Sunday, August 25, 2013

Job Market: Still Underwater

We follow two monthly reports from the Bureau of Labor Statistics: the Employment Situation (EMPSIT) report, and the Job Openings and Labor Turnover Survey (JOLTS) report. Taken together, they show how many people are looking for work, and how many jobs are available. When you overlay the two sets of numbers, this is what the chart looks like:

(click to enlarge)

Several points stand out:

  1. Look at the number of unemployed before and after the 2001 recession: we never returned to pre-recession levels, even before the Great Recession.
  2. The Great Recession created an unprecedented number of unemployed.
  3. Job openings have almost recovered to the level they were before the Great Recession, and if current trends continue, may approach the level they were before the 2001 recession.
  4. To balance the current number of unemployed workers with the number of job openings, we would need an additional 7.8 million jobs to open up.
  5. That doesn't include the almost 7 million men and women not in the labor force who also want a job.

What does it all mean? It means that we need policies and business practices that will rebuild the middle class, which took a gut punch during the recession. It means that we need to create an extra 15 million jobs if we're going to get back to full employment.

In terms of Schumpeter's creative destruction, it means we've had a ton of destruction, but not much creation at all.

It also means that there are millions of Americans out there, every day, looking for work that's not yet there. And until the jobs are created, they need our help.

Picture Of The Day

Thursday, August 22, 2013

Compromise and Bipartisanship

The open letter written to Senator Lamar Alexander by an assembly of Tea Party and other groups has drawn particular attention for this quote:

"Unfortunately, our great nation can no longer afford compromise and bipartisanship, two traits for which you have become famous. America faces serious challenges and needs policymakers who will defend conservative values, not work with those who are actively undermining those values."

The names of the groups who signed the letter include the terms "Tea Party," "Patriots," "Liberty," and "Freedom." The groups themselves often harken back to Founders and to America at the time of the Revolution.

It would be helpful, then, to look back at what the Founders actually said about compromise.

In Fitting Together Uneven Planks: The Constitution And The Spirit of Compromise,an article written for the National Constitution Center, the Founders are quoted as saying:

  • "For myself, I was ready to have embraced any tolerable compromise that was competent to save us from impending ruin." - George Washington
  • John Adams described it as "the result of accommodation and compromise" "admirably calculated to cement all America in affection and interest, as one great nation."
  • Thomas Jefferson said "I am captivated by the compromise of the opposite claims of the great and little states, of the latter to equal, and the former to proportional influence."

The article is well worth the read, because it makes clear that our nation, and our founding documents, were created through the very spirit of compromise. Those who try to claim the mantle and legitimacy of the Founders have a long way to go before they can prove themselves worthy. It takes more than a tricorner hat to be a patriot.

Saturday, August 10, 2013

Dear @SenatorTimScott: What Would You Call It?

…when a vocal fringe group of Americans, including high-profile Presidential candidates and even sitting members of Congress, refuse to accept Barack Obama as a natural born citizen and the legitimate President of the United States?

…but not say a word about a potential Republican presidential candidate who was actually born in a foreign country?

What would you call it when a leading conservative voice declares, in the days before the President's Inauguration, "I hope Obama fails"?

…or when we learn that a group of prominent Republican Senators and Congressmen gather for a quiet dinner on Inauguration Day, to craft a plan the challenge the President and the Democrats on "every single bill and every single campaign"?

What would you call it when your party has turned a once rarely-used parliamentary procedure into something that's now so frequently used that it threatens to break the Senate? According to Norm Ornstein, "the use or threat of filibuster as a routine weapon of obstruction is new, and it has changed the character of the Senate and distorted democracy."

What would you call it when Republicans, who previously voted for debt ceiling increases as a matter of course under a Republican president, now call the US economy a "hostage worth ransoming"?

What would you call it, Senator Scott, when state after state rush to enact voter ID requirements, mere hours after the Supreme Court struck down a provision of the Voting Rights Act?

…or when GOP-majority legislatures are found to have discriminated against minority voters by drawing gerrymandered voting districts?

Senator Scott, would you be as "sincerely disappointed" by the GOP's actions as you claim to be about Senator Reid's speculative question? Would you call for an apology from your Republican colleagues for their demonstrated behavior?

Finally, Senator, what would you call it when presented with evidence like this? Would you call the pages after pages of vitriol based on substance, or based on race?

Our country does deserve more, Senator. It deserves more from its citizens, and it deserves more from those who serve it. Our country deserves more from you, sir.

Thursday, August 1, 2013

HBR Blog Network: Why HR Needs to Stop Passing Over the Long-Term Unemployed

Professor Peter Capelli of the Wharton School on "Why HR Needs to Stop Passing Over the Long-Term Unemployed"

"What we do know about job candidates who are long-term unemployed, which is related to job success, is that they are persistent. Millions of other unemployed facing this job market gave up looking and dropped out of the labor force. We also know that they will likely be very grateful to have a job, and gratitude is associated with many aspects of good job performance. They are also likely to be cheaper and easier to hire because you don't have to woo them away from their current employer.

"The way to get hiring of the long-term unemployed started is to recognize that there is no objective case in this economy for not considering a candidate who has been out of work for a while. Therefore, excluding them out of hand is a form of prejudice. The people at the top of organizations need to point out that excluding such candidates is likely costing us money because we are ignoring potential good hires, just as it costs us money to exclude women, minorities, older individuals, and anyone else who has the potential to do the job.

"It's the right thing to do in terms of our social impact, it's the right thing to do to make our organization inclusive and looking like our society, and it's also the financially sensible thing to do."

Atlas Shrugs Because He Just Doesn't Care

I came across this quote from Ayn Rand as one of the posts on the AEIdeas blog:

"If workers struggle for higher wages, this is hailed as 'social gains'; if businessmen struggle for higher profits, this is damned as 'selfish greed.' If the workers' standard of living is low, liberals blame it on the businessman; but if the businessmen attempt to improve their economic efficacy, to expand their markets, and to enlarge the financial returns of their enterprises, thus making higher wages and lower prices possible, the same liberals denounce it as 'commercialism.'"

That sounds nice. It sounds right: businessmen try to improve their efficacy, expand markets, enlarge returns, and make higher wages and lower prices possible.

In the real world, however, things are quite different:

Or, looking at the averages of corporate profits and wages, both as a percentage of GDP:

The last chart is from November, 2011, and needs updating, but it's all too clear: corporate profits are going up at the same time that wages are going down.

And Atlas and his ilk continue to shrug.