Wednesday, May 17, 2017

A Year of the Gig Economy

A year and a month ago I posted twice about something existing on a small scale for as long as anyone could remember, but had only recently been given a name and drawn a flurry of discussion.  The “gig economy,” or the offering and working of individual and often very short tasks or sets of tasks, seemed to be gaining a new credibility.  I commented that although taking such small-scale employment was clearly an economic inferior good, it offered both experience and the chance to earn money without being held off by minimum wage laws.  Since then, it has continued without as much attention – but what has been said about it when it has reached print?

On June 4th, Jonathon M. Trugman expressed his displeasure about this phenomenon in New York Post (“This new ‘gig’ economy isn’t helping anyone”).  He didn’t really support the title in the article, which stated that “temporary gig work is better than no work at all,” but did tell us, sadly, that the net new number of American temporary positions added from 2005 to 2015, 9.4 million, exceeded that time’s overall jobs increase, 9.1 million.  That movement away from permanent positions is the real trend, and is disturbing enough, but hardly means that other opportunities are worthless.

A more balanced view turned up in CNN Money (“Millions in gig economy can’t find better jobs or pay,” October 27), which acknowledged both the advantages and disadvantages I named above.  The statistics here, apparently invoked to be negative, almost served the other side better; although “nearly 30% of gig workers who work part-time would prefer a full-time job,” that number could be much higher, and it is redundant to say that three-quarters of “these part-timers” have low incomes. 

What’s interesting about “Rigging the gig economy:  A proposed bill would lure freelance workers to sign away their employee rights for cash” (Salon, November 29th), is that it sought to make one politically liberal point, failed, and in the process unintentionally put forth cases for two others.  It related a proposed legislative bill that would either mandate, or allow participation in, a scheme where companies would subsidize gig workers’ health care at an amount equal to 2.5% of their income, in exchange for them agreeing to “accept their classification as nonemployees.”  That’s not a large bonus, but it is significant, and, if they are legally not on their companies’ payrolls, it costs them nothing.  The two true improvements it supported were strict, well-enforced worker-favoring laws on what constitutes a contractor as opposed to an employee, and national health insurance unconnected to income sources.

It was months later before anything more on this subject crossed my desk, and it was on the April 10th New York Times editorial page.  “The Gig Economy’s False Promise” properly debunked what the editorial board called “the promises Silicon Valley makes about the gig economy,” namely the illusions of entrepreneurism and independence, and the idea that “use of the independent contractor model is in fact better for workers.”  The problem here is that as an inferior good, gig jobs, taken mostly when permanent ones are unobtainable, do not hurt those who have them.  As shabby and misleading as these positions can be, the permanent jobs crisis, not those offering them, deserves the blame. 

Most recent was “Is the gig economy working” (New Yorker, May 15).  This long, long form piece (it printed out to 24 pages) used a combination of stories, statistics, and interviews to assess where this form of work might be going.  Its angle, as its subtitle put it, “many liberals have embraced the sharing economy.  But can they survive it?”, surprised me, as I had thought of the gig economy as having mostly conservative appeal, since it facilitates free-market transactions while requiring workers to defend their own interests without regulatory protection.  Author Nathan Heller, though, said some called it “the power to control one’s working life,” with gigs offering a chance for employment to “return, grassroots style, to the people.”  He interviewed some who earned money through TaskRabbit and Lyft, who were actually only choosing the ancient, big-city combination of side work financing primary efforts in creative projects that may or may not sell, and contrasted the reality of such jobs with Uber and Airbnb promotional material.  After much more thought, analysis, and conflation of pure gig opportunities with sharing-economy ones, he came around to the independent-contracting and health-coverage issues above, and concluded with a worker, with whom he started the story, finishing a group of handyman tasks and saying “the gig economy is such a lonely economy.” 

Through these different viewpoints, the real significance of gig work is clear.  First, it is not as good as regular employment.  Second, it is necessary for its participants to be aware of their true after-expenses earnings.  Third, however, to call it harmful or somehow immoral is to make the same mistake as condemning foreign sweatshops or a lower minimum wage, as if laborers under those circumstances would be better off without the best opportunities they can find.  That is “let them eat cake,” a philosophy for which, in any labor market, let alone during a permanent jobs crisis, we can have no use.        

Friday, May 12, 2017

Two Old and One New: Stagnant Living Standards, Underpaidness, and Another Generation

Last month, three articles appeared on worthwhile job-related topics.  Two were on subjects we’ve seen before, and the third was one of the first on something sure to be discussed for at least the next half-century.

Robert J. Samuelson’s “Are living standards truly stagnant?” (The Washington Post, April 11) addressed and partially debunked a “widespread belief” that broad-based American prosperity is not improving.  Although mean inflation-adjusted pay is where it was 42 years ago, Samuelson cited a Dartmouth College study giving authority to something I have repeatedly commented on over the years, that many of our lifestyle improvements don’t show up that way.  One area mentioned here is electronics, specifically cable TV, cellphones, and Internet access.  The research also found that the poorest quarter of households averaged 1.4 cars in 2015, up from 0.75 in 1970, that mean living spaces for those in the bottom half had increased from 1,200 square feet to 1,300 from 1993 to 2007, and that outdoor plumbing, which 12% of the bottom 25% had in 1970, was almost nonexistent two years ago.  These are meaningful things, and serve as a reminder that money, which may become rarer as the jobs crisis worsens, is not the only measure of how well off as a country we are.

In Alternet on April 24th, Paul Buchheit’s “A future of shrinking jobs:  Most workers today are underpaid, and it gets worse” turned out to be better than its title, which could have been written any time since 1973.  That is because it provided the shocking statistic that 94% of positions created since 2007 were “temporary or contract-based.”  Although hardly all of those were low-paying, and that high a share must mostly mean that employee-employer relations are changing, it is consistent with that in general, and answers the question of why fewer people are relocating for work. 

The third piece, by Christine Comaford on April 22nd in Forbes, is “What Generation Z Wants From The Workplace – Are You Ready?”  As I get older, it strikes me how easy it is to mentally run the younger generations together, as if they were one solid group.  I saw that blind spot into the 1980s, when otherwise astute observers missed the difference between the establishment-questioning 1960s and the superficially self-centered 1970s, which I knew, from growing up in them, were totally different times.  We run the risk of doing that again.  Those who haven’t really comprehended the difference between Generation X, which followed the Baby Boomers, and the Millennials after them, are now confronted with another cohort. 

There is disagreement on the exact or even approximate birth years defining each, but using the U.S. Census Bureau definition the last Millennials were born in 2000.  That means that the oldest members of “Generation Z,” a name which may not stick, are now 16 and reaching the workforce.  They are no more Millennials as Boomers such as myself fit with the preceding Silent Generation. 
So how do those in Generation Z differ from those just older?  Comaford referred to a conversation between two researchers, one from that cohort, on the Society for Human Resource Management website, “Move Over, Millennials; Generation Z Is Here” (David Stillman and Jonah Stillman, April 11).  Among its many fascinating points are:  those from Z were largely raised by “tough-love, skeptical Gen Xers” instead of “self-esteem-building, optimistic Boomers,” making them more pragmatic and independent; they want more to “showcase (their) own individual talents” instead of collaborate; they are more competitive and entrepreneurial; they are “true digital natives,” but still prefer to talk face to face; they want to be independent, and “35% would rather share socks than an office space”; they feel lucky to have good jobs, with 76% saying they are willing to start at the bottom and work their way up and 61% willing to put in a decade or more with one employer; and, in one word, they can be described as “realistic.” 

As this generation has barely if at all reached even nominal adulthood, and, depending again on varying definitions, may still be being born, it is too early to know conclusively what it will be like.  However, Comaford, Stillman pere, and Stillman fils have given us a fine start.  Even if we only take away that generations are different and that those in Generation Z are not the same as Millennials, that will help us understand them.  Let us strive to do that, as, before we know it, there will be yet another group to deal with. 


Friday, May 5, 2017

Latent Demand for Jobs, Most from Those Not Officially Unemployed, Lowest Since Great Recession as AJSN Drops to 16.6 Million

Once again, the American employment situation exceeded its expected improvement.

Estimates called for a gain of 189,000 net new nonfarm positions, with the adjusted jobless rate worsening from 4.5% to 4.6%.  We got 211,000, and a bettering to 4.4%.  Other key numbers, while mixed, were generally also positive, with the count of those officially unemployed for 27 weeks or longer down 100,000 to 1.6 million, and the number of people working part-time for economic reasons, or wanting full-time engagement while holding on to something with fewer hours, plunging 281,000, rounding to 300,000, to 5.3 million.  The two measures showing best how common it is for Americans to have jobs, the employment-population ratio and the labor force participation rate, were split, with the former up a significant 0.1% to 60.2% and the latter down the same amount to 62.9%.  Average wages were adjusted 2 cents per hour downward for March, but even with that are up another nickel, more than inflation once again, to $26.19.  Best of all was the unadjusted employment rate falling 0.3% to a clearly prosperous 4.1%.

The measures of marginal attachment, though, did not improve.  The count of people wanting work but not looking for it over the past year, those also desiring employment but temporarily unavailable, and those with a similar view but out for ill health or disability all rose.  Those claiming no interest whatever in a job continued its steadyish rise upwards, up over 200,000 to 89,210,000.  Overall, the American Job Shortage Number, which shows in one figure how many more positions could be quickly filled if getting one were as easy as getting a pizza, was down over 600,000, as follows:



Compared with a year before, the AJSN has dropped over 700,000 from 17.3 million, completely from lower official joblessness. 

Even though times are clearly improving, we have one cause for concern.  The statuses outside official unemployment are almost all collecting more people.  A year ago, although there were 858,000 more technically jobless, there were fewer in the family responsibilities, in school or training, ill health or disability, other, and did not search for the previous year categories.  There are now 400,000 more Americans saying they do not want to work than in April 2016, some of whom would change that view if the right position came along, and the non-civilian, institutionalized, and off-the-grid total is almost 900,000 higher.  All told, if this many opportunities were created and filled, more than 64% would go to those not officially jobless.  There are still plenty of potential workers on the sidelines, and most are not getting unemployment checks.  They should not be ignored, and constitute a real social change about which organizations seeking employees should be aware.  In the meantime, the turtle, who would be surprised if he looked behind him to see how much ground he has covered over the past two years, took another clear step forward.


Friday, April 28, 2017

The Work’s New Age Blog: Five Years of The Bipartisan Pro-Jobs Truth

Hard to believe, but it’s now been half a decade.

I posted for the first time here on April 10th, 2012, with a preliminary welcome message.  Since then I have come back 262 times, or almost exactly once a week. 

My original idea was to give insight on employment in America, especially supporting the thesis, which I still hold, that the jobs crisis is permanent and will not go away with better economic times.  A few months before I had released the book of the same name, and several of the posts were taken from it.  Since then I have incorporated ideas from my follow-on volume, Choosing a Lasting Career

This blog has evolved since then.  I have moved into public policy, first on Barack Obama’s words and actions and the same with his successor Donald Trump.  I have looked at not only the specifics of what is happening with jobs here, but also in other countries.  I have written on larger changes I see, some similar to those documented in my books but some different.  Over the past year or so I have focused especially on a few fast-changing areas critical for American employment, namely driverless vehicles, robots, the sharing economy, the minimum wage, and guaranteed income.  These are where the action is, and will shape much of what happens with jobs in the next decade and beyond.  

My political views are easy to identify but hard to consolidate.  I am independent and objective, and do not seek to reinforce or validate my readers’ opinions, whatever they are.  I am classically conservative on environmentalism, minimum wages, and government intervention in general.  I am liberal on overtime laws, social services for the poor and unemployed, and drug legalization.  I am in favor of a guaranteed income, though not yet, and think gun laws should be adjusted in both directions rather than weakened or strengthened overall.  I get my news from sources on the left, center, and right and consider ideas from all of them.  I recommend that to everyone.   

My real bias is in favor of more jobs, whatever their pay and benefits, so come out against anything that works against that.  Those in favor of mandating $15 per hour or want to ensure that all employment pays “a living wage” or some such don’t seem to understand that geographic and personal differences make defining that impossible.  I find it cruel that people who would dearly like to work, even at less than legal minimums, are barred from doing that. 

Will I write more books?  Probably, though most likely not for a while.  In the meantime, my platform includes several other outlets.  One is my weekly 5-minute radio show, WORK SHIFT, on WJFF 90.5 FM in nearby Jeffersonville, New York, which comes on at 10:00am Eastern Time on Wednesday mornings.  You can also listen to its stream, at http://www.wjffradio.org/wjff/, and on podcasts at http://www.wjffradio.org/wjff/index.php?section=38.   Another is my generally monthly 50-minute talk show appearance on The 11th Hour on WRTA 1240 AM out of Altoona, Pennsylvania – this show, hosted by Doug Herendeen and the winner of two Associated Press awards, also streams, at http://player.listenlive.co/51581, with the next one scheduled for 11:05am ET on May 17th.  I maintain three Facebook pages, Work’s New Age, Choosing a Lasting Career, and AJSN, at https://www.facebook.com/pages/Works-New-Age/129923513764092,https://www.facebook.com/pages/Choosing-a-Lasting-Career/190327604467499, and https://www.facebook.com/ajsnjobs, and also send Twitter messages through @worksnewageusa, with links to #jobs and #employment.  I produce and release the AJSN, or American Job Shortage Number, which tells in one figure how many more positions could be quickly filled if getting one were easy, monthly.  All of this and more is on my website at http://choosingalastingcareer.com/.  I also send out a newsletter eight times a year with my summary of the employment situation – if you want to be on its list, email me at jhuntington@royalflushpress.com


Thank you for reading.  I will be back next week, as usual, and hope for at least five more years.   

Friday, April 21, 2017

Minimum Wage Increases: Plenty in 2017, But Fewer On the Way

On January 1 we saw a lot of states raising their lowest legal pay even further from the $7.25 federal bottom.  According to Karl Russell’s “A Higher Minimum Wage in 2017” (The New York Times, January 5), 29 states and the District of Columbia have compensation floors higher than the national, with concentrations on the Northeast and the West Coast, and 19 boosted them more, effective the beginning of the year.  Seven, with annual increases tied to inflation, lifted theirs 10 cents an hour or less, but in five – Arizona, Washington, Maine, Massachusetts, and Colorado – it jumped 99 cents or beyond.  The District’s, higher than any state at $11.50, did not change, but the top six, Massachusetts, Washington, California, Connecticut, Arizona, and Vermont, each went up 40 cents or more and are now at least $10.

However, the pace is heading for a slowdown.  Except for those indexing their minimum wages to inflation, only ten states have voted for future increases.  Of those, only California and New York, along with the District of Columbia, have committed to reaching $15 per hour.     
    
Will there be many more this year?  Three pieces published since then suggest it is unlikely.  The first, also in the New York Times, Noam Scheiber’s January 10th “Higher Minimum Wage May Have Losers,” noteworthy for appearing in a news outlet consistently in favor of raising it in the past, cited two studies, one at New York University showing that increasing minimum pay had the effect of making fewer working hours available, and one from Harvard Business School and Mathematica Policy Research concluding that such wage boosts were often followed by restaurants, especially ones rated low on the Yelp website, closing.  In this area, where controlled experiments of course cannot be conducted, all research results are controversial and unreplicable, but each study does become a data point.

The same conclusion was put forth by Forbes columnist Tim Worstall, in “Surprise, San Diego’s Minimum Wage Rise Appears To Be Killing Restaurant Jobs” (April 12th).  This author, previously and now against higher pay floors, wrote that “roughly… 50% of people in restaurants get the minimum wage and some 50% of the people who get it work in restaurants,” and cited a report that, after San Diego increased their minimum ahead of the rest of California to $11.50, 3,900 food service positions were either “lost, or never created in the first place.”  Worstall’s best point here is that higher mandated levels effect not only jobs that end but ones that would otherwise have started and didn’t.  Measuring those, though, is not easy. 

“Has the Movement to Raise the Minimum Wage Reached Its Limit?”  That question was explored by Scott Calvert and Eric Morath in The Wall Street Journal on April 6th.  They named Baltimore mayor Catherine Pugh’s veto of a proposition that would raise the minimum to $15 by 2022, which matched the end of a similar effort made in Maryland’s Montgomery County, even though it borders the already-$15-approving District of Columbia.  Pugh, though a Democrat, said that although higher pay was good, she also wished for her “city to survive” – and who should know better?  Another point here is that providing a date by which a large minimum wage increase will take effect, especially if years in the future, gives automation companies a deadline by which they can make available robots and other machines costing less than that per hour.  It also affects longer-range business plans such as opening factories, one example of which Calvert and Morath gave. 


As I have written before, my bias is in the direction of more jobs.  It remains simple economics that requiring employers to pay more than they would otherwise need to do means they will offer fewer of them.  As these authors have shown, that not only manifests itself in jobs that are discontinued, but in those that were never created in the first place.  It is too early to get much data on this year’s minimum wage increases, but it will come in – expect more here as it does.  

Friday, April 14, 2017

Five Observations on Trump, or Why We Aren’t Heading to Authoritarianism

Donald J. Trump’s surprising election to president – and again, if you don’t agree with that assessment, you should have quintupled some of your money by betting on him – scared a lot of us, and rightfully so.  Although we still need to wonder if he will push North Korea or even China too far and get us all nuked, the threat of an American totalitarian state that concerned many, including me, has faded dramatically.  Why?  To see that, consider the following.

First, a solid wall of opposition, with The New York Times and Washington Post in the middle, has formed.  These front-line publications have been emitting a steady stream of anti-Trump editorials and opinion pieces.  Many of these items are essentially pointless, decrying him for being himself or bemoaning his lack of interest in liberal-appeal issues such as climate change, but others critique his actions from his own stated standpoints, or from what they consider reasonable presidential behavior.  The writings’ overall effect is to show that nationally-respected commentators are watching, documenting, and freely disapproving of what he does.  There was nothing similar at all in 1933 Germany.

Second, Trump is consistently coming off not as evil but as incompetent.  He, as expected, shows no inclination or even ability to negotiate with his political opposition.  He is not assembling any sort of authoritarian government, or even a full government at all, with the number of appointments he has made being far smaller than that from even his most anti-bureaucracy predecessors. 

Third, as shown by his failure to repeal Obamacare, our federal checks and balances are still working effectively.  In the House and Senate he has enough opposition within his own party, let alone from Democrats, to stop him from dictating anything which would consolidate power into the executive branch.  The addition of Neil Gorsuch means only that the Supreme Court is ideologically similar to what it was before the vacancy he filled materialized, when it was hardly a source of fascist legal interpretations.

Fourth, Trump is lacking in solid allies.  Although he has done some things which should please true conservatives, such as approving the Keystone pipeline, his previous hostility toward them has made those in Congress at most temporarily on his side.  Among constituents, though surveys show he has lost only a small percentage of his supporters, he is gaining even fewer.  It is possible that, during his first term, he will reach a point where he will be able to rely on nobody, with the Goering, Himmler, and Goebbels equivalents nowhere to be seen.


Fifth, with all that said, the outcome of Trump’s time in office is still very much unknown.  We know remarkably little about which ideological segment will benefit most from his failures in the 2018 and 2020 elections.  His current scandals, especially given a Republican-dominated legislature, do not project to be nearly sufficient for impeachment, yet the Predictwise site gives him a 49% chance of being out of office before 2020, and, at sportsbook.ag, you can win $10 for every $18.50 you wager that he will complete four full years.  The latter site gives the same odds for a Republican or a Democrat to win the next presidential contest, with the most likely individual winner, after Trump, being Democrat Elizabeth Warren, at 8 to 1 against.  That’s all we know – stay tuned, as that could change suddenly… and unpredictably.                  

Friday, April 7, 2017

AJSN (American Job Shortage Number): We’re Now 17.2 Million Positions Short, After Good Federal Employment Report

This morning the headline jobs number came in much worse than expected.  Far from a projection of 180,000, there were only 98,000 net new nonfarm positions created in March.  But don’t let that fool you.

Almost everything else improved, starting with stunning drops in the official unemployment rates.  The one you hear about the most, seasonally adjusted, did not stay at 4.7% as some expected but fell to 4.5%.  The unadjusted figure, higher since in March fewer people are working than in an average month, plunged even more, from 4.9% to 4.6%. 

The other results were consistently favorable.  The count of long-term unemployed, or people officially jobless and out for 27 weeks or longer, was off 100,000 to 1.7 million.  The tally of those working part-time for economic reasons, or unsuccessfully seeking full-time work while maintaining shorter-hours employment, also dropped 100,000, reaching 5.6 million.  Average private nonfarm wages were up a nickel an hour to $26.14, nothing trivial when inflation is less.  While the labor force participation rate stayed at a strong-by-recent-standards 63.0%, the employment to population ratio, helped by lower joblessness, ticked up 0.1% to 60.1%. 

The American Job Shortage Number or AJSN, which shows latent demand for work, or how many more American positions could be filled if getting one were known to be easy and routine, dropped a surprising 647,000, with the categories of marginal attachment adding 105,000 to the effect of reduced official joblessness, as follows:


 Compared with a year before, an important evaluation since the AJSN is not seasonally adjusted, the metric is down 584,000, with lower unemployment partially offset by a substantial increase in the count of those reporting interest in work but not having looked for it for at least a year. 


The net new jobs disappointment, and its failure to match those needed for population increase, notwithstanding, March was clearly a positive month.  With room to spare in February’s 235,000 gain, the data gives no signs of a correction, and already excellent figures such as the unemployment rates are still improving.  The share of latent demand coming from official joblessness is now only 38%, meaning that there is too much unfulfilled general interest in work for the economy to be as robust as that 4.5% would indicate.  Yet the turtle, once again, did take a step forward.