. That may be largely due to the high chicken prices and low production costs. But Ed Fryar, President of Ozark Mountain Poultry in Rogers, Arkansas, believes chicken prices will not continue to increase in 2015, except for the chicken wings.  

"As you move into the Super Bowl and into March Madness, that causes wing prices to jump up," Fryar says.

Fryar says chicken breast has a strong market during the summer time and chicken feet are mostly exported to China.

"It’s hard to find a strong seasonal pattern in dark meat," Fryar says. "We export a substantial amount of dark meat from the United States, and because of that any issue with Avian Influenza, any political situation which causes one of our major importers to come and announce a ban on U.S poultry exports to them, those things kind of come and go."

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