Tuesday, August 26, 2014

[NJFAC] At Amazon.com "cheap" comes at a very hefty price, reports Hightower LowDown

It's time to pay attention to what Jeff Bezos and his online retail colossus are doing

Like Walmart, only with supercomputers and drones: At Amazon.com "cheap" comes at a very hefty price

....The warehouses are dehumanizing hives in which Bezos has produced his own Kafkaesque sequel to Modern Times.

Consider the job of "picker." In each warehouse, hundreds of them are simultaneously scrambling throughout a maze of shelves, grabbing products. This is hard, physically painful labor, for two reasons. First, pickers must speed-walk on concrete an average of a dozen miles a day, for an Amazon warehouse is shockingly big-- more than 16 football fields big, or eight city blocks--and pickers must constantly crisscross the expanse. Then, there are miles of seven-foot-high shelves running along the narrow aisles on each floor of the three-story buildings, requiring the swarm of pickers to stoop continuously. They are directed by handheld computers to each target. For example, "Electric Flour Sifters: Dallas sector, section yellow, row H34, bin 22, level D." Then they scan the pick and must put it on the right track of the seven miles of conveyor belts running through the facility, immediately after which they're dispatched by the computer to find the next product.

Secondly, the pace is hellish. The pickers' computers don't just dictate where they're to go next, but how many seconds Amazon's time-motion experts have calculated it should take them to get there. The scanners also record the time each worker actually takes--information that is fed directly into a central, all-knowing computer. The times of every picker are reviewed and scored by managers who have an unmerciful mandate to fire those exceeding their allotted seconds.
....
Likewise, the two 15-minute breaks awarded by the Amazonians include the mass of co-workers scampering a half mile or more to the break room, waiting in line to pass through the despised metal detector and another line if you need to pee. The fifteen-minute "break" is usually reduced to a harried hiatus of under seven minutes.
....

There's even a category of uniquely vulnerable Americans that Amazon goes after: "Workampers," they're called. These are modern day migrants who could've stepped right out of a Steinbeck novel or Woody Guthrie song. Unable to get stable jobs, they travel in RV campers, taking whatever temporary work they can get, then move on down the road. ....

The temp agencies that are, in essence, the hiring offshoots of Amazon, have long lines of hard-up applicants waiting for every job in its warehouses, so oppressive conditions and ruthless work requirements that constantly cause workers to quit, be fired, or pass out are no problem for Bezos. By paying just one notch above McDonald's, he draws tens of thousands of people willing to get in line for exploitation.

Amazon smells today's mass desperation, preys on it, and thrives on it. That is the "magic" behind its super-cheap prices and super-efficient delivery system.

....Phase two is to take advantage of recent advances in artificial intelligence and ultimately replace all floor workers with robots.

....

Yes, you can say there's no humanity in Amazon warehouse jobs anyway, so who cares? Well, those workampers and others who have nowhere else to go care. It's a barren and wretched social vision that posits abusive jobs or no jobs as our choice. Last November, Amazon placed 1,382 Kiva robots on the floors of three of its warehouses. In addition, Amazon/Kiva is developing automated fulfillment systems for such other retail giants as Gap, Staples, and Walgreens.

The future of work is not creeping up on us, it's sprinting past us.

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National Jobs for All Coalition
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Tuesday, August 19, 2014

[NJFAC] Inversion: "'Competitiveness' Has Nothing to Do With It"

Have you wondered why corporations with some of the industrial world's lowest tax rates, are shifting ownership abroad?

"Competitiveness" Has Nothing to Do With It Edward D. Kleinbard

ABSTRACT
The recent wave of corporate tax inversions has triggered interest in what motivates these taxdriven transactions now. Corporate executives have argued that inversions are explained by an "anti-competitive" U.S. tax environment, as evidenced by the federal corporate tax statutory rate,
which is high by international standards, and by its "worldwide" tax base. This paper explains why this competitiveness narrative is largely fact-free, in part by using one recent articulation of that narrative (by Emerson Electric Co.'s former vice-chairman) as a case study.

The recent surge in interest in inversion transactions is explained primarily by U.S. based multinational firms' increasingly desperate efforts to find a use for their stockpiles of offshore cash (now totaling around $1 trillion), and by a desire to "strip" income from the U.S. domestic tax base through intragroup interest payments to a new parent company located in a lower-taxed foreign jurisdiction. These motives play out against a backdrop of corporate existential despair over the political prospects for tax reform, or for a second "repatriation tax holiday" of the sort
offered by Congress in 2004.

The paper can be downloaded at http://papers.ssrn.com/sol3/Papers.cfm?abstract_id=2476453 with a free registration.

Thanks to a NY Times article, "Report Suggests Tax Burden Is Not So Heavy."

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

Sunday, August 10, 2014

[NJFAC] government role in technological innovation

Jeff Madrick review. Innovation: The Government Was Crucial After All:

Mariana Mazzucato "shows in detail that, while Steve Jobs brilliantly imagined and designed attractive new commercial products, almost all the scientific research on which the iPod, iPhone, and iPad were based was done by government-backed scientists and engineers in Europe and America. The touch-screen technology, specifically, now so common to Apple products, was based on research done at government-funded labs in Europe and the US in the 1960s and 1970s."

See her

THE ENTREPRENEURIAL STATE

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

Tuesday, August 5, 2014

[NJFAC] Unemployment Benefits Prevented 1.4 Million Foreclosures

Extending Unemployment Benefits During The Recession Prevented 1.4 Million Foreclosures

by Bryce Covert August 4, 2014

"Extending Unemployment Benefits During The Recession Prevented 1.4 Million Foreclosures"

Extending unemployment insurance during the recession didn't just give the unemployed some extra income, but actually prevented millions from being foreclosed on, according to a new study from Joanne W. Hsu, David A. Matsa, and Brian T. Melzer.

Given that different states have different amounts they'll pay out in unemployment benefits — in 2011 it ranged from $6,000 in Mississippi to $28,000 in Massachusetts — the researchers looked at what impact more generous benefits had on mortgage delinquency. They found that for every $1,000 extra in maximum benefits, the likelihood that an unemployed worker's mortgage would go into delinquency declines by 25 basis points. Getting benefits for a longer period has a similar effect, as each additional week decreases the chance of delinquency by 34 basis points. "Based on this variety of tests, we conclude that the estimated effect of UI generosity is causal," they write, meaning that bigger checks reduce the chances of going into delinquency directly.

They also found that the effect isn't just a temporary forestalling of an inevitable foreclosure, but that it has a lasting impact on keeping people in their homes. "The effect seems to be long term," they write, "as UI [unemployment insurance] benefits not only mitigate loan delinquency, but also reduce homeowner relocations and evictions." Each additional $1,000 in benefits reduces the chance of an unemployed person's mortgage going into default by 2.4 to 11 basis points. "We find that UI helps not only to postpone delinquency but also to keep laid off homeowners in their homes," they conclude.

Extrapolating out from their findings, the authors estimate that the expansions in the unemployment benefits program during the recession prevented about 1.4 million foreclosures.

The research shows that bigger unemployment benefit checks have a positive effect for the people who receive them, proving that "[h]aving a source of income following job loss can enable households with credit obligations, such as mortgage payments, to continue making loan payments rather than defaulting," as they write. The other option would have been that bigger benefits reduced the incentive for recipients to look for work, prolonging their unemployment spell and increasing the risk of default, but that's not what their research shows.

Other research from the Government Accountability Office in 2010 comports with the new study, filling in the picture on the other side for people who don't get unemployment benefits. Their poverty rate spiked and 40 percent had incomes below 200 percent of the poverty line. More than a third relied on government programs, while others relied on family members or savings.

The new research cuts against one argument in favor of letting the federal long-term unemployment benefits program lapse, as it did in December, which is that it would take away a cushion keeping people from job hunting and push more to get jobs. There's other evidence that disproves that view. In Illinois, more than 80 percent of the long-term unemployed still had no income two months after being cut off from benefits.

And North Carolina has served as a testing ground, as it was cut off from the federal program months before it lapsed. There is no evidence that the cutoff helped the state's labor force and in fact it is now experiencing the largest contraction in its workforce ever.

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

Thursday, July 31, 2014

[NJFAC] Workers are getting smaller share of income

Employees' Pay in U.S. Is Smaller Slice of Income Pie

By Lorraine Woellert, Bloomberg, Jul 30, 2014

Worker pay was a smaller piece of the U.S. income pie than earlier estimated as some Americans collected significantly more in interest and dividend payments over the past two years.

Employee compensation, including wages and benefits, was lower for each year from 2011 to 2013 than previously calculated, according to revised data from the Commerce Department issued today in Washington. The figures highlight the debate over inequality that flared this spring with French economist Thomas Piketty's work showing that the wealthy pull ahead by reaping disparate rewards from financial capital.

"It's even more money going to very high-income people relative to the rest of the country," said Harry Holzer, professor of public policy at Georgetown University and former Labor Department chief economist. "We were a little worried about it and now we're a little more worried about it."

With the revisions, employee compensation was reduced by $9.5 billion in 2011, $5.1 billion in 2012 and $14.6 billion last year, Commerce data showed. It accounted for 52 percent of gross domestic income in the last quarter of 2013, down from a prior estimate of 52.2 percent. The government revised GDI data back to 2003, before adjusting for inflation.....

More rank-and-file workers are participating in the recovery as companies report record profits and boost hiring. Compensation has accelerated this year, rising $134.8 billion after a $153.4 billion surge in the first quarter. It marked the biggest back-to-back gains since the six months ended in the first quarter of 2007.

That's because companies are hiring again and more people are returning to the workforce, not necessarily because paychecks are getting fatter, said Gary Burtless, a labor economist at the Brookings Institution in Washington.

"We've added millions of people to the payroll since the low point of the economy, but we haven't added at all to the payouts that workers are receiving," Burtless said. "Little has flowed to workers except as an increase in their employment rate."....

"Everything's coming up roses for people who own a chunk of American capital," Burtless said. "What we've seen in the economic recovery is inequality on steroids. The market is giving wealthy people a very good run."
....

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

Sunday, July 27, 2014

[NJFAC] Wealth of the Typical Household, Now Worth a Third Less

The Typical Household, Now Worth a Third Less By ANNA BERNASEK NY TImes, JULY 26, 2014

Economic inequality in the United States has been receiving a lot of attention. But it's not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.

The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation.....The Russell Sage study also examined net worth at the 95th percentile. (For households at that level, 94 percent of the population had less wealth and 4 percent had more.) It found that for this well-do-do slice of the population, household net worth increased 14 percent over the same 10 years.

For households at the median level of net worth, much of the damage has occurred since the start of the last recession in 2007. Until then, net worth had been rising for the typical household, although at a slower pace than for households in higher wealth brackets. But much of the gain for many typical households came from the rising value of their homes. Exclude that housing wealth and the picture is worse: Median net worth began to decline even earlier.

"The housing bubble basically hid a trend of declining financial wealth at the median that began in 2001," said Fabian T. Pfeffer, the University of Michigan professor who is lead author of the Russell Sage Foundation study.

The reasons for these declines are complex and controversial, but one point seems clear: When only a few people are winning and more than half the population is losing, surely something is amiss. [emphasis added-jz]

See the study at http://web.stanford.edu/group/scspi/_media/working_papers/pfeffer-danziger-schoeni_wealth-levels.pdf

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National Jobs for All Coalition
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Tuesday, July 15, 2014

[NJFAC] Share of the long-term jobless giving up job search has been rising steadily

No, the Long-Term Jobless Aren't 'Catching a Break' Jun 27, 2014 By Ben Casselman

....

In April, Labor Secretary Tom Perez told me that "long-term unemployment is what really keeps me up the most at night." Based on May's data, it doesn't look like he'll be getting a good night's sleep anytime soon.

Earlier this month, the Bureau of Labor Statistics reported that the number of Americans out of work more than six months had dropped to 3.4 million in May, the lowest level since the recession. There are still two-and-a-half times as many long-term unemployed as before the recession, but the number is down 50 percent from the 2010 peak and down more than 20 percent in the past year alone. The long-term jobless now account for just over a third of total unemployment, down from 45 percent three years ago. A Bloomberg article this week declared that the long-term unemployed were "finally catching a break."

The reality, however, appears to be much bleaker. The government uses a relatively narrow definition of unemployment that includes only people who are actively looking for work. That means unemployment can fall for good reasons (because people are finding jobs) or bad ones (because they're giving up looking). The recent decline in long-term unemployment is being driven by the bad reasons.

....
Only about 11 percent of the long-term jobless find jobs each month, little better than in the depths of the recession. Moreover, even those who do find jobs are often able to find only part-time or short-term work.

If they aren't finding jobs, what's happening to the long-term unemployed? They're dropping out of the labor force altogether. As the chart below shows, the share of the long-term jobless who are giving up their job searches has been rising steadily, even as the job-finding rate has remained largely flat. (Not shown on the chart are the more than 50 percent who remain unemployed.)

casselman-datalab-longterm-2

So, long-term unemployment is falling fast — but for all the wrong reasons.

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National Jobs for All Coalition
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