Friday, February 24, 2017

Trump and Jobs: A First Presidential Look

What will President Donald Trump do about employment?  Despite how much has been said, by him but to a much greater extent on his behalf, we know very little. 

That is not only because of his extremely chaotic nature and his well-established tendency to lie, but also because it is way too early to know.  There is a reason why the first serious assessments of presidents are done after they have been in office 100 days – it takes that long for them to find their footing, to talk with people in both legislative houses, and to get a realistic picture of what they can and cannot do.  We may also not know much before then what concessions Congress will want from him, and what key senators and representatives will request to be added to laws he wants to pass.  We don’t have much help from commentators, who, if on the left, are mostly only repeating concerns they have had about him since before his election, and, if on the right, are finding their own positions between supporting him and holding back in favor of true conservatism instead. 

Thus, we are reduced to reading tea leaves.  Some people, such as stock investors, expect good things, probably from Trump’s almost certain attempts to cut taxes on those with the most income and net worth.  In some cases, employers have seemed scared to announce job cuts, and others have re-publicized upcoming hiring increases.  Most of their business moves have nothing to do with Trump, such as Amazon’s long-in-the-works promise to add 100,000 full-time American positions by the end of next year, “as bricks-and-mortar retail crumbles” (The New York Times, January 12th), “but at what cost?” (USA Today, January 13th). 

What pertinent things did our president propose before he was elected?  Per “A look at Trump’s economic proposals” (USA Today, November 9th), there were many of them.  He wanted to reduce income tax rates, the highest one to 33%, and eliminate gift and estate levies.  He would slash corporate rates from 35% to 15%, and cap small business income taxes at the same level.  Trump also advocated a wide-range of protectionist laws, most spectacularly 45% and 35% Chinese and Mexican import tariffs.  He would increase forgiving of student loans, offer new child-care tax credits, and, surprisingly, mandate six paid maternity-leave weeks.  He wanted no federal minimum-wage increase.  Trump asked for Obamacare to be repealed, but backed a $1 trillion infrastructure proposal that, though it would never approach the 13 million jobs he said it would create, would generate a lot of them.          

On the prospects for these things being accomplished over the next four years, we do know a little more now than then.  With Republicans controlling both houses, tax rates are likely to go down, though probably, since conservatives care more than Trump seems to about the financial consequences, not as much as he would like.  The tariffs will be debated, and could come out either way.  The student loan and child care measures would be good bargaining chips for Democratic support – if this president can show ability to work with Congress instead of only trying to dictate to it.  Almost day by day after the election he backed off further from his pledge to end Obamacare, though that still could happen.  The infrastructure project would seem in the abstract to have strong bipartisan support, but some on the right are against it, and we will hear plenty from them, on this and other issues, over the next year.

When looking at what could be accomplished over the next four years, we must also consider another possibility, peculiar to Trump.  As of yesterday evening, the prediction market gave him 20%, 15%, and 11% chances of leaving office in 2017, 2018, and 2019 respectively., an offshore betting facility which allows, as American casinos do not, wagers on outcomes determined outside the rules of games or sports, had the odds only 27 to 20 in favor of Trump finishing a full term.  An early departure, with chances too significant to be ignored, would precipitate a Mike Pence presidency, with clear expectations of conservative Republican governance.  In particular, that could, or could not, mean an end to the protectionism Trump proposed. 

Other major things could also happen.  A trade war, or even a shooting war, with other large countries could change what Congress is willing to pass.  Negative world-leader reactions to Trump could distort job-related outcomes.  And of course there is the standing possibility of a recession, which last happened eight years ago.  These also mean an unusual amount of uncertainty.  We will know much more, though, by April 30th

Friday, February 17, 2017

On the Job: Three Months of Choosing Good Ones, Getting Them, Hating Them, and Containing Them

Whatever your work status, something has come out recently for you to think about.

In Northeast Pennsylvania Business Journal’s November 2016 Dave Gardner interview of Maurice Flurie, “CEO:  The trades are booming,” Flurie, who runs “state-wide cyberschool” Commonwealth Charter Academy, described a disconnect between the jobs for which public schools are preparing their students and actual marketplace needs.  He did not fall into the tired and incorrect view that employers deserve no blame for their unfilled below-market-rate-paying openings, but instead focused on teaching pre-high-school students entire careers, not only considering differing aptitudes but fully recognizing the value of skilled trades.  I have advocated those in construction, as demand for them will stay high in general, and see as the only concerns what can be up-and-down hiring and confusion with manufacturing positions having much poorer long-term prospects.

Also on career selection, The Economist, which has disappointed me recently in employment-related matters, did much better in their The World in 2017 special issue.  In “Apply within,” author Tom Standage only wrote up our Bureau of Labor Statistics forecasted jobs rate through 2024, but those projections showed more depth than those made before.  The top position, expected to provide twice as many opportunities as now, was wind turbine service technician, far ahead of second-place occupational therapy assistant.  After that, not until eighth place does one with which I disagree, statistician, appear.  The others follow my principles in 2013’s Choosing a Lasting Career remarkably closely:  giving best prospects to healthcare-related professionals other than physicians; a great emphasis on jobs that must be done locally and in person; a #10 rating for the position I named first overall, physician assistant; and avoiding currently good but dangerously vulnerable occupations such as pharmacist and computer programmer.  Kudos to the BLS for their pronouncement and to Standage and The Economist for educating us about it.

On December 16th, a Washington Post Jeffrey J. Selingo opinion piece asked “Why are so many students failing to find good jobs after college?”  I could almost completely dispose of it by answering “because the permanent jobs crisis means there are too many workers chasing too few jobs,” but the article brings up a few items worthy of other note.  I was surprised that as recently as 2005 the top motivation for incoming UCLA students was to “learn about things that interest me” – I had thought that the vocationalists, who seemed to win that war in the late 1970s, were still in the majority at least nationally.  According to other studies Selingo uncovered, fewer than 20% of students graduating 2010 or later found their university career centers helpful, rather stunning given such low official unemployment.  Selingo called on colleges to make use of federal 75% work-study subsidies by offering positions with skills more advanced than those typical for student-employee positions; whatever the solution, it is depressing to think how poorly university vocational help would be doing if we had another recession.

Just after Thanksgiving, Forbes career columnist Liz Ryan offered two lists for jobseekers and jobholders.  The second, “Ten Job-Search Habits to Break” (December 5), described how to stick to what she described as “the new-millennium approach using Pain Letters,” in which the applicant acts as a consultant, seeking out information on what the employer needs to improve, to show they can contribute effectively.  The behaviors Ryan recommends ending are using standard cover-letter language, describing career backgrounds instead of problem-solving examples, writing the likes of “results-oriented professional” or “motivated self-starter,” being obsequious in general, only waiting to answer questions in the interview, walking through an already submitted resume, and naming related experience, mentioning compensation levels, asking for approval, or trying to impress hiring managers.  All revolutionary but often justified, especially for people suspecting they may not have a real chance to be hired without it.

Ryan’s previous list, “The Top Ten Reasons People Hate Their Jobs” (November 29), put incentive for good work performances on employers’ shoulders, saying “motivation is a feature of the environment, not the people who work in it.”  Her in-effect checklist named the following as indications that organizational management may be falling short here:  employees “not respected as people at work”; people lacking both the correct tools for their jobs and ability to get them; apathy about personal lives; a supervisor unqualified or “a tyrant”; too many lies; no confidence in leadership; too much politics; being “underpaid and overworked”; inability to get their projects moving forward; and an atmosphere where employees “could get in trouble – or get fired – for almost any reason.”  Some are old and vague, but are indeed worthy of avoiding. 

That brings us to January 17th’s “Why America Needs the French Email Law,” written by Katie Denis in Pulse.  The title referred to the January 1st requirement in France that companies with at least 50 workers must name hours during which their employees cannot send (or answer) email messages.  We’re a long way from agreeing on some of the points Denis made, such as that “skipping vacation time doesn’t make you more valuable” or that we need to “appreciate power of downtime” – perception means a great deal, and innumerable corporate managers cannot tell the difference between work quality and quantity – but I agree that even if such a law were enacted in the United States, which it should not, it is positive that a major advanced country has actually done that.  There is not enough pressure on American employers to let their workers manage their own lives, and this law, applicable to them or not, will provide some.  It, along with the other five subjects here, was well worth publicizing.

Friday, February 10, 2017

Uber, Lyft, Airbnb, and their Jobs are Sputtering as Expected

It’s not been a good several months for the two largest car-and-driver-sharing companies and the main sleeping-space one.  As I predicted years ago when they made broad-based national news in 2014, these three ever-growing and still successful “sharing economy” companies are falling prey to two things:  the catching-up of regulations they had thus far avoided; and proper cost accounting being done by those providing those services, showing that neither ride-sharing nor home rentals are as profitable as Airbnb, Lyft, and Uber management want us to think. 

On June 27th, even a rare regulatory victory, in which Airbnb in San Francisco won the legal right to offer extensive short-term living quarters without being subject to hotel laws, sprung a leak, as that city’s supervisors ended up voting to require registration of each person providing such services, with $1,000 per incident fines for noncompliance.  The problem, as the board saw it, was not occasional home-sharing, but, per Katie Benner’s June 28th New York Times article, their owners doing that almost continuously.  That controversy resulted in the view from Abha Bhattarai’s July 31st Washington Post piece, “As regulatory attacks mount, Airbnb goes on a charm offensive,” describing how that company organized Washington rental hosts to meet with other local business owners to get their customers to shop with them, in exchange for, they hoped, their votes against a strongly regulatory city council bill. 

The Economist, for which being based in Britain is no excuse for being behind the times, issued a September 3rd piece, “Uberworld,” which looked like it could have been written a year before.  Its unbilled author told us that Uber is “the world’s most valuable startup” (more than Wal-Mart?), which is “shaking up the $100-billion-a-year taxi business” and “will transform daily life as profoundly as cars did in the 20th century” and “could reduce the number of cars needed by 80-90%.”  Though driverless vehicles will have great effects, cheaper taxis will not.  All we need to do to confirm that is to look at cities such as Seoul and Buenos Aires, where relatively low-priced cabs are used more often than in America and have facilitated such improvements as less drink-driving, but have barely if at all reduced the number of privately-owned cars.

Uber, though, has been expanding their business offerings in other, if not new, ways.  Per Business Insider on September 29th, it is now delivering food from over 500 London restaurants to a large area of that city.  If customers will choose Uber for such a service instead of from two other companies, and will pay rates not specified in this James Cook article but seeming to approach $12 to $15 per hour, it will succeed.

Another sign of regulation being applied as much to Uber and Lyft as to true taxi companies reached San Jose’s Mercury News two days later, as the California governor signed a bill requiring both to strengthen their already robust driver background checks.  One more, “New York cracks down on Airbnb” (Sara Ashley O’Brien, October 21,, banned renting of “entire apartments” for less than 30 days in that city.  Those against that activity, per O’Brien, “say (the law) is aimed at people who use Airbnb to effectively turn their homes into hotels – and thus take potential rental housing off the market and deny cities tax revenue.” Airbnb’s resulting lawsuit, which they dropped six weeks later (“Airbnb Ends Fight With New York City Over Fines,” The New York Times, December 3), claimed that they should not be responsible for what their hosts do.

Going beyond simply driverless vehicles, one of the ridesharing companies seemingly let loose more than that in an October 28th USA Today piece, “Uber looks to flying cars as next big shift” by Eli Blumenthal.  The article itself, however, was about helicopters proposed for especially large and heavily trafficked cities, such as Sao Paulo, New Delhi, and the San Francisco Bay area.  Not the same thing as flying cars, and such services are, in New York for one place, available already.

On another flawed area of ridesharing, that company lost another judgment that same day.  The title of Danica Kirka’s October 28th “UK Uber drivers win case to get paid vacation, minimum wage” said it all, with the chances of Uber getting away with calling its workers contractors taking another legal hit.  That issue was discussed further in The New York Times (“In Europe, Is Uber a Transportation Service or a Digital Platform?,” November 27th), in which Mark Scott recapped conflict between that company’s practices and both governments and taxi companies in France, Frankfurt, Barcelona, and elsewhere.   Scott also mentioned similar European issues with Airbnb.  A few days after that, a Danish appeals court upheld an unlicensed-taxi conviction against an Uber provider, (Salon, December 2), judging only that cabdriving regulations applied to that company.

Not every situation, though, has been clearly lost by the sharers.  In “New Orleans Becomes New Model for Airbnb to Work With Cities” (Katie Benner, The New York Times, December 7), we saw the results of a rare cooperative effort.  There, the company agreed, in exchange for being allowed to do business in its usual way:  to share data including host names and addresses; to its hosts being required to obtain city permits; to be limited to 90 annual rental days per entire home; and, perhaps most painfully, to almost completely stay away from the French Quarter.  If these agreements hold, expect them to be duplicated elsewhere.

Three more stories, though, showed how reality is catching up with the ridesharers.  Fox News’s “Uber, Lyft clashing with cities over new regulations” (Dan Springer, December 20) was mainly about what could be called an “et tu, Brute?” moment for those two, in which tech-loving Seattle determined that they should be subject to the same rules as taxi companies, since, as an assistant city attorney common-sensically put it, “at the end of the day, they do the same thing, they drive people from point A to point B.”  Fox Business informed us on January 5th that the state of Massachusetts will soon be subjecting “tens of thousands” of Uber and Lyft drivers to what “officials say are the country’s most stringent background checks.”  And, as for the cost accounting problem mentioned earlier, per The Wall Street Journal on January 19th, Uber has been fined $20 million by the Federal Trade Commission for misleading potential drivers about their actual earning potential.  
The possibility is real that, within two years or so, Uber, Lyft, and Airbnb will consistently be held to the same standards as traditional lodging and taxi companies.  Whether they will survive in some form, such as with driverless cars, we do not know.  In an intriguing February 2nd Forbes article (“Uber and Lyft May Just Be Here For A Brief Ride”), Jeff McMahon told us about an idea from urban real estate expert Randy Rowe, that automobile companies may, when self-driving vehicles are well established, sell contracts instead of cars, in which “you’ll get a certain number of points in a year, and if you order a sports car for that morning it costs you that many points, if you order a van for the family trip to the mountains it costs you that many points, and when you have your four-door sedan for your normal stuff it’s a different price.”  Ford, which is as Rowe put it “rebranding itself… as a mobility company rather than an automaker,” may lead the way.

Will that happen?  Hang on – we will see.  In the meantime, don’t buy stock from any ride or home sharing companies. 

Friday, February 3, 2017

AJSN, Up To 18.3 Million, Is Back to Where It Was a Year Ago On Higher Seasonal Latent Demand For Work

This morning’s monthly Bureau of Labor Statistics employment data had an odd pattern.  All the most important numbers were larger.  That held for those where increases were good as well as bad.  What happened?

First, the favorable.  What is rightfully now the marquee figure, the number of net new nonfarm positions, came in at 227.000, almost 100,000 more than our population increase could have absorbed.  The two metrics showing best how many Americans are actually working, the labor force participation rate and the employment-population ratio, each rose a large 0.2% to 62.9% and 59.9% respectively.  Average hourly earnings, which gained 6 cents per hour (adjusted down from 10 cents) last time, did not backtrack, but solidified that with another 3-cent rise to $26.00. 

The other major numbers did not do as well.  Both seasonally adjusted and unadjusted unemployment shares rose, 0.1% to 4.8% and 0.6% to 5.1%.  The count of those officially jobless for 27 weeks or more went up 100,000 to 1.9 million.  Those working part-time for economic reasons, or keeping less than full-time positions while unsuccessfully seeking ones with more hours, jumped 200,000 to 5.8 million. 

The American Job Shortage Number or AJSN, showing in one figure how many additional positions could be filled if getting one were quick and easy, gained 1.3 million.  Although that reflects mostly the usual large difference between January and December employment, as the AJSN is not seasonally adjusted, its gain was broad-based, with high latent demand increases coming not only from people officially jobless, but from those not looking for work in the previous year and those describing themselves as discouraged.  Overall, the AJSN came in at just over 18.3 million, as follows:

Compared with a year before, though, the AJSN is almost unchanged.  January 2016’s was 18.36 million, with higher official unemployment and more discouraged workers offset by losses in non-civilian, institutionalized and unaccounted for, expatriate, and those not looking for the previous year. 

So how did we do last month?  With such a large difference in how many people are working between January and holiday-work-rich December, the year-over-year comparison is most important.  That showed essentially no advance.  However, four numbers – net new positions gained, average wages, and both employment percentages – improved, and did not need to.  Our multi-year job situation gains are not quite topping out, so the turtle once again stepped forward.   

Wednesday, February 1, 2017

Higher Minimum Wages: Six Months of Laws, Studies, Viewpoints, and Speculation

This employment area has had a lot of activity since the Fourth of July.  What has happened, and what has been said?0

Tom Knighton’s snide-titled July 6th article in PJ Media, “Boston Globe Accidentally Reports That Raising the Minimum Wage Kills Jobs,” showed how the YouthWorks program, which provides pay for teenagers with low family incomes to work at nonprofit opportunities, delivered fewer of them when the lowest legal Massachusetts pay was increased, and correctly pointed out that “no wage” was “harder to live on” than the minimum, whatever it may be.  Radio host Mark Levin hit a similar note later that month, as reported in CNS News, by saying that “raising the minimum wage eviscerates jobs for the little people,” from sheer inability of employers to maintain as many jobs. 

On July 29th, The Washington Post printed Max Ehrenfreud’s “Why raising the minimum wage in Seattle did little to help workers, according to a new study.”  The author wrote that such efforts “have often produced contradictory results,” and reported that, when Seattle’s large-business base rate increased from $9.96 to $11.14, one research project determined that it raised average earnings $5.54 per week, while another found that it reduced them by an almost identical amount.  He named another study result, that birth weights correlated with minimum wages, which could not possibly have shown causality.  Another one Ehrenfreud cited concluded that Seattle’s increase was followed by reduced hours and employment.  The next day, The Seattle Times released something intended and succeeding as an even-handed editorial, “Read between the lines of the minimum-wage experiment,” saying that the new rate was neither “a universal good” nor “a job-killer”;  that while that city’s “white hot” economy had precipitated no reduction in job openings, had mandated pay floors stayed the same there would have been 1.2% more;  and that workers had lost an average of 35 to 40 work minutes per week.  

The negative views continued the next day in New York Post, with Nicole Genilas’s “A $15 minimum wage will crush the retail industry.”  She pointed out that there are now 8 million retail salespeople and cashiers earning hourly averages of $10.47 and $9.28, and maintained that “the result of impossible labor costs will be more automation.”  Much the same viewpoint came out August 1st in Salon, of all places, in Carrie Sheffield’s “Hillary Clinton’s bogus war on poverty:  Her proposed minimum wage hike would only hurt low-income families,” saying that $15 per hour would “price young people… out of the labor market, and for many, their first job.”

Although there are many causes affecting the number of work opportunities, Tyler O’Neil, in PJ Media on August 28, gave as well documented an example of minimum pay affecting jobs as I have seen.  “D.C. Restaurants Lose 1,400 Jobs Amid Minimum Wage Increase” started with a graph showing steady increases in the number of restaurant positions in Washington and its suburbs from 2010 to July 2016, with the only exception being a drop in the city, six months before July’s mandated $1 per hour raise, but not elsewhere. 

On November 30th, Brian Sozzi’s piece in The Street, “Fight for $15 Serves Up Huge Risk for Restaurant and Retail Investors,” predicted that “the latest populist wage protests will come to a head for many companies in 2017.”  He warned that McDonalds and T.J. Maxx stock might each suffer, and concluded that investors should “pay attention now,” or “be served up a side of losses later.”  The next day, an untitled Investor’s Business Daily editorial came out against that rate, citing a study showing it “would have a devastating effect,” with “ultimately, millions of jobs lost” (italics theirs), with the poorest 10% of such workers dropping 28% and 38% of the positions shed in Chicago and Boston.  The authors said those favoring the $15 minimum may “think they’re taking a moral stand,” but are “merely killing jobs that poor people could do, achieving badly needed training and experience along the way,” contributing greatly to “such a large income and jobs gap, and why minorities have such a hard time getting a foothold in our economy.”  Valid points.

From the other side, Barry Ritholz’s “Minimum-Wage Foes Tripped Up By facts” (, December 7) claimed “many” studies have found that “modest increases in minimum wages don’t lead to job losses,” and said that Wal-Mart workers were receiving an average of $1,000 in public assistance.  He did not consider employers cutting positions to prepare for higher pay to be meaningful, and noted the stimulus effect instead.

This year, per Jeanne Sahadi in CNN Money (December 19), there will be minimum wage increases in 19 entire states and seven additional cities and counties.  The floors are going up in Arkansas, California, Colorado, Connecticut, Florida, Hawaii, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, New Jersey, New York, Ohio, Oregon, South Dakota, Vermont, and Washington, along with, among other smaller places, Washington, D.C. and Albuquerque, New Mexico. 

So what will be the result of all this?  “What will a higher minimum wage do?  Two new studies have different ideas” (Natalie Kitroeff, Los Angeles Times, January 11) gives us some formal conjecture, including, from Berkeley, California, the ideas that that state’s rises will actually cause a net increase in jobs (!), and that “bigger salaries also make people more productive,” which runs counter to the classic literature on that subject.  We won’t know much, though, until near the middle of the year, when, clearly, there will be plenty of data to analyze.  I’ll see you on this topic then.