When Graduate Jobs in America Involve a Broom, a Bartender's License and an Apron

There's something about America that feels a lot like India these days. In India, you're often likely to find that in the cities, every low-paid clerk at the grocery store, the cab drivers, the office gophers and construction workers, hold graduate and postgraduate degrees. Back in America today, you're likely to find lots of similar stories. You'll find someone with an MA in classical languages stocking shelves at Target; you'll find that your bartender has a degree in psychology; and you'll find that that bright political science from down the street works a phone for a little money. These are the new graduate jobs. These are the jobs that young people take out student loans that they pay back for the rest of their lives for.

When you hear that the recession is over and that the economy is back on track, don't believe it. One of the worst things the recession has done has been to take hope away from today's generation. And education was always supposed to be one's ticket to a better life. Today, with people with graduate school under their belt flipping burgers and scooping french fries at McDonald's, one wonders what people with only high school or a year of college are doing.

The really lucky ones do find suitable graduate jobs; but they find that those jobs pay sharply lower salaries then they would have three years ago, before the recession. On average, the starting salary of a young person last year with a four-year degree under his belt, was $27,000. That's $3000 less than what it used to be before the recession. And this is a period of time that prices have risen quite spectacularly. So if you think about it, that's actually a $5,000 salary cut when you adjust for inflation.

When you hear that unemployment around the country is at 9% or 10%, does that sound truly alarming to you? How does 45% sound? That's the unemployment figure among new graduates from last year. It used to be before the recession, that only 10% of those who graduated with a four-year degree had trouble finding a job right away.

Of course, not all graduate degrees are the same. When it comes to finding graduate jobs - or jobs that actually require a graduate degree (unlike the aforementioned jobs tending bar or stocking shelves at Target), young people who have degrees in teaching or engineering are more likely to find a job today. Young people who have a degree in political science or the classical languages are the least likely to find graduate jobs.

People who suffer this way react often by resorting to further education with a vengeance. They go back to school trying to get a PhD or something. What could they do? It's their only shot.

Selling Gold - the New National Pastime

What kinds of treasures lie in your attic? To families across the country, digging out poorly-used and very old silver items from storage and bits of broken gold jewelry from deep in some drawer are becoming quite a profitable pastime. The price of gold and silver have been soaring on the backs of vigorous investing activity for quite a while now; and people are beginning to realize that this could be a great time to bring long forgotten pieces of precious metal out in the open. As people begin to hear the news of how they are in the middle of a rare opportunity to turn forgotten scraps of precious metal into cash, with gold and silver prices at record highs, they have taken to everything short of digging out their fillings to cash in. Selling gold has become the new national pastime.

The price of gold jumped up 50% in the first quarter of this year alone. It's the highest it's been since the 80s. And jewelers of every description have begun to change the recipes they use for their designs. Gold, long the mainstay of the wedding ring, is beginning to give way to silver. In some cases, jewelers are trying to construct rings almost entirely without metal - mostly with precious stones like emeralds. As the marriage season picks up steam, even Indian weddings, long dependent on the luster of gold to make things look classy enough, are changing their ways.

With everyone getting in on the act, selling gold and silver, one of the first kinds of business to benefit has been the pawn shop. Corporate-owned businesses like First Cash Financial and EZCorp have been doing spectacularly well. They've seen growth that's about 50% higher than even a couple of months ago, with customers and bringing in every scrap of gold and silver they can lay their hands on.

Investors who wish to get in on the precious metals are in many cases worried about how they've missed the boat with gold. At $1600 a troy ounce, this isn't any market for investors to be getting into for the first time. It's for investors who have already bought in and who wish to be selling gold to cash out. Silver, at about $50 a troy ounce is priced exactly right for those who may wish to make a killing. Silver has never been really considered a precious metal; it is not a base metal, of course; but it hasn't quite been in the same leagues as gold or platinum.

Basically, jewelry makers who design stuff for the affordable end of the market are trying to switch to base metals. Even silver is too expensive these days. Go to stores like Nordstrom or Saks, and the jewelry you see there that sells for $300 or so is usually gold-plated brass these days.

Positive Motivation - Why Don't Businesses Offer More Pay for More Efficiency?

Because Positive Motivation Only Goes so Far

The first thing that companies do in response to poor demand in a recession is usually to lay workers off. Somehow, almost never do companies decide to keep employees but to ask everyone to take a pay cut. They know that while people may be grateful for a new job with lower pay once they are fired, they don't actually think that way when they haven't been fired yet. In other words, if a company tries to keep everyone on rather than fire them, workers will consider that as negative motivation and stop working well. Positive motivation can be a pretty popular choice too - Henry Ford, to appeal to the best workers and technicians in the country, paid twice what anyone else paid for similar skills. He called it efficiency wages. Positive motivation has been a well-known principle of employment - pay people more than the going rate, and they show you their appreciation by working harder.

But economists and hiring managers know the bigger truth in that today. When you offer someone higher wages as positive motivation, the goodwill they feel for you can be real. And it will certainly make them want to work harder and work better for you. The problem is, that people need new stimulation all the time. Pretty soon, the higher pay that you give them is going to be taken for granted, and efficiency will quickly slip. Well, so much for the positive motivation.

How about what happens to a worker when you cut pay without an explanation? Do they still work well because they are appreciative of having some job to go to during a recession? Or do they not care? Do they take their opportunities for granted and slack off? If you picked choice B, you really are remarkably astute. That's the way people's minds work.

People's minds work by comparing what they've been through with the experience of other people. If they look around them and find other people are making more money, they are going to resent this completely. And this resentment will never be forgotten. What the scientists are trying to tell us is that while positive motivation at least works for a short period of time, negative motivation - a pay cut for poor performance - breeds resentment forever.

So there you have it, psychology is an important reason for why there are so many in America who are jobless. If employers were to take pity on workers by lowering wages but still retaining them instead of firing them, they would hit back by working inefficiently, rather than be grateful. But a lot can depend on how exactly an employer imposes a pay cut. If it's done with no explanation at a time when the company is obviously doing well, of course it's something that won’t go over well with any worker. If it's done with a proper transparent explanation, things could go far better.

A New Personal Payment Solution to Make Splitting a Restaurant Check Easier.

And it's from Visa!

People love going out to dinner with friends; inevitably, everything goes well, until it comes time to pay the bill. Often, no one person seems to have enough in their wallet to actually pay their share. So everyone reasonably, decides to pay by credit card. Of course, that would mean that this restaurant would have to come up with five bills, one for each diner. Needless to say, the restaurant doesn't see any sense in this, and it asks the diners to deal with it. And so, after a lot of serious negotiating the whole sorry affair ends with a set of payment agreements so complex, it would do a hedge fund manager proud. Do things really have to be this difficult? Can't we have a personal payment solution where people can just use their cards to pay one another not always a business?

As sophisticated a financial world as we live in today, there still is no real remedy for this. If you ran out to the ATM, you would have to pay fees. PayPal exacts its pound of flesh too. Why does America not have a way by which people can just pay each other without cash in hand?

Visa seems to think that it's ridiculous that we don't have a solution to this. They announced in March that they would soon have a person-to-person payment solution ready for the market. From now on, splitting our checks, paying the kid who mows your lawn, paying allowances, everything becomes easier. Starting this summer, anyone who has a Visa card will be able to send money to another Visa cardholder, no matter what bank they go to or where they live. You get your babysitter’s Visa account number or their cell phone number, and the money you send just appears in their account. It's as simple as that. You don't even have to mess with any tiny credit card readers that attach your iPhone (recall The Square).

This could really revolutionize the whole credit card industry and small business. No longer do small merchants have to pay a punishing 5% processing fee every time they process a credit card the way they would in the conventional way. The surprising thing is, that America is last among the developed countries to come up with such a thing.

Visa says that it needed all this time to bring this payment solution to America because it needed to upgrade VisaNet in America before it could get the process rolling. It needed time to form strategic partnerships with companies and it needed to work with banks so that they would be able to actually get the money coming and going. Of course, that's a non-explanation. Because somehow, Visa was able to get all of this in place years ago and other countries.

The problem in America has basically been the banks. The banks have been reluctant to allow transfers like this for free. They've always made a lot of money on these transfers; if they allowed Visa into this space, they'd lose a huge income stream. Visa plans to charge no more than a dollar for a transfer. If Visa’s plan is successful, PayPal should be the company that loses the most. Maybe the new Visa program will make PayPal cheaper and better.