Friday, December 25, 2015

Quick Graph: Monthly Year-to-Year changes in Hourly and Monthly wages

Wage growth finally beat inflation for the first time since the start of recession

Wages are finally picking up.  A comparison of wage from month to prior year month show a growth rate of about 2% for the past year.  It also well above inflation which is close to zero.  By this measure, the recession may finally be over.

Version 2

Sunday, November 22, 2015

A closer look at Black Labor Force Participation from 1972 to 2015

We are going to look at the Labor Force Participation (LFP) rates for Black workers. Historically (slavery does not count) Blacks have had higher participation rates than whites until the 1970s. Now, in 2015 the difference between the Black and White rate is about 1%.  It has not been this small since 1974. 

One of the reason Blacks had a higher LFP rate than whites was the large number of Black women who worked while White women did not.  This changed during the 1970 and 1980 as some discrimination barriers against women were reduced and women, especially white women joined the labor force. 

It has continued to Black women have also benefited from reduced discrimination and stable jobs. Women have benefited from job in education and healthcare that offer good benefits and security as compared to jobs held by men. 

In fact the 2007-2009 recession was called a "Man-cession" since men fared far worse during the down turn.

Finally, during the recession, many older workers who could afford to, retired. 

Below is a chart of Labor Force Participation Rates for Blacks and Whites since 1972.

This chart shows the changes in population versus labor force participation for different groups. For example, during the time period from 1972 to 2015, the population of White Men increased by 60% but only 40% additional White males considered themselves participating in the labor market in the US.

The numbers are still huge: the civilian non-institutional population grew by an additional 36.5 million white men and the labor force by 19.2 million but the growth in the overall participation rate is slower than the growth in the population rate

For Black and White women the trend is positive.  Women joined the labor at a faster rate than their population grew. 

Black men's LFP grew at more than 90% but below the 120% rate of population increase and the 160% LFP increase for Black women. Ideally one would have expected to see higher growth in the participation rates during the time period however almost every

Black men are plagued by the worst economic evils of our society: poor educational opportunities, incarceration, increased competition from immigrant labor, reduced discrimination against women, foreign competition, and geographic isolation. Still a 90% increase is very good.

Overall, the US national Labor Force Participation has been dropping steeply since the recession of 2007(peak is January 2000). 

The gap between Black LFP and White LFP is about 1.1%, a historically low figure.  It has been as high as 3.5% during the recent recession.

During the prime working years(25 to 54), Black labor force participation remains high: about 80%.

Female LFP has risen steadily since 1972. Black women's participation rate remains higher than Whites.This may be due to the different economic circumstances such as general wealth differences, future economic prospects, family situation or better retirement plans,  It may also be due to cultural characteristics such as the expectation that Black women work.

Black Women have worked at rates as high as 5.5% more than White women. Between 1990 and 1995 the participation rates for Back and White women were about the same. Now Black women participate about 4% more than White women.

Wednesday, November 18, 2015

New York Times on H-1B Visa abuse

The New York Time has been slowly awakening to the abuse of the H-1B visa program.  Here is a recent story on Big outsourcing companies abuse of the H-1B lottery system.

The H-1B program along with outsourcing is used by US companies to reduce the cost of IT support by employing lower cost foreign labor. It has had a major effect on IT wages and employment prospects for US workers.

Buying Black for one year: Maggie Anderson

Maggie Anderson's book "Our Black Year" got coverage in the New York Times as a possible method of Black Economic Empowerment.

Sunday, November 1, 2015

An article NY Times describes the "brutal" modern workplace at Amazon

Quality of Life Warning

We have all heard the stories and anecdotes about Amazon over the years.  We have read news reports about conditions at it's warehouses. We have seen Jeff Bezos ignore profits and Wall Street. And we have seen the powerhouse Amazon Web Services has become.

Now the New York Times has a detailed piece on what it's like to actually work at Amazon, which is described here. Quality of Life Warning

Sunday, October 11, 2015

Pew Research releases comprehensive immigration report covering 1965 to 2015 with projections out to 2065

The Pew Reseach centerreleased a comprehensive study of US immigration since 1965.  The study also include projections for different immigrant groups out to 2065. The US immigration system underwent major reform in 1965. The report covers the period 1965 to 2015. 

Here are the highlights:

Immigrants and their descendants account for 72 million in population growth from 1965 to 2015. They are projected to increase the population by an additional 103 million through 2065.

In 2065, 80 million people or about 18% of population will be foreign born.

Also in 2065, an additional 18% of the population will be second generation foreign born

Asians will replace Hispanics as the largest immigrant group by 2055. 

Here is a link to the Pew Research Center web page with the story.

and here is the full study

Poor September job report: Payrolls at 142,000 and US unemployment rate stays at 5.1%

The BLS released it's September 2015 employment report. Non Farm Payroll increased by only 142,000 jobs.  The U-3 Unemployment rate stayed at 5.1%.

Monday, June 15, 2015

May Unemployment report. Economy added 280,000 jobs as unemployment rate rises to 5.5%

An Analysis of the May 2015 Unemployment Report

The Bureau of Labor Statistics of the Labor Department  released the May Employment situation report on Friday, June 5th 2015.  The economic report also known as the "Unemployment Report". The report is the key measure of how well out the economy is benefiting working and poor people. The report includes a couple of key statistics that describe the real economy for the average American.


The US National unemployment rate(U-3) moved up slightly to 5.5%. The Black unemployment rate was 10.2%.  The broadest and most realistic measure of unemployment, U-6, stood at 10.8% and wages (average hourly earnings) rose 8 cents. The work week was unchanged at 34.5 hours.

The business employment report(Non Farm Payrolls) showed a gain of 280,000 positions. Jobs gains occurred in Trade and Transportation, Business Services, Leisure and Hospitality and Healthcare. The Government sector saw 18,000 new positions but 15,000 were local. Information Processing job shrank by 3K.

Figure 1. Non Farm Payroll Changes. June 2015. Source: BLS

The labor force participation rate was 62.9%. The rate has not changed in a year and been with 1% of 63% for the past 3 1/2 years. So the number people joining the labor force is almost exactly matching the number of new jobs. The situation is not good for wages, since there is no demand pressure driving wage higher.. An additional 397,000 people joined the labor force.

Figure 2. Unemployment Rate and Labor Force Participation Rate, June 2015. Source: BLS

The number of people unemployed increased by 125,000 to 8.67 million. Workers continued to rejoin the workforce and actively look for work, so they are now included in the unemployment counts.

The number of long term unemployed stayed at about 2.5 million.  The figure has dropped by 300,000 since Jan 2015.

The Big Story

The number of new payroll jobs came it at an above expected 280K after a slow growth spring. The GDP grew by 3.7% (annual rate) in the 2nd quarter after growing just 0.6% in the 1st quarter.

News of the Political Economy

No important news as government continues to shrink. The Dow Jones Industrial Average dropped below 18,000 index value as investor assume the fed will raise interest rates based on the strong jobs report.

Black Unemployment Situation

As stated earlier, the Black unemployment rate moved up to 10.2% because 120,000 newly unemployed people lost their jobs. The number of Black unemployed was nearly two million (1.988 million)

The Black labor participation rate was stable to 62%. The rate has been near 62% since January 2012.

Once again we compute the "real" Black unemployment rate: 15.5%. The real Black rate is the current Black unemployment rate plus the difference between the US national U-3 rate (5.5%) and the U-6 (10.8%). It is used to gauge how the economy affects real people.

Household Employment Details

Establishment (Business) Survey Results for February

Among the key industry sectors, Business Services added 63,000 jobs, total healthcare and social worked posted 58K new positions and  leisure and hospitality increased by 57, 000. 

Government increased by 18,000 jobs but 15,000 were at the local level. 

Non-Farm Payroll Revision

The March NFP number was revised upward by +34,000 from 85K to 119K while the April number was revised downward by 2k (+223K down to +221K)


ADP reported a non farm private employment increase of 201,000 jobs. Small business (1-49) employees accounted for 122,000 new jobs. Medium sized business(50-499) added 65,000. And large businesses(500 workers or more) added only 13,000 employees. ADP also reported that 

Sunday, March 22, 2015

Larry Fink CEO of BlackRock on Corporate Under Investment

Today, we are looking at stagnant wage growth and corporate under investment. Basically, the rich (companies and people) are sitting on huge piles of cash. Here is an old but important story.

Anyone concerned about growing inequality in the Untied States knows that wages have not grown since the time of Ronald Reagan.  That's forty years ago! During that forty years, corporations and investors have "harvested" profit while reducing investments and wages.

Here is an open letter from Larry Fink, Chairman and Chief Executive of BlackRock, the nations largest asset management company encouraging companies to invest more in improving company operations rather than stock buybacks and dividends. The letter is from March 21, 2014.  He wants to steer corporations toward investments that will lead to long-term, sustainable growth.

The areas he suggest for investment are:

"innovation and product enhancements, capital and plant equipment, employee development, and internal controls and technology"

You can read the letter Larry Fink wrote on Long-Term Growth Strategies in the Wall Street Journal.

Tuesday, February 24, 2015

H-1B Debate February 2014

All, here is the latest news on the H-1B visa program in the United States. The H-1B visa program lets people from foreign countries work in the United States in professions where there is a identified "skills shortage."  The program is controversial because US born workers contend H-1B workers take their jobs and work for lower wages. Supports say the lack of employees is holding back growth as key positions go unfilled.

The goal of the original program was to provide temporary workers with critical skills to support growth in US industries.  These industries supply jobs to millions, so the thinking was, fill a key position and others will get jobs. A similar situation would be to provide a critical part to enable a machine to function.

However, large corporations and outsourcing companies have instead used the H-1B visa program to replace seasoned and high earning US IT workers with cheaper and younger foreign workers. 

The H-1B visa program has gained wider recognition in the news lately because Southern California Edison laid off 400 IT workers and replaced them with on-site H-1Bs.  The story was first reported in computerworld by Patrick Thibodeau.  Also, the comments on any H-1B story are enlightening. Some can be pretty nasty.

Note: I have been following the H-1B debate for years.  It has personally affected me twice.  


Here are the detailed computer world columns

The story is even more interesting since the re-organization that led to the outsourcing was prompted by a shooting by a Black Employee.

Here is an mediocre editorial in the LA times which captures the uninformed level of debate.  They don't even know the difference between UNISYS and InfoSys.

The best research based analysis is from the "The Economic Policy Institute"  They have a commentary 

and a research study which shows how few H-1Bs are sponsored for work permits.  The implication is that they are expendable workers who are being used to drive down US wages.

Ron Hira also wrote the famous "Bill Gates Tech Worker Fantasy " Editorial

There is also a more corporate point of view with some facts about the program

Saturday, January 24, 2015

Dec 2014 Unemployment Summary: Rate drops to 5.6% with an increase of 252K jobs

An Analysis of the December 2014 Unemployment Report

The national unemployment rate fell 0.2% to 5.6% as the US created 252,000 Non-Farm Payroll jobs in December. Job growth occurred in construction, manufacturing, health care and food service. Construction added 48,000 jobs.  The temporary help category grew by 14,700 jobs and the governments added 12K jobs. The Black unemployment rate dropped 0.6% from 11% to 10.4% as an additional 93,000 people found work. 

The national unemployment rate declined from 5.8% to 5.6% as an additional 111,000 people reported employment based on the Current Population Survey. The labor force shrink by -273K people and the labor force participation rate also declined to 62.7%. The drop in the unemployment rate was due to a people leaving the labor force which is measured in the labor force participation rate. When the recession started most labor force drop outs were people who could not find jobs. Now, in 2014, the low participation rate is due to baby boom retirees.  

Figure 1. Unemployment Rate and Labor Force Participation Rate, Dec., 2014. Source: BLS CPS

There is some positive news: The employment to population ratio remained at 59.2, the best rate since August 2009. The EM ratio reached a modern high of 64.7% in May 2000 toward the end of the Clinton administration.

The private sector added 252,000 jobs while the government increased the job total by 12,000 jobs. The construction added 48,000 jobs during a winter month. There were also 17,000 new manufacturing jobs and 44,000 new healthcare jobs added in December 2014. Professional and business services has a jump of 52K while leisure and hospitality also added 36.000 workers. 

There were 2.8 million people classified as long-term unemployed (out of work for 26 weeks or longer),  About 6.8 million people who were underemployed (working part time but wanted full time work). A total of 15.5 million workers were unemployed or underemployed (9.9% of the workforce).

Figure 2. Non Farm Payroll Changes. December 2014. Source: BLS CES

The unemployment rate for women was calculated at 5.0% and men at 5.3%, while the rates for other groups remained largely unchanged: teenagers (16.8%), whites (4.8%), and Blacks (10.4%). The Hispanic rate dropped to 6.5%. A huge drop show the economy is recovering is paces that generate Hispanic employment.  Black teenage unemployment was 33.2%.

The Dow Jones Industrial Average rose again on the news to an index value of 17,200. 

There were positive revision for October employment numbers(+18,000 to 261K) and for November from 321K to 353K (+32,000 increase). 

News of the Political Economy

No real news.  President Obama and House Republicans released budgets. Sequestration continues to depress government spending. 

The Big Story

According to the Bureau of Economic Analysis, the economy grew by 4.6% annually in 2nd quarter and 5.0 in the 3rd quarter.  That is impressive growth for an "older" economy.  European growth has been flat or down except for Germany.  Wages were stagnant again.  Larry Wilmore got a regular show called "The Nightly Show".

Wall street is trying to figure out when the fed will rate interest rates. Many economists are trying to figure out how much slack there is in the economy.  People are no longer watching the unemployment rate and have switched to wathcing part-time workers who want full-time jobs and wage growth.

Black Unemployment

The national Black unemployment rate was pegged at 10.4% while the Black labor force participation rate was 61.3%.  The number of Black people holding jobs increased by +93,000 while the labor force was reduced by -19K causing a large 0.6% decrease in the unemployment rate. The 12 month average black unemployment rate has been 13.3%, so we are finally dropping below the 12 month trend.

Figure 3. Unemployment and LFP Rates for Blacks, December 2014. Source: BLS CPS

The "real" black unemployment rate dropped to 16% during December due to improvements in the national rate, the U-6 rate and the Black unenployment rate. The rate is calculated by adding the difference in national U-6 / U-3 to the national Black unemployment rate(Black U-3). 

Figure 4. The Real Black Unemployment Rate, December 2014

There was about 1.96 million Black workers looking for jobs and 93 thousand self reported they had found employment. Black labor force drop outs increased by 54,000. 

Below is draft form...

Household Survey Details for December

As previously mention, the economy grew by more than 4.0% in the 2nd and 3rd quarters, yet there has been only a small increase in hiring. Total job gains for the year are 2.95 million jobs of which 2.7 million are private sector jobs.

The long-term unemployed (27 weeks or more) was 4.1 million people which represents 37.3% of the unemployed.  The median duration of unemployment was 17.0  weeks  while the average duration was 37.2 weeks.  

The “work part-time, wants full-time,” fell to 7.7 million.  This is a measure of excess labor in the marketplace. About 2.1 million workers were marginally attached to the labor pool.  They have looked for work in the last 12 months but not in the last four weeks.    The report estimated that there were 762K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.

All three categories dropped in November which is a postive sign of a tightening labor market. 

Establishment (Business) Survey Results for February

Non Farm Payroll increased by a reported 203,000 which is well above the 12 month average of 150K jobs created since Dec 2009 (+194K Average for past 12 months). Shockingly, even government payrolls expanded(+7,000). Growth was broad based, with gains in manufacutring and services. Transportation added 30,000 and retail trade added 22,000 postions while business services increased by 35,000. Healthcare added 29.6K and leisure services jobs increased by 17,000.

Key sectors of the economy fared well. Construction added 17,000 while Manufacturing jumped 27,000 spots.  Temp Help, a negative indictor, grew by 16,400 workers.

Below is a chart of the job gains in the non farm payroll categories.

Major gains occurred in high wage areas including manufacturing, construction and healthcare. Leisure and Hospitality also expanded. 

Non-Farm Payroll Revision

October was revised upwards from +243K to +261K and November was revised upward from +321K to +353K total additional increase of +50K jobs. 


ADP report a non farm payroll increase of 241,000 jobs. Small business (1-49) employees accounted for 106,000 new jobs. Medium sized business(50-499) added 70,000. And large businesses(500 workers or more) added 66,000 employees.

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