Friday, September 19, 2014

Reuters on Yesterday’s Employment-Related Data: Too Rosy


Yesterday, a report with commentary on jobless claims and residential building was published in The New York Times and elsewhere.  Titled “Housing Data Is Mixed, but Job Figures Show Strength,” with a byline only of Reuters, it showed how such data can be misunderstood.  What do I mean?   Going through the article…

“The number of Americans filing new claims for unemployment benefits fell more than expected last week, suggesting that a sharp slowdown in job growth last month was probably an aberration.”

We can’t reasonably assess the robustness of new job growth through how many people are officially dismissed from old ones, have reasonable grounds to get unemployment compensation, and are not retiring or leaving by their own choice.  Reuters is hardly the only source to do that, but it still just doesn’t make sense. 

“While other data on Thursday showed that housing starts declined in August, upward revisions for groundbreaking in July offered hope that the housing market was continuing to improve.  “We have broad-based growth in the economy, including the housing market,” said Gus Faucher, senior economist at PNC Financial Services Group.”

Fine, but a country of 318 million people and rising, when demonstrably not in a recession, had darn well better have “broad-based growth.”  The issue is whether the level of said growth is a sign of strength, or whether it is just at a neutral point. 

“Initial claims for state unemployment benefits dropped 36,000 to a seasonally adjusted 280,000 for the week ended Sept. 13, the lowest level since July, the Labor Department said Thursday.”

The lowest level since July?  That’s two months!  So what?

“Economists polled by Reuters had forecast claims falling to only 305,000 last week. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, slipped 4,750, to 299,500.”

That’s not much of a difference – less than 2%. 

““This is consistent with that the Federal Reserve is expecting to see,” Mr. Faucher said of the data.”

So it seems Mr. Faucher wasn’t impressed at all, in effect giving this data a grade of C.  The tone of the article is more positive than that.    

“The data came a day after the Federal Reserve renewed a pledge to keep interest rates near zero for a “considerable time,” while hinting at a faster pace of rate increases than the central bank was signaling a few months ago.”

Keep them low they should and keep them low they will.  Janet Yellen clearly seems to realize, correctly, that the unemployment rate is not the only story.  If she is not aware of the American Job Shortage Number (AJSN) showing the country could quickly absorb almost 20 million more positions, she seems to act as if she is.   

“In a separate report, the Commerce Department said housing starts fell 14.4 percent to a seasonally adjusted annual pace of 956,000 units.  July’s starts were revised to show a 1.12-million unit rate, the highest level since November 2007, instead of the previously reported 1.09-million unit rate.”

A tad better, but that’s all.  Most of that is due to pent-up demand, as housing starts have been poor for years. 

“That helped take some of the sting out of the report, which also showed that permits fell 5.6 percent, to a 998,000-unit pace in August.  Single-family starts in the South, where about half of the single-family construction takes place, increased last month to an eight-month high.  Permits in the South hit their highest level since April 2008.”

Some better, some worse.  The only other major reason for any improvement in housing may be more subprime loans, as the Times also reported this past week. 

“Housing is clawing back after a setback caused by a rise in mortgage rates last year.  However, it remains constrained by a relatively high unemployment rate and stringent lending practices by financial institutions.”

And fundamentally greater job insecurity, with the permanent crisis as the root cause. 

“With the labor market gaining traction, though, economists expect housing activity to accelerate next year.  “The underlying momentum in the housing sector remains quite favorable and we expect building activity to rebound next month,” said Millan Mulraine, deputy chief economist at TD Securities in New York.”

Rebound to what?  Accelerate how much?  There is no substantial good news, other than the prospect of continuing to inch forward, on the American employment front now. 

“Last week’s jobless claims data covered the period during which employers were surveyed for September’s nonfarm payrolls.  Claims fell 19,000 between the August and September survey periods.  The drop suggested that payroll growth rebounded from August’s eight-month low, which most economists dismissed as a fluke, noting that payroll gains tended to be smaller in August because of problems adjusting the data for seasonal hiring.”

As this data is already seasonally adjusted, that looks like bending the map to me.  And it doesn’t matter much anyway – whether 140,000 net new jobs gained or 240,000, it still projects to close to a decade to get to what anyone could reasonably call full employment. 

“Employers added only 142,000 jobs to their payrolls in August, snapping six consecutive months of job increases above 200,000.  The jobless claims report showed that the number of people still receiving benefits after an initial week of aid fell 63,000, to 2.43 million, in the week to Sept. 6.”

Actually, the number of people using up their unemployment benefits but not working would be a good indicator, with higher numbers being bad.  That points to August being not a good month, and once more the jobs crisis going nowhere.  And nothing – nothing at all – in this report contradicts that at all.   So being positive about this incremental and mixed data is a disservice.  That’s just the opposite of what we need now.

Friday, September 12, 2014

Guaranteed Government Jobs: A Fourth Possible Jobs Crisis Solution?


An article came out in Salon last week advocating a new, rather large social program.  Its author Bryan Williams showed some advantages of the United States federal government providing jobs, with pay about $30,000 per year, for everyone officially unemployed. 

Such an effort would be expensive.  Williams multiplied $30,000 by 9.8 million unemployed to get $294 billion annually, but when the cost of benefits, and expenses putting these people into work settings of some sort, are added, it would be more like $500 billion.  Some of that, immediately, would be saved from other programs – the author estimated $28 billion less in unemployment benefits, $49 billion less in Medicaid, and “billions” from food stamps.  As well, $25 billion per year would be collected from the workers in payroll taxes.  By comparison, the remaining amount, about $390 billion, is well under 2013’s $585 billion Medicare cost. 

Clearly, with the jobs crisis permanent, such a program is worthy of consideration.  What are its other good and bad points?

Another advantage would be the stimulus effect of putting more money in the hands of people who may not have much.  It’s almost impossible to quantify how much that would be, but, clearly, when formerly unemployed people buy things they wouldn’t have bought before, those who sell them gain income as well, meaning even more spending and even more taxes collected.  In poorer areas in particular, not only current businesses would be helped but new ones would appear to deal with the increased demand.  We do not need to debate exact or even approximate amounts, only to realize they would be real and substantial.

A second good thing about an automatic employment program is that it would get necessary tasks  done, in particular infrastructure work.  A recent estimate claimed the country now needs $3.6 trillion of that by 2020 alone, and no other program to greatly step up its activity has even been seriously proposed.  The effort could potentially cover almost all of the infrastructure labor needed, with room left over to do many other constructive things. 

How about the downside?  Three problems come to mind.

First, assured government jobs would damage incentive for people to work at other positions much more than either a guaranteed income or the current safety net.  Giving people, say, $10,000 per year just for being American citizens would take some off the working rolls, but the bulk would still want to have cars, meals out, good private houses, and other things such a stipend would not cover.  If people knew they would always be employed, though, they would often care less about keeping their existing jobs, and quality and quantity of work would suffer across the country.  The same problem would happen with the government positions themselves.  As well, if everyone unemployed were assured of working for $30,000 per year, many would find ways of losing their lower-paying positions.  Both practices would be seriously destructive.     

Second, such a program would overemphasize official unemployment.  The latest American Job Shortage Number (AJSN) shows a national deficit of 19.6 million jobs, of which only an estimated 8.8 million would be filled by the country’s technically jobless.  The proposed effort would provide nothing for people in other categories who would work if the opportunities were truly there:  700,000 of the 775,000 discouraged; 2.9 million of the 3.6 million who did not look in the previous year; 1.1 million or one-tenth of those institutionalized, in the military, and off the grid; and even 4.2 million representing only 5% of those claiming no interest whatever in jobs.  Those people, more willing to work than many think, arguably need such a program more than many whose skills are fresher and contacts more current.

Third, a guaranteed jobs effort would be very hard to manage.  Dealing with the highly variable numbers of people needing it, assigning them to workplaces, anticipating how many could be used where, and handling those suddenly leaving would mean a lot of inefficiency, and a lot of $600 weeks for no work all.  Especially given that it would take years to develop and implement the logistics of assigning people, there would be chaos for quite a while.  

So how much promise does assured federal jobs have?  It could be an improvement over long-term falling employment, but would need changes to be truly good, which could make it even more gigantic and unwieldy.  The stimulus effect, as well, could be offset by what could become an effective $15 per hour minimum wage, as most jobs paying less would be quickly vacated in favor of government opportunities.  There would also be temptations to go further with the program, as those on the left would not only lose little time in labeling jobs there as holding a stigma, but would push to make them pay closer to what they considered a living wage. 

Therefore, while the idea of guaranteed government jobs has some appeal, it would not be the right way to go.  Full marks to Bryan Williams, though, for presenting it – with a crisis this profound, we need more people doing just what he did.  His idea, as flawed as it is, gets a place with three other possibilities:  guaranteed income, shorter work hours, and payments for online contributions.  We need more. 

Friday, September 5, 2014

AJSN Down as USA Now 19.6 Million Jobs Short on Dull August Jobs Report


The new Employment Situation Summary is out – and it’s small wonder that there was little eager anticipation of what it would contain.  Nothing happened.

Official seasonally adjusted unemployment moved to 6.1% from 6.2%, going back to where it was the month before.  The same happened with the labor force participation rate, which returned to 62.8%.  There were 142,000 more jobs in August, again seasonally adjusted, than in July, a smaller gain than in previous months but still more than were absorbed by the population increase. 

The best news was on long-term unemployed and those working part-time for economic reasons.  Both declined, from 3.2 to 3.0 million jobless for 27 weeks or longer and from 7.5 to 7.3 million with work and wanting but not finding full-time hours.  The employment to population ratio held at 59.0%.

The largest components of the American Job Shortage Number (AJSN) generally improved.  The total number of unemployed, as with all of the figures in this section not seasonally adjusted, fell more than 500,000 to just under 9.8 million.  About 150,000 fewer reported they wanted work but had not looked for it for at least a year, and now add up to about 3.6 million.  After those, August’s results were mixed, with the two largest categories of people away from the labor force well up, including almost 1.6 million more Americans saying they did not want a job at all, and the total of those in the armed forces, institutionalized, and off the grid or otherwise unaccounted for up a high 1.3 million.  Overall, the AJSN’s drop of 378,000 adds up this way:


               

In the past year the AJSN has fallen 1.3 million.  In August 2013, there were about 1.7 million more officially unemployed, but 1.7 million fewer reporting no interest at all in a job, and over 200,000 fewer wanting work but not having looked for it for a year or more. 

So, not much change anywhere here.  The improvements in long-term jobless and part-time for economic reasons could be the start of something good, but they look like fluctuations within their ranges for now.  The same thing goes in the other direction for the higher count of people saying they did not want to work.  Otherwise, we couldn’t ask for a more neutral jobs report. 

One thing stood out, though.  Curiously, those unaccounted for jumped in August last year as well – perhaps there’s something about summer weather that makes people disappear for a while.  We’ll see if they come back this month, when the new federal jobs data, and the new AJSN, are released October 1.    

Friday, August 29, 2014

How Can We Be "Found" in America? An Imaginary Conversation with Frank Bruni


Frank Bruni (this and everything below from “Lost in America,” The New York Times, August 25, 2014):  More and more I’m convinced that America right now isn’t a country dealing with a mere dip in its mood and might. It’s a country surrendering to a new identity and era, in which optimism is quaint and the frontier anything but endless.

James B. Huntington:  Yes, the country is in a new era.  It is called Work’s New Age, in which the number of jobs will never again match the number of people who want them.  Actually it’s been going on for a long time, but it’s become obvious only since the Great Recession.  Being unsure you, your loved ones, your friends, and even your countrymen can’t always support themselves, something which Americans knew and counted on since before George Washington was born, makes for persistent pessimism.  

FB:  There’s a feeling of helplessness that makes the political horizon, including the coming midterm elections, especially unpredictable. Conventional wisdom has seldom been so useless, because pessimism in this country isn’t usually this durable or profound.

JH:  Helpless is the word, especially when there isn’t a presidential candidate, or even a House or Senate one I am aware of, who is clearly and forthrightly addressing the jobs crisis.  A few passable employment reports are all it takes, it seems, to put any hints of this great transition on the major media’s back burner.

FB:  Americans are apprehensive about where they are and even more so about where they’re going. But they don’t see anything or anyone to lead them into the light. They’re sour on the president, on the Democratic Party and on Republicans most of all. They’re hungry for hope but don’t spot it on the menu. Where that tension leaves us is anybody’s guess.

JH:  We have a president who sometimes seems to be spread too thin, with too many top priorities, and sometimes seems to be disengaging from everything.  The Democrats have been going for the wrong issues:  gun control, climate change, massive and broad-brush immigration reform, and insinuations that a suburban cop who shot someone he claims was threatening his life embodies the collective thoughts of America’s 280 million non-blacks.  Republicans are continuing to act like the child on the toilet who refuses to do anything, and are deluding themselves that they are getting more and more mass appeal, when Sportsbook.com, which puts their money where their pixels are, says their chances of winning the presidency in 2016 are 17 to 10 against.  Congress’s approval rating might be lower than Hitler’s.  What on earth is to like?

FB:  Much of this was chillingly captured by a Wall Street Journal/NBC News poll from early August that got lost somewhat amid the recent deluge of awful news but deserved closer attention.  It included the jolting finding that 76 percent of Americans ages 18 and older weren’t confident that their children’s generation would fare better than their own. That’s a blunt repudiation of the very idea of America, of what the “land of opportunity” is supposed to be about. For most voters, the national narrative is no longer plausible.

JH:  That’s exactly what we’re going through now.  Billy Joel wrote in 1981 that people expected to do as well as their fathers, when before it had always been “better.”  Since then that has got worse, backed up by most people’s lives.  When I get a Milwaukee airport porter telling me in the 2000s, before the recession, that the 1970s were “the good times,” that means we aren’t moving forward, even if our phones are slicker and our computers faster.  I wasn’t kidding when I put in large letters on the back of Work’s New Age, three years ago, that “the core American idea has been destroyed.”      

FB:  The poll also showed that 71 percent thought that the country was on the wrong track. While that represents a spike, it also affirms a negative mind-set that’s been fixed for a scarily long time. As the Democratic strategist Doug Sosnik has repeatedly noted, more Americans have been saying “wrong track” than “right track” for at least a decade now, and something’s got to give.

JH:  Nobody can get to 71% without large numbers of both conservatives and liberals, so it’s safe to say that neither side is happy.  But what has to “give,” and when, and why?  The problem we have is that the status quo always seems to roll on. 

FB:  But to what or whom can Americans turn?  In the most recent of Sosnik’s periodic assessments of the electorate, published in Politico last month, he wrote: “It is difficult to overstate the depth of the anger and alienation that a majority of all Americans feel toward the federal government.” He cited a Gallup poll in late June that showed that Americans’ faith in each of the three branches had dropped to what he called “near record lows,” with only 30 percent expressing confidence in the Supreme Court, 29 percent in the presidency and 7 percent in Congress.

JH:  Again, these are bipartisan numbers.  The government is managing to be both too intrusive and too inactive.  If those 70%, 71%, and 93% (!) could agree on anything else, there’d be a revolution, but they don’t, so there won’t be.

FB:  The intensity of Americans’ disgust with Congress came through in another recent poll, by ABC News and The Washington Post. Typically, Americans lambaste the institution as a whole but make an exception for the politician representing their district. But in this poll, for the first time in the 25 years that ABC and The Post had been asking the question, a majority of respondents — 51 percent — said that they disapproved even of the job that their own House member was doing.

JH:  One reason is that representatives aren’t so bad with local issues, but stink on ice with the national ones.  So we get the local parks, land use laws, and balanced county budgets, while we can’t find jobs, are held back by byzantine business regulations, and bumble around in our relations with other countries.  Ted Kennedy, whatever you think of his politics, was about the best senator ever for his constituents – if you had a problem with government, on anything from poor trash collection to getting already-paid bills from the IRS, you called his office and they fixed it.  If it isn’t quite true that all politics is local, as Tip O’Neill used to say, Americans sure seem to believe it – and vote that way.   

FB:  So we can expect to see a huge turnover in Congress after the midterms, right?  That’s a rhetorical question, and a joke. Congress wasn’t in any great favor in 2012, and 90 percent of the House members and 91 percent of the senators who sought re-election won it. The tyranny of money, patronage, name recognition and gerrymandering in American politics guaranteed as much. Small wonder that 79 percent of Americans indicated dissatisfaction with the system in the Journal/NBC poll.

JH:  And those numbers are actually down!  Once was 98%, for House incumbents anyway.  It’s no surprise, then, that the URL www.throwthebumsout.org is still unassigned.    

FB:  Conventional wisdom says that President Obama’s anemic approval ratings will haunt Democrats. But it doesn’t take into account how effectively some Republicans continue to sully their party’s image. It doesn’t factor in how broadly Americans’ disapproval spreads out.

JH:  We still have the two-party system, where if we don’t like the show on one TV channel we just switch to the other.  It’s not enough to say the Democrats will lose since they have done so badly, without considering what’s on the other station.   

FB:  Conventional wisdom says that better unemployment and job-creation numbers could save Democrats. But many Americans aren’t feeling those improvements. When asked in the Journal/NBC poll if the country was in a recession — which it’s not — 49 percent of respondents said yes, while 46 percent said no.

JH:  Absolutely correct.  We have not been in a recession since 2009.  It feels so much like one because of the permanent jobs crisis, and the 20 million more American jobs which could be quickly absorbed.  The worse news is that when we get a real recession, we will look back on 2010 to 2014 as good times – which they, in a relative sense, truly are. 

FB:  The new jobs don’t feel as sturdy as the old ones. It takes more hours to make the same money or support the same lifestyle. Students amass debt. Upward mobility increasingly seems a mirage, a myth.

JH:  We don’t need to “feel” that the positions now are weaker – the data is there.  One-third of new jobs since 2009 have been with temporary help agencies.  American student debt is now over $1 trillion and blew by total credit card debt last year.     

FB:  “People are mad at Democrats,” John Hickenlooper, the Democratic governor of Colorado, told me. “But they’re certainly not happy with Republicans. They’re mad at everything.” That’s coming from the leader of a state whose unemployment rate is down to 5.3 percent.

JH:  That’s just the point, and Colorado certainly has both, along with a shortage of about 200,000 jobs, lowish official unemployment or not. 

FB:  And it suggests that this isn’t just about the economy. It’s about fear. It’s about impotence. We can’t calm the world in the way we’d like to, can’t find common ground and peace at home, can’t pass needed laws, can’t build necessary infrastructure, can’t, can’t, can’t.

JH:  Not many public issues can evoke fear and impotence as much as being unsure if you can get another job if you lose your current one.  And as long as Democrats continue to pursue their most partisan issues, and Republicans refuse to go along with even inherently conservative Democratic proposals, large numbers of people will maintain those feelings.

FB:  In the Journal/NBC poll, 60 percent of Americans said that we were a nation in decline. How sad. Sadder still was this: Nowhere in the survey was there any indication that they saw a method or a messenger poised to arrest it.

JH:  That’s what politicians are supposed to do.  Authors, bloggers, and columnists can yack forever about what should be done, so there is no shortage of ideas, even neutral or centrist ones, but that is not enough.  It’s too optimistic to ask for much along those lines from the fall elections, but it’s not excessive to expect at least one 2016 major-party presidential candidate to advocate some real bipartisan action and changes, by throwing off extreme beholdenness to their political base.  In many ways, such as technological progress, life expectancy, and, yes, personal safety, America is not declining at all, just governmentally tied up in knots.  In the meantime, the jobs crisis, as long as it is not addressed in ways both parties can live with, will assure plenty of long-lasting malaise.       

Friday, August 22, 2014

How Careers Stack Up for the Next 20 Years


Last year, I published Choosing a Lasting Career, a book designed to fill the gap between those with occupational personality assessments, such as What Color Is Your Parachute?, and sources on the tactics of getting hired, such as Sweaty Palms.  My thesis was that in order to determine the best careers, we needed to consider not only personal factors such as how much time they would leave for our outside activities, but objective ones such as how resilient they would be in the face of such growing factors as replacement by robots and foreigners. 

The conclusions, at times, were stunning.  While published lists of the most desirable jobs emphasized those with strong current demand, I took a longer view.  In 2033, most recent graduates of college, not to mention high school, will have over 20 years remaining before they turn 65, so the long-term viability of the fields they choose will be critical.  Some careers, such as pharmacy, are doing well now, but, considering the trends toward globalization, automation, and efficiency, along with likely technological improvements and social developments, are almost certain to have vastly smaller demand.  On the other hand, health care aides, while generally low paid, promise to be around for a long time, and also have high rankings on other factors I considered.

In Choosing a Lasting Career, I rated 506 different jobs on seven different factors.  They were local boundness (the chance of a job needing to be done from the same immediate area in 2033), resistance to robotics improvements, resistance to computing and connectivity improvements, the prospects for it paying a good living wage, median pay level, overall quality of working conditions, and compatibility with family life and outside projects.  Assessments on the last four of these I documented and compared but left mostly at that, as they are personal matters.  One man may welcome working with his hands outdoors, while another would prefer to be in an air-conditioned office, and neither is objectively correct.  The first three factors, which are good or bad for everyone regardless of what they want from a job, were incorporated into ratings for each position of Excellent, Very Good, Good, Fair, and Poor. 

Using these evaluations, I assembled average scores for each of what the United States Department of Labor terms “occupation groups.”  On a scale from 1 to 5, with 1 meaning all jobs in the occupation group were scored at Poor, and 5 indicating all were Excellent, the 25 groups came out as follows:

         

Those in the process of determining what career they want to have, or soon to get there, should be aware of several things in particular.

First, the categories of Community and Social Service and Healthcare, though far from consistently excellent, are the standouts for lasting through 2033.  Both benefit from needing to be done in person, with little prospect for replacement by robots or computer systems, along with aging and disadvantaged populations guaranteed to continue needing their efforts.  In Community and Social Service, one of ten specific jobs came out as Excellent (mental health counselors and marriage and family therapists), and ten of 48 in Healthcare achieved the same (audiologists; cardiovascular technologists and technicians and vascular technologists; EMTs and paramedics; home health and personal care aides; massage therapists; nursing aides, orderlies, and attendants; occupational therapists; occupational therapy assistants and aides;  physical therapist assistants and aides; and physician assistants).  By comparison, only eight of the 448 jobs in the other 23 groups achieved that ranking. 

Second, some generally humble fields will be around long after current ones are devastated.  People working in Building and Grounds Cleaning, Personal Care and Service, and Food Preparation and Serving may not be paid well (though, if they become managers or business owners, may well be), but they will be in solid demand for the next 19 years.  Those who think money less of a factor should consider something here.

Third, Computer and Information Technology, regardless of its current flourishing, is in big long-term trouble.  The main problem that will savage this field for Americans is that few people in this area need to be that.  Indians and Russians, especially, already often have the background and skills to succeed at these positions at far lower pay, and it only remains for companies to realize that before putting together entire teams of technicians, most paid less than average corporate secretaries, elsewhere. 

Fourth, while construction, extraction, and production are often considered together, and indeed two of them still are by the Department of Labor, they have completely different long-term prospects.  Jobs in production and extraction look poor long-term, especially because of the threat from robotics and other technology, but construction will flourish, especially in relatively good economic times.  There is a vast difference between the enduring employability of dry-wall specialists, who can count on many things being built that require their skills, and good, experienced manufacturers of almost anything.

Fifth, the same goes for jobs in the sciences, which are generally promising especially in private industry, and positions in mathematics, which suffer from the same problem as those in computer technology.  Math is the same all over the world, and Americans have no monopoly on education in it. 

Sixth, notice the low rankings for Office and Administrative Support, Production, and Military.  During the postwar years, these fields had close to half of American jobs.  Now, all three are in terrible shape.  Keep that in mind when wondering if demand for people in careers can actually go away.

Watch this blog for more posts about the prospects for future careers.  In the meantime, Choosing a Lasting Career is available, among other places, on Amazon and Barnes & Noble.