Saturday, January 31, 2015

The AJSN vs. Other Economic Data, 2012-2014

We’ve just finished the second full year of the American Job Shortage Number, the key economic indicator which shows how many additional jobs could be quickly absorbed in the United States.  As per earlier this month, the past several months’ AJSN’s have been retroactively adjusted, to reflect the U.S. State Department’s Bureau of Consular Affairs’ determination that as of May 2014 there were 7.6 million American-citizen expatriates living in other countries.  That is now the most recent data available, and I will be keeping up with them to see if and when they will be updating it.

Over the past 2½ years, the main jobs story has been what has been called either a recovery or a partial recovery from the 2008-2010 Great Recession.  I agree with the former, with the gap between employment now and as it was seven years ago belonging to the permanent jobs crisis, but whatever it is, times have got steadily better. 

So what has the AJSN worked out to since it started?  Here is a chart:

Since the AJSN is not seasonally adjusted, it varies according to annual tendencies.  If we graph it by month, we get the following, showing both the annual flow and the AJSN’s consistent year-over-year improvement.  

Although the AJSN has got lower, which means better, it has not followed the trend of other economic indicators.  Here are the monthly AJSN’s again, along with the unemployment rates, labor force participation rates, and employment to population ratios, all also unadjusted.

Graphed, they look like this, with the right-hand scale used for the three smaller numbers:

Although times have been relatively good, the number of additional jobs that could be easily filled has not decreased as much as the jobless rate:

This graph shows that while unemployment has fallen more than a third, the AJSN has not followed, and in fact has dropped only 17%, or about half that amount. 

The failure of the AJSN to follow along with official joblessness shows how much more broad-based that statistic actually is, and documents what millions of people looking for work already know – that positions are not as easy to come by as the unemployment rate suggests.  It also explains why average wages, which actually fell last month, have not kept pace either.  There are simply too many people who want to work.  It may take another recession to address this issue, but it will happen someday.    

Tuesday, January 20, 2015

Obama’s Community College Proposal: Good, Bad, and Different

On January 9th, President Barack Obama presented, in person, something intriguing.  He proposed that all American community college students enrolled in 2-year associate’s degree programs maintaining at least 2.5 grade point averages receive free tuition and fees.

I have a lot to say about this, and my background on it comes from both sides.  In the past decade I taught at two community colleges, Seminole and Valencia near Orlando.  I was always impressed by my students, who were often not only working full-time but raising children, sometimes even as single parents, yet managed to get to class and to do their work well.  I have long thought two-year schools to be fine places to start higher education, with not only lower rates but settings facilitating marginal students easing into college, and when associate’s degree recipients transfer to and graduate from four-year schools their diplomas look the same as those who attended the whole time.    

In contrast, though, I have been reactionary about school as an unemployment solution.  In the Work’s New Age book I called education and training “one applicant over another,” and tagged Obama for saying that more such expenditures were necessary to reduce joblessness.  When the problem is that the number of applicants is burying the number of available positions, formal learning programs will only affect who gets hired, not whether anyone will.  Community colleges, which generally prepared people for entry-level jobs already in excessive demand, were no better than four-year schools benefiting inordinately from their long-false reputation of assuring entry into the middle class.

So what can I say about Obama’s free-tuition proposal? 

First, the positive things.  Free community college tuition would reduce the amount students owe for education, which soared over $1 trillion several years ago and might be the next bubble to burst, as much of that will never be repaid.  It will steer more people into community colleges who should be going there anyway, the marginal students statistically unlikely to get degrees and those lacking in family money.  It will encourage states, such as Wisconsin, where almost all go to four-year schools right away, to save money by implementing and expanding two-year institutions. 

Next, the plan’s disadvantages.  As above, it could perpetuate the illusion of colleges automatically conferring middle-class status, which they have not done successfully for decades.  If it turns out overly easy to maintain a required grade point average, and controls on ensuring students are making steady, even if slow, progress toward graduation prove to be weak, the proposal may allow people to consume educational resources indefinitely.  The idea should not be seen as a first step toward free tuition at 4-year institutions, which would not be viable without admission requirements tougher than Americans would accept. 

Beyond the good and bad points, the free tuition plan would have effects hard to predict.  It would put the first two years of post-secondary schooling in the same category as elementary and high school, available publicly at no charge but with more expensive alternatives also possible.  It would become the default for high school graduates, to an even greater extent than college is now.  It would shrink the sizes and change the missions of lower-tier four-year schools.  It could either raise or lower community college completion rates, depending on whether students become more likely to enter degree programs, whether those struggling but not clearly wanting to leave decide to complete their 2-year degrees in the name of finishing successfully, or if more choose just to drop out and leave that phase, free tuition and all, behind, with no further obligations. 

The fascinating question is whether free community college would help improve mobility, or only entrench financial inequality.  It would certainly help some poor but smart and motivated students to pull themselves up, by providing education they might not be able to get otherwise.  It would also, though, solidify a three-tiered (or more) system, in which after high school people go to community colleges, the stronger four-year state schools and the like, or Ivy League or other elite private universities, resulting in tightly circumscribed work opportunities for each.  Although inequality as such is overrated as a problem in itself, it would be a shame for a country long called “the land of opportunity” to have career outcomes more predetermined than the descendants of the old European monarchies.

Overall, though, the strengths and weaknesses of free community college are irrelevant.  Although it is based on an originally Republican idea, Congress will not pass it into law.  Many will agree with the Wall Street Journal’s view that it would be “just another federal entitlement,” and, right or wrong, that will be the end of it.  Whether that will be a good or bad thing is for you to decide.       

Friday, January 16, 2015

Women, Jobs, and the Great Recession

Lately, a number of my Work’s New Age blog posts and WORK SHIFT radio episodes have focused on the problems faced by men in getting employment.  Women, though, have hardly got off freely, despite having lost only 25% of jobs that disappeared in 2008 through 2010.  What else can we say about how they have fared?

First, although men’s official seasonally adjusted unemployment was far worse at the end of the Great Recession – for example, 10.2% in January 2010 compared with 7.9% for women – the sexes were much closer before and after.  During 2004, about 5.0% of men were jobless, compared with 4.8% of women.  By 2007, the difference was the same, 4.2% and 4.0%.  In August 2008 the gap went up to 5.7% against 5.0% and it remained high, until in 2011 men’s unemployment dropped almost month-by-month and women’s stayed about the same to reach 8.0% and 7.8% in December.  Since then, more jobs have been added, and the difference between the sexes has continued to be small; at the end of 2014, 5.3% of men were officially jobless compared with 5.0% of women, a gap actually wider than most recent months.  That means that we are not moving, as some analysts have feared, toward huge employment gender gaps.

Second, when measured by the total number of jobs, men have done much worse.  In January of 2007, men had about 4.7 million more than women, 70.9 million to 66.2 million.  Early in 2008, men’s jobs, even in absolute numbers, began to go away, when women’s were still rising – in the first half of 2009, men were losing over 400,000 net positions per month, compared with women’s 200,000.  By January 2010, the sexes were about even, at just over 64,600,000 apiece.  Afterwards they started to diverge, but even by the end of 2012 they were much closer than they had been before the recession, with about 1.7 million more for men.  The difference between unemployment rates, which include only those actively looking, and the number of jobs confirms that more men than women, indeed, have left the workforce. 

Third, per a detailed New York Times look at sets of 147 25 to 54-year-old men and women not employed, there are some real differences between the things they do.  Women spent much less time watching TV and movies and at other entertainment, and much more doing housework and caring for others.  Men put more hours toward education, and toward looking for their next employment opportunities.

Fourth, the reactions of men and women to being out of work were even more different.  As shown in a December 15th New York Times article, men had more interest in getting hired again and more willingness to take long commutes, but were less likely to accept low-paying positions.  Personally, men were more like fish out of water, with 41% and 43% reporting worse physical and mental health against 16% and 19% respectively seeing improvement, compared with women claiming 25% better and 29% worse mental health and, per the article, “almost no difference” physically.  Sixty percent of women said that being out of work had improved relations with their children, but only 22% of men agreed.

Fifth, another December Times piece, “Why U.S. Women Are Leaving Jobs Behind,” made the case that more mothers could return to the workforce if they were accommodated with longer mandated maternity leave, more flexible work times, more telecommuting, and government-subsidized child care.  That brings up the problem of whether, when not only men but many women without children are also out of work, a lot of money and laws should go for things that cost jobs.  That is not sexist but practical, especially if women with children are likely to do generally better with unemployment.  Perhaps that is unfair, but hard public policy choices are made all the time.

Overall and once again, the jobs crisis may affect different sets of people in different ways, but it is ultimately an equal-opportunity transition.  That women tend to do better personally and organizationally does not mean they wouldn’t rather be working.  That is the key to understanding what is happening with employment now – it is not the official jobless rate that shows the trouble we are in, but the number of people, not totally by choice, on the sidelines.  Only when we understand that will we be poised for the progress we need.

Friday, January 9, 2015

Unemployment’s Down, but December AJSN Shows America Now 18.3 Million Jobs Short

This morning’s jobs data was, once again, better than analysts expected.  The 252,000 net new positions, down from November but still strong, was more than the projected 220,000, and the headline seasonally adjusted unemployment rate, predicted to stay the same, fell from 5.8% to 5.6%.  Unadjusted joblessness was also off, from 5.5% to 5.4%. 

While the count of those wanting to work but not having looked for a year or more also went down, from 3,467,000 to 3,309,000, other employment categories were up.  Those reporting no interest in a job jumped almost 1 million to 87,294,000, meaning that even if only 5% of them would actually take employment if it were readily available, the increase in this group alone could absorb 50,000 more new positions.  Other large gainers were those discouraged, up 42,000, and the “other” unemployment category (not officially jobless and wanting to work now but not held back by discouragement, ill health or disability, family responsibilities, or school or training) rose 91,000. 

Newer data for American expatriates, 7.6 million from the Bureau of Consular Affairs instead of the previous 6.32 million from the Association of Americans Resident Overseas, added 256,000 to December’s American Job Shortage Number (AJSN), and the same number to each previous month retroactive to its May 2014 date.

In all, the December AJSN came in at 18.3 million, down almost 300,000 from November’s adjusted 18.6 million, as follows:

Compared with one year before, the AJSN has dropped almost 1.1 million, with 1,487,000 fewer jobs absorbable by those officially unemployed partially offset by gains in those not looking, those unavailable to work now, those not wanting work at all, and expatriates.

In December, the four critical secondary numbers were mostly unchanged.  The count of long-term unemployed, still officially jobless after looking 27 weeks or longer, held at 2.8 million.  Those working part-time for economic reasons, wanting a full-time opportunity but not finding it, are still at 6.8 million.  The employment to population ratio was unchanged at 59.2%.  Labor force participation, though, tied its post-1978 low of 62.7%.

Generally, these are good if unspectacular results.  Official unemployment is at a non-recession level, and for the 11th straight month the number of net new positions outstripped the population increase.  However, the improvements are all incremental, and so must carry on for many more months for the country’s overall job situation to get back to 2007 levels.  In the meantime, more people continue to leave the workforce and make other life choices, giving us no realistic reason to think that the 66% participation that year will happen again.

A permanent effect of the recession?  No, a permanent effect of the jobs crisis, which is still here, although the turtle did take a couple of steps forward last month.         

Friday, January 2, 2015

How to Get Fewer Young Men to Drop Out, Jobs Crisis or Not

Last week I wrote about an angry but clear and defensible post on the blog.  Written by Milo Yiannopoulos, “The Sexodus, Part 1:  The Men Giving Up on Women and Checking Out of Society” explored the recent tendency of males 15 to 30 years old hunkering down alone or with same-sex friends, and not pursuing jobs or romantic relationships but instead maintaining a sort of state of early adolescence.  I made four main observations about the phenomenon:  that the model of men being primary breadwinners had good reason to become obsolete; that their joblessness alone caused deep problems with getting wives or girlfriends; that recent attention on rape beyond its status as a violent crime, along with mandatory consent codes, damaged young men even more; and that women were themselves being hurt badly by men in their 20s and late teens giving up on so many things.  The failure of an expanding share of half of the population to grow up, even beyond lacking the financial ability to take on more responsibility, is not a value-free cultural change, but destructive in itself.
So how can we solve, or at least alleviate, this rising concern?

First, authors, columnists, and involved people themselves need to publicize the tendency of young men to drop out.  There seem always to be articles and books about the issues faced by women of those same ages, on topics ranging from high-school cyberbullying to documentation of and commentary on the sex ratios of those entering scientific and technical fields.  It should not take a rather rough-edged blog post to bring such a sad and alarming sign of American deterioration to the attention of those publishing in more widely read outlets, only because the people suffering in this case are men.  We need much more on this subject to find its way into the likes of David Brooks’s and Ross Douthat’s columns and the New York Times Sunday Book Review.

Second, men and older teens who find themselves stopped from jobs or romance need to keep bettering themselves in other ways.  One article in the New York Times’s recent series on “nonemployment,” or the growing tendency of people to not be working, named a disturbing difference between men and women going through joblessness.  Women, according to Binyamin Appelbaum in “Key Differences Between Men and Women,” when not employed did more volunteering, exercising, and helping people in their own families, whereas men did more reading, watching TV, and Internet surfing.  Those choices of activities, as well as ones taken up by those interviewed and discussed by Yiannopoulos, reveal an area of improvement for all too many men, who are failing to find more constructive actions and help themselves in ways they can.

Third, since men’s falling income and employment likelihood seems to be a trend that will stay around for a while, they should not give up on either women or on society as quickly.  Men unable to find work should not be ashamed of themselves, and should not assume that they are ineligible for wives or girlfriends, since they are hardly the only ones in that situation.  Because of the shrinking number of males with jobs, more women will face a choice of either being involved with people who are stable and civilized but not employed, or holding on to old-fashioned expectations about being supported and eventually settling for being unattached.  If nonworking men can show they are worthy in other ways, they will usually get somewhere.

Fourth, more husbands should drop the false pride of needing to earn more than wives with higher income potential and more wholeheartedly acclimate themselves to contributing secondary income, or even none at all.  The number of househusbands keeps increasing, but that title still only applies to a small minority – in fact, to only 140,000 Americans as recently as 2008.  With about 40% of wives earning the most in their families, it is time for many more men to accept current realities. 

Fifth, since the root of so many of young men’s troubles is the jobs crisis, we need to address it, and at least seriously discuss possible solutions.  Four with at least some merit are guaranteed income for all, shorter working hours, a system of paying contributors of online resources, and guaranteed government jobs.  Two measures, though they would not be as permanent, would be a nationwide WPA-style infrastructure program and reformed taxes to give the lowest rates to those creating or maintaining paid work for others.  There are more, and once the issue of not enough employment reaches our collective consciousness, they will also be put on the front burner.  And that is the right place for them.