The Job Seekers Guide To LinkedIn

Whether you’re in the midst of a job search or among the 60% of professionals that aren’t actively looking, but would be willing to listen if someone approached them about a new position, you need to be on LinkedIn. LinkedIn is a powerful social networking site that is a vital tool for all professionals, and is arguably the most important part of a job search. Some companies exclusively post openings on LinkedIn and 80% of recruiters use LinkedIn as a tool to find candidates. When used correctly, LinkedIn can help connect you with employers, alert you to positions you may be a candidate for, secure you interviews, and even launch your career. With weekly emails of jobs you’re qualified for and the ability to apply for many positions with one click without leaving the site, LinkedIn is a job seeker’s best friend.

It wasn’t until social media guru Wendy Soucie taught me how to use LinkedIn that I realized how important it is to have a strong profile. Wendy probably has the most robust LinkedIn profile of anyone on the social network, so I recommend you use hers as a reference as you build or improve your own profile.

LinkedIn is one of those things where you get out of it what you put in. It is most effective when you’ve developed an expansive professional network on the site, which is all predicated on you building a profile that other people want to connect with. If you showcase yourself correctly on LinkedIn, it won’t be long before people start reaching out to you about jobs they want you for. There is an art to building an appealing profile and this post will endeavor to convey it to you.

In your profile, you want to include information that will be seen as authentic by colleagues as well as future and past employers since all three audiences are vital to your success on LinkedIn. Before creating your LinkedIn profile, think about keywords that describe you, your current position, any unique skills you posses, and the type of words that your target audience or employer would be looking for.

How Recruiters Use LinkedIn - Employers, HR reps, headhunters, and recruiters will use the search function on LinkedIn to find specific keywords in profiles they believe will lead them to an ideal candidate. If you want to be found by those people, your profile must have those keywords. I want to be found for jobs that are relevant to Leadership Development (among other things), so I have the words “Leadership Development” in my profile. When someone searches for “Leadership Development”, my profile and others with those words pop up. Picking the right keywords is important, so put yourself in the mind of a recruiter. If they were searching for a candidate for your ideal job, what keywords would they be searching for? Once you identify them, be sure you work them into your profile.

Picture - TMB has waxed poetic about how much one’s looks affect desirable outcomes. Given all the research that shows the importance of appearance to securing a job, a good LinkedIn photo is essential. The photo should always be professional to reflect both your personal brand and your current or desired employer. You are a brand ambassador. Use a headshot picture from any digital camera with a clean, white background or something similar. Most university career centers will take these pictures for you free of charge and you should utilize this resource. Avoid avatars, group photos, logos, or pictures where you have obviously cropped out one or more other people (especially if it was taken at a bar or club). You can upload up to a 4Mb file and the system has a cropping tool, but fair warning: it is a serious pain in the ass to use.

Your Name - Your name should only contain your name. Avoid adding any additional titles, email, acronyms or credentials. There is a section for education to show you have a masters or PhD, so keep your name clean and concise! LinkedIn may even ask you to remove or shut down your profile if other things are used and abused in your name field.

Header/Headline – Your headline should be memorable and have keywords you want to be associated with. This is the most important section on your profile. If you don’t customize this section, it will default to your Current Job Title at Current Employer if you don’t uncheck the box when you set your profile up. Use those words that you want employers to find you for. This is critical in attracting people to click through from search listings. Create a headline that captures your target market’s attention to encourage them to check out your profile. Your profile MUST have those keywords in it for you to come up in searchers and eventually be contacted by employers. Keep your audience in mind. For me, I have words like “Management Consultant” “Human Resources” and “Industrial Organizational Psychology” in my header because those words appear in the titles of jobs I would be interested in. Identify what those words are for you, and be sure to use them in your header.

Personal URL - Below your profile picture is the URL that links directly to your profile. Edit this so that it is custom to you. I suggest using your name if possible. My name wasn’t available, so I included my middle initial making my personal URL I like having a personal URL because I include my LinkedIn profile URL in my email signature. It looks more professional and people are more likely to click on it because they know where they are heading.

Summary – This is your elevator speech in written form. You get about 2,000 characters to work with so you have some space. Begin with how your work has helped others or an organization. Only include current and relevant information, as this is a high-level overview and can be focused on a specific market that you are pursuing. There are other sections to talk about what you’ve done in the past. You can also think of this is a cover letter. This is the best place to include results oriented statements such as, “grew sales by 15%,” “reduced costs by $5M,” “improved customer satisfaction ratings by 20%” etc., but be careful to avoid including any proprietary information from a current or past job. Be sure to keyword load your summary and profile, strategically place them in various sections, but be sure they are at least in the first sentence and last sentence.

Experience (Work History) – When it comes to the “Experience” section, you have some choice points. You should include every employer since college because it broadens your network to include people in all of those companies. If you had multiple positions at a company, use the highest position held. However, if you have been with only one company and held multiple increasing roles, you can add them as separate positions. When you put in the dates worked, you should only use the years you worked there and omit the months. LinkedIn requires three positions to have a “completed profile” so be sure to include at least three.

If you’re a college student or recent graduate, you should highlight the experiences that most support the type of job you are trying to get. Internships are a great way of demonstrating experience and skills, so they should be featured prominently. If you worked in the service industry, you should include the position if it is relevant. For example, if you worked as a bartender and are heading into a sales career, include the position and try to include any financial metrics you can that show sales increased during your time in that position.

Do NOT simply copy and paste in text from your resume. You get 2,000 characters, which is a lot of space, so make use of it by including some of the skills you used or responsibilities and projects you had that may be appealing to someone looking for an employee. Again, make sure you include those keywords you want to be found for within this section. Also, you should include a brief description of the company so that people know what industries and size firms you’ve worked in.

Publications – This section of LinkedIn allows you to showcase anything you have written that has gone in a trade journal, academic journal, or that has been presented at a conference. This has a more academic flare to it, so it won’t apply to everyone, but if you do have publications be sure to include them. You should include the citation for it, tag who you collaborated with, and provide a brief description of the work. I’ve included two papers I wrote with Chantale Wilson, another academic publication, and a poster presentation.

Skills – This is an opportunity to highlight special skills and indicate level of experience with roles or specific software. You can also add language and proficiency. People can also “endorse” you for certain skills to give credibility to your work. It’s one thing for me to say I know about Job Analysis, but having several others support that assertion makes it much more reliable. The LinkedIn search allows users to search by skill, so this becomes a very effective visibility tool for attracting prospective hiring managers, or those recruiting for a position with a specific set of skills. This section allows for up to 50 different skills.

Education – This is an opportunity to represent your Alma Mater as well as any other business or professional training you’ve received. This includes six sigma training, Hootsuite certifications, or professional/continuing education courses. If you have an advanced degree that required a capstone project, thesis, or dissertation, include the title and a description of the work. Enter each degree you have separately. You should list your High School as well to expand your network, but again only use years and omit the months. If you are still in college or recently graduated, you can also include relevant classes you have taken as part of another tab.

Certifications – You can separately add certifications such as PE, CPA, RN, MBA, M.A., PhD etc in this added section. DO NOT include this in your name field.

Volunteer Organizations – You can list in a separate section volunteer roles you have held with civic and service oriented organizations. However, if your experience section is looking thin, you can include these volunteer opportunities there instead.

Interests – What do you like to do when you are not at the office? Including a few different activities is nice because it humanizes you a bit and makes you more relatable. Formatting is important. Use single words or short phrases separated by commas.

Twitter – If you are on Twitter, you may list it in your profile and it will show up under your contact information. A general note of caution: especially if it is connected to your LinkedIn profile, whatever you post on Twitter WILL BE REVIEWED BEFORE YOU ARE HIRED. Twitter comes up as one of the first hits in a Google search for your name, which means your content is easily accessible for anyone trying to gather information about you. A good rule of thumb is don’t post anything on a social network including Twitter that you would not want to be asked about during a job interview. DO NOT have your Twitter posts automatically go to LinkedIn. Out of context tweets are often hard to understand on LinkedIn.  However, if you post on LinkedIn and want it to go to Twitter, make sure its less than 140 characters. If you’re employed by or are a representative of some institution, be sure to add the following phrase to your Twitter profile if you connect them “opinions expressed are my own” or a good variation. To connect your twitter account to LinkedIn, click on your picture in the upper right hand window of the screen that takes you to Account and Settings, click on “Privacy and Settings”, then under the “Settings” header, click on “Manage your Twitter settings” where you can add your account.

Join LinkedIn Groups –Groups are a great way to expand your network. Find professional societies, interest groups, or your alumni association.

Get Some Recommendations – These further build your credibility and distinguish you from competition. People with important titles that are associated with large or prestigious companies are ideal recommenders. College professors or someone you know at a company you want to apply at are also good suggestions. Consider a mix of clients, past and present colleagues, civic and nonprofit affiliations. Friends are okay too as long as they can attest to your work. You can also request recommendations for educational experiences and nonprofit or volunteer work. Offering to reciprocate may help increase your number of recommendations too.

Update Your Status Post helpful content for your target market. This shows you are active, consistent, and focused on providing value. More importantly, it pops your profile up in other people’s feeds making you more salient to your connections so they may think of you when looking for someone to fill a position. This also helps you appear more frequently in searches.

Connect With Everyone You Meet -  Download the LinkedIn app on your phone and connect with relevant people you meet. You may include a link to your LinkedIn profile in your email signature or put it as a QR code on the back of your business card. Trade shows and conferences are great networking opportunities and LinkedIn is a great way to help you remember names and faces of people you meet. Lastly, I encourage you to connect with me

Follow me on Twitter @Aaron_Kraus

Your Weekend Hangover

Things have been pretty quite on TMB over the last few months as things have been pretty wild for me in that same time period. As many readers may know, I’m an Industrial/Organizational Psychology doctoral student and all that stands between me, a PhD, full time job, and student loan repayment is a dissertation. A dissertation is an expansive research study and mine is investigating how to predict the most successful leaders of innovation in organizations. Like most dissertations, mine has been a roller-coaster ride over the last few months and I have been primarily focused on making it work. Given this goal, it was hard to justify writing 5-10 pages a day in blog posts while having 150 dissertation pages hanging over my head. This is why we’ve seen less activity on the blog. However, I do endeavor to write more for TMB over the next several months because I’m a better practitioner when I’m reading and writing about what is going on in the business world and I sincerely enjoy it. With that in mind… here is a little something for your hangover.

Ask any Industrial/Organizational Psychologist what they do and they are likely to call themselves anything but that. For example, when I introduce myself, I typically say I’m a management consultant specializing in leader selection and development or that I’m studying organizational behavior. The reason I avoid using the title I/O Psychologist is the word “Psychology” primes an image of Sigmund Freud smoking a cigar and talking to someone on his couch. When I say I/O Psychologist people automatically think I council people on mental health issues in organizations. This couldn’t be further from the truth. Check this link to answer the question, What is Industrial/Organizational Psychology? It’s not like it sounds, but it is one of the hottest and fasting growing jobs on the market.

Israel’s car of the future, called The City Transformer, runs on a rechargeable battery and folds to fit into parking places just one meter in width.

The Economics of Online Dating: Giving a personality test to your date may not be a bad idea... Side note, does Tinder count as online dating?

The 6 things that happen when a coworker dies. Fortunately, this is something I haven’t experienced first hand, but it seems reasonable at a large informal company.  For a smaller company or a smaller work team, I would think the reaction would be a lot more personal and grief ridden.

Should men take Paternity Leave? According to new research, men who take time off to help care for a new child (paternity leave) will earn less money in their career. Men don’t experience as significant a loss as women do, but still one substantial enough to think twice about it. Sure they are giving up some money, but when fathers are involved in child care women enjoy more wealth, power, and authority in society and their kids develop worldviews that are more gender-balanced, are smarter, and better socially adjusted. One study even indicated that men who take paternity leave live longer than those who do not. Would you take paternity leave?

Rent the Runway, founded by two young women who met in business school, figured out a way to allow women to wear dresses well outside of their price range. Rent the Runway has become the Netflix of the fashion world and now rents and ships dresses to its 3 million members.

Zappos is going holacratic and getting rid of job titles, managers, bureaucracy, and hierarchy. Bold move, let’s see how it plays out for them.

This is a fascinating research study that will appeal to the scientist or degenerate gambler in you. The study investigated how circadian rhythms enhance athletic performance in the NFL by seeing if west coast teams play better on Monday Night Football since the late time (8:30et) is closer to the point in their circadian rhythm where athletic performance peaks. They found that West Coast teams win more often and by more points per game than East Coast teams and perform significantly better than is predicted by the Las Vegas odds (the point spread) on MNF. This apparent advantage enhances home-field advantage for west coast teams and essentially eliminates the beneficial effects of home-field advantage for east coast teams during MNF games. Next NFL season; take the west coast team on MNF.

Two Roads to Orgasm: Why you should take the high road. Hint: it involves more foreplay.

College Campus Beer Pricing: How leniency with ID checking affects store pricing. As you may expect, stores that are less strict with checking fake ID’s charge higher prices. I see two reasons for this: 1. Students with fake IDs don’t have another option given they are underage so they have to purchase from the lenient store at higher prices. 2. The store has to raise prices because their costs (potential for fines) are higher.

Speaking of alcohol, people tend to be drinking less, but are doing so more harmfully. Deaths from overuse of alcohol rose from 750,000 in 1990 to 2.5M in 2011, accounting for nearly 4% of all fatalities worldwide. Worldwide, 80% of Australian police work is alcohol and drug related, in Europe 65% of domestic violence and 40% of murders are linked to alcohol. Despite policymakers pushing for higher prices to curb drinking, Wal-Mart is now selling beer at cost in parts of Europe to lure in customers.

Four Reasons Smart People Make Dumb Dating Decisions: I’m guilty of all four.

If you’re better at dating than I am and ready to bring your significant other home to “Meet the Family”, don’t do it without reading this brief article about what the research in psychology has to say on the topic. No pressure.

The Cheerleader Effect: What Men Do to Impress. When women are around, men are more likely to jaywalk, wait until the last second to get onto a bus, take more risks playing blackjack, and make bad economic or financial decisions. I’m a good illustration of that last one. I once met with a financial planner and he asked what the best financial decision I made in the last year was. Without thinking I said, “Broke up with my girlfriend” and I was probably right. Research shows that in the presence of women, men become more generous in economic games by making contributions to public goods, volunteering more time for charity and tipping more. All these effects that women have on men are amplified as the female present gets more attractive.

My, what big (and sexy) eyes you have. Apparently, people who have bigger eyes are rated as more attractive.  

Why you should hire more pretty people: Well for starters, pretty people tend to be smarter. One study even showed that even when controlling for family background, race, and body side, attractive people have an additional 12.4 IQ points on average. That is a massive number when you consider the average IQ is 100 and the standard deviation is 15. This is one of the reasons they also tend to have more money.

The rich do not pay the most taxes. They pay ALL the taxes. According to a Congressional Budget Office report, the top 40% of wage earners in America pay 106% of the taxes and the bottom 40% pay -9%. Check Table 3 on Page 13 of the report to see for yourself. The bottom 40% pay negative taxes as a result of “refundable tax credits” that give money back to a tax payer greater than the amount they contributed in the form of social security or food stamps. Don’t feel bad for the rich though, they have saw their incomes rise 16% from 2009-2010 and the stock market was up 25% in 2013.   

Is your new years resolution to exercise more? If so, then start by having more sex! According to a recent study, sex was found to burn almost as many calories and was reportedly more enjoyable than jogging. 

How Justin Bieber Killed BlackBerry. Both are Canadian, have terrible judgment, and are prone to faux pas… it sounds like a match made in Halifax.

How about AmeriCanada? Every 20 years or so, the idea of merging America and Canada gets floated. A management professor at the university of Toronto just published a paper arguing that the two countries should become one. I’m against it, just for the pure fact Bieber would become American. 

High Times Ahead For The Marijuana Industry

Editor's Note: Last night I was talking with my younger brother and a group of friends when the subject of marijuana came up. When asked his thoughts, my brother mentioned that despite never having used the drug and having no plans to, he didn't have a negative opinion of it and those who do. I agreed with him, and being in the same position, I decided to do a little research. This is what I found.

Over the last several years, the fight to legalize marijuana has broken out across much of the country. Those in favor of legalizing the drug have won major victories including approval for medical use in twenty-one states plus Washington D.C. Marijuana has also been approved for recreational use in Colorado and Washington for those 21 and older. In other places, such as Vermont, the personal use of marijuana has been decriminalized and is simply a ticketable offense. The majority of Americans now favor legalization and fourteen other states are likely to join Colorado and Washington in permitting recreational use. Uruguay recently became the first country to legalize marijuana possession, use, and sales and Canada has opened its medical cannabis business to the free market. In America, 2,000 people are arrested every day on minor marijuana-related charges. Although these developments at the state level are all at odds with federal law, the Justice Department has indicated that it has no plans to take any responsive actions.

Recent national poll numbers that indicate 58% of Americans support the legalization of cannabis for adult use. The same poll in 1969 showed just 12% supported legalization of the drug. While there certainly has been a large a shift in favorability, legalizing the drug still faces many challenges, particularly since those most likely to support legalizing marijuana fall in the younger demographic, which also happens to be the least likely to vote in elections.

Society has come a long way from the “This Is Your Brain On Drugs” PSAs of the 1990s that touted the dangers of recreational drugs including marijuana. Only 2.4% of high school seniors reported using marijuana daily in 1993, but nearly 6.5% of current high school seniors report using marijuana daily today. One reason for the shift is the change in the perception of the drug’s dangers. Sixty percent of U.S. high school seniors do not see regular marijuana use as harmful to their heath and thus nearly 40% reported smoking marijuana in the past six months. This trend extends beyond high school students as nearly 12% of eighth graders report having used marijuana. In contrast, the consumption of alcohol among students in both of these demographics has decreased since peaking in 1997. Students have traded drinking for smoking in part because they see the dangers of smoking as less than drinking, and they may have a point.

There are about 88,000 deaths attributable to excessive alcohol use each year in the United States, but there are no reported cases of someone dying from smoking or consuming too much marijuana. (The economic costs of excessive alcohol consumption in 2006 were estimated at $223.5B.) Of all the studies investigating the effects of marijuana, 94% focus on the drug’s potential harm, yet few have indicated the drug is dangerous.

In some studies, marijuana has been shown to lower testosterone levels, which can delay the onset of puberty, decrease testicle size, and cause some abnormalities in sperm. This is one of the reasons states have only legalized marijuana use for those 21 and older. One of the worst side effects linked to smoking marijuana is “Gynecomastia”, which means “woman like breasts” in layman terms. Gynecomastia is caused by a hormone imbalance between testosterone and estrogen with excess estrogen creating excessive breast tissue. That’s right guys, smoking marijuana can give you man boobs.

The negative effects of marijuana have only been subjected to initial research given its designation as a Schedule I drug by the DEA, making it as hard to obtain for research purposes as heroin. A Schedule I drug is defined as having no medically accepted use and high potential for abuse. The catch is that in order to change the classification of a drug from schedule I to schedule II or III, there must be FDA approved research to show it is safe and non-addictive, but its designation as a schedule I drug makes it nearly impossible to do research on it. To accomplish the necessary research to change the classification, a plethora of scientists would need to obtain a DEA license and have their study approved by the FDA. You can imagine how difficult it would be to get approval from two government agencies to conduct research on a drug that one believes is as bad as other Schedule I drugs such as methamphetamines, cocaine, heroin, and anabolic steroids.

To illustrate this challenge, I had a professor in college who was able to study the effects of benzodiazepines (Valium and Xanax) and barbiturates (used for physician-assisted suicide and lethal injection), which are both schedule IV drugs in her animal lab. Schedule IV drugs have a low potential for abuse and have an accepted medical use. However, she could not work with marijuana because of its classification as a schedule I drug (high potential for abuse, no medical purpose).

Although the FDA has sanctioned only a handful of studies, there are over 19,000 published studies on the medical benefits of cannabis. Most studies show that marijuana is less addictive and harmful than caffeine or nicotine.

Colorado has been a pioneer in the journey towards marijuana legalization and is poised to allocate $7M in state dollars to universities, research hospitals, and foundations to study marijuana’s effect on a variety of medical conditions including epilepsy, PTSD, and brain development in infants. The research grants are coming from the $13M the state has in the Medical Marijuana Program Cash Fund that was generated from people who paid for the medical-marijuana cards. This research would directly support the use of marijuana as a legal drug both recreationally and medically.

As research continues to progress and more states legalize cannabis use, marijuana could be the best-selling legal drug ever. The national market for legalized marijuana could hit $10.2 billion in as little as five years. Pfizer’s Lipitor, which is used to treat high cholesterol, currently holds the record for prescription rugs at $13 billion. This year, the market for legal marijuana was about $1.5 billion. Marijuana sales in states where cannabis is legal is expected to hit $3 billion in 2014. Part of the appeal of marijuana to drug makers is its resilience to being undercut by generic drugs. Prescription drugs have their profits slashed the moment generic versions hit the market and marijuana is unlikely to have that same competitive disadvantage.

The receptor that marijuana activates is called tetrahydrocannabinol or THC and used in a prescription drug called Marinol, which is sold by Abbott Labs. Marinol is used to stimulate appetite and control nausea and vomiting in patients undergoing chemotherapy, but it is little used because the absorption rate of THC varies widely, so the dosage is hard to pinpoint. Drug maker Sanofi tried to block the THC receptor to create a drug to treat obesity. The drug was called Acompila and had moderate success at helping people drop weight, but it had severe psychiatric side effects that featured depression, so the FDA never approved it.

Despite what the perception may be, drug companies and stoned hippies are not the only ones supporting the rapid expansion of the marijuana industry. The marijuana industry is filled with white-collar business executives who have built companies and prestigious resumes in other fields. Recently, the cannabis-focused private equity firm Privateer holdings Inc. hired former DEA agent Patrick Moen to be its managing director of compliance and senior counsel.

Privateer is an interesting firm that does not directly invest in growers, processors, or distributors in the U.S., where it could violate laws. Rather, most of its investments are in Canada, where there is a federal licensing system for medicinal suppliers. Privateer has already raised $7 million and is hoping to raise $25 million more next year to stimulate growth in the marijuana industry. Investors committed minimums of $250 thousand to the firm’s first fundraising effort, but the bar will be at $1 million for the coming round, indicating that even the nation’s wealthiest individuals believe the marijuana industry is about to take off.

Average interest rates on loans to medical marijuana businesses hover between 20% and 30% given that marijuana is still illegal at the federal level and the risks exceed normal business challenges. Executives could face criminal prosecution and investors can lose everything overnight if the government or local officials shut the industry down.

Despite the risks, several successful executives have jumped ship to try to seek new highs with marijuana. California-based GrowLife Inc. is a public company (ticker symbol: PHOT) that sells cultivation equipment and operates hydroponics stores across the country. GrowLife recently hired Marco Hegyi, a former executive with Yahoo and Microsoft to be its President. Shares were trading at $.14 at time of writing.

Similarly, Jamen Shively is another former Microsoft executive who has plans to develop a nationwide chain of dispensaries and retail stores. Also, former Massachusetts Congressman Bill Delahunt is among the 100 applicants vying for dispensary licenses in the state. He is listed as the head of Medical Marijuana of Massachusetts in the applications. These men will be competing with California-based Harborside Health Center, which is currently the most successful dispensary in the US with sales of more than $20 million annually, and the company is looking to enter new states as they legalize use.

The marijuana industry will inject more money into the economy beyond the simple purchase of the drug. One beneficiary will be the food and beverage industry as companies like Dixie Elixirs that makes marijuana-infused sodas, ice cream, and other products have started to spring up (not to mention fast food restaurants that would benefit from munchy mania). The multiplicative or collateral benefits of a booming marijuana industry include the dollars spent on professional services, ancillary products, agricultural products, farming equipment, and other offerings. Like other industries, the marijuana industry will need an army of lawyers in addition to accountants, human resource professionals, insurance specialists, and consultants.

From a financial standpoint, states are likely to want to legalize marijuana given the large potential for revenue from taxes. Taxation issues may arise as drugs that are used medicinally are not typically taxed, however recreational drugs like cigarettes and alcohol are taxed at a very high rate. For example, one marijuana dispensary in Oakland collected $1.2 million in sales tax last year for the city and Colorado pulls in $5 million from their pot sales tax annually. Some estimates indicate legalization of marijuana would save the federal government $13.7 billion in enforcement costs and $1 billion on individuals incarcerated for marijuana related charges.

The business case has certainly been built for the legalization of marijuana and preliminary research shows the drug has more heath benefits than risks, if it is used responsibly. State governments have tended to side with the majority of the population in their preference to legalize marijuana, but it’s less than clear what it is going to take to get the federal government to agree with the people and state governments. At the same time, so long as the federal government declines to take any responsive enforcement actions, it is likely that more and more states will take steps to decriminalize marijuana in ways that meet their own values and policies, which might be an even better outcome.

Follow Me On Twitter: @Aaron_Kraus

Two things you can always count on: Death and Lies about Taxes

Last week, I found myself sitting at home on a Friday night enjoying the Sean Hannity show on Fox News. My riveting social life aside, this particular episode featured a special discussion with millennials, both democratic and republican, about their views on politics, policy, and their future. In general the discussion was your normal “news” banter about healthcare, job growth, student debt and taxes.

My favorite of the discussants was conservative blogger Kellen Curry who must have been the panelist who was allowed to make logical arguments in this segment. At one point in the show, he suggested the perpetual republican fight for lower taxes is no longer a valid one. He supported his claim by citing the downward trend in marginal tax rates over the last 60 years.

Before diving deeper, let’s take a second to review Taxes 101. As you know, people pay different tax rates based on many factors including how much money they make and their marital status. Below is the table of the 2013 marginal tax rate. A common misreading of this table would be to find the box your income falls in, look to see what rate it is taxed at, and be done with it. This is INCORRECT. Everyone’s first $8,925, whether they make $5,000 or $500,000 per year, is taxed at 10% and so on through the stages.


Taking the example of a single filer who made $450,000 in 2013 (see table below), the first $8,925 is taxed at a rate of 10% for a value of $892.50. Dollar $8,926 to dollar $36,250 is taxed at a rate of 15% for a value of $4,098.60. Skipping ahead, every dollar over $400,000 is taxed at a rate of 39.60%. So for this example, dollar $400,001 to dollar $450,000 is taxed at a rate of 39.6% for a value of $19,799.60. All together, this person is paying $135,962 in taxes on an income of $450,000 for an effective tax rate (percent of total income paid in taxes) of 30.2%. This is what is called the effective tax rate, or what you actually pay for the entire tax year.


Back to my thrilling Friday night, Kellen Curry articulated that conservatives were able to call for lower taxes throughout the 1950s, 60s, and 70s, when the marginal tax rate peaked at over 90%, but today it is only 39.6%. As you can see on the chart below, Woods is right in saying that the top marginal tax rate has steadily declined since the 1960s.


As Curry was making his point, he was quickly drowned out by the angrier conservative in the room Michelle Fields (a classic Fox News move: drowning out logic with anger). Fields countered that facts are not going to dissuade conservatives from calling for lower taxes, and that the fight for lower taxes should be continued based solely on principle. She went so far as to say that we need, “real people who are really fighting for our country, not a bunch of John McCains.” Perhaps Ms. Fields forgot that McCain actually did fight for this country.

Sean Hannity eventually stated that 60 cents of every dollar he earns goes to taxes of some kind (Federal, State, and Local income taxes as well as Sales, and Property taxes.) He was confident of this number, and I am sure he has used it many times, but I thought to myself… there is no way that is actually the truth, right?

I did some searching and I think this is may be where he gets his numbers from:


Here is the problem: There is absolutely no way that this is actually what Hannity pays in taxes. His numbers are calculated by taking the absolute highest tax rates in every category, which is easy and convenient, but vastly overstates his final end of year tax bill after all loopholes and deductions are included. This would also mean Mr. Hannity is making $0 a year on investment income, which is taxed at a much lower, 15 percent rate.

Also, he is making this argument while living in New York City, which I would agree is slightly excessive in its taxing policies, but you simply cannot make a federal tax argument from the standpoint of a single NYC citizen. While the city is huge, it only makes up only 2.5 percent of the US population. Just think of the horror of living in a country whose policies were completely dictated by those living in New York City, I think Mr. Hannity’s head might explode if that were the case. (Editor’s Note: Apparently it’s nothing Jacoby Ellsbury couldn’t tolerate for $150M.)

Anyway, back to the facts. The Tax Policy Center provides this chart which contains a mass of information. First, move to the bottom and to the right side of the chart, this is showing the Total Federal Taxes paid by the top 1% of wage earners. The total federal tax burden for those in the 90th percentile of federal taxes paid is only 32.3 percent of their income, a full 7.3 percentage points lower than the number used above to get to the 60 percent tax rate.  

That is the top tax payers in the entire country, which probably amounts to less than 150 thousand individuals. Looking at the other extreme, the lowest percentile of taxes paid for top 1 percent of earners in 2010 handed over only 5.9 percent of their incomes to federal taxes. Moving the federal tax burden from 39.6 in the original calculation down to the 5.9 percent that is paid by some of the richest people in the world would drop Mr. Hannity’s 60 percent claim down below 27 percent. Sean, call me. You must be getting terrible tax advice.

The total percentage drops even more when you look at the specifics of the State and Local level taxes. For example, the 8.97 percent New York state tax is the marginal rate for incomes over $500k, meaning only an individual’s $500,001st dollar is taxed at this rate, however the effective rate on all income earned up at a salary of $500,001 is dropped to 7.37 percent, a 1.6 percentage point drop below the number used in Hannity’s original calculation. You didn’t expect facts from cable news did you?

Here is a complete shot in the dark estimate of what Sean Hannity most likely pays in taxes each year on his $20 million/year contract. I estimate that his total effective tax rate is much closer to 46 percent than the 60 percent that he claims (a difference of over $2 million). The point here isn’t to say that 46 percent is high or low, the point is that if we are going to discuss tax policy let’s at least start with factual numbers.

Table 4.jpg

The US Tax Code is 10,000 pages long and filled with deductions designed to prevent anyone from having to give 60 percent of their income to the government. That being said, the US Government is currently spending $680 billion more than it collects in taxes each year and the national deficit is up to $17 trillion. (For details on the budget deficit and national debt, see this post). This trend isn’t sustainable for much longer, so logic would suggest the government should both cut spending and raise taxes. 

It is hard enough to have a political argument on something as convoluted as tax policy, but it becomes even harder when “political journalists” say they pay an exorbitant 60% of their income in taxes to convince the 2 million+ daily Fox News viewers that the wealthy among us are taxed at incredible rates. A simplification of the tax code would largely eliminate loopholes and make deductions for things like home mortgages and charitable deductions clear so they are generally understood by all tax payers. A simplification may also bring to light the true story of taxes in the United States, which very few seem to understand. The only downside of a simplification- what would I do on Friday nights?

Rob Mahrt graduated from Ohio University in 2008 with a degree in Economics and Management Information Systems and currently works as an Energy Consultant for the United States Navy. In his free time he enjoys the incredibly dull study of tax and foreign policy, attempting to outplay the stock market, and long walks on the beach. You should follow him on Twitter @RobMahrt

Your Weekend Hangover

Every holiday break starts out with the prospect of productivity. I always believe I’m going to read an entire book, catch up on writing, and do all the tasks I’ve been putting off over the last few months. As you’d expect, this break has been filed with eating, drinking, and sleeping. I hope the lie I always tell myself was true for you, but I doubt it so I feel like I owe you your traditional Weekend Hangover. I hope your hangovers and lack of productivity were totally worth it as you enjoyed time with your favorite bottle of whatever and people you love. I know mine was.

I’ve been fortunate to have taken many things from my college professors both undergrad and graduate alike. Key takeaways from them have been that I have to live in the moment and stop trying to grow up so damn fast, that I can do anything, but not everything, so I need to say "no" more often, and this post on Mark Twain’s Top 9 Tips For Living a Kick-Ass Life.

I’m going to let you in a little secret: Black Friday deals are rigged. Most Black Friday deals are a carefully engineered illusion. Big retailers work backward with their suppliers to set starting prices, that after markdowns, yield the profits they want. Yes, what looks like such a great deal is an illusion in reality. Apparently those illusions are worth the 9 serious injuries reported across the country as of 5:00pm on Friday. Click here for up to the minute stats on Black Friday Deaths and Injuries. That link was from Mike Collier, who is brilliant to follow on Twitter.

While we’re on the subject… Here are 50 items to please the cooks, geeks, creative types, and everyone else on your holiday shopping list. However, if you’re a college graduate you would probably trade any one of those items in a heart beat to have the same dollar value applied to the massive balance on your student loans. There is an outstanding service that allows you to do just that, which my friend Caitlin Cavanaugh posted. It’s called Tuition.IO and is the only thing on my Christmas list. Have your grandma deposit that $12 check through them this year and after accounting for internet it's worth about 25% more or $15. If you really don’t want to pay down my student loans, I’d be totally happy with something from this list.

Have you ever wondered why you’re always sitting next to the bathroom or in the back corner of a restaurant? New research shows that good looking people are the ones who get the best tables at restaurants. I’m pretty sure I’ve posted something about the benefits of good looks in every Weekend Hangover so far, but it’s a sexy topic (sorry, I couldn’t resist) and it illustrates that not everyone is born with the same opportunities.

In things I didn't expect to read this week, the Bill Gates Foundation held a condom design contest. The winners were just announced. Beef tendon and a “wrapping” condom were good, but I would probably have named my design “Wrap God”.

Every time there is a public shooting, mass killing, or other visible act of violence there is naturally a great deal of media attention, which is exactly what the villains want. Rampage shooters crave the spotlight and we should do everything possible to stop them from getting it. There is a way to prevent this from happening, and I think it starts with a moratorium on the phrase, “going out in a blaze of glory” for media covering the story.

Everyone loves Oreo cookies and there are more ways to eat them then you can count. New research shows just how much Oreos are adored. For rats, Oreo cookies are more addictive than cocaine. If you give a mouse a cookie… it might end up selling itself for another bite.

Girls are vicious, and especially to each other. New research shows “intrasexual competition” intensifies female aggression.

 New research shows that being thankful is sexy. Maybe the reason you didn’t get laid on Thanksgiving Eve was because you didn’t tweet or Facebook enough about what you’re thankful for.

Most Americans couldn’t last long without a paycheck. 59% of U.S. workers said they would only be able to pay their bills without a paycheck for 12 weeks if they became sick and unable to work. 29% said they would blow through their resources in a month or less.

Talk about priorities. South Korea shut down their stock market, closed roads, and grounded flights so that students could take college entrance exams in peace.

The U.K. is serious about austerity. The Queen asked ministers for a poverty handout to help heat her palaces, but was rebuffed for fear of a PR disaster.

You should really watch this video on global population growth. It’s really well done and freaking interesting.

Did you bring a significant other home for the holidays to meet the parents for the first time? If so, I hope it went well. Unfortunately, well is not how you often describe these types of interactions. Here is a little science that explains why your parents think your partner isn’t good enough.

Similarly… Sometimes when you’ve taken drastic steps to reform your life or made significant changes, not everyone is supportive. Even if you’ve lost weight, quit smoking, or improved your mental health, people can be less than encouraging. What to do when nobody likes the new you.

The new agriculture industry in California is threatening forests and wildlife. It took the death of a small, rare member of the weasel family to focus the attention of Northern California’s marijuana growers on the impact that their huge and expanding activities were having on the environment.

4 dating mistakes you (and I) really need to stop making. Some of these suggestions (Being too sexually cautious?) made me raise an eyebrow.

What a brilliant take on the Twitter IPO I’m just now seeing:

 “What if I told you I had a company that last year generated $4 in sales? The problem is that I had $5 in expenses so we actually lost $1.

The good news is that things got better this year. For the first half, we generated sales of $3. But again, we spent heavily. We had expenses of $4 so lost lost another $1. We have $5 in debt.

How much would you pay for this company?

If you said $1,700, congratulations. That's Twitter.”

Follow me on Twitter @Aaron_Kraus

Your Thanksgiving Hangover

Thanksgiving Eve is typically the biggest drinking night of the year when everyone goes out to the local bars for a mini high school reunion. Last night you probably hugged people you didn’t like, said you missed people you couldn’t recognize, and lied about your level of success to try and impress the nerdy girl from high school that got hot and an MD. After a night like that, you’re bound to need something to get you through your hangover or impending stuffing induced coma. Here is Your Thanksgiving Eve Hangover:

First off, I want to dispel a myth. Yes, Turkey does have Tryptophan, which has the potential to make you sleepy. However, there is only a small amount of tryptophan in turkey and less than there is in chicken and pretty much all beef, so Thanksgiving dinner does not increase the production of serotonin or melatonin any more than every other meal you eat. You’re probably just tired from stuffing 2500 calories into your gullet (yes that is the average amount of calories an American will eat during Thanksgiving dinner) or from being out hitting on high school flames until 3am the previous night. If it’s not one of those, it might be the bottle of wine you refused to share at dinner or a placebo effect from people talking about falling asleep after Thanksgiving dinner. Pick one of those reasons, but leave the turkey out of this.

I’ve noticed that in the last couple years, I can’t recover after a night of drinking like I used to. After a night out on the town, I’m more likely to have to stay in bed the next day suffering from a hangover than I was in my early 20s. Alcohol hits people harder as their age increases for many reasons, but much of it has to do with a decreased tolerance for alcohol. Most of your tolerance for alcohol is determined by the amount of the enzyme alcohol dehydrogenase that breaks down alcohol you have. That enzyme decreases as you age and as you drink more infrequently. There are also several other factors worth reading about to explain your hangover today.

So you’re a college senior or a recent graduate and are still looking for a job. Everyone is going to ask you how your job search is going. Here are tips to answering 5 of the most common questions you’ll get at thanksgiving.

When the Patriots started making their epic comeback on Sunday night football against the Broncos, I stayed frozen in the same position for the entire second half and overtime. I didn’t get up to stretch, I just laid there because I didn’t watch to sabotage the game. It was at this moment I realized I’m a little superstitious. While me laying on my couch in the same position had no effect on the outcome of the game, new research shows superstitions can affect outcomes in a positive way.  Some superstitions boost self-confidence or provide the illusion of control, both of which lead to increased performance. There are no people more superstitious than golfers, and those given a golf ball they were told was 'lucky' made 35% more putts than people with a 'regular' ball. I want a box of lucky golf balls for Christmas.

Introductions are the gift we love to receive, but forget to give. This holiday season, if you’re ever with people who don’t know each other, give them an introduction. They are likely to return the favor.

I’ve written much about the benefits that physically attractive people get. On of those benefits is that physically attractive people are more likely to be leaders, but now new research sheds some light on why. The reason is that, simply, they look healthy! A low life expectancy indicates a high “disease threat” and the evolutional perspective suggests that people facing disease threats show a greater preference for attractive, and thus healthy looking leaders.

Research shows it takes one second for most people to accurately predict who will win an election. That is not a typo or hyperbole.

Departing Wal-Mart CEO Mike Duke will get $113M severance package. Yes, he just got paid $113M to retire.

Nature’s Bounty: The Smart of Tart. Cranberries are more than saucy; they make special claims on the brain.  

5 Things You Didn’t Know About Disney: I’m glad they picked the name “mickey” instead of “Mortimer” the latter sounds so macabre.

4 Things You Didn’t Know About Orbitz: Launched in 2001, the travel broker was created by a coalition of airlines.

14 of the 20 Heisman Trophy Winners from 1991 to 2012 were drafted in the first round of the NFL draft, but the 20 have only earned 18 cumulative Pro Bowl berths among them. That number is particularly low when you realize that Charles Woodson and Eddie George (whose alma maters of Michigan and Ohio State play this week) combined for 12 of the 18. Being good in college doesn’t mean you’ll be good in the NFL. Has The Heisman Trophy Lost Its Luster?

13 Things Mentally Strong People Avoid: It’s 50/50 whether or not they avoid lists like this.

9 Reasons Why You Must Update Your LinkedIn Profile Today. At some point in the near future, I’ll publish a how to guide on creating a LinkedIn profile.

Why Men Won’t Drink Diet Coke: “Gender contamination” is a term used to describe how uncomfortable women and men become when a product they use to symbolize their gender is extended to appeal to another gender. This is why women’s razors are pink and smell fruity and men’s are typically a metallic gray and austere. This is why coke zero was created (Diet coke didn’t appeal to men) and is in a black can.

Why Facebook Pages are a Bust for Brands: They have become too one sided and don’t allow for personal interaction as much as they used to. A good read for marketing folks.

“Dumb Ways to Die” is a cutely morbid video that won the internet and became the best add campaign of the year.

This graph shows how much money people with your personality type (I’m an ENTJ) are set to make.

After checking that graph, please read this post: The MBTI The Bad Fad That Won’t Die.

 Wal-Mart can afford to give it’s workers a 50% raise.

The real reason new college grads can’t get hired? They lack business and interpersonal skills.   

Wielded wisely, No is an instrument of integrity and a shield against exploitation. It often takes courage to say. The Power of No.

Do you think your girlfriend, boyfriend, love interest, or whoever is bad at loving? There is a new assessment titled “The Love Inventory” that researchers are using to identify how good or bad someone is at loving. There are 11 dimensions that go into being good at loving, check out where you (or your partner) fall(s). How good are you at loving?


Beer Sales Decline in 4 of the Last 5 Years

You’d never know judging from the people I hang out with, but beer sales are down by about 2% in 2013. This yearly decline isn’t an anomaly either, beer sales peaked in 2008 and have since declined in 2009, 2010, and 2011 before rising slightly in 2012 then falling again this year.

In an analysis of why beer sales have declined, experts point to financial changes in the blue-collar American male, who is the product’s largest consumer. Experts at Bernstein Research suggest the pay-roll tax hike and high unemployment in this demographic has led to the downturn in beer sales. In general, as taxes go up, beer sales go down and as the economy tumbles, so do beer prices. When times are tough financially, people tend to stay away from beer.

That being said, the percentage of Americans who drink alcohol has remained constant since the 1990s, but people have migrated from beer to wine and liquor. In 1992, 47% of people said their drink of choice was beer compared to 27% who favored wine. In 2013, beer is now only 37%, one percentage point ahead of wine at 36%. Good news for the wine industry, bad news for big beer.

Breweries like Anheuser-Busch InBev are trying to get people to drink more expensive beer to compensate for the decrease in volume. High-end beer represents about 23% of beer sales in the U.S. and that number is even higher at 35% for France and Italy. AB Inbev beat financial predictions in the most recent quarter despite their decreased sales volume as they had some success with their Budweiser Black Brown brand that is marketed as a higher class brew. Despite the success of Black Crown, AB InBev’s purchase of Grupo Modelo (the Mexican beer giant makes Corona and Modelo) was the largest factor in their success as it enabled the company to cut operating expenses (jobs).

Given that selling better beer is the strategy most breweries are trying to employ, Boston Beer Company (maker of Sam Adams) shipped 29% more in volume year on year and increased their income by 24% in 2013. The company accounts for 1.3% of all beer sold in the U.S. making it the largest craft brewer and 5th largest brewer overall. Boston Beer founder Jim Koch because the first craft beer billionaire after shares of the company hit highs in September.

It seems to me like the future of beer is with smaller craft breweries. When I go out, I’m equally likely to order a good whiskey as I am a craft beer. The only time I order a bud light or the like is after midnight on a Friday or a Saturday, but like my football coach used to say, the only good decision you can make after midnight is to go home. 

Follow me on Twitter: @Aaron_Kraus

Microsoft sells 1M Xbox One consoles in 24 hours.

Microsoft sold over 1M Xbox One consoles within the first 24 hours of it going on sale Friday. Sony had similar success with the launch of its PlayStation 4 console a week before, but Microsoft got the same numbers releasing the Xbox One in 13 countries while the PS4 was only launched in the U.S. and Canada. Microsoft had planned to release the Xbox One in 21 countries, but there were issues with production so it had to scale back the release. The Xbox One is priced at $499 and the PlayStation 4 at $399.

The release surpassed sales of the Xbox One’s predecessor the Xbox 360. Both Microsoft and Sony are trying to resuscitate a console market that shrank by 32% to $13.3B from 2008 to 2012. Both companies are currently backordered for their devices as 2.3M customers are on GameStop’s waiting list for a new device. Sales are expected to reach 3M for each console by the end of 2013. 

Follow me on Twitter @Aaron_Kraus

Your (Delayed) Weekend Hangover

Have you ever had a night of aggressive drinking (say you mixed whiskey and wine one night in college) and inexplicably woke up the next morning feeling fine only to have the mother of all hangovers hit you at 4:00pm the next day? That’s essentially what today’s weekend hangover is. It may be late, but it packs even more of a punch than usual. Here is your (delayed) Weekend Hangover:

As if JC Penney didn’t have enough problems, (to illustrate: their stock price is down to $8.87 from a high of $43 last year) they lost a full percentage point of profit margin to shop lifting. The company is already facing bankruptcy, has been replaced by Allegion in the S&P 500, and lost $400M in Q3. JC Penny made the decision to remove sensor security tags as part of a transition to a new inventory tracking system and then for some reason they decided to stop requiring receipts with returned merchandise. This decision worked out about as well as the one to end promotions. People started grabbing merchandise off the rack and “returning” it without ever leaving the store. Management of this company is comical and almost criminally bad. The company is bleeding money so fast that they may have to offer more stock in Q4 to avoid bankruptcy.

75% of people regularly tell lies to get out of a tough situation. 50% of people lie about the reason they were late on a daily basis. If someone says, “the traffic was bad” or “my alarm didn’t go off” they are likely not telling the truth. If you want to tell a convincing lie (I fell like I’m publishing the formula for creating smallpox here) you must make it personal, express contrition, and believe your own lie. (I considered making up an excuse for why this post wasn’t up at 8am, but I then I read this article.)

Marissa Mayer hasn’t yet turned the flash to cash for Yahoo. Stockholders on the other hand have experienced a 130% increase since she took over.  

Mike “The Situation” Sorrentino is back in the spotlight. This time because he is under a federal investigation into his finances. He probably should have swapped “tan” for “tax” in his signature acronym GTL.

How the financial crisis changed Wall Street in one chart.

Why you should be dating a CrossFit Girl: A lot of good logic in that post… 

Because we’re on the subject… The 5 types of women you should NOT be dating. More good logic in here, those 5 types of women definitely do not do CrossFit.

Video: How To Deep Fry A Turkey. There is only a slight chance of catastrophic injury and setting your house on fire.

Five classic holiday cocktails to warm your spirit. Hot Buttered Rum is exactly how I imagine Butterbeer would taste. I can’t wait to try all of these.

The FCC is considering allowing passengers to make phone calls on planes, but for the love of God, please don’t. If you are considering making a phone call on an airplane, don’t and instead read this post on How to Fly Like a Gentlemen.  

It was a long week for me too and that’s not always a bad thing, but sometimes it is, How To Know When It’s Time To Quit Your Job.

The Spotlight Effect: Research shows that when you publically make a fool of yourself by tripping, spilling something, or getting something stuck in your teeth, few people notice and even fewer care. 

Help I’ve fallen and I can’t get up! Massive 747 mistakenly lands at a tiny Kansas Airport that doesn’t have a long enough runway for the plane to take off again.

It’s not surprising that the test circling the internet indicating whether an individual is right brained or left brained is bullshit. Most of those tests are (hint: never trust a psychological assessment that is available for free on the internet) and anything that has Dr. Phil’s name attached it should be treated with the same reverence as cow manure. Anyway, new research shows there is not such thing as “Right-Brained” or “Left-Brained”.

The feeling of annoyance, just like pain, is unpleasant but that is because it’s supposed to be! Annoyance is an evolutionary mechanism that indicates when you don’t like, and should therefore avoid, something. Annoyance is a precursor to anger and lets you know that if something doesn’t change you’re about to get angry. The body doesn’t like it when it’s angry.  Here are 5 message the feeling of annoyance could be trying to send you.

If you “like” a charity on Facebook, you’re less likely to donate money to it. Researchers suggest the effect is a result of giving public endorsement satisfies the desire to look good to others, reducing the urgency to give financial support. I would argue that “liking” is cognitively equated to giving, so people feel they have already contributed and have met their “giving” obligation without even brining the social aspect into it.

People who are not accustomed to holding power are more likely to be vengeful when placed in charge. People that are experienced with authority were more tolerant of wrongdoing.

This made me laugh. The Unofficial Goldman Sachs Gift Guide: When money and pomposity are not an issue, there is a whole world of unnecessary opulence at your disposal.

Incase you haven’t seen this yet… A Wal-Mart in Canton, Ohio held a food drive… for its employees. Keep in mind Wal-Mart is the largest company and grocery seller in the world.

37% of adults with college educated parents received financial assistance from them with an average gift of $6,500.

Despite its founder's best efforts, Lululemon is still growing

Lululemon Athletica has engendered the gratitude of men everywhere for their popularization of yoga pants. Now the company is trying to turn men from spectators to customers with the popularization of Broga. Broga is yoga for men and the name makes it sounds even worse than the growing fad is in reality.

More than 15M Americans already practice yoga and that number growing rapidly at an average of 20% annually with men making up about 25% of all yogis. When you look at the demographics of people who practice yoga, it is easy to understand Lululemon’s success. Of individuals who practice yoga, 44% make more than $75k and 24% make more than $100k annually. The median family income is around $50k. It’s no wonder that Lululemon offers free yoga classes at its stores and is trying to get more involved.  The company has over $1.37B in revenue. 

Companies like Nike, Under Armor and Lululemon have been trying to capture more of this lucrative market and have increased their success with to the male demographic as athlete an endorsers like LeBron James, Ray Lewis, and Victor Cruz have all credited their success as professional athletes at some level to yoga.  The key is getting men to look past the branding of yoga being for women and hippies and get down with downward dog. I do yoga occasionally (typically Saturday’s at CrossFit Cadre), and it’s a lot tougher than it looks. I promise you I’ll never wear tight fitting yoga pants though, no matter how flattering they may be.

Despite the growing popularity of yoga and the company, Lululemon has a long history of significant faux pas. Earlier this year, Lululemon endured a product recall of see through yoga pants that may have caught many Broga participants’ eye, but cost the company $67M after they had to pull 17% of the inventory from shelves. They have no yet been able to catch up on inventory and CEO Christine Day resigned shortly thereafter in June and the company still has not found her successor. Despite those miscues, the company is experience rapid growth so there is really only one reason that makes this job unappealing.

Chip Wilson founded Lululemon Athletics in Vancouver, British Columbia after taking his first yoga lesson. The name Lululemon doesn’t have any significance, beyond its catchy and memorable three l’s. As a businessman, Chip Wilson is a big fan of Ayn Rand’s objectivist philosophy illustrated in her novel Atlas Shrugged and incorporated it into the company values. He went so far as to put the phrase, “Who is John Galt” onto the store’s shopping bags, which outraged some customers. (As an aside, regardless of your beliefs, Atlas Shrugged is a book everyone should read just for an understanding of the perspective.)

That isn’t the only incendiary statement Wilson has made. Wilson publicly said, “Birth control and smoking are the result of higher divorce rates along with more women suffering from breast cancer.” He tried to explain his statement by saying birth control encouraged women to enter the business world and made hem feel like a man’s equal counterpart, which gave them a feeling of power that led to cigarette smoking. To cap it all off, he also once said, “third-world children should work in factories.” Coincidently, Lululemon produces 70% of its products in factories that are in third-world countries. I think he and Toronto Mayor Rob Ford would get along well.

Just last week Kelly said some women's bodies, "Just don't actually work" for his company's pants. He has thus far refused to make sizes that would accommodate all women. Under Armor put out an add days later that featured the slogan, "designed for all shapes." 

Despite a founder that needs a PR team working around the clock, controversial company values, and the occasional see through product, Lululemon has had great success. As yoga and Broga continue to grow in popularity, Lululemon is expected to have strong growth as well. 

Follow me on twitter @Aaron_Kraus