Category Archives: jobs

Pity the Poor Union

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The Chicago Teacher’s Union, which is unhappy and feeling rushed.

Using the children its teachers claim to teach as hostages, the union has decided to continue its strike for more money, more job security, and less stringent individual teacher performance evaluation.  Of course, this leaves those children out of school and forces parents to lose income from taking time off from work or to incur additional child-care expenses to handle children who should be in school.  That doesn’t matter, though, to teachers whose salaries already are some 50% higher than those of the parents whose children they’re not teaching.  (On the other hand, what’s the downside for the kids, really?  This collection of teachers does poorly by the students: a 60% high school graduation rate, generally, and a 44% rate for black high schoolers.  Just 15% of fourth graders are proficient in reading.  Just 20% of the students are grade level proficient in math.)

But faced with a generous offer from the city to come back to work, the CTU declined even to vote on the offer over the weekend.

CTU President, Karen Lewis, said teachers wanted the opportunity to continue to discuss that offer.

Our members are not happy,

she said.

They want to know if there is anything more they can get,

she said.

They feel rushed,

!?  she said.

They want to squeeze more—as if their already failed performance should be rewarded.  Talk about not hurting (teachers’) self-esteem.  They feel rushed?  They always could come back to work and study the city’s offer at leisure.

In the meantime, the kids are suffering.  Or, maybe not so much.

How’s That Working Out For You?

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Here are some more data on our economic condition:

  • US wholesale prices in August had the largest one-month gain in more than three years
  • The producer-price index, which measures how much manufacturers and wholesalers pay for finished goods, increased a seasonally adjusted 1.7% in August from July
  • Prices for intermediate goods—which are semifinished goods, like lumber or flour, that require further processing—grew 1.1% in August from July
  • Prices of raw materials increased 5.8% in August, suggesting prices for finished goods will rise further in the future
  • [I]nitial jobless claims were up 15,000 to a seasonally adjusted 382,000 in the week ended Sep 8.  Economists surveyed by Dow Jones Newswires had expected “only” 370,000 new applications

And these data [emphasis mine]:

The income of the typical US family has fallen to levels last seen in 1995.  Census Bureau said annual household income fell in 2011 for the fourth straight year to an inflation-adjusted $50,054.  …it will be a generation before Americans regain the peak income levels reached at the close of the ’90s

Here’s a graph of what that looks like:

Notice that: Not only is income much lower than the Evil Bush years, it’s still falling.

The monthlies are snapshots, and should be taken with a grain of salt, certainly.  But they also bear watching, especially in light of those falling incomes under the Obama administration, and the inflation trap his Fed chief, Ben Bernanke, is building in with all that dollar injection.

And the guy who sometimes sits in the President’s chair actually said this, as though he believed it,

[W]e have made progress digging our way out of the worst economic crisis since the Great Depression[.]

Jobs

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The latest Labor Department jobs report, as James Pethokoukis of AEIdeas noted, was especially dismal.  For one thing, there’s this:

The Labor Department also said that 41,000 fewer jobs were created in June and July than previously reported.  The change in total nonfarm payroll employment for June was revised from 64,000 to 45,000, and the change for July was revised from 163,000 to 141,000.

These are very sharp downward corrections of initially erroneous (it turns out) numbers.  In fact, this initial coarse overestimation of job creation by Labor has become pretty commonplace this year.  Some might say that Democratic Presidential Candidate Barack Obama’s Labor Department is trying to cook the books for their boss’ benefit.  I’m not convinced of that.  It seems more likely to me that our economic situation simply is so dismal that it’s much harder today for the government to collect reasonably accurate near-real time data than it was in past times.

Here are some ugly graphs that further illustrate the depths of our economic woes three and a half years on, and three years after the nominal end of this recession.

This graph, from Pethokoukis’ article, shows the sharp fall-off (I hesitate, so far, to call it a collapse) in labor force participation over the last dozen years.

Notice that.  The recession formally ended in spring 2009, yet, as The Wall Street Journal noted, participation has kept right on falling during these three years of recovery—an unprecedented decline in our history.  And to put a bit more perspective on this decline, see the next graph, from the same WSJ link:

We haven’t had so low a per centage of Americans trying to find work in 30 years.  And it took the last three years—three years during which we’re “recovering,” we’re “on the right path,” and “it just takes a bit more time,” as some have lately insisted—to sink to such a depth.

One more ugly picture.  Pethokoukis also cited a graph from The Hamilton Project that illustrates the “jobs gap” in our current economy.  (It’s an interactive graph at the Project; go over and play with it).  This gap, according to the Project, is the monthly number of jobs that the US economy needs to create in order to return to pre-recession employment levels while also absorbing the people who enter the labor force each month.

The 96,000 jobs in this graph is the increase the latest Labor report says we had for the month of August.  The other three lines represent, in decreasing order, the effect of steady increases of 472,000 jobs/mo (from the highest single month in this century), 321,000 jobs/mo (the average of the best year in the ’90s), and 208,000 jobs/mo (the average of the best year in the 2000s).

We’re not even keeping up.  To paraphrase Anderson Cooper, those insisting we’re “making progress” are in an alternate universe.

There He Goes Again

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Alan Blinder had another one in The Wall Street Journal the other day.  This time he’s bellyachingtalking about the Romney/Ryan ticket and averring that it’s from too deep in right field.  He supports this with three main points grounded in an FDR-ian…consensus:

  • a modest social safety net to protect vulnerable Americans from some of the downsides of unfettered markets,
  • Keynesian-style policies to shorten recessions, and
  • a progressive tax-transfer system to mitigate income inequality

It continues to amaze me that he can say those things with a straight face.  He didn’t make deep right field this time, either.  He fanned.  Struck out in three pitches.

There’s nothing modest about today’s “safety net.”  Far from FDR’s original supplemental income design for social security, with retirees expected to look to their own families for any needed additional support, today’s social security is intended to be replacement income, funded not by themselves and their own families, but solely by direct transfer payments from strangers—at immediate cost to those strangers’ ability to see to their own and their own parents’ financial futures.

Those highly touted, wholly unsuccessful Keynesian policies didn’t shorten the Great Depression, they prolonged it.  By putting floors under food and labor prices, Keynesianism made it far more difficult for companies to resume hiring and for the out-of-work (among too many others) to buy their food (and so were created food stamps).  On top of that, FDR’s Keynesian spending crowded out of the economy that already straitened private sector.  FDR’s own Treasury Secretary confessed the utter failure of these policies.  Henry Morgenthau confided to his diary:

We have tried spending money.  We are spending more than we have ever spent before and it does not work.  I want to see this country prosper.  I want to see people get a job.  I want to see people get enough to eat.  We have never made good on our promises.  I say after eight years of this administration, we have just as much unemployment as when we started.  And enormous debt to boot.

Obama’s Keynesian stimulus spending has been a similarly dismal failure.  Unemployment remains above 8% (and underemployment above 14.5%) nearly four years after he began his spending spree.  Fewer people are working today than at the end of the Panic of 2008, even with the 4 million “new” jobs that the economy has created despite his policies.  Obama today has spent “more than we have ever spent before,” it still “does not work,” and he has “never made good on [his] promises.”

To see what does work, review the actions taken by President Ronald Reagan in response to the Carter Recession.  Then go back to the FDR era—just a decade prior to FDR himself—and review the actions taken by President Warren Harding in response to the Depression of 1920-1921, still in progress when he took office (and begun from the policies of another Progressive President).

Mitigate income inequality?  This is the wrong goal, and separately, it’s immoral.  It’s the wrong goal because everyone’s economic prosperity flows from supporting opportunity equality, not income equality, so that every man can show the best that there is in him, so that  every man can seek to the fullest of his ability (in John Adams’ terms) his own happiness.  This also allows—and actively facilitates—every man to maximize his ability to satisfy his duties to himself, his family, and those less well off than he by maximizing his ability to accumulate the resources with which to achieve that satisfaction.  Working toward income equality necessarily caps the ability of a man to maximize the outcomes of his own potential, and it disincentivizes both the man redistributed from and the recipient.  Here, then, is the immorality of forced income equality: it denies every man his opportunity to honor his own obligations.

There are a couple of lesser points in Blinder’s piece.

Any piece of legislation running 2,319 pages will have flaws.

There’s a hint there.  And

For people now under age 55, the Republicans would like to replace Medicare by vouchers that will almost certainly fall short of covering future insurance costs.

There are two small things about this.  First, it’s a carefully static analysis that ignores free market responses to the competition that flows from letting people exercise responsibility for their own medical costs.  But, then, how free would our market be after four more years of Progressive central planning?  The other thing is that this is of a piece with the Progressives’ general refusal to allow any part of today’s Social Security to be privatized.  Americans, you see, are just too grindingly stupid to be able to manage our own fiscal affairs.  We need our Progressive Betters in government to “guide” us.

Some Labor Questions

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The Wall Street Journal asked these on Labor Day, and supplied some answers.  Here are some of those questions and answers.

  • 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 U.S. 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?  Some.  …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 Jackson Hole conference….

The Democratic Presidential Candidate has taken a bad situation and done little to improve it.  He has, though, actively attacked businesses—the hirers—demonizing them, (over)regulating them, demanding to raise taxes on them.