Business Trends

Archive for August, 2009|Monthly archive page

The Cash For Clunkers Aftermath

In Uncategorized on August 28, 2009 at 4:39 pm

If there was one pocket of the auto industry doing remotely well this past year, it was used car dealers. While the recent Cash For Clunkers program did boost new car sales, it also accounts for 7 percent of the expected decline in used car sales in 2009, according to industry research firm IBISWorld.

“Of course, there are winners and losers,” explained George Van Horn, senior analyst with IBISWorld. “Dealerships selling used cars will invariably get the short end of the stick, as the program has created a greater number of substitute consumers to purchase new rather than used vehicles.”

New car sales this year are estimated to be 20.5 percent lower than in 2008, down to 10.5 million. But if the program was not implemented, IBISWorld estimates total new car sales would be about 700,000 units fewer in 2009, at about 9.8 million (representing a 25.8 percent decline). So far, the most popular vehicle purchases and trade-ins are as follows:

Top 5 Vehicle Purchases Top 5 Vehicle Trade-ins
Toyota Corolla Ford Explorer (2 & 4 wd)
Honda Civic Ford F-150
Ford Focus fwd Jeep Grand Cherokee
Toyota Camry Jeep Cherokee
Toyota Prius Dodge Caravan

Light trucks were the most traded-in vehicle, which is a net positive for the program’s goal in encouraging Americans to drive more environmentally-friendly, fuel-efficient vehicles. And while critics are quick to argue how most of the cars sold will actually benefit foreign companies like Toyota, General Motors ranks second as being a top manufacturer for new vehicles purchased:

Top 5 Manufacturers %
Toyota 18.9
GM 17.6
Ford 15.4
Honda Motor Co. 12.9
Chrysler 9.1

Among others to reap the benefits of the program are finance and insurance companies. Even with a $4,500 maximum cash rebate, lenders and insurance providers will both benefit from the higher fees associated with increased loan volumes, loan balances and higher car values on the new cars purchased. At the other extreme, with all that clunker clutter, salvage yards will be a lot busier than usual.

“Cash For Clunkers strives to induce consumer spending on fuel-efficient cars, as well as give the auto sector a boost by helping dealers generate turnover. The program has been successful in doing just that, but it’s really a short-term fix, not a long-term solution,” said Van Horn.

Less Luster For Tiffany In Jewelry Industry

In Uncategorized on August 28, 2009 at 4:27 pm

tifSales are lackluster for high-end jewelry retailers this year as Tiffany & Co. is declining much faster than the jewelry industry as whole, according to industry research firm IBISWorld. Analysts at the firm expect industry revenue to fall 4.8 percent to $28.26 billion this year, with price competition from big-box retailers, like Walmart, stealing market share sparkle from traditional jewelry retailers.

“Although luxury shoppers represent a small elite portion of the population, they are the primary target market for high-end jewelers,” said George Van Horn, senior analyst with IBISWorld. “Even the wealthy are cutting back on extra discretionary purchases like jewelry and watches.”

Tiffany is expected to generate earnings per share of about $0.34, which will represent a decline of 46 percent from the $0.63 cents per share compared to the same quarter in 2008. Also, revenue for the quarter is expected to be about $600 million, which will be down 17.3 percent from the $732 million for the same time in 2008.

The fourth quarter of 2009 should see a significant revenue boost compared to the tough Christmas trading period of 2008. It is during this period, the fourth quarter, when jewelry stores will begin to realize more solid returns and better operating performance. As a result, profitability is expected to rise from 10.5 percent of revenue in 2009 to 11.2 percent of revenue in 2010, as luxury spending slowly returns.

While some improvement in industry operating conditions is expected in 2010 as the economy improves, IBISWorld industry risk ratings for jewelry retailing will remain at a very high level. Despite some modest improvement in ratings during the past six months, jewelry retailing continues to have the highest risk rating among the 60 different forms of U.S. retailing that IBISWorld monitors.

Over the coming few years, one of the major challenges for the industry will be the entrance of De Beers into the Jewelry Stores Industry. De Beers is planning to stake its ground as a retailer with a long-term plan to open around 150 stores under the De Beers LV joint venture with LVMH Moet Louis Vuitton. IBISWorld estimates that this move by De Beers will further increase the competition and boost the consolidation that has been under way over the past few years.

“The Jewelry Stores industry is on the precipice of a restructure at both retail and wholesale level that forces players to move quickly to ensure long-term viability,” added Van Horn. “Tiffany will continue to be challenged in finding new ways of selling its products without compromising its brand.”

Majority of Companies Believe U.S. Economy Will Rebound in Early 2010

In Uncategorized on August 25, 2009 at 6:24 pm

New research from Deloitte issued today shows that although most major companies surveyed believe that the U.S. economy will start improving in early 2010, many of those same companies will lag behind the general economy when the rebound occurs. The reason: Too much focus on short-term, tactical actions and little attention to structural changes and strategic investments that are needed to support growth in the new business environment.

Approximately 55 percent of companies surveyed feel the U.S. economy will start showing signs of recovery in the first or second quarter of 2010; though 25 percent think relief won’t come until the third quarter or beyond.

Industry research firm  IBISWorld forecasts the US economy will decline by 3% in 2009, and will not return to its normal course until 2011. Believing unemployment will continue to rise into the first quarter of 2010, Dr. Richard Buczynski, chief economist at IBISWorld, believes it won’t be until 2011 that overall economic activity will again surpass 2008 levels.

After implementing initial cost cutting measures when the economy first began to tumble — such as reducing salaries, layoffs and plant shutdowns — many companies are now are confused about their next steps,” said Kelly Marchese, principal, Deloitte Consulting LLP. “We believe these businesses should stop focusing on short-term concerns and look at their business in this new reality. Businesses need to focus on areas such as talent, growth and structural change so that their business doesn’t just survive — it thrives.”

Deloitte also identifies the following three key economic phases and their timeframes that businesses need to recognize, and provides recommendations for corporate leaders to consider as they focus their business revitalization efforts during these uncertain times:
Phase 1: Over the Edge: companies were focused on shuttering their business, generating cash, and looking at tactical cost reduction. Survival was priority number one.
Phase 2: Lumpy and Bumpy: the current phase of the economic downturn where companies need to place the focus on structural changes, strategic investments and a resetting the profit model.
Phase 3: Growing into a New Reality: this is what companies need to prepare for; where the new economics, market realities and competitors emerge.

“Like any recession, this one will play out in stages and will vary by industry,” said David Brainer, principal, Deloitte Consulting LLP. “And, regardless of which stage your company fits, or the speed of change, you must move beyond tactical, reactionary moves and make structural changes needed to support growth. To make this shift, companies need to be proactive and prepare now for the new growth environment, whatever it may look like.”
As Deloitte sees it, every organization grows at its own pace, determined by factors as large as the global economy and as personal as its current balance sheet. But, every business must grow — the only question is how. Getting it right requires deep industry and business insights that help identify smart, well-timed investments. But, that’s just the beginning. Profitable growth also involves effectively assimilating and integrating those investments, something far too many companies fail to accomplish. It’s not just about strategy; it’s also about practical execution.

For more information and a copy of the Deloitte survey visit: www.deloitte.com/us/heretodaywheretomorrow

For IBISWorld’s economic forecast “Economic Crisis: When Will It End?” visit: http://www.ibisworld.com/recession2009/default.aspx

Africa Becoming Leading Foreign Investment For U.S. Businesses

In Uncategorized on August 18, 2009 at 4:57 pm

In one of the toughest global economic downturns in decades, the African continent continues to be one of the leading foreign direct investment destinations for U.S. businesses, according to the Corporate Council on Africa (CCA). In fact, recent data released by the International Monetary Fund (IMF), reveals that while other regions of the world are experiencing economic decline, Africa has experienced significant economic growth over the past five years and is expected to maintain a positive growth rate of 3.5% for 2009.

“The reliable growth that we are seeing in Africa is due not only to the wealth of opportunities available in Africa, but also due to its continued efforts for greater political stability and an unprecedented level of government reform to attract foreign investment,” said CCA President and CEO Stephen Hayes. “Africa has proven itself to be an essential asset for companies across many business sectors.”
Industries that represent promising growth sectors in Africa include:

  • Financing – While global foreign direct investment inflows worldwide fell by an estimated 21% in 2008, FDI inflows to Africa grew by 15% to $61 billion in 2008.
  • Health – In the next few years, Africa will need 550,000-650,000 hospital beds, 90,000 physicians, 500,000 nurses, and 300,000 community health workers. The private sector has the potential to deliver between 45 and 70% of this needed increase in capacity. By 2016, the African healthcare market is projected to double, demanding an additional $25-$30 billion in new investments over the next 7 years.
  • Energy – Africa contributes more than 19% of U.S. crude oil imports and many analysts predict that it will provide more than 25% of U.S. imports by 2015. In 2008, Nigeria, Algeria, Angola, Chad, Libya, Equatorial Guinea and Gabon were respectively the top sources of U.S. oil and petroleum product imports from Africa.
  • Power – According to the U.S. Department of Energy, demand for electricity in Africa is expected to grow by more than 50% over the next 20 years. This growth will come not only from harnessing the large amount of natural gas that is currently being vented or flared by gas producing nations across the continent, but also from the implementation of new technologies and innovations being developed by the private sector.
  • Tourism – In 2007 the sector generated close to $90 billion in economic activity and is expected to exceed $185 billion within the next 7 years for the region, demonstrating positive growth and investment opportunities.
  • Agribusiness – With nearly 70% of Sub-Saharan Africans involved in agriculture or agriculture-related business and as much as a third of GDP being derived from agriculture, growth in Africa is founded upon growth in agriculture. Sub-Saharan Africa’s agricultural exports totaled $25.3 billion in 2006, an increase from $14.7 billion in 2000.
  • Natural Resources Development – Africa supplies half the world’s diamonds, a third of its gold, more than three-quarters of its platinum and palladium and accounts for about 12% of world oil supply.
  • Technology – Internet use in South Africa increased by 12.5% in 2008. The number of people in South Africa using internet is expected to double by 2014. In addition, mobile communication subscriber rates are expected to grow. In Kenya alone, subscriber numbers are expected to rise 95% by 2013. As for landlines, Africa accounts for 12% of the world’s populations but hosts only 3% of the world’s telephone lines.
  • To advance trade and investment flows between the U.S. and Africa, CCA is hosting its 7th Biennial U.S. – Africa Business Summit at the Walter E. Washington Convention Center in Washington, D.C. from September 29 – October 1, 2009, to which senior U.S. officials, including President Obama and Secretary of State Hillary Clinton, have been invited. In addition, United States Trade Representative (USTR), Ambassador Ron Kirk will be in attendance.

    During Secretary Clinton’s trip to Africa last week, she applauded CCA’s efforts to forge new, mutually beneficial private sector partnerships between the U.S. and Africa. The three-day event will include more than 50 industry-specific sessions, with a focus on the most promising business sectors – agribusiness, financing, health, infrastructure, natural resources development, power and tourism. These sessions will include dialogue among U.S. and African business and government leaders worldwide.

    “American businessmen and women don’t always think of Africa as an attractive and potentially lucrative market,” said Hayes. “Yet, we know that international trade between the U.S. and many African countries is increasingly becoming an important part of a company’s portfolio. The U.S. also benefits when we import goods from Africa, which leads to enhanced consumer choice and job creation here at home. The Summit will speak to these issues.”

    Summit participants will hear about the latest financing options, meet African heads of state and key government officials, and learn about the U.S.-Africa policies of the Obama administration. They will also have the opportunity to network with African and U.S. private sector and government representatives and identify specific growth areas that are ripe for investment.

    Retailers Having Back To School Blues

    In Uncategorized on August 17, 2009 at 4:59 pm
    EconomyWith 55.8 million kids enrolled in public and private schools this fall, retailers can anticipate their usual brief stint of shoppers. But given lackluster consumer spending and a 9.4 percent unemployment rate, it is no surprise analysts at industry research firm IBISWorld expect back-to-school spending to decline by 3.4 percent – from the $20.42 billion generated in 2008.

    In probing their back-to-school cost breakdown, the Los Angeles-based firm divided the following four categories into what it considered to be typical school-related expenses: electronics, traditional supplies, footwear and clothing.

    “Parents will inevitably put more thought and less dollars into their back-to-school shopping strategies,” said George Van Horn, senior analyst at IBISWorld. “In particular, dollar-variety stores can expect to see a greater wave of traffic since parents are doing everything they can to save an extra buck”.  In fact, IBISWorld approximates 21.3 percent of sales from the $47 billion discount-retailer industry to come from school and office supplies alone.

    The fastest growing category, electronic school supplies, will see a slight decline of 1.8 percent, down to $5.12 billion. Parents on average will spend $91.69 per child on electronic equipment this year, a fairly significant leap from the $43.36 average observed in 2005. Items such as calculators and personal laptops are must-haves in today’s learning environment, and IBISWorld predicts that by 2016, this sector will become the number one back-to-school spending category – overtaking the core area of clothing, as the learning environment becomes more technologically focused.

    The biggest decline this year comes from the clothes category, expected to plunge 5.4 percent. For each child enrolled in school this year, sporting the latest trends in clothes and accessories will cost parents $136.60 on average.

    And for the 1.23 million kids that will be home-schooled this year, IBISWorld found that while parents may be saving on certain expenses like clothes and shoes, educating a child at home escalates costs in other areas. In particular, parents incur the hefty price of purchasing the latest teaching tools, textbooks, and learning equipment – typically covered by public and private schools.

    “Back-to-school spending is a necessary and justifiable expenditure,’” said Van Horn. “Retailers have driven down overall prices in order to entice consumers, so price-conscious parents won’t need to significantly cutback, because they will get a lot more out of their dollar this year.”

    About IBISWorld, Inc.
    Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every U.S. industry.  With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions.  Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide.  For more information visit www.ibisworld.com or call 1-800-330-3772.

    Small-Business Bankruptcy Filings Up 81% In June

    In Uncategorized on August 11, 2009 at 7:41 pm

    Commercial bankruptcies among the nation’s more than 25 million small businesses increased by nearly 81% in June 2009 from June 2008, according to Equifax Inc., which analyzed its comprehensive small business database for the study.

    There were 10,339 bankruptcy filings in June 2009 throughout the U.S., up from 5,712 a year ago, according to the data.

    California is the most negatively affected state with 10 MSA’s (metropolitan statistical areas) among the 15 areas with the most commercial bankruptcy filings during June. Los Angeles, Riverside/San Bernardino and Sacramento metropolitan areas led the nation in small-business bankruptcy filings. The other MSA’s with the most bankruptcy filings during the month include:

    Charlotte-Gastonia-Concord, NC-SC
    Atlanta-Sandy Springs-Marietta, GA
    Portland-Vancouver-Beaverton, OR-WA
    Dallas-Plano-Irving, TX
    New York-White Plains-Wayne, NY-NJ
    California (excluding MSA’s within the state)
    Oakland-Fremont-Hayward, CA
    Santa Ana-Anaheim-Irvine, CA
    Denver-Aurora, CO
    San Diego-Carlsbad CA
    Oregon (excluding MSA’s within the state)
    Houston-Sugar Land-Baytown, TX

    “The data shows that the economic pain is continuing for small businesses across the country,” said Dr. Reza Barazesh head of North American research for Equifax’s Commercial Information Solutions division. “While it may not be quite as intense in some areas as what we saw earlier this year, we’re still seeing hefty increases in the number of bankruptcies in a lot of major metro areas. ”

    The Atlanta MSA increased to 208 bankruptcies from 93 a year ago; Houston increased to 153 from 84; and Charlotte, which wasn’t even in the top 15 a year ago, had 225 bankruptcies in June, the fourth highest of any MSA.

    The company’s report also listed the 15 metro areas with the fewest small-business bankruptcy filings. They are:

    Springfield, MA
    Lafayette, LA
    Cedar Rapids, IA

    Charleston, WV
    Hagerstown-Martinsburg, MD-WV
    Hawaii
    Huntington-Ashland, WV-KY-OH
    Clarksville, TN-KY
    Gainesville, FL
    Gulfport-Biloxi, MS
    Huntsville, AL
    Lynchburg, VA
    Baton Rouge, LA
    Beaumont – Port Arthur, TX
    Brownsville-Harlingen, TX

    For the analysis, Equifax analyzed both Chapter 7 and Chapter 13 filings. Chapter 7 is a liquidation proceeding in which a debtor receives a discharge of all debts, while Chapter 13 is a reorganization bankruptcy enabling filers to pay off debt over a set period of years.

    According to IBISWorld, an industry research firm, the key difference in bankruptcy law – as a result of the Bankruptcy Abuse Prevention and Consumer Protection Act – is that the qualification requirements for a Chapter 7 filing, under which non-exempt assets are liquidated to pay some debts and many remaining debts are canceled, have become more stringent.

    This means that those unable to qualify under the new rules are left with the less palatable choice of a Chapter 13 filing, under which debts must be repaid over a period of up to five years under court supervision. Any debts not addressed by the court plan under Chapter 13 are generally forgiven, though the filer’s access to credit is restricted for a period of up to ten years.

    IBISWorld notes that in 2005, the year before the new legislation took effect, 71.4% of business bankruptcy filings fell under Chapter 7, compared to 60.3% in 2006.

    Headquartered in Atlanta, Georgia, Equifax Inc. operates in the U.S. and 14 other countries throughout North America, Latin America and Europe. Equifax is a member of Standard & Poor’s (S&P) 500(R) Index.

    Headquartered in Los Angeles, California, IBISWorld  is recognized as the nation’s most trusted independent source of industry and market research. The firm provides  a comprehensive database of unique information and analysis on over 700 U.S. industries – offering the largest collection of industry reports available.

    MBA Programs Undergoing Changes To Increase Relevance

    In Uncategorized on August 10, 2009 at 6:19 pm

     

    mba

    The MBA Roundtable, a nonprofit organization focused on MBA curricular design and innovation, has released the results of its 2009 MBA Curricular Innovation Study. The study indicates that MBA programs are reacting seriously to criticism that they are not relevant enough to today’s business needs and are making corresponding curricular changes.

    Among the findings

    -69% have made a significant revision to their MBA curriculum within the past four years.
    -The most common curricular revision was “adding applied content” such as project-based courses.
    -Integration across topics and disciplines and interdisciplinary content were also popular curricular revisions.
    -25 percent have added an industry specialization in the past three years; the most common were healthcare/biotech/medicine and entrepreneurship.

    About half the programs reported that they had added leadership development offerings and provided more emphasis on global perspectives.

    14 percent of the programs surveyed were new MBA programs that had been launched within the past three years.
    Most of the new programs had moved from concept to enrolling students in less than 18 months, indicating a fairly rapid development cycle.

    Full-time MBA programs experienced the most changes

    89 percent of all MBA programs surveyed are planning additional curricular changes.

    “I think this is very promising news,” said Rodney Alsup, president of the MBA Roundtable. “It shows that there has been a concentrated effort among MBA programs to innovate and make changes that increase their relevance to both students and employers. Furthermore, this has been done in an educational environment that can be resistant to change, or, at the very least, has approval processes that make it difficult to make changes in a timely manner. Some schools need approval from their state boards of education prior to revising their curricula, for example.”

    The motivation for these changes comes from both internal and external sources, according to the study. The most common motivator by far was internal quality improvement initiatives, with 64 percent of participants selecting it as one of their motivators. Among external motivators, “competitor schools” was the most commonly chosen answer, with 34 percent of respondents choosing it as one of their motivators.

    “The best news to come out of this study is that 89 percent of MBA programs are already planning additional curricular changes,” concluded Alsup. “That indicates that these programs are on a cycle of continuous improvement.”

    Tuition Fees Getting Pricier, Applicants Increasing

    According to industry research firm IBISWorld, tuition fees for both public and private institutions grew in real terms, and accounted for a higher proportion of total revenue in 2009 than in 2004. Tuition fees per student have also grown faster than household incomes.

    “Higher tuition rates and a high unemployment rate is good news for business schools”, said Toon Van Beeck, senior analyst at IBISWorld.

    “Prior to the recession, there has been an ongoing trend of people prolonging their education. Now more than ever, we’re seeing a rise in MBA applicants, invariably altering the selection process to become a lot more competitive”.

    The Cost of America’s Groceries

    In Consumer Trends, Uncategorized on August 4, 2009 at 11:58 pm

    Americans have many choices when it comes to supermarket purchases: store brand, commercial brand, organic, etc. – but what is the cost difference and does it vary across the nation? Industry research firm, IBISWorld, investigated grocery costs in Los Angeles, New York City and Chicago to gauge consumer spending across the U.S. Here are the findings for the average grocery cart:

     

    On average for all food-brand categories (store, commercial and organic), Chicago is the cheapest of the three analyzed regions, coming in at $115.73. New York was the most expensive at $122.6, while Los Angeles was slightly cheaper at $121.66.

    The consumers with the lowest grocery bill ($92.04) are those in Chicago purchasing store brand products. This compares with $104.54 and $105.84 for New York City and Los Angeles, respectively.

    Chicago did however have the most expensive organic bill, coming in at $142.95, and Los Angeles had the cheapest at $135.80. This is due to Los Angeles’ proximity to Mexico as well as the high volume of food production in California. With the biggest selling area of organic groceries being fresh produce – expected to account for 42 percent of sales this year – and California accounting for 53.8 percent of the nation’s melon and vegetable production, it is no surprise Los Angeles shoppers have cheaper organics.

     “Large supermarkets have bypassed wholesaling activities as much as possible, and by taking greater control of the entire supply chain they have been able to minimize the cost structure for store brands versus competing products,” said George Van Horn, senior analyst with IBISWorld. “Organic markets still look to ‘own the supply chain’, but they operate on a much smaller scale, resulting in markups.”

    According to IBISWorld’s findings, the average organic grocery cart is about 18 percent more expensive than a grocery cart primarily filled with commercially branded products. But the organic grocery cart is a staggering 37.6 percent more expensive than a basket primarily filled with store branded products.

    “Despite the high price of organic products and the recession restricting budgets, the organic food market is still growing by four percent in 2009,” adds Van Horn. 

    About IBISWorld, Inc.

    Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of trends and market analysis on every U.S. industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information visit www.ibisworld.com or call 1-800-330-3772.

    Most Prestigious Occupations in America

    In Uncategorized on August 4, 2009 at 6:06 pm

    Every year at this time, The Harris Poll asks whether an occupation can be considered to have very great prestige or hardly any prestige at all. This year there are some changes as well as some stability in what occupations are considered ‘prestigious’.

    The survey was conducted between July 8 and 13, 2008, among 1,010 U.S. adults. 

    The occupations at the top of the prestige list:

    •Firefighter (62% say “very great prestige”),
    •Scientist (57%),
    •Doctor (56%),
    •Nurse (54%),
    •Teacher (51%), and
    •Military officer (51%).

    Least Prestigious Occupations:

    Looking at the other side of the list, only 15% or fewer adults regard the following occupations as having very great prestige:

    •Real estate agent/broker (5%),
    •Accountant (11%),
    •Stock broker (13%),
    •Actor (15%).

    Substantial majorities of adults (from 65% to 80%) believe that these occupations have “hardly any” or only “some” prestige.

    Additionally, several occupations are regarded as “very prestigious” by more people this year than they were last year:

    •Business executive, up six points to 23%,
    •Military office, up five points to 51%, and
    •Firefighter, up five points to 62%.

    However, even with this improvement, business executives are still near the bottom of the list with 62% of Americans saying they have only some prestige or hardly any prestige at all.

    Interestingly, the most recent Executive Quiz results conducted by The Korn/Ferry Institute reveal that nearly half (47 percent) of employed executives are either somewhat or very dissatisfied with their current position. The lackluster job market has not only left executives unhappy with their jobs, but survey results also uncover a lack of trust for corporate leadership.

    When asked what best describes employee morale within their company, 45 percent of employed executives said either “fair” or “poor,” followed by 42 percent who said “good” and only 13 percent who said “outstanding.”
    “The global recession has left fewer employees to do more work, often for less pay. Stress levels are high and some executives are getting burnt out. However, irrespective of the business cyclicality, companies must take proactive steps to keep key employees engaged if they want to retain them for the long term and be seen as an employer of choice.”

    Two occupations lost four or more points since last year:

    •Farmers, down five points to 36%,
    •Accountant, down four points to 11%.

    Biggest Changes over Last 30 Years

    The Harris Poll first asked this question, but with a shorter list of occupations, in 1977. The biggest change since then has been a 22 point increase from 29% to 51% in those who believe teachers have very great prestige.

    Two occupations have lost substantial ground since 1977: scientists, down 9 points to 57% and lawyers, down 10 points to 26%. In addition, two have remained unchanged – priests/ministers/clergy at 41% and journalists at 17%. Also, two have remained very stable – entertainers, down 1 point to 17%; and bankers, down 1 point to 16%.

    So What?

    While some of the numbers may fluctuate from year to year, one thing remains constant, especially in the past two decades. The professions that are at the top of the list and considered to have very great prestige are ones that are not considered to be high-paying jobs – firefighters, nurses and teachers. The ones at the bottom are ones that may have a lot of fame attached to them – athletes, actors, entertainers – or are ones that have the potential to earn large salaries – business executives, stockbrokers, real estate agents. People do not equate money and fame with prestige. These are two completely separate concepts to the American public.

    Most Accountants Loyal To Their Companies

    The accounting profession, when compared to the rest of the U.S. job market, has held up well in terms of job losses, shedding less than 2% of jobs since June 2008. Perhaps as a result, accountants are loyal to their employers with 57% saying they plan to stay with their companies once the economy improves, according to a new survey by Ajilon Finance, a leading specialty finance and accounting recruitment firm, in conjunction with the Institute of Management Accountants’ Inside Talk Webinar Series.

    In contrast, a smaller but still significant number of accountants – more than one-fifth (23%) of the 458 accountants surveyed – say they plan to look for new jobs when the economy rebounds, according to the survey. Impressively, however, when asked where they see themselves in five years, 44% of accountants anticipate serving in a more senior role at their current company with a much smaller 25% saying they see themselves at another company in five years.

    “Despite the deterioration of the overall job market over the past year, accountants are still in great demand nationwide,” said Jodi Chavez, senior vice president of Ajilon Finance. “That said there is still a strong core of highly-skilled accounting professionals available for hire. Companies which are gearing up for the transition to International Financial Reporting Standards (IFRS), the implementation of XBRL-tagged financial statements or even just for the coming tax season should take the opportunity now to snap up top accounting talent while it is available.”

    U.S. Health Care Plans Ignites Mixed Reviews

    In Uncategorized on August 3, 2009 at 6:00 pm

    Health Care And Small Businesses

    According to market research firm IBISWorld, around 162 million people – 61% of the U.S. population under 65 years of age – currently receive health insurance coverage as part of employee benefit plans.

    Currently, small businesses are paying up to 18 percent more for coverage compared to large firms.  These higher costs spell out lower profits for the firm, and lower take-home wages for their employees.

    Because of the higher costs they face, small-business owners are far less likely to provide health insurance for their workers. Less than half of firms with three to nine workers offer any type of coverage, while 99 percent of firms with 200 or more employees offer employer-sponsored insurance. With costs continuing to rise, more small-business owners have either reduced or dropped coverage.

    With the health care reform debate in full swing, proposals working their way through Congress have included the creation of an “insurance exchange,” where both small businesses and individuals can purchase coverage, to including a tax credit for small businesses providing health care coverage for workers.

    Concerns continue to be raised over the so called “pay-or-play” fees that are designed to encourage firms to maintain employer-sponsored insurance coverage.  But the current proposals exempt small businesses from these fees. For example, the draft bill from the Senate Health, Education, Labor, and Pensions Committee exempts firms with fewer than 25 workers, which is more than 90 percent of all firms in the United States. However, if a small firm decides not to provide coverage, the exchange provides a way for its workers to get quality coverage at affordable rates.

    Mixed Opinions About Health Care Plans

    reformAccording to an online survey conducted by Harris Interactive® between July 9 and 13, 2009, there is a 5-to-3 majority supporting the idea of a public or government health plan to compete with private insurance.

    In addition to the 5-to-3 majority support of the plan, the survey tested the strengths of three arguments in favor of a public, or government plan and three against it. The three arguments in favor elicited the support of majorities between 68% and 55%:

    •A 68% majority thought a public plan would be a valuable alternative to private insurance;
    •A 63% majority thought that it would help to keep insurance costs down; and
    •A 55% majority thought it would help patients to get better care.

     
    Arguments against a public plan generated mixed reactions:

    •A 55% majority agreed it would reduce the freedom of patients to choose the doctors and treatments they want, but
    •A 54% majority disagreed that it would be “too much like socialism,” and
    •A 56% majority disagreed that it would drive insurance companies out of business.

    Putting Patients First Should Be Top Priority

    Dr. Donald Palmisano, former president of the American Medical Association and current spokesman for the Coalition to Protect Patients’ Rights (Coalition) and over forty doctors from across the country today urged Members of Congress to slow down health system reform and do it right. The Coalition held a press conference at the National Press Club to urge legislators to put patients first when developing a system overhaul.

    “The healthcare system is never closed in the United States. Hospitals never have a holiday and there are no vacations for Emergency Rooms. There are always patients who need care and we must ensure that care is always available,” said Dr. Donald Palmisano. “We are very concerned about the rush to pass healthcare legislation – we want Congress to take their time and do it right. When I was performing surgery, I wasn’t worried about finishing the operation quickly, I was concerned about getting the job done right. Lives depended on it. Now, we’re asking Congress to take their time and do health reform right. Lives are depending on it.”

    Also participating in the press conference was Dr. Todd Williamson, a neurologist from Georgia and the president of the Medical Association of Georgia. In addition to serving as a member of the Coalition to Protect Patients’ Rights, Dr. Williamson is leading a group of 11 state, specialty, and county medical associations who are speaking out against key elements of the tri-committee bill.

    “We believe that America’s physicians deliver the best medical care in the world and we are united in our resolve to preserve the patient-physician relationship,” Dr. Todd Williamson said. “Patient choice must be a key tenet of any health reform proposal. Implementing a government-backed insurance program will not give a patient added choices – it will eventually allow him or her only one option, the public option.”

    After voicing their concern about rushed legislation at the press conference, doctors met with Members of Congress on Capitol Hill to talk about working towards a bi-partisan solution that would help the uninsured obtain coverage without negatively affecting the 250 million Americans who have health insurance. The doctors expressed their fear that a government-controlled “public option” would have an inherent advantage in the marketplace because it would ultimately be subsidized by American taxpayers and a government takeover of the American healthcare system would result. Consequently, millions of Americans would be forced from a private plan of their choosing to a government controlled plan, which would lead to long waiting lines to see a doctor, substandard care, and the slowing of medical discovery and innovation.

    Dr. Marcy Zwelling-Aamot, an internist from Southern California and a patients-rights advocate said, “Patients must be kept at the center of healthcare reform. As Congress takes the important steps to reform our current system, we need to remember that at the end of the day it is the patient that should be the decision maker about their healthcare, not the government.”

    Health Bill Could Benefit 6.6 Million Illegals

    A new analysis by the Center for Immigration Studies estimates that 6.6 million uninsured illegal immigrants could receive benefits under the House health reform bill (H.R. 3200). While the bill states that illegal immigrants are not eligible for the new taxpayer-funded affordability credits, there is nothing in the bill to enforce this provision. Congress defeated efforts to require the use of the Systematic Alien Verification for Entitlements (SAVE) program. More than 70 other programs of this kind use SAVE.

    Among the findings:

    In 2007, there were an estimated 6.6 million illegal immigrants without health insurance who had incomes below 400 percent of poverty, which is the income ceiling for the new affordability premium credits.

    If all uninsured illegal immigrants with incomes below 400 percent of poverty received the new credits, the estimated cost to the federal government would be $30.5 billion annually.

    The current cost of treating uninsured illegal immigrants at all levels of government is an estimated $4.3 billion a year, primarily at emergency rooms and free clinics.

    On July 16 an amendment by Rep. Dean Heller (R-NV) that would have required the use of the Systematic Alien Verification for Entitlements (SAVE) program to prevent illegal immigrants from receiving the affordability credits was defeated by the House Ways and Means Committee.

    At present 71 other means-tested federal programs require use of the SAVE system to prevent illegal immigrants and other ineligible non-citizens from accessing them.

    Even though there is no mechanism to prevent enrollment, it is likely that many income-eligible illegal immigrants would not enroll out of fear or lack of knowledge of the new programs. Thus the actual costs would be less than the maximum estimate of $30.5 billion. However, if illegal immigrants are legalized and could receive affordability credits, a much larger percentage would be expected to enroll, with a corresponding increase in costs.

    Uninsured illegal immigrants tend to use less in health care on average than others without health insurance because they tend to be young. This fact is incorporated into the current cost estimate of $4.3 billion. However, government-provided affordability credits paid to insurance companies are the same for everyone regardless of age or preexisting conditions. Therefore, the younger age of illegals does not result in lower average costs for taxpayers for this program.

    It is also worth noting that the report estimates that 38 percent of illegal immigrants had health insurance in 2007. Additionally, the report estimates that there are at least 360,000 uninsured illegal immigrants with incomes above 400 percent of poverty who would not qualify for benefits under H.R. 3200.

    It is also possible that illegal immigrants could benefit from the expansion of Medicaid under H.R. 3200. The bill does not require identity verification for those claiming U.S. birth. Of illegal immigrants with incomes under 400 percent of poverty, about half live under 133 percent of poverty, which is the new ceiling for Medicaid eligibility.

    On July 30 an amendment by Rep. Nathan Deal (R-GA) that would have required identity variation for those claiming U.S. birth was defeated by the House Energy and Commerce Committee.