The New Deal in Reverse (Steve Fraser)

by Dollars and Sense

From TomDispatch, a piece by Steve Fraser criticizin' Obama's populist droppin' of g's and his inadequate jobs "surge." Here's Tom E.'s intro to the piece:

From TomDispatch today, a canny and striking comparison between Franklin D. Roosevelt and Barack Obama that shows how, by the end of their first year in office, they were heading in mirror-opposite directions: Steve Fraser, The New Deal in Reverse, How the Obama Administration Ended Up Where Franklin D. Roosevelt Began. (An accompanying TomDispatch audio interview discussing why Obama has ignored the jobs model Roosevelt pioneered.)

Franklin D. Roosevelt came into office with far less expected of him than Barack Obama. He was, on arrival, wedded to the traditional idea of a balanced budget, like his predecessor Herbert Hoover, determined not to alienate high finance or corporate power, and eager to create jobs and restart the Great Depression economic engines of the country indirectly through the business community. That was Roosevelt, the New Deal president, on day one; that, as TomDispatch regular and New Deal historian Steve Fraser indicates, is Barack Obama at the end of year one. Their rhetoric was similar. How did they end up in such different places, going in such different directions as their first year in office ended? Why did one president take an historic and extraordinary path and the other head into the quagmire?

This is a remarkable tale which Steve Fraser tells in his usual striking fashion, examining three key steps Roosevelt took: separating commercial and investment banking (while Obama simply shored up Wall Street), creating the Tennesee Valley Administration which competed successfully with private utility companies (while Obama's public health option went down the tubes and the insurance companies emerged triumphant), and creating millions of jobs through direct government intervention (while Obama's jobs plan relies on funneling tax relief to business).

The upshot was one historic presidency and another heading into the swamps of disappointment -- and a tale of two presidencies not to be forgotten.

As ever, Fraser offers a stimulating take on today's headlines in the long view of history.

Read The New Deal in Reverse.

Labels: Barack Obama, FDR, jobs, New Deal, unemployment

 

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2/11/2010 12:00:00 PM 0 comments

 

Mixed Jobs Report for January (BLS)

by Dollars and Sense

The Bureau of Labor Statistics has released its employment numbers for January. It is a mixed report: the official unemployment rate fell from 10.0% to 9.7%, yet the economy lost 20,000 non-farm jobs. This means that the decline in the rate of unemployment has to do with people who aren't (fully) employed but aren't counted as unemployed (i.e. they have become discouraged or marginally attached). The BLS also revised upward its estimate of the number of jobs that were lost in Dec. 2009, from 80,000 up to 150,000. Here are the basics from the BLS:

THE EMPLOYMENT SITUATION -- JANUARY 2010

The unemployment rate fell from 10.0 to 9.7 percent in January, and nonfarm payroll employment was essentially unchanged (-20,000), the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and in transportation and warehousing, while temporary help services and retail trade added jobs.

Household Survey Data

In January, the number of unemployed persons decreased to 14.8 million, and the unemployment rate fell by 0.3 percentage point to 9.7 percent.

In January, unemployment rates for most major worker groups--adult men (10.0 percent), teenagers (26.4 percent), blacks (16.5 percent), and Hispanics (12.6 percent)--showed little change. The jobless rate for adult women fell to 7.9 percent, and the rate for whites declined to 8.7 percent. The jobless rate for Asians was 8.4 percent, not seasonally adjusted.

This release includes new household survey tables with information about employment and unemployment of veterans, persons with a disability, and the foreign born. In January, the unemployment rate of veterans from Gulf War era II (September 2001 to the present) was 12.6 percent, compared with 10.4 percent for nonveterans. Persons with a disability had a higher jobless rate than persons with no disability--15.2 versus 10.4 percent. In addition, the labor force participation rate of persons with a disability was 21.8 percent, compared with 70.1 percent for those without a disability. The unemployment rate for the foreign born was 11.8 percent, and the rate for the native born was 10.3 percent. (The data in these new tables are not seasonally adjusted.)

In January, the number of persons unemployed due to job loss decreased by 378,000 to 9.3 million. Nearly all of this decline occurred among permanent job losers.

The number of long-term unemployed (those jobless for 27 weeks and over) continued to trend up in January, reaching 6.3 million. Since the start of the recession in December 2007, the number of long-term unemployed has risen by 5.0 million.

In January, the civilian labor force participation rate was little changed at 64.7 percent. The employment-population ratio rose from 58.2 to 58.4 percent.

The number of persons who worked part time for economic reasons (sometimes referred to as involuntary part-time workers) fell from 9.2 to 8.3 million in January. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

About 2.5 million persons were marginally attached to the labor force in January, an increase of 409,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 1.1 million discouraged workers in January, up from 734,000 a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million people marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Read the full report.

Labels: Bureau of Labor Statistics, jobs, unemployment

 

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2/05/2010 01:00:00 PM 1 comments

 

The Obama Budget and the Deficit Chorus

by Dollars and Sense

Get ready for "the deficit chorus," as James K. Galbraith put it to us today.

I was happy to see that David E. Sanger quoted Galbraith in his news analysis of Obama's budget in today's New York Times.

But I was puzzled by the way he was quoted, in an article that makes this claim: "For Mr. Obama and his successors, the effect of those projections is clear: Unless miraculous growth, or miraculous political compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors." There is some wiggle room here—virtually no room for new domestic initiatives, unless there are no miraculous political compromises; and I suppose it would take a miraculous political compromise for Congress to change its priorities away from ever-increasing military spending and refusal to raise marginal tax rates on the wealthy, and toward health care, education, jobs programs, etc. But the effect is to suggest that domestic spending is just not possible.

Well—judge for yourself; here's the beginning of the article:

Deficits May Alter U.S. Politics and Global Power

By DAVID E. SANGER | February 1, 2010

WASHINGTON—In a federal budget filled with mind-boggling statistics, two numbers stand out as particularly stunning, for the way they may change American politics and American power.

The first is the projected deficit in the coming year, nearly 11 percent of the country's entire economic output. That is not unprecedented: During the Civil War, World War I and World War II, the United States ran soaring deficits, but usually with the expectation that they would come back down once peace was restored and war spending abated.

But the second number, buried deeper in the budget's projections, is the one that really commands attention: By President Obama's own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years. In fact, in 2019 and 2020—years after Mr. Obama has left the political scene, even if he serves two terms—they start rising again sharply, to more than 5 percent of gross domestic product. His budget draws a picture of a nation that like many American homeowners simply cannot get above water.

For Mr. Obama and his successors, the effect of those projections is clear: Unless miraculous growth, or miraculous political compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors. Beyond that lies the possibility that the United States could begin to suffer the same disease that has afflicted Japan over the past decade. As debt grew more rapidly than income, that country's influence around the world eroded.

And this would be a bad thing?

Here's the bit quoting Jamie Galbraith:

[Obama's chief economic advisor Lawrence] Summers, in an interview on Monday afternoon, said, “The budget recognizes the imperatives of job creation and growth in the short run, and takes significant measures to increase confidence in the medium term.”

He was referring to the freeze on domestic, non-national-security-related spending, the troubled effort to cut health care costs, and the decision to let expire Bush-era tax cuts for corporations and families earning more than $250,000.

But Mr. Summers said that “through the budget and fiscal commission, the president has sought to provide maximum room for making further adjustments as necessary before any kind of crisis arrives.”

Turning that thought into political action, however, has proved harder and harder for the Washington establishment. Republicans stayed largely silent about the debt during the Bush years. Democrats have described it as a necessary evil during the economic crisis that defined Mr. Obama’s first year. Interest in a long-term solution seems limited. Or, as Isabel V. Sawhill of the Brookings Institution put it Monday on MSNBC, “The problem here is not honesty, but political will.”

One source of that absence of will is that the political warnings are contradicted by the market signals. The Treasury has borrowed money to finance the government’s deficits at remarkably low rates, the strongest indicator that the markets believe they will be paid back on time and in full.

The absence of political will is also facilitated by the fact that, as Prof. James K. Galbraith of the University of Texas puts it, "Forecasts 10 years out have no credibility."

He is right. In the early years of the Clinton administration, government projections indicated huge deficits—over the "sustainable" level of 3 percent—by 2000. But by then, Mr. Clinton was running a modest surplus of about $200 billion, a point Mr. Obama made Monday as he tried anew to remind the country that the moment was squandered when "the previous administration and previous Congresses created an expensive new drug program, passed massive tax cuts for the wealthy, and funded two wars without paying for any of it."

But with this budget, Mr. Obama now owns this deficit. And as Mr. Galbraith pointed out, it is possible that the gloomy projections for 2020 are equally flawed.

Simply projecting that health care costs will rise unabated is dangerous business.

"Much may depend on whether we put in place the financial reforms that can rebuild a functional financial system," Mr. Galbraith said, to finance growth in the private sector—the kind of growth that ultimately saved Mr. Clinton from his own deficit projections.

His greatest hope, Mr. Galbraith said, was Stein's law, named for Herbert Stein, chairman of the Council of Economic Advisers under Presidents Richard M. Nixon and Gerald R. Ford.

Stein's law has been recited in many different versions. But all have a common theme: If a trend cannot continue, it will stop.

When I asked Jamie Galbraith whether he was misquoted, here's what he told us:

The press is indulging in a vast wave of hysteria.

Of course the deficit chorus has an agenda, which is to block jobs programs, prevent public investment, and to trim and privatize Social Security and Medicare.

I'm not normally an oracle of the markets. But the markets are sending a very clear signal: they don't believe a word of the hysteria. If they did, the 20 year Treasury bond rate would not be under 4.4 percent. In fact, the US government can borrow what it needs, at historically low interest rates, and so there is no financial barrier to funding the jobs, social programs and public investments that the country actually needs.

It's case of who you gonna believe, them or your lying wallet?

Not quite what showed up in Sanger's analysis, alas. (Otherwise wouldn't the headline have been: "There is no financial barrier to funding the jobs, social programs and public investments that the country actually needs"?) I'm still glad he contacts Galbraith for his articles, though...

Labels: Barack Obama, budget, deficit, James K. Galbraith, jobs

 

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2/02/2010 07:41:00 PM 0 comments

 

Yves Smith on Krugman on Jobs

by Dollars and Sense

From the fantastic Yves Smith at Naked Capitalism:

Krugman on the Need for Jobs Policies

Paul Krugman has a good op-ed tonight on how Germany has fared versus the US in the global financial crisis. Recall that there was much hectoring of Germany early on, for its failure to enact stimulus programs. German readers were puzzled, since Germany has a lot of social safety nets that serve as automatic counter-cyclical programs. As an aside I visited a few cities in Germany on the Rhine and Danube in June (unfortunately in heavy book writing mode, and so did not get to see as much as I would have liked) and it was remarkable how there were no evident signs of the downturn: no shuttered retail stores, no signs of deterioration in public services, stores and restaurants looked reasonably busy (although I had no idea of what norms there might be).

Krugman holds Germany up as an example of the merits of employment oriented policies (which had been the norm in America prior to the shift to "markets know best" posture (and more aggressive anti-union policies) inaugurated by Reagan:

Consider, for a moment, a tale of two countries. Both have suffered a severe recession and lost jobs as a result—but not on the same scale. In Country A, employment has fallen more than 5 percent, and the unemployment rate has more than doubled. In Country B, employment has fallen only half a percent, and unemployment is only slightly higher than it was before the crisis.

Don't you think Country A might have something to learn from Country B?

This story isn't hypothetical. Country A is the United States, where stocks are up, G.D.P. is rising, but the terrible employment situation just keeps getting worse. Country B is Germany, which took a hit to its G.D.P. when world trade collapsed, but has been remarkably successful at avoiding mass job losses. Germany's jobs miracle hasn't received much attention in this country—but it's real, it's striking, and it raises serious questions about whether the U.S. government is doing the right things to fight unemployment....

Germany came into the Great Recession with strong employment protection legislation. This has been supplemented with a "short-time work scheme," which provides subsidies to employers who reduce workers' hours rather than laying them off. These measures didn't prevent a nasty recession, but Germany got through the recession with remarkably few job losses.

Should America be trying anything along these lines? In a recent interview, Lawrence Summers, the Obama administration's highest-ranking economist, was dismissive: "It may be desirable to have a given amount of work shared among more people. But that's not as desirable as expanding the total amount of work." True. But we are not, in fact, expanding the total amount of work—and Congress doesn't seem willing to spend enough on stimulus to change that unfortunate fact. So shouldn't we be considering other measures, if only as a stopgap?

Now, the usual objection to European-style employment policies is that they're bad for long-run growth—that protecting jobs and encouraging work-sharing makes companies in expanding sectors less likely to hire and reduces the incentives for workers to move to more productive occupations. And in normal times there's something to be said for American-style "free to lose" labor markets, in which employers can fire workers at will but also face few barriers to new hiring.

Yves here. Krugman does Germany an injustice by failing to contest US prejudices about European (particularly German) labor practices. If German labor practices are so terrible, then how was Germany an export powerhouse, able to punch above its weight versus Japan and China, while the US, with our supposedly great advantage of more flexible (and therefore cheaper) labor, has run chronic and large current account deficits? And why is Germany a hotbed of successful entrepreneurial companies, its famed Mittelstand? If Germany was such a terrible place to do business, wouldn't they have hollowed out manufacturing just as the US has done? Might it be that there are unrecognized pluses of not being able to fire workers at will, that the company and the employees recognize that they are in the same boat, and the company has more reason to invest in its employees (ignore the US nonsense "employees are our asset," another line from the corporate Ministry of Truth).

A different example. A US colleague was sent to Paris to turn around a medical database business (spanning 11 timezones). She succeeded. Now American managers don't know how to turn around businesses without firing people, which was not an option for her. I submit that no one is willing to consider that the vaunted US labor market flexibility has produced lower skilled managers, one who resort to the simple expedient of expanding or contracting the workforce (which is actually pretty disruptive and results in the loss of skills and know-how) rather than learning how to manage a business with more foresight and in a more organic fashion because the business is defined to a large degree around its employees.

Read the original post.

Labels: fiscal stimulus, Germany, jobs, Paul Krugman, unemployment, Yves Smith

 

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11/13/2009 03:52:00 PM 0 comments

 

Billionaires Against Regulating Finance (B.A.R.F)

by Dollars and Sense

A public service announcement on behalf of America's most oppressed minority: billionaires.



FOR IMMEDIATE RELEASE - September 29, 2009
Contact: Beemer N. Mazzerati (aka Steve Schnapp)
(857) 277-7868 sschnapp@faireconomy.org

"Billionaires Against Regulating Finance" to Face Off with Protesters in Boston's Financial District Day of Action set for Thursday, October 1, 2009

Boston, MA, September 29th, 2009 - In response to the so-called "March Against a Jobless Recovery" planned for Thursday, October 1, 2009, the Billionaires Against Regulating Finance (BARF), an activist group for the wealthy and the corporate elite, will protest the march in full suit and gown at Bank of America in Boston's financial district between 4:30 and 5:30 pm.

According to the event organizers, "The federal government gave hundreds of billions of taxpayer dollars to bail out big businesses, but corporations, in turn, are not creating the jobs that were promised."

BARF members strongly oppose the claim of a "jobless recovery." Stockson Bond, board chairman of investment banking firm, Goldin Racks, remarked, "Of course jobs have been created. Have you seen the number of foreclosed homes in the US? There must be hundreds, maybe even thousands, of people needed to print and post foreclosure yard signs. And don't forget about career counseling. That field is booming with the unemployment rate hovering at 10 percent!"

Gree D. Bastid, chief executive of Smells Fargo, noted, "To the extent that job creation is slower than preferred by the marchers, BARF's message is clear: Stop Whining! The fact is, we couldn't possibly create millions of jobs AND get our huge, hard-earned bonuses. Keeping our top talent is number one. It's all about priorities."

The Billionaires are prepared to defend corporate executives against the marchers' unfair claim that a recovery for Wall Street does not equate to a recovery for Main Street. Beau Ness, Vice President of Banking on America, fumed, "I resent the idea that these people don't consider Wall Street a part of Main Street. Complex derivatives and credit default swaps are as vital to average Americans and the economy as the neighborhood grocery or hardware store!"

BARF commends Treasury Secretary Timothy Geithner's recent action at the G-20 summit in Pittsburgh, where he rejected French President Nicolas "May-As-Well-Be-Communist" Sarkozy's outrageous proposal to place hard caps on financial executives' compensation. A triumphant Mr. Ciyo crowed, "Earlier this year, Tim talked tough to the American people about our taxpayer-funded bonuses. But we knew that when the rubber hit the road, he'd be with us 100 percent. It feels great to see our political 'investments' paying off."

$$$

Labels: BARF, billionaires, financial activism, jobs

 

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9/30/2009 11:25:00 AM 0 comments

 

Latino Jobless Rate Jumps To 12.7% In May

by Dollars and Sense

A summary of today's BLS report from Bob Feldman:

The official "seasonally adjusted” unemployment rate for Latino workers in the United States increased jumped from 11.3% to 12.7% between April 2009 and May 2009, according to the latest Bureau of Labor Statistics data.

The official "seasonally adjusted" unemployment rate for white male workers also increased from 8.5% to 9% between April 2009 and May 2009.

For all U.S. male workers over 16 years-of-age, the officially "seasonally adjusted" jobless rate increased from 10% to 10.5% between April 2009 and May 2009.

For all U.S. workers, the "seasonally adjusted" jobless rate increased from 8.9% to 9.4% between April 2009 and May 2009.

The official "not seasonally adjusted" jobless rate for Black female workers over 20 years-of-age also increased from 10.5% to 11.1% between April 2009 and May 2009; and the official "not seasonally adjusted" jobless rate for all Black workers increased from 14.4% to 14.7% during this same period.

The official "seasonally adjusted" rate for all Black male workers over 20 years-of age was still 16.8% in May 2009.

The official "not seasonally adjusted" jobless rate for Black youth between 16 and 19 years-of-age increased from 33.5% to 40.1% between April 2009 and May 2009, while the "not seasonally adjusted" unemployment rate for Hispanic or Latino youth increased from 26.5% to 31% during this same period. The official "not seasonally adjusted" jobless rate for white youth between 16 and 19 years-of-age also increased from 18.8% to 21.1% between April 2009 and May 2009.

According to the Bureau of Labor Statistics' June 5, 2009 press release:

"...Employment fell by 345,000 in May...Steep job losses continued in manufacturing...

"The number of unemployed persons increased by 787,000 to 14.5 million in May...

"The number of long-term unemployed (those jobless for 27 weeks or more) increased by 268,000 over the month...

"...The employment-population ratio, at 59.7%, continued to trend down...

"Manufacturing employment fell by 156,000 in May...Three durable goods industries—motor vehicles and parts (-30,000), machinery (-26,000), and fabricated metal products (-19,000)—accounted for about half of the overall decline in factory employment...Mining shed 11,000 jobs in May...

"Employment in construction decreased by 59,000 in May...In May, employment fell in nonresidential specialty trade contractors (-30,000) and in residential construction of buildings (-11,000)...

"Retail trade employment was down by 18,000 in May...Employment in wholesale trade fell by 22,000 over the month...

"Financial activities employment continued to decrease in May (-30,000). Securities lost 10,000 jobs and real estate lost 9,000...Employment in information decreased by 24,000 in May... "

--b.f.

See the full June 5th BLS "Employment Situation Report."

Labels: Bob Feldman, Bureau of Labor Statistics, jobs, Latino jobless rate, unemployment

 

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6/05/2009 03:06:00 PM 0 comments

 

Job Fair Canceled Because of Crowds

by Dollars and Sense

Next up, bread lines?

From the Boston Globe:

A weekend job fair at a Dedham shopping center was postponed today after organizers became concerned that a flood of job seekers would snarl traffic and create safety problems.

"The volume of expected attendees was much larger than we had initially anticipated," said David Fleming, marketing director for W/S Development, which was planning to host the job fair tomorrow at the new Legacy Place retail and entertainment complex.

Fleming said his firm and Dedham officials became concerned when they started receiving a high volume of telephone calls about the event, which they did not advertise. He said W/S Development is now searching for a different venue for the event, which will be re-scheduled for a date within the next few weeks.

The event was expected to connect job seekers with 14 retailers that plan to hire hundreds of workers before they open stores in Legacy Place this summer. The retailers include Apple, City Sports, L.L. Bean and Showcase Cinema De Lux.

The high level of interest in the event drew parallels to a recent job fair in New Hampshire, where officials were overwhelmed with more than 10,000 attendees. They had initially expected 5,000.

Legacy Place, a 675,000 square foot complex with restaurants, stores, a cinema and other attractions, is scheduled to formally open Aug. 20., although L.L. Bean will begin operating July 24, Fleming said. Once fully open with 80 stores, the complex is expected to result in the hiring of about 1,500 people.

Labels: jobs, unemployment

 

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5/31/2009 11:43:00 AM 0 comments

 

Job Loss Fallout Map

by Dollars and Sense

Slate has put together an amazing interactive map illustrating the 5 million jobs that have been lost since the start of the economic meltdown. The immediate image it brings to mind is a fallout map after a nuclear attack.

Labels: jobs, Slate, unemployment

 

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4/17/2009 11:45:00 PM 0 comments

 

Job Bytes, March 6 (Dean Baker)

by Dollars and Sense

Hat-tip to reader Panayiotis M. for reminding us about Dean Baker's weekly employment notes, available here (and you can subscribe). Here is this week's, in full:

Unemployment Jumps to 8.1 Percent as Job Loss Accelerates

By Dean Baker | March 6, 2009

This report shows that recent economic projections were overly optimistic.

The February employment report showed the labor market deteriorating at an even faster rate, with the unemployment rate rising from 7.6 percent to 8.1 in February. The economy lost 651,000 jobs in the month, but job loss for the prior two months was revised up as well. Job loss for the last three months is now reported at 2,013,000, an average of 671,000 per month.

Job loss continues to be disproportionately in construction and manufacturing. Construction lost 104,000 jobs in February; it has lost 512,000 jobs since September, 7.2 percent of employment in the sector. Employment in the non-residential sector is falling almost as rapidly as in the residential sector.

Manufacturing lost 168,000 jobs in February, bringing job loss in the sector to 845,000 since September, a decline of 6.3 percent. Hours per worker have also been reduced; the index of aggregate hours is down 9.6 percent since September. All sectors of manufacturing have been hit hard, but the auto sector has seen the sharpest decline, with employment down by 128,600, or 15.3 percent, since September. The hours index is down by 21.9 percent over this period.

Retail lost 39,500 jobs, bringing its loss since September to 318,300. Employment in auto dealers has been holding up in spite of the plunge in sales. Employment is down by only 167,000, or 13.4 percent, since the pre-recession peak, even though sales are down more than 30 percent. In the same vein, employment in real estate is down by just 70,000, or 4.7 percent, even though sales are down by 40 percent. In both cases, workers are paid largely on commission and therefore have likely seen their wages slashed even though they still have their jobs.

Employment in trucking fell by 33,400 in February. It is down by 88,000 since October, a drop of 6.5 percent. This reflects the huge decline in goods being shipped. The employment services sector lost 87,500 in February. As a result of a sharp downward revision to prior data, this sector reportedly lost 402,000 jobs, 13.2 percent of employment, since September.

The rise in the unemployment rate was accompanied by a 0.2 percent drop in the employment rate. The 3.1 percentage point drop in the employment rate already exceeds the decline in any downturn since 1948. Men have been disproportionately hit by the downturn, with their unemployment rate rising by 3.8 percentage points over the last year to 8.1 percent. The unemployment rate for women rose by 2.4 percentage points to 6.7 percent. This gap is not surprising with construction and manufacturing as the big job losers.

Black men saw a 6.9 percentage point jump in their unemployment rate over the last year to 14.9 percent. The employment rate for black teens dropped to 17.0 percent, the lowest level on record. The unemployment rate for Hispanics hit 10.9 percent, up 1.2 percentage points from January and 4.6 percentage points from last February.

Unemployment has risen sharply for workers at all education levels. The 12.6 percent rate for workers without a high school degree is 5.2 percentage points above the year ago level. The 4.1 unemployment rate for college grads is nearly double the 2.1 percent rate of last February, and 0.7 percentage points higher than the previous high in 1992 when this series was first published.

The number of people involuntarily employed part-time rose by 838,000 in February and is now 3,753,000 above its year ago level. This is consistent with the sharp decline in hours in the establishment survey.

The one piece of somewhat good news in this report is that wages are continuing to rise, with nominal wages rising at 3.5 percent annual rate over the quarter. However, everything else in this report is extremely bad. The economy is in a free fall with no obvious brakes in place. The recent forecasts, used in analyzing the stimulus and the budget, which projected 8.5 percent unemployment for the 4th quarter, now look impossibly optimistic. The unemployment rate is likely to hit 8.5 percent by March and will almost certainly cross 9.0 percent by the early summer. Without substantial additional stimulus, it could cross 10.0 percent by year-end.
Dean Baker is the Co-director of the Center for Economic and Policy Research. CEPR's Jobs Byte is published each month upon release of the Bureau of Labor Statistics' employment report. For more information or to subscribe by fax or email contact CEPR at 202-293-5380 ext. 102, or chinku [at] cepr [dot] net.

Labels: Dean Baker, jobs, recession, unemployment

 

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3/06/2009 02:46:00 PM 0 comments

 

Black Male Jobless Rate: 16.1% in February

by Dollars and Sense

From Bob Feldman; includes key excerpts from today's BLS report.

Black Male Worker Jobless Rate: 16.1 Percent In February

The official "not-seasonally adjusted" unemployment rate for Black male workers over 20 years of age in the United States increased from 15.8 percent to 16.1 percent between January 2009 and February 2009, while the "seasonally adjusted" unemployment rate for Black male workers increased from 14.1 percent to 14.9 percent, according to the latest Bureau of Labor Statistics data (http://www.bls.gov/news.release/empsit.t02.htm ) . The "not-seasonally adjusted" jobless rate for all Black workers over 20 years of age increased from 13.4 percent to 13.8 percent during this same period, while the "seasonally adjusted" jobless rate for all Black workers increased to 13.4 percent.

For all U.S. workers, the "not-seasonally adjusted" jobless rate jumped from 8.5 percent to 8.9 percent between January 2009 and February 2009, while the "seasonally adjusted" jobless rate for all U.S. workers increased to 8.1 percent. The "not-seasonally adjusted" unemployment rate for white male workers also increased from 8.3 percent to 9 percent between January 2009 and February 2009. The "not-seasonally adjusted" jobless rate for Hispanic or Latino male workers increased from 11 percent to 12.1 percent between January 2009 and February 2009.

Between January 2009 and February 2009, the "seasonally adjusted" jobless rate for Black youth between 16 and 19 years-of-age increased from 36.5 percent to 38.8 percent, while the "seasonally adjusted" jobless rate for white youth between 16 and 19 years-of-age was 19.1 percent.

According to the Bureau of Labor Statistics' March 6, 2009 press release:

"The number of unemployed persons increased by 851,000 to 12.5 million in February...

"Among the unemployed, the number of job losers and persons who completed temporary jobs increased by 716,000 to 7.7 million in February...

"The number of long-term unemployed (those jobless for 27 weeks or more) increased by 270,000 to 2.9 million in February...

"In February, the number of persons who worked part time for economic reasons (sometimes referred to as involuntary part-time workers) rose by 787,000, reaching 8.6 million...This category includes persons who would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs...

"There were 731,000 discouraged workers in February, up by 335,000 from a year earlier. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them...

"Total nonfarm payroll employment dropped by 651,000 in February...

"Employment in professional and business services fell by 180,000 in

February. The temporary help industry lost 78,000 jobs over the month....In February, job declines also occurred in services to buildings and dwellings (-17,000), architectural and engineering services (-16,000), and business support services (-12,000).

"Widespread job losses continued in manufacturing in February (-168,000).

The majority of the decline occurred in durable goods industries (-132,000), with the largest decreases in fabricated metal products (-28,000) and machinery (-25,000). Employment in nondurable goods manufacturing declined by 36,000 over the month.

"The construction industry lost 104,000 jobs in February...

"Employment in truck transportation declined by 33,000 in February...The information industry continued to lose jobs (-15,000)...


"Employment in financial activities continued to decline in February
(-44,000).... In February, job losses occurred in real estate (-11,000); credit intermediation (-11,000); and securities, commodity contracts, and investments (-8,000).

"Retail trade employment fell by 40,000 over the month...In February, employment decreased in automobile dealerships (-9,000), sporting goods (-9,000), furniture and homefurnishing stores (-8,000), and building material and garden supply stores (-7,000). Employment in wholesale trade fell by 37,000 over the month, with nearly all of the decline occurring in durable goods.

"Employment in leisure and hospitality continued to trend down over the month (-33,000), with about half of the decrease in the accommodation industry (-18,000)..."

--b.f.

Labels: Black jobless rate, Bob Feldman, Bureau of Labor Statistics, jobs, recession, unemployment

 

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3/06/2009 01:19:00 PM 0 comments

 

Can My Boss Do That?

by Dollars and Sense

We received a press release from the good folks at Interfaith Worker Justice in Chicago. They had a conference call on this today that we weren't able to listen in on, but it sounds like a really great project. For more info contact: Cynthia Brooke (773) 728-8400, ext. 40; cbrooke--at--iwj .org. Or just visit the site.

Can My Boss Do That?
New website with vital information on rights and protections during a job loss
www.CanMyBossDoThat.com responds to overwhelming need.

The numbers are staggering: 3.6 million jobs lost between December 2007 and January 2009. The February unemployment figures, due out this week, will continue to be grim. When workers face job loss, they often don't know where to turn for answers. They may be improperly denied their last paycheck, money due when their plant closes, or told by their employer that they cannot collect unemployment benefits.

Interfaith Worker Justice (IWJ) has created a website, Can My Boss Do That? (www.CanMyBossDoThat.com), which enables workers to understand their rights and protections and advocate for themselves. It offers state-specific information geared to help real life situations:

• A teacher is trying to find out if her student can collect unemployment after quitting because she was groped by her boss.


• An upscale grocery store closes, with no notice. Workers are told to take their final pay in food and wine.


• A worker doesn't file for unemployment after his boss tells him that he isn't eligible because he's a part-time worker. He regularly worked 35 hours a week and was eligible.

"The need for clear, usable information for people who are facing unemployment is overwhelming," said Anne Janks, worker advocate and website creator. "We're seeing more bosses cutting corners and breaking employment laws. This website is one way workers can make sure they understand how best to protect themselves."

Labels: closures and layoffs, Interfaith Worker Justice, jobs, unemployment, worker rights

 

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3/05/2009 05:12:00 PM 0 comments

 

Unemployment (Including Closures and Layoffs)

by Dollars and Sense

Two more unemployment items:

• The unemployment rate in our fair commonwealth, Massachusetts, went over 7% for the first time in over 15 years. The Boston Globe reported that the rate is now 7.4%. From the article:
  

  The Massachusetts unemployment rate in January jumped above 7 percent for the first time in nearly 16 years as the state's employers slashed nearly 5,000 jobs, the state Executive Office of Labor and Workforce Development reported today.
  
  The state's jobless rate hit 7.4 percent in January, up from a revised 6.4 percent in December. It's the highest rate since June 1993, when Massachusetts was recovering from the deep recession of the late 1980s and early 1990s. There are now more than 250,000 unemployed in Massachusetts, up by nearly 100,000, or about 60 percent, from a year ago.
  
  The national unemployment rate was 7.6 percent in January. The US Labor Department reports February employment statistics tomorrow. Economists forecast that the national jobless rate rose to about 8 percent last month as employers cut hundreds of thousand more jobs.
  
  In Massachusetts, employers cut jobs for the eighth consecutive month. The state has lost about 73,000 jobs over the past year, or about 2 percent of total employment.

  
  Read the full article.



• We've been posting the weekly unemployment report from Mark Heschmeyer of the CoStar Group. This is from his report for March 1-7:
  
  

  Biggest Job Cuts May Have Peaked
  
  Companies are now settling in to what many believe will be a long recession. More than 60% of companies say that they believe their business results will not hit bottom until the end of 2009 or into 2010, according to Watson Wyatt's most recent human resource survey.
  
  In response, many employers made significant changes to their HR programs between October and February, including layoffs, salary and hiring freezes and resetting merit increase budgets for the upcoming year.
  
  However, our results show that many companies are putting the drastic cuts behind them and are now looking to make smaller cost-cutting changes moving forward.

  
  Read the rest of the report.



• If weekly news of unemployment isn't frequent enough for you, check out Layoff Daily. Hat-tip to Bob F. for letting us know about this cheery site. Note that you can get the Layoff Daily iPhone App at the iTunes Store for just $1.99 (though I really wonder who would do so, and why).

Labels: closures and layoffs, jobs, Mark Heschmeyer, Massachusetts, unemployment

 

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3/05/2009 04:53:00 PM 0 comments

 

Unemployment Picture Yet Worse

by Dollars and Sense

It is getting tedious (not to mention scary) to have to keep relaying yet-worse news on employment. But here it is:

• The ADP National Employment Report, a private alternative to Bureau of Labor Statistics data, came out with their latest report today (the BLS numbers for February come out on Friday). The short version: "Nonfarm private employment decreased 697,000 from January 2009 to February 2009 on a seasonally adjusted basis... The estimated change of employment from December 2008 to January 2009 was revised down by 92,000, from a decline of 522,000 to a decline of 614,000." And I had gotten so used to talking about the economy shedding half a million jobs a month in this recession; that convenient turn of phrase will no longer work, alas. The full report is worth checking out just for the spectacular graphs.


• The Providence Journal reports that Rhode Island's jobless rate has reached 10.3%. (No need to click on the link; the site is really annoying, with lots of ads, pop-ups, animations, and the cheesy domain name, "projo.com". And the article isn't too informative beyond that landmark statistic. NPR reported yesterday that RI's unemployment rate is second worst after Michigan's, but the Journal didn't even go that deep. I guess no Rhode Islanders have gotten laid of in Michigan yet.)


• Yesterday we weighed in on a New York Times article about women's paychecks that has generated some criticism in the feminist blogosphere; I posted an article on women and unemployment from our November/December 2008 issue. Not about the current horrifying numbers, but relevant, and refers to Heather Bouchey's interesting research.

Labels: Bureau of Labor Statistics, jobs, Michigan, Rhode Island, unemployment

 

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3/04/2009 10:57:00 AM 0 comments

 

Obama's Address (Dave Lindorff--Counterpunch)

by Dollars and Sense

Recently posted to Counterpunch. Hat-tip to Bob F. For an assessment of O.'s address by frequent D&S blogger Larry Peterson, click here; someone just left a nice comment on it: "Thanks, Larry. Some of the best writing on the economy is here at Dollars and Sense."

Obama's Address to Congress

Smooth? Yes. Transformative? No.

By DAVE LINDORFF | Counterpunch | February 26th, 2009

Barack Obama's first address to Congress provided Americans with yet another example of competent speechmaking, and I suppose, given that we've just endured eight painful years of oratorical farce, being able to listen to your president without wincing is something.

The problem is that the way forward proposed by the president as laid out in this address was almost always half-hearted, wrong-headed or doomed.

Obama declared at the outset of his address that the economic crisis was the major issue confronting the country, and while one could argue that this crisis is merely a symptom of much bigger issues, like the nearly completed deindustrialization of the nation, the death grip of militarism, and the growing political power of corporations, one could also concede that there is an urgent need to deal with the deepening recession.

But clearly, the proposals offered by the president for tackling the crisis are not up to the task. He spoke primarily of the need to "get banks lending" again, explaining that this would require pouring still more hundreds of billions of dollars into these failing institutions. You'd think that with a whole stable of bankers at his elbow, the president would by now have heard from at least someone that this is nonsense, but apparently not. Nobody in the White House or the Cabinet seems to want to point out to the boss that the reason banks aren't lending is because most people—and companies—aren't interested in borrowing. The economy is tanking and assets are sinking in value by the day. Why would anyone want to borrow to invest in such an economy? Furthermore, even if someone did want to borrow, banks will not want to lend unless they think there's a reasonable prospect of having the money repaid. That means they want to see income, they want to see a full order book, they want to see, in the case of a mortgage, an asset that is fairly valued. None of this exists.

That's why the first $350 billion that was given to the banks last fall was simply pissed away and lost, not lent out, and it's why the same thing is likely to happen to the next $350 billion Obama is preparing to give away. It won't matter if he establishes a monitoring system for the second tranche of the Troubled Assets Relief Program bailout funds, or a mandate that they be used for making loans.

What is needed to fix this crisis is job security, and the only way to create that is by creating jobs. Obama talks of creating 3-3.5 million jobs, but most of these won't even be created, even in smaller numbers, until the end of this year, by which time the official rate of unemployment could be above 9 percent , and the real unemployment rate possibly more than twice that (that would be including people who've given up looking for work, or who are involuntarily working part time).

Read the rest of the article.

Labels: Barack Obama, financial crisis, jobs, recession, unemployment

 

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2/26/2009 12:35:00 PM 0 comments

 

Alternative Job Creation Plan (S. Aronowitz)

by Dollars and Sense

This is from Bob Feldman—he sent it to me before the last item he sent for me to post about alternative job creation plans (the one from a 1973 book), but I forgot to post it. It raises interesting issues that we have covered in D&S, e.g. the idea of a "basic income guarantee" (and he might have also mentioned the related idea of "employer of last resort," which we covered in our March/April 2008 issue), and the key issue of tax havens, which we'll be covering in our May/June issue.

Aronowitz's Alternative Jobs Creation Plan Of 2005

If you're wondering what an alternative left jobs creation program to the Obama Administration's recently enacted "stimulus" economic program might look like, here's what CUNY Grad School Professor Stanley Aronowitz proposed in his 2005 book Just Around The Corner: The Paradox of the Jobless Recovery:

"Slightly less than 10 percent of the annual military budget (not counting emergency Iraq funds), $50 billion, would create almost 2.5 million jobs...Jobs could be created to build low-and moderate-rental or limited-equity cooperative housing (where `owners' are obliged to sell their apartments back to the co-op rather than offer them for sale in the private market)...

"...The housing story of the postwar era has been one of federal, state and local abandonment and betrayal of the brave New Deal public-housing program. It was replaced by a program that used public funds to subsidize private developers...

"Where will we get the funds for creating public jobs and for building new housing...? We urgently need to reinstitute a progressive tax system where large corporations and wealthy individuals are required to pay their fair share and no individual or profitable business is exempt from paying taxes. In addition, in the interest of creating these jobs, loopholes for upper-middle-income taxpayers should be closed. And the bloated military budget, much of which neither enhances our security nor is justified if we had a reasonable foreign policy that was not oriented toward empire, could be slashed and reorganized. The savings could help fund a labor-intensive public-service jobs program.

"Would this jobs program require a new government institution such as the New Deal Public Works and Works Project Administration (PWA and WPA)? Probably...It would be important to stipulate that these are public jobs to expand public goods, and slots should not be crated to subsidize wages in the private sector. Right now, huge quantities of federal funds are shoveled into private contractors' pockets...

"...When will working people share in the benefits of the technological revolution of our time?

"We need to amend the Wage and Hour Act to provide for overtime pay for work performed after 6 hours in any day, and after 30 hours a week...

"What to do about the unwaged and the underwaged?...America needs a basic-income guarantee...It is time to revive the concept of a basic guaranteed income for all Americans...

"...Corporations that register offshore must be required to pay U.S. taxes. Those who avoid such taxes should lose their right to sell their goods and services in this country. (Of all U.S. corporations, 60 percent failed to pay taxes in 2003. Many of them were registered in another country, usually a Caribbean site; others simply took advantage of gaping loopholes in U.S. tax law.)"

--b.f.

Labels: basic income guarantee, Employer of Last Resort, jobs, militarism, Stanley Aronowitz, tax havens, unemployment

 

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2/26/2009 10:14:00 AM 0 comments

 

Job Creation Proposal from 1973

by Dollars and Sense

From Bob Feldman:

Perlo's 1973 Alternative Jobs Creation Proposal Revisited

Most hip anti-war people in the United States (and most long-time readers of Dollars & Sense) probably realize by now that the U.S. government's recently passed "economic stimulus" legislation won't really create enough high-wage jobs for U.S. workers to really restore economic prosperity for most U.S. working-class people; or quickly stop the rapid rise in long-term unemployment rates for U.S. blue-collar and office workers.

Yet until anti-war left dissidents in the United States are able to quickly present some kind of anti-militarist alternative left jobs creation program for U.S. working-class people to mobilize in support of on the U.S. streets, the suffering of U.S. working-class people in the current U.S. historical "era of permanent war abroad and economic depression at home" will probably continue to increase--until there's finally some kind of upturn in U.S. capitalism's business cycle.

In a 1973 book, The Unstable Economy: Booms and Recessions In The U.S. Since 1945 (International Publishers), a Marxist economist named Victor Perlo indicated what an anti-war alternative left jobs creation program for the U.S. economy might look like by proposing the following:

"Nationalization and government operation of major economic units are essential for overcoming monopoly domination of the economy to the extent necessary for realizing significant progressive reforms.

"Plants abandoned by private owners, or left with substantially curtailed operations, are prime targets for nationalization. Conspicuous in this respect are enterprises in the aerospace and other armament-connected industries, whose private owners have proved unwilling or unable to shift to civilian production. Also there has been large-scale phasing out of electornic plants, as multinational corporations have shifted output to foreign lands. There continues a constant flow of industrial enterprises from urban areas, where workers are organized into relatively strong unions, into rural areas, and especially to open-shop southern areas offering special tax concessions and a prospect of low wages and no resistance to inferior working conditions.

"The government should take over all such plants, fully maintain employment, and charge the corporation with all transitional costs.

"It should take over munitions plants generally, thereby weakening the economic base of the notorious `military-industrial complex.'

"The transportation system should be nationalized...The entire system should be made into an integrated public system for freight and passengers, covering all modes of transportation, with lowered fares and rates, greatly increased and improved service.

"The telephone system and other `public utilities' should be made really public, to end the superhigh charges and corresponding private profits now guaranteed by business-dominated regulating commissions.

"Along with a system of socialized medicine, available without charge to all, there should be nationalization of the drug industry, hospitals, and related industries.

"The construction of new housing should be nationalized. That is the only way to build quickly the tens of millions of units needed to decently house America at rents the illl-housed can afford, with adequate employment opportunites for Black and other minority workers...

"Nationalization of industry should not be like that of the `public authorities' and some quasi-government corporations run by boards of directors and managers from the officialdom of the private big corporations and banks, for the profit of these enterprises rather than service to the public.

"Democratic nationalization is required, involving direct, major participation by the workers of the nationalized enterprises in their management, and a real voice for the users of the services. It calls for boards of directors to be elected directly by the voters and by the enterprise workers...

"Aa whole series of measures would be directed towards cutting unemployment...A major element in the fight against unemployment is to win a shorter work week and the elimination of overtime. This, of course, would directly add millions of jobs...

"...The demand has become popular among workers for continuation of unemployment insurance for the full term of unemployment. This should be accompanied by expanding coverage to all workers, minimizing the waiting periods, ending the exclusion of strikers and other categories of workers, and ending the humiliating compensation offices with their pressure on the client to take sub-standard jobs at sub-standard pay.

"A uniform Federal system should be substituted for the state systems, and the payments should be financed out of general revenues.

"Every enterprise, private and public, should be required to employ Black and other minority workers at least in proportion to their numbers in the area's population at each occupational level, including the highest managerial and professional levels...

"All Government support for and privileges granted to existing foreign investments would be ended. New private corporate foreign investments would be completely prohibited or sharply curtailed. This would encourage economic growth in the United States, by making it not longer possible for big corporations to give priority to overseas operations while cutting back at home..."

--b.f.

Labels: 1973, employment, jobs, militarism, nationalization, Victor Perlo

 

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2/25/2009 11:23:00 AM 0 comments

 

Economic Ignorance (Michael Yates)

by Dollars and Sense

A great post from Michael Yates' blog.

Michael Steele is a Nitwit and Wolf Blitzer is a Jackass

Economic ignorance is widespread in the United States. People think they know something about the subject, but few do. My mother is convinced that China is the cause of all our economic problems. When I challenge her, she doesn't think it matters that I have spent forty years studying and teaching the dismal science. If Lou Dobbs says it's so, it must be true. I once taught classes for automobile workers who were employed at a General Motors plant near Pittsburgh. A man insisted that recessions were caused by the media. Newspapers and television were apparently so pessimistic and intent on presenting only bad news that the public became too demoralized to spend money. It never occurred to him to ask why the media, which depend on us spending money for their existence, would want this to happen.

Had my UAW student argued that the media were a constant source of economic misinformation, he would have been on to something. Every day I watch that talking heads on television and read the columnists in our newspapers and I marvel at the stupidity that passes for wisdom. Dick Morris, the prostitute-loving former presidential advisor and current Fox News savant, sagely advised nearly every night during the Obama-McCain campaign that economic recovery would not be possible unless the capital gains tax was eliminated. There is no evidence remotely consistent with this view, but analysis seems irrelevant to Morris and his Fox friends. To any suggestion that it might be necessary for the federal government to temporarily nationalize some troubled banks, most of which are now insolvent, Fox's wise men and women screamed "socialism." Never mind that this would be socialism for the rich, with the wealthy reaping the rewards of a boom but the public pays for the losses in the downturn. Their answer is always that markets will regulate themselves, though there is even less evidence that this ever happens. They also say that during a recession, taxes should never be increased. But if the taxes are levied on the highest incomes, the recipients of these incomes can pay them without reducing their spending at all. That is, they can pay the taxes out of their savings, money they wouldn't have spent anyway. Then if the government uses the taxes paid out of money that wouldn't have been spent in the first place to do things like build public transit systems or housing for the poor, total spending, output, and employment will all rise.

"Well," you say, "That's Fox." Let's hit the remote and tune into CNN. You might catch the demagogue Lou Dobbs blaming immigrants, again without proof, for all our economic woes. If you are really lucky, you'll see newscaster Wolf Blitzer. Here is a man with an empty head.

A few weeks ago, I saw something on his show that amazed even me. He was interviewing Michael Steele, who had just become the first black person to be selected to chair the Republican National Committee. Steele was a constant presence on Fox News during the recent presidential campaign, and like almost all Fox commentators, he said plenty of stupid things. Not as many as Sean Hannity or Ann Coulter. But no one would mistake Steel for a bright guy.

The topic of the exchange between Steele and Blitzer was the economic stimulus package proposed by the Obama administration. The U.S. economy is in the midst of its worst crisis since the Great Depression. Legendary Wall Street investment banks have failed, as have scores of commercial banks. Millions of homeowners have been either foreclosed or are expecting to be soon. Credit is frozen, as lenders don't trust that borrowers will pay them back and borrowers are so strapped with debt that they cannot take on new loans. The unemployment rate is at 7.6 percent and heading toward double digits. This translates into 11.6 million people, and these do not include the 7.6 million people who want full-time work but can only get part-time jobs and the 734,000 workers too demoralized by the lack of employment opportunities to look for work. If these two groups were counted as suffering labor market distress the same as the officially unemployed, the unemployment rate would be 13.1 percent. State governments across the country are facing serious tax revenue shortfalls and have or will cut their spending, which will cause spending, output, and employment to fall, and exacerbate the crisis. Economic misery has spread to every corner of the globe, and this means that U.S. exports, until recently the one bright spot in our economy, have started falling and will continue to do so, increasing unemployment still further. There is not a hopeful sign on the horizon. Not one. Over the past year or so, the Federal Reserve and the Treasury have pumped a couple trillion dollars into the financial system with little result. The Fed has pushed its target interest rates to near zero without getting banks to lend or businesses to borrow.

Many mainstream economists, including Joseph Stiglitz and Paul Krugman, have concluded that only direct and massive fiscal stimulus, in the form of federal government spending can plug the hole in spending now plaguing the economy. Obama's economic team proposed a trillion dollar stimulus plan, since enacted into law, albeit with too many tax breaks for business and not large enough to compensate for the enormous drop in private sector spending. Included in the legislation is aid to state and local governments, which will help them to maintain employment and social services in the face of declining tax revenues. Monies are provided for the unemployed, as well as for infrastructure spending. Our roads, bridges, ports, sewage systems, schools, hospitals, communications and energy networks, and public transit systems are all in need of repair, upgrade, and expansion. Federal spending on these, especially those that are already in the planning pipeline, will have a dramatic impact on spending and employment.

When Blitzer interviewed Steele, the plan had yet to be voted on by Congress. I paraphrase but Steele said this about it: "The government has never created a single job." I did a double take. What??? Not one job? So the $787 billion dollars the Congress had just approved won't put anyone to work? It is bad enough that monetary policy hasn't worked. Now fiscal policy won't do the trick either, according to Mr. Steele. Boy, we are really in a bad way.

But wait a minute. Do you know a police officer? A firefighter? A public school teacher? A secretary at the local college? An air traffic controller? A career military officer? A clerk at the state liquor store? A janitor in a federal office building? A mail carrier? Do you have a son or daughter on duty in Iraq? All of these are public employees, hired directly by local, state, or federal government. The Bureau of Labor Statistics (BLS) collects employment data every month in a survey of hundreds of thousands of private and public establishments. The BLS produces among the best labor market statistics in the world. It is a creation of the government, and all of its workers are public employees. For January 2009, the BLS estimated that there were 134,580,000 non-farm employees in the United States. Of these, 22,539,000 were public employees, 16.7 percent of all employment, divided as follows:

Federal government employees: 2,792,000

State government employees: 5,187,000

Local government employees: 14,560,000

I hate to tell Mr. Steele, but every one of these jobs was created by the government. And this does not tell the whole story. For three decades, governments have been busy privatizing, that is, contracting out public services to private businesses. Everything from local transit services to prisons to college food services to security forces in Iraq. The workers are private employees, but they are paid from public funds. What is more, all of these workers, direct and indirect public employees, spend their paychecks every month and this spending generates a lot more employment. These wages amount to at least 1.5 trillion dollars, which will support plenty of spending on outputs that someone has to produce.

When the Obama plan is implemented, it probably will not end our current economic crisis. But one thing is certain: the money spent will cause employment to rise. The government will create jobs, just as it has always done.

We could put Steele's statement to a test. If we put the most charitable light on what he said, perhaps he meant that public employment always "crowds out" private employment. A public worker just replaces a private one but doesn't add anything to total employment. This is an argument conservative economists have used to say that public investment just takes the place of private investment, which would have occurred but for the public spending.

Therefore, if Steel is right, we could eliminate every single government job and employment would not fall at all, because private employment would rise by he same amount that public employment fell. To put it so baldly tells us just how preposterous Steele's remark was. What mechanisms would cause the private sector's demand for labor to rise by more than 20,000,000 persons? Would falling wages from all the new unemployed scrambling for and willing to labor for next to nothing do the trick? How could it when the massive public layoffs would cause the demand for private sector goods and services to drop drastically? Employers don't hire when demand for what they make collapses. Steele and his fellow nitwits think that what another nitwit, Ronald Reagan, called the "magic of the marketplace" will somehow right our economic ship. This is not only a foolish idea. It is a dangerous one.

After Steele made his statement, Wolf Blitzer had a golden opportunity to challenge it and educate his audience. Instead he said nothing. He just moved on to his next question. It was as stunning example of the depths to which journalism has sunk as you'll ever see. That a jackass like Wolf Blitzer has a prime spot on a major news outlet anddraws a very large paycheck every month is enough to make me sick. I hope it makes you sick too.

Addendum: I just watched Louisiana governor Bobby Jindal (he calls himself Bobby after a character on the Brady Bunch) give the Republican response to President Obama's speech to Congress. If Steele is a nitwit and Blitzer a jackass, Jindal is a dolt.

Labels: economics, ignorance, jobs, Lou Dobbs, Michael Steele, Michael Yates, recession, Wolf Blitzer

 

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2/25/2009 10:06:00 AM 2 comments

 

The Ultimate Growth Industry (Nancy Folbre)

by Dollars and Sense

UMass-Amherst econ prof Nancy Folbre was a guest economist on the New York Times's Economix blog yesterday. Here is her post.

Willing to invest for the long term? Looking for a socially responsible growth industry offering consistently high returns? Want to "buy American" and create domestic jobs without discouraging international trade? Consider the benefits of public investments in early childhood education.

Critics of proposed increases to Head Start in the House stimulus bill labeled them porky pet projects. But many economists argue that those forms of spending represent a very big collective piggy bank. Spending on programs specifically designed to provide high-quality early education—especially for children in low-income families—yields significant and measurable economic benefits.

W. Steven Barnett, the director of the National Institute for Early Education Research, and other education experts have been making this argument for years. The University of Chicago economist and Nobel Prize winner James Heckman puts his reputation on the line for it, mobilizing a tremendous amount of evidence on the impact of model programs on children's cognitive skills and personality traits like conscientiousness. As he puts it, "learning begets learning."

Reading though his dense, 100-plus-page PowerPoint presentations will make you wish you had attended a better pre-school. His estimate of the average rate of return—explained below—recalls a number that stockbrokers once promised us we could get in our private retirement accounts: 12 percent per annum.

Read the rest of the post.

Labels: economic stimulus, education, growth, jobs, Nancy Folbre

 

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2/13/2009 11:52:00 AM 0 comments

 

ILO: World Economy May Lose 51 Million Jobs

by Dollars and Sense

From Reuters; hat-tip to LP:

By Laura MacInnis |Wed Jan 28, 2009 9:06am EST

GENEVA (Reuters) - Up to 51 million jobs worldwide could disappear by the end of this year as a result of the economic slowdown that has turned into a global employment crisis, a United Nations agency said on Wednesday.

The International Labor Organization (ILO) said that under its most optimistic scenario, this year would finish with 18 million more unemployed people than at the end of 2007, with a global unemployment rate of 6.1.

More realistically, it said 30 million more people could lose their jobs if financial turmoil persists through 2009, pushing up the world's unemployment to 6.5 percent, compared to 6.0 percent in 2008 and 5.7 percent in 2007.

In the worst-case economic scenario, the Global Employment Trends report said 51 million more jobs could be lost by the end of this year, creating a 7.1 percent global unemployment rate.

Read the rest of the article.

Labels: International Labor Organization, jobs, recession, unemployment, United Nations

 

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1/28/2009 11:58:00 AM 0 comments

 

Stampede for 'Bush shoe' creates 100 new jobs

by Dollars and Sense

Ok--this is a bit outside of the mission of our blog (except, uh, job-creation?), but I couldn't resist. From the Guardian; hat-tip to Lois Ahrens.

Robert Tait in Istanbul | Monday 22 December 2008

Their deployment as a makeshift missile robbed President George Bush of his dignity and landed their owner in jail. But the world's most notorious pair of shoes have yielded an unexpected bonanza for a Turkish shoemaker.

Ramazan Baydan, owner of the Istanbul-based Baydan Shoe Company, has been swamped with orders from across the world, after insisting that his company produced the black leather shoes which the Iraqi journalist Muntazar al-Zaidi threw at Bush during a press conference in Baghdad last Sunday.

Baydan has recruited an extra 100 staff to meet orders for 300,000 pairs of Model 271 - more than four times the shoe's normal annual sale - following an outpouring of support for Zaidi's act, which was intended as a protest, but led to his arrest by Iraqi security forces.

Orders have come mainly from the US and Britain, and from neighbouring Muslim countries, he said.

Around 120,000 pairs have been ordered from Iraq, while a US company has placed a request for 18,000. A British firm is understood to have offered to serve as European distributor for the shoes, which have been on the market since 1999 and sell at around £28 in Turkey. A sharp rise in orders has been recorded in Syria, Egypt and Iran, where the main shoemaker's federation has offered to provide Zaidi and his family with a lifetime's supply of shoes.

To meet the mood of the marketplace, Baydan is planning to rename the model "the Bush Shoe" or "Bye-Bye Bush".

"We've been selling these shoes for years but, thanks to Bush, orders are flying in like crazy. We've even hired an agency to look at television advertising," he said.

Zaidi has been in custody since the shoe-throwing incident, amid claims that he has been badly beaten. He faces a possible jail sentence for insulting a foreign leader, but has reportedly apologised and requested a pardon from Iraq's prime minister, Nouri al-Maliki.

Labels: george bush, jobs, Muntazar al-Zaidi, shoe production, Turkey

 

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12/22/2008 10:49:00 AM 0 comments