Commencement

Commencement season has completed for most colleges and universities. Back to normal with a few limitations is the correct assessment of Commencement 2022. 

Something’s in the air this month: college graduation. The class of ’22 is entering a super strong labor market during an exceptionally strange time. Stocks are plunging — the Dow just had its first seven-week losing streak since 2001 — and economic growth is slowing. But the U.S. is adding jobs at a record rate.

In two-thirds of developed countries, college is free or less than $2K a year. In the U.S., private college costs $38K a year, on average, and public schools cost $23K out of state and $10K in state. The cost of college has tripled since 1980, while average pay for young workers is up just 20% since then. Still, many undergrads go into debt for degrees, since grads earn $1M more over their careers than non-grads. But students are reconsidering college’s value: in the past two years, US enrollment dipped 7% as more choose to “earn over learn.”

President Biden campaigned to make public college free in the U.S. Now that his Build Back Better bill is stalled that’s… not likely. Meanwhile, schools are making class less costly to woo students: Columbia University recently nixed tuition for kids whose families make less than $150K/year, and Utica College is one of several schools exploring cheaper three-year degrees. National discount rates (reduced tuition) are around 52%.

Most Commencement speakers still mainly talk about themselves instead of the students they are addressing. More and more students are graduating in debt, more and more employees are further behind the cost of living, and equal pay for all graduates is a spin phrase not a reality.

2022 COMMENCEMENT SPEAKERS –

Alma College: Robert Pinsky, U.S. Poet Laureate

Boston College: Kyriakos Mitsotakis, Prime Minister of Greece

Columbia International University: Mike Pence, former U.S. Vice President

Cornell University: Constance Wu, actress

Dartmouth College: Russell Wilson, NFL quarterback

Duke University: Mary Barra, General Motors CEO

Gallaudet University: Tim Cook, Apple CEO

Harvard Kennedy School: Maia Sandu, Moldova President

Harvard Law School: Loretta Lynch, former U.S. Attorney General

Harvard University: Jacinda Arden, New Zealand Prime Minister (Merrick Garland, U.S. Attorney General, for 2020 and 2021 classes)

Loyola Marymount University: Abby Wambach, U.S. soccer gold medalist

Loyola University New Orleans: Sean Payton, former New Orleans Saints coach

New York University: Taylor Swift, singer

Ohio State University: Patrick Gelsinger, Intel CEO

Princeton University: Dr. Anthony Fauci, infectious disease specialist

Rutgers University: David Remnick, editor of the New Yorker

Southern Utah University: Condeleezza Rice, former U.S. Secretary of State

Spelman College: Stacey Abrams, Georgia candidate for governor

Springfield College: Billie Jean King, former tennis star

Stanford University; reed Hastings, co-founder Netflix

Syracuse University: David Muir, ABC News anchor

SUNY-Potsdam: Bernie Williams, former baseball player, New York Yankees

Tennessee State University: U.S. Vice President Kamala Harris

U.S. Naval Academy: President Joe Biden

University of California at San Diego: Jessica Meir, NASA astronaut

University of Delaware: President Joe Biden

University of Florida: Tim Tebow, athlete/TV personality

University of Georgia: Ed Bastian, Delta Airlines CEO

University of La Verne College of Business: Randall Lewis, real estate developer

University of La Verne La Fetra College of Education: Richard Martinez, Superintendent Pomona Unified School District

University of Maryland-Baltimore County: Dr. Anthony Fauci, infectious disease specialist

University of Michigan: Maria Shriver, journalist

University of Notre Dame: Condoleezza Rice, former U.S. Secretary of State

University of Pennsylvania: Ken Burns, documentary filmmaker

University of Southern California: Allyson Felix, Olympic track gold medalist

Vanderbilt University: Reed Hoffman, co-founder of LinkedIn

Vassar College: John Leguizamo, actor

JOB MARKET - Add another head-scratching new feature to the post-Covid employment landscape: A job isn’t filled until the new hire actually shows up for work.⁠

⁠Manufacturers, restaurants, airlines and cleaning companies are among the employers seeing a surge of job seekers who accept positions—and are neither seen nor heard from again. Southwest Airlines said some 15% to 20% of new hires for some jobs don’t turn up on their first day. At security and facility-services provider Allied Universal, roughly 15% of new hires disappear before starting a job.⁠

⁠The practice, often called ghosting, isn’t new. In the tight labor market that preceded the pandemic, employers reported that some staffers quit without giving notice or just stopped showing up for their shifts. The practice picked up its own shorthand: “no call, no show.” What is different now, employers said, is that more people are vanishing before even starting a job.⁠

⁠Nationally, the job market is the strongest it has been in about a half-century. By some measures the odds of getting laid off are the lowest in decades. Many companies streamlined hiring processes or improved technology, at times making it possible for people to get hired online within minutes—and without ever speaking to a hiring manager.⁠

⁠The rise in no-shows “could be just an expression of job seekers having a lot more confidence in their ability to find a job,” said Nick Bunker, an economist at the job-search platform Indeed.⁠

REMOTE WORK - The challenges of remote work are getting harder to ignore:

A growing number of corporate executives want to put an end to the work-from-home revolution. But workers have gotten used to the flexibility — and have the leverage to demand it, writes Javier E. David, Axios managing editor for business.

It's becoming increasingly apparent that Zoom and Webex aren’t substitutes for in-person dynamics that bridge communication gaps, foster creativity and help build careers.

 

The convenience of hybrid working is being tempered by limits of virtual collaboration, which empirical data has now started to identify.

A University of Chicago study found remote workers put in longer hours but were less productive — effects that were especially pronounced among parents. Workers spent more time in meetings, the study found, but lost out on important face time with their managers.

A study published in Nature Human Behaviour drew on "emails, calendars, instant messages, video/audio calls and workweek hours" of 61,182 U.S. Microsoft employees over the first six months of 2020.

The software giant’s business units became "less interconnected" over time. An over-reliance on email and messaging made it "more difficult for workers to convey and/or converge on the meaning of complex information."

Reality check: However flawed, remote work arrangements have become a linchpin of a COVID-era labor market defined by high employee turnover.

SCIENCE 101 - There's a 50-50 chance of surpassing the critical global heating threshold of 1.5 degrees Celsius over the next five years, according to a new study.

Climate prediction centers, led by the U.K. Met Office, said in an annual update that the chance of the planet temporarily exceeding the key global temperature limit has significantly increased.

As recently as 2015, climate scientists had said there was zero chance of surpassing 1.5 degrees Celsius above pre-industrial levels in the next five years. However, the likelihood of exceeding this level was upgraded to 10% in the years between 2017 and 2021, before climbing to nearly 50% for the 2022 to 2026 period.

The 1.5 degrees Celsius goal is the aspirational global temperature limit set in the landmark 2015 Paris Agreement.

It is recognized as a crucial global target because beyond this level, so-called tipping points become more likely. Tipping points are thresholds at which small changes can lead to dramatic shifts in Earth's entire life support system.

The WMO warned that global temperatures will continue to climb for as long as humanity continues to emit greenhouse gases. "And alongside that, our oceans will continue to become warmer and more acidic, sea ice and glaciers will continue to melt, sea level will continue to rise and our weather will become more extreme."

Mind-bending extreme weather events:

The annual forecast uses the best prediction systems from international climate centers to produce practical information for policymakers.

The study shows that it is now a near certainty that at least one year between 2022 and 2026 will be the warmest one on record, displacing 2016 from the top ranking — when a natural El Nino event fueled temperatures.

It also says there is a 93% chance of the five-year average for 2022-2026 being higher than that of the last five years.

"A single year of exceedance above 1.5 °C does not mean we have breached the iconic threshold of the Paris Agreement, but it does reveal that we are edging ever closer to a situation where 1.5 °C could be exceeded for an extended period," Leon Hermanson of the Met Office said in the report.

The temperature warning follows a series of mind-bending extreme weather events around the world.

For instance, in the last few months, a brutal heatwave swept across parts of India and Pakistan; authorities urged people in Iraq to stay indoors as sandstorms blanketed the country; and an ice shelf the size of New York City collapsed in East Antarctica following record-high temperatures.

100 DAYS - Yesterday marked 100 days since Russia invaded Ukraine in a brazen move that has shaken up the post-Cold War geopolitical order, caused economic hardships all over the globe, and displaced millions of people from their homes.

So where do we stand? Before it launched its invasion, Russia controlled 7% of Ukraine—including Crimea, which Russia annexed in 2014, and parts of the eastern Donbas region. On Thursday, Ukrainian President Volodymyr Zelensky said that Russia has increased its territorial control to 20%.

Zelensky said this week that 60–100 Ukrainian soldiers are dying every day in the conflict, in addition to the tens of thousands of civilians who have been killed since Feb. 24, per Ukrainian estimates.

6.8 million people have left Ukraine and 7.1 million have been displaced from their homes but remain in the country.

Russian forces have also suffered severe losses due to well-publicized mishaps and fiercer than expected Ukrainian resistance. But, despite failing in its initial aims to topple the Ukrainian government, Russia appears set on defending the territory it has already seized. And with Zelensky vowing to keep up the fight, this war could drag on for a while, experts say.

Ukraine’s first lady Olena Zelenska told ABC News on Thursday that Americans should “not get used to this war.” But it appears to be fading from many Americans’ radars: Social media interactions on news articles about Ukraine have decreased from 109 million in the first week of the war to 4.8 million last week,

MARKET WEEK – Last week, stocks hit the brakes on a post-Memorial Day rally. But one bright spot is investor Cathie Wood’s closely watched ARK Innovation fund (RR is an investor), which is composed of a bunch of high-growth tech stocks. It’s up 17% since hitting rock bottom on May 11, compared to the S&P’s 4.4% gain over the same period.

Economy: US Commerce Secretary Gina Raimondo said on CNN yesterday the US might consider lifting tariffs on some goods in a bid to curb inflation. More than $300 billion worth of imports from China still have tariffs dating back to former President Trump’s trade war.

Adventures in inflation targeting — You might know the Federal Reserve’s goal is for inflation to average 2 percent over time. Obviously that is not what we have (the personal consumption expenditures index increased 6.3 percent over the past year). But here’s what might sound like an odd question: Does the Fed really want inflation to be 2 percent right now?

In a vacuum, the answer is, yes, of course. But in reality, getting inflation back down to 2 percent this year would almost certainly cause a recession. That’s because price spikes are only this severe because of all sorts of production and shipping delays — from China’s Covid lockdowns to Russia’s invasion of Ukraine and more. The question is how much getting back to 2 percent is in the hands of the Fed, and how much is related to factors outside its control.

(If you look at the Fed’s most recent projections — we’ll get updated ones in a couple weeks — they project PCE to drop only to 4.3 percent by the end of this year.)

So, what’s going on? You can think of inflation as being caused by some combination of demand (people are spending lots of money) and supply (goods aren’t getting from point A to point B very fast). The Fed can only really address the demand side, as Fed Chair Jay Powell has pointed out. That means there’s some amount of inflation that the Fed can’t do anything about, and if it did, it would be damaging healthy levels of consumer spending.

That makes targeting 2 percent inflation a little bit more confusing, especially since it’s pretty difficult to parse out how much inflation is caused by each half of the equation. The Fed seems to be hoping that the supply chain problems will ease quickly enough (over the next year or so) that this dilemma won’t be too much of a problem. Or at least, that prices, such as on commodities, will stop rising, even if they stay high.

But if supply problems keep inflation elevated, that could pose communications problems for the Fed in the future, since the central bank has pivoted to a focus on the economy running too hot. Its current message: we’ve got this.

Bill Spriggs, a professor at Howard University and chief economist at the AFL-CIO, thinks the Fed risks overpromising on its ability to tame inflation, given the severity of supply problems.

“At the very beginning, the Fed had done an excellent job of setting people up to understand that the supply shocks were going to be very big and very intense,” he said. “I don’t understand why they didn’t stick to their guns.”

George Selgin, a senior fellow at the Cato Institute, similarly said the Fed shouldn’t be overly fixated on 2 percent — particularly in the wake of a pure, severe supply shock in the form of Russia’s invasion of Ukraine.

“There are good reasons for the Fed to allow the inflation rate to continue to be above target for some time,” he said. “But if it’s now convinced the public it’s not going to do that, that’s adding to the confusion.”

Of course, the Fed definitely hasn’t dropped its mentions of supply-side problems and their role in inflation. Powell has said success on inflation may depend on “events that are not under our control” and said outright that it’s the demand side of the equation that the central bank can fix. But these questions are simpler to talk about than they are to truly measure.

“There’s a lot of excess demand. There’re more than 5 million more employed plus job openings than there are the size of the labor force. So there’s an imbalance there that we have to do our work on,” Powell said in May.

But if supply issues stay bad: “It would be a very difficult situation. I mean, we have to be sure that inflation expectations remain anchored. And I mean, that’s part of our job, too, so we’d be watching that carefully. And it puts any central bank in a very difficult situation.”

SOCIAL SECURITY & MEDICARE - The good and bad of inflation — One of the underappreciated aspects of Social Security is that benefits are automatically adjusted each year for inflation.

That’s great for beneficiaries, who saw a 6 percent rise in benefits last year, the biggest annual increase since 2008. It’s not so great for the program’s finances, which take a big hit from those higher costs. High inflation also erodes the value of Social Security’s trust fund, which is meant to cover income shortfalls.

At the same time, high inflation is good for Medicare Part A, which sets rates based on expected inflation. Last year, those rates were much lower than actual inflation turned out to be, which likely had the effect of holding down costs.

It’s worth noting that the strong economy and rising worker wages has also helped boost program revenues.

The tricky economic assumptions — The trustees’ economic assumptions, from inflation and economic growth to employment and interest rates, all factor prominently into their financial forecasts for Social Security and Medicare. But forecasting this year has been tricky business, given the huge shifts in the outlook driven by more persistent price pressures, faster tightening of monetary policy and the war in Ukraine.

The grim reality of Covid deaths — Social Security’s finances were likely bolstered by a grim reality: Many of the people who have died from Covid-19 were older Americans, and more likely to be collecting benefits than paying into the system. That will likely result in lower program costs, at least in the near term.

But it’s hard to gauge how the pandemic effects will play out over time, officials said last year. For example, the pandemic may have accelerated deaths of sicker individuals, leaving a healthier pool of beneficiaries that pushes up future program costs. And the prevalence of long Covid, which is not well understood, may result in higher rates of disability or Medicare costs.

The mystery of disability insurance — Applications for Social Security’s disability program typically shoot up during recessions, but the opposite happened during the pandemic.

With many in-person services suspended, some applicants — including people with limited English proficiency or homeless people, who tend to apply in person — were much less likely to seek disability benefits.

The very generous jobless benefits available during the pandemic, followed by a historically tight labor market, likely kept some people in the labor force who otherwise would have applied for disability.

The programs are still not in great shape — In its 2020 report, the trustees said Social Security would deplete its trust fund by 2034, while Medicare would exhaust its reserves by 2026. After that, automatic benefit cuts would kick in unless Congress acts.

Those depletion dates may have shifted by a year or two, the trajectory is roughly the same.

We are still going to have a 15-year trajectory of the Social Security balance getting worse each year, to the point that it would be really, really, really challenging to close it at this point, especially if you want to phase things in.

 

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Kathryn Culligan-Simon ….still teaching, still learning, Clint Eastwood (92), Morgan Freeman (85), Ronnie Wood (75), Mike Zazon ….Columbus, Ohio hockey guru.

 

CHRONICLES OF HIGHER EDUCATION - Mark Emmert and the NCAA mutually agreed to part ways a few weeks back, announcing he would step down as its president no later than June 2023.

Finding Emmert's replacement was never going to be easy, but it's made more difficult by turbulent times. The NCAA's future has never felt less certain than it does right now, and the next commissioner's job description is still being written.

The rise of NIL (Name, Image and Likelness) and the transfer portal have essentially brought free agency to college sports, though the changes hardly stop there.

The Transformation Committee is working to make radical changes to NCAA bylaws, which will give schools and conferences far more power.

Plus, some believe the most dominant FBS schools will inevitably break away and form their own "super league," whose influence would rival the NCAA's.

Emmert's rocky tenure began in 2010, and his first major controversy came in 2012 when he levied such severe sanctions on Penn State after the Jerry Sandusky scandal that they were later rolled back.

The two biggest moments, though, were the landmark NIL trials that paved the way for college sports' evolving status quo: Ed O'Bannon in 2014 and Shawne Alston in 2021.

In both cases, Emmert and the NCAA fought to maintain the concept of amateurism, but after the Supreme Court unanimously ruled in Alston's favor, the tide turned.

What the NCAA needs is a younger experienced person filled with great ideas about how to navigate an uncertain future. Sounds like all of higher education.

Possible candidates include Baylor president Linda Livingstone, NCAA senior vice president for basketball Dan Gavitt and former Secretary of State Condoleezza Rice.

Another idea: Rebuild the NCAA as a three-branch system, with commissioners for football, basketball and non-revenue sports.

The bottom line: One of the biggest organizations in sports is changing leadership for the first time in 12 years, and whomever it hires will shape the next 12 years and beyond.

PLASTICS - The use of plastics is surging and could nearly triple by 2060, Axios' Erin Doherty reports.

The math for 2060, via a new OECD report out last week:

The buildup of plastics in bodies of water could triple.

Plastic leakage to the environment could double.

Almost two-thirds of plastic waste will be from short-lived items, including packaging and low-cost products.

Much of the growth will be in developing countries, but per capita consumption will be far higher in rich countries.

The bottom line: About half of the plastic waste produced globally is expected to end up in a landfill — and less than a fifth is expected to be recycled.

DETROIT STYLE??? - Detroit Style pizza now the rage – I grew up in Detroit never heard of it as a kid. Coney Island hotdogs are what Detroit food is all about.

THE THREE COMMA PLAYER - LeBron James missed the playoffs this year, but he still managed to do something no NBA player has ever done: He’s the first active player to reach a net worth over $1 billion, per Forbes.

The star has earned $385 million in salary from the Cleveland Cavaliers, Miami Heat, and Los Angeles Lakers, but his endorsements, investments, and ventures have brought him into the three-comma club.

James holds an estimated $300 million in equity in the entertainment venture SpringHill Company, which he founded with Maverick Carter. SpringHill, a producer on last year’s “Space Jam: A New Legacy,” was valued at $725 million after a $100 million raise in 2020.

His stake in Fenway Sports Group, owner of the Boston Red Sox, Fenway Park, Liverpool, and the Pittsburgh Penguins, is valued at $90 million.

Forbes estimates that James has $80 million in real estate and $30 million through his stake in Blaze Pizza.

On top of his most publicized investments, James is believed to hold over $500 million in cash, stock, and other assets.

While James’ Lakers had a forgettable year, LeBron still excelled as an earner. He’s the second-highest-paid athlete in the world this year with $121.2 million, behind only Lionel Messi at $130 million, according to Forbes.

While Messi gets most of that through his salary ($75M on-field, $55M off-field), James earns $80 million off the court — deals such as his lifetime pact with Nike brings him tens of millions annually.

DRIVING THE WEEK – April trade and consumer credit data released Tuesday … Treasury Secretary Janet Yellen testifies on the president’s budget before Senate Finance on Tuesday and House Ways and Means on Wednesday … Senate Banking votes on Fed vice chair nominee Michael Barr and SEC nominees Jaime Lizarraga and Mark Uyeda Wednesday …

CFTC Chair Rostin Behnam participates in a virtual discussion with Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) on cryptocurrency regulation hosted by Washington Post Live Wednesday … Sen. Pat Toomey (R-Pa.) participates in a discussion at the Cato Institute on the updated case for free trade Wednesday … Senate Budget hearing on saving Social Security Thursday … Consumer price index data released Friday.

An unprecedented gush of income tax revenue is flowing into the federal government, driven in part by investors and business owners, and the size and speed of the increase has surprised even the nation’s fiscal-policy experts.

Individual income tax collections are poised to reach $2.6 trillion, or 10.6% of the economy in the fiscal year that ends Sept. 30, according to the Congressional Budget Office. That is up from 9.1% in 2021 and would mark a record in the 109-year history of the tax, topping the war-tax receipts of 1944 and the dot-com boom of 2000.

 

THE SWAMI’S WEEKEND PICKS –

MLB Game of the Week – Saturday 6/11, 4:15 PM (PDT), FS1: Los Angeles Dodgers (35-19) vs. San Francisco Giants (29-24). They hate each other, love it. Dodgers win this one 6 – 5.

Season to Date (8 - 5)

 

Next Blog: Jack Ass of the Month

Until June 13, 2022, Adios.

Claremont, California

June 6, 2022

#XIII-2-448

 

4,151 words, seven-minute read

 

CARTOON OF THE WEEK – America!

RINK RATS POLL - Do you support or oppose background checks on all gun sales?

____ Strongly support

____ Support

____ Oppose

____ Strongly oppose

 

QUOTE OF THE WEEK – “Be Brave. Take Risks. Nothing can substitute experience.” – Paulo Coelho

 

 

Rink Rats is a blog of weekly observations, predictions and commentary. We welcome your comments and questions. Also participate in our monthly poll. Rink Rats is now viewed in Europe, Canada, South America and the United States.

Posted at Rink Rats The Blog: First Published – May 3, 2010

Our Eleventh Year.

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