Tag Archives: jobs

More Governance by Diktat

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Rule by law, not rule of law.  Here‘s the latest Obama installment.

The president plans to make the announcement [ordering Labor to expand overtime pay requirements to include millions more workers] on Thursday at the White House, a senior administration official confirmed to Fox News. Though the administration has claimed previous executive actions had bipartisan support, officials are acknowledging that this particular move [does not.]

These aren’t blue-collar jobs covered by “collective bargaining” agreements—union contracts—either.  Now, managers and executive officers of companies will be…covered: fast-food restaurant managers, loan officers, computer technicians, and more.

There’s not even a pretense of union-management mutually agreed compensation structure in this latest government move—the Federal government is dictating to businesses how they must conduct their businesses, the Federal government is dictating to businesses how they must structure their internal costs.

No market forces allowed.  And if the law doesn’t let the Federal government do what it wants to do to us, the Feds (not us) will change the law, and the Feds will change it with, or without, our permission.

What’s next?  It’s a truism, that if something becomes—or is made—more expensive to have, buyers will buy less of it.  If labor—blue- or white-collar—is made more expensive, businesses will retain/hire less of it.  Look for slowed hiring and outright management staff reductions, either in people retained or in salaries paid to make room for the mandated overtime increases.

Then, look for this administration to change/write its own law to mandate that salaries and wages can never be reduced, and that once hired, an employee can never be terminated.  Businesses, after all, are jobs welfare programs in the Progressive mind.

Jobs

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Here’s where we are, five years into the Obama “recovery” from the Panic of 2008:

  • 4.1 million fewer full-time workers today than in November 2007
  • 81% of workers are full-time now vs. 83% prerecession—and that per centage is of a smaller labor force than extant in 2007
  • per CBO, 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…”if the participation rate had risen to the level it would have attained without the current cyclical weakness”

Real wages have gone nowhere in this recovery:

And this graph of the performance of the Obama “recovery:”

This recovery is some 10 per centage points below the recoveries of the three prior…recessions.

If this sounds like a broken record, it’s because this “recovery” is a broken record.

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.