Connect with us

Opinion

Despite Huge Pandemic-Driven Reductions In Road Traffic, Greenhouse Gas Emissions Not Expected To Decline Significantly

Published

on

action asphalt automobile automotive

Short Term Effect ‘Won’t Last’; Commuting Is Only Driving Category Likely To Diminish Over The Long Term

The COVID-19 pandemic has caused an unprecedented shift in commuting and mobility patterns worldwide, something that has led to a false perception that the pandemic may be a boon to greenhouse gas reduction. A new analysis examines California’s GHG emissions before and after the viral outbreak and finds that despite significantly less road traffic in the state, long run emissions reductions are not likely to result from the crisis.

The report, released today by the UC Riverside School of Business Center for Economic Forecasting and Development, finds that while there will probably be a long term reduction in commuting to and from work as some workers shift permanently to online or work-from-home arrangements, the resulting reduction in GHG emissions will be small – estimated at just 2.4% in California. This metric is based on a number of factors including the relatively low share of wage and salary workers who can permanently perform their jobs from home, and the equally low share of GHG emissions that are attributable to commuting and passenger vehicles in general.

“When you add it all up, despite the startling and massive drop off we’ve seen in on-road vehicle traffic in recent months, the pandemic is not going to lead to a substantial decrease in GHG emissions over the long term in California or the nation at large,” said Hoyu Chong, Senior Researcher at the Center for Forecasting and the report’s author. “Although we will see a large decrease in GHG emissions from passenger vehicles in 2020, it’s a short-term effect.”

According to Chong, the report’s findings are also based on the fact that commuting is the only category of overall vehicle miles travelled (VMT) that will realistically experience an ongoing reduction. “Other reasons for driving such as for social or recreational purposes, shopping, personal errands, and other trips are not expected to decline long term, and in fact, driving to some destinations, such as grocery and pharmacy, have already returned to pre-pandemic levels,” said Chong.

Moreover, the analysis argues that the pandemic may pose a long-term risk to shared mobility, a critical component of California’s emissions reduction strategy. Public transit and ride sharing have become very unpopular since the viral outbreak began but it is unclear whether that will persist or whether usage will return to normal levels when the threat of COVID-19 ends.

While U.S. and California data are relatively scant, the report analyzes mobility behavior in countries that are currently at more advanced stages of reopening. In nations where most workers have returned to work, transit station patronage has resumed to a certain degree but remains far below pre-pandemic levels. Moreover, the decline in trips to transit stations is far more severe than the decline in trips to workplaces. Worldwide, as of the week of June 10 to June 14, compared to baseline levels, mobility to transit stations is down 34%, on average, while mobility to workplaces is down 18%. 

Among its recommendations to meaningfully reduce emissions from passenger cars and trucks, the new analysis urges California policymakers and climate leaders to accelerate the electrification of motor vehicles on a large scale, expand infrastructure that makes walking and cycling viable alternative modes of transportation, and educate Californians more broadly about the full cost of driving. 

The complete analysis, COVID-19, Commuting, and Clean Air: A Look at Pandemic Era Mobility and Transportation Emissions in California, is available here

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

Opinion

Despite Popular Narratives, California’s Economy is Doing Fine…For Now

Published

on

Leading Economic Forecast Pushes Back Against “Doom and Gloom” Prophecies; State’s Housing Supply Problem At The Crux Of Slowing Economy

California is far from becoming the ‘failed state’ depicted by critics, and even a cursory look at the data proves it, says one of the state’s leading economic forecasts. According to Beacon Economics‘ latest outlook for California, the state’s economy will continue to grow in the near future and there is little sign of a recession in 2024.

Consider a few of the new forecast’s findings:

  • Since just prior to the pandemic, the number of jobs in California has grown by only 2.1%, compared to 3.7% in the nation as a whole, however, the state’s private sector output has grown by 10% compared to just 8% in the nation overall. This means that California’s output has expanded through greater worker productivity.
  • California’s median household income grew by 9.2% from 2019 to 2022, compared to just 8% growth in the nation overall. Median incomes in the state are now 14.3% higher than in the U.S. as a whole, the largest gap ever seen in this data.
  • Real income (accounts for inflation) has increased despite persistent claims to the contrary. Official data from the U.S. Bureau of Labor Statistics shows a 20% increase in consumer prices in California between the end of 2019 and the end of 2023, but a 23% increase in workers’ average weekly earnings over the same period. Importantly, the earnings growth has been greatest among lower skilled workers, according to the new forecast.
  • From 2019 to 2022, the average poverty rate in California was 12%, lower than the U.S. average and the lowest level ever seen in the state.

The new forecast is careful to acknowledge California’s glaring problems, including its housing shortage and massive budget deficit, but argues that untruthful and excessively negative narratives are making things materially worse by affecting the way leaders spend their time and do their jobs.

“The state’s economy certainly has its share of problems, but many of these issues are things that can be solved with some pragmatic changes to state policy,” said Christopher Thornberg, Founding Partner of Beacon Economics and the forecast author. “When pessimistic public narratives take hold, no matter how false or overblown, elected leaders tend to veer off on impractical missions to fix problems that don’t really exist – at least not in the way these artificial narratives say they do.”

One of the most urgent, and real, challenges facing California this year is it’s colossal budget deficit of between $35 and $70 billion, depending on who you ask. But according to the new forecast, this gap is not a function of the state’s economy, which is growing, it is the obvious (and oft repeated) result of a volatile revenue system that badly needs to be overhauled.

“California loves soak-the-rich policies, and our high marginal tax rate on high-income earners means that when financial markets are hot, revenues surge, but when asset values fall or crash, it cuts deeply into the state’s tax haul,” said Thornberg. “On top of that, we have a mishmash of band aid type laws that have been put in place over the years which force a certain amount of spending, preventing lawmakers from saving for lean times.”

All that said, according to Thornberg, California’s biggest budgetary problem today is not with revenues but expenditures. “State spending is currently 40% higher than it was pre-pandemic, and as painful as it is, the deficit will not fully go away until either programs are cut back or new taxes are raised, both of which would be incredibly difficult to achieve,” he said.

In terms of the state’s economic future, perhaps California’s most burning dilemma is its low supply of housing, which has driven infamously high housing costs and a declining population, ergo workforce. According to the forecast, the only way to fix the problem is to sharply expand the pace of new housing supply. “This is a tremendously consequential issue for the economy and population of the state – a workforce cannot grow if there is nowhere for workers to live,” said Thornberg. “The inability to genuinely tackle our housing supply issue is slowing the mighty California economic machine and the effects we’ve started to see in the past few years will only grow worse.” 

View the new The Beacon Outlook California including full forecast tables here.

Continue Reading

Education

Unlocking Potential: Fostering Inclusion and Innovation through Entrepreneurial Education at REAL Journey Academies

Published

on

The REAL Journey Academies Entrepreneur High School Model / Inclusive Education Programming

Inclusive education is a fundamental right for all students.  REAL Journey Academies was founded on this principal. The unique high school programs of Entrepreneur High Schools in Fontana and San Bernardino integrate entrepreneurship and career & technical education (CTE) to offer a unique opportunity to unlock the potential of students and prepare them for success in the constantly evolving century workforce. By providing tailored support, fostering self-confidence, and nurturing entrepreneurial skills, our unique high school program empowers students with IEPs and hidden talents to thrive academically, professionally, and personally.

This white paper explores the values of  our entrepreneurship focused high school program for students with IEPs and hidden talents, highlighting the program’s potential to promote inclusion, boost self-esteem and cultivate a culture of innovation and entrepreneurship.  The value proposition of our programming, in relationship to inclusive education, include:

  1. Promoting Inclusion:
    • Our entrepreneurship focused program focuses on full inclusion by providing students with diverse learning needs, including those with IEPs and hidden talents, with opportunities to actively participate in hands-on, experiential learning experiences.
    • By embracing diversity and fostering a sense of belonging, the entrepreneurship focused program of REAL Journey Academies empowers all students to realize their full potential and become active members of their communities.
  2. Boosting Self-Esteem:
    • Entrepreneurship focused programming at its core boost self-esteem and confidence by recognizing and celebrating students’ individual strengths, interests, and talents.
    • Through project-based learning and real-world experiences, students in an Entrepreneur High School have the opportunity to showcase their skills, gain recognition for their achievements, and build a positive sense of self-worth.
    • Our program is designed to give students the support and encouragement they need to overcome challenges, set ambitious goals, and pursue pathways to success that align with their unique abilities and aspirations.
  3. Cultivating a Culture of Innovation:
    • Our entrepreneurship focused program cultivates a culture of innovation by encouraging students to think creatively, problem-solve collaboratively, and pursue their entrepreneurial dreams.
    • By providing students with the tools, resources, and mentorship they need to explore their passions and develop their talents, the unique Entrepreneur High School Program is designed to inspire a lifelong love of learning and skills associated entrepreneurship.
    • Through extensive work-based learning experiences and real-world projects, Entrepreneur High School students have the opportunity to unleash their creativity, tap into their potential, and make meaningful contributions to society.

The REAL Journey Academies’ entrepreneurship focused high school program has immense value for all students, including those with IEPs and hidden talents. By promoting inclusion, boosting self-esteem, and cultivating a culture of innovation, at its foundation our program is designed to empower students to overcome barriers, fulfill their potential, and pursue their dreams. As we strive to build a more equitable and inclusive society, investing in developing entrepreneurial skills in students with diverse learning needs is not only a moral imperative but also a strategic investment in our collective future

Continue Reading

Opinion

Rethinking Dynamic Pricing: Wendy’s CEO Pulls Back on Controversial Strategy

Published

on

A strategic retreat sheds light on the complexities of surge pricing in the fast-food industry and the importance of customer perception

By Sandeep Krishnamurthy and Christopher Tang, IEBJ Contributors

What a difference a day makes. Wendy’s CEO, Kirk Tanner, retracted his decision to introduce a dynamic pricing plan on February 28. This reversal came just a day after his statements about the 2025 launch of dynamic pricing were reported in a February earnings call.

Dynamic or surge pricing, regardless of the terminology used, is generally not favored by customers, particularly in restaurants, pubs, or supermarkets. To successfully implement dynamic pricing, companies need to understand customer psychology and must effectively explain their approach to customers.

The obstacles that Mr. Tanner is encountering are not unique, and there are valuable lessons to be gleaned from his experience.

First, low hanging fruits may not be beneficial.

As the newly appointed CEO of Wendy’s since January, Mr. Tanner faced the daunting task of devising a plan to revive the company following a 14% drop in its stock price in 2023.

One potential strategy to boost profits involves using an AI-enabled system to dynamically promote different items at varying prices, potentially encouraging customers to order and spend more. As reported in the press, Tanner had unveiled new strategies during the February earnings call to enhance Wendy’s profitability. These strategies included digital menu boards capable of real-time price updates and diverse menu offers throughout the day.

While Mr. Tanner might consider this approach a no-brainer, he should be aware of past instances where similar plans were met with resistance. Rumors circulated in 2017 that UK supermarkets like Tesco, Sainsbury’s, and Morrisons were planning to use electronic labels for dynamic price changes. However, they subsequently denied these plans following customer backlash.

The implementation of dynamic pricing in restaurants and supermarkets carries inherent risks of customer defection and loss of brand reputation. This is why so few companies dare to pick this low-hanging fruit.

Second, transparency and honesty are paramount when it comes to price increases.

Following an online uproar over its dynamic pricing plan, Wendy’s issued an online statement clarifying that it “would not raise prices when our customers are visiting us most.” While this statement may mitigate some of the backlash against surge pricing, it also implies that Wendy’s intends to increase prices for certain items, which may not be perceived as sincere by consumers.

Dynamic pricing can be counterproductive if a company is seen as greedy. Before implementing a price increase or dynamic pricing, companies must genuinely explain their reasoning, supported by facts. For instance, in the fast-food sector, like Wendy’s, it’s crucial to emphasize that material and labor costs have risen post-pandemic. A new California law effective April 1, 2024, will set the minimum wage for fast-food workers at $20 per hour, $4 higher than the state’s minimum wage for 2024. Additionally, the costs of employing servers during busy hours are even higher, setting the stage for price increases.

Given the higher labor costs during peak hours, a restaurant may choose to increase prices either all the time or only during peak hours. To maintain or improve service quality during busy periods, it is arguably fairer to charge higher prices during these times rather than spreading the increased labor costs across all customers, including those who patronize the establishment during off-peak hours. This logic was employed in the UK when about 800 pubs owned by the Stonegate Group started charging an extra 20 pence (25 cents) for a pint of draft lager during peak hours from September 2023. Despite some UK customers expressing dissatisfaction with the surge pricing at the pub, no significant boycotts against the Stonegate Group have been reported to date.

Third, presenting dynamic pricing from a different perspective can be advantageous.

Dynamic pricing, which involves varying prices based on supply and demand, can be reframed positively. For fast-food chains like Wendy’s, where peak and off-peak hours are consistent daily, lower prices could be offered during off-peak hours instead of higher prices during rush hours. This approach, often termed as ‘happy hour discounts’, is familiar to customers, even though they are aware that regular prices during peak hours are higher.

Proper framing can alter customer reactions to differential pricing. This strategy has been employed at gas stations for years, where instead of imposing credit card surcharges, they offer cash discounts. The effectiveness of this framing lies in the concept of reference pricing. By promoting ‘happy hour discounts’, customers use the higher regular price during peak hours as a reference, and are pleased to find discount opportunities during off-peak hours.

While dynamic pricing is a common practice in industries like airlines, hotels, and ride-hailing services, customers in the food and beverage sector have a stronger sense of fair pricing. The use of the term “surge pricing” in particular is seen as an inherently unfair pricing approach that only benefits the company at the cost of the customer.

Therefore, the implementation of dynamic pricing in restaurants and pubs requires careful planning. If executed correctly, customers are more likely to accept price fluctuations over time. Simultaneously, restaurants and pubs can balance demand, reduce labor costs, and provide consistent service to customers.

In essence, dynamic pricing can be a mutually beneficial solution if implemented correctly.

About the Authors

Sandeep Krishnamurthy
Singelyn Family Dean, College of Business Administration
Cal Poly Pomona

Dr. Chris Tang
Distinguished Professor, Edward W. Carter Chair in Business Administration
Anderson School of Management
UCLA

 

 

Continue Reading

Business Journal Newsletter



Events Calendar

« April 2024 » loading...
M T W T F S S
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
1
2
3
4
5

Trending