What Does Poverty Really Mean, and How Will the Jobs Crisis Affect It?

Poverty:  “The state or condition of having little or no money, goods, or means of support; condition of being poor.” – From dictionary.reference.com.

But, as we define it now, is that actually true?

Our government has defined “thresholds,” below which it considers a person or family to be in poverty.  In 2014 they ranged from a cash income under $11,354 before taxes for one person 65 or older and $14,309 for two to $52,685 for a family of nine relatives containing exactly one under 18 years old.  That sounds simple, and is in fact not a bad back-of-the-envelope scheme determining who is poor, but what is wrong with it?

First, it is not geographically adjusted.  Even ignoring the best and worst neighborhoods in individual cities, the United States has huge cost-of-living differences.  According to numbeo.com, the most expensive American metropolitan area has general consumer prices averaging over 65% higher than the cheapest.  That ratio is as high as 138% for groceries, and rents in San Francisco are nearly 5½ times those for comparable Iowa City homes.     

  

Second, although income toward poverty thresholds includes investment earnings, it has nothing to do with existing assets or possessions, which can vary massively.  Third, it does not consider noncash benefits covering basic needs, such as food stamps or housing subsidies, but counts money unusable for survival purposes, such as that going for child support and work-related expenses.  Fourth, poverty determination under the federal system cannot be made for people in the military, college dorms, prisons, nursing homes, or other institutions, which distorts statistics.  Fifth, it makes no provision for which goods and services are needed more in different areas, from the near-necessity of air conditioning in parts of Florida but not in Minnesota to the reduced need for cars in cities in general.

Sixth, even if geographical differences were somehow accounted for accurately, we would have no agreement on what constitutes a minimum non-poverty set of belongings and other resources.  We can settle on seven things that should always be present:  a steady supply of enough breathable air; sufficient water for drinking and washing; enough nutritionally and calorically adequate food to maintain health; adequate and reasonably safe shelter; sufficient clothing in reasonable condition; enough basic personal hygiene supplies; and medical care (including drugs, doctor’s examinations and instructions, and surgery and other procedures as needed) to adequately combat and reduce pain from health issues as they arrive.  Beyond those needs and cost-effective ways of maintaining their coverage such as refrigerators, we will not only disagree, but will immediately run into problems from the cost and nature of individual needs and preferences, as well as debates on goods which may reflect unusually poor personal choices, for example, cigarettes.      

These problems mean that we cannot currently determine, let alone agree on, just who is doing without a fully sufficient set of necessities.  While conservatives may think that American poverty is overstated, since most people even below the line have what they need to live, and liberals, with a wider view of what constitutes necessities, often see understatement, it is certain that, in individual cases, it can be either.  With low cash income, disabled people I have known were often well below poverty thresholds, but with food stamps and almost free Section 8 housing, along with Medicare Part B health care and more than enough Social Security income for other necessities, they were not in need.  In contrast, many retired people publicized for choosing between eating decently and buying prescriptions would not count as poor since their federal benefits took them over $11,354 or $14,309.

Given all that, what is true poverty?  While there is value in some kind of income-based approximation, that is all such a thing can be, and should not be the main determinant of who is truly poor.  Our national goal should be preventing shortfalls in the seven human needs above, without regard to how much money changes hands.  There is no tax or charge levied for breathable air, and running water is almost universal and low-cost.  As well, we have access to numerous other things at no charge or nearly so, such as a vast range of information, music, reading material, games, and other recreational outlets on the Internet.  Broadcast radio and public libraries are still free, and use of roads, parks, and playgrounds still cost nothing.   

With a permanent job shortage in force, despite ever-lower official unemployment, money may often be harder to acquire than many other resources.  That means we need to consider providing more things as a public service.  For one idea, it would be a superb and eventually technically attainable project to provide free wireless Internet for the entire country. 

In some ways, such as how an increasing number of Americans survive, we are going back to the times before the Industrial Revolution.  It may surprise modern people to learn that countless people lived full lives while getting and spending very little money, but that was how much of the country actually worked, well into the 20^th century.  With more and more basic resources either government-provided or free, we may go back to that.  Such a situation will not mean more poverty, in the real sense of the word.  After all, jobs are not the stuff of life – and money isn’t either.               

The Latest on Jobs in the News, So to Speak

American employment, at first glance, has looked good lately.  Official joblessness keeps dropping, more net new positions are added almost every month than the population increase can absorb, and in August’s data, average wages even got into that spirit by rising at a way-over-inflation 4% annual rate.  The bad news of more and more people deciding they don’t want to work at all is whispered by comparison, as is the vulnerability we have by piling up the years, about six of them now, with no recession. 

Given all that, it’s no wonder that other concerns, even among the output from the huge crowd of 2016 presidential contenders, are predominating.  There are, however, some meaningful things about work which we can get from other stories, even those which don’t seem relevant. 

The first is about football.  The regular NFL season opened last night, with its about 1,600 well-employed production workers.  Yet one seems unlikely to be on the field – Tim Tebow.  This winner of the Heisman Trophy (best college player) was drafted in the first round, did well at quarterback, gathered a lot of attention for not only his work but his evangelical Christianity, but was considered flawed for various reasons, and ended up being traded and cut.  He was a college football analyst on TV, then was signed by the Philadelphia Eagles.  In the preseason, he again played respectably, but did not make the team. 

So why am I writing about him in a column about employment?  Many people seem to think that the reason Tebow has not been able to stay on rosters is that, despite achieving results coaches want, he falls short in how he does what goes into them.  Even though his passes have generally been on target, they are often wobbly.  Are these employers doing the right thing by judging him on technique instead of outcomes?  If people consistently get their jobs done, should they be fired in favor of those who can’t match their proven achievements?  I’m sure I don’t know the whole story here, but such an attitude is destructive, to workers and customers (in this case, fans) alike, whatever the industry.   

Another story appeared in Sunday’s New York Times.  It was titled “Friends at Work? Not So Much,” and essentially bemoaned the dropping likelihood of Americans socializing with their coworkers outside of their jobs, which is apparently much more likely in some other developed countries.  A raft of reader responses came in on why, many of which came down to people spending less time with any social companions.  But there is more than that.  One root cause is the permanent jobs crisis, which has caused jobs to be more and more transitory, making them less desirable sources for investments of time and effort in friendships. 

As for the presidential candidates, two things are forestalling most discussion on any substantive issues.  The first is Hurricane Donald.  Trump has been getting amazing amounts of press attention, even for irrelevant things such as his TV show.  Both despite and because of his wildly aggressive statements, he is way on top of the Republican polls, yet most think he won’t last, and if any well-established newspaper columnist anywhere in the country supports him I don’t know about it.  Other hopefuls in his party are reacting in various ways, ranging from trying to grab his coattails to just waiting for him to crash and burn, and, generally and understandably, are not saying much for now.   

The other factor preventing more candidate substance is on the Democratic side.  Hillary Clinton, once the massive favorite and still with much shorter sportsbook.ag election odds than anyone else (now at 35 to 20 against, compared with next-best Jeb Bush’s 6 to 1 against), is falling as fast as the worst recent stock market days.  Even on the liberal side she is gathering almost exclusively negative press, mostly from her atrocious handling of her email message management scandal, and is being buried by once fringe candidate Bernie Sanders in how much she is liked and trusted.  She is now behind in both Iowa and New Hampshire polls.  Even Joe Biden, an undeclared contender with the same 15-to-1 odds as Sanders, has been taking a long time to decide whether to get in the race, which he is heavily likely to do only if Clinton falls much more.  Until we see a bottom to her descent, others will not commit themselves. 

One Republican, though, released something substantive.  On Wednesday, Jeb Bush put forth a plan for federal tax reform.  It included consolidating income tax brackets into three (10%, 25%, and 28%), increasing deductions for those at the low end, removing various loopholes, eliminating the estate tax, and other ideas.  Although such policies would create jobs, through tens of millions of Americans having more money to spend, even Republicans acknowledged that the proposal would cost over $1 trillion in revenue shortfalls over ten years, and few outside his campaign staff really think it would, by itself, achieve the national economy’s touted 4% annual growth.  Slashing revenues would call for hacking spending as well, and that would devastate prospects for the labor-intensive infrastructure project America badly needs.   

     

There have been a few other odds and ends on the edges of American employment.  Will the Kim Davis idiocy make it fashionable for people to refuse to do their jobs?  (I would sure like to get weeks of nationwide publicity just for not doing mine.)  Atlantic published a piece about “job flexibility” helping economic mobility, which would have been worthwhile if author Gillian B. White had defined even in general terms what she meant by that.  Candidates and commentators everywhere are still conflating good things for American jobs, such as mandating high standards for workers to be considered contractors instead of employees, with bad ones such as forcing all employers everywhere to raise their lowest rates of pay.  Despite the lull, the news about work is still out there – we just need to look a little harder.      

America Now 18.1 Million Jobs Short, as AJSN at Lowest Level Since Recession – But More People Leaving the Workforce

This morning, we got a particularly important set of Bureau of Labor Statistics employment numbers.  Articles had popped up all week about how they would affect the Federal Reserve’s slow-motion decision about raising interest rates.  There were no massive surprises, but the data fell out strangely.

Many eyes were on the count of net new jobs, which some expected to be around last month’s 215,000.  That fell short with 173,000, not a huge difference but the lowest since March.  Yet the heavily publicized seasonally adjusted unemployment rate did better than forecast, dropping from 5.3% to 5.1%.  Unadjusted joblessness fell more than the usual difference between July and August would suggest, down from 5.6% to 5.2%.  Average hourly earnings, another input into the interest rate decision, grew 8 cents per hour for a robust 4.0% annual rate. 

The four main secondary numbers were mixed.  The count of people working part-time for economic reasons, or wanting but not finding a full-time position instead, gave back July’s improvement to return to 6.5 million.  Those jobless for 27 weeks or longer stayed at 2.2 million.  Of the two percentages telling the most about how common it is for Americans to be working, civilian labor force participation held at 62.6%, while the employment to population ratio improved by one tenth of a percent to 59.4%.     

The American Job Shortage Number, or AJSN, giving in one number how many more positions could be quickly absorbed if finding work were easy and routine, dropped not only from lower actual unemployment, but from an almost 400,000 cut in the number of those wanting work but not looking for it in the previous year, which took about 300,000 off overall latent employment demand.  Other marginally attached statuses almost broke even, with the most noteworthy a stunning almost 1.9 million increase in those saying they did not want work at all.  All told, the AJSN fell 849,000, as follows:

The AJSN continued its strong year-over-year improvement.  August 2014’s number was more than 1.6 million higher, all but 200,000 of that on lower official unemployment and the rest on fewer people discouraged or not looking for a year or more, offset slightly by the 2.3 million-plus gain in those expressing no interest in having a job.    

So how good were this morning’s numbers really?  Despite net new positions disappointing, they are in line with the rest of 2015’s – lower official joblessness, higher and higher number of people leaving the workforce, labor force participation and employment-to-population edging slowly but persistently down.  The economy keeps getting better, but we are still short more jobs than just before the Great Recession, of which less than 41% would be filled by people officially unemployed. 

With so much latent demand for work, the Fed would be foolish to push up interest rates now. The turtle is again creeping forward, but he would find himself stopped, or even backtracking, if what is still weak incentive for companies to create positions and spend money were impeded.  Janet Yellen and company, you have done well to keep us out of a recession – don’t blow it now.  

Are Creative Jobs Going Away, or Not?

One year ago this month I published a post on the effects of the Internet on jobs, especially in artistic fields.  Using books from 2013 and 2014 I assessed the situation, concluding it didn’t look good.  I maintained that although online outlets had created more places for performers and writers to sell their work they rarely provided significant money, that online publicity was mostly illusory, and that pay for most creators was low or nonexistent with life-supporting earnings going to fewer and fewer people.

I hadn’t seen much in the past year to contradict any of that, so was surprised to see an article in last week’s New York Times Magazine, “The Creative Apocalypse That Wasn’t,” by Steven Johnson, making a case that such “careers are thriving.”  So what points did this piece make?

First, the article was actually consistent with some of my perceptions.  Johnson acknowledged that the music industry had gone through a “financial Armageddon” with its sales dropping 75%, from $60 billion to $15 billion, since 1999.  He wrote that more and more content providers, especially musicians, writers, and actors, were self-employed, and that “most full-time artists barely make enough money to pay the bills.”    

Second, it named developments new to me.  According to the Department of Labor’s Occupational Employment Statistics, the number of those working for others in the Arts, Design, Entertainment, Sports and Media Occupations category increased, from 1.5 million to 1.8 million, between 1999 and 2014.  Those performing or writing music as their main job rose a similar percentage, from 53,000 to 60,000.  While recording revenue has crashed, live music has done the opposite, with its worldwide sales tripling from $10 billion in 1999 to $30 billion 15 years later.  As a result of the latter, as hit singles, on which most artists earned little, once served as promotion for albums or CDs, recorded music is now serving as a way to get people interested in buying concert tickets.  

Third, Johnson pointed out that both availability and cost of first-rate professional music production have given it to artists and companies which could never before have afforded it.  Software has made sound quality costing millions of dollars a generation or two ago available for thousands or even hundreds.  Top quality books can be designed and printed by many independent publishers much smaller than Simon & Schuster or HarperCollins.  Correspondingly for TV and movies, truly professional-quality filming can be and has been done, astonishingly, with smartphones.       

Fourth, the explosion of advertising, which I also named a year ago, has brought demand for many more creative artists.  As well, the growth of cable radio and the profusion of cable TV channels, both of which unlike their predecessors are funded directly by consumers, provide more markets for creative work.  Other outlets once suspected to be in danger, specifically movies and independent bookstores, have held on, at the middle financial levels as well as at the top.

What, then, sheds doubt on paid artistic workers still being in healthy demand?  For one thing, the data Johnson used ends at 2014, and these positions may have been damaged since.  For another, the growth in self-employment in these fields hardly means those in them are paid well – indeed, most or at least many are not earning enough in them to survive.  The use of “average,” or mean, income conceals concentration at the top, so increases tell us little about how most are doing. 

One conclusion pointed to by both the New York Times article and what I and others wrote earlier in the decade is that people involved with writing, music, acting, and other creative fields need to realize the economics of their businesses have changed.  It is no longer sufficient for financial success, or even financial survival, to simply excel at performing; as Johnson put it, “the new environment may well select for artists who are particularly adept at inventing new career paths rather than single-mindedly focusing on their craft.”  The good news is that, given this technology-driven transition, these jobs will not go away. 

A long time ago I predicted that in-person activities, in this computer age, would come to be valued much higher than electronic ones, and that is exactly what is taking place now.  I cannot take much credit for being prophetic, as I expected it to happen ten years ago.  However, led by the creative fields, that shift in beliefs may finally be appearing.      

Amazon’s Office Work Environment Is a Product of the Jobs Crisis

After my complaint last week about the lack of recent attention to employment-related issues, one became the big story last weekend.  That, specifically what it is like to be an Amazon.com management employee, was the subject of the main piece on the front page, not the front business-section page, of Sunday’s New York Times.  

The article, or, as it might be called, a 100-megaton stink bomb, “Inside Amazon:  Wrestling Big Ideas in a Bruising Workplace” by Jodi Kantor and David Streitfeld, described what it is like to hold down a thinking job at this online retailer, a juggernaut which now has a quarter-trillion dollars in market capitalization.  It’s not easy, nor is it slow-paced, peaceful, harmonious, or, as the story implies and some cited former employees state, humane.  These positions require especially long hours and responses to emails at almost all other times, and are in a confrontational culture in which criticism can be sharp and frequent.  In what has become the most controversial part of the article, employees with health or other non-work problems, even severe issues such as cancer, have been put on performance improvement plans or have lost their jobs in Amazon’s annual removals of their lowest-ranking staff.  One interviewed manager said “nearly every person I worked with I saw cry at their desk.”  As a result, in sharp contrast with those getting the opportunity to work at relatively high pay for large, successful organizations, many new hires have lasted two years or less. 

In the five days since publication, the story has precipitated an outpouring of responses in major media outlets.  One of the first was a broad-based denial of Kantor and Streitfeld’s allegations from Amazon CEO Jeff Bezos, in which he said “this article doesn’t describe the Amazon I know or the caring Amazonians I work with every day,” along with his view that the piece described “shockingly callous management practices” and asserted “that our intentional approach is to create a soulless, dystopian workplace where no fun is had and no laughter heard.”  Within 48 hours, follow-on pieces were published in The Washington Post, Salon, and Fox Business, and, soon after that, related articles turned up in Financial Times and Harvard Business Review.  These pieces had views ranging from calling Bezos’s response “spin” which was “hard to swallow” (Salon) to questioning what Kantor and Streitfeld wrote, since Bezos had disagreed with it (Fox Business).  Columnist and former Treasury Secretary Robert Reich claimed that “America is a nation of Amazons,” and in the Harvard Business Review article, “The Research is Clear:  Long Hours Backfire for People and for Companies,” the original New York Times story was cited in its first paragraph. 

So what can I add to the conversation? 

First, Amazon’s working conditions, even if accurately described, are hardly unique.  Many physicians, lawyers trying to become firm partners, and front-line Wall Street traders, to name three, have similar hours, on-call requirements, and overall obligations of job intensity.  There are others without such high pay, for example those in the armed services.

Second, the self-critical mentality, which one Kantor and Streitfeld interviewee said was common at Amazon, may not be common in America but is characteristic of not only employees but students in Japan and Korea.  It takes a real toll on those learning or completing tasks, but is a tradeoff, since it can help people succeed. 

Third, not all jobs are suitable for all with the required skills and abilities.  Different people are willing to accept different levels of hardship at their jobs, including the areas the article describes of work atmosphere, time required, and after-hours demands in exchange for advantages such as high involvement, fast competency acquisition, and the chance for promotion and a lucrative career with a gigantic, successful, and growing company.      

Fourth, it may be bias from my own corporate experience (14 years in AT&T management), but I am suspicious if some aspects of the culture Kantor and Streitfeld claimed that management mandated match up with reality.  Are subordinates actually able to criticize those at higher levels without damage?  Are they truly empowered to spend company resources, including money, to help customers outside of established channels?  Can they “disagree and commit,” as put by one of Amazon’s “leadership principles” (reminiscent to me of AT&T’s “Shared Values”), without repercussions?  It is an old business expression that workers will hear from their management that independent thought is valued right up to the day they are fired for it – has Amazon truly beat back the political realities that made this expression trite? 

Fifth, workplaces such as the Times authors described, even if they as their critics say were exaggerated or marred by unrepresentative examples, are a natural consequence of the permanent jobs crisis.  Where workers are in excess, workplace standards will rise.  When there is a large pool of qualified applicants ready to replace those giving up their jobs, high turnover becomes less detrimental.  When a large share of people hired turn out to be unequal to the intensity, hours, and lack of outside obligations a position requires, they can be replaced by others who can try. 

Over the next few weeks and months, much more will be written and published about Amazon.com and on other work environments.  We will gain information about the accuracy of this New York Times story, and more on how companies allegedly or actually function in 2015.  What we should not be is surprised, or think that we are facing something truly new in the world of work.  We are not.  We may, though, be seeing more and more effects of the jobs crisis, which despite a lower unemployment rate is still with us.  That is what the Amazon article truly means.         

Jobs Schmobs! What’s Happening with the Candidates?

On one day last week we had two fine debates among 2016 Republican presidential hopefuls, with a sad but understandable omission.  American employment, just about out of the news otherwise as well, was essentially absent from the candidates’ Thursday discussions.  I’m not going to fight that, so here are my views on what’s happening with this bunch of people who now number enough to make up two football teams. 

Donald Trump, as my wife Mary put it, is still sucking all the air out of the room.  The press, as well as a remarkable number of scarily likely voters, is infatuated with him, to the point where we’re seeing major-press articles about what he does at home and about the statuses of his TV ventures.  He’s not lasting much longer at his lofty polling level, though, for two main reasons.  First, George Will beat him up but good yesterday in the Washington Post, calling him “incorrigibly vulgar,” “no conservative,”  and per his column’s title a “counterfeit Republican,” and pulled his punches even less when describing Trump’s recent and forecasted words.  Will, since he excels like no other public figure at being the only adult in the room, is taken seriously, especially by his and Trump’s party’s leadership.  Second, if gravity doesn’t bring Donald’s numbers down, he will find out just how difficult it is to be a front-runner.  His intimidation won’t carry him through even the inoffensive questions that will pour in about him and his policy positions, and his veneer of supporters won’t be able to protect him.  Temper tantrums from those aspiring to the highest office in the land won’t exactly be seen as seemly.  

When this drunken binge by a quarter of the population gives way to its inevitable hangover, the path will be reinstated for (speaking of adults in the room) Jeb Bush, whose audience will let him make the case for being the true presumptive nominee.  How well he does at that will determine how much scope there is for his true competition, which is still Scott Walker (despite his stupid approval of a quarter-billion dollar basketball arena) and the invisible but still present Marco Rubio. 

At the next tier, the Republicans certainly have bench strength.  Waiting in the wings, but probably not truly able to put themselves in the top group, are the sensible, thoughtful, and superintelligent Ben Carson and the clear-thinking Carly Fiorina.  Chris Christie also belongs here, though the forthcoming public disgust with bullies such as Trump may give him too much, in conjunction with Bridgegate, for him to overcome. 

On the other side, Hillary Clinton is in real trouble.  She made the wrong decision about her email mishandling – this far from the primaries, she should have put all of her cards on the table without being forced – and that isn’t her only problem.  Not since the death of disco have I seen such a juggernaut resented by so many in the shadows.  If my mother, a well-educated woman from the Northeast whose first presidential vote was for Adlai Stevenson and has never made one for the other party, is leery and distrusting of Clinton, then what kind of people are in Hillary’s core constituency?  Rush Limbaugh made an interesting point this week, suggesting that Bernie Sanders’ phenomenal appeal might be coming from the same thing that propelled Obama into office eight years before, namely dissatisfaction with the same presumptive nominee.   Her latest sportsbook.ag odds have lengthened to 13 to 10 against, which I suspect are much too short.  Joe Biden, almost certainly a target of passionate Democratic elders these past few weeks, will probably get in the race, as the longer he takes to decide, the more time he puts between himself and the death of his son.  The refreshingly forthright Sanders has not yet peaked, and in the absence of Biden will continue to be the chief recipient of disaffected former Clinton supporters. 

So what about jobs?  It will take a recession to put them on the presidential candidates’ front burner.  Some Democrats have mentioned the excellent idea of a national infrastructure project, but as I still see no takers for that among Republicans, it has become a partisan issue.  Otherwise, we’re going nowhere with this permanent crisis which has slightly abated but hardly disappeared.  At least, though, our candidates are giving us some kind of show to watch.  

AJSN Little Changed in July as U.S. is Now 18.9 Million Jobs Short

July was a consolidation month.  The Bureau of Labor Statistics employment data was barely different from June’s, as the labor force participation rate, the employment-to-population ratio, and the headline seasonally adjusted jobless rate were all unchanged.  We gained 215,000 net jobs last month, a tad lower than in June, but still more than the population increase could cover, and unadjusted unemployment rose, due to fewer people working as usual in July than in June, to 5.6%.  The number of long-term jobless, or those out for 27 weeks or more and still looking, bounced back partway from its 400,000 June drop to 2.2 million, and, in the best news of the month, those working part-time for economic reasons, or people wanting to extend their labor hours to full-time and not finding the opportunity, fell 200,000 to 6.3 million. 

What is most significant, except the last improvement, is that the 37-plus year lows in labor force participation and employment as a share of population, the best indicators of how common it is for Americans to have jobs, held last month’s losses.  Often when one of these numbers varies greatly from the month before it reverses somewhat in the next, as did long-term unemployment as above, but these two did not.  That means they have a real chance of setting new post-1977 lows again for August. 

The American Job Shortage Number, or AJSN, showing latent demand for additional jobs, increased 83,000 last month.  That was actually less than the growth in the share of those officially unemployed expected to take work if it were readily available.  As it usually does, those reporting they would accept jobs if they were not in school or training fell from June to July, and people wanting work but not having looked for it for a year or more did the same.  In all, the AJSN came in as follows:

Compared with a year before, the AJSN has shown real improvement.  In July 2014, there were 1.5 million more officially jobless, meaning that if 90% of them would take work if it were easy to find, that set of people would absorb 1.35 million more positions than now.  The other groups offset a tiny bit of that.  Fifty-eight percent of these jobs would now be filled by people not technically unemployed, higher than in previous months but still not far from historic lows. 

So where are we now?  This month splendidly fits with the movements of 2015 – new jobs moderately but not massively outstripping population gains, fewer Americans working part-time for economic reasons and staying officially unemployed for over six months, but jobs becoming, proportionally, less and less common.  Those are the modern trends.  We are also piling up years without a true recession – a fine thing, but not one assured of continuing indefinitely.  The jobs crisis, if softened somewhat, continues, even if the turtle is still moving forward.