Friday, March 27, 2015

Jobs and our Next President: What, If Anything, Do We Know?

Around the horn in the world of presidential politics, on jobs and beyond:

If you were announcing a run for president as the first major declared candidate, wouldn’t you have a website with your positions on issues ready to go?  Well, Ted Cruz didn’t.  Searches on “Ted Cruz” and “Ted Cruz for President” brought up nothing new, so I can’t say much about what he plans to do about the permanent jobs crisis.  His old stuff, mainly asserting that unemployment benefits are bad, wasn’t too encouraging.  I guess none of the 2.7 million Americans officially jobless for 27 weeks or more and legally required to look for work weekly are in his inner circle. That may be a reason why you can get 40 times your money by betting on him to win a year from November, as you can on, say, Martin O'Malley.

Speaking of politicians making stupid statements, get a load of Ben Carson!  The man is a neurosurgeon.  You can’t get into that specialty by just choosing it – you need to beat out lots of well-qualified doctors (not just medical students) to get the training you need.  Bet that every single neurosurgeon in the country would qualify for Mensa, going away.  I see how he might need to appeal to his base by comparing gay marriage to bestiality, or saying Obama is “like a psychopath,” but how can anyone of that intelligence say that men are gay by choice?  Carson, somehow, makes me want to root for him – he can be partially excused by now being more a politician than anything else, and wrote a good, remarkably thoughtful book about what he thinks – but there’s a difference between routine pandering or spouting ideology you think will go down well, and saying things which are clearly wrong.  Which, since it calls his grip on reality into question, I don’t like at all.  As for Carson on jobs – well, what does he REALLY think?  Will we ever know?

How about Scott Walker?  Radio host Rush Limbaugh has seemed to endorse him, at least for now, and has him as the second most likely Republican to become our next president, at 9½ to 1 behind Jeb Bush at 6½ to 1.  He’s had his doubtful statements too, and his lack of a bachelor’s degree all these years on is strange, but he has the right view on labor unions.  As classic business author Robert Townsend put it, unions served a noble purpose once, but now they’re part of the problem.  There is all the difference in the world between reigning in the abuses of the early (and not so early) Industrial Revolution, when few knew and too many didn’t care how long, hard, and unsafely people could work, and getting the most from governmental employers with little or no incentive to limit pay and perks.  Ultimately, unions cost jobs, which is why Walker did the right thing in leading Wisconsin to right-to-work status.  Could he be good for jobs in other ways too?  We’ll see as the campaign progresses.

Still no word from Hillary Clinton on employment.  Being way in front, Emailgate notwithstanding, with odds of 5 to 3 against in the 2016 election, has made her more noncommittal than ever.  Since she’s moderate, it would be consistent with her views to tone down pushes for higher minimum wages, which are now popping up here and there anyway, and campaign on a national infrastructure project.  But I’m not holding my breath.

Then there is Chris Christie, with both good and bad attributes of being forceful.  He’d love to lead a 1950s Chicago-style “machine,” in which people on his side were assured of decent jobs if they got out the vote, but the time for that sort of thing has passed even in that city – you could have asked Representative Dan Rostenkowski, who tried to reinstate one and ended up wearing stripes.  Could Christie lean on possible employers to make more work available?  That possibility alone could make him a fine candidate – but I don’t know if he would or could.  So I’ll still go with the hope of Jeb Bush, if he’s not too beholden to his fellow one-percenters to realize they can’t make money if the bulk of Americans have none to spend. 

As for political views, America’s problem goes deeper than anything above.  Why is it that the combinations of opinions are as set as they are?  Why do almost all of those who think there is no human-caused climate change also oppose gun control?  Does it make sense that those against capital punishment are consistently in favor of more spending on social programs?  Would someone from Mars see it as logical that humans seeing government as more of a problem than big business tend heavily to see abortion as murder?  Can’t be.  The answer is that most of us make complex realities easier by going with, in effect, a slate of opinions.  That is unexamined, and, if Socrates said, the unexamined life is not worth living, we are falling short.  If Americans were more independent in chosen views, we would reach the right answers more often as a country.  We are not doing well at that now, and, strangely enough, think almost everyone on both sides, and in the middle would agree.  Will we ever be up to that challenge? 

Friday, March 20, 2015

Yes, the Pay Gender Gap is Real – But It’s Not All from Discrimination

One work-related issue seems to have perpetual press coverage.  Consider the following:

Men and women must be paid equal wages if they perform substantially the same work under the Equal Pay Act.  “Equal pay” refers to more than just your paycheck.  Under this law, all employers must provide employees within the same establishment whose jobs require substantially equal skill, effort and responsibility, and are performed under similar working conditions “equal pay.” – U.S. Department of Labor Website

In 1951, women made about 64 cents for every dollar earned by men.  The wage gap has narrowed over time, with today’s women (age 15 and over) earning 77 cents for every dollar earned by men, for year-round, full-time work.  –

How can we reconcile the above two statements?

In 2005, to answer that question, author Warren Farrell published Why Men Earn More:  The Startling Truth about the Pay Gap – And What Women Can Do About It.  Per its subtitle, the book also included constructive ideas on how women can avoid getting less than men.  The way they can do that, the author wrote, is for them to make more of the same choices as men.  And what are they?
Note that none of these are about acting differently in the workplace, or fighting remaining sex discrimination.  Such things would help, but are hardly the whole story.  So what did Farrell, backed with documented statistics, come up with?
First, women can choose from the 25 worst positions, as assessed by the Jobs Rated Almanac on quality of work environment, employment prospects, physical demands, job security, and related stress.  As of 2002, 92% of workers in these 25 jobs were men.  Only one position, dancer, had more than 32% female workers.  Some of the better paying ones in this list were carpenter (99% male), boilermaker (100% male), and the overall lowest-ranking one, lumberjack (98% male).

Second, Farrell recommended that women opt for careers with lower personal fulfillment, such as being a tax accountant instead of a child-care professional.

Third, on the lower-qualification end, women are likely to be paid more if they end up with jobs outdoors, such as package deliverers, instead of those only requiring work inside.

Fourth, if women seek positions in which they “can’t psychologically check out at the end of the day,” such as corporate attorney, instead of working as, for example, librarians, their earnings will tend to be higher.

Fifth, being more willing to take the most extreme physical risk, being killed on the job, of which 92% suffering that early last decade were men, can help women’s pay.

Sixth, female workers can help themselves by putting in more hours.  According to a 2004 Department of Labor survey, women were less than half as likely than men to work over 50 hours per week.

Seventh, gaining more experience, by not being among the 50 times as many women as men who are full-time homemakers, the 8 times as many who take at least four years out of the labor force, or the 9 times as many who leave work for six months or longer for family reasons can boost expected income.

Eighth, simply getting to work more often, and not contributing to women’s averaging twice as much time away from it as men, can help.

Ninth, being more willing to take nonphysical as well as physical risks, such as joining heavily male fields such as venture capitalism, generally pays more.

Tenth, taking jobs requiring working at inconvenient times, such as being a doctor in private practice instead of working for an HMO, can shrink the income gap.  

These ten were only those I chose from one old book – many, many more are out there. 

Despite sex discrimination laws in effect for half a century, there are reasons for women still being paid less, overall, than men.  There are certainly men in positions of power who would prefer their subordinates to be the same.  But that sort of thing is nowhere near the whole story.  Choices matter too, and mean enough that no simple assertion of broad-based pay differences should be taken as being caused by other reasons.  The issue of average pay differing by sex, as is the case for many, is far more complicated than it looks. 

Friday, March 13, 2015

The Sharing Economy and Jobs – II

Now, back to the phenomenon I wrote about two weeks ago.  Why is it not as great as its believers claim, why is it so controversial, and what should and shouldn’t we do about it?

Its main weakness is that once proper expense accounting is applied, sharing economy engagements, compared with conventional employment, simply don’t pay very much.  Last month, Joann Weiner wrote in The Washington Post that while Uber claimed taxi-like drivers averaged over $74,000 per year in San Francisco, making it one of the most lucrative sharing-economy propositions, the real net number was more like $40,000, with no paid vacation or other benefits, and mandatory health insurance and matching Social Security contributions pushing that even lower.  (The Internal Revenue Service, not known for its generosity, allows 57.5 cents per business mile – if a driver averages 120 miles per day, as I did for Yellow Cab in the 1970s, he or she would have annual car expenses alone of over $18,000.)  If they drive, as true taxi drivers often do, 55 hours per week, $40,000 net, even if that high, pays even a lower cash rate than an $11.00 per hour job with time-and-a-half overtime.  

Second, the income achieved by Uber, similar Lyft, and room-renting facilitator Airbnb service providers is inflated by a temporary lack of regulation.  It is almost certain that major cities will develop legal limitations either banning or charging high license fees for what they are selling.  It is unthinkable that with New York City taxi medallions, or permits, costing over a million dollars that amateur cabdrivers will be allowed to proliferate, or even operate, forever.  Once zoning laws, and legally sound complaints by neighbors, catch up with the extent of Airbnb rentals, the time when anyone can run a de facto hotel or even a bed and breakfast in residential-zoned neighborhoods will be over.  Good money for now, but not by decade’s end at the latest. 

Third, once such regulation catches up, the bulk of other sharing-economy opportunities will be what established businesses don’t want to pursue for lack of profitability.  In Salon last month, Robert Reich said a more proper name for it would be the “share-the-scraps economy.”  Whatever you think of Reich, that phrase, sadly, fits too well. 

Fourth, while being paid for personal resources provides useful money, being able to sell them means you already have them.  If you have an apartment in Manhattan, you can do well renting it out, but most people don’t.  Not everyone meets the driving-record, car-condition, and other standards Uber and Lyft require.  If you don’t have the right kind of aptitude, you will not do well at doing tasks requiring it.  That does not mean these propositions are invalid, but it does mean that many are effectively available to only a minority.

Overall, once the laws and their enforcement get in place, once more participation and therefore competition brings prices lower, once the drivers and house hosts have commercial insurance, and so on, there won’t be enough left of the sharing economy to constitute a broad-based alternative to even minimum-wage employment.  What will remain will be the selling of possessions and other finite resources, ventures with appeal dependent on incomplete expense accounting, and, as the best of the lot, small business propositions, requiring as for more established ones the right kind of attitude, drive, stamina, wide-range skills, and often willingness to put in hours unheard of when working for others – a set of attributes few people have. 

How can we best deal with the sharing economy, as it is and will be?  There is no need for special regulation, as existing laws will do just fine.  With vastly differing personal completion times, efforts to establish a minimum wage of sorts for less remunerative and more unusual tasks would be misguided, not to mention bureaucratically difficult or impossible, and anyway more opportunities for people to earn money should not be discouraged.  Yet we are best off resisting being enamored of the sharing economy, as it is hardly a jobs-crisis solution.  We need more for what we face in America. 

Friday, March 6, 2015

Another Good Month, But February’s AJSN Shows We’re Still 19.3 Million Jobs Short

The Bureau of Labor Statistics’ monthly Employment Situation Summary continued its good and remarkably steady pattern again this morning.  Seasonally adjusted net new payroll employment jumped 295,000, and the jobless rate reflecting it reached a post-recession low of 5.5%.  Average wages improved also, with an average 3 cent gain that may sound puny but in fact works out to an annual rate higher than inflation has been. 

The American Job Shortage Number or AJSN, which is not seasonally adjusted, fell about 260,000, essentially completely on lower official unemployment, as follows:

The raw number of technically unemployed declined 400,000 from January to February, meaning that latent demand for jobs from that segment fell 360,000.  The AJSN, though, did not drop that much, because the count of people in three significant smaller categories, those not searching for work in the previous year, those discouraged, and those temporarily not available to work now, were all up.  Since any seasonal bias in these figures would call for them to be lower instead of higher, as employment is generally better in February than in January, once again the job creation statistics did not tell the whole story.

The four key secondary measures were mixed.  Long-term unemployed, out 27 weeks or longer, improved by 100,000 to 2.7 million.  The count of those working part-time for economic reasons, or wanting full-time work but only finding part-time, dropped 200,000 to 6.6 million.  The employment to population ratio, which shows what percentage of Americans are working, held steady at 59.3%, but the labor force participation rate, despite official joblessness tumbling substantially, fell to 62.8%.  As well, seasonally unadjusted unemployment fell from 6.1% to 5.8%. 

Year-over-year AJSN component comparisons were much the same as between the past two months.  The AJSN is almost 1,000,000 less than it was in February 2014, but way more than that – over 1.6 million – is from the drop of people technically unemployed.  Those in other categories, in particular the count of people wanting to work but not looking for it for at least the previous year, which has jumped from about 3.22 million in February 2014 to 3.74 million last month, offset almost 40% of that improvement. 

So where are we now?   Unemployment keeps dropping, wages are doing better, and the number of new jobs is consistently more than covering the population increase.  However, although higher absolute numbers of Americans are working, the problem of people leaving the labor force remains, is not getting weaker, and will become much worse with the next recession.  Even after giving jobs to each technically unemployed person, we could, easily and quickly, fill over 10 million more.  But, to be fair, the turtle is still plodding forward.