Friday, November 7, 2014

AJSN Down Again, As America Is Now "Only" 18.3 Million Jobs Short

October was another good month for United States employment.


The country added 214,000 net new jobs and the headline seasonally adjusted unemployment fell to 5.8 percent.  Long-term joblessness, those looking for 27 weeks or longer plunged to 2.9 million, and unadjusted unemployment fell to 5.5 percent.


Other secondary measures changed little or not at all.  The labor force participation rate and the employment to population ratio came in at 62.8% and 59.2% respectively.  There were 7.0 million people working part-time for economic reasons, or wanting full time work and not finding it, the same as in September.


Two developments were worthy of concern.  Those wanting work but not looking for the past year grew over 150,000 to 3,350,000.  The job groups with the largest gains in employment were food services, drinking places, retail trade and health care, at least 3 of which are full of low-paying positions.


Overall, the American Job Shortage Number, or AJSN was down 135,000, as follows:


AJSN
OCTOBER 2014
Total Latent Demand % Latent Demand Total
Unemployed 8,680,000 90 7,812,000
Discouraged 770,000 90 693,000
Family Responsibilities 247,000 30 74,100
In School or Training 229,000 50 114,500
Ill Health or Disability 131,000 10 13,100
Other 816,000 30 244,800
Did Not Search for Work In  Previous Year 3,350,000 80 2,680,000
Not Available to Work Now 580,000 30 174,000
Do Not Want a Job 85,919,000 5 4,295,950
Non-Civilian, Institutionalized, and Unaccounted For, 15+ 9,514,318 10 951,432
American Expatriates 6,320,000 20 1,264,000
TOTAL 18,316,882


The turtle is still moving forward.


Thanks to my wonderful wife Mary for being my eyes, on which I had surgery, this week.















Monday, November 3, 2014

The Triple Revolution Statement – 50 Years Later, It’s as Perceptive as Ever


In the spring of 1964, a group of scientists, professors, social activists, and experts on technology issued a report and addressed it to then-President Lyndon B. Johnson.  The document, published in Liberation magazine, claimed that mankind was on the edge of not one but three profound historic transitions. 

The second shift was “the weaponry revolution.”   In the center of the Cold War, fears about nuclear bombs, which per the report “cannot win wars but can obliterate civilization,” peaked.  The third was “the human rights revolution,” fueled by the American black equality movement, which it described as “only the local manifestation of a worldwide movement toward the establishment of social and political regimes in which every individual will feel valued and none will feel rejected on account of his race.”  Both of these were highly accurate, though with different outcomes.  Nuclear weapons, for various reasons, especially as Sting put it that the Russians did indeed “love their children too,” have not been used in war since.  In America the civil rights revolution has erased maybe 90% of the legal, structural, and major social inequalities – hardly complete, but a very admirable result given the difficulties in changing human behavior.   However, the country, and other developed ones, has done less well on the second part of Martin Luther King’s march – the need for jobs.  That brings us to the first upheaval – “the cybernation revolution.”

It may seem hard to imagine that in 1964, only 18 years after the first true computer was released and few existed outside governments, the military, universities, and the largest companies, that people were concerned about the effects of automation, but they were – and well before then.  Mathematician Norbert Wiener had published The Human Use of Human Beings:  Cybernetics and Society in 1950, and Kurt Vonnegut’s novel Player Piano, about a future where machines had made the great majority of work unnecessary, had arrived two years later.  The Triple Revolution paper called cybernation “a new era of production,” following the agricultural (extraction) and industrial phases.  For the revolution, it credited “the combination of the computer and the automated self-regulating machine,” which would result in “a system of almost unlimited productive capacity which requires progressively less human labor.” 

If that doesn’t seem predictive enough, we can look at what else the article foresaw:

  • Machines would use most resources, leaving more and more humans dependent on government handouts.  (We now have 3 million officially long-term jobless.)
  • “A growing proportion of the population is subsisting on minimal incomes, often below the poverty line, at a time when sufficient productive potential is available to supply the needs of everyone in the United States.”  (That reflects the rising gap between mean and median individual or family income, and the ever-growing piles of money in the hands of the 1% and the largest companies.)
  • “The general economic approach argues” that demand for goods and services is understated, and that all of the capacity in workers and other resources will be needed again.  (That is still the largest reason for observers not seeing the jobs crisis as permanent.)
  • “The underlying cause of excessive unemployment is the fact that the capability of machines is rising more rapidly than the capacity of many human beings to keep pace.”  (Rising prosperity and demand prevented the jobs crisis from really taking effect until 1973, with various booms and bubbles slowing it down for 36 years after that, but automation, along with globalization, has been the main cause of the work shortage.)
  • “A permanent impoverished and jobless class established in the midst of potential abundance.”  (Exactly what has been happening here; see “The American Rasta Class” in Work’s New Age.) 
  • “The number of people who have voluntarily removed themselves from the labor force is not constant but increases continuously.”  (The article didn’t anticipate the mass influx of women, which allowed the labor force participation rate and employment-to-population ratio to keep rising for decades, but both measures are now at or near the lowest ever since that trend was only halfway finished.)

The document contains many recommendations for dealing with the jobs crisis.  They include, as “the traditional link between jobs and incomes is being broken… to provide every individual and every family with an adequate income as a matter of right,” as a replacement for welfare, unemployment compensation, and other similar programs.  It also advocates, among others, the following:

  • A huge public works program (which I have supported since 2011, and columnists from Paul Krugman to David Brooks have since called for)
  • Much more low-cost housing (a lot has been built since 1964)
  • A new public-power system based on coal (actually, in the case of anthracite, an almost  pollution-free fuel)
  • Repurposing old military bases (has been done a great deal since then)
  • More of an “excess-profits tax.”

For various reasons, especially within the service-sector phase which the committee either played down or missed, truly widespread joblessness has not happened yet.  The majority of adults are still working, with most of those getting the bulk of their income that way.  It is not true, though, that because the worst effects of automation did not come to pass as quickly as this committee expected, they never will.  On this planet we have probably run out of labor-intensive work areas.  Large online servers, for example, employ less than a hundredth of those once working for the auto industry.  The Triple Revolution authors also did not anticipate competition from foreign workers, with at least ten times as many suitable for American-style jobs as in 1964. 

Sometimes prophecies don’t take effect for a while.  Christians, whose spiritual forbears were Jews waiting for the son of God for millennia, will tell you that.  And there are frankly no good reasons to think we will have full employment any time this century, which will bring, and is bringing, new problems we must solve.  As this visionary statement said, history will record that – even if it takes fifty years longer than expected.                     

Friday, October 31, 2014

This Halloween, Fiends to Fear and Not Fear


Here in the Catskills, Halloween is sort of classic.  Eldred, New York is too small and spread out for children to go house-to-house, but our “Trunk or Treat,” with people like me giving out candy in the Peck’s supermarket parking lot, is well attended.  The weather is usually appropriate, cool but not too cold, and it’s dark early.  There’s enough wind to imagine you’re hearing things, but children here, playing outdoors, develop good judgment about what to fear and not fear.  That’s better than many older people.

What do I mean?

Here are some things none of us should be afraid of. 

One is widespread gun confiscation.  It will never happen in the United States.  There will long be debates on what can be sold to whom, and even on what the Founding Fathers intended as the spirit of the Second Amendment, but I’ve never heard of anyone in any kind of responsible position making a case for taking them away from law-abiding people.  For that matter, I haven’t heard that from insane or irresponsible ones either.

Two is the effect of climate change during our lifetimes.  Even if you accept the five-horse parlay that a) Earth’s long-term weather is getting warmer, b) a large portion of that is caused by 200-pound creatures on a 6.6 sextillion ton planet, c) such change is consistently harmful, d) our actions are capable of halting it, and e), no technology will emerge that will reverse or largely mitigate the problem, it is a slow process, and about as likely to stop us, in this half of the century, as a glacier. 

Three, Ebola.  There will be no epidemic here.  It is barely more contagious than AIDS, meaning casual contact, unless somehow involving eyes, lips, or open cuts, cannot spread it.  Containing Ebola is a good idea, since we don’t want to trifle with diseases so deadly, but few of us need to be concerned. 

Four, statistics-based racial profiling by police.  Civil rights matter, but until crime patterns are uniform across groups, police, and others, will continue, in the absence of other information, to draw inferences on what they can see.  Two things coming up will help here – cameras on police officers to record what they actually do, and more and more legalization of marijuana, which will end much of what has been a silly “war” anyway.

Five, any and all worries about American inflation.  With a $17 trillion national debt, our government has about the strongest vested interest in keeping interest rates low we will ever see.  True, there is a lot of money out there, but where is it going? 

However, monsters we should all fear, this time of the year, are political candidates who don’t care about jobs.  Fewer give employment as high a priority as in 2010 or 2012, and that’s understandable, but all running for legislative office outside of, say, North Dakota should be aware finding work is a real problem for many.  Hide from that kind!

As of last night, there is one more we don’t need to fear either.  The man strongly believed to have laid in wait for and shot two Pennsylvania state troopers in front of their barracks has, after seven weeks, been captured.  That was actually a local issue here – the whole scene was close enough to us that for a while Eldred schools were under special guard.  Entire hunting seasons at some locations, cutting out not only local recreation but a real income source for many in these economically weak areas, and numerous community events, including trick-or-treating, were cancelled.  Now, though, we can celebrate Halloween - with one less monster.  Let’s do that.      

Friday, October 24, 2014

Republicans Ready for Senate Takeover With 46 Job-Related Bills: How Good Are They?


As of Thursday evening, sportsbook.com says the Republicans are 9 to 4 favorites to take over the United States Senate.  If and when that happens, the House, which has been Republican-dominated this term, will not see a need to work on any bills designed to improve United States employment.  It has already cleared 46 of them, which Speaker John A. Boehner has been pushing. 

What’s on the list, and how much would they help the American jobs situation?

  • Approve the Keystone XL pipeline.  Positive, as it would create jobs, and take America one step closer to, though still far away from, maximizing its energy resources and opportunities. 
  • Block federal regulation of fracking.  Slightly positive, for the same reasons.
  • Open national forests to timber companies.  Slightly positive, as jobs would be needed to cut it. 
  • Water projects in Oregon and California.  Positive, though may not be very labor-intensive.
  • Allowing business owners to record phone calls and meetings with federal government regulators.  Neutral – no real job loss or gain here. 
  • Repeal of the Affordable Care Act.  Negative.  Obamacare is adding jobs and will continue to do so.
  • The Ryan Plan, making changes to Medicare and Medicaid, cutting military and other spending, and reducing taxes.  Slightly negative. 
     
    How do these stack up, as a group, as jobs initiatives?  Puny.  And extremely partisan.
     
    The last three are not jobs bills at all.  The first and fourth are useful, though small and incremental.  There is no mention of the badly-needed infrastructure effort, or anything else nearly that broad-based and large.  Passing off these things as significant employment legislation shows Republican priorities are elsewhere.
     
    So, does that mean I’m happy with the Democrats instead?  No!  They are little better, with their emphasis on raising the minimum wage (negative) and climate change (slightly negative). 
     
    The 2014 midterms look bleak for jobs.  Maybe the unemployment drop is the reason, though both sides agree employment, and the rest of the economy, is the most important issue for voters – above Ebola, beyond the alleged evils of the National Football League, over the real or imagined need for more “diversity” in high-technology and other careers, even over guns. 
     
    So, vote for whom you will – but check their websites first.  Some have plenty to say, some have almost nothing.  We’ll get the leaders, and the jobs efforts, we deserve.  Yes, I’m grouchy this time – that will get better when both sides see the need to work together for the good of the country.  Such an epiphany may precede a severe and obvious need, but I’m not betting on it.    

Friday, October 17, 2014

The Midterm Election: Five Close Races, Viewed From a Jobs Perspective


Two weeks from Tuesday (yes, it’s that soon), Americans will go to the polls for the most important election in years.  The immediate impact of the choices people will make varies greatly from state to state, from quiet here in New York (no senatorial race, and the current governor very likely to continue), to many others with a close race for at least one major office. 

Below are five such contests, all described somewhere as “too close to call” or something similar.  How do the candidates in them see, and want to deal with, their state’s employment situations?  For this, I’ll forget their real or alleged general ideologies, and what others have said and assumed they would or would not try to do, and focus only on their own platforms, as described in their websites.  Who looks better in each?

First, we have the Georgia U.S. Senate contest.  Per Democrat Michelle Nunn, “job creation and economic growth is my top priority.” She mentions a need to “upgrade our aging roads, bridges, mass transit and rail, water and sewage lines, and port infrastructure,” reverse cuts in research and development spending, and “work to expand public-private partnerships to provide our young people with training, experiential learning and apprenticeships that better equip them to meet the needs of employers in Georgia.”  That last piece, tying schools and workers together, is a big improvement over the common and incorrect assertion that jobseekers’ education levels are to blame.  Republican David Perdue only mentions “revitalizing American manufacturing,” which in my view is somewhere between a distraction and a pipe dream, and he has very little to say about Georgia’s particular situation.  Big edge to Nunn.

Second, New Hampshire’s U.S. Senate race starts with Democratic incumbent Jeanne Shaheen.  She provides much about how to get more jobs there, from helping small businesses, which she calls “the engine of New Hampshire’s economy,” to “expanding the federal research and development tax credit and making it permanent” in support of science and technology jobs, which she claims “are projected to be the fastest growing occupations over the next decade.”  She also mentions energy and infrastructure.  Her opponent, Republican Scott Brown must be getting his support in other ways, since his website is a disaster – it doesn’t consistently work, has almost invisible print, and has links to information on some of his stands but not others.  He advocated “better jobs for all,” but offered nothing about how he could help with that.  Big edge to Shaheen.

Third, we have a gubernatorial contest in Kansas.  Incumbent Republican Sam Brownback has “growing the Kansas economy” at the top of his issues list, and sets a goal of 25,000 new jobs in the state for each of the next four years.  He lists no fewer than 21 explicit ways of achieving that objective, mostly by improving the general business climate, but also by supporting specific, named commercial initiatives.  His Democratic opponent Paul Davis, except for naming “creating good-paying jobs” as a priority, with no hint of how he would do that, has nothing at all on his website about helping Kansas employment.  Big edge to Brownback.    

Fourth, the next Illinois governor is on track to be either Democratic incumbent Pat Quinn or Republican challenger Bruce Rauner.  Quinn’s website jumps out with a request to “add your name if you agree it’s time to raise the minimum wage,” hardly the way to increase employment.  His page of issues has links to more on 11 of them, including “equality & inclusion” and “women & children,” and mentions his previous job creation in “Illinois’ Comeback,” but has no sections for employment or even for the economy in general.  Running on his record, the last-mentioned page has a detailed accounting of the positions added under his leadership, but “Blueprint for Illinois’ Future,” though showing him speaking above a sign touting jobs and opportunity, has nothing on either.  Rauner’s view makes us wonder if he and Quinn are in the same state; his website has “jobs” first in his list of issues, and starts by saying “We are in a jobs crisis.  Illinois has the worst unemployment rate in the Midwest and among the highest in the nation.  That’s unacceptable.”  However, he names only four ways to improve on that:  overhauling tax codes, creating right-to-work zones, reforming tort laws, and cutting workers’ compensation costs.  Those are not enough.  Quinn seems to have won in the past, but neither seems poised for the future’s employment, so I’ll call it a tie, and not a high-scoring one at that.

Last, the Wisconsin gubernatorial race pits Republican incumbent Scott Walker against Democrat Mary Burke.  Walker’s website has a whole large section on jobs, calling the economy “the top concern for families across Wisconsin,” and advocating “cutting taxes on small businesses, curbing frivolous lawsuits that drove costs up, eliminating the state tax on Health Savings Accounts, reforming the Department of Commerce into a true Economic Development Agency” and “immediately convening a Waste, Fraud and Abuse Commission that was intent on curtailing wasteful spending at all levels of state government.”  Burke, though also plagued with website readability problems, has “jobs” at the top of her issues list, and has a link to a 40-page (!) document with a long, specific, detailed jobs plan.  The course of action has proposals from both political sides, and shows outstanding effort and emphasis on what is hardly only a Wisconsin issue.  Edge to Burke.  

So what can we learn from these ten candidates?  There is great variation in how much they seem to care about American employment.  A good attitude on the jobs crisis can come from either Democrats or Republicans, and from incumbents or challengers.  Perhaps most of all, those doing the best with this issue are nearer the national political center than others, and, especially in the cases of Michelle Nunn and Mary Burke, show that they see merit in ideas more likely to be put forth by those in the other party.  Before voting, I recommend that you do the same with your state’s candidates for senator, governor, or U.S. representative – the results may be enlightening indeed.       

Friday, October 10, 2014

Ideas for Action From the G20 Labor and Employment Report – Good, but Not Enough


Two weeks ago I posted on an important report, issued by the International Labour Organization, the Organisation for Economic Co-operation and Development, and the World Bank Group, on jobs in the world’s 20 largest economies.  As well as a fine dose of straight information, explaining how the document terms the “jobs gap,” and what I have been calling the permanent jobs crisis, is unfolding in large countries from Germany to Indonesia, the report includes ideas for dealing with the problems we face.  What do these organizations recommend, and how good would those things be?

The first suggestion in the fourth section of the report, “Achieving strong, sustainable, and job-rich growth,” is increasing consumer demand, which, as correctly stated, is not only a result of poor employment but a cause of it.  Breaking out of this vicious circle is an advantage of federal stimuli, which, though sometimes necessary as at the beginning of the Great Recession, cannot go on indefinitely.  More government work in countries with the worst employment problems, also advocated in the document, is a better idea.  Overall, we have a conflict with tax revenues;  on one hand, we want to make them more progressive, as to impact fewer people and thus to hurt consumer demand the least, and on the other, the most regressive sources, such as VATs and sales taxes, are the most impervious to decreasing from a shrinking number of people working.  Resolving that will be our largest related challenge. 

The second area of recommendations is on improving employment.  The report mentions the destructive effect of long-term joblessness on the workers themselves, and correctly advocates strong social programs for the unemployed.  The United States, better off than many of the other G20 countries, has been remiss in not extending jobless benefits from its generally current 6 months, and we have simply had too much difficulty and controversy with food stamps.  European countries have done better here, but the poorer large countries, where such programs are needed more than anywhere else, have not.  When more acknowledge the jobs crisis as permanent, the need for such benefits will naturally be accepted by more and more conservatives, here and elsewhere.

Third, the report takes on increasing labor force participation, which it first correctly notes is not going anywhere in the more developed countries without more jobs, then likewise mentions it can be helped by incentives for companies to provide jobs, which is badly lacking now in the United States.  It also remarks on accommodations for older workers, which would indeed help more of them want work, if not to actually locate it more often.

Fourth, the document falls into a common trap – advocating much more jobseeker education and training.  As with efforts to give preferential treatment to women and minorities, more schooling does not help the population as a whole, but only raises competition for existing positions.  While some people do need something, greatly increased occupational training is no priority for either today’s or tomorrow’s total employment situation.

The last area the report addresses is economic inequality.  To its credit, its approach is to connect efforts to make income outcomes more equal with general employment growth, instead of trying to make the case that differences in financial results are inherently bad.  It mentions the need for higher-paying jobs, but does not recommend higher minimum wages for countries with already substantial ones.  The issue of workers shut out from even the lowest-paying positions is more of a problem in some developing G20 countries, where people have much less adequate anti-discrimination legal protection. 

In all, the ILO/OECD/WB report is thoughtful and moderate on recommended solutions, which should, as it implies in spots, vary vastly between countries.  What is missing is a look at more fundamental, instead of incremental, ways of dealing with this 200-year crisis, which would continue to transform lives even if all of the ideas listed here were successfully implemented for all 20 countries.  That is what we need the most.                

Friday, October 3, 2014

Stop Calling It a Recession: AJSN Hits 5-Year Low as US Jobs Shortage Drops to 18.45 Million


As did most analysts, I expected this morning’s federal employment data to be worse than it was.   I anticipated maybe 100,000 net new jobs to disappoint again, and the official unemployment rate to hold. 

It was better.  Not only did the Employment Situation Summary data far outperform these two estimates, with 248,000 and a drop from 6.1% to 5.9%, but the measures feeding into the American Job Shortage Number were almost all improved.  The result was the lowest AJSN since 2009, down almost 1.2 million as follows:

 

The number of unemployed fell over 800,000, some but not all due to more jobs generally available in September than in August.  There were 77,000 fewer discouraged workers, defined as those who thought no jobs were available to them, and over 400,000 – many – fewer reported wanting work but not looking for it for at least a year.  Once again with September more Americans stood up and were counted, as the non-civilian, institutionalized, off the grid, and otherwise unaccounted-for category decreased over one million.  The only significant exceptions were, as expected with the new academic year, the set of people wanting jobs but in school or training, up one-third, and the number that keeps going up, those claiming no interest in work whatever.  That last one is now over 86 million, and, even at its low and conservative estimate of 5% taking jobs if they were more available, it accounts for more latent demand than any category other than official unemployment. 

Compared with a year before, the AJSN was also greatly improved.  In September 2013, it was a hair short of 20 million, with the almost 2 million more officially jobless only partially offset by lower counts of those not having looked for work in the past year and those not wanting it at all.  Unadjusted unemployment was down also, all the way from 7.0% to 5.7%. 

The main four secondary statistics, though, were mixed.  While the count of those working part-time for economic reasons, or wanting full-time jobs but not finding them, edged 100,000 below the bottom of its 2014-long range at 7.1 million, the other three did not improve.  Long-term unemployed, or those looking for 27 weeks or longer, stayed at 3.0 million, and the employment to population ratio is still 59.0%.  The labor force participation rate dropped to 62.7%, a new post-1978 low. 

In the current scheme of things, September was a fine month.  Yet ever-lower labor force participation and ever-higher counts of people claiming no interest in jobs mean that America is not going back to work again.  That may never happen.  These are good times, however, and with the permanent employment crisis not being addressed are the best they will be.  Enjoy them while they’re here – if you have a job.