Friday, January 31, 2014

State of the Union Speech Shows Obama’s Going Nowhere on Jobs

One annual Washington ritual took place Tuesday evening.  As usual, per George Will’s recent column, it was more of a pep rally than anything information-sharing, with the traditional rundown of actually and supposedly good things from Barack Obama’s fifth year in office, along with the usual list of what the president would like to see.

As for employment, Obama did of course pay lip service to it.  After bragging about “the more than 8 million new jobs our businesses have created over the past four years,” which readers of this blog know was only enough to cover the country’s adult population increase, and the “lowest unemployment rate in over five years,” almost completely due to people leaving the labor force, he spent a sentence, transcribed as its own paragraph, saying that the recent budget compromise should facilitate job creation.  After tipping his hat to the two greatest reasons why the employment crisis is permanent, automation and globalization, he pittered out into general statements about economic inequality and the red herring of more training and education.  His best idea of the speech, lowering taxes for employers of Americans, went out but went nowhere.  He got close to suggesting the WPA-style jobs project the country increasingly needs, but seemed to tie it to higher wages than would be workable.  His subsequent advocacy of manufacturing hubs and domestic energy jobs sounded good but also fell short, with recognition of neither the reasons why “entire industries… based on vaccines that stay ahead of drug-resistant bacteria or paper-thin material that’s stronger than steel” aren’t more prominent now nor of the roadblocks put up by environmentalists, whom he seemed to placate, repeatedly, in the next several minutes.  Then, off to job training programs (wrong), more unemployment benefits (right), more and more higher education with emphasis on career preparation (not the problem; just ask your local degreed, poorly employed millennial), conflicting sentences about women deserving “equal pay for equal work” (the law for 51 years) but their lower average pay being “wrong” and “an embarrassment,” and, consistent with his words of the past few weeks, a higher minimum wage.  By mentioning expanding the Earned Income Credit, Obama made an intriguing feint towards guaranteed income, which, except for a hope for “honest work” being “plentiful,” ended his words on jobs for the speech.

All told, we should expect very little on employment from the executive branch over the next three years.  Why?  Mainly because Obama’s problem is the same one many Republicans have had – he is just too beholden to others in his party and has not found the courage to break free from them.  If he wants to make jobs an overriding or even truly major priority, why is he pushing for a higher minimum wage?  If American energy positions are important to him, then why doesn’t he approve the Keystone pipeline?  If he sincerely wants to put Americans back to work, then why is he getting stuck with non-solutions such as training for jobs that don’t exist, and conflicting and peripheral issues like ending alleged overall sex discrimination?  What, if anything, will he give up to get what he wants?

Barack Obama is a very successful politician.  He knows it is important to give people the impression that he cares about them and their problems.  That is his job, and, indeed, there was something for everybody to agree with on Tuesday.  But that doesn’t mean we need to believe anything substantive about the issue of not enough employment, or anything else for that matter, is on the way. 

America is going nowhere on jobs.  Barring a collective Washington epiphany about the permanence of the crisis, that will not change for over 1,000 days.  Our next president may or may not be better.  Whether Republican, Democrat, or something else, he or she will have ample opportunity to address the largest personal prosperity-related crisis the country has faced since the Industrial Revolution.  However, to do that, as Obama’s comments underscored this week, neither party’s ideas alone will even come close, and our current president won’t either.  

Friday, January 24, 2014

Inequality’s Not the Real Problem

According to a large and even growing amount of commentary, the first political issue for 2014 has been chosen.  It is economic inequality, usually shortened to “inequality.”  What is that really about?

In its dictionary definition, inequality refers to differences.  People in the United States vary from each other in many ways.  They look differently, act differently, have different backgrounds, have different values, and want different things out of life.  They are, in a word, different from each other.  As a result, Americans are not all in the same economic spot.  That has always been the case.  From the days of imported English gentry and indentured servants, through the times of plantation owners and slaves, on to the era of rail barons and abused early industrial workers, and following through to the age of Gates, Jobs, and millions in electronic sweatshops, economic inequality has been the norm in America.  That is an expected legacy of the country where the idea of legally sanctioned personal freedom was first implemented and, ever since, has had a tradition of and shared cultural belief in its citizens being freer than in almost any other place with any government at all.  Countries with less liberty have always been more equal, and, indeed, two in the last century with great economic equality were Maoist China and the Soviet Union. 

Prosperity, also, has been and remains a strong American circumstance, which continues.  Despite the Great Recession and the permanent jobs crisis, as of 2012 United States per capita income trailed only Qatar, Luxembourg, Singapore, Norway, and Brunei, which combine for fewer than 14 million people.  Even median family income, showing the common-run much better, as of 2010 trailed only Luxembourg, Norway, and Switzerland, with also about the same population as greater Los Angeles.  With money this spread out despite great individual differences, it is hard to maintain that economic inequality is bad in itself.

Yet recently, we have seen another effect, along with the loss of jobs, of automation, globalization, and efficiency – more wealth being concentrated into fewer and fewer people.  At the same time, jobs lost in the recession have not come back.  A New York Times Economix blog post, earlier this month, gave a clear view of that.  A chart showing the percentage of adults employed showed around 63 percent from January 2007 through July 2008, then a steady flow to between 58% and 59% in late 2009, where it has been ever since.  That explains how, while the unemployment rate has gone way down in the past five  years, so many people have left the work force that the chance of working has not improved at all.  Accordingly, the AJSN (American Job Shortage Number) still shows the country over 19 million positions short, about 4 million more than before the recession.

It is no random twist of fate that the recent concern about economic inequality has coincided with frustration about these lost jobs not coming back.  So what should we be doing?  Raising the minimum wage, usually mentioned in editorial pieces about inequality, is not the answer.  As of three years ago, it took annual earnings of $506,533 to get into the top 1% - how much closer would even $15 per hour be to that than $7.25?  Neither is confiscatory taxation, if it would pull down the wealth of people, often with unusual drive, intelligence, aptitude, education, and personal interests, who own businesses employing dozens, hundreds, or more.  While trickle-down economics is not the answer – few doctors or lawyers, for example, help American employment through their work – destructive envy is not either.  It is time for all to realize the problem is not that some people have, and capitalize on, more opportunity than others, it is that the jobs crisis is not going to end.  When we unite behind that idea, we can find solutions we can live with.

Friday, January 17, 2014

Living Off The Grid: An Answer for Many Without Jobs

As we know, there aren’t enough jobs to go around, and many people have given up on the chance of working in one way or another.  Some are living with parents, in school longer than expected, or making do on what they have and what other income sources they can find.  There is another possibility, which numbers do not measure accurately – having a life without the usual physical connections, commonly known as “living off the grid.”

Millions of Americans have been living that way for decades.  The two major possibilities could be called rural, or living in the countryside, and town or urban.

The countryside version, as it is now commonly lived, often includes a lack of links to municipal infrastructure.  One source in 2007 estimated 300,000 American households without connection to government-provided electricity, water, and heat, and expected that would grow to 520,000 homes with close to one million people by 2010, a projection which has almost certainly been exceeded.  Those who lived off the grid outside cities and towns before the Great Recession were generally from the ends of the political spectrum, either liberal anti-capitalists or conservative survivalists and rural Southerners.

People living a back-to-the-land lifestyle often grow food, heat with free or cheap materials from trees and abandoned buildings in old or homemade stoves, barter, buy clothing used, and generally get as much as possible from their environments.  Those raising children often homeschool them, and value living in a community where there is little peer pressure to buy them expensive toys.  Religiously, they are often Anabaptist (Amish or Mennonite), other Christian, Zen Buddhist, pagan, and atheist.  While some consider living off the land a political deed, others are unconcerned that way.  Some draw inspiration from the 5th century B.C. Athenian Diogenes, who at one point lived purposefully without any possessions.  They usually own their homes which may be trailers, abandoned, or otherwise not mainstream houses.  With the help of used construction materials and self-manufacture they usually owe no money on them, which some say is a critical component to the lifestyle.  Some work occasionally and some permanently but part-time, while others earn money through such as babysitting, doing housework for others, breeding and selling animals, and selling plants, all on a small scale.  They often do not have cars and usually walk or bicycle for transportation.  Work at home and on the land generally takes them several hours a day, varying greatly by season. 

People choosing to live in the country with low expenses often do so to be freed of mortgages, mass marketing, and being tied to a working life, and want to live more independently and environmentally soundly, though many are greener only unintentionally.  Modern electronic connections can be managed though wireless modems and car battery power.  Expenses can be extremely low – one interviewee claimed that with a home owned outright and growing his own food he could live for $150 per month.  Some with this lifestyle generally think it is harder to pay for many things than it is to do without them.  As clear disadvantages, though, they usually have no insurance and minimal health care. 

On the more urban alternative, many considerations are similar to those of the rural people above, including avoiding many ways to spend money.  Several things that people with town or city low-expense lifestyles do to manage expenses include cutting their own hair, repairing clothing, cooking from ingredients, buying used in general, choosing public or self-powered transportation, using libraries, growing vegetables, making some household products usually bought, and self-maintaining their cars, motorcycles, and bicycles.  Exchanging unneeded items through organized or community systems for those personally useful, along with reusing, conserves their money also.  As with the frugal rural residents, some consider that children do not need as many high-priced toys and electronic devices as others might think, and discussing the family’s financial situation and budget truthfully with them may help, along with reinforcing that less money means less time away for work and therefore more with them.  To reduce housing costs they live in smaller quarters or share them with others, limit insurance to that which covers true financial disasters, keep older cars, eat ordinary food, and avoid wasting heat or electricity. 

A low-expense mindset can be understood by considering the spending habits of many who lived through the Great Depression.  Many also budget amounts for each large category and record all money spent.  In general, efficiency and decreasing waste are important, and many couples with frugal city and town lifestyles are able to live on less than $25,000 per year.

Work, when less of it is needed for one’s lifestyle, can fall into several categories.  Those which author Bob Clyatt named included “the filler job,” or a reasonably pleasant but low-paying steady position; “the avocation,” or a job one might take on even if it were unpaid; “your former job, but less of it,” maybe without benefits; and “hobby turned business,” if profitable.  Those living frugally also consider it important to discover other meaningful activity.  One danger is to be too intense about work, which can be offset by consciously calming down, delaying key decisions until a year after ending the full-time job, or just accepting it.

Although isolated from most others, people living off the grid still often enjoy strong communities, in person and otherwise.  Several websites have good information, including how to handle many problems with little or no money - three good ones are,, and

A frugal lifestyle, whether on or off the power and communications infrastructure, has clear disadvantages – it can be very austere in ways which Americans are used to more comfort, for one thing – but the ideas behind it offer something to almost everyone.  Now that we are in a time of lower general affluence it behooves us to evaluate what is essential.  For most of us, if we neither need something nor greatly want it we should consider doing without it – a strategy which will continue to show some people they are best off living off the grid.

Friday, January 10, 2014

Despite Big Drop in Official Unemployment, America’s Job Shortage Increases – Now 19.4 Million

We know what most headlines will say about this morning’s unemployment numbers.  December’s seasonally adjusted jobless rate plunged to 6.7%, down from 7.0% the month before.  But how much better did work opportunities actually get?  Once again, the American Job Shortage Number, or AJSN, tells a different story.

One level down, the secondary Bureau of Labor Statistics measures are almost all disturbing.  While the count of people officially jobless for 27 weeks ago finally fell, to 3.9 million from 4.1, the labor force shrunk again.  Almost 350,000 fewer were there, despite the country’s population rising almost 200,000 and the number under age 15 actually lower.  Discouraged workers, not technically unemployed but with a real desire for work, spiked to 917,000, the highest since July.  Ninety-two thousand more Americans wanted jobs, but had not looked for them for at least a year, in December than in November.  Except for those in school or training, down 14,000, the other marginally attached categories – family responsibilities, ill health or disability, and “other” – all rose last month, and the number not wanting to work at all continued its upward march, gaining 322,000.  Perhaps most telling was the 800,000+ rise in the non-civilian, institutionalized, and unaccounted-for, which includes a growing share of people living off the grid.

Here is the data for last month’s AJSN:

Compared with one year ago, the metric has, however, shown substantial improvement.  In December 2012, latent job demand from unemployed Americans was almost 1.7 million higher, and even more were discouraged and had not looked for at least a year.  Yet while most of the other marginal categories had changed little, the largest ones have gone way up – about 3.7 million additional report they have no interest in working, and 3.4 million more are in the military, in institutions, or otherwise off the charts.  The United States is a huge country, but those percentages, over only one year, still work out to jumps of 4.4% and an amazing 48.7% respectively.

So, consistent with last month’s drop in labor force participation to 62.8%, Americans are responding more than ever to the true work situation by living without jobs.  Larger numbers are losing their unemployment status by not looking for work, becoming discouraged, deciding they don’t want to be employed after all, and dropping out of the mainstream.  That labor force participation rate is the lowest since disco was king.  Despite the 6.7%, there are still 7.8 million working part-time for economic reasons.  And jobs aren’t coming back, but only decreasing in lower seasonal numbers than expected – employment in December was actually 352,000 down from November. 

The validity of the unemployment rate is now being put to a test.  How low can it go without any real improvement in what it is supposed to measure?   Times are better than in 2009 through 2012, but, for workers, only incrementally.  Ever more people leaving the labor force does not constitute an end to the jobs crisis, no matter how well the marquee number does.           

Friday, January 3, 2014

What We Need For Jobs in 2014, Beyond the Numbers

United States unemployment has improved greatly from a few years ago.  But with our country over 19 million jobs short, we have far to go.  Beyond just plain “a lower jobless rate,” or even “a lower AJSN,” how can we measure our progress in 2014?  I propose ten things. 

First, from Congress, we need to start a WPA-style infrastructure project.  In the quality of its bridges, highways, and airports, America has dropped, in an international engineer’s survey, from first to fourteenth.  Conservatives should not tolerate our country falling behind, and liberals should back an effort both necessary and employing millions.  If Congress finds itself capable of bipartisan cooperation, this should be at the top of its list.

Second, from President Obama, a better understanding of inequality.  The most brutal gap is not above people earning the minimum wage, it is between them and those with no work at all.  Taking steps sure to decrease their number through forced anti-market pay increases will not help Americans become more equal, only less likely to have a job.

Third, longer unemployment benefits.  For months on end, 4.1 million Americans have been out of work, officially, for 27 weeks or longer.  Time was that people not finding work after this much time were not really motivated, or at least were doing the wrong things, but not anymore.  It is cruel and unreasonable to let the tail of people abusing the system wag the dog of so many who keep trying, keep playing by the rules, and still cannot legally support themselves.

Fourth, more food stamps.  We need to make sure our countrymen are eating.  Abuse, with ATM-style cards and IDs, is minimal.  As with unemployment compensation, these are not the times to stop or even inhibit something filling such a basic need.

Fifth, we as Americans need to take a serious look at guaranteed income.  Would it work?  Could it be paid for?  What are the alternatives?  A few columnists have addressed it – will more do that this year? 

Sixth, we also must examine the possibility of charging for online resources.  Free may not be best.  As with guaranteed income, paying for something new – and possibly large – may be hard to swallow, but it may be the only way for Americans to benefit from contributions, and their own tracked personal information, they provide for free as well. 

Seventh, shorter work hours.  We have been stuck on 40 per week since the days of the Duesenberg, and there is no profound reason why that must continue.  Less time on the full-time job was a stock science-fiction prediction as late as the 1980s, and hardly anyone half a century ago would imagine it hasn’t happened.  I don’t advocate forced limits on anyone, but if the federal government and a few prominent companies went to, say, 30 or 32, many more would follow.  Not only would it allow for vast numbers of jobs to be created, but it would improve the quality of our lives.

Eighth, employers, it’s time to stop waiting for perfect people and hire who you need at market rates.  There is no skills shortage, only a company training shortage and a company pay shortage.  If you can’t find the workers you need, it’s your fault, not theirs.  Instead of complaining to the media, pick the best applicant – many are underrated these days – and fill your business need.

Ninth, we all need to realize the jobs crisis is permanent.  Too many observers danced around this possibility in 2013, looking for explanations for this so-called five-year incomplete recovery in such fantasies as “a hidden recession, unspecified government action or inaction, or something artificially caused by the 1%, when the answer is right in front of us.  Automation, globalization, and efficiency go only one way, and the baby boomers, with generally fine health and poor savings, aren’t going to bail us out by retiring en masse.  That is, unless they have to, from a lack of jobs. 

Tenth, civil rights leaders, I call on you to unite with the rest of us to solve the number-one problem your constituency, whatever it is, faces – not enough jobs.  That was a pillar of Martin Luther King’s 1963 March on Washington – if that was good enough for him, it should be good enough for you.

At year’s end, a blog post will look at how we did on these ten points.  Happy New Year, all – but remember, the clock is running!