Tag Archives: jobs

Some Labor Day Questions

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First published in 2012, I’ve updated it for today.  In an ideal world, I’ll be able to update it again next year, with a still more optimistic tone.

The Wall Street Journal asked some questions on Labor Day 2012, and supplied some answers.  Here are some of those questions and answers, which remain as valid this Labor Day.

  • Q: How are America’s workers doing? Not good. Over the past decade, over the ups and downs of the economy, taking inflation into account, the compensation of the typical worker — wages and benefits—basically haven’t risen at all. … The Labor Department recently said that 6.1 million workers in 2009-2011 have lost jobs that they’d had for at least three years. Of those, 45% hadn’t found work as of January 2012. … Federal Reserve Chairman Ben Bernanke said Friday that unemployment is still two percentage points higher than normal….
  • Q: Things ARE getting better, though. The US economy is creating jobs, right? Back in December 2007 when the recession began, there were about two jobless workers for every job opening.  When the economy touched bottom in mid-2009, there were more than six unemployed for every job.  At last count, the BLS says there were 3.4 jobless for every opening.
  • Q: How much of this elevated unemployment is because the unemployed just don’t have the skills that employers are looking for right now?  …the bulk of the evidence is a lot of the unemployment really is the old-fashioned kind: the kind that would go away if the economy was growing at a stronger pace. Mr. Bernanke said as much at the [2012] Jackson Hole conference….

Today, the jobs situation is drastically improved.  The overall unemployment rate is at an historic low, and there are more job openings than there are folks to fill them.  The black unemployment rate is at a record low.  The Hispanic unemployment rate is at a near record low.  The women unemployment rate is at a near record low.  Wages, both real and nominal, are growing.

Happy Labor Day.

Value

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Wretchard (@wretchardthecat) asked an interesting question on Twitter Wednesday, and the implications from the question are being carefully ignored by the Progressive-Democratic Party Presidential candidates who want to forgive all—or most—student debt.

Forgiving student debt sends the signal that educational investment is worthless because it cannot return the rate of the money borrowed to finance it. That may actually be true but then what is the value of the credential?

Read the whole thread, it’s pithy and concise, as are the comments ensuing.

A related question has implications that Progressive-Democratic Party Presidential candidates who want to make college/university education “free:” if nothing is paid for the education—if it has no cost (to the user)—what is the value of that education or of the credential that proclaims it? Value not in the eye of the holder, but in the eye of any employer?

Another Venue for Private Education

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In a piece about Amazon.com’s decision to drop $700 million on retraining/educating its work force, The Wall Street Journal‘s editors closed with this forlorn hope:

And dare to dream, maybe colleges will cut their prices to compete with Amazon U.

Sad to say, it is a dream: colleges have no need to compete, and so have no interest in cutting prices, as long as the Federal and State governments keep throwing money at them.

Watch, instead, the hue and cry from the Left to develop in opposition to Amazon’s (and others—dare I hope?) schooling, just as they actively oppose existing competition in K-12, the charter and voucher schools that put to shame the public schools.

Progressive-Democrats’ Minimum Wage Push

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Progressive-Democrats want to raise the national minimum wage to $15/hr.  Here are some back of the envelope numbers that could result.

The CBO says that the new minimum would cost 1.3 million Americans their jobs (in the optimistic scenario; their more pessimistic scenario had 3.7 million Americans put out of work): their current wage would go from $10.10/hr (CBO’s 2014 minimum wage which formed the core of their that-year outcome analysis) to $0.00/hr. The CBO also says that the $15/hr minimum wage would lift 1.3 million American workers out of poverty.

So, 1.3 million, or many more, Americans would lose their jobs so 1.3 million, at best, could get above poverty.

There’s more to it than that, though.

Based on that same $10.10/hr prior minimum that the Progressive-Democrats tried for just five years ago, the currently proposed job losses would result in a bit over $26.25 billion dollars lost to our economy per year through lost wages.  That’s based on only 1.3 million American workers being fired, mind you.  Balancing that would be that $4.9/hr raise (because, by CBO assumption, $15/hr is a non-poverty wage) for the lucky 1.3 million, or a skosh under $12.75 billion inserted into our economy each year.  That’s a net loss to our economy of some $13.5 billion per year.

If we adjust all of that for the actually extant minimum wage of $7.25/hr, the numbers shift to $19.5 billion per year lost to our economy in lost wages from those 1.3 million being fired, and a gain for the lucky ones of $20.2 billion per year.

That makes the Progressive-Democrats’ latest proposal a wash on wages in our economy.  Tell that wash business to the fired workers, though, and hear what they think of break-even.  Oh, and what was that, again, about “livable wages?”