Wednesday, April 30, 2014

[NJFAC] Growth of Low-wage jobs of early recovery a persisting pattern

Tracking the Low-Wage Recovery: Industry Employment & Wages

See Full Report:  The Low-Wage Recovery:  Industry Employment and Wages Four Years into the Recovery (April 2014)


This report updates NELP's previous industry-based analyses of job loss and job growth trends during and after the Great Recession. The report shows that low-wage job creation was not simply a characteristic of the early recovery, but rather a pattern that has persisted for more than four years now.

We find that during the labor market downturn (measured from January 2008 to February 2010), employment losses occurred throughout the economy, but were concentrated in mid-wage and higher-wage industries. By contrast, during the recovery (measured from February 2010 to February 2014), employment gains have been concentrated in lower-wage industries. Specifically:

  • Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth.
  • Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth.
  • Higher-wage industries constituted 41 percent of recession losses, and 30 percent of recovery growth.


Today, there are nearly two million fewer jobs in mid- and higher-wage industries than there were before the recession took hold, while there are 1.85 million more jobs in lower-wage industries.

Service-providing industries such as food services and drinking places, administrative and support services, and retail trade have led private sector job growth during the recovery. These industries, which pay relatively low wages, accounted for 39 percent of the private sector employment increase over the past four years.


Click here for the full report

NELP also shows some key charts from the report.

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Tuesday, April 22, 2014

[NJFAC] best predictor of long-term unemployment: state of economy when you lost your job

The Biggest Predictor of How Long You’ll Be Unemployed Is When You Lose Your Job

By Ben Casselman

....
A FiveThirtyEight analysis shows that by far the single biggest predictor of whether someone will be out of work for a year or more is the state of the economy when he or she loses his or her job.1 Over the past 15 years, a period spanning two recessions, a one-point increase in the unemployment rate increased an individual’s odds of remaining unemployed for at least a year by about 35 percent. No other characteristic — age, sex, race, marital status, education or occupation, among others — had even close to that big an effect.

Americans who had the misfortune of losing their jobs during the height of the most recent recession in 2009 were more than four times as likely to end up out of work for a year or longer than those who lost their jobs during the comparatively good economy of 2007. Extended unemployment benefits, which are often cited as a driver of the persistently high levels of long-term joblessness, don’t appear to be a major cause of the pattern.



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Tuesday, April 15, 2014

[NJFAC] Krugman on unemployment benefits and employment

Supply, Demand, and Unemployment Benefits

Ben Casselman points out that we’ve had a sort of natural experiment in the alleged effects of unemployment benefits in reducing employment. Extended benefits were cancelled at the beginning of this year; have the long-term unemployed shown any tendency to find jobs faster? And the answer is no.

Let me parse this a bit more, and ask, how was it, exactly, that reduced benefits were supposed to encourage employment in the first place?

Making the unemployed miserable arguably increases labor supply, as workers become less choosy and more willing to take whatever job they can find. But the US labor market in 2014 isn’t constrained by supply, it’s constrained by demand: given what firms can sell, they have no need for as many hours of work as workers are willing to give.

So make the long-term unemployed more desperate; so what? They can’t do anything to increase the amount of work demanded, and in fact their reduced purchasing power reduces labor demand.

You might imagine that the long-term unemployed, through their desperation, might take jobs away from existing workers — but it’s not easy to see how that might work, and there’s no evidence that this is happening.

So the point is that as long as you understood that we have a demand-constrained economy, you knew that cutting off the unemployed would produce all pain, no gain. And your prediction was right.

Oh, and this constitutes another source of evidence that the “regular economics” extolled by Barro and others — that is, economics in which unemployment benefits must reduce employment because they’re “paying people not to work” — is just wrong in a depressed economy.


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[NJFAC] cartoon about attack on public unions

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Wednesday, April 9, 2014

[NJFAC] Walmart more selective than Ivy League in a job-short economy

Wal-Mart has a lower acceptance rate than Harvard Christopher Ingraham, Washington Post March 28, 2014

This year's Ivy League admissions totals are in. The 8.9 percent acceptance rate is impressively exclusive, but compared to landing a job at Wal-Mart, getting into the Ivy Leagues is a cakewalk.

Last year when Wal-Mart came to D.C. there were over 23,000 applications for 600 jobs. That's an acceptance rate of 2.6%, twice as selective as Harvard's and over five times as choosy as Cornell.

ivy league admission rates wal-mart

This isn't an anomaly - last year a Wegman's in Pennsylvania boasted an acceptance rate of 5%, while Google only has room for one half of one percent of its job applicants.

Parents and students - particularly those from a certain socio-economic background - tend to obsess a lot over the college admissions process. The danger, of course, is that this single-minded focus on preparing kids for college - the extra-curriculars, test prep, admissions coaching, and the like - is coming at the expense of prepping them for the job market hurdles that come after.
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Wednesday, April 2, 2014

[NJFAC] US trade deficits larger with free trade agreements than without

U.S. Trade Deficits Have Grown More Than 440% with FTA Countries, but Declined 16% with Non-FTA Countries

The aggregate U.S. goods trade deficit with Free Trade Agreement (FTA) partners is more than five times as high as before the deals went into effect, while the aggregate deficit with non-FTA countries has actually fallen. The key differences are soaring imports into the United States from FTA partners and lower growth in U.S. exports to those nations than to non-FTA nations. Incredibly, the U.S. Chamber of Commerce website states, “For those worried about the U.S. trade deficit, trade agreements are clearly the solution – not the problem.” Their pitch ignores the import surges contributing to growing deficits and job loss, while their export “data” is inflated, using tricks described below.

The aggregate U.S. trade deficit with FTA partners has increased by more than $147 billion (inflation-adjusted) since the FTAs were implemented. In contrast, the aggregate deficit with all non-FTA countries has decreased by more than $130 billion since 2006 (the median entry date of existing FTAs). Two reasons: a sharp increase in imports from FTA partners and significantly lower export growth to FTA partners than to non-FTA nations over the last decade. Using the Obama administration’s net exports-to-jobs ratiothe FTA trade deficit surge implies the loss of about 800,000 U.S. jobs. Trade with Canada and Mexico (our first and third largest trade partners, respectively) contributed the most to the widening FTA deficit. Under the North American Free Trade Agreement (NAFTA), the U.S. deficit with Canada ballooned and the small U.S. surplus with Mexico turned into a nearly $100 billion deficit. The trend persists under new FTAs – two years into the Korea FTA, the U.S. trade deficit with Korea has jumped more than 51 percent. Reducing the massive trade deficit requires a new trade agreement model, not more of the same.

U.S. Export Growth Falters under FTAs

Growth of U.S. exports to countries that are not FTA partners has exceeded U.S. export growth to countries that are FTA partners by 30 percent over the last decade. Between 2003 and 2013, U.S. goods exports to FTA partner countries grew by an annual average rate of only 4.9 percent. Goods exports to non-FTA partner countries, by contrast, grew by 6.3 percent per year on average. Since 2006, when the number of FTA partner countries nearly doubled with the implementation of the Central America Free Trade Agreement (CAFTA), the FTA export growth “penalty” has only increased. Since then, average U.S. export growth to non-FTA partner countries has topped average export growth to FTA partners by 47 percent.

....

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