[NJFAC] The dark side of involuntary part-time work

The dark side of America's reluctant part-time workers

  June 25, 2015

Many part-time workers were left behind by the economic recovery.

Nearly half of the 26.5 million Americans (46%) who work part-time are desperate to work full-time, according to a new report — "A Tale of Two Workforces: The Benefits and Burdens of Working Part Time" — by Rutgers University. The vast majority of the nation's 26 million part-time workers — from college students working in coffee shops between classes to freelance computer software designers working for multinationals — receive no benefits beyond their paychecks and almost one-third say their financial condition is flat out poor.

Nearly one-in-five American workers is employed in a part-time job, logging fewer than 35 hours a week. Some 20 million people, known as voluntary part-time workers, do so to supplement their income, pursue an education, or care for children, but another 6.5 million Americans, so-called involuntary part-time employees, want a full-time job but can't find one. The persistence of such large numbers of involuntary part-time workers is an indicator of underlying weaknesses in the U.S. labor market six years since the beginning of the economic recovery, the study found.

These part-time workers are also divided along ethnic lines. Voluntary part-time workers are disproportionately white, while involuntary part-time workers are disproportionately from a minority, especially Hispanic. Although white Americans make up around 63% of the general population, they comprise 72% of voluntary part-time workers, and just 54% of involuntary ones. Hispanics account for 23% of involuntary part-time workers, and African-Americans account for another 15%, for a total of 38%.....

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[NJFAC] Jobs: The second job you don’t know you have; the "sharing" economy

The second job you don't know you have

How self-checkouts, ATMs and airport check-ins are changing our economy. By CRAIG LAMBERT  5/15

Technology has knocked the bottom rung out of the employment ladder, which has sent youth unemployment around the globe skyrocketing and presented us with a serious economic dilemma. While many have focused on the poor state of our educational system or the "jobless" recovery, another, overlooked factor behind this trend is the phenomenon of "shadow work." I define shadow work as all the unpaid jobs we do on behalf of businesses and organizations: We are pumping our own gas, scanning our own groceries, booking our travel and busing our tables at Starbucks. Shadow work is a new concept, so as yet, no one has compiled economic data on how many jobs we, the consumers, have taken over from (erstwhile) employees. Yet it is surely a force shrinking the job market, and the unemployment it creates is structural. Thanks in part to this new phenomenon, widespread joblessness could become entrenched in the social landscape.

Consider what you now do yourself: You can bank on your cell phone, check yourself out at CVS or the grocery store without ever speaking to an employee, book your own flights and print your boarding pass at the airport without ever talking to a ticket agent — and that's just in the last few years. Imagine what's coming next.....

How Everyone Gets the 'Sharing' Economy Wrong
Uber isn't the Uber for rides—it's the Uber for low-wage jobs  Christopher Mims, Wall St.Journal, May 24, 2015 

If you want to start a fight in otherwise polite company, just declare that the "sharing economy" is the new feudalism, or else that it's the future of work and all the serfs should just get used to it, already.....

In the minds of critics, perhaps the worst offender in how it controls its labor force is Uber. Uber sets the prices that its drivers must accept, and has lately been in the habit of unilaterally squeezing drivers in two ways, both by lowering the rates drivers are paid per trip and increasing Uber's cut of those wages….

Boosters of companies like Uber counter that they allow for relatively well-compensated work, on demand. When I asked them for comment, Uber officials pointed to previously released data suggesting just that. The most recent report, a collaboration between Uber and economist Alan Krueger, paints a fairly rosy picture of Uber's job-creation abilities. Uber has said in the past that world-wide it is hiring 20,000 new drivers a month, and in this report it claims that in major American cities like Los Angeles and Washington, D.C., drivers are averaging more than $17 an hour.

But this data doesn't reflect what Uber drivers actually make, for the simple reason that it doesn't include drivers' expenses. Work by investigative journalist Emily Guendelsberger, for example, shows that Uber drivers in Philadelphia, a fairly typical city for the service, are probably earning only a fraction of that. According to Ms. Guendelsberger's admittedly limited sample of 20 drivers, including herself, it was around $10 an hour after expenses.

It isn't minimum wage, but it's a far cry from Uber's previous claims about what drivers make, which reached the height of absurdity in May 2014, when the company claimed that the median income for drivers in New York was $90,000 a year. Months of investigation of that claim by journalist Alison Griswold yielded not a single driver in New York making that much.

What this all means is simple: Uber and its kin Lyft, which is more generous with its drivers but has a similar business model, are remarkably efficient machines for producing near minimum-wage jobs. Uber isn't the Uber for rides— it's the Uber for low-wage jobs.....

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[NJFAC] Half of American Families Staring at Financial Catastrophe

Half of All American Families Are Staring at Financial Catastrophe

And they're turning to payday loans and other lenders of last resort when crises occur. Kriston Capps May 29, 2015

....

"Forty-seven percent of respondents say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money," reads this year's annual report.

Maybe Americans are feeling better about their finances, as The Wall Street Journal puts it, but that figure is a downer. Several years into the recovery, almost half of all U.S. households could not withstand a minor financial shock without incurring debt or liquidating assets.  

Forty-seven percent of respondents could not cover an emergency expense of $400, or would have to sell something or borrow money.

"Even prior to the [Great Recession], and more acutely after the recession, it's true, American households are vulnerable," says Gregory B. Mills, senior fellow at the Urban Institute. "Depending upon the measure you use, somewhere between one-third and one-half of households are at great risk—as in, they would be unable to fend off hardship."

Families' savings not where they should be: That's one part of the problem. But Mills sees something else in the recovery that's more disturbing. The number of households tapping alternative financial services are on the rise, meaning that Americans are turning to non-bank lenders for credit: payday loans, refund-anticipation loans, pawnshops, and rent-to-own services.

According to the Urban Institute report, the number of households that used alternative credit products increased 7 percent between 2011 and 2013. And the kind of household seeking alternative financing is changing, too.

                                                                                                                                                    (Urban Institute)

While that figure might seem small—it's an increase of about 750,000 households total—it's a significant figure for the economy in recovery. Families that are looking for credit aren't finding it in mainstream financial institutions. "You used to be able to get small loans for reasonable rates, below 36 percent," Mills says. "That's what's opened the door for more predatory products."

The nature of households looking for alternative financial products, including predatory loans, has morphed during the recovery. According to Mills's research, the share of households seeking non-bank credit with incomes above $30,000 increased from 42 to 48 percent between 2011 and 2013. And the share making more than $75,000 increased from 7 to 11 percent over the same span.

                                                                                                                                                    (Urban Institute)

It's not the case that every one of these middle- and upper-class households turned to pawnshops and payday lenders because they got whomped by an unexpected bill from a mechanic or a dentist. "People who are in these [non-bank] situations are not using these forms of credit to simply overcome an emergency, but are using them for basic living experiences," Mills says.

More middle- and upper-income households are using alternative financial products, including predatory loans.

Still, survey respondents who said they couldn't weather a $400 hit are bound to be some of the same folks who are turning to non-bank lenders for routine expenses. That's a huge problem nationwide. Alternative financial services come with steep interest rates, especially payday lenders, which lock borrowers into vicious lending cycles with interest rates north of 400 to 500 percent. The Consumer Financial Protection Bureau is moving to regulate the payday lender sphere—which is a good start.

Here's another disquieting finding from the Fed: "Nearly a third of respondents went without some medical treatment in the past year because they could not afford it." Later this summer, 7.5 million Americans will find out whether or not they will get to keep their healthcare policies. Guess they better cross their fingers.

[Have you wondered why output growth is slow? J]

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[NJFAC] Long-term unemployment trends--BLS

Trends in long-term unemployment March 2015

Karen Kosanovich and Eleni Theodossiou Sherman

Long-term unemployment reached historically high levels following the Great Recession of 2007–2009. Both the number and share of the unemployed who are long-term unemployed typically continue to increase after a recession ends, before falling during a labor market recovery.  Following this cyclical pattern, long-term unemployment has fallen in recent years, although it remains high by historical standards. Five years after the Great Recession ended, the number of long-term unemployed still made up a larger share of unemployment than during any previous recession.

This Spotlight on Statistics examines trends in long-term unemployment and the characteristics of people who have experienced it.

A good slide-show of data organized by categories--age, gender, race, education, etc.

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[NJFAC] tax rate falls for top 1 percent as they get richer; majority at $100k and up for government policy to reduce inequality

Once you're in the top 1 percent, your tax rate gets lower as you get richer Dylan Matthews June 2, 2015

The top 0.001 percent of US income tax filers — who account for only 1,361 returns and each earned over $62 million — paid an average federal tax bill of 17.6 percent in 2012. That's striking, because the top 1 percent had an average bill of 22.83 percent, according to IRS data. In fact, the richer the rich get, the lower their average tax rate:

It's important to distinguish the "average tax rate" here from the marginal tax rate. This was 2012, when the top marginal tax rate was 35 percent; it's since grown to 39.6 percent as part of the fiscal cliff deal that year.

No one actually pays that much as a share of income. For one thing, deductions, exemptions, and credits mean that taxable income is lower than actual income. For another, the lower brackets serve to reduce the overall burden for top earners. But the most crucial factor in reducing the tax burden of the ultra-rich relative to the merely rich is probably the preference the tax code gives to investment income. While earned income now faces a top rate of 39.6 percent, long-term capital gains and dividends are taxed at 20 percent. There's an additional 3.8 percent surtax that Obamacare added, but even throwing that in, there's a big discrepancy. (In 2012, the year the above data is from, the top capital gains rate was 15 percent and there was no surtax.)

And the uber-rich tend to make most of their money from capital gains and dividends. IRS data on the top 400 tax returns in 2012 — an even more select group than the top 0.001 percent — shows that the returns accounted for about $134.3 billion in adjusted gross income, total, and that $91.9 billion of that (68.4 percent) came from capital gains and dividends subject to preferential tax rates. A mere $10.1 billion (7.5 percent) came from salaries and wages.

There are plausible economic reasons to keep the discrepancy in tax rates in place, but it does have the perverse effect of making the federal tax code quite lenient on the richest of the rich.

http://www.vox.com/2015/6/2/8712109/irs-tax-rates-rich

http://www.washingtonpost.com/page/2010-2019/WashingtonPost/2015/06/03/National-Politics/Polling/question_15679.xml#
but probably not the very top j

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