Tag Archives: jobs

Speaking of Out of Touch

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Senator Bernie Sanders (I, VT) demonstrated the depth of his condition of out of touchness in a Tuesday op-ed in The Wall Street Journal.  Although Sanders’ out of touchness is amply demonstrated by his full-throated defense of the dinosaur that is the United States Postal Service, I want to look at a couple of other things he said in his piece.

First, there’s this:

There are very powerful and wealthy special interests who want to privatize or dismember virtually every function that government now performs, whether it is Social Security, Medicare, public education or the Postal Service.  They see an opportunity for Wall Street and corporate America to make billions in profits out of these services….

He says this in all seriousness, as if shrinking government and returning the bulk of its functions to the private sector where they belong is somehow a bad thing.  And that there would be profit in that private sector (and not only for “Wall Street and corporate America,” but also for medium-sized and small businesses and the Americans these would employ) is something only an avowed Democratic Socialist like Sanders would decry.  Moreover, it’s not only the powerful and special interests who want this shrinking of government and a divestment of its present array of “functions.”  Apparently he’s missed the Tea Party revolution that’s been going on these last five years.

He also had this (with some overlap with the quote above):

They see an opportunity for Wall Street and corporate America to make billions in profits out of these services, and couldn’t care less how privatization or a degradation of services affects ordinary Americans.

This is a false dichotomy.  Privatization doesn’t at all degrade services—it improves those extant and leads to vast expansion of new services, and at lower prices than before.  This is the example of the breakup of Ma Bell, effective at the start of 1984.  Under Ma Bell, we had a very good land line telephone system.  After the breakup, we got an even better land line system of competing companies (until their effective remerger); a cell phone system of competing companies; a cable system of more-or-less competing companies, which also compete for telephone business; and all of them competing for Internet business—including telephony communications.

A further example is the USPS, which prior to the divestment of package delivery and mail service other than first class, did a very good job of delivery.  Now we have competing package and special delivery service companies that are cheaper, faster, and even more reliable, and they have a broader range of special delivery services that the USPS is scrambling to match.  Additionally, all those communications services above are functionally competing for first class mail delivery, too, even though only the USPS can handle formal first class.  That’s what email, texting, Skype, AIM Chat, Twitter, and on and on—even that other dinosaur, faxing—are doing.

Apparently, Rip van Sanders has been sleeping through the end of the 20th century and this beginning of the 21st.

Our Economic Recovery

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The Congressional Budget Office had some remarks last Thursday.

More than four and a half years after the end of the recession, employment has risen sluggishly—much more slowly than it grew, on average, during the four previous recoveries that lasted more than one year.  At the same time, the unemployment rate has fallen only partway back to its prerecession level…and a significant part of that improvement is attributable to a decline in labor force participation that has occurred as an unusually large number of people have stopped looking for work….  Moreover, the rate of long-term unemployment—the percentage of the labor force that has been out of work for more than 26 consecutive weeks—remains extraordinarily high.

And

CBO estimates that GDP was 7½% smaller than potential (maximum sustainable) GDP at the end of the recession; by the end of 2013, less than one-half of that gap had been closed.  With output growing so slowly, payrolls have increased slowly as well—and the slack in the labor market that can be seen in the elevated unemployment rate and in part of the reduction in the rate of labor force participation mirrors the gap between actual and potential GDP.

And [emphasis in the original]

Employment at the end of 2013 was about 6 million jobs short of where it would be if the unemployment rate had returned to its prerecession level and if the participation rate had risen to the level it would have attained without the current cyclical weakness. Those factors account roughly equally for the shortfall.

Any questions about the effectiveness of the Obama administration’s economic policies?

Union Greed, Extended

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Included in President Barack Obama’s latest budget proposal was a 1% raise for Federal employees.  Of course, in this time of profligate spending and exploding debt, that’s not enough for public service unions.

David Cox, president of the American Federation of Government Employees, the nation’s largest federal employee union, said Monday that the 1% increase is “pitiful” and fails to compensate for sacrifice by government workers.

“Federal employees have endured years of pay freezes and cuts in retirement benefits,” Cox said in a statement.  “Federal employees deserve a meaningful pay raise, not a token increase that will be more than eaten up by rising living costs, including higher retirement and healthcare costs.”

And

Union leaders argue the planned increase is not enough to compensate for recent hardships endured by federal workers, who will see an estimated $120 billion in lower wages and benefits during the next decade due to the pay freezes, according to the American Federation of Government Employees.

“I strongly believe that federal employees deserve more, and this amount is inadequate,” [National Treasury Employees Union President Colleen] Kelley [said].  “There is no question in my mind that inadequate raises will have consequences on recruitment and retention.”

All Americans have been sacrificing in this failed recovery, especially in the private sector, where too many have no job at all in which to get a 1% pay raise, and some Americans have been sacrificing far more in defense of this country—and these government unions—against threats and attacks by our enemies.  Government union employees are hardly special, except perhaps in their own minds.  If government employees don’t like their “rewards” for doing their jobs, they don’t have to stay in those jobs.  Not even government employment is a jobs welfare program.

These guys “deserve” a pay raise based on what useful criteria?  The actual “meritorious” job performance of the IRS?  Of State?  DoJ?

What rising living costs are being claimed in an environment of artificially depressed interest rates and low inflation?

Rising healthcare costs?  You mean Obamacare, which you guys (and your private sector counterparts) enthusiastically supported?

Beuller? Beuller?  Anyone?

The bit about lower future wages and benefits is especially…amusing.  This is of a piece with the fantasy of future-year “cuts” that exist only in the minds of those trapped in the Beltway Imaginary Friends World.

As to those cried over consequences to recruitment and retention, that works for me; we have too many Federal employees, anyway.  During the recent Democratic Party shutdown of the government, the EPA rated 94% of its employees non-essential, for instance.  And see my earlier remark about nobody being held in a government job against his will.

Welcome to the Republic

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Isn’t this part of what the 10th Amendment is about, guys?

Maybe some States finally are figuring that out.

Governors…have a blunt message for Congress and the White House: They’re moving ahead on job-creation, infrastructure and other matters in the face of federal inaction.

Democratic and Republican governors gathering for National Governors Association meetings say they’ve been forced to fill a vacuum created by the partisan battles in Washington that have blocked agreement on a long-term fiscal plan.

“We’re not waiting.  It would really be great for them to solve the mess here, but in the meantime we’re going to do what we can,” said Michigan Governor Rick Snyder, a Republican.

It’s not their mess to solve, albeit they’ve certainly been actively enthusiastic contributors to it.  Your States’ citizens are your responsibility.  The voters elected you to deal with the problems not to foist them off on relay them to the Federal government.

And this:

“There’s no long-term infrastructure plan coming out of DC—none,” said North Carolina Governor Pat McCrory, a Republican.

Mr McCrory last year pushed through legislation changing the way North Carolina spends scarce transportation dollars.  Under the plan, projects that boost the economy, such as highways that link urban centers and relieve congestion, get priority.

In an interview Friday, Mr McCrory said the measure was partially a response to the failure of federal lawmakers to rework transportation funding.

You guys shouldn’t need one Federal action first; you should be acting on your own initiative.  When that happens, you get McCrory’s outcome: you finally stop feeding your addiction to Federal dollars, you start getting more efficiency and better prioritization, and you stop spending OPM willy nilly.

And this:

Colorado Governor John Hickenlooper, a Democrat, said the “cycle of partisanship and dysfunction” in Washington could ultimately benefit state and local governments by forcing them to rethink how they relate to the federal government.

Well, NSS.  Welcome to the world of independence and responsibility.

States’ rights come with States’ responsibilities.  Where you guys been?

Minimum Wage and Collateral Damage

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The CBO, the other day, looked into the Democrats’ proposal—demand, really—to raise the Federal minimum wage to $10.10 from the present level of $7.25 per hour.

The CBO found two key outcomes from such a hike.  The first is that the increase is almost certain to cost jobs, to increase unemployment.  While acknowledging that the headline number of jobs lost—500,000—is only an estimate, the CBO said quite clearly that the range of the number of jobs that will be lost from this forced wage increase runs from a “very slight decrease” in jobs to 1 million jobs lost.  Notice that.  No increase at all in job availability will ensue.  A “very slight decrease” in jobs is a decrease in jobs.  Full stop.

The other key finding is this: the

increase to $10.10 an hour by July 2016 would eliminate 500,000 jobs, but lift 900,000 Americans out of poverty from the total of 45 million projected to be living in poverty in 2016.

900,000 Americans will be able to use the wage increase to climb out of poverty.  But 500,000 Americans will be forever locked out of that opportunity, will be sacrificed in favor of those others.  Low-wage jobs—minimum wage jobs—are low skilled jobs, are entry level jobs, in which the worker can accrue experience with which to earn promotion, gain needed skills for better jobs, bring extra money home to the family so the family as a whole can have a chance to climb out of poverty.  These jobs are how teenagers, just starting out, can begin to learn a work ethic, can start earning some money for college or for a car, or just earn some walking around money.

These folks, though, apparently are just necessary collateral damage on the way to equal outcomes for the survivors.

So much for equality of opportunity.

The CBO’s full report can be seen here.