Tuesday, September 11, 2018

[NJFAC] No Gloomy Danes? Frank Stricker, NJFAN Board, and Deborah Schopp

            Most of you know something about the advantages of social democracy in the countries of Scandinavia: generous health care, decent wages, free college, less income inequality, and more. These countries and others like them including the Netherlands, are not utopias: some have racist anti-immigrant movements, some are privatizing public services and trimming benefits. More of their citizens believe in science than is true in America, but they are not perfect on fighting global warming. (Norway gets rich selling North Sea Oil.) But in these countries there are extensive income support programs, virtually universal government-supported health insurance, and many other things that help people live more securely.
            And against conservative assumptions, generous government programs aren't demoralizing people. We felt no gloom and doom during two weeks in Denmark, Norway, and the Netherlands in June. Most of the people we met were friendly and upbeat. In fact, the Danes were recently judged the happiest people on earth. As the attached article mentions, a Fox Cable commentator recently talked about the horrors of socialism in Denmark. Nothing new with that. In the 1950s and 1960s, it was knee-jerk among American right-wingers to harp on high suicide rates in Scandinavia. The explanation for the high rates was that when everything is given to people, they lose initiative and sense of worth. But the people we met were getting help from the welfare state and/or paying for it in high taxes)--but they were professional, friendly, positive, and proud of their social democracies. The tour guide who led us through the spectacular murals in Oslo's city hall emphasized that people in Norway valued the practice of helping one another through their government. So did the guide for our food tour in Copenhagen. By the way, on the food tour, we visited six businesses that ranged from very small to almost medium-sized. None were owned by the government and none, as far as I could tell, were being run and ruined by Bolsheviks working out of Commie Central. Some of these businesses were cutting edge and there was pride among the beer-makers and bubbly enthusiasm from the guy who knew all about hard cider. In other words, there is plenty of entrepreneurialism in these countries.
            There are many lessons that Americans can learn in Western Europe. The idea of Americans learning from the European social democracies is second nature to socialists like Bernie Sanders, but a fearsome thing to others. One Democratic candidate--not a conservative-- stated in 2016 that we should not learn from the Danes. But young people in America are less resistant to things socialism and the Democrat Socialists of America have recently had a surge of new members. Maybe it will get harder for Trump and Swamp-dwellers to flail away at the welfare state while they are beating up on the working class. The attached article, "Something Not Rotten in Denmark," is Paul Krugman making good points about the Danish system. By the way, Denmark, the Netherlands, and Norway have suicide rates below those in the United States. So does Iceland.
 
 
 
 

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Monday, September 3, 2018

[NJFAC] Announcement of Important Conference on a Jobs Guarantee and MMT


Dear Friends,
I want to call your attention to the following Conference of interest to all who advocate "Jobs for All. It is led by NJFAC's Board members Raúl Carrillo and Rohan Grey. I hope to see you there.
Best regards,
Trudy Goldberg
 
 
The Second Annual MMT Conference will be held at the New School in New York City from Sept 28-30. This year's theme is "Public Money, Public Purpose, Public Power", signaling the MMT community's efforts to build bridges between social justice movements, inspire broad-based participation, and more deeply discuss how our ideas may be concretized politically.
We are especially focused on discussing the future of the movement for a Job Guarantee, as well the Job Guarantee's eventual implementation.
 
Day 1 of the conference will feature a keynote discussion of how we might organize around a right to a job. This conversation will feature Raúl Carrillo (Director, Modern Money Network & National Jobs for All Coalition), Shawn Sebastian (Director, Center for Popular Democracy's Fed Up campaign), and Sarah Treuhaft (Senior Director, PolicyLink). This will be followed by a panel on the substantive dimensions of the Job Guarantee, especially focused on green work and care work. The panel will feature Pavlina Tcherneva, (Director, Economics Program, Bard College), Kate Aronoff (Journalist, The Intercept), Vicki Schultz, (Professor, Yale Law School), and Donatella Alessandrini (Professor, Kent Law School).
 
Day 2 of the conference will consist of a series of workshops, both academic and non-academic. Many of these workshops will focus on the Job Guarantee.  The Modern Money Network is taking a leadership role in organizing this year. We are still in the process of finalizing workshop topics and formats, so if any NJFAC members are interested in participating, with the knowledge that this is a yearly MMT community event, we would earnestly welcome your participation.
 
See program and register at

http://www.mmtconference.org/program.html

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June Zaccone
National Jobs for All Coalition
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Thursday, August 23, 2018

[NJFAC] "in a strong economy, job seekers are the ones who get to be choosy about their next job"

[Unnecessary] Standards Go Out The Window As Employers Struggle To Fill Jobs 

Getting a job in the United States has never been easier. The U.S. unemployment rate dipped to 3.9 percent in July, the lowest point since 2000, and one new trend is helping: Employers are ditching requirements for college degrees and previous experience.
As of last year, there are more jobs available than people to fill them, so it's time to throw age-old standards out the door.
In the first half of 2018, the share of job postings requesting a college degree fell from 32 percent to 30 percent, according to an analysis by labor-market research firm Burning Glass Technologies covering some 29 million job postings.
Share of posts requiring three or more years of job experience have dropped from 29 percent in 2012 to 23 percent in 2018, which translates to 1.2 million jobs that could be open to less-experienced candidates.
Even better … some one million job openings—for everything from preschool teachers and warehouse workers to e-commerce analysts--have opened up to candidates with "no experience necessary" in the last year. 
Some companies no longer even insist on performing criminal background checks or drug testing on the candidates.
So, what started as a recent trend of relaxing job requirements is now becoming the new mantra for businesses trying to attract talent—and keep it at a time when Americans are increasingly job-hopping and shopping around for better deals.
Amy Glaser of staffing agency Adecco Group, told the Wall Street Journal that in a strong economy, job seekers are the ones who get to be choosy about their next job.
"If a company requires a degree, two rounds of interviews and a test for hard skills, candidates can go down the street to another employer who will make them an offer that day," Glasser said....

[emphasis mine--jz]
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June Zaccone
National Jobs for All Coalition
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Wednesday, August 15, 2018

[NJFAC] Is Lower Inflation the Secret to Getting More Real Wage Growth? Frank Stricker 8/14/18

            I try not to miss Dean Baker's short pieces on wages, inflation, and jobs, and I learn a lot from him. His post, "The Story of Stagnant Wage Growth,"  (Beat the Press, August 4, 2018), made me remember that unusual price changes can cause short-term shifts in real wages. It also made me think about whether we should focus on inflation spurts to explain slow or no growth in real wages in recent years and also whether low inflation can be a key to real wage growth.    
            Dean Baker seems to exaggerate the extent of real wage growth in the last five years. He graph shows not much progress for several months in 2013-2014 and a number of bad months at end of the last five years. I think Dean's text tends to underestimate the bad periods. It is true that real wages have grown at times, but they have also not grown at other times. Overall, real wages for rank-and-file workers have increased by a total of 5% in the last five years. That's good. But while better than stagnation, 1% a year is not going to reverse forty years of mostly lousy wages.
            History suggests that in recent times even fairly modest rates of inflation often eat up wage increases. The monetary authorities want prices to rise 2 to 3% a year, which is about what prices are doing now. But that means that if you are a worker getting nominal pay increases of 2 to 3%, you are standing still. And 2 to 3% inflation is pretty typical. The main culprit may be energy prices or housing prices, or food prices or health care costs or college tuition or some combination. But a 2 to 3% annual increase in the consumer price index is not uncommon in the last few decades. It means that nominal pay--the face value of the paychecks of average workers--must rise 4% or more a year over the long haul if real wages are ever to make a big U-turn to solid, long-term growth.
            The history of the 1980s, 1990s, and early 2000s is illuminating. The 1980s began with two recessions. The second, giant one started in 1981. Paul Volcker caused it and Ronald Reagan went along. Inflation rates came down, from three years of more than 10% to roughly 3 to 4% a year. That was the miracle of the Reagan-Volcker Recession. But the recession and Reagan's attack on unions added to other forces that disempowered the working class. Nominal pay rose 24.4% over 1983-1990, about 3% a year. But prices rose 31.2%, even in this low-inflation period. That was roughly 4% year. As a result real wages fell. In other words, inflation in consumer prices was not soaring at 9 or 10%, but even the lower inflation rates that people were glad to see were enough to wipe out wage gains and then some.
            In the 1990s, which are generally thought of as low-inflation years, consumer prices rose 32% (31.8% over 1990-2000); nominal pay increased 37% which sounds wonderful, but after the  effects of inflation are included, real pay increased for the whole decade 4.9%. That's all. Just 5% for a decade that ended with years of strong demand for labor and a period that was thought to shine for low inflation rates.
            As to the 2000s in the years before the Great Recession, if you forgot about inflation, you'd have been thrilled. In nominal face-value dollars, hourly pay for the average worker increased 29% from 2000 through 2008. But while inflation rates were fairly moderate at 3% a year, that was enough to wipe out most gains in purchasing power. The average real wage in 2008 was just 3% over the average real wage in 2000. That's less than a half percent a year gain.
            So what's the big take-away? Everyone knows that real wages are not progressing much. One important point here is that trying to get strong wage growth by relying on lower inflation rates is a losing proposition. A second point is that thinking that wage increases of 2 to 3% are going to be enough to make for real advances is wrong. This is not big news but it means that people on our side have to be forthright about what is necessary. Many people need a lift now to $15 or even $20. And on average workers must see increases in their face-value hourly pay of 4% a year or more. And if we want nominal increases of 4% or more, we must--it's no secret--focus on politics, organization, minimum wage laws, and propaganda about social justice. The caps grab too much of the national income pie. That's the number-one overarching economic problem of our time.

Frank Stricker is on the board of NJFAC and has written What Ails the American Worker: Unemployment and Crummy Jobs. He can reached at frnkstricker@aol.com.
Most of the data in this piece is from the United States Bureau of Labor Statistics and from the Dean Baker article mentioned in the first paragraph of my essay. Also useful is Baker's Prices Byte on the latest inflation report, "Rising Rents Continue to Drive Inflation: Core Excluding Shelter Up Just 1.5% in Lat Year," August 10, 2018.

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Saturday, July 21, 2018

[NJFAC] The Crummy Good Economy and the New Serfdom by Frank Stricker

            For about a year now, the unemployment rate has been around 4%. That's supposed mean full employment, labor shortages, and rising pay. But the latest earnings report is the same old story: no gains in real hourly wages from June of 2017 through June of 2018. Most employers have been able to find new workers without having to raise pay offers much.
           
            What's going on?  There are screwball right-wing diversions and explanations. A Trump economist, D. J. Norquist, opines that it will take time for the Republican tax-cuts to work their way through the economy. This is nonsense. Just because the lords of creation get more money doesn't mean more will filter down to workers. We have the evidence of forty years on that issue. Then we have Stephen Moore at the Heritage Foundation. He suggests that the economy might be creating a disproportionate number of low-wage jobs, which could outweigh rising wages higher on the job ladder. But this compositional shift is not happening. And if it were, we would be right back to asking why a booming labor market was generating more lousy jobs.

            It's true that scattered labor shortages are lifting wages and employment opportunities for some people. California farm workers' average pay is now about $14 an hour. More prisoners and ex-prisoners are getting regular jobs and the unemployment rate for disabled people has fallen to 7%. These are positive events. But average real wages have been stuck for two years.
 
           So what are the causes for the general wage drag? Here are the important ones.

1. There is still a plentiful supply of jobless workers. The official unemployment rate tells us nothing about millions of people who are essentially unemployed and ready to work, but who are not currently searching for work and are not labeled as unemployed. Five million people came off the sidelines to take jobs in June. We are not close to full employment.

2. Few workers are unionized; most do not have collective power to take full advantage of good labor markets. Employers love dealing with workers one at time. Most employers don't want unions. Quite a few don't want regular employees. Millions of employees are  involuntary part-timers, temps, or "independent" contractors who get no company contributions for Social Security and health insurance and may earn less than the minimum wage.
 
3. U.S. employees have less job security than employees in other rich nations. They are more likely to be laid off or fired, and less likely to get enough unemployment benefits to carry on a careful search for a better-paying job.
 
4. Capitalists and their financial overlords are more determined than ever to limit pay raises for rank-and-file workers. Everything, including executive pay, is about corporate earnings, stock prices, and shareholder gains. When American Airlines offered wage increases to employees, there was bitching and boo-hooing on Wall Street. "Labor is being paid first again," said Citigroup's analyst. "Shareholders get leftovers." Really?  In what evil parallel universe do people like this guy live?  Shareholders have been making out like bandits for years, and they are benefitting now from the Republican tax-cut giveaway which lowers rates on personal and corporate income, and gives companies tons of money for share-buybacks. Yes, I am aware that capitalism is inherently self-interested and amoral. But American capitalists seem more parasitic than ever. The invisible hand of self-interest does less to promote the general welfare than it once did. Wages are too low, poverty rates too high, global warming races ahead, and so on.   
 
5. Another factor keeping wages down is akin to serfdom: employers rig labor markets with non-compete and no-poaching contracts. Employees must promise not to move to a competitor, even within the same company. Franchise owners pledge not to hire employees from other franchisees in the company. Company arguments are that employees have trade secrets, and also that employers must protect their investments in worker training. But the average fast-food worker doesn't get trade secrets, and there can't be a lot of training for fast-food workers. The real issue is that when employees have more freedom to search for a better deal, average wages are more likely to rise.
            How restrictive are these contracts? In 2014 Jimmy John's required low-level employees to sign non-compete contracts that prohibited them from going to work for any business that earned more than 10% of its revenue from "selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches" within three miles of any JJ's franchise anywhere in the United States. This meant, for example, that a Jimmy John's employee in Chicago would not be able to take a new job making sandwiches in the Chicago area.
            These anti-competitive contracts occur in many occupations, but they have been common in the fast-food industry. And truly wicked: you are an owner and you are paying very low ages--the median hourly rate at six fast food chains is $9.58--and now you and your company are barring employees from searching for a better job in the industry.  
            There's some reform at the state level. As I composed this article, the Attorney General of the State of Washington announced binding agreements to end no-poaching practices with McDonald's (which had stopped enforcing its contracts last year), Auntie Anne's, Arby's, Carl's Jr., Jimmy John's, Cinnabon, and Buffalo Wild Wings. Meanwhile, Democratic Attorney Generals in ten other states and Washington, D.C. announced investigations of six companies, including Panera Bread and Burger King.
            So here's a little good news at a time when the Supreme Court, the White House, and Congress are dominated by people whose main labor policy is to limit the power and the living standards of workers. So treasure small victories. But remember other, bigger things that make for more subtle forms of modern serfdom.
 
Frank Stricker is on the board of the National Jobs for All Coalition, and emeritus professor of history and labor studies at California State University, Dominguez Hills. He has just finished What Ails the American Worker: Unemployment and Crummy Jobs: History, Explanations, Remedies.
 
 
Useful sources
 
Abrams, Rachel, "Why Aren't Paychecks Growing? A Burger-Joint Clause Offers a Clue," New York Times, September 27, 2017, accessed at nytimes.com on 7/11/2018.
 
Bureau of Labor Statistics, U.S. Department of Labor, "Real Earnings--June 2018," USDL-18-1114, released July 12, 2018.
 
Cohen, Patricia, "Paychecks Lag as Profits Soar, and Prices Erode Wage Gains," July 13, 2018, accessed at nytimes.com, 7/13/2018.
 
Dougherty, Conor, "Losing the Right to a New Job," New York Times, May 14, 2017, 1, 4-5.
 
Hiltzik, Michael, "Labor Losing Out to Wall Street," Los Angeles Times, July 12, 2018, C1, C5.
 
Krueger, Alan B., and Eric A. Posner, "A Proposal for Protecting Low-Income Workers from Monopsony and Collusion,"  Hamilton Project Policy Proposal 2018-5, February, 2018.
 
Stein, Jeff, "Fast-Food Hiring Practices Are Probed," Los Angeles Times, July 10, 2018, C6
 
Van Dam, Andrew, "Why Many U.S. Workers Feel Left Behind in Hot Economy," Los Angeles Times, July 6, 2018, C3.
 
Velshi and Ruhle, MSNBC, July 11, 2018, "What 'No Poach' Rules Mean for Fast Food Workers."
 
 

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Thursday, July 12, 2018

[NJFAC] Trade: It’s About Class, Not Country; Six Lies on Trade--Dean Baker

Two good pieces by Dean Baker:

There is a fundamental flaw in the way that both Donald Trump and his critics generally talk about trade. They make it an issue of country versus country, raising the question of whether China, Canada and other trading partners are treating the United States fairly as a country.
Trump of course does this more explicitly with his "America First" rhetoric and complaints about other countries cheating us because they run trade surpluses, but his critics also often use similar language. After all, it is common for the adults in the room to make assertions about China's theft of "our" intellectual property.

Have you had any intellectual property stolen by China?

The economist and policy types who have been pushing the trade agenda of the last four decades often make assertions like "everyone gains from trade." This is what is known in the economics profession as a "lie." 

No models show that everyone gains from trade. Standard models show that some groups are benefitted by trade and others are hurt. The usual story is that the winners gain more than the losers lose.
This means in principle that the winners can compensate the losers so that everyone is better off. In the real world, this compensation never takes place, so when we talk about trade we're talking about a policy that redistributes from some groups to others.

Our trade policy over the last four decades has been quite explicitly designed to redistribute income upward. This was the point of deals like NAFTA, or admitting China to the WTO.

These deals were about putting US manufacturing workers in direct competition with much-lower-paid workers in the developing world. The expected and actual effect of these policies is to reduce employment in manufacturing. This also put downward pressure on the wages of the manufacturing workers who kept their jobs, as well as on the wages of less-educated workers more generally, since manufacturing has historically been a source of relatively high-paying employment for workers without college degrees.....


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June Zaccone
National Jobs for All Coalition
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Wednesday, July 4, 2018

[NJFAC] Increased Minimum Wage’s Positive Effects Grow

Report: Increased Minimum Wage's Positive Effects "Persist and Indeed Grow in Magnitude over Several Years" Paul Constant, 4/18  Here's the best news about the minimum wage that nobody is reporting.

Last month, Kevin Rinz and John Voorheis from the U.S. Census Bureau published an astounding new working paper on the minimum wage. (It's titled "The Distributional Effects of Minimum Wages: Evidence from Linked Survey and Administrative Data," and you can read it in full in PDF form here.) The study examines decades' worth of unique data, and it comes to some pretty thrilling conclusions. You'd think that a study about the minimum wage coming from Census employees in the Trump era would be worth a juicy headline or two, don't you?

Not one single news outlet that I can find picked up on this report. Seriously. Go check Google News for yourself, and let me know if I'm wrong. Granted, Rinz and Voorheis are economists and the language they use in the report is highly technical, but technical language has never stopped a news outlet from reporting on a negative study. In fact, the only difference I see between this study and some of the other minimum-wage studies that have been heavily covered in the media over the last few years is that the results are overwhelmingly favorable.
....
So how is the Census report different? They take information from the Social Security Administration and cross-reference it with Census data in order to track how the effects of the wage "persist over time."This allows the Census report to follow how individuals were affected by the wage increase. The majority of studies, even the most positive examples, are unable to prove that the higher minimum wage benefits the people it's intended to help. Critics will often argue that a higher minimum wage pushes the most undereducated or under-skilled employees out of the labor market entirely, rendering them unemployable. This study puts that thesis to the test.
....
After running the data, Rinz and Voorheis find it reasonable to argue that "a minimum wage increase comparable in magnitude to the increase experienced in Seattle between 2013 and 2016 would have blunted some, but not nearly all of the worst income losses suffered at the bottom of the income distribution during the Great Recession."

Further, their findings suggest that "raising the minimum wage increases earnings growth at the bottom of the distribution, and those effects persist and indeed grow in magnitude over several years." So raising the minimum wage increases the wages of the poorest Americans, and an increased minimum wage has positive effects that grow over time.
....

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June Zaccone
National Jobs for All Coalition
http://www.njfac.org

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