Category Archives: Economy

World Bank Aims to End World Poverty

Economy, , , , ,
World Bank President Jim Yong Kim
World Bank President Jim Yong Kim

Officials of international finance are solidly behind the new goal of the World Bank to put an end to extreme global poverty by the year 2030. The leaders emphasized that the focus of the World Bank should be making sure that the world’s most impoverished populations will reap the benefits from strong growth and improving affluence in the developing nations of the world.

“For the first time in history we have committed to setting a target to end poverty,” World Bank President Jim Yong Kim said on Saturday. He made his statement after a meeting of the World Bank’s Development Committee. “We are no longer dreaming of a world free of poverty; we have set an expiration date for extreme poverty,” he added.

The World Bank set the goal to reduce extreme poverty down to only 3 percent throughout the world. This will be accomplished by targeting the most impoverished 40 percent of people now living in each country of the developing world. Currently the economies of developing countries are growing at an annual rate of 6 percent on average. Millions of people are being removed from the ranks of the extreme poor and an expanding middle class is also creating growth of economic inequality.

“We recognize that sustained economic growth needs a reduction in inequality. Investments that create opportunities for all citizens and promote gender equality are an important end in their own right, as well we being integral to creating prosperity,” the Development Committee said.

Statistics reveal that global poverty has been reduced substantially over the past 25 years. In 1990 the percentage of people living in extreme poverty throughout the world was 43 percent. In 2010 that number was down to only 21 percent, and continues to decline. Most of the world’s poorest people live in South Asia and sub-Saharan Africa. China has been able to successfully cut extreme poverty over the last several decades.

Capital Business Investment Up in January

Economy, ,

In the largest increase in over a year, the month of January saw US companies purchasing machinery and factory goods at a rate of increase of 7.2 percent over December’s figures. This number, despite fears of tax hikes and sequestration (budget cuts), registers among economists as a sign of increasing confidence in the US economy.

Increased capital purchases, especially long after the holidays have passed, bodes well for the economy, as it’s a sign that production is pushing ahead, with a hoped-for increase in jobs and decrease in unemployment.

Aircraft and defense orders are not included in these figures. If sequestration causes the Defense Department to slash its budget, then this sector could adversely affect the economy as a whole. Because orders for aircraft fell in January the total factory orders in January was really down by 2 percent.
 

In Some Parts of US Foreclosures are Still High

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Chicago/Naperville/Joliet, Illinois

Yes, its true that the overall foreclosure rate in the US has declined, down by 28 percent for the year and 7 percent lower in January 2013 as compared to the year before. However, much of this reduction can be attributed to the new law passed in California which went into effect on January 1st.

"The U.S. foreclosure landscape in January was profoundly altered by the effects of new legislation that took effect in California on the first of the year,” said Daren Blomquist, vice president at RealtyTrac.

“Dubbed the Homeowners Bill of Rights, this legislation extends many of the principles in the national mortgage settlement — including a prohibition on so-called dual tracking and requiring a single point of contact for borrowers facing foreclosure — to all mortgage servicers operating in California. …As a result, the downward foreclosure trend in California accelerated into hyper speed in January, decisively shifting the balance of power when it comes to the nation’s foreclosure activity."

Yet many other areas of the country are still suffering the ill-effects of foreclosures. The following is a list of the 17 worst rates of foreclosure in the country, by city, according to RealtyTrac.

1.    Ocala, Florida: 1 out of 223 homes
2.    Miami-Fort Lauderdale-Pompano Beach, Florida: 1 in every 228 homes
3.    Orlando-Kissimmee, Florida: 1 out of 241 homes foreclosed
4.    Rockford, Illinois: 1 out of every 265 homes
5.    Stockton, California: 1 out to 277 homes
6.    Las Vegas-Paradise, Nevada: 1 in every 283 homes
7.    Chicago-Naperville-Joliet, Illinois: 1 in every 293 homes
8.    Jacksonville, Florida: 1 out of 301 homes
9.    Tampa-St. Petersburg-Clearwater, Florida: 1 in 307 homes
10.    Lakeland, Florida: 1 in every 332 homes
11.    Cape Coral-Fort Myers, Florida: 1 out of 336 homes foreclosed
12.    Palm Bay-Melbourne-Titusville, Florida: 1 in every 339 homes
13.    Port St. Lucie, Florida: 1 out of every 341 homes foreclosed
14.    Canton-Massillon, Ohio: 1 in 366 homes
15.    Atlanta-Sandy Srpings-Marietta, Georgia: 1 in 390
16.    Sarasota-Bradenton-Venice, Florida: 1 out of 391 homes
17.    Modesto, California: 1 out of 415 homes received foreclosure filing in January 2013.
 

Small Business Optimistic Despite Continued Uncertainty

Economy, , ,

The National Federation of Independent Business released the data on their business optimism index on Tuesday, which rose by almost 1 percent to a total of 88.9 in January. The index has been going up since its 2 and a half year low which it showed in November, 2012.

The index rose despite the worrisome payroll tax cut which expired on January 1st, 2013, part of the fiscal cliff which has been haunting economists, businessmen and politicians for the past many months. The tax cut expired along with huge, across-the-board spending cuts which will go into effect next month, unless Congress acts do prevent them.

The outlook of business owners for the coming six months went up by five points. In addition their feelings about profits, sales, credit availability and capital investment improved.

An even more encouraging gauge was the increased willingness of small business owners to begin to create more jobs and other business owners who reported difficulties finding workers to fill their job openings.
 

Small Business and Health Insurance

Economy, ,
Small Business Owners Have a Lot to Think Over When it Comes to Healthcare Benefits for Employees

Many factors need to be considered by small business owners when deciding what exactly they should do about equipping their employees with health insurance benefits. Here are several issues to consider when contemplating this costly decision.

1.    What type of business do you run? According to healthcare consultant Robert Laszewski small companies which are made up mostly by the owners, such as doctors’ offices, dental practices, architectural and accounting firms should most likely provide health insurance for their employees.  “I expect they’ll continue to offer insurance through the group model because that’s the way to get tax-deductible health insurance. They also have to compete for skilled workers,” says Laszewski. However, he adds, family owned restaurants or dry cleaning shops that hire minimum wage or unskilled workers might not find it in their best interest to provide group insurance for their employees.

2.    Consider the tax benefits of providing healthcare insurance to your workers: The federal government gives tax breaks to most companies with less than 25 low-wage employees. Today the benefit can come to 35 percent of health costs, but will go up to 50 percent in 2014 for businesses that purchase their insurance through their state’s online health insurance market.

3.    Take into account what your employees actually want: Now that employees are going to be required to own health insurance, they might prefer to get that coverage from their employers, therefore encouraging their bosses to supply that coverage.

4.    Don’t forget about subsidies when deciding to offer health coverage or not: It is possible that your employees might be better off buying their healthcare coverage at a subsidized rate from the newly formed state exchanges. (Families of four with income of $92,000 annually or less will qualify for such subsidies. Low-income workers in California may be eligible for even bigger subsidies under Medi-Cal.)

5.    Do not make your decision under pressure: Laszewski says, “Do absolutely nothing until this shakes out,” he says , adding that there is a dearth of information at the moment. “I might wait a year, because what the exchanges look like and what the prices look like the first year may not be what they look like the second year,” he adds.

Small business owners should try not to panic. Although it is certain that we are entering a brave new world of healthcare culture, it is certainly not going to be as bad as you may think.