Friday, January 13, 2017

Jobs General and in Public Policy: A July Through January Round-Up

In this blog I’ve focused mainly on what is happening in various industries, along with monthly numbers which give insight into our employment situation.  More, though, has happened, and been written about, how our laws could help with that.

First is July’s issue of the Northeast Pennsylvania Business Journal, in which Howard J. Grossman, former executive director of what is now NEPA Alliance, an organization promoting economic growth in this area, wrote “unemployment insurance:  an option for joblessness?”.  Grossman discussed private work-loss compensation insurance covering annual income up to $250,000, with premium costs averaging about $1,000.  He advocated it, and showed that it is not only viable but a desirable choice for many.

In The Atlantic, Alana Semuels’ August 8th “Is the U.S. Due for Radically Raising Taxes for the Rich?” considered this issue which seemed headed for change before our presidential election.  The article is mostly a history of top American income tax rates, which almost doubled for the highest bracket under Republican Herbert Hoover and went even higher with his Democratic successor Franklin D. Roosevelt.  They held at 70 percent-plus from 1935 to 1982, but have been under 40%, also under presidents of both parties, since 1987.  The piece noted the correlation, if not the causality, of high levels of income inequality after long stretches of low marginal income taxes over the past 90 years, and concluded that for raising those rates to be effective, it would need to be done by “all the big countries,” and that “the U.S. must really want it to be done.”  That, now, means not soon. 

Former labor secretary and active author and blogger Robert Reich decried “corporate tax deserters” in Salon on September 14th.  He suggested an end to “financial incentives that encourage” it, and opined that United States companies moving their cash or headquarters overseas “should no longer be entitled to the advantages of being American,” including political involvement and use of the domestic litigation system.  That has plenty of merit, and removing tax breaks instead of implementing new levies should in theory have bipartisan support.  I have previously advocated better tax treatment of companies creating and maintaining large numbers of jobs, and Reich’s ideas here could be implemented along with that.

Another viewpoint to which I have subscribed, that of the need for a national infrastructure project, gathered opposing views.  The Wayne Independent and other sources published Heritage Foundation research associate Michael Sargent’s “What both candidates get wrong about infrastructure” (July 29th).  The author cited statistics and studies showing that American pavement, bridges, and highways had improved, not worsened, since 1992, and that such efforts were susceptible to overspending.   George F. Will’s November 25th Washington Post “Infrastructure projects aren’t jobs programs” differentiated between these two purposes, but unfortunately illogically claimed that New Deal public works projects “did not significantly reduce unemployment,” since joblessness then did not drop, and said such efforts would not be as useful as those before since our infrastructure is now more developed.  Both Sargent and Will bring worthwhile points, but nothing in either article convinced me such a plan, perhaps modified to consider the above, would not be worthwhile.

The worst labor-related news of the year came out November 22nd, when a federal judge blocked adjustment of the maximum salary for overtime eligibility.  My May 27th post named six reasons why this change was good, even if a higher minimum wage was bad, and said that I had never seen as many “bad arguments” as put forth by those opposing it.  However, lawsuits filed by “21 states and a coalition of business groups, including the U.S. Chamber of Commerce” (Reuters, in Fox Business) provoked the judicial response that the change was unlawful.  The measure is now under nationwide injunction, but further legislation and litigation are sure to follow.  Eventually, though probably not with the incoming presidential administration, the courts will see that low pay is not the same as employee abuse, and resolve the overtime issue appropriately.

In “What a 21st-century safety net should look like” (Washington Post, November 29), Democratic Virginia Senator Mark R. Warner suggested, in response to “modern American capitalism… not working for many Americans,” portable health-care and disability insurance, some type of retirement savings protection, and incentives for companies to retrain workers.  He bemoaned business’s short-term financial focus, but had no ideas on changing that.  Overall there is not much here, except inadvertently pointing up that agreement on the causes of problems is not enough to solve them by itself.

Although there has been a lot of recent press about guaranteed income, there is still some confusion about what it actually is.  That was made clear in reports of Finland’s experimental enhanced unemployment benefits, going to 2,000 jobless people for two years.  Since the money will not be stopped by the recipients’ earnings elsewhere, Peter S. Goodman in the December 17th New York Times, despite his article’s title “Free Cash in Finland.  Must Be Jobless.,” described this effort as “an experiment in a form of social welfare:  universal basic income.”  But it is not.  For earnings to be both guaranteed and universal, they must go to people regardless of employment status.  By skewing the set of people given this money, the outcomes will be misleading and will distort the views of those not realizing this distinction.  Higher unemployment compensation is generally a good thing, though, even if it is represented as something else.

On December 28th, Fox Business published “The Average Retirement Age in Every State in 2016.”  I was stunned by how little variation this study, which used federal data for people aged 40 to 80, found across the nation.  All 51 data points, for the states and the District, came out between 62 and 65, with the relatively largest in New England and nearby New Jersey.  Additionally, despite much talk about later retirements, only 6% of Americans are still in the labor force at age 80.  More interesting would be the share of people who have left what could be defined as their main careers at certain ages – that would not come out anywhere near 20th-century levels. 

Lauren Weber’s January 3rd Wall Street Journal piece “‘Routine’ Jobs Are Disappearing,” discovered what readers of this blog have known since its 2012 inception, that many doing algorithmic work, be it physical or mental, have been losing it.  Weber’s additional statement that “the U.S. must invest in raising the skills of the workers most likely to be affected by the disappearance of routine jobs, labor market experts say” is even less useful, not only no newer but something I debunked five years ago in Work’s New Age

Shorter workweeks have great value, and stand as one of the few comprehensive solutions to the permanent jobs crisis.  Have they failed already?  Liz Alderman, in “In Sweden, Happiness in a Shorter Workday Can’t Overcome the Cost” (The New York Times, January 6th) seems to consider that possibility.  She documented the Swedish experiment with a six-hour workday, which resulted in “happier, healthier, and more productive employees,” but proved too expensive, as others needed to be hired to cover the lost time.  On further examination, though, the trial was held with retirement home workers, who needed to cover predetermined hours.  Under those circumstances, it was clear that shortening their work would mean more employees would be needed.  That would not be the case for most cubicle-job workers who, if they did not have as in this case ten hours a week of idle or expendable time, could have their least essential tasks cut.  Clearly, shortening hours for production workers, or those needed to be present for certain lengths of time, is not as viable as doing that for those with slack time or flexible workloads.  Thus, the headline here was as misleading as the subhead of the Finland article above, “the idea, universal basic income, is gaining traction worldwide.”  Guaranteed income and shorter working hours have great potential, but they must be understood properly.      

There will be more.  If anything else, it is good to see the issues above being discussed.  Even if the unemployment rate stays low, we will need to keep doing that as the years roll on.

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