How to create jobs ???
Well, no one is really sure, but Alan Blinder of Princeton is in favor of a tax credit for new jobs and a government program to create employment. He does, fairly, worry about the deficit. You can read his post.
Here
Monday, November 16, 2009
Sunday, November 15, 2009
Opinion: Whitehouse jobs summit -- Hey kids, let's put on a show.
The whole White house jobs summit seems, to me, completely contrived and disingenuous. It seems like he had the jobs summit plan in Axelrod's back pocket and they were waiting to pull the trigger when the unemployment rate hit 10%. It is easy to think you have bigger fish to fry when you are running the world, but jobs and middle class economics are always in the top 3 for issues.
I can understand what the president is thinking. Hey's pretty smart. "There is very little I can do about jobs and unemployment. The Republicans in congress are screaming 'Debt' every time I float a stimulus proposal. I have to pass healthcare. Then education. Two issues domestic I can do something about. And both issues will help with long term unemployment. But I have to do something. Hmm, jobs summit."
Oh, you have to say jobs summit in the same voice as Mickey Rooney, "Hey, kids, let's put on a show."
America has some real long term issues around jobs and employment. Basically there is a long term mis-match between the US population and the US job market in terms of the size and education level required. Some good news is that financial shock absorbers like unemployment benefits, SSI, Medicare and aid to state and local municipalities help cushion the pain. There is very little the president can do unless things are really bad.
So for now let us watch the show. Right now the fun for us professionals is seeing who will be invited. I would think Stiglitz, Krugman and Ed Phelps would be a good start. It will be interesting to see what Conservative economist get picked.
I can understand what the president is thinking. Hey's pretty smart. "There is very little I can do about jobs and unemployment. The Republicans in congress are screaming 'Debt' every time I float a stimulus proposal. I have to pass healthcare. Then education. Two issues domestic I can do something about. And both issues will help with long term unemployment. But I have to do something. Hmm, jobs summit."
Oh, you have to say jobs summit in the same voice as Mickey Rooney, "Hey, kids, let's put on a show."
America has some real long term issues around jobs and employment. Basically there is a long term mis-match between the US population and the US job market in terms of the size and education level required. Some good news is that financial shock absorbers like unemployment benefits, SSI, Medicare and aid to state and local municipalities help cushion the pain. There is very little the president can do unless things are really bad.
So for now let us watch the show. Right now the fun for us professionals is seeing who will be invited. I would think Stiglitz, Krugman and Ed Phelps would be a good start. It will be interesting to see what Conservative economist get picked.
Whitehouse Annouced a Summit on Job Creation
Less than a week after another bad employment report, the white house announced plans for a "jobs" summit at the white house in December. The forum will invite business leaders, economists and labor leaders to discuss job creation. Obama has said that his administration has taken steps to stop the recession by bailing out banks and stimulating the economy, but the slide in job losses has continued. Business are not hiring at any significant rate.
Employment Situation for October
The Bureau of Labor Statistics(BLS) released employment data for October 2009. The standard U-3 unemployment rate moved to 10.2 percent from 9.8 in September, a 0.4% jump. Non-farm payroll dropped again by -190,000 workers. A smaller decrease. Since the recession started, the unemployment rate has increase by 5.3% and the number of unemployed has increased by 8.2 million. That is, of the 15.7 millions currently unemployed there are 8.2 million additional workers who are now unemployed since the recession began in December 2007.
Women continued to have a lower employment rate that of men (8.1% vs. 10.7%). Black unemployment jumped 0.4% to 15.7. The Hispanic unemployment rate was 13.1 percent.
There was some small employment good news. Temporary help workers increased by 34,000 in October. Temporary help has been shedding jobs up until July. Average work week was at 33.00 hours (unchanged).
Wages (average hourly earnings) also rose 0.05 cents in October to $18.72 dollars and hour.
Finally, August and September's Non Farm Payroll job loses were revised downward. The august number was reduced from -201,000 to -154,000 and September was reduced from
-263,000 to -219,000.
And now for the graphics. Graphs make the data real !!! Graphs of the the Big-3: Unemployment, Black Unemployment and Non Farm Payroll
Standard U-3 unemployment rate
Black Unemployment Rate
Non Farm Payroll
Women continued to have a lower employment rate that of men (8.1% vs. 10.7%). Black unemployment jumped 0.4% to 15.7. The Hispanic unemployment rate was 13.1 percent.
There was some small employment good news. Temporary help workers increased by 34,000 in October. Temporary help has been shedding jobs up until July. Average work week was at 33.00 hours (unchanged).
Wages (average hourly earnings) also rose 0.05 cents in October to $18.72 dollars and hour.
Finally, August and September's Non Farm Payroll job loses were revised downward. The august number was reduced from -201,000 to -154,000 and September was reduced from
-263,000 to -219,000.
And now for the graphics. Graphs make the data real !!! Graphs of the the Big-3: Unemployment, Black Unemployment and Non Farm Payroll
Standard U-3 unemployment rate
Black Unemployment Rate
Non Farm Payroll
Monday, November 9, 2009
Military as a jobs program
Once you have learned some of basic economic principals you start to see a lot of activities in purely economic terms. And it is hard to stop seeing things that way. What value is a newborn baby ?? Oh about $2.3 million in middle class suburban united states. But I digress.
Today, I was thinking about the fact that the cost of healthcare is almost exactly equal to the cost of the wars in Iraq and Afghanistan. Hmmmmmm. I know it is just a coincidence but it does make you think. So what are we getting for that $1 Trillion dollars. Well we are getting a lot of jobs. Unfortunately the jobs are very expensive to produce and don't add very much to our Gross National Happiness other than in the security area. The Military contractors also produce jobs. But very little of the output contributes to better society. You cannot re-use or re-purpose an out of date tank. It must be scrapped. In fact with the many toxic metals in the electronics and other equipment, it is very expensive to dispose of newer military equipment. The Military is just going green. Off track again.
There are examples of military benefits in civilian life such as: The internet, or tang but they are few and far between. Overall the military is a huge waste of money. And a very inefficient job creation program.
Once, the wars in Iraq and Afghanistan have been fought to necessary stalemate, it will be time to take a real hard look at our Military. I believe we can no longer afford such a large expense.
[Graph of Military related employment vs. Military spending]
Today, I was thinking about the fact that the cost of healthcare is almost exactly equal to the cost of the wars in Iraq and Afghanistan. Hmmmmmm. I know it is just a coincidence but it does make you think. So what are we getting for that $1 Trillion dollars. Well we are getting a lot of jobs. Unfortunately the jobs are very expensive to produce and don't add very much to our Gross National Happiness other than in the security area. The Military contractors also produce jobs. But very little of the output contributes to better society. You cannot re-use or re-purpose an out of date tank. It must be scrapped. In fact with the many toxic metals in the electronics and other equipment, it is very expensive to dispose of newer military equipment. The Military is just going green. Off track again.
There are examples of military benefits in civilian life such as: The internet, or tang but they are few and far between. Overall the military is a huge waste of money. And a very inefficient job creation program.
Once, the wars in Iraq and Afghanistan have been fought to necessary stalemate, it will be time to take a real hard look at our Military. I believe we can no longer afford such a large expense.
[Graph of Military related employment vs. Military spending]
Party of "No"
Conservatives and the Republican party have really come up empty several serious issues facing the country. Empty is probably too nice, it is more like vacuum of space, when it comes to ideas to solve the countries problems.
Their standard answer seems to be "No" without offering any specific counter proposal. Luckily, this a country based on progress. On moving forward. We all firmly believe things can be improved. That they can be done better.
So on Healthcare, Afghanistan, Jobs, Education and Improving the standard of living, I encourage our readers it figure out just what exactly the "No" means and who it benefits in the long term. The "No" is frequently a narrow minded, status quo, heck-with-everyone-else kind of "No" as opposed to a I agree with the goal, but not the method "No" and here is my alternative proposal to get there.
Their standard answer seems to be "No" without offering any specific counter proposal. Luckily, this a country based on progress. On moving forward. We all firmly believe things can be improved. That they can be done better.
So on Healthcare, Afghanistan, Jobs, Education and Improving the standard of living, I encourage our readers it figure out just what exactly the "No" means and who it benefits in the long term. The "No" is frequently a narrow minded, status quo, heck-with-everyone-else kind of "No" as opposed to a I agree with the goal, but not the method "No" and here is my alternative proposal to get there.
Sunday, November 8, 2009
Creating jobs by lowering the minimum wage
I live in the New York metropolitian area. And I listen to Bloomberg radio on 1130 am. Whenever a jobs report comes out they give the most extensive jobs coverage around. Sometimes they even have Edmund Phelps on to discuss the situation. He has long advocated government subsidies to businesses increase the quality and quantity of jobs.
Anyway, this time, they had a quick interview with a university of Chicago economist who is recommending cutting the minimum wage to increase employment. I had to laugh out loud. Even the host if the discussion was skeptical, dismissing the idea as politically impossible.
In theory, of course, the economists was right. Basic supply and demand says lowering the wage will let employers hire more workers. But it sounded more like he was offering the standard "free-market" line on unemployment.
But in 21st century democratic capitalism, such a reduction is close to impossible.
1) Wages are some what sticky. The impact on performance of lowering existing employee wages would offset any savings.
2) Government insurance means less employees have to take a lower wage.
3) High political costs. It would be impossible for an liberial or moderate to reduce the minimum wage. They would be called "Uncle Scrooge". Their committment to poor and work class people would be questioned. Their public image would suffer from being labeled as insensitive to the poor.
4) It could put downward wage pressure on middle class wages. The middle class would oppose the move vigorously.
5) Bad income distribution effects. It would benefit the rich at the expensive of middle and lower classes. It would reduce the amount of total income to the poorest citizens.
6) Highten social tension. Renew class tension. Government and corporations would be accused of getting rich on the backs of the poor.
Creating jobs is one thing; but creating good jobs is the real goal. Their are more equitable ways of creating jobs than lower the minimum wage. Job subsidies, training subsidies and extending employment benefits are better approaches for a better united states.
Anyway, this time, they had a quick interview with a university of Chicago economist who is recommending cutting the minimum wage to increase employment. I had to laugh out loud. Even the host if the discussion was skeptical, dismissing the idea as politically impossible.
In theory, of course, the economists was right. Basic supply and demand says lowering the wage will let employers hire more workers. But it sounded more like he was offering the standard "free-market" line on unemployment.
But in 21st century democratic capitalism, such a reduction is close to impossible.
1) Wages are some what sticky. The impact on performance of lowering existing employee wages would offset any savings.
2) Government insurance means less employees have to take a lower wage.
3) High political costs. It would be impossible for an liberial or moderate to reduce the minimum wage. They would be called "Uncle Scrooge". Their committment to poor and work class people would be questioned. Their public image would suffer from being labeled as insensitive to the poor.
4) It could put downward wage pressure on middle class wages. The middle class would oppose the move vigorously.
5) Bad income distribution effects. It would benefit the rich at the expensive of middle and lower classes. It would reduce the amount of total income to the poorest citizens.
6) Highten social tension. Renew class tension. Government and corporations would be accused of getting rich on the backs of the poor.
Creating jobs is one thing; but creating good jobs is the real goal. Their are more equitable ways of creating jobs than lower the minimum wage. Job subsidies, training subsidies and extending employment benefits are better approaches for a better united states.
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