Friday, September 15, 2017

Uber and Lyft Beyond the Management Gaffes – What’s Been Happening, and How Can They Survive?

The two largest American ridesharing companies have garnered attention, and a couple of interesting headlines, these past few months. 

The first, “San Francisco investigating whether Uber, Lyft are public nuisances,” appeared in Fox Business on June 5th.  This odd move was driven by that city’s government’s set of mostly left-leaning objections, including allegedly poor usability by those “with a disability” (does this phrase now only refer to ambulatory incapacities, as “accessible” has come to mean “wheelchair-accessible”?) and a company-dictated driver strategy that supposedly “disfavors” some neighborhoods.  Though their City Attorney also named the problem of being “stuck in traffic behind a double-parked Uber or Lyft,” since that issue could be easily solved by traffic enforcement it was clearly less important to him than the other two, as was his disapproval of drivers coming from surrounding areas and becoming “drowsy.”  Wrong.  Even if you don’t like them, running Uber and Lyft out of cities for poorly disguised ideological reasons is not the way.

The second headline, “Uber Can’t Be Fixed – It’s Time for Regulators to Shut It Down,” graced a June 21st Harvard Business Review piece.  During the company’s horrendous mismanagement streak, author Benjamin Edelman wrote that “the problem at Uber goes beyond a culture created by toxic leadership,” and that the ride-sharer’s “business model is predicated on lawbreaking,” so it “can’t easily pivot toward following the rules.”  Some of what Edelman mentioned was more skirting than flouting, by, for example, avoiding the need for million-dollar taxi medallions by dispatching through apps instead of through phone calls, and some, such as the Greyball authority-dodging effort, were seemingly determined illegal only after they were put into practice, yet the company has built up quite a track record at this sort of thing, in line with music pirating facilitator Napster’s instead of those of other large electronic innovators Amazon and Facebook. 

The conclusion Edelman reached was the same one I put forth years ago, to legally treat Uber and Lyft as the cab companies they are.  That novel-****ing-idea made it into another headline, “Uber Should Be Regulated as Taxi Service, European Legal Adviser Says” (The New York Times, July 4th).  Author Amie Stang reported on a Court of Justice of the European Union nonbinding recommendation requiring that Uber “abide by tough European rules governing taxi services,” and in effect upholding a $500,000 fine levied by French authorities “for running an illegal transportation service.”  Fair is fair.

New York’s lawful taxi companies struck back that same month with true innovation, involving “two competing ride-hail apps” Via and Curb, on a way for people to agree in advance to combining with other passengers on rides (“Share a Cab in New York City?  It’s Now Easier,” Winnie Hu, The New York Times, June 6th), in exchange for lower fares.  They seem to have organized the process well, with limits of two parties and three people and drivers not required to participate.  A fine idea. 

What may be the only way out for Uber and Lyft, and a better attitude from a certain city on a bay, made the September 12th Yahoo News, in “Lyft to begin testing self-driving cars in San Francisco.”  The experiment will offer free rides, if passengers agree, in generally autonomous but human-monitor-equipped taxis, through “an area that’s already been mapped out in very high detail.”  That effort may seem not to break new ground, but it doesn’t need to, as the more companies can practice driverless ridesharing the more it will be improved and accepted, and the sooner it will arrive as a normal practice. 


Overall, the prospects of Uber and Lyft continuing to do business as they have look bleak.  As I predicted last year, the regulators are circling.  Accordingly, ten years from now they may be long gone, or they may be in the thick of automated, and fully legal, taxis – the choice is up to them.  

Friday, September 8, 2017

In Four More Months on Minimum Wage Increases, We Have Reached a Ceiling

The past year has made quite a difference in the lowest hourly amount American workers can legally be paid.  Before it, we were hearing about “the fight for $15,” with implications from those left of center that such a struggle was not only noble but just.  Now those calls have died down, and that quest doesn’t look worthy, even to many liberals.  What has happened to shift the tide?

In “The Minimum Wage Eats Restaurants” (The Wall Street Journal, May 9), marked as “Commentary,” Michael Saltsman presented data that 60 San Francisco-area eateries closed between September and January, and cited one owner as saying “there’s only so much you can charge for tamales.”  Saltsman cited a Harvard and Mathematica study connecting a $1 increase in the minimum wage with a 14% rise in the chance of a “3.5-star” restaurant folding, and concluded that better pay and benefits “don’t mean much if you can’t find a job.”  In contrast, though, The New York Times editorial board, in “Remember the promise of good jobs?” on June 13th, while correctly in my view disapproving of the Fed raising interest rates, the presidential administration seeking to reduce top-bracket taxes, and the blocking of badly-needed for-inflation adjustments of mandatory overtime pay thresholds, tripped on issues of average pay not tracking productivity gains (why should it?), higher minimum wages when over 17 million Americans want to work and can’t find it, and a vain hope for “Republican leaders’ changing their ways.”

For 16 days in late June and early July, we had what might be called “dueling studies” on the outcome of Seattle’s minimum wage increases.  Fox Business, in “Study:  Seattle minimum wage hasn’t cut jobs” (June 20), started the ball rolling, naming a University of California at Berkeley research effort finding that, without, though, a look at how many additional jobs went uncreated, and citing a University of Washington effort determining that “the law appeared to have slightly reduced the employment rate of low-wage workers even as it boosted pay.” The New York Times also covered both in Noam Scheiber’s June 26th “How a Rising Minimum Wage Affects Jobs in Seattle,” concluding that its labor market was unusually strong and that total earnings by workers in low-paying jobs actually decreased, as did The Seattle Times, in Jon Talton’s nicely titled June 27th “Seattle’s minimum wage:  The plot thickens,” which noted that neither piece of research had yet been peer reviewed, but did not mention that automated solutions, which can be stated and sold in terms of the cost of labor being replaced, can forestall additional positions.  Three days later Holman W. Jenkins Jr. weighed in in The Wall Street Journal, opining that “Seattle Aims at McDonald’s, Hits Workers.”  Although he lost any claim to objectivity by not even mentioning the Berkeley study, he made good points, such as that President Obama’s statement “that a full-time job should be able to support a family,” when implemented through higher minimums, “was a way of saying that jobs that won’t support a family shouldn’t exist,” and that many countries allow “teenagers, trainees,” and “probationary hires” to be paid less.  Politically centrist USA Today, in July 5th’s “In ‘Fight for $15,’ Seattle loses,” concluded the same, matching Yahoo Finance’s Rick Newman in June 26th’s “A $15 minimum wage appears to be too high.”  The last straw, though, may have come from generally liberal Washington Post columnist Catherine Rampell, in “Feel-good ideas that need a hardhearted examination,” who concluded that a mandatory $15 minimum “would risk pricing a lot of people out of work,” such as in Mississippi, where half of workers were now paid below $14.22. 

One indication of a trend topping out is people not only refusing to join it, but rollbacks.  Fox News’s June 29th “Maine restaurant workers successfully lobby to lower the minimum wage” recapped how servers arranged for defeat of new laws endangering their jobs by forcing employers to pay them the same minimums as non-tipped workers.  An even clearer sign of a tide turning is backlash reactions, such as the subject of “Missouri Republicans Lower St. Louis Minimum Wage from $10 to $7.70” (Yahoo.com, July 3rd), implementation of a state law barring communities there from setting their own, higher, floors.  That is a questionable step, since one problem with state-level wage mandates is that they do not account for differing living costs, resulting in required pay being too high in some areas, too low (if you advocate meaningful minimum wages) for others, or both, and they prevent local governments from making decisions that should fall to them.  
In the context of the fight for $15 being seemingly on the way out, we probably won’t need to worry about something being assessed in the United Kingdom, a “Minimum wage push for gig economy workers” (Kamal Ahmed, bbc.com, July 10th).  That is a good thing, since, in addition to removing this bottom rung on the ladder, such would require either determining maximum lengths of time these tasks would take or paying less effective workers more to complete them.  I do like the idea of officially designating them “dependent contractors,” between employees and independent agents, which while not as good as making them the same as company-hired would remove the pretense that they are free to work any way they want.  Yet they cannot viably have guaranteed hourly rates.  That would be bad – and, as I also believe that about higher national minimum wages, the shift in our views is positive.   


Friday, September 1, 2017

August Was a Blah Jobs Month, With AJSN Still 17.6 Million – Is That Good or Bad?

This morning’s Bureau of Labor Statistics employment data has arrived, and everything’s the same as it was.

Reminiscent of those signs saying something like “on this spot in 1897, nothing happened,” we treaded water, ran in place, broke even, didn’t change, went nowhere. 

We did, though, see some small variability between metrics.  There were 156,000 net new nonfarm payroll jobs created, a tad lower than a 180,000 estimate but still about 25,000 more than our population increase soaked up.  The seasonally adjusted unemployment rate ticked up 0.1% to get to 4.4%, but the unadjusted equivalent was down a similar amount to 4.5%, an unusual combination given two generally similar months.  The number of unemployed adjusted to 7.1 million, up 100,000, but the long-term jobless, or those with that official status but without work for 27-plus weeks, fell the same amount to 1.7 million.  The labor force participation rate held at 62.9%, though the other measure best showing how common it is for Americans to have jobs, the employment-population ratio, shed 0.1% to reach 60.1%.  The count of those working part-time for economic reasons, or maintaining short-hours employment while looking for full-time opportunities, had its third straight month of 5.3 million.  After a substantial July increase, average private nonfarm hourly wages rose only 3 cents per hour, less than inflation, and is now at $26.39. 

The American Job Shortage Number or AJSN, which shows how many additional positions could be quickly absorbed if getting one were as easy as getting a pizza, was almost unchanged from July, down 20,000 as follows:

  


The largest changes to the AJSN came from lower official unemployment, which cut latent demand by 138,600, and more people not technically jobless but wanting work and not searching for it in the previous year, which increased the AJSN by 85,600.  The trend toward demand for jobs coming from those with non-unemployed statuses continued, with a new low of 37.2% of the AJSN from those officially jobless.  Despite generally good economic times, the set of people neither working nor technically unemployed is ready to take over 11 million positions – other than, of course, those being advertised now.

Compared with August 2016, the AJSN is down almost 400,000, with the officially-jobless and discouraged-worker shares, down 638,000 and 115,000, partially offset by 100,000-plus gains in the demand from American expatriates, those not looking for a year or more, and non-civilian, institutionalized, and people off the grid.


Is this stasis a good or bad thing?  We have certainly seen worse situations to camp out in.  Yet we are still short a lot of jobs.  We are still finding improvements in some places, such as the number of positions, and the big domestic news event of the past month, Hurricane Harvey and its massive rainfall, promises to create much employment.  Barring the start of a recession, which could happen any times, better times are coming soon, so I vote for August as “good enough.”  Accordingly, while we may need a microscope to see it, the turtle, did, again, take a step forward. 

Friday, August 25, 2017

Social Changes, from Decreased Capital to Generation Z – Good Ones Coming Up?

As time moves on, we get new things to consider in United States social organization.  Three articles, one each from May, June, and July, point that out. 

The first, “How to Raise an American Adult,” by Nebraska U.S. Senator Ben Sasse on May 5th in The Wall Street Journal, talked about “how he and his wife are encouraging their own children to become fully formed, independent grown-ups.”  That was a good idea, but the rest of the subtitle, “many young Americans are locked in perpetual adolescence,” not so much.  It is true that the shares of those under 35 living with parents, and not getting established in careers or marriages, are still rising.  Sasse cited the percentage of those aged 25 to 29 still at home being up from 18% in 2006 to 25% last year, and, of a wider age group, the portion of those 18 to 34 living with parents now exceeding that “living with a spouse or partner in their own household.”  All of this, though, was in the first 500 words of the five-page story, which went downhill from there and did not recover.  Sasse disposed of the overwhelming reason for these trends by saying “the economy has something to do with it, of course,” but then blamed technology, prosperity, and “our reluctance to expose young people to the demands of real work.”  He said, 180 degrees from reality, that “too many of our children simply don’t know what an adult is anymore,” and seemed to recommend imposing artificial difficulty to “embrace the pain of work.”  True, personal responsibility is critical, but it is more important to realize that people consistently choose the paths available to them, which has explained every difference from the success of the “Greatest Generation,” many of whom were forced into heroism and then greeted into careers with open arms by a country with massive pent-up consumer demand and a clear path worldwide, to the slow-growing Millennials, who in their teens and twenties were consistently unwanted in the job market. 

The second piece, the strangely titled “Trump is not destiny. Here’s what is,” featured Robert J. Samuelson telling us, in The Washington Post on June 11th, that social capital, which he called “an obscure academic term” (either in error, or he never heard of Bowling Alone), is weakening.  He cited a recent Joint Economic Committee report which found Americans were less inclined to join with others in “family life, the workplace, religion and community.”  The figures he named were a mixture of new and old, valid and questionable, and did not address recent trends, but did succeed in showing that many quantitative proxies for social capital, since about 1970, are still way down.  For example, from that year to 2015 the percentage of American children raised by one parent has gone up from 15% to 31%, while single mothers’ share of births went from 11% to 40%.  He also stated that the 70% members of a church or synagogue has now become 55%, though I would like to know how increased Southern nondenominational megachurch attendance, without affiliation in the conventional sense, is reflected here.  To no surprise, those having much confidence in civic institutions are in the minority, with Congress bringing up the rear at 6%.


We don’t know where we are headed with the lack of social capital, but one thing is happening that rates to help.  That is the emergence of Generation Z.  Those in and around each age cohort have sought to avoid the excesses and mistakes of the last.  Baby Boomers, who grew up in the most child-centric time of our country’s history and often chose college majors which did not help them find good jobs, were followed by Generation X children who were ignored, and became the most careerist cohort to date.  The parents of Millennials saw this neglect and bubble-wrapped their progeny, who became, instead of a group rife with loners, generally outstandingly cooperative.  And now Generation Z, lacking an agreed-on definition but likely to be born from roughly 1999 to 2019, are starting to reach workplaces.  In contrast to their older brothers and sisters, they have received few delusions about being special, and are willing to start at the bottom, pay their dues, and move up – much like early Baby Boomers or those in the Silent Generation preceding them.  This is one of two main ideas in “You Need To Treat Generation Z Well And Loyalty Will Be Your Reward,” by Nick Morrison in Forbes on July 3rd.  The other is that those now approaching age 20 will expect and need good training programs, to help them develop their skills.  Per Morrison, they will be more likely to stay with employers than the job-hopping Millennials, but will need their abilities to be used.  That sounds like a fair deal to me.  It is too early to tell, but it would logically follow that Generation Z (which needs a better name) people will leave their parents’ homes earlier, if they are sanctioned to support themselves, and, with their marriages being earlier, will become the best young sources of social capital we have seen since the Silents.  Possibly they will make my 20-year-old prediction, of people coming to value in-person interaction and activities more than the online kinds, which may be seen as inferior or at least dully ordinary propositions, finally come true.  That would be a good thing for the United States, and, if they and their children can get hired in large numbers, or prosper through guaranteed income or unpaid ventures, may spell the end of suggesting any special ways of raising American adults.  That may be as well as we can do, so let’s watch the next 20 years – and hope.        

Friday, August 18, 2017

Opioids and Unfilled Work Positions in Middle America: What Would Help?

There are many Americans foreigners rarely see.  Away from the cities and coasts, with lifestyles often much more modest, they like things those from other countries, and not a few in ours, simply don’t fathom.  How many other fully developed nations have masses of ordinary citizens with affinity toward such as fundamentalist Christianity, rodeos, tractor pulls, guns, our style of country music, and their large vehicles?  How can they be against abortion, and remain skeptical about climate change?  And why on Earth did they, and do they still, support Donald Trump?  They are rarely black, so are seldom invoked in discussions of “diversity,” and often share the same English, Scottish, or Irish last names with wealthier and more urban Americans, but they differ much more meaningfully from those from Silicon Valley, midtown Manhattan, or the Seven Sisters campuses than do those with different racial backgrounds in the likes of Atlanta, Philadelphia, or Detroit.  Articles in The New York Times and other publications often show a complete lack of comprehension as to why these citizens of our country, with roots going back hundreds of years, think as they do. 

These people, who might constitute the center of America, are, as a group, in bad shape.  Their unemployment has long been high, with industries in their regions, such as coal mining, becoming less common and much less labor intensive.  Average incomes and out-of-poverty rates in their towns and counties still badly lag.  And, over the past few years, a scourge has reached them:  opiate abuse.  
   
Over the past few months, three articles describing the effect of this extra use of prescription drugs on work opportunities, which many in these parts have historically valued as much as Winchesters or Johnny Cash.  May’s Atlantic featured Alana Semuels’s “All the Men Here are Either on Drugs or Unemployed,” which painted a picture, with stories and statistics, of masses of one sex falling away from being able to support their families or even themselves.  In Pulse, July 26th’s “The opioid crisis is creating a fresh hell for America’s employers” described the problems businesses are having filling jobs when many seeking them are using medical chemicals recreationally.  CNN’s “This Ohio factory owner says she has jobs but few sober applicants,” by Alexandra King on July 29th, focused on one specific location in an 8,000-population town in one of the most-affected states.  Overall, the problem of impaired jobseekers resembles the alleged “skills gap,” in which potential workers are too often unsuited for positions, but has more validity.   

Long before large numbers of people exercised the abuse potential of the likes of Percocet and Fentanyl, there was the permanent jobs crisis, which, despite low official unemployment, has been running since the early 1970s.  As I made a case for in 2012’s Work’s New Age, otherwise possible employees in our country have responded to the lack of hiring by choosing lifestyles incompatible with most paid positions, which has had the effect of preventing them from working when the opportunity has presented itself.  That may well be the case here also, with many becoming addicted when jobs were rare enough to discourage the bulk of those needing work from even seeking it.  But we don’t know, and some who wanted to be able to handle jobs were seduced by the power of these drugs. 

As well, we need to ask a question about the connection between opioids and work performance.  Not only do any number of people with bodily pain use them on the job with no presumed ill effects, but the connection between substance abuse and ability to complete work tasks is not always clear.  While it is obvious to me that those who are impaired, for whatever reason, should not be using dangerous machines, they may not have problems in, say, offices.  It is also demonstrably untrue that using mood-altering chemicals automatically reduces quality and quantity of work.

So what can I recommend for employers facing this problem?  First, they must differentiate between drug use, such as marijuana during off-hours, with little or no effect on work performance, which should be disregarded, and that, such as workday alcohol or very heavy opiate consumption by drivers or drill press operators, which could be deadly.  Second, those hiring can do what most must when faced with what seems like a worker shortage:  pay more.  Third, if as expressed in these articles a lot of employees start jobs clean but have trouble staying that way, companies can combine freer hiring with low starting pay and regular drug testing, with substantial raises after some time, such as six months, has passed.  Fourth, without hiding behind insincere allegations of zero tolerance, they should publicize and honestly state their policies, so that those struggling with opiate and other addictions can see what they would need to do to get back to work. 


Economics applies to everyone.  Those different from us, even if educated less on average, still respond to incentives.  The employees are out there – even the co-owner of the Ohio factory featured above admitted that 60% of applicants “qualified to be welders, machinists, and crane operators” were clean – but as always, job shortage or not, managers need to not only make it worth workers’ while but to be honest with them.  That will keep the opioid and jobs crises as separate as possible. 

Friday, August 11, 2017

The Google Memo: What Could It Mean Someday?

This past week, we began the largest corporate culture brouhaha since Amazon’s “bruising workplace” article was published in The New York Times two years ago.  It started with a 10-page memo, titled “Google’s Ideological Echo Chamber,” sent by 28-year-old company software engineer and Harvard master’s degree holder James Damore.  The missive, described since as “anti-diversity” and a “screed” (Gizmodo, which published it at http://gizmodo.com/exclusive-heres-the-full-10-page-anti-diversity-screed-1797564320, and Salon), “inflammatory” (The Verge), and a “manifesto” (The Verge, yahoo.com, and Salon), made a case for Google to not be concerned about its staff being 69% male.  The piece, sent internally, said most if not all “population level differences” were because “men and women biologically differ in many ways,” naming attributes which “women, on average, have more” of.  He added material on other related subjects, such as:  the pressures faced by men, such as being “still very much tied to the male gender role,” the existence of “swaths” of them “without support,” and being compelled by a “higher drive for status,” causing many to accept positions which “require long, stressful hours that may not be worth it if you want a balanced and fulfilling life,” which he maintained was something women generally sought more; naming Google’s “discriminatory practices,” specifically “programs, mentoring, and classes only for people with a certain gender or race, a high priority queue and special treatment for “diversity” candidates, hiring practices which can effectively lower the bar for “diversity” candidates,” and “reconsidering any set of people if it’s not “diverse” enough, but not showing that same scrutiny in the reverse direction”; an equating of liberals’ rejection of “biological differences between people” with conservatives’ denial of evolution and climate change; and requests that Google “stop alienating conservatives” and “have an open and honest discussion about the costs and benefits of our diversity programs,” which, if they were intended to increase the share of female workers, were “as misguided and biased as mandating increases for women’s representation in the homeless, work-related and violent deaths, prisons, and school dropouts.” 

Whew.

After Damore’s memo went public, Google CEO Sundar Pichai sent a response, on Saturday, saying that, although “we strongly support the right of Googlers to express themselves,” and that “much” of Damore’s writing was “fair to debate,” nonetheless “portions” of it “violate(d) our Code of Conduct and cross(ed) the line by advancing harmful gender stereotypes in our workplace.”  He also announced he was shortening his just-beginning “family vacation,” “as clearly there’s a lot more to discuss as a group.”  Although Pichai’s response was cautious and noncommittal, it showed great concern under the surface, and two days later, on Monday, Damore was fired.   Also on Monday, Pichai announced a Thursday all-employee meeting to discuss the issues Damore brought up, which Pichai cancelled that morning, saying some workers felt they would be endangered if they spoke up.  The CEO, as The New York Times put it, “said the company would find other ways to gather and engage employees on the subject in the coming days.”  As we can see, the subject is not only far from closed, but is just getting started.

Commentators are now, as I write this Thursday evening, weighing in.  So what can I add?

First, almost regardless of the merits of what Damore wrote, Google was well within its rights to fire him.  As the expression would more accurately go in the corporate world, the squeaky wheel gets replaced.  Goring sacred cows, which Damore did multiple times in a memo for which he had no reasonable expectation of limited distribution, can be deadly to careers.  While I was not dismissed, my 11-year upward trajectory at AT&T’s information technology unit ended with reactions to a mail message I sent to my group explaining why an excessively beloved software package we used was in fact poor quality and destructive to our business objectives.  It is common knowledge, cynical or not, that high-level managers at large companies will say they value independent thought right up the time they fire you for it, and Damore, if in fact he wanted to keep his job, should have been aware of that.      

Second, the foundation of Damore’s work was a series of interesting and reasonable but debatable assertions:  that sex differences are “universal across human cultures,” “often have clear biological causes and links to prenatal testosterone,” and are “exactly what we would predict from an evolutionary psychology perspective”;  that women, on average, “have more… openness directed towards feelings and aesthetics rather than ideas… a stronger interest in people rather than things… extraversion expressed as gregariousness rather than assertiveness… higher anxiety, lower stress tolerance,” “are more cooperative,” and are “more agreeable,” and “humans are generally biased toward protecting females,” which, in part, “likely evolved because males are biologically disposable”; that it is “culturally universal” that “for heterosexual romantic relationships, men are more strongly judged by status and women by beauty“; and that “conservatives tend to be higher in conscientiousness.”  Each one of these could be, and probably has already been, the subject of multiple individual books.  Accordingly, having sources, which Damore claimed but did not include, even of successfully replicated first-rate research, is not enough to make these propositions clearly correct.  With that said, these ideas all have real merit, and nobody should fear at least considering them.   

Third, in understanding the situation here we need to avoid two related logical gaffes.  One is the assumption that Damore and those agreeing with him think that all women and men fit the tendencies he mentioned, when, in fact, he is saying that the sexes form two overlapping bell curves.  The other is to forget that when these attributes differ at all between entire populations, they cause differences in overall mean values, which do not describe everyone accurately.  If the average annual income of Americans under four feet tall is $2,000, because maybe 95% are children, that is insufficient reason for the remaining 5% to claim that low figure means they are being discriminated against.

Fourth, although we can argue about the extent, it is absurd to say that women, with different body structures, different brain characteristics, and the only sex which can get pregnant and give birth, are identical to men.

Fifth, even if as Damore claimed Google management implicitly believes that women’s disadvantages are due to sex-role stereotypes, many if not most cannot viably be retrained.  Google exists to seek maximum profits from the software business, and needs the best workers, not those who might have been better if enormous social patterns were different.

Sixth, reverse discrimination is discrimination.  Our choices of prohibiting, condoning, or encouraging it do not alter this statement’s validity.  


Seventh, if there are any overall, average differences at all between groups of people, equality of opportunity will not produce equality of results.  That is an iron fact we need to accept.  James Damore has, I hope, put us on the way.    

Friday, August 4, 2017

July: Another Good Jobs Month, But Latent Demand for Work Rises Again – AJSN Now At 17.6 Million

According to the prognosticators of record, July was supposed to be another winner for employment, and it was.  We added another 209,000 net new nonfarm payroll positions, almost matching June’s 222,000.  Seasonally adjusted unemployment returned to its May 4.3% level, and the two measures of how common it is for Americans to be working, the labor force participation rate and the employment-population ratio, each matched June’s 0.1% gain to return to their April levels and end concern about May’s beginning a trend.  Average hourly earnings, for the first time in three months, increased more than inflation, to reach $26.36.

The other measures were flat or slightly down.  The adjusted number of unemployed Americans stayed at 7.0 million.  The count of those working part-time for economic reasons, or holding on to less than full-time positions while seeking ones with longer hours, stayed at 5.3 million.  The number of long-term jobless, or those without work for 27 weeks or longer, stepped up 100,000 to 1.8 million, and the unadjusted unemployment rate gained 0.1% to reach 4.6%. 

The American Job Shortage Number or AJSN, which shows in one figure how many more positions could be quickly filled if all knew they were easy to get, shrugged everything off and increased a mostly but not entirely seasonal 154,000, as follows:


July’s gain was essentially all due to higher official unemployment, which rose 191,000 over June’s.  Otherwise, the categories of marginal attachment above changed little, with none adding or subtracting more than 20,000 fillable jobs.  The AJSN’s 766,000 improvement over a year before was much the same story, with Bureau of Labor Statistics-defined joblessness responsible for 743,000 of that. 

A simple month, a simple report.  The positives clearly outweigh the modest negatives, and, although progress is sketchy outside that 209,000 payroll gain, we don’t need much more to call these relatively good times.  We’ll continue watching.  As for July, the turtle, once again, took a small step forward.