Economist 10/30/15

  1. Baltimore, a once-thriving port and factory town, has lost a third of its population since 1950, dropping to about 622,000 souls. Like other north-eastern cities, it has grappled with economic decline, shrinking tax rolls and the toxic legacy of race laws which corralled black residents in districts blighted by bad schools and crime. Urban-renewal projects have brought tourists and professionals back to some districts after decades of white flight. But one of Ms Rawlings-Blake’s favourite projects—to attract 10,000 new families to Baltimore—remains a far-off dream. The mayor wants more to stay put.Cash is not the main lure for refugees who reach America. The great gift is the immediate right to work, followed by a legal pathway to permanent residency and eventually citizenship.
  2. Ten big employers in the public and private sectors—including the civil service, HSBC and Deloitte—have agreed to start recruiting on a “name-blind” basis in Britain; others may also follow suit. In such schemes, those drawing up shortlists of applicants cannot see their names, with the aim of reducing racial and sexual bias.Discrimination against job applicants based on their names is well documented, particularly among ethnic minorities.However, the results from other trials are less clear. A second Swedish experiment found that only women, not immigrants, were boosted by anonymous recruitment.According to the IZA, experiments in the Netherlands showed no increase in the likelihood of ethnic-minority candidates being offered a job if their CVs were seen anonymously, suggesting that discrimination had crept in at the interview stage.Ensuring that a candidate is completely anonymous is also tricky.In places fraught with religious tension, such as Northern Ireland, the name of a school can reveal a candidate’s faith, while a few years missing on a CV may suggest maternity leave, and thus that the candidate is female.
  3. cashpoints (ATMs, to Americans) are still evolving. This week Citibank unveiled one that can identify account-holders by scanning their irises, thus doing away with codes—and with cards, for that matter. Customers request funds via their phones before confirming their identity with a scan.Nearly half a century since the cashpoint came into service, its origin is still disputed. Barclays, a British bank, often gets the credit for installing the first one, at its Enfield branch in 1967.In fact, cashpoints are still multiplying. Nearly 200,000 were installed in 2014, taking the global total to over 3m, says RBRLondon, a British consultancy. Much of the rise is in emerging markets; Europe and America are barely growing.
  4. Globally, the number of people in credit unions has doubled since 2000, from 108m to 217m. Savings are up by 130% in real terms (see chart).Credit unions first appeared in 19th century Germany. Like banks, they took deposits and made loans. But, crucially, they were owned by their members, who shared a “common bond”, such as a profession or place of residence. Earnings were returned to members in the form of better interest rates.In Europe, most of these early institutions evolved into co-operative networks, such as DZ Bank in Germany and Rabobank of the Netherlands, which are still owned by members but no longer serve a particular group.
  5. Three forces are driving the growth of credit unions. The first is simple: they offer higher rates than banks to savers and lower rates to borrowers. American credit unions charge an average rate of 2.66% on a three-year used-car loan, against 5.13% for banks.A second factor is the financial crisis.Without the same pressure to chase short-term profit, they took fewer risks. As the big banks were hit by failure and scandal, credit unions presented themselves as a more wholesome alternative.The third cause of growth is more lasting, In America, legal changes have allowed for multiple “common bonds”, helping credit unions to merge. Big credit unions are now professional operations with nationwide ATM networks.In America, bankers complain loudly about credit unions’ exemption from federal income tax. But even in Australia, where they don’t enjoy the same tax breaks, credit unions still offer competitive rates

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