Saturday, May 25, 2019

[NJFAC] Fwd: Rubio Wants Caps to Focus on Real Investments


Harold Meyerson of The American Prospect evaluates a policy paper issued by Senator Marco Rubio. Rubio wants capitalists and shareholders to focus more on real investment and less on share buy- backs. The Senator is not clear on how to get there from here. And he does not seem to want more public investment. He voted for the 2017 Republican tax cut that gave tons of money to rich people, owners, and investors. That handout has not done much to change behavior or raise the kind of investment that is needed to provide good jobs and to do important work for the environment and infrastructure. 

Here is the link:  https://prospect.org/article/god-damnedest-policy-paper-year 

Posted by Frank Stricker is board member of the National Jobs for All Network and has written American Unemployment: Past, Present, and Future,



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Monday, April 29, 2019

[NJFAC] Minimum wage: rising based on state and local laws; NBER study

NBER study: "We find that the overall number of low-wage jobs remained essentially unchanged over the five years following the [minimum wage] increase." Cengiz et al, 4/19, cited by Times article.

Source: "Americans Are Seeing Highest Minimum Wage in History (Without Federal Help)," Tedeschi, NY Times 4/19

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Sunday, April 7, 2019

[NJFAC] It’s True: Real Wages Are Rising. But Fast Enough? And for How Long? Frank Stricker

             The real wage for rank-and-file workers in January of 2019 was 2% above what it had been in January of 2018. Last year was the second best of the last ten years. But will the good news continue? We're due for a recession, but even if we avoid that for a while, there are the usual impediments to strong wage growth: low rates of unionization, a federal minimum wage stuck at $7.25, and millions of workers just outside the labor force eager to work when decent jobs appear.* In the last ten years, the annual average increase in the purchasing power of a rank-and-file worker's wage has been 0.5%--half of a percentage point.
            Also, despite better labor markets, some capitalists seem confident enough of always finding workers to take back with one hand what they have given with the other. Amazon-Whole Foods is raising hourly rates, but it is also cutting hours for workers, many of whom aren't making that much to begin with. UBER slashed drivers' per mile rate from 80 cents to 60 cents. Even before the cut it was likely that after paying for the upkeep of the car, contributing to Social Security, and buying health insurance, many drivers weren't even earning the minimum wage. So labor markets aren't as strong as some observers say.
            But they are better and the average money wage--the dollar amount written on your paycheck--is up 3 to 4%, and after inflation, 2% a year. Why the good news? Inflation rates are low, partly because oil prices are down. Also, a fair number of state and local governments have raised their minimum wages. (In California, firms with at least 26 employees must pay $12 an hour this year and some localities require more than that.) And another reason: we're not close to full employment, but the number of desperate people who will work for very low pay must be shrinking and the ratio of job seekers to job slots has fallen. More employees have confidence that they can find a better job. The rate of workers quitting their jobs reached a 17-year high in 2018. Other evidence of tighter labor markets include the fact that job-ghosting--not letting your employer know you've quit--is on the rise. One recruiter says she's seen a spike in no-shows for job interviews and for first days on the job. What's more, the number of people working part-time who want full-time work is down and so is the number who say they are out of work due to illness and disabilities. (The number of such people rises when labor markets are bad.)
            In addition, unemployment rates for low-wage workers, less educated workers, and minorities are down. For example, African-American unemployment rates were 6.8% in January; they had been 16.5% in January of 2010. But--there's always a but--black unemployment rates are still double white rates. And in the next recession, people of color, the working poor, and people with less education will add more points to their unemployment rates than better off workers. Scholars Julia Hotchkiss and Robert Moore found that benefits to disadvantaged groups in hot economies are smaller than their losses in bad times.
            There are well-known solutions to such problems and to wage inertia. First, equality of access to good schools and good jobs. That means affirmative actions. Second, the federal minimum wage must be raised to $15. Third, there should be legislation that obligates the federal government and the Federal Reserve to avoid or soften recessions. Despite current restraint, if Federal Reserve officials believe that wages or prices are rising too fast, they will tighten credit to cut economic demand and raise unemployment. Fourth, as part of both anti-recession policy but everyday policy, the federal government should establish large-scale direct job-creation programs. One such program has been introduced into the House of Representatives by allies of the National Jobs for All Network. Several senators have their own ideas for job programs.         It seems crystal clear that the private sector does not create enough good jobs. Or maybe they do and I'm wrong. Perhaps a total real-wage increase of 12% over the last nineteen years is good enough for U.S. workers. I am pretty sure the robber baron class would not accept that kind of increase for themselves.
 
* I am not an economist, so I may not understand. But it's hard for me to accept that insufficient productivity growth is a key reason why wages aren't increasing much. In a just world, it might be so. In our real world, the robber baron class grabs most of the gains of rising productivity. They've been doing it for forty years now.
_____________________________________________________________________________________
 
Frank Stricker is emeritus professor of history and labor studies at California State University, Dominguez Hills, and he is a board member of the National Jobs for All Network. He's written a book called American Unemployment: Past, Present, and Future.

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Tuesday, April 2, 2019

[NJFAC] Realizing the promise of FDR's Economic Bill of Rights; time for the Left

Another State of the Union: A chance to realize the promise of FDR's Economic Bill of Rights, Trudy Goldberg, $ & Sense  M/A/19
 
As Dollars and Sense describes the article, "In our ongoing series on a federal job guarantee, Gertrude Schaffner Goldberg pays tribute to FDR's Economic Bill of Rights, which turns 75 this year. Goldberg shows how the Green New Deal and related policy proposals could finally realize FDR's vision and address the climate crisis and economic inequality at the same time."

Goldberg is Chair of the National Jobs For All Network.

As a bonus, read this intriguing interview with Clinton economist Brad DeLong, who describes himself as a "Rubin Democrat":
"Barack Obama rolls into office with Mitt Romney's health care policy, with John McCain's climate policy, with Bill Clinton's tax policy, and George H.W. Bush's foreign policy," DeLong notes. "And did George H.W. Bush, did Mitt Romney, did John McCain say a single good word about anything Barack Obama ever did over the course of eight solid years? No, they *** did not."
The result, he argues, is the nature of the Democratic Party needs to shift. Rather than being a center-left coalition dominated by market-friendly ideas designed to attract conservative support, the energy of the coalition should come from the left and its broad, sweeping ideas. Market-friendly neoliberals, rather than pushing their own ideology, should work to improve ideas on the left. This, he believes, is the most effective and sustainable basis for Democratic politics and policy for the foreseeable future.....

A Clinton-era centrist Democrat explains why it's time to give democratic socialists a chance

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Friday, March 15, 2019

[NJFAC] Manufacturing Job Growth: Let’s Check the Numbers, by Frank Stricker

                                                                                                                                                                                       
            The president believes that manufacturing jobs are booming and that he is the reason why. Is he right?  Below are changes in the number of manufacturing  jobs over two-year periods since 2010, when the recovery from the Great Recession began. These numbers are for production and non-supervisory employees, who are 70% of all persons in manufacturing.
 
                               Increase in Manufacturing Jobs       2011-2019
Jan. 2011 - Jan. 2013
289,000 additional jobs
3.6%
Jan. 2013 - Jan. 2015
226,000 additional jobs
2.7%
Jan. 2015 - Jan. 2017
 25,000 additional jobs
0.3%
Jan. 2017 - Jan. 2019
311,000 additional jobs
3.6%
 
            The third two years (2015-2017) were the worst, partly due to a slowdown in the world economy. Economic growth and job additions picked up in 2017 and 2018, in part due to a one-time boost from the Republican tax cut. Other administration policies did not have a net positive effect. New tariffs protect some factories but cause others to lose access to suppliers and spark retaliatory tariffs that hurt workers at exporting factories and farms. And Americans keep buying imports. In 2018, the U.S. trade deficit in goods rose to its highest level ever. That is the opposite of what Donald Trump promised.
            Nor do longer-term numbers give reason for optimism. From 1998 through 2018, the number of manufacturing employees fell by 27%, while the private sector non-farm work force grew by 25.8%. In other words, the manufacturing share plummeted. The most recent decline in manufacturing employment did not start with Obama or the Great Recession. Manufacturing jobs began to contract in 1998, in the midst of an economic boom. They fell twelve years in a row including the good and bad years of the Bush presidency and the Great Recession. A gradual turnaround began in 2010.
            But while manufacturing jobs are growing again, it is foolish to think they will get back to the relative weight they had in the 1950s, 60s, or 70s. Global trends and automation are against it. And the economy may soon falter. Business economists believe that there's a recession on the horizon. Even if they are wrong, manufacturing utopia is not on the horizon. As a thought-experiment, imagine that for the next 6 years we add manufacturing jobs at the same rate as we have added them in 2017 and 2018. In January of 2025 the number of rank-and-file manufacturing workers would be 9,953,000. That's an improvement. But it would only take us back to where we were just before the recession hit.
            We should be happy when there are more good jobs, but we should not fantasize about the number of manufacturing jobs we are adding. Nor about how good the jobs are. It used to be obvious that factory work, much of it unionized, paid better than other occupations. Today that's not so clear. Manufacturing workers' hourly wage in December, 2018, was $21.85. Workers in almost every other sector were paid better, with two exceptions: retail ($16.29) and the leisure and hospitality sector ($14.19).
            It is an understatement to say that people should be skeptical of Mr. Trump's anecdotes about this or that factory expansion. Certainly, the modest expansion of manufacturing jobs currently under way cannot provide the number of good new jobs that are required to lift the struggling half of the working class.
            If you were a president who wanted to make a real difference, here are two things you could do: push for a government program that directly creates good jobs for people in distressed communities who will be hired to improve their communities; and push to lift pay for all low-wage workers. Support for the Democratic Raise the Wage Act of 2019 is an absolute minimum. It aims only to get the federal minimum to $15 by 2024. For a full-time, year-round worker that would be an annual, pre-tax income of $31,200--a lift for many people but not enough. No matter what the Census Bureau says, that amount is poverty for families. And incidentally, $15 ain't what it used to be when it became the banner goal of the minimum wage movement. It will have lost a couple of dollars in purchasing power by 2024.
 
Frank Stricker is a board member of the National Jobs for All Network and emeritus professor of history and labor studies at California State University, Dominguez Hills. Most of the statistical information in the essay is at BLS.gov. Also useful: Justin Fox, "Farewell to the Blue-Collar Elite," April 6, 2015, accessed February 21, 2019, at bloomberg.com/opinion/articles/2015-04-06/factory-worker-wages-are-nothing-special; Lawrence Mishel, "Yes, Manufacturing Still Provides a Pay Advantage, but Staffing Firm Outsourcing is Eroding It," March 12, 2018, Economic Policy Institute, epi.org/14119; and Nelson D. Schwartz, "Cold Hearts on the Furnace Line," New York Times, August 12, 2018, about job insecurity at the Carrier plant in Indiana.

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Saturday, February 23, 2019

[NJFAC] 'Why Cities Should Stop Playing Amazon's Game"

Are you worried about all those jobs New York City lost when Amazon walked away?  Here is an article with many links that will put your mind to rest.

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Wednesday, January 23, 2019

[NJFAC] Left-Behind Rurals: Some Facts, Many Questions

Left-Behind Rurals: Some Facts, Many Questions                                         by Frank Stricker
            Job totals keep increasing in this long economic recovery and the unemployment rate has stayed under 4% for awhile. But there are not enough jobs for everyone who needs a job, and certainly not enough good ones. This is especially true for many poor and neglected urban neighborhoods and rural communities. More  jobs in the national total does not do enough to relieve employment and poverty problems in many of these areas.
            Because not enough jobs are reaching depressed communities, targeted direct-job creation is essential. Among large-scale proposals is the Humphrey-Hawkins 21st Century Full Employment and Training Act, which people in National Jobs for All Network helped to write. It has had several dozen sponsors in the House of Representatives. The proposed legislation uses federal funds to pay for jobs in government and non-profits. It is not limited to city populations, but it may work best in areas where there are many jobless persons and which are near employers who can later offer participants regular jobs. There is also a major proposal by UC Irvine economist David Neumark. It is urban-oriented.  Neumark's proposal includes a thorough demolition of job-creation efforts that rely on tax incentives for capitalist investors. (There's such a program in the 2017 Republican tax-cut legislation.) The key to both proposals is the recognition that decent jobs won't get to where they are needed unless the federal government funds them.
            There are scholars and also emigrants from rural America who believe that not much can be done or should be done to save depressed rural areas. Some such areas aren't economically viable. Some nourish nasty values. One person recalls "up-the-holler" villages reeking with self-righteousness, aggressive racism, and willful ignorance. There is a dark side to life in some small towns. But remember also that millions of rural people are African Americans, Hispanics, and Native Americans--groups that have higher poverty and jobless rates than rural whites.
            Right now there aren't many compelling big-bang proposals for creating permanent jobs in low-population areas. In most cases, there is little reason for private investors to locate in such areas. And apparently they haven't. The decade-long economic recovery from the Great Recession has not helped. In the early 1990s recovery period, 71% of new businesses in America were in counties with fewer than 500,000 people; in the recovery from the Great Recession, just 19%. In many counties with even smaller populations, there has been no net growth in the number of business firms in recent years.
            Traditional approaches won't help much. With exceptions that include solar and other green manufacturing, factory employment is unlikely to grow much in country towns. Also, many kinds of farming are becoming less labor-intensive. Coal mining is not going to make a big comeback in Appalachia; and it is a moral abomination that President Trump says otherwise.  Appalachian coal is not economically viable in the long run; black lung disease is attacking miners at younger ages than ever; and coal-burning is a leading cause of global warming.
            Ecological restoration projects may be a good idea for areas ravaged by mineral extraction. And what about new tech jobs? Entrepreneur Ankur Gopal and a couple of politicians have brought a handful of good tech jobs to a severely depressed coal area of Eastern Kentucky. Whether that effort can be enlarged and replicated elsewhere is uncertain. Rural areas may need access to high-speed internet, and they should have it. But will new businesses and enough good jobs follow? Entrepreneurs who want companies that innovate tend to believe that innovation thrives where there are large agglomerations of skilled workers, and proximity to transportation, as well as restaurants, theaters, and other things that make educated workers happy.
            There are experts who say that the best thing we can do for the rural poor is help them leave town. Governments can offer moving subsidies. A utopian suggestion is to increase the amount of affordable housing units in San Francisco, New York, and other cities, and thus provide a stronger incentive to get people away from rural America. Some observers suggest that we strengthen small cities, such as Rockford, Illinois, and build links between such cities and the rural communities that can be part of their economic networks.
            Any program to lift people in some rural districts has to lift wages. Solving poverty cannot be done by maintaining a sub-poverty federal minimum wage. The federal minimum wage should be put on the road to $15, as House Democrats have now proposed. It's true, some establishments may shut down. That they cannot support a living wage is a reasons why government has to step in
            Is rural America hostile to big government? Some of its inhabitants may be, but quite a few of them are hooked on government assistance. Can they be helped to face reality? Elites in poor southern states in the south have been happy with the kind of state socialism that brought a lot of military installations. Why not socialism focused on civilian projects? If the private sector cannot supply a living wage, government should do it, directly or indirectly. In a way it's already happening, but not in mines and factories. Educational, health and social service establishments--some of them governmental or non-profit--are already the single largest employing group in the 704 entirely rural counties in America.  
            Many southern Republican governors don't seem to care much about poor people. I could be wrong. While popular support for Obamacare provisions is growing, southern governments are active in the campaign against the Obamacare-Medicaid expansion, and some are imposing phony work requirements to keep poor people from getting assistance. That won't help people who cannot afford health insurance, or opioid and heroin addicts who need a lot of help. And those who resist Obamacare are fighting to limit a sector that is always adding new jobs. Of 86 rural hospitals that have closed in America since 2010, most are in southern states that have not expanded Medicaid coverage.
 
Frank Stricker is on the board of NJFAN and emeritus professor of history and labor studies at California State University, Dominguez Hills. He is finishing What Ails the American Worker? Unemployment and Crummy Jobs: History, Explanations, Remedies.
 
Questions and comments welcome. Some useful readings that helped me:
 
Arnosti, Nathan, and Amy Liu, "Why Rural America Needs Cities," November 30, 2018, Brookings Institution.
 
Guzman, Gloria, et al., at the United States Census Bureau's Income Statistics and Poverty Statistics Branches, "Poverty Rates Higher, Median Household Income Lower in Rural Counties Than in Urban Areas," December 6, 2018.
 
Hochschild, Arlie, "Silicon Holler: A Bipartisan Effort to Revitalize the Heartland, One Tech Job at a Time," New York Times, Sunday Review, September 23, 2018.
 
"How Medicaid Work Requirements Will Harm Rural Residents--and Communities," Center for Budget and Policy Priorities, August 22, 2018.
 
Jarvie, Jenny, "Black Lung, Grim Future for Younger Miners," Los Angeles Times, December 26, 2018.
 
Kirby, Brendan, "Alabama's Poorest: Almost Half of All Income in Wilcox County Comes from Uncle Sam," February 13, 2014, Alabama Media Group at al.com.
 
Neumark, David, "Rebuilding Communities Job Subsidies," 71-121, in Shamburg and Nunn, eds., Place-Based Policies for Shared Economic Growth ((2018)
 
Volcovici, Valerie, "Awaiting Trump's Coal Comeback, Miners Reject Training," November 1, 2017, at Reuters.com.
 
Porter, Eduardo, "Abandoned America, The Hard Truths of Trying to Bring Jobs Back to Small Towns," New York Times, Sunday Review, December 16, 2018; and Rachel Harris and Lisa Tarchak, "Small Town America is Dying. How Can We Save It?" (Readers Talk Back), December 23, 2018.

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