Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘unemployment rate’

Under Trump, coal communities are stuck between a rock and a hard place

Wednesday, April 26th, 2017

Blair Zimmerman, Pennsylvania’s Greene County Commissioner, knows coal. As a mine worker for 40 years and then a politician in southwestern Pennsylvania, he knows how important coal is to both the identity and economic stability of his community. He’s even called the White House a few times since President Donald Trump took office, asking the president—who ran on a platform of supporting coal miners that he argued had been forgotten by Washington—to renew health insurance for thousands of retired coal miners.

But he doesn’t think that anything Trump does will bring coal jobs back to levels seen in the industry’s heyday.

“The coal industry is going to be around for years, but to bring it back—that’s not going to happen. [Utilities] are not going to invest in fossil-fueled power plants,” Zimmerman said. When he talked about the promises Trump made to places like Greene County, a community of just over 36,000 situated on the state’s southwest border, Zimmerman laughed, raising his voice a little.

“He doesn’t have a plan. That was all political B.S.,” Zimmerman said. “He said it just to get elected.”

And it worked, because of places like Greene County—in November, Trump overwhelmingly carried the county’s vote, beating Hillary Clinton by 40 points.

One hundred days into his presidency, however, Trump’s actions to help coal communities have been limited to cutting environmental regulations that experts say will do little to help bring mining jobs back.

Meanwhile, Trump’s skinny budget, released in March, would cut funding to seven of the 12 federal programs aimed at revitalizing struggling coal communities. Since 2015, these programs have functioned together under the Partnerships for Opportunity and Workforce and Economic Revitalization, or POWER, Initiative. These Obama-era programs include things like workforce training, to help unemployed coal miners obtain necessary skills for finding new jobs, and economic development, to help new businesses move into these communities. According to a new Center for American Progress analysis, Trump’s proposed budget would cut at least $1.13 billion from these programs. ThinkProgress is an editorially independent news site housed at the Center for American Progress.

“A lot of the attacks in this budget make it clear that the Trump administration is not really concerned with helping coal miners.”

“Having the administration fund programs that direct money into economic development in the coalfields is really the only way to truly help people right now that are living and working in these communities,” Veronica Coptis, a lifelong Greene County resident and executive director of Coalfield Justice, told ThinkProgress. “A lot of the attacks in this budget make it clear that the Trump administration is not really concerned with helping coal miners, but more concerned with ensuring that coal companies continue to have more control.”

In Greene County, where the unemployment rate is currently 6.7 percent(about two percent higher than the national average), POWER Initiative funds have been hugely useful for the Southwest Corner Workforce Development Board, a body that oversees programs aimed at helping job seekers find employment and learn skills in southwest Pennsylvania.

Ami Gatts, who has worked for the Southwest Corner Workforce Development Board for 25 years, rising to the position of director two and a half years ago, said that the board has received over $1.5 million in POWER Initiative funds, which has paid for things like supportive services to help unemployed workers get computers or transportation for school, or training seminars aimed at helping out-of-work miners obtain new skills. Through POWER Initiative funding, for instance, the Southwest Corner Workforce Development Board can reimburse companies up to $8,000 taking a chance on an untrained worker. The employee gets a full salary, while the company is taking less of a financial risk on its new hire.

“When you cut those funds, we don’t have the money to train people to make a skilled workforce,” Gatts said. “It’s going to affect our employers, and it’s going to affect the people who need those skills. It’s very detrimental.”

Beyond cutting programs, however, Gatts said that Trump’s rhetoric about coal jobs coming back has a paralyzing impact on coal communities, where many workers would rather go back to familiar jobs than embark than learn a new trade or skills. Many unemployed coal workers have been hesitant to take advantage of the workforce training services provided to the community?—?because they are convinced that the coal industry, with Trump’s help, will rebound to its former glory.

“Every time I hear, ‘We are going to put the coal miners back to work,’ it stops our coal miners from moving forward.”

“Every time they put out hope, it stymies people. They just stop and they don’t move forward,” Gatts said. “Change is not something people welcome, and every time I hear, ‘We are going to put the coal miners back to work,’ it stops our coal miners from moving forward.”

The story of the fall of the coal industry has been one of a steady, decades-long decline, with the number of coal mining jobs falling from 177,500 in 1985 to just over 50,000 today. As both a candidate and as president, Trump has made a great many promises to coal communities devastated by a rise in automation and competition from natural gas and renewable energy. He has promised to repeal the Clean Power Plan, the Obama-administration’s signature domestic climate regulation aimed at tackling greenhouse gas emissions from the power sector. He has pledged to repeal environmental regulations aimed at protecting streams from mining pollution, and has promised to do away with other regulatory burdens that he argues have been killing the coal industry.

But while these moves may boost coal production slightly—and line the pockets of coal executives in the process—they will do little to stem the production of cheap natural gas or slow the automation of the coal industry. Utilities have already said that Trump’s recent actions have not changed their outlook on coal as an energy source, nor have the actions caused utility executives to reconsider previously scheduled coal plant closures. In short, Trump’s regulatory assault will do little to bring back coal jobs to the regions where he’s promised relief.

Mining jobs paid well—an average of $60,000 a year for people just starting in the industry. And finding unemployed miners jobs that pay similar wages is not easy—especially when workers lack particular skills that employers are looking for. Many unemployed miners, as well as potential employers, are either unwilling or unable to take on the financial burden of paying for a particular kind of skill training, which is why POWER Initiative funds have been so crucial for entities like the Southwest Corner Workforce Development Board in trying to address the gap between unemployed workers and potential employers.

“In order to get the skills, you need to have money to pay for the training,” Gatts said. “If you take that away from us, you’re not going to be offering our employers any trained workers.”

Both Gatts and Commissioner Zimmerman note, however, that POWER Initiative funds can only go so far—and that it means little to the community to have a trained workforce without opportunities for employment within the community.

“The future of the county needs to be the future, and that means looking beyond the coal industry.”

“We have to bring in other industries, and support the guys that are here now in the coal industry,” Zimmerman said. “The future of the county needs to be the future, and that means looking beyond the coal industry.”

Both Zimmerman and Gatts are looking to the technology sector as a potential new industry for Greene County—they argue that since tech work really only requires an internet connection, companies could find lots of potential workers in economically-depressed coal communities, as long as those communities have access to education and training. It’s a strategy that is similar in many ways to candidate Hillary Clinton’s proposed plan for revitalizing coal communities, which involved federal support for local education and training programs as well as major investment in expanding broadband access for rural communities.

Since 2015, Greene County has been partnering with a nonprofit called Mined Minds, which was started by tech consultant Amanda Laucher, who was born in Greene County but moved to Chicago to work in tech. Together with her partner Jonathan Graham, Minded Minds has begun offering coding bootcamps to teach software development and tech skills to unemployed miners and others in Greene County and the surrounding area.

“We strongly believe that there is talent in these areas,” Graham told ThinkProgress. And he said the program is mutually beneficial. “The tech industry is continuing to grow and getting a talented workforce is difficult and expensive.”

Graham and Laucher also offer their students both pre-apprenticeships—a combination of real world tech work and continuing workshops—as well as full apprenticeships. Mined Minds also works with companies from Silicon Valley to New York to help place graduates of the programs in tech jobs that can be done remotely, so that graduates don’t have to leave their homes, once they have completed the bootcamp and apprenticeships.

The Mined Minds programs, thus far, are self-funded, but POWER Initiative Grants have helped the Southwest Corner Workforce Development Board pay for some of the associated training costs for Greene County residents. Mined Minds also recently applied for their own POWER Initiative funds, with the hopes of expanding their boot camps and reaching more residents in southwest Pennsylvania and West Virginia.

“I think as a model, it makes sense. Having the support of grants means that we’re not taking all the risk ourselves in trying to bring more industry into an area,” Graham said.

He said that if the Trump administration were to cut POWER Initiative funding, it would slow—but not completely derail—their ability to expand their training programs.

“Don’t pull these funds. We need to help these people.”

But for Gatts, who has worked in economic development in this community for over a decade, losing federal funding would be a blow.

“I do think these programs are very necessary,” she said. “Don’t pull these funds. We need to help these people.”

This blog was originally posted on ThinkProgress on April 24, 2017. Reprinted with permission.

Natasha Geiling is a reporter at ThinkProgress. Contact her at ngeiling@americanprogress.org.

98,000 Jobs Added to the Economy in March, Unemployment Is 4.5%

Tuesday, April 11th, 2017

The U.S. economy added 98,000 jobs in March and the unemployment rate declined to 4.5%, according to figures released this morning by the U.S. Bureau of Labor Statistics.

While the job growth was tepid in March, and the revisions for the numbers for January and February are weaker than earlier reported, the economy is continuing close to the trend of job growth that started under President Barack Obama. If we continue the trend of job growth over the past seven years he established, the economy will add another 25 million jobs in eight years. Oddly, the claim President Donald Trump has made is that he will create 25 million jobs.

Still, wage growth needs time to recover as does the share of workers employed so household incomes can recover to their 1999 peak. With modest job gains in March, the Federal Open Market Committee of the Federal Reserve that sets monetary policy needs to pause ahead of its proposed interest rate hike in June. The higher interest rates are meant to signal a return to normal, but we are not there, yet.

The biggest gains were in professional and business services (+56,000) and in mining (+11,000), while retail trade lost jobs (-30,000). Other sectors of note include health care (+14,000) and financial services (+9,000). According to BLS, construction employment saw little change in March (+6,000).

Employment in other major industries, including manufacturing, wholesale trade, transportation and warehousing, leisure and hospitality, and government, showed little or no change over the month.

Among the demographic groups of working people, the unemployment rates for adult women (4.0%), white people (3.9%) and Hispanic people (5.1%) declined in March. The jobless rates for adult men (4.3%), teenagers (13.7%), black people (8.0%) and Asian people (3.3%) showed little or no change.

This blog was originally posted on aflcio.org on April 7, 2017. Reprinted with permission.

We Must Create Good Jobs: Sherrod Brown Shows the Way Forward

Thursday, March 16th, 2017

February, the first full month of the Trump presidency, witnessed solid jobs growth of 235,000 with the headline unemployment rate little changed, at 4.7 percent, according to the Bureau of Labor Services monthly report.

Trump has already tweeted to claim credit for the results, but neither his plan nor his administration were in place. In fact, the February figures, a record 77th straight month of jobs growth, result from the momentum of the Obama recovery, plus whatever benefit or harm came from Trump’s bombast.

The jobs growth will harden the Federal Reserve’s resolve to raise interest rates again when its Open Market Committee meets next week. The Fed is acting in anticipation of an expected rise in inflation, that is to date not much in evidence.

By raising rates, The Fed is choosing to put a drag on the economy, even though full recovery is a long way off. Nearly 15 million people are still in need of full-time work. The share of the population in the workforce – 60 percent – is still down from 2000. If our work rate were back to where it was, about 10 million more Americans would have jobs.

Over the course of the recovery, most of the jobs created are contingent – part-time, short-term, contract work – with few benefits and often low wages. Lawrence Katz and former Obama economic advisor Alan Kreuger found that a staggering 94 percent of new jobs created from 2005 to 2015 were “alternative work,” contract or short-term or contingent.

Trump’s trickle-down agenda – to cut taxes on rich and corporations so they will create jobs – doesn’t address this reality. In fact, corporations are swimming in money, and using it increasingly to buy back shares or for mergers that do little to create jobs. Companies, contrary to Trump’s rhetoric, don’t lack capital or access to it, they lack demand for their products.

Democrats are sensibly critical of the Trump agenda, but too many fall back to a defense of Obama’s policies as the alternative. Obama helped save the economy that was in free fall when he took office, and presided over record months of jobs growth, but his policies, frustrated by Republican obstruction, did little to counter the stagnant wages, growing inequality and increasing insecurity of the modern economy.

The challenge is not simply to expose Trump’s bait and switch on the working people who voted for him, but to lay out elements of a bold alternative agenda. Bernie Sanders modeled that effort in his surging primary challenge.

Now, Senator Sherrod Brown of Ohio, who is up for re-election in 2018, has stepped  boldly into the breach. Brown has released a 77 page, meticulously documented report –Working Too Hard for Too Little – that delves into how policies and power have undermined workers, and offers the elements of an agenda to rebuild the middle class.

Brown’s central insight is a direct counter to Trump’s recycled voodoo. Trump believes that cajoling and bribing companies is the way to generate good jobs. Brown argues “It’s not businesses who drive the economy – it is workers.”   Workers with decent wages and secure jobs generate the demand that allow companies to grow and the economy to thrive. As it is, “Between 2000 and 2013, the middle class shrank in all 50 states. And that’s hurting our country. When hard work doesn’t pay off – when workers have no economic security and their paychecks don’t reflect the work they do – our economy cannot grow.”

The unemployment rate, Brown argues, isn’t the measure of a good economy. “The unemployment rate is one thing, but whether workers have jobs that pay a decent wage and provide security is another. And the unemployment rate certainly doesn’t reflect the frustration, the worry, the anger, the pain that workers feel.”

Senator Brown details how the policies that have structured globalization, technology, corporate management have undermined workers, savaged unions, and pushed companies to offshore, contract out, and cut back on jobs, wages and benefits.  He then offers a worker based alternative agenda, some old and some new.

He’d act directly to lift the floor under workers – requiring a $15.00 minimum wage, setting up a national fund to finance 12 weeks family and medical leave, mandating minimum paid vacation days and enforcing overtime pay.

He calls for empowering workers at the workplace– cracking down on labor violations, curbing wage theft, policing misuse of contract labor, and reviving the right to organize and bargain collectively. While Republicans are intent on destroying unions, Brown argues that clearly we all have a large stake in challenging the current imbalance of power in the workplace.

He details measures to help workers save for retirement – including matching grants and expansion of opportunities for part-time and short-term workers.

Then Brown offers a far more coherent plan than Trump to change corporate incentives. He’d create a “Corporate Freeloader Fee,” levied against all corporations “whose pay is so low that taxpayers are forced to subsidize their workers.” The fee would force companies to reimburse American taxpayers for the insult. He’d accompany this with offering companies that do right by the workers a tax break – if they “commit to staying in the US, to hiring in the US and to providing good wages and fair benefits for workers.”

The academic rigor – complete with footnotes – of Brown’s report is a rarity among politicians. It exposes House Speaker Paul Ryan’s much celebrated power points for the thin gruel that they are. Brown doesn’t see creating jobs as a standalone – affordable health care, better schools, access to colleges and good training, aggressive anti-trust and more are also vital.

Work unites all of us, Brown writes, citing Pope Francis: “We don’t get dignity from power nor money or culture. We get dignity from work.” With Working too Hard for Too Little, Brown has shown Americans that there is an alternative. The choice is not between Trump’s antics and more of the same. Good analysis leads to bold alternatives that offer a way out. His courage and his leadership should be applauded.

This blog originally appeared in ourfuture.org on March 10, 2017. Reprinted with permission.

Robert Borosage is a board member of both the Blue Green Alliance and Working America.  He earned a BA in political science from Michigan State University in 1966, a master’s degree in international affairs from George Washington University in 1968, and a JD from Yale Law School in 1971. Borosage then practiced law until 1974, at which time he founded the Center for National Security Studies.

Trump’s Treasury secretary pick claims the unemployment rate is ‘not real’

Thursday, January 19th, 2017

Steve Mnuchin, Trump’s nominee for Treasury Secretary, claimed during his confirmation hearing on Thursday that the unemployment rate is “not real” and that “the average American worker has gone nowhere.”

In response to a line of questioning by Sen. Maria Cantwell (D-WA) about what he would do to protect voters from another recession, Mnuchin claimed that he has traveled with the president and understands why Trump was elected.

“The unemployment rate is not real,” he said. “The average American worker has gone nowhere, and president-elect is committed, as am I, as his economic adviser, to work for the American people and grow the American economy so that the average American worker does better.”

On the campaign trail, Trump also repeatedly claimed that the unemployment rate is a “phony number,” and that the real rate could actually be close to 42 percent.

But Mnuchin, a former Goldman Sachs banker and the co-founder of a major lending bank, should know better. Calculated by the Bureau of Labor Statistics (BLS), the unemployment rate is the percentage of the total labor force that is unemployed but actively seeking employment. The number is a critical indicator of how the economy is doing and is widely used by economists. The number is respected by both Democrats and Republicans as a valid indicator of job growth. The BLS has calculated the rate the same way since the 1940s, and its methods do not change from one administration to the next.

The rate has also fallen by more than one-third since President Obama took office, dropping last month to just 4.6 percent?—?the lowest level since August 2007.

Despite the (real) numbers, a recent poll found that 53 percent of Republicans believe that the unemployment rate has risen under Obama. More than a third of all Americans think its worse now than when Obama took office.

Some believe that there’s a better measure to track unemployment. That statistic, called the U-6, tracks everyone who is out of work, people not looking but who want work, and those unable to find full-time employment. That number is higher?—?currently it hovers over 9 percent. But Mnuchin made no mention of this statistic being a better indicator of job growth, and it’s not clear he would give any credence to any labor statistic as Treasury Secretary.

This blog originally appeared in ThinkProgress.org on January 19, 2017. Reprinted with permission.

Kira Lerner is a Political Reporter at ThinkProgress. Contact her: klerner@thinkprogress.org

The Federal Reserve and Black Unemployment

Tuesday, August 23rd, 2016

The Federal Reserve Open Market Committee (FOMC) that determines U.S. monetary policy met in July.  Its job is to weigh the state of the American economy, both the labor market and inflationary pressures to set policy.  In an interesting note, its discussion of the labor market explicitly noted the condition of the African American and Hispanic unemployment rates.  More than just an aside, reflecting on the status of June’s labor market the minutes of the meeting show the following note:

“The unemployment rates for African Americans and for Hispanics stayed above the rate for whites, al­though the differentials in jobless rates across the different groups were similar to those before the most recent recession.”

While it is good the FOMC notes the damage its policies may be doing to the African American community, it unfortunately appears too simplistic in understanding the dynamics of the market and how the growth in labor demand affects the African American community.  It is simplistic because it appears to say that nothing has changed; that while the African American unemployment rate of 8.6% was on par with its pre-recession level of 8.4% in March 2007, when the white unemployment rate was 3.8%, little different than June’s 4.3%.  This suggests, the relative position of African Americans is fixed, immutable by macro-economic dynamics, so this lamentable gap corresponds to the best level of African American unemployment that can be reached.  In short, we must be near full employment.

Here is what the June report showed in detail.  The unemployment rate for adult African Americans (older than 25) with Associates Degrees was 3.0%, well below the unemployment rate for white high school graduates 4.2% rate.  This was a first since the recession began, for better educated African Americans to have unemployment rates lower than less educated whites.  In July 2015, African Americans with Associate Degrees had a 4.8% unemployment rate compared to white high school graduates lower 4.4% rate.

Further unnoticed, is that at the depths of the labor market downturn, the employment-to-population ratio for African Americans (the share of people with jobs) fell to 51.0% in July 2011, but had grown by June to 56.1%, a five percentage point gain, but a 10% increase.  For whites, on the other hand, the EPOP had grown only from 59.3% to 60.2%, less than one percentage point.

So, the change in unemployment rates is deceptive.  The African American unemployment rate is improving on a strong growth in employment and in the relative improvement resulting from less discrimination in hiring.  That success has further encouraged the rise in labor force participation for African Americans; which has the perverse effect of fighting against a lower unemployment rate, because it increases the number looking unsuccessfully.

The problem for African Americans is that they face much higher probabilities of enduring long spells of unemployment.  African Americans, of the same educational attainment and with the same cognitive skill levels (the so-called test score gap often mistakenly attributed as a measure of inferior schooling) as whites, face a fifty percent greater chance of being thrown into a long spell of unemployment.  And, once having fallen into that labor market quicksand, face about a third less chance of escaping.  The result is that massive levels of unemployment, like the Great Recession spawned, result in a very long queue of unemployed African Americans.  That long line can only clear by a similarly long and sustained recovery to pluck the unemployed back among the employed.

Put it simply, the unemployment rate is a snapshot composed of the probability of becoming unemployed plus the inability to escape unemployment; so it is a much more complex picture when large numbers of people are unemployed for long periods, as they are more likely to be captured by the snapshot.  When unemployment spells are very short, people move out of the frame before the snapshot can be taken.

The unemployment gap is not one of skill, it is the very real and present discrimination prevalent in a labor market where demand for workers is low and the power and caprice of employers is high.  The relative size of the gap can change, if policies push beyond conventional measures of unemployment and underutilization of workers; it is possible to see another answer is possible.

So, it is good that the FOMC at least is aware that macro-economic policies can have a good or bad effect on African Americans.  The next step is for the FOMC to further understand how much a difference it can make.

This is not just important for African Americans.  It is important for the health of the national economy.  First, everyone benefits if we push the labor market to its true and full level of maximum employment; it means more jobs and opportunities for everyone.

Second, because the African American community has such little wealth, when the economy expands, it is a community very sensitive to the interest rate movements and credit availability to catch-up on purchases like cars and making home improvements.  These purchases are fueled by rising employment opportunities and the easing of credit when the FOMC acts to lower interest rates and stimulate economic growth.  But, in such a leveraged position, it means that a slowing economy and the loss of jobs quickly turns auto loans and home borrowing into severe household balance sheet nightmares.  Those bad effects spill over to the broader the economy.

Since African American employment is more sensitive to a slowing economy, it means the FOMC has to get it right about understanding when African Americans have reached full employment.  So far, they have consistently guessed at a number that is too high, ending labor market recoveries too soon—and economic expansions too soon for everyone.

This blog originally appeared in aflcio.org on August 22, 2016.  Reprinted with permission.

William E. Spriggs serves as Chief Economist to the AFL-CIO, and is a professor in, and former Chair of, the Department of Economics at Howard University. Follow Spriggs on Twitter: @WSpriggs.

Unemployment Drops To Lowest Rate Since April Of 2008

Sunday, September 6th, 2015

Bryce CovertThe economy added 173,000 jobs in August while the unemployment rate fell to 5.1 percent, according to the latest data from the Bureau of Labor Statistics. Analysts had expected 220,000 jobs to be added. That’s the lowest unemployment rate since March of 2008.

August jobs reports are frequently unreliable, however, and tend to get revised upward in later reports. The initial report tends to get an extra 90,000 jobs on average in later months, more than double the jobs added from revisions in other months. And revisions for June and July added an additional 44,000 jobs compared to what was originally reported.

August job growth was led by 56,000 in health care, 33,000 in professional and business services, 26,000 in food and drink services, and 19,000 in finance.

Wages rose by 8 cents in August following a 6-cent rise in July, but have risen just 2.2 percent over the last year, in line with record low rates.

This blog originally appeared at ThinkProgress.org on September 4th, 2015. Reprinted with permission.

About the Author: Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

The Dark Side Of the Jobs Report: Shrinking Workforce, Stagnant Wages

Sunday, January 11th, 2015

Image: Dean BakerThe unemployment rate edged down to 5.6 percent in December from 5.7 percent in November (revised from an earlier reported 5.8 percent), the Labor Department reported today. However, the main reason was that 273,000 workers reportedly left the labor force. The employment-to-population ratio (EPOP) was unchanged at 59.2 percent, roughly 4.0 percentage points below the pre-recession level.

The establishment survey showed the economy adding 252,000 jobs in December. With upward revisions to the prior two months’ data, this brings the three-month average to 289,000.

Some of the job growth in December was likely attributable to better than usual weather for the month. For example, construction reportedly added 48,000 jobs; restaurant employment rose by 43,600. But even without these strong gains, there was still healthy job growth. Manufacturing added 17,000 jobs, finance added 10,000, and professional and business services added 52,000. Unlike prior months, the jobs in this sector were mostly (35,200) in the less well-paying administrative and waste services category.

The health care sector added 34,100 jobs. Job growth in this sector has accelerated sharply, averaging 36,500 over the last three months. By comparison, it averaged just 21,200 in the year from September 2013 to September 2014. Retail added just 7,700 jobs. This reflects the earlier than usual Christmas hiring, which added 88,300 jobs the prior two months.

The story on wages is less encouraging. The widely touted November jump in wages was almost completely reversed, with the December data showing a 5-cent drop from a downwardly revised November figure. The average over the last three months grew at a 1.1 percent annual rate compared with the average of the prior three months, down from a 1.7 percent growth rate over the last year. This may be due in part to a shift to lower paying jobs in restaurants, retail, and the lower-paying portions of the health care industry. However, it is also possible that we are just seeing anomalous data. Nonetheless, the claims of accelerating wage growth have no support in the data.

Interestingly, there seems to be some shift to generally less-skilled production and non-supervisory workers. The index of weekly hours for these workers is up 3.6 percent from its year-ago level. By contrast, the index for all workers is up by just 3.3 percent. Since the former group is more than 80 percent of the payroll employees, hours for supervisory workers would have risen by just 2.5 percent. This is consistent with employment data showing much sharper employment gains for workers with high school degrees or less than for college grads. The EPOP for college grads is actually down by 0.2 percentage points over the last year.

Other data worth noting in the household survey include a rise in the employment-to-population ratio for African Americans of 1.8 percentage points over the last year and for African-American men of 2.2 percentage points. The EPOP for African Americans is up by 3.9 percentage points from its low in 2011, although it is still down by 4.0 percentage points from pre-recession levels. The 10.4 percent December unemployment rate for African Americans is down from a recession peak of 16.8 percent.

This report shows some evidence of the labor market effects of the Affordable Care Act. While the number of people choosing to work part-time was down slightly from its November level, it is still 1.1 million above its year-ago level. The number of people who are self-employed is also up from its year-ago level. Averaging the last three months, the number of self-employed workers is up by 480,000 (3.5 percent) from the same months of 2013. (It had been dropping in 2013.) Also, the over-55 age group comprised just 37.6 percent of employment growth in 2014, compared to an average of 65.3 percent in the prior two years. This could indicate that many pre-Medicare age workers now feel they can retire since they can get insurance through the exchanges.

On the whole, this is clearly a very positive report with the strong December jobs number (even if inflated by weather) coupled with upward revisions to the prior two months. However, quit rates are still very low and wage growth remains weak. This should remind the public of how far the labor market has to go before making up the ground lost in the recession.

This article originally appeared in Ourfuture.org on January 9, 2015. Reprinted with permission.

About the author: Dean Baker is an American economist whose books have been published by the University of Chicago Press, MIT Press, and Cambridge University Press.

Chicago’s Black Unemployment Rate Near Quadruple That of Whites

Sunday, November 23rd, 2014

Adeshina EmmanuelWith 25 percent of its African-American residents jobless, Chicago has the highest black unemployment rate among the nation’s five most populous cities. Chicago’s rate is higher than Philadelphia’s 19 percent, Los Angeles’ 18 percent, Houston’s 15 percent and New York City’s 14 percent, based on 2013 U.S. Census figures.

Why?

Experts point to Chicago’s unique brand of residential segregation, among other factors.  Almost 75 percent of black Chicagoans live in a community that’s at least 90 percent black, according to Census data. Blacks are about one-third of Chicago’s population. The unemployment rate for white Chicagoans is 7 percent; for Latinos, it’s 12 percent.

Michael Dawson, a leading scholar on politics and race, said Chicago’s “extreme segregation” deprives many residents of the predominantly black South and West Sides of adequate public transit and job networks.

“The way people get hired is through networks,” and most people’s social networks are predominately within their own race, he said.

For decades, the city’s economically marginalized black communities have been saddled with failing, underfunded public schools, high youth unemployment and low college graduation rates.

“You get neighborhoods where not only do you not have a job, you don’t know many other people who have one and can help you get one,” said Valerie Wilson, an economist who heads the Program on Race, Ethnicity and the Economy at the Economic Policy Institute, a Washington, D.C., think tank.

But segregation alone doesn’t explain the situation.

This blog originally appeared in the Chicago Reported and then reposted on In These Time on November 18, 2014. Reprinted with permission. http://inthesetimes.com/working/entry/17378/chicago_ranks_fifth_in_highest_black_unemployment_rate

About the Author: Adeshina Emmanuel is a reporter for the Chicago Reporter.

Full Employment: The Recovery’s Missing Ingredient

Tuesday, November 4th, 2014

Image: Dean BakerBy Dean Baker and Jared Bernstein

Federal Reserve Chairman Janet Yellen gave a speech a few weeks ago that was doubly unusual.

First, she provided a welcome and trenchant analysis of inequality, focusing on the stagnant income and wealth of middle- and low-income families relative to the top few percent. For the nation’s chief economist to elevate this issue is an important contribution in its own right.

Second, she declined to mention the critical role of slack labor markets in these outcomes. In what is a rare case for her, the word “unemployment” was not even mentioned in the speech. The omission was especially noticeable as Yellen, to her credit, has so consistently pointed out the extent of remaining slack in the U.S. job market.

Unemployment is down and gross domestic product is up, yet there isn’t much progress in real wages and incomes of most working families. While many reasons have been set forth to explain this unfortunate disconnect, including globalization and technological change as well as unmet skill demands and the Federal Reserve’s asset-buying program, our research suggests that the main factor behind both stagnant real wages and rising inequality is the absence of full employment. Truly tight labor markets — an unemployment rate closer to 4 percent than 6 percent — would not only boost real wages, but would give a larger lift to the lowest-paid workers and those with the least bargaining clout, pushing back on stagnation and inequality.

It’s true, as noted, that the unemployment rate has fallen quite sharply, from 10 percent in late 2009 to just below 6 percent now. This decline is partly due to job creation, but it’s also a function of people giving up looking for work and therefore not being counted as unemployed.

That’s important because it means there’s more slack in the labor market than we would usually associate with a 5.9 percent unemployment rate. And when there is lots of slack, most American workers lack the bargaining power they need to press for wage gains. With wages growing close to the rate of inflation — about 2 percent — since 2009, most workers have been stuck with stagnant real earnings.

By contrast, corporate profits have risen sharply in the recovery, with the profit share of national income hitting the highest level in many decades and the stock market also has hit new highs. Meanwhile, real median household income is still down 3 percent since the current expansion began in the second half of 2009.

To use a seasonal analogy, growth has been doing an end run around most households.
The impact of a falling unemployment rate on real wages at different points in the wage scale demonstrates why this relationship is so germane right now. Looking at a large data set with observations across all 50 states for more than 30 years, we find that a sustained 10 percent drop in the unemployment rate, say from 6 percent to 5.4 percent (10 percent, not 10 percentage points) does not have a uniform effect on real wages.

Instead, it leads to real wage gains of 10 percent for low-wage workers, 4 percent for middle-wage workers and does nothing for high-wage workers. That’s why full employment is such an important antidote to earnings inequality. By forcing employers to bid compensation up to get and keep the workers they need, it re-channels growth away from the top and back toward the bottom and middle of the pay scale.

But don’t both wage stagnation and inequality predate the recession? Does the fact that these are ongoing phenomena diminish the explanatory power of labor market slack?

Not at all, because a broad look over our history shows that the income stagnation period generally matches the slack period (we’re switching to income here because our wage data don’t go back far enough). From the late 1940s to the late 1970s, the job market was at full employment 70 percent of the time and incomes doubled for low, middle, and high-income families. Working families at all points in the income distribution shared in the gains of growth.

Since then, we’ve been at full employment only 30 percent of the time, and all that slack has been accompanied by periods of wage stagnation and rising inequality.

Of course, the absence of full employment is not the only difference between these periods of growing together and growing apart. For example, we engaged in much less and much more balanced global trade in the earlier period, a point we will return to in a moment.

So, let’s not make this any more complicated than it needs to be. We must plot a policy course back to full employment ASAP. Given Washington’s partisan fever, here are three ideas that might plausibly be enacted, even in these divided times.

1.) A deep dive into infrastructure investment is warranted to replenish our deteriorating stock of public goods and to absorb slack among the underemployed in production and building occupations. Historically, such investments have garnered bipartisan support.

2.) The trade deficit, a serious drag on employment growth in our factory sector, should be reduced by pushing back on competitors who deliberately keep down the value of their currencies to get a price advantage in global markets. Again, joining this fight is favored by both parties, although the White House tends to get squeamish on the issue.

3.) With fiscal stimulus sidelined by gridlock, the Fed is the only game in town. Yellen’s slack attack has been strong and consistent, but the central bank is facing pressures to tighten sooner rather than later. Given the striking absence of inflationary pressures and wide room for non-inflationary wage growth, Yellen and Co. should continue to tack toward full employment.

Economists tend to come up with all kinds of complexities when sometimes a shave with Occam’s razor is all that’s needed. The bargaining power of most American workers is at a historical low point. The best way to restore it is to get the economy back to full employment.

 

This blog originally appeared on CEPRE.net and on OurFuture.org. on November 3, 2014. Reprinted with permission. http://ourfuture.org/20141103/full-employment-the-recoverys-missing-ingredient

About the Author: Dean Baker is an American economist whose books have been published by the University of Chicago Press, MIT Press, and Cambridge University Press. 

288,000 New Jobs Drop Unemployment Rate to 6.3% in April

Monday, May 12th, 2014

Image: Mike HallThe economy added 288,000 jobs in April, a big boost over March’s 192,000 new jobs. The unemployment rate dropped to 6.3% from last month’s 6.7%, according to figures released this morning by the U.S. Bureau of Labor Statistics.

Over the past year, the number of jobless has decreased by 1.9 million and the unemployment rate has fallen from 7.5%. While the improved jobs numbers over the past several months show the economy is beginning to recover, job growth is still not robust enough to provide jobs for the millions who remain out of work or to boost wages for most Americans.

AFL-CIO Government Affairs Director Bill Samuel said, “Today’s strong job numbers represent a significant step in the right direction for working families.” But he added:

Yet with wages stagnant and too many still out of work, our job is not done. As our economy recovers, it is important that everyone reap the benefits of our shared recovery by ensuring we are not simply creating new jobs, but good jobs. Our leaders in Congress must work quickly to build on today’s good news by passing comprehensive jobs legislation, extending unemployment insurance, and raising the minimum wage, so that growth can not only continue, but provide everyone a fair chance at the American Dream.

The number of long-term unemployed people (those jobless for 27 weeks or more) declined by 287,000 to 3.5 million in April. While the problem of long-term joblessness continues to plague the economy, House Republicans continue to refuse to allow a vote on the extension of the Emergency Unemployment Compensation benefits program that was approved by a bipartisan Senate majority. House Republicans allowed emergency help for jobless workers to expire at the end of last year.

So far, nearly 3 million jobless workers have lost benefits and that number continues to rise.

Call your representative at 845-809-4509 and her or him to pass the emergency unemployment benefits extension.

Last month’s biggest job gains were in professional and business services (75,000), retail trade (35,000), food services (33,000), construction (32,000), health care (19,000) and mining (10,000).

Employment in other major industries, manufacturing, transportation and warehousing, wholesale trade, financial activities and government, changed little over the month.

Unemployment rates for the major worker groups declined in April: adult men (5.9%), adult women (5.7%), whites (5.3%), blacks (11.6%) and Latinos (7.3%).

This article was originally printed on AFL-CIO on May 2, 2014.  Reprinted with permission.

About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journaland managing editor of the Seafarers Log.  He came to the AFL- CIO in 1989 and has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety.

Your Rights Job Survival The Issues Features Resources About This Blog