QUOTE OF THE DAY
Crain’s: How the big, new manufacturing tech lab could keep talent in Chicago
Among the many reasons to applaud UI Labs — the research consortium that just won a $70 million federal grant to create a digital manufacturing tech center in Chicago — is its potential to stem the brain drain of computer science graduates from the University of Illinois at Urbana-Champaign.
Ever since Marc Andreessen headed west to commercialize the Web browser, U of I has sent too much talent to the coasts and not enough to Chicago. As my colleague John Pletz reported recently, only four in 10 of these graduates stay in Illinois.
Young people have always left college towns for urban centers after their four years are up. But as the closest big city to Urbana, Chicago should be attracting more University of Illinois grads.
Chicago Tribune: For states, financial icebergs loom
If you’re in the hospital with multiple fractures, a staph infection and a collapsed lung, you may not take great comfort when your doctor informs you that his last patient has it worse, being dead. Sometimes encouraging comparisons are not that encouraging.
So Chicagoans didn’t break out confetti upon hearing that Standard & Poor’s Ratings Services regard the city’s fiscal condition as less dire than Detroit’s. In other news, most residents of Baghdad were not killed by suicide bombers yesterday.
The S&P report is not exactly a burst of sunshine. It judges “both Detroit’s and Chicago’s budgetary performance to be ‘very weak,'” and notes that debt service amounts to 12 percent of total Chicago expenditures, only marginally better than Detroit’s 14 percent. It points out that Chicago’s public pension funds are badly underfunded, creating pressure for a tax increase.
Cafe Hayek: Minimum Wage, Maximum Folly – Again
Scott Sumner understandably wonders why exceedingly high rates of youth unemployment in economies with minimum-wage statutes are seldom explained as being at least in part a consequence of minimum-wage statutes, despite empirical evidence consistent with this explanation.
Pres. Obama insists that raising the hourly U.S. national minimum wage by 39.3 percent – from its current $7.25 to $10.10 by July 2016 – will have (as described by two members of Mr. Obama’s Council of Economic Advisors, Jason Furman and Betsey Stevenson) “little or no negative effect on employment.” Furman and Stevenson and the Administration dispute the Congressional Budget Office’s findings that this proposed hike in the minimum wage will put hundreds of thousands of low-skilled workers out of jobs. So here’s a challenge that I (and others) have posed before but believe to be sufficiently penetrating to pose again. This challenge, of course, is posed to supporters of this hike in the minimum wage: Name some other goods or services for which a government-mandated price hike of 39.3 percent will not cause fewer units of those goods and services to be purchased. Indeed, name even just one such good or service.
If the challengees want to get picky, let’s factor out likely inflation over the next few years. Let’s call the real hike in the minimum wage, not 39.3 percent but, say, 30 percent. Oh heck, let’s assume that inflation will be higher than it will likely be over the next three years. Let’s call the real hike in the minimum wage “only” 25 percent. So I amend slightly my challenge: Name some other goods or services for which a government-mandated price hike of 25 percent will not cause fewer units of those goods and services to be purchased.
Crain’s: Groupon’s destiny is global greatness: CEO Lefkofsky
Just minutes after a quarterly financial report that left Wall Street deflated and Groupon Inc.’s stock price battered, Eric Lefkofsky is as stoked as ever.
The online-deal company has “the chance to be one of the truly great Internet businesses of the world and maybe the great mobile-commerce company of the next decade,” the co-founder and CEO says in a small conference room near his small office. “Ultimately the question is, when people open up their phone and they want to buy something, where do they start? We believe we can create a compelling proposition for them to check Groupon first.”
It’s an audacious claim, even for an exec who infamously predicted that Chicago-based Groupon would be “wildly profitable” when he was supposed to refrain from such talk before the startup’s 2011 IPO. Given what has happened since then—three years in a row of losses that now total $430 million and a stock price that has pingponged in the past year from $4.53 to $12.59 and back to $8.31—many analysts don’t believe a word of it.
Fast Company: At these companies, interns make more than the US median household income
It’s time to do some serious life evaluation. Glassdoor has compiled a list of the top 25 companies with the best-paid internships, and annualized, interns at all of these organizations make more than the median household income in the U.S., which sits at around $53,000. With that kind of money, you know no one’s fetching coffee.
Unsurprisingly, the list is tech-heavy. The highest-paying company for interns, based on average monthly base pay, is Palantir ($7,012), followed by VMWare ($6,966), and Twitter ($6,791). Oil and energy companies also made a strong showing, including ExxonMobil (No. 8, $5,972), Chevron (No. 13, $5,424), ConocoPhillips (No. 15, $5,357), and Schlumberger (No. 25, $4,634). Overall, the average intern makes between $2,400 and $3,100 a month, according to Glassdoor.
While the Obama Administration’s IRS is trying to roll back the political speech of 501(c)(4)s across the country, states like Wisconsin have been trying to criminalize political activities and intimidate donors. The latest example is Texas, where a conservative tax-exempt group went to court on Wednesday to fight harassment by the state Ethics Commission.
The lawsuit was filed in federal district court in Austin on behalf of Michael Quinn Sullivan and Empower Texans, a 501(c)(4) that works on issues like spending caps and tax reform and puts out scorecards of state legislators. The suit charges that the commission has violated the group’s rights to free speech and due process by using subpoenas to force the group to disclose information that isn’t required of a 501(c)(4) under state or federal law.
The saga started in 2011 when the group gave low rankings on its annual Fiscal Responsibility Index to Republican state legislators Jim Keffer and Vicki Truitt. The group also criticized Ms. Truitt’s support for raising the gasoline tax and endorsed her opponent. Mr. Keffer and Ms. Truitt (who subsequently lost her seat) filed complaints with the state Ethics Commission. The complaints claimed that Mr. Sullivan should have to register as a lobbyist and that Empower Texans was operating as an illegal political action committee. You can guess what came next.
CARTOON OF THE DAY
