The GOP plan to turn students into Trump voters – Michael Whinston

MIT Sloan Fellows Professor of Management  Michael Whinston

From Boston Review

Much has been written about who the likely “winners” and “losers” are if the Republican-controlled Congress is able to pass a version of its tax bill. The middle class: losers; the wealthy, who own nearly all of the stock in U.S. corporations that isn’t owned by foreigners: winners. Those whose income comes from wage earnings: losers; those whose income comes from “passive” ownership of businesses: winners.

It has even been suggested that several geographic distinctions in the legislation may be “payback” for how California, New York, and other coastal blue states voted in the 2016 election. Taxpayers in high local and property tax states such as California and New York, for example, are losers in the GOP plans while Texans and others in low-tax “Red” states are winners.

If that seems like an overly sensitive reading, consider this: under the GOP plans, the ability to deduct personal casualty losses from wildfires and earthquakes would be phased out. The deduction for damage from hurricanes and floods, however, would be kept. As California State Senator Mike McGuire, a Democrat whose district includes areas ravaged by wildfires, told the New York Times, “. . .it’s hard not to think that Congress has their sights set on the Golden State.”

But the aims of this legislation are more politically ambitious than mere retribution, and nowhere is this more evident than in the House bill’s assault on higher education. If enacted, three provisions promise to have a devastating effect on college students, graduate students, and higher-education institutions. First, the House bill eliminates the deductibility of interest payments on student loans—a deduction that more than 12 million people used in 2015, according to the New York Times. Next, it taxes the tuition grants given to graduate students, grants that enable them to forego entering the workforce and instead pursue a Masters degree or PhD. As a result, a typical graduate student on a $20,000 stipend and a tuition waiver could end up owing nearly $10,000 in additional tax. And finally, it taxes the endowment investment income of roughly seventy universities and liberal arts colleges, reducing the funds available for undergraduate and graduate scholarships.

While these changes will help offset the massive tax reductions for the rich, they are a pretty small drop in the bucket towards that goal. And it is strange that pro-growth and pro-investment Republicans would sign off on something that so harms those who want to invest in human capital. So why then did the House pass this bill? The answer can be found by looking at the 2016 election results. Read More »

Six key issues millennials should consider before diving into a family business–Peter Kurzina

MIT Sloan Senior Lecturer Peter Kurzina

From Forbes

Joining a family business isn’t for everyone. It’s a risky decision that needs a lot of careful consideration. You might build a successful dynasty that grows into a Fortune 500 company, with generations of family continuing to lead the business. Or, like the vast majority of family businesses in the U.S., your business might not make it to the second or third generation. Even worse, your family dynamics could break down, leaving a legacy of dysfunction that long outlasts the business.

So how do you decide whether to join a family business? The next generation should consider six key issues before diving in:

1. There can only be one CEO
Think about where you currently stand in the family and where you can potentially go in the business. If you’re in the second or third generation, there may be siblings and cousins all hoping to take over as CEO. Stop and think about whether your goal is senior leadership. If it is, ask yourself if this is realistic. Who is competing for those positions? Is your cousin the “golden child” of the family? Are you the most qualified? Are there family politics involved?

Read More »

Fix your resume by cutting the part about how passionate you are — Miro Kazakoff

MIT Sloan Lecturer Miro Kazakoff

MIT Sloan Lecturer Miro Kazakoff

From Bloomberg Businessweek

A young woman I know did everything right in high school, got into a good private college, and landed a position in corporate marketing for a major retail chain after she graduated. While it was a good, stable job—the kind that makes parents happy—she found it stultifying and unsatisfying.

With a solid academic pedigree and good experience, she hit the job market to look for a more fulfilling career. Several months into her search, she was floundering despite a solid job market in Boston. She wasn’t sure why.

This situation is typical of those faced by millennials I talk to. This woman’s job quest mirrors a unique phenomenon of this generation: an obsession with passion and a misunderstanding of its currency in the job market.

Read More »

How Wal-Mart can secure the American Dream for millennials — Thomas A. Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From Fortune

It’s time all stakeholders — employees, business leaders, government officials, and educators — have a serious discussion about how the nation can create better jobs for the next generation.

Wal-Mart has been getting good press recently for its decision to raise its associates’ wages to a minimum of $9 per hour. And it should. So should the unions and community groups that have been pressuring the U.S. retailer to do just that. They also deserve some of the credit for exposing Wal-Mart’s low wages, reliance of associates on food stamps and other public assistance, anti-union tactics, and bottom of the industry ratings on customer service and employee satisfaction.

Read More »

America’s young workers: Destined for failure? — Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From Fortune

We’ve all heard the message from our parents: If you work hard, get a good education, and play by the rules, you will do well in life. Baby boomers like me were able to turn that formula into the American Dream.

But while we were able to graduate from high school, vocational school programs, or college into an economy that was growing and providing us with great opportunities, we cannot make the same promise to our children and grandchildren today. Instead of hope, the nation faces a widening economic divide; according to Gallup and other surveys, a majority of Americans agree that the U.S. has been going in the wrong direction for at least a decade, and they expect thenext generation will have a lower standard of living than ours.

Is this gloomy outlook inevitable? Have the global economy, ever-advancing technology, and other forces left us with no control over the destiny of future generations? Only if we choose to do nothing. Reversing course is possible, but it will take a cross-generational effort by baby boomers and next-generation leaders to negotiate what I call a New Social Contract that fits and works with the features of the future economy and workforce.

Read the full post at Fortune.

Thomas Kochan is the George Maverick Bunker Professor of Management, a Professor of Work and Employment Research and Engineering Systems, and the Co-Director of the MIT Sloan Institute for Work and Employment Research at the MIT Sloan School of Management.