Friday, March 29, 2013

Around the Horn on Jobs – End of March, 2013

It’s the last business day of the first quarter.  It’s finally starting to look like spring here in the Catskills, and there have been many different issues getting press.  Some, such as gay marriage, I can’t do much with from a jobs standpoint, but others bear on this ongoing crisis.  What have we had to read this week?

“Median Household Income Down 7.3% Since Start of Recession” – Catherine Rampell, Economix blog, The New York Times

No surprise.  One-third of new jobs created since 2008 pay $12 per hour or less, so naturally the median, as opposed to the mean, will get worse.  And we’re not in a recession – that ended two years ago.  When we have another one, we’re going down more than 7.3%.

“Jobless claims tick up for second straight week” – Don Lee, Los Angeles Times

This supposed bad news means almost nothing.  If people don’t have jobs, they can’t lose them.  One effect of companies being so cautious about hiring permanent workers is what looks superficially like a good outcome – few recent hires mean fewer recent job losses.    

“For federal workforce, the furlough terrain is uneven” – Lisa Rein, The Washington Post

Will people cut back to four days a week from five file for benefits?  They can, but will they?  The one-week waiting period some states have after a job loss, with no checks will be issued, will hurt them also. 

“Cheating Our Children,” Paul Krugman, The New York Times

The Nobel-winning polemicist takes on the issue of which rips off the younger generations more, raising the deficit or cutting spending on education and the infrastructure.  He concludes the latter is worse, of course, but makes good points.  If they have no work and can’t get across town anyway, Millennials and beyond, indeed, won’t care much how many trillions are on the right-hand side of the country’s balance sheet.

“Jobs Act falls short of grand promises” – Dina ElBoghdady, The Washington Post

Yes, it has, but not only Obama is to blame.  Both sides have continued stinking up Capitol Hill on infrastructure work, the lack of which is poised to do real damage to American pride as well as to American business competitiveness.  Not to mention that much of the act reads as if it were written by conservatives.  That lack of action is one of the worst outcomes from our current partisan-only climate.

“Energy security and American jobs” – The Chicago Tribune

This editorial says we’ve had “enough dawdling” and that Obama should approve the Keystone pipeline.  This editorial is correct.  We want those jobs in the United States, not to mention getting the geopolitical advantages of getting more energy from Canada, instead of from the likes of Venezuela.  The number of positions, especially permanent ones, the pipeline would actually create is uncertain, and may be disappointing, but the environmental concerns must be weighed against other advantages, which comfortably prevail over them.

“’Lean In’ author Sandberg:  It’s time for women to lead” – Cheryl V. Jackson, The Chicago Tribune

I have closely followed the Sheryl Sandberg controversy, but have not mentioned it in this blog, mainly because it has little effect on the number of jobs.  I will weigh in here, though.  Sandberg’s ideas are not sufficient to equalize the overall career outcomes of men and women, but they are necessary.  We need to get past the idea that protected groups are 0% responsible for their statistical shortcomings;  whether their share is more like 10% or more like 90% is, strangely, not the issue.

“Where Obama should hear Paul:  Legal pot” – Clarence Page, The Chicago Tribune; Colorado pot growers gear up for ‘green rush,’” The Washington Post

Now HERE’S a source of jobs!  With marriage equality clearly unstoppable, how about also moving forward quickly on marijuana legalization, which a majority of Americans now support?  Let’s tax it, and collect money instead of paying for enforcement of hopeless laws.  Keep it away from children.  Test for it roadside.  Collect income tax from both its workers and its businesses.  Discover, as we will, that the huge majority of people not smoking it now won’t do it when legal either.  We have better, and much more constructive, things to do as a country than banning what citizens do with a common domestic weed. 

In the meantime, prepare for our next recession.  When it happens, and we discover that today’s sub-8% unemployment was not so bad after all, tens of millions of Americans will need all the help they can get.

Friday, March 22, 2013

Americans: Deal with What Is, Together, or Be Conquered

Both conservatives and liberals are correct.  Higher income correlates strongly with more education, with more work, and with a variety of positive, self-developed attributes.  But more earnings also correlate with being white, being male, and being straight.

Yet both sides are also wrong.  Good life habits often go along with a positive and financially solid upbringing, which is hardly distributed equally among demographic groups.  Being black, Hispanic, female, or gay, though, is by no means a solid barrier to success.

So how do we sort this out?  Where do we go from here?

First, all groups are not identical culturally, psychologically, or in their views of life, as much as we would like that to be the case.  Equality of opportunity will never guarantee equality of results, even in our great-grandchildrens’ time.  What sense does it make that the set of people who grow up female, with different hormones and body structures from others, would without any discrimination have identical statistical distributions of the complex factors influencing career success?  Why should people from all cultures, some made up of those consistently prizing education and cooperation and some not, have the same rates of success, however you define it?  Failure to achieve equal outcomes does not make us, our culture, or, least of all, our discrimination-banning legal system racist, sexist, homophobic, or anything else.    

Second, we are all Americans.  Within that, we have many appearances, values, preferred lifestyles, ancestral ethnicities, and outlooks in general.  We differ not only in our abilities, but in our inclinations.  A high school friend, in the early 1970s, ran a 60-second 440-yard dash - in a gym class, without any preparation.  The teacher, who was also the school’s track coach, said to him afterwards, “Do you know what you just did?,” and told him his time.  The coach implored him to join the track team, where almost immediately he could be one of the school’s top sprinters.  My friend did not.  Track success meant little or nothing to him.  What we do, and do not do, is up to us, regardless of what is possible.  Our national identity, though, means more and more as other countries compete better and better with ours.

Third, if we do not unite, we will be divided and conquered.  Not by any great outside force, but by the realities we face.  The jobs crisis is permanent, and not only for blacks, women, or non-college-graduates.  Problems such as shockingly low employment (not unemployment), high crime rates, high incidences of illegal drug use and alcoholism, and very large amounts of TV watching, symptoms of an often justified attitude that people have little chance to support themselves, have moved far outside the inner cities and are still spreading.   

Fourth, we need to find our success from the abilities we have and can gain.  I excel at manipulating abstract ideas, so have done well as a computer programmer, project manager, professor, and author.  Yet, despite interest in making things with my hands, I would be a below average carpenter.  The same goes for advantages we have over others.  Some 1970s baseball fans thought it was unfair that Joe Morgan, a second baseman headed for the Hall of Fame, could crouch his 5’6” frame when batting to shrink his strike zone and get lots of walks, but they did not consider how many people of that height did not play in the major leagues, let alone get enshrined in Cooperstown.  If you look around your life at the people you have known, you will see plenty of other examples – both ways.                

Fifth, we need to focus on reality.  What “should” be true in life is frequently not the case.  That is often painful to realize, but when we do that we will be healthier in the long run.  It would be great if everyone who wanted to work could find a job, and those not successful could blame only personal shortcomings, as was essentially true 60 or 100 years ago.  It would be wonderful if everyone totally lost the possibly genetic Homo sapiens tendency to be initially wary of those different from themselves.  It would be nice if women working, or men for that matter, did not face “glass ceilings” where their career limits arrived before their personal ones.  Religious tolerance from everyone would be a grand idea.  It would be super for all of us to be judged only on our merits.  These, though, are not how the world is put together, and may never be. 

We are all different.  We have one thing in common, though – we are Americans.  If we put our efforts into dealing with the jobs situation as it is, together, we will justify our shared belief that the United States is the best country in the world.  If we stay divided, we will be conquered by it. 

Friday, March 15, 2013

7 Unemployment Charts Which Do, Indeed, Tell the Truth about Jobs

At the end of last month, The Motley Fool published a set of graphs which tell us a lot about what is really happening with the jobs situation.  Titled 7 Employment Charts You’ve Got to See, written by Morgan Housel and available at , it starts as such:

Today, 5.5 million more Americans are working than were in February 2010. That's the good news.

But we are still likely years away from a jobs market anyone could consider normal. Twelve million are officially out of work. Millions more want full-time work but can't get it. The longer this lasts, the harder it is to break, as Federal Reserve Chairman Ben Bernanke told Congress this week: "Lengthy periods of unemployment and underemployment can erode workers' skills and attachment to the labor force or prevent young people from gaining skills and experience in the first place -- developments that could significantly reduce their productivity and earnings in the longer term."

It's ugly.

The first chart shows how long it has taken for jobs lost in recessions, over the past 65 years, to come back.  As I pointed out in Work’s New Age, that has become progressively worse.  Each recession from 1948 to 1980 has a line which looks like the letter V, or a sharp-peaked mountain, hitting a low point no later than one year after recession’s start and then rebounding, with the longest-lasting of these seven downturns recovering all of its jobs lost (though not enough to cover population increase) within 22 months.  The tracks for the most recent downturns, though, look like bowls, each one since 1980 wider than the one before.  In order, the recessions of 1981, 1990, and 2001 took about 26, 31, and 47 months to recover their jobs.  The 2007 downturn is, as of chart time, 59 months in, and has still made it little better than half way back.

Second, the article presents quits, layoffs, and hiring, along with posted job openings, since the beginning of 2001.  This chart shows that from the beginning of the most recent recession advertised jobs fell faster and farther than layoffs increased, and hiring reached a decade-long low.  In the four years since, though, posted jobs have increased much faster than people getting them. 

The third graph shows government employment, which, for the first time since 1990, has dropped, not counting temporary census-worker spikes.  Conservatives rejoice – government, at least the number of people working for it, is truly getting smaller! 

Fourth, we see the ratio between the number of workers quitting jobs and those being laid off or otherwise involuntarily removed.   From 2002 through 2008, that number fluctuated between 1.2 and 1.8, until the recession took hold in the spring of 2009, when it dropped to about 0.7.  Since then, it has rebounded, most recently to just short of 1.4.

The fifth chart shows unemployment rates by state, comparing current ones with previous recent-recession lows.  There are, of course, some large differences, from North Dakota (just over 3% now) to Nevada (a bit over 10%).  There has been the most post-downturn improvement in Michigan, Nevada, Ohio, and Alabama, a random-looking group of states, and the least in New Jersey, Pennsylvania, Connecticut, and New York, not random at all. 

Sixth, we have what Housel calls “one of the most incredible employment charts that exist,” of the percentage of men with jobs since the late 1940s.  It would be an exaggeration to say it looks like a ski slope, but it does resemble one of those graphs in old cartoons at the foot of a declining person’s hospital bed.  It starts at about 84%, reaches a little higher during the Korean War, then ratchets down, persistently if irregularly, to reach the latest 64-65%.  Last, we have the number of unemployed people per posted job opening, which shot up from 2.0 in mid-2008 to about 6.6 only a year later, and has since fallen back to about 3.3. 

What can we conclude from these?  In the first, unless the job-recovery trend continues for several years and there are no new recessions, the total number of positions lost late last decade is not coming back.  Second and seventh, job openings no longer mean job hiring.  Third, government positions are no longer a port from the employment storm.  Fourth, the recession is long over, and layoffs are not the problem – that is why it is not particularly encouraging news to hear, for example, that unemployment claims are down a little bit from the previous month.  Fifth, while the job situation has indeed improved since 2009, the best-performing states are simply too small to offer any broad-based help;  the 10 with the lowest unemployment rates all have 7 or fewer electoral votes, compared with third-worst California’s 55.  Sixth, while an aging population means more non-workers, men are becoming breadwinners less and less often, with huge implications for the American social fabric.

Clearly, employment times are changing – Work’s New Age is a well-entrenched reality.  Americans will make it through; since the winter of 1620, in which almost half of the Mayflower pilgrims died but the colony survived, we always have.  What we’re seeing now is not just a bad economic time – it is what we must face indefinitely, together, as a nation. 

Friday, March 8, 2013

February: Unemployment Dropped, and AJSN is Better Also

Today, instead of on the usual first Friday, February’s Bureau of Labor Statistics job data arrived.  Most headlines will say that unemployment, seasonally adjusted of course, dropped to 7.7%, and 236,000 net new nonfarm jobs, more than enough for the population increase, were created. 
Nothing misleading there - it was a good month.  The American Job Shortage Number improved also, by over 600,000, as follows:

Latent Demand %
Latent Demand Total
Family Responsibilities
In School or Training
Ill Health or Disability
Did Not Search for Work In  Previous Year
Not Available to Work Now
Do Not Want a Job
Non-Civilian and Institutionalized, 15+
American Expatriates


The effect of the growth in jobs, actually an unadjusted gain of 614,000, accounted for almost exactly all of the AJSN’s improvement.  The fringe categories increased overall, but the shares of people in them who would take a readily available position was almost unchanged.  Although those wanting to work but not searching for it in the past year dropped 150,000, people claiming they were discouraged gained 81,000,  and the numbers of those with family responsibilities, in school or training, with temporary ill health or disability, and otherwise not available to work also rose.  To summarize February’s data with little oversimplification, the 600,000+ working who were not last month came from the number of unemployed.
Even with the improvement, American job status is much the same.  There are still 8.0 million working part-time for economic, hours-availability reasons.  Those out of work for 27 weeks or longer stayed at 4.8 million.  The AJSN above, rounding to 21.8 million, is the second highest since August.  The population 15 and over increased an estimated 166,000, and if demand for jobs increased accordingly a reasonable 100,000, given seasonal variation it would take 80 months as good as this one to cut the AJSN in half.  So if you see lead sentences asserting that America’s getting back to work, you will know the proper response is “not yet.”  At the current rate, maybe late in Rubio’s first term.
So while we can be happy about February’s jobs data, that should be tempered.  Was it good news?  Yes.  Was it a fundamental improvement in the jobs crisis?  Absolutely not. 

Saturday, March 2, 2013

What’s Really Being Sequestered – Progress on Jobs

To no one’s great surprise, the federal budget sequester has taken effect.  Though its result will not be nearly as massive and horrendous as many have predicted, at least for a while, it could do quite a bit of damage if it continues all year, which it might – per Alex Altman in the latest issue of Time, it could cost 750,000 jobs. 
Whatever you say about American politics and the American national situation, you probably should agree that Democrats and Republicans aren’t cooperating with each other too much, so chances are good that we’ll roll along as we are through Christmas. 
And how are we rolling now?  Check out the following headlines:
“U.S. incomes see largest drop in 20 years” – The Chicago Tribune, March 1
Down 3.6% in January.
“Student debt tripled in eight years” –, March 1
On and on we go with what the article described, correctly I fear, as a bubble.
“Dow rises 35 points but stops short of record again” – Los Angeles Times, March 1
Investors have an “upbeat spirit”!  How about that!  To me, it looks ripe for a 1,000-point correction.  And how many jobs would THAT cost?
“Do-nothing Congress does something” – Los Angeles Times, scheduled for print publication March 3
On gun control, specifically on expanding background checks.  I just hope President Obama doesn’t squander too much political capital on this country-splitting issue.  If he doesn’t, there’s always immigration.
How about jobs?  Consider this:
The U.S. economy just can’t catch a break.  It has been poised time and again to rocket back to a growth rate that would recapture all the ground lost in the Great Recession, while delivering big job gains.  But every time, some outside event scuttles things.  The euro crisis flares up.  A Japanese tsunami scrambles global supply chains.  Lawmakers play chicken with the federal debt limit. – Jim Tankersley, “What’s the story with the economy?,” The Washington Post, March 1. 
The problem, Jim, is not that there was a tsunami in Japan.  It’s called Work’s New Age.  The jobs crisis is PERMANENT, and will NOT end with better economic times, or with an unprecedented lack of “events.”  As far as progress on what we can do, here is Alex Altman in Time on the sequester again: 
4.  Why all this focus on cuts?  Wasn’t the latest election about which party could create more jobs?
Funny you should mention that:  both parties say job creation is their top priority, but their actions keep hindering it in the public and private sectors alike.
No kidding.  Or at least they’re ultimately apathetic about jobs.  Even when measures would put people to work and are ideologically consistent with both sides (e.g. infrastructure repair, and permanently cutting the payroll tax), they seem to go nowhere.
If the first thing the sequester slashed were Congressional salaries, we’d already have a budget agreement – From one of my Facebook contacts, taken from a liberal site
So, this is it, folks.  It’s too bad yesterday was the only first 2013 Friday on which the Bureau of Labor Statistics did not release any overall unemployment data – it will go out March 8, so we’ll need to wait for our monthly jolt of cold water in the face.  I’ll be back then to tell you how many Americans would take a job if they were available, sequester or no sequester.   Until then, save your money. 
But wait – I’ll give the last eloquent, to-the-point words to our Speaker of the House, John Boehner, also from Time:
We should not have to move a third bill before the Senate gets off their ass and begins to do something.
What a novel idea.