Friday, December 27, 2013

Christmas Presents for New Yorkers: Casino Jobs

One or two full-service casinos will be opening in the Catskills, with the remaining two or three in the Albany or Saratoga area and near Binghamton.  Licenses will be granted in the middle of 2014, and the businesses will open over the next two years.  Current contenders include two in Monticello, two in Liberty, one in Rock Hill, and one in Ellenville.  What jobs will they have?

Casino-hotels typically have about one full-time employee per guest room.  That means locations in Sullivan County and nearby will need about 200 or 400 workers.  All will be local, and most will be recruited from area residents.

Casino resort jobs can be divided into two groups – those connected with the gambling operations, and those with other functions.  Gaming managers can expect to earn $45,000 to $95,000 per year.  Dealers, at blackjack, craps, roulette, poker, and other table games, are usually paid the minimum wage plus health insurance and other benefits – the tips they receive put them solidly in the middle class.  Slot machine attendants are paid similarly.  Pit bosses, who supervise groups of gambling tables, can expect to earn around $50,000.  Cage workers and their supervisors are needed to buy and sell chips from players, and sports books, which take wagers on football, basketball, baseball games and more, require people to set the odds and handle bets.  A large number of security guards, generally getting around $30,000 per year, will also be hired, along with their higher-paid supervisors. 

The Catskills casinos will need many more workers than these.  Each will have several restaurants with chefs, cooks, bussers, and waitstaff.  They will also need bartenders, not only at up-front locations but at service bars from which players’ drinks are prepared.  These jobs will typically pay as much as they would in other settings, and many will have opportunities for tips, which are often very large; for example, Las Vegas cocktail waitresses, though paid only the minimum by their employers, often earn over $150,000 per year.  In addition, a full hotel staff, ranging from front-desk workers and housekeepers to managers, will be required.  Almost all casino-hotel jobs have two advantages:  first, employers tend to promote people quickly and from within; and second, work skills can easily be transferred to other gambling locations.      

What does it take to get these positions?  Related experience is highly valued, but not always necessary.  The casinos will be looking for people good at communication, customer service, and arithmetic, and willing to work at unusual times.  When the licenses are granted, a variety of community and technical schools will partner with management to offer courses, focused on getting students hired, on dealing and other skills. 

Will you have a good, new career before the next presidential election?  That is quite possible, if you have the interest, abilities, and competence for a casino job.  

Friday, December 20, 2013

Rand Paul, Just Another Social Conservative, Would Do a Job on American Workers

In the 1988 primaries, I supported Ron Paul.  He came up from Texas with fresh ideas, including an end to American military involvement in Iraq and Afghanistan, an eventual return to the gold standard, legalization of marijuana and other recreational drugs, outright dissolution of several large federal departments, and much more.   I had voted for Libertarian Party presidential candidates Ed Clark in 1980 and Harry Browne in 2000, and this author and obstetrician seemed to represent a unique opportunity, one with those beliefs who had a chance with a major party.  Perhaps what I liked best about Ron Paul was that he seemed to say what he thought was right, regardless of whom he might offend or whatever other Republicans seemed to think of him. 

Alas, he never won a primary.  He did get national attention as a serious member of the field, and rose, anyway, to the point where national columnists mentioned him.  The two references I remember were someone writing that he was the only candidate who seemed completely consistent, and another saying that Paul apparently wished that all financial transactions be carried out in pieces of eight.  Maybe not such a bad thing, I thought later that year, when the stock market crashed and paper net worth dropped trillions seemingly overnight.  So Ron Paul had made his mark.

Soon after that campaign ended, he made it clear that he, well into his seventies, would not be seeking the presidency again.  He did, however, have someone to pass his legacy on to – his second-oldest son.  Rand Paul, named of course after matron saint of libertarianism Ayn Rand, was himself a physician, and became a United States Senator from Kentucky two years later.   Only 47, he had plenty of time to take on the mantle of a good cause.  I shared the hope that someday I would want to support him as I had his father.

Unfortunately, it hasn’t worked out that way. 

Now, three years from his senatorial election, I know Rand Paul best from two comments he made.  The first was when states began sanctioning same-sex marriage, and he said that if that became law, next would be people marrying non-human animals.  Earlier this month, he laid an even larger egg.  He said that lengthening unemployment benefits would be a “disservice” to those out of work for more than six months, that such payments would be “causing them to become part of this perpetual unemployed group in our economy.” 

Now for the facts.  There are now 4.1 million Americans jobless and still looking for work for 27 weeks or more.  Although the unemployment rate has improved greatly over the past several years, the American Job Shortage Number is down below 20 million, and secondary employment measures have fallen also, that 4.1 million hasn’t budged.  That means more people than live in the cities of Chicago and Milwaukee combined lost their jobs in June or earlier, and ever since have kept plugging – reading who knows how many job ads, probably making innumerable phone calls, and applying for large numbers of positions – and have got nowhere. 

Rand Paul, apparently, thinks they keep doing these things insincerely.  But the anecdotal stories would amaze anyone steadily employed for a long time, with literally thousands of applications filled out.  These people are in all kinds of careers, blue-collar as well as professional, and, despite what must be serious discouragement, they keep looking.  Millions more have left the labor force, contributing to a participation rate lower than at any time since the Carter administration.   Sure, some would prefer to draw their average of $300 per week instead of actually doing paid labor, but study after study shows most would rather get back in the game, and the laws say anyway that someone who refuses an offer to work gets no benefits that week. 

Libertarianism, a brilliant concept, may have passed its moment.  In the 1990s, a healthy looking young man tried to panhandle from me in the streets of Orlando.  After he was out of earshot, I said to my companions “Get an expletive deleted job!  There’s three percent unemployment!”  I stand with that opinion – for that time and place.  He could easily have been hired at, if nowhere else, a restaurant where he would have received not only enough money to live on but free food.  Yet markets only work when people have something to trade, and if all they can offer is their labor, they need protection of some sort when that turns out to have no value. 

What I dislike most about the younger Paul is not that he is a disappointment.   It is that he did not inherit his father’s open views.  When he made his same-sex marriage comments, against common sense as well as on the wrong side of history, he was playing to Republican voters.  I don’t know if he really believes 4.1 million long-term unemployed Americans, many with job-searching histories few as consistently privileged as him have ever approached, are moochers, but what he said must have sounded good to many of the nation’s Republicans. 

Rand Paul is almost certain to run for president, in 2020 if not in 2016.  Support him if you see fit, but don’t be fooled.  Factoring in his view on abortion, which he thinks should be illegal in all cases, he is not the libertarian he calls himself.  He is not his father either.  And that is not a good thing.      

Friday, December 13, 2013

Six Points Against a Higher Minimum Wage

Over the past few weeks, the most press related to jobs has gone to the effort by fast-food workers to be paid much more, usually $15 per hour.  It seems like an easy thing to sympathize with – they work hard, are often educated and skilled beyond what they do, and the companies named are immense and lucrative.  The workers are not unionized, seem to have little legal representation, and number in the millions nationwide.  Their push for more money seems to symbolize rebellion against the worsening of jobs all over the country, and many have maintained that if we could only pay them “a living wage,” such positions would become much better and a lot of poverty would end.

It is true that there would be some good things resulting from a higher minimum.  The bad things, however, are more substantial.  I count six reasons why the minimum wage should not be increased.

First, not every low-paying job is with a large and very profitable company.  When I read about workers dissatisfied with their low pay, they always seem to work at Wal-Mart, McDonalds, Burger King, or the like, never at the corner grocery store that’s having trouble paying its bills, the new small venture where the owner is joined by one or two $7.25-per-hour helpers, or in the back of a small town’s only restaurant.   In reality, most low-paid employees work for places you’ve never heard of, many of which simply can’t, from a practical business standpoint, give them anything like $15 per hour.

Second, the country is over 19 million jobs short, and forcibly raising pay for many will make that number higher.  I don’t know the exact effect minimum wage raises have had in the past, and I’m not sure anyone conclusively does – the data doesn’t always agree, and it has become politicized.  I don’t need to know, though, whether this proposed 106% increase would cut 5% or 50% of jobs now paying, say, $10 per hour or less, or how much of the effect would be immediate and how much would be spread out over years through attrition, decisions not to grow, and business failures from needing to set prices too high.  I see it as common sense that some number of jobs would go away, a number extremely likely to be substantial. 

Third, demand for even low-paying jobs is great as it is, and making it higher – possibly much higher – will not help anyone.  Even in the last decade’s good times, a Wal-Mart opening near Chicago got 25,000 applications for its 350 supposedly reviled jobs.  When workers needed are too scarce, businesses will generally offer more money anyway, so the effect of a higher minimum would consistently be to force owners to pay more than the market requires.  As before, that may not cause damage if they are unusually profitable, but otherwise it is in effect an extra tax on employers – not what we want when jobs are as scarce as they are. 

Fourth, for many Americans the largest inequality is not between those being paid at or near the minimum wage and others working for more – it is between employed people and those without jobs at all.  To name just one statistic, over 10 million are officially jobless.  Many of them would be delighted to have any offer, even if for less than $15 per hour.  By adding to the ranks of those who have no way to legally support themselves, we would create an even larger gulf within our country.

Fifth, the number of those a higher minimum would actually move out of poverty would be remarkably small.  Twenty-four percent of those at the minimum wage are teenagers, and over 20% more are in their twenties.  Most Americans of those ages are living with employed parents.  Many are also in areas where the cost of living is too high for $15 per hour to allow them to be truly self-supporting, even if, unlike many at food and service positions, they work 40-hour weeks. 

Sixth, forcing the lowest pay rate much higher, even if not the more than doubling the protesters are requesting, would disproportionately hurt businesses in less prosperous areas of the country.  Although many low-paid fast-food workers are in large cities, those in less populated areas, where the cost of living is much lower, would not be allowed to work for less.  There are many American towns and counties where most employees, even those we don’t think of as in the same boat as fast-food workers, earn less than $30,000 per year, and aren’t broke either.  Police officers, teachers, and a variety of office workers, for example, often start under that amount, and with many houses available for, believe it or not, $50,000 or less, they often have no real financial trouble.  If their jobs go away, it would be an unmitigated loss for the higher minimum wage.       

How about other ways of helping those with low income?  There have also been public controversies about unemployment benefits and food stamps.  In those cases, the liberals are right.  When we are maintaining 4.1 million out of work for 27 weeks or more, there is no excuse for not extending those payments to 39 weeks or, preferably, 52, nationwide.  Likewise, food stamps, seldom abusable when delivered through ATM-style cards and redeemed only when identification is presented, only assure that Americans can eat;  while they need not be designed to provide more than the basics, there should never be a question that people who need them should have them.  Yet the minimum wage is not the same thing.  People working can survive.  Confusing them with those not assured of either is destructive.  And if their jobs would go away due to simple business decisions caused by forced higher pay, we would have only ourselves to blame.        

Friday, December 6, 2013

November AJSN: The Best Month in 2013 Brings the US to 19.3 Million Jobs Short

Monthly updates to the Bureau of Labor Statistics employment data this year have precipitated some overly positive reactions.  At times, commentators have waxed enthusiastic about a one-tenth-of-a-percent drop in the unemployment rate, even when it was accounted for nearly completely by people leaving the labor force.  The data, when examined beyond the headline jobless rate, has often turned out to be as robust as a fairgrounds haunted house, with nothing you would really like to see behind the fa├žade. 

November, though, was legitimately good. 

Not only did seasonally-adjusted unemployment drop all the way from 7.3% to 7.0%, it was achieved without people pouring out of the working life.  The number of Americans with jobs rose over 600,000 to 144,775,000, and the number of those employed part-time for economic, as opposed to personal, reasons, which had been stuck at about 8,000,000, dropped 331,000 to reach 7.7 million.  Although the count of those saying they did not want a job went up over 300,000, most of the other AJSN components, specifically discouraged workers, people with ill health or disability, those not looking during the previous year, and those not immediately available, decreased.  Most stunning was the labor force actually increasing by 455,000, erasing two-thirds of last month’s fall and resulting in the labor force to population ratio rising to 58.6%.  The non-seasonally-adjusted unemployment rate plunged also, to 6.6%.

Overall, the American Job Shortage Number reached 19.33 million, its lowest since 2008, as follows:




AJSN
NOVEMBER 2013
Total Latent Demand % Latent Demand Total
Unemployed 10,271,000 90 9,243,900
Discouraged 762,000 90 685,800
Family Responsibilities 238,000 30 71,400
In School or Training 260,000 50 130,000
Ill Health or Disability 118,000 10 11,800
Other 718,000 30 215,400
Did Not Search for Work In  Previous Year 2,905,000 80 2,324,000
Not Available to Work Now 436,000 30 130,800
Do Not Want a Job 86,084,000 5 4,304,200
Non-Civilian, Institutionalized, and Unaccounted For, 15+ 9,501,768 10 950,177
American Expatriates 6,320,000 20 1,264,000
TOTAL     19,331,477
 
 
Over the past 12 months, the American jobs situation has improved substantially.  The November 2012 AJSN was 20.6 million, almost 1.3 million higher, with over 1.1 million more officially unemployed, more than 200,000 discouraged, and 442,000 more saying they had not searched for a job in the previous year. 

Not every number this morning was positive.  The stubborn count of 4.1 million jobless for 27 weeks or longer did not improve, and neither did the labor force participation rate of 63.0%.  The 358,000 additional deciding they did not want to work was half again the population increase, and the 203,000 rise in those employed, while good, was hardly the fundamental improvement that could have explained the large unemployment-rate drop.  Another statistic that may well do poorly today is the Dow Jones Industrial Average, if investors are scared that the Fed’s bond-buying stimulus will, despite Chairman Ben Bernanke’s revised 6.5% unemployment cutpoint, be reduced soon.    

Yet here we have something.  It’s way too soon to say the country’s getting back to work, let alone that the jobs crisis is over.  We still would need several years of months like this one, the best in half a decade, to achieve full employment.  But for once, the numbers in back, as well as the numbers in front, are encouraging.  

Wednesday, November 27, 2013

In the Jobs News: Economic Resources Deteriorating, Pundits Who Don’t Get It, Where R&D is Jumping, More on Sea-Tac, and Amortizing Employee Expenses



In American employment events, coming in to the holiday season:

First, a paper released at an early November International Monetary Fund conference in Washington made a fine case for the need for continued stimulus and for why austerity policies, such as cutting non-wasteful government spending, are bad in the long run.  A main point the piece, written by Federal Reserve Board members Dave Reifschneider, William L. Wascher, and David Wilcox, made was that economic supplies, such as the classic land, labor, and capital, do not automatically maintain themselves, and can atrophy like muscles with disuse.   I have contended that encouragements to “buy land, since they aren’t making any more of it” are misguided, since a gigantic amount of it is undeveloped and so, in effect, hasn’t been “made” yet.  The authors of the paper point out that when people leave the labor force and their skills deteriorate and become obsolete, the amount of national work capacity shrinks, even if the people are still in the population.  Capital, the third main resource, is as good as nonexistent when the people owning and controlling it do not think it can be constructively deployed; that is exactly why, despite the money supply rising close to 10% per year, inflation is only about 2%, and also why precious metals, usually a fine investment in times with so much paper currency, have had a very poor three years.

Second, most major columnists, even those who should know better, are still blind to the possibility that the jobs crisis is permanent.  I found the title of last week’s Paul Krugman’s New York Times piece, “A Permanent Slump?” promising, and it started out with good points made by Larry Summers:  our economic conditions may be a new normal, we can’t blame a recession which ended four years ago for them anymore, and the best 21st-century times have been caused by bubbles.  Krugman, though, considered the wrong explanations, specifically low population growth (no, the country is still taking on almost 200,000 people per month, which isn’t huge but is significant and is after all not a decrease) and continued trade deficits (have been around too long, and aren’t anywhere near large enough).  The answers are globalization, automation, efficiency, and a half-dozen other smaller one-way factors, which are not being offset by retiring baby boomers (they won’t) or anything else.  Not to worry, though.  The idea of a permanent jobs crisis has received some serious attention in major news sources this year – the New York Times did, in fact, print my letter and responses to it – and the reality of Work’s New Age will get much more in 2014.

Third, although corporate research and development have been down since and including the Great Recession, for information technology it is sky-high.  In the first half of this year, Twitter spent 44% of its sales on R&D, and Facebook spent 27% of the same in 2012.  Why?  As Robert Cyran pointed out in the DealBook blog, such products are often “winner-take-all,” and there is little room for second-place companies.  Who lately has even thought about Ping, Friendster, or Yahoo Auctions?  Some areas are natural for monopolies, and when combined with the chance of a competitor coming from almost anywhere in the world, survival, meaning staying on top, is always endangered.  What all that means for jobs is that if you are a researcher, you had better be in a field which needs you to stay in business, otherwise your opportunities may be slim.

Fourth, to update the Sea-Tac story, elections officials on Tuesday declared the $15 hospitality-worker minimum wage proposition a winner.  There will probably be lawsuits and demands for recounts, but it seems like it will become law next year.  As has been pointed out, the best comparison might be at Los Angeles International Airport, where employees are assured of at least $15.37.

Fifth, would businesses hire more workers if they could amortize the likes of training as if they were depreciating a truck?  That intriguing idea is part of a proposition put forth by Senate Finance Committee chair Max Baucus.  The pre-bill, as you might call it, calls for similar writing off over time of intangible and tangible assets, with rules on the latter becoming stricter.  For example, if accelerated depreciation now allows for 40% of the value of a new piece of equipment to be considered an expense in the first year, 24 percent for the second, over 14 percent for the third, and so on, it would be changed to something like 30%, 21%, and 15%, which would also be allowed for similarly perishable new-employee needs.  That adjustment, which would affect companies already with net incomes (as they would have tax bills to be cut), could be combined with other corporate tax reform, and would also encourage more research and development in general.

These are some things happening on the frontier of American employment.  I am glad to see them.  Keep them coming.  We need more.   

   
 

Friday, November 22, 2013

Work’s New Age in Europe? Yes - And It Makes American Unemployment Look Great

Last Friday, The New York Times published a stunning graphic.  It showed the unemployment rates for young people in 11 European countries, comparing 2008 and 2013 and including where the United States fits in.

Joblessness among Americans aged 15 to 24, not including full-time students, was 16% for the year ending in June.  That’s way, way too high, and, after correcting for different measurement practices, may even be higher than the overall rate in 1933, the worst year of the Great Depression.  Despite a general fall in official unemployment since then, it has rocketed up from the 10% measured from July 2007 through June 2008.  It’s also much better than many other developed countries.

Great Britain, which has avoided the worst of the eurozone’s economic problems by keeping its own currency, has 21% of its 15 to 24-year-olds officially jobless.  Belgium, long regarded as one of the more solid countries using the Euro, is at 22%.  France, a large, diverse country of 66 million, has reached 25%.  But wait – except for Austria, Germany, and The Netherlands, with 8% to 10%, these are the good ones.  Ireland has 29%.  Italy has 38% of those under 25 and willing to work not finding it.  Portugal has no jobs for four young people in ten.  In Spain, which has a population of 47 million, 55% – over half – of those 15 to 24 count as officially unemployed, which is almost as high as Greece’s 58%.

It is true that the youngest workers are often not welcome in the workforce, especially at career jobs.  But the next generation up also has severe problems.  Unemployment in the eight troubled European countries above for those 25 to 29, when the massive majority of those in the United States are able to work in some form, ranges from 8% to 41%.

It’s hard for most modern-day Americans to even comprehend these percentages.  Joblessness in the Great Depression, still thought of as a time of hoboes, bread lines, and people taking opportunities far from home, peaked at less than 25%, even though it was assessed more liberally than today.  That meant three out of four people in the labor force were still on the job.  In most of our lifetimes, Detroit’s 17% rate in the early 1980s is the worst a large American city has been – tough times, with auto-related manufacturing positions disappearing to other domestic sites, various foreign locations, to automation, and to sheer lack of customers – but they have nothing on what’s happening to young Europeans now.

The closest we have had in this country to these jobless rates is the situation with some inner cities and some populations.  Even in the good times of 1990, two Chicago neighborhoods, Woodlawn and Oakland, had employment (not unemployment) rates of 37% and 23%, causing people to essentially give up on earning a living and move instead to drinking excessively, using illegal drugs, smoking at high rates, eating unhealthy foods, watching prodigious amounts of television, and general apathy.  As of 2009, 57% of black American males aged 16 to 19 were jobless – it is not a coincidence that, earlier that decade, more college-age black men were in prison, on parole, or dead than in school.   In Work’s New Age, I wrote that as joblessness seems both expected and unavoidable, more of our countrymen will, like the Jamaican Rastafarians, develop lifestyles and habits, not all constructive, appropriately adapted.

Why is half of Europe doing so much worse than we are?  It is tempting for me to blame higher minimum wages, as I do not support them in a time of fewer and fewer jobs, but they are not the primary culprit.  True, some of the countries above guarantee workers much more – at current exchange rates, France’s is $12.70 per hour, Belgium’s $12.28, Ireland’s is $11.65, and Britain’s $10.52.  Yet Greece, Spain and Portugal, the three worst off, have minimums of $5.31, $5.85, and $4.39, all well below America’s $7.25, and Italy has no national floor.   Several of these countries are officially in recession, which the United States is not.  The impact of automation is as strong in Europe as here, and its susceptibility to losing jobs elsewhere, with poorer countries closer, may be worse. 

Beyond the often-mentioned and true problem of a generation being permanently hampered financially by not being able to start careers earlier, what can we take away from Europe’s youth unemployment crisis?  We have five things.  First, when accounting for the permanence of the jobs crisis, these are good times, not bad ones, for the United States right now.  Second, the difficulties we face are hardly peculiar to us, or even to our political decisions.  Third, we are all in this together.  Fourth, with education levels ever rising on both sides of the Atlantic, degrees are less likely to come with success guarantees than ever.  And fifth, we had better be aware that our next recession, which will come sooner or later, may well be devastating.    

Friday, November 15, 2013

Sea-Tac’s $15 Minimum Wage – What Does It Mean If It Succeeds?

On Election Day, there were two measures to raise minimum wages.  New Jersey voters agreed to boost their state’s to $8.25, one dollar above the federal rate.  The other increase was rather larger.  The Washington city of Sea-Tac had a proposition to lift theirs, for 6,300 workers connected with Seattle-Tacoma International Airport, to $15.00.  The success of that proposition is still unknown, with votes still being tallied and a recount all but certain afterwards.

Washington already has the highest minimum wage of any state, at $9.19.  Those favoring a higher level for Sea-Tac airport, restaurant, and rental-car workers, the scope of the ballot proposition, have cited the stimulus effect of higher pay and an end to workers’ poverty.  The change, as with that already passed in New Jersey, would also include cost-of-living increases. 

The nature of the city is different from most others.  Sea-Tac was incorporated in 1989 from four small communities, which had grown because of the airport.  Its other large employers include the headquarters of Alaska Airlines and Horizon Air, offices of 80 of the Fortune 1000, and a federal detention center.  Sea-Tac’s jobs, about 40,000, make it a place where almost one and a half times as many work as live.   Median income of residents is around $29,000, close to what, at the new minimum wage, the lowest full-time income would be.  

Consistent with my previous posts, I oppose any minimum wage increases.  Workers whose jobs are worth less to their employers than the new pay level will lose them, sooner or later.  Instead of reducing inequality, such forced raises create more of it, between those working and those not.  Such a change costs positions at a point when the country is short almost 20 million of them.  Demand for even the lowest-paying jobs is already high enough.  And, even in the limited Sea-Tac scope, not every employer is a multibillion-dollar corporation – one story cited in the recent press was that of an immigrant and lifelong small-business owner, who had recently bought a hotel near the Seattle airport and has since been forced to put plans to hire more workers on hold.  

So why might this effort be happening in Sea-Tac?  The scope of the amendment makes that clear.  The jobs that would benefit not only center around the airport, but serve travelers from elsewhere.  Locals rarely rent cars or get hotel rooms, and they use airport restaurants less often than those just passing through.  In Central Florida, a strong vacation area with low local taxes, the easiest new revenue sources to get voter approval have been those targeted at tourists, such as hotel and rental-car add-ons.  It is tempting for any area to pay its expenses this way, but can also backfire as outside people become aware of it.  

In effect, Sea-Tac may be trying out a new tourist tax.  Seattle-Tacoma International Airport had 33.2 million passengers last year, vastly more than those living near it, and like others they actually spend more, per person, on airport-related services than on the flights themselves.  The change may well be successful; prices will go up, but if typical fast airport meals move from, say, $6 to $8, little pleasure-traveler revenue and almost no business-traveler income will be lost.  Rental cars already vary in price two-to-one or more from city to city, and Seattle’s going higher will be only a small factor as well. 

The worst disadvantage can be seen in other recent articles.  There has also been a movement to greatly raise the minimum wage in Seattle, a large city without such a high share of captive customers.  An NBC News piece even said that the Sea-Tac proposition may “set the national tone” as well.  Some poor-quality objections, such as the higher pay being “inflationary,” may do more damage than good, but the real problem could be if the airport area maintains its number of jobs and observers say that a higher minimum would, therefore, do well elsewhere.  The actual outcome for too many small businesses would be closer to what one Seattle seafood market owner expected if $15 per hour became the law there – jobs cut, prices up 5% to 10%, and, with price-sensitive customers, a possible loss of sales.  Cities where most business is done with locals will always have different considerations.

It would be great if people could all be paid more.  But there is no free lunch.  We will keep our eyes on how Sea-Tac fares, if the measure passes into law, but we should not be fooled into extrapolating its results inappropriately.  In the meantime, too many people want to work to justify forcing businesses to pay those already with jobs more than they, or their customers, can bear.  

Friday, November 8, 2013

America Now 19.9 Million Jobs Short as Exodus from Labor Force Accelerates


America Now 19.9 Million Jobs Short as Exodus from Labor Force Accelerates

In today’s Bureau of Labor Statistics Employment Situation Summary, the words and phrases standing out are those of stability.  The official, seasonally-adjusted employment percentage, now 7.3%, “changed little.”  Rates by sex and race “showed little or no change.”  The count of long-term jobless, 4.1 million out 27 weeks or longer, “was little changed,” as was the 8.1 million employed part-time for lack of full-time opportunity, and the overall 2.4 million with statuses somewhere between not interested in working and officially unemployed.  All much the same, the message seems to be.

Yet the Summary did admit to some disturbing, if not directionally changing, differences.  In October, a month usually quite similar to the previous one, the civilian labor force tumbled 720,000, resulting in a 62.8% labor force participation rate and a 58.3% employment to population ratio.   Those are both new multi-decade records, lower than any since 1977 and 1976 respectively. 

Overall, the American Job Shortage Number (AJSN) dropped about 113,000, as follows:

AJSN
OCTOBER 2013
Total Latent Demand % Latent Demand Total
Unemployed 10,773,000 90 9,695,700
Discouraged 815,000 90 733,500
Family Responsibilities 225,000 30 67,500
In School or Training 233,000 50 116,500
Ill Health or Disability 169,000 10 16,900
Other 842,000 30 252,600
Did Not Search for Work In  Previous Year 2,949,000 80 2,359,200
Not Available to Work Now 451,000 30 135,300
Do Not Want a Job 85,780,000 5 4,289,000
Non-Civilian, Institutionalized, and Unaccounted For, 15+ 9,434,354 10 943,435
American Expatriates 6,320,000 20 1,264,000
TOTAL     19,873,635
 
The largest variation since September was in the number of those saying they did not want a job at all, which increased a stunning 922,000.  For one month, that is a gigantic change.  Those officially unemployed fell 112,000.  People unavailable for work for being in school or training dropped 91,000, those discouraged were down 37,000, and those not available for jobs due to unnamed reasons rose 88,000.  Official non-seasonally-adjusted unemployment was steady at 7.0%.

Compared with October 2012, there are now about one million fewer officially jobless, 36% fewer naming school and training (wow!), almost 10% fewer saying they had not looked for a year, and 2.7 million more not wanting to work at all.  Other AJSN component numbers were much the same, resulting in the indicator’s drop of 688,000. 

As for last month’s government shutdown, the Situation Summary admitted to some confusion about the furloughed federal workers, many of whom reported at survey time that they were unemployed.  Although the report was delayed one week to help straighten out such issues, the BLS’s words make it clear that adjustments will be made later.  When they are, the official unemployment rate’s increase from 7.2% to 7.3% will probably disappear.

So, what are we left with?  No jobs-crisis progress at all.  Though I don’t expect almost a million more people to choose a no-employment lifestyle each month, that is clearly how Americans are reacting to the lack of work.  The headline unemployment numbers aren’t changing much, but other observers have done well to consistently see that as no sign of health.  At best, we are treading water, with too many people out of work for too long.  At worst, the base of the United States economy is shrinking.  There are virtually no job-creating or even job-facilitating efforts in progress in Washington.  Overall, I see no reason why our economic situation, whatever you consider it to be, will improve.    

Friday, November 1, 2013

Unequal Sex Distribution in IT and Other Careers – Is It a Problem?

There has been a remarkable amount of recent discussion about the share of women working in information technology.  According to the U. S. Department of Labor, 25% of the 3.6 million Americans employed in computer and mathematical occupations in 2011 were female.  Articles about the percentage of women in that field appeared in Slate, The New York Times, and other major publications last month, and BBC News Hour spent almost half of one broadcast discussing it.  These pieces share a common assumption, that this sex distribution and by extension others are problems which need correction.  That is incorrect.

To see why, let us go back to 1948.  Despite jobs being plentiful, women’s labor force participation was only 32.7%, compared with 86.6% for men.  A lot of working women were nurses, secretaries, elementary school teachers, or in other heavily female occupations.   The idea of feminism had not made it into the mainstream, and girls were routinely taught that their real occupations were to support their husbands.   Many American families could do that, since 1948 was into the Winning by Default Years, with great prosperity and little foreign competition, and salaries for even remotely middle-class people were well higher, in constant dollars, than they have been for decades since. 

Fast forward to 2010 and 2011.  Sex discrimination in employment is illegal.  Education levels for women are passing those of men.  Most families need two breadwinners.  Women’s labor force participation has risen to 58.6%, and for men it has fallen to 71.7%.  Many jobs once held almost exclusively by men have substantial shares of women, such as 31.9% of lawyers and 33.8% of physicians with newcomers to both roughly evenly split.  Most physical positions still have high male percentages, but some imbalances seem to defy logic.  Why are registered nurses and mechanical engineers 91.1% and 5.5% female respectively?  Why are 97.5% of dental hygienists women, but only 4.8% of truck drivers?  

Now, on to 2013.  After Harvard president Larry Summers’ comments eight years before suggesting that women’s underrepresentation in some technical fields might be because of statistically lower aptitude, the idea of men and women having brain arrangement differences has been discredited in both academia and the popular press.  Yet otherwise inexplicable gaps in attitudes and outcomes keep popping up.  The “opt-out revolution,” in which many times more women than men leave high-powered jobs to support their families at home, has continued, ten years after it was first publicized.  Debates on whether women can “have it all” and whether they should “lean in” by pursuing their career advancement more aggressively have precipitated much debate and commentary, much of it on whether women can be expected to be as competitive, and distant from their children, as men. 

Most of these changes have been favorable.  There is no doubt that equal rights for women are a good thing.  The problem is when equality of opportunity withers into a need for equality of results.   Author Warren Farrell documented a quarter-century ago that women tended to choose career paths less risky and more comfortable both physically and emotionally, and that explained why pay for librarians, usually required to have master’s degrees, was about the same as that of garbage collectors, many of whom did not even finish high school.  If librarians’ pay were doubled, the field would draw an excess of people attracted to its pleasant work settings.  Likewise, in order for much more than 2011’s 1.1% share of roofers to be women, their pay would have to increase well beyond the amount needed to fill available positions.

Yet this view is incomplete.  It does not explain why nurses, on their feet and dealing with life and death, are so rarely male, or why engineers, usually in nice offices, almost always are.  Something else is happening.  I worked in information technology, in large offices, for twenty years.  The jobs at AT&T, while well sought after, required enough intelligence, aptitude, and specialized education, the first two measured by testing before hiring, for only a limited set of people to be considered acceptable.  There were plenty of women overall, but it was noteworthy that the most hard-core technical positions, such as those requiring hexadecimal dump debugging or intensely abstract system programming, were almost always filled by men.  There was no sign of any sex discrimination around those jobs – there as elsewhere, people were given opportunities based on how well their skills and interests matched the needs of the business.  The environments, fine settings with no physical strain and the only emotional stress coming from office politics, were essentially identical to those of similarly-paying positions at which women predominated.      

It may be that we are near a high-water mark for considering the sexes equal in all aspects of aptitudes, preferences, and what they want from their jobs.  Eventually we may be able to accept that some groups of individuals making choices will never be demographically identical.  For now, we need to at least consider the possibility that some careers will attract more of one sex than the other.  The real problem we face is the job shortage, as shown by the 20 million positions that could be quickly filled if available, the 4.1 million officially unemployed for over six months, and much more.  Distracting ourselves by confusing equality of opportunity, which is the well-enforced law in America, with equality of results, which even our descendants may never see, is the wrong way to go.        

Tuesday, October 22, 2013

September AJSN: USA Now 20 Million Jobs Short as 2013 Trends Continue

The Bureau of Labor Statistics monthly employment data may have been delayed, but it didn’t change much.  Seasonally adjusted jobs were up 148,000, about 15,000 more than needed for population increase, and the official unemployment rate was down fractionally to 7.2%.  That rate when not seasonally adjusted fell, as expected in a month when more people go back to school and more jobs pop up, to 7.0%. 

Secondary measures were almost uniformly unchanged.  Those officially jobless for six months or longer remained at 4.1 million, the civilian labor force participation rate was still 63.2%, and there were still 7.9 million working part-time who would like to work full-time.  Most noteworthy was the jump in people counted as being out of the labor force, up over 2 million to 90,632,000. 

The AJSN (American Job Shortage Number) was extremely close to 20 million, broken down as follows:

AJSN
SEPTEMBER 2013
Total Latent Demand % Latent Demand Total
Unemployed 10,885,000 90 9,796,500
Discouraged 852,000 90 766,800
Family Responsibilities 215,000 30 64,500
In School or Training 324,000 50 162,000
Ill Health or Disability 157,000 10 15,700
Other 754,000 30 226,200
Did Not Search for Work In  Previous Year 2,943,000 80 2,354,400
Not Available to Work Now 530,000 30 159,000
Do Not Want a Job 84,858,000 5 4,242,900
Non-Civilian, Institutionalized, and Unaccounted For, 15+ 9,449,940 10 944,994
American Expatriates 6,320,000 20 1,264,000
TOTAL     19,996,994


Of the AJSN components, the number of unemployed, down 577,000, and the estimate of people who did not search for work in the previous year, down 443,000, accounted for almost the entire drop.  (The AJSN is not seasonally adjusted.)   The increase in those claiming no interest in working offset smaller numbers in almost all of the other categories.  Since the data is for September, it is unaffected by early October’s partial government shutdown.

Compared with September 2012, a year earlier, the AJSN is down about 730,000, from 20.73 million.  Since then the number of unemployed is down 857,000, those wanting to work but not looking for at least a year are 335,000 fewer, and the count of people saying they do not want jobs at all has grown by 2.5 million. 

All in all, the September employment data fits closely with 2013’s consistent pattern.  It again showed a small gain in jobs beyond population increase, but more people leaving the labor force, this time by deciding they were done working.  My general comments, so, still hold:  it is good but hardly great, the number of departing workers explains more than anything else, the long-term unemployed and partially jobless are still there, and we would need a decade or more of months like this to be back to pre-2008 numbers.  Next month’s figures, which should not include the 800,000 government workers whose pay was only delayed but will show some secondary shutdown effects, will tell more.  In the meantime, the American jobs situation is business as usual.