Is Pokemon Go just a poke in your eye?

IMG_8154 (1) - Drew McLellan is the Top Dog at McLellan Marketing Group

In July of this year -- the world experienced a phenomenon that we are still trying to process. Pokemon Go. The game is already (in less than 2 months) the most downloaded app in iTunes history and the owners (Niantic and Nintendo) are enjoying about a $1.6 million dollar take every single day.

But what does any of this mean to the average business?  We've all read the stories of players falling off cliffs, playing during a funeral and even hunting pokemons at the Holocaust Museum

Is it ridiculous? Is it inappropriate? Sure. I'm not going to make excuses for stupid or insensitive. But it is clear that the game is breaking new ground and has already captured a significant portion of the globe's population. Don't believe me? Go down to the Sculpture Park any time of night or day and you will be amazed at the numbers of people there, all walking the park and capturing pokemons on their smart phones.

In terms of what Pokemon means to businesses and marketing -- there are two distinct camps. Those who do not want people hunting pokemon near their location and those who very much do want that. There are perfectly valid reasons 

I have some advice for both.

If you do not want people playing Pokemon Go on your property/store/location: The question is how do you do this without looking like a curmudgeon who hates fun?  

  • Be nonjudgmental in how you communicate your request that they play somewhere else.
  • Give them suggestions on where else nearby to play/catch pokemons.
  • Provide context as to why you'd rather they not play in your space.

On the flip side, if you'd like to use Pokemon Go to attract people to your business:

  • Create specials. (Show us your pokedex for a discount, discounts for players at a certain level or with a specific Pokemon in the pokedex.)
  • Buy/launch lures at pokestops near your location.
  • Watch for the opportunity to create special events/stops down the road. (The company says they are coming.)
  • Post signs if you're a site that spawns a rare Pokemon or if that is happening nearby.
  • Play along -- join in the conversation and connect with your customers at a different level.

On the one hand, this seems silly, doesn't it? Seriously -- we're planning our communications messages around a game? Maybe it will blow over. (W.when was the last time you heard an Angry Birds mention?) But for now, it's a cultural trend/reality.

Our businesses don't exist in a vacuum and the smartest marketers know to pay attention to what has captured their audience's attention. It's hard to deny that this might matter, at least in the short run.

 

 

 

What is the goal of a minimum wage hike?

- Gretchen Tegeler is president of the Taxpayers Association of Central Iowa.

The Polk County Supervisors appear poised to follow the lead of Linn and Johnson counties in raising the minimum wage from $7.25 per hour. The change, to $10.75 per hour, would take effect on Jan. 1, 2019; the idea being the Iowa Legislature would have an opportunity to act first by raising the rate statewide.

But what is the goal of a minimum wage hike? Because the Polk County task force began its work based on the assumption there would be an increase (the only question being how much), there never was a discussion of goals, or whether a minimum wage hike is the best way to accomplish them. It’s a relevant discussion, even if the Polk County Supervisors don’t have the power to implement other options. Certainly if the Iowa Legislature eventually feels compelled to act, the discussion is essential.

So what is the underlying goal of minimum wage discussions, and what does the research indicate?

If the goal is to reduce poverty, or the incidence of families living in poverty, a minimum wage increase is indeed a blunt instrument, and there is a better tool.

According to data cited in a December 2015 paper by the Federal Reserve Bank of San Francisco, “a sizable share of the benefits from raising the minimum wage would not go to poor families. In fact, if wages were simply raised to $10.10 with no changes to number of jobs or hours, only 18 percent of the total increase in incomes would go to poor families, based on 2010-2014 data.” (1)

According to the paper, this is because:

  • Many nonelderly poor families (57 percent) have no workers;
  • Some workers are poor because of low hours, not low wages; for example 36 percent have hourly wages above $12; and
  • Many low-wage workers, such as teens, are not in poor families.

The paper goes on to point out that 49 percent of the benefits would go to families that have incomes below twice the poverty line. Some 32 percent would go to families in the low-income range, but with with incomes at least three times the poverty line. 

Others, including the San Francisco Federal Reserve paper and a Feb. 6, 2016 Des Moines Register guest opinion written by Steve Hensley (2), suggest a better approach for reducing poverty would be to increase the earned income tax credit (EITC).

A full-time minimum wage worker in Iowa with two children already receives checks from the state and federal governments that together raise family income above the poverty level. The EITC could be increased and potentially expanded to include single-individual households. Because our state and federal tax systems are progressive, these costs would be borne by higher income taxpayers. And all of the benefit would go to the target population.

In contrast, many business owners who employ minimum wage workers are operating close to the margin. They are not well positioned to finance an income redistribution program, especially when so little of the benefit is actually reducing poverty and so much is actually going to higher income families.

If the Iowa Legislature does believe that government should do more to move people out of poverty, let’s hope they begin with the end in mind, and fairly evaluate all options.

Correction: An error in the date and the amount of the minimum wage in this blog when it was first published has been corrected. 

Free trade as straw man

- Brent Willett, CEcD, is executive director of Iowa's Cultivation Corridor. He writes on economic development.

It's fashionable this election season to be anti-trade.  That's not just naive. That's dangerous.

In a politico-cultural soup of an election season with an otherwise yawning lack of substance, a raging policy Shutterstock_295357133 debate about the future of free trade has taken a strikingly prominent role. Not since the 1992 election, when the North American Free Trade Agreement [NAFTA] was being publicly litigated -- thanks in large part to Ross Perot’s “giant
 sucking sound
” description of the trade pact -- has trade played so significant a role in public political discourse. 

What distinguishes the Bush 41 – Clinton campaign and 2016, though, is the fact that the two major party candidates in 1992 were firmly pro-trade and today Hillary Clinton and Donald Trump are both -- bewilderingly -- proudly anti-trade. 

This is not a minor phenomenon; the default position for virtually every serious contender for the office of the presidency in the modern era has been one of strong support for trade, and for good reason.  Today the free trade agreements the U.S. has with 20 countries around the world account for nearly half of America’s exports. 

Somehow, dispensing with $1.2 trillion, which is how much of the $2.3 trillion in total export activity the U.S. would lose out annually in export activity if those agreements disappeared today, has become a winner of a position in today’s theater of the absurd presidential contest.

All this candidate trade rancor and empty rhetoric is dangerous to the ability of any American community, region or state to compete for new investment, jobs and research from companies and institutions which are, whether our presidential candidates like it or not, complex and global, and that’s not going to change. 

Econ 101

Take yourself back to your college microeconomics class. What is trade, and what does it do? Trade is, of course, Hesiod-sm the buying and selling of goods and services in a competitive marketplace. Trade permits specialization, which drives down input costs [plumbers plumb; programmers program] and serves as the framework for a competitive marketplace. In a competitive trade scenario, buyers -- and sellers, crucially -- benefit by way of respective surpluses. A ‘buyer surplus’ provides the buyer a net monetary benefit if she was able to purchase a product or service for less than she was prepared to pay, and a ‘seller surplus’ provides the seller a net monetary benefit if she was able to sell the product for more than she requires to continue operating. 

All this is to say trade, at its most fundamental level, improves welfare; it’s a basic economic law. Trade creates wealth, for buyers and for sellers. That’s everyone. Ancient philosopher Hesiod ably put it: "Through work men grow rich in flocks and substance."

Are there real and widening imbalances in wealth in this country?  Absolutely. Is multinational trade the major cause of it? Probably not. On average workers in manufacturing in this country whose jobs depend on exports earn an average of 18 percent more than other workers. 11 million U.S. workers and at least 1 million farmers directly benefit at an earnings level thanks to this premium. In the U.S., multinational companies pay, on average, 25 percent more than the mean and are the source of more than 80 percent of private-sector R&D.

American farmers have increased their exports to free-trade partners to $56 billion, up 130 percent since 2003. Closer to home in Iowa, where one of every three acres of crops planted in our country is for export, $15 billion in Iowa goods were exported in 2014 by more than 3,400 Iowa companies, 81 percent of which were small companies. 108,000 Iowa jobs were supported by exports in 2014.  In our great state, opposing trade simply does not comport with economic growth reality.

A short diversion to monetary policy

Despite how unprecedented it is to have two major party presidential candidates in the anti-trade column, there is at least one benefit to the raising of trade in the national discourse as an issue of concern: it’s placed a spotlight on global currency policy, traditionally an opaque, sleepy area of concern reserved for central bankers and economists.

While currency ‘manipulation’ by China is the fashionable villain in the narrative of a troublesome strong dollar, as Judy Shelton points out in her Aug. 10 Wall Street Journal commentary, currency imbalance today is about more than China.

The "shortcomings of our present international monetary system --volatility, persistent imbalances, currency mismatches -- which testify to its dysfunction. Indeed, today’s hodgepodge of exchange-rate mechanisms is routinely described as a non-system,” she writes.  Shelton argues that in today’s effectively lawless international monetary arena, nations are incentivized to establish isolationist exchange-rate policy, which contributes to a winner-take-all monetary infrastructure in which central banks play an outsized role, playing whack-a-mole in addressing rolling economic crises the world over.

“It is one thing to lose sales to a foreign competitor whose product delivers the best quality for the money,” Shelton writes. “[I]t’s another to lose sales as a consequence of an unforeseen exchange-rate slide that distorts the comparative prices of competing goods.” 

Fair point.

Back to trade.

So what happened? How have we become a country in which our two major-party leaders can safely criticize free trade and the treaties and agreements which undergird it as ‘a mistake’ [Clinton, in 2008, on NAFTA] and ‘horrible’ [Trump, 2015, on the Trans Pacific Partnership deal]? 

What’s happened, I guess, is Americans who are busy living their lives have begun, amidst so much political noise, to resignedly accept irresponsible trade-bashing rhetoric from political leaders as an accurate reflection of the cause of a general lack of net global economic growth in real income terms for many years. The reality, though, is that were it not for the free trade pacts which help orchestrate literally trillions of dollars of export income for U.S. companies, we would be in a much deeper, almost difficult to comprehend place of economic malaise today. Economic developers like me would have much less to do.

The good news

There is good news. Americans, by and large, don’t agree with the irresponsible anti-trade positions of the two major party candidates.  A July NBC News/Wall Street Journal poll found that 55 percent of voters think free trade is good for America. Thirty-eight percent consider it damaging. An October 2015 poll by Gallup found that only 18 percent of Americans would support leaving NAFTA.

Aggregate polling on TPP suggests that more than three Americans support the deal for every one who opposes it. It is quite possible that on the other side of this election we'll see the prominence of trade bashing become more marginalized in the public discourse, creating bandwidth to debate the real issues contributing to doggedly weak national growth. Economic development efforts across the country, including right here in the Cultivation Corridor, would only see benefit from such a pivot.

Brent Willett, CEcD, is executive director of Iowa's Cultivation Corridor.  Contact him:

Human: 515-360-1732

Digital: bwillett@cultivationcorridor.org / @brent_willett / LinkedIn.com/in/brentwillett

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