Kwanzaa Crawl Brooklyn on December 26th, 2016

Kwanzaa Crawl is an event to support Black business and bars in Brooklyn.  The event is December 26th in Fort Greene, Bedford-Stuyvesant and Prospect Heights. Meet at 1pm at Restoration plaza.

For more information visit Kwanzaa Crawl.

CNN & Time/Warner face discrimination suits

Two former employees of  CNN and TBS, respectively, have filed a class action discrimination lawsuit against TBS, CNN and holding company Time/Warner.  In the suit they allege a pattern and practice of racial discrimination in evaluations, compensation and promotion.

They also charge CNN and TBS with having a "glass ceiling," where African Americans were blocked from promotions and a "glass wall," where Blacks were discouraged from working in certain divisions.

BET.com has a story by Paul Meara here.

Dominic Pattern writes on Deadline.com about the suit. Deadline also has the actual court document for the suit that was filled with the norther district of Georgia on their website.

Hollywood Reporter has a story on the suit by Ashley Cullins.

November Unemployment Report: Unemployment drops to 4.6%. Wages Sink 3 cents

In November, the BLS reported that the unemployment rate declined to 4.6% as 178,000 new jobs were created.  Wages dropped $0.03 cents. The number of unemployed person dropped -387,000 to 7.4 million people.  There were large increases in payrolls in the industry categories of business services, healthcare, leisure and construction.

The labor force participation rate stayed at 62.7% and the employment to population ratio was 59.7%. Both rates have leveled off and are largely unchanged in the past two years. LFP measures how many people participate in the job market.  It has dropped significantly since the recession. 

There were  a couple of positive long-term trends. The long term unemployed (out of work for more than 26 weeks) decreased to 1.856,000. The level is well below 2 million. The number of people working part time for economic reasons also dropped -220,000 to 5.67 million workers.

The Big Story

The big story is the continuing lack of wage growth for workers.  If the economy is near full employment, there should be wage growth and wage inflation.  There is none. So the US economy has failed to deliver good paying jobs to its citizens. 

The chart below shows the national unemployment rate.

In November, 178,000 jobs were added by US business establishments. The 4 month moving average has dropped to 170K during the fall slowdown in job creation.   

The Black unemployment rate dropped to 8.1% from 8.6% last month as 154,000 more people reported working. The unemployment rate for Black men, 20 and order, was 7.7% while Black women in the same age group were unemployed at a rate of 7.1%.  Black men participate in the labor market at a 67.5% rate while the participation rate for Black women is 62.6%. Black teenage unemployment was calculated at 26%. 

The real Black unemployment rate was pegged at 12.6% in November. Both the Black unemployment rate and the US U-6 rate declined during the period.   U-6 is the broadest measure of unemployment. U-6 is basically anyone who wants to work and has looked for a job in the past 12 months.

 Blacks has an unemployment rate of 8.1%, the White rate was 4.4% and the Hispanic/Latino rate was 5.7%.

The business survey showed the usually job growth categories: Business Services, Healthcare and Leisure.  Manufacturing lost -4,000 jobs.

There were big gains in business services, health care and leisure. Construction added 19,000 jobs.

 The united states continues to move toward a service economy.  Only 19% of new jobs produce goods (15% if you include government as a service).

Hourly wages declined by $-0.03 cent in November to $25.89.  Hourly wages are up about 2.5% (1.2% when adjusted for inflation) in the past year.

The average growth in wages has been below 1% after inflation between 2006 to 2016.

ADP reported 216,000 non farm payroll jobs were created.  The jobs were split among small businesses (+37K), medium sized businesses (+89K) and large businesses (+90K).  According to ADP goods producing business shed -11K jobs while services hired 228K workers. Manufacturing lsot -10K jobs.

Paychex small business jobs index was flat at 100.38; a completely neutral value.

Donald Trump wins the presidency. What's his economic plan ?

Donald Trump won the US presidential election. Donald ran on a platform of economic populism. He ran a wild campaign of slogans and untruths that attacked the economic establishment.  And he won.

He is in the unique position of owning very little to the existing economic order: Democratic or Republican. He does owe a great debt to working class Whites in key states that voted for Trump in larger than expected numbers.

He will try to focus his economic programs on their needs.  However, short of a government jobs program, no one is quite sure how to help working class Whites.


Let's look at some of Donald Trumps economic policies:

Likely to Pass Quickly

Two to three trillion dollar federal tax cut. Higher deductions and lower rates for the middle class.
$500 billion to $1 trillion in Infrastructure spending tax credits over 10 year
Reduced funding for regulatory agencies
Cut government spending 1% for non-defense

Likely to Pass Longer Term

Child care tax credits
Business can repatriate off shore profits at 10%
Energy Policy changes
ACA (Obamacare) replacement

More difficult to pass

$25 Billion dollar wall with mexico
Trade agreement changes
Tax changes beyond tax cuts
Changes in immigration policy


Election Year Promises only

Renegotiate NAFTA
Limit cuts to safety net
Eliminate corporate subsidies except for R&D
Eliminate carried interest

v2

How to handle an Affirmative Action Brownie Sale

Houston Chronicle: Bake sale at University of Texas

Occasionally you will see a conservative group selling cookies or brownies at different prices to make a point about affirmative action.  They will offer the same brownies at different prices for male, female, Black, Hispanic/Latino and White customers. For example, the brownies is $1.00 for White men, $0.50 for Hispanic women and $0.25 for Blacks.

They are trying to make the point that Affirmative Action gives people "free" things they did not deserve. They are wrong for three reasons.

1) They are making broad generalizations about groups of people while ignoring the fact that each individual had a unique struggle to make it to the University of Texas

2) They also miss the idea that a diverse student population increases the richness of the campus experience. Diversity improves debate, strengthens ideas and encourages understanding.

3) Finally, they are also ignoring the long history of educational, political and economic oppression of minorities in the US.

Most people see how mean spirited and shallow the brownie sale argument is and do not take the young conservatives seriously.

How to respond

The best way to respond is a large anti-racism protest. The more people the better.  A large show of numbers is critical. You need, as the police say, "An overwhelming show of force."  Chanting "no to racism, yes to unity" and "racist" works great.

Try not to ridicule the anti-affirmative action protesters since it breeds resentment.

Short of jumping up in someone face and screaming "You don't know me," the second best response we found was is to set-up an alternative stand near by with free food items.  The stand would promote an alternative point of view. For example:

1. The graduate and professional students of color at University of Illinois organized a White privilege popcorn sale.  White males get a full bag and everyone else get a 1/3 of a bag. You can read the story in the Daily Illini.

2. You can also give away free cookies while also promoting "Cookies under Socialism."  While giving away the cookies, explain that racism, class, ignorance and selfishness are natural byproducts of capitalism. And that capitalism encourages racism.

Other alternatives are:

3. A booth on slavery or murders by police with graphic photos. A photo of a lynching or a whipped slaves' back is pretty effective.

4. A booth on poverty in the US, the minimum wage or income inequality.

5. Bake White privilege cookie which is costs 4 slave hours in 1860; 3 Jim Crow hours in 1930 (15 cents); 1 hour at incarceration wage (UNICOR 0.23 cents)

Note: Price Discrimination is when he same supplier charges different groups different prices for the same item.  For example, reduced drink prices on "Ladies Night". Price discrimination is illegal when based on race, gender, nationality or religion

v4

No change in key rates ahead of election: Unemployment stable at 4.9% with 161,000 new jobs

October Unemployment Wrap-up

Every major unemployment indicator has been "little changed" over the past 18 months. This report was no exception. The unemployment rate dropped to 4.9% as the 161,000 new employees found work in October according to the BLS monthly unemployment report. The report, which was released four days before the election, was ignored by both candidates. Wages rose $0.10 cents to $25.92 per hour at an annual rate of 4.6%. The unemployment rate has been 5.0% or below since October 2015.

The Labor Force Participation(LFP) rate was 62.8%. The figure has been flat since December 2013.

The Black unemployment rate rose to 8.6%, the second straight month of increase. The long term unemployed was also unchanged at $2.0 million.

Establishment Survey

Business reporting hiring 161,000 new workers in October. Both the business services (+43,000) and the healthcare sector (+39,000) added the highest number of new jobs.  The federal government add (+12,000) while manufacturing lost (-9,000) positions.

Black Unemployment

The Black unemployment rate was calculated at 8.6% after hitting a recent low of 8.1% in August. The Black LFP was 62% overall. Black men 20 and over participated in the job market at a 67% rate while 62% of Black women were in the labor force.





The national unemployment rate was 4.9%.




The Black labor force participation rate was a low as 60% in December 2013 but has since rebound to nearly 62%. Black unemployment was measured at 8.6%.

The Black unemployment rate continued to be significantly higher than the White or Hispanic/Latino rate.

Government added 19,000 jobs in October 2016.

Every category was up except manufacturing and retail trade.

We are adding a new chart which shows where the jobs are being created: in the good producing sector or in the service providing sector.   Service jobs are being created at a ratio of about five service performing to one goods producing jobs. The number of manufacturing jobs has steadily dropped since the recession due to the growth in imports and the efficiency of the manufacturing sector.

Laundry List of Hillary Clinton's and Donald Trump's Economic Policies

I have to vote tomorrow in New Jersey. I went from Bernie to Hillary to Jill Stein and then back to Hillary.  Hillary needs a mandate to govern.

To prepare for voting I went through every economic policy from the websites of both Hillary Clinton and Donald Trump.  No judgments were made about the quality of the proposed programs. 

Economic Policies of Hillary Clinton

Taxes

- Ensure the wealthy and corporations pay more
- 4% surcharge tax on $5 million or more
- 30% minimum tax rate on incomes of $1 million or more

- Close tax loopholes used by the rich like stepped up basis on estates, offshore tax avoidance schemes and using derivatives trading to reduce taxes

- Eliminate the carried interest tax loophole

- Restore estate tax; eliminate stepped up basis

Child Related

- Double child tax credit to $4000

- Provide tax credits for affordable housing

- Limit child care expenses to 10 percent of income

Corporations, Financial Institutions, Small Business, and Manufacturing

- Additional risk fees on large financial institutions

- End overseas inversions. Pay exit tax when they leave the US. Stop Earning stripping

- Use Treasury department to stop inversions

- Offer manufacturing tax credits

- Reward companies that invest in the US or bring back jobs

- Close tax loopholes for oil and gas. Promote clean energy

- Allow small businesses to immediately deduct some expenses. Simplify small business returns

- Support small business, advanced manufacturing, and startups

- $1500 tax credit for apprenticeships

- Spend $275 billion over five years on infrastructure investments: Roads, public transit, airports, energy and internet networks.

Education

- Make college debt free. Eliminate current student debt

- Make college free now, if you make less than $85,000. Free public college tuition for those making $125,000 or less by 2021. 

- Free tuition at community colleges

- Provide $25 billion for HBUCs and Hispanic Colleges

Minimum Wage and Labor

- Raise the minimum wage and get rid of tipped minimum wage

- General support for unions and labor

- Tax relief for working families

Other

- Support public investment in R&D

- Refinance students loans at  current low rates

- Have companies share profits with workers

- Give green cards to STEM masters and Ph.D. degrees graduates and visas for entrepreneurs

Economic Policies of Donald Trump

- Create a booming economy. Boost growth to 3.5% on average

- Create 25 million new jobs

Individual taxes

- Pro-growth tax plan. Reduce taxes across the board especially for working and middle-class Americans.

- Reduce tax brackets from 7 to 3: 12%, 25%, and 33%

- Proposed a tax cut of $4.4 Trillion ($2.6 Trillion with growth). $1.8 trillion in trade, energy, and regulatory reform savings. $800 billion in other cuts.

- Carried interest is treated as ordinary income

- Repeal 3.8% tax on investment income. Repeal alternative minimum tax(AMT).

- Increase standard deduction to $30,000 for married filers and $15,000 for singles.

- Repeal estate taxes. Capital gains over $10 million would be taxed. Repeal special treatment of appreciated assets donated to charity.

- Offer spending rebates for child care expenses for people receiving the EITC

- Ensure the rich pay their fair share.

Child Related

- Eliminate special interest loopholes. Reduce business taxes

- Deduct average child care or eldercare costs from taxes

- 50% match of child savings accounts

Regulatory Reform

- Create a modern regulatory framework. Reduce anti-growth regulations

- Impose a moratorium on new regulations. Agency and department heads will remove needless, job-killing regulations.

- Scrap clean power plan regulations

Trade Policy

- Promote an America first trade policy

- All trade agreements must increase the GDP growth rate, reduce the trade deficit and strengthen US manufacturing base.

- No TPP

- Actively enforce trade agreement violations

- Renegotiate NAFTA

- Enforce WTO rules against china for currency manipulation and industry subsidies using tariffs and taxes

Energy

- Energy plan

- Support coal and fracking. Support energy development on federal lands.

- Ease energy regulations. Streamline permitting process.

- Allow the free market to determine energy technologies, not government

Business Taxes 

- Lower business taxes from 35% to 15%.

- Bring back off-shore profits at 10% rate

- Eliminate corporate tax subsidies except for R&D

Other

- Reduce non-defense, non-safety net government spending by 1% each year for ten years.

Big Econ Story of the Week: Shrinking Global Trade

Global Trade is Shrinking (by Binyamin Applebaum in the New York Times)

This weeks most talked about economics story is that global trade is shrinking.   The drop in trade is clearly linked to the slowdown in global growth.  Political sentiment against trade may also be playing a part. Some believe the trade explosion was a one time event (you can only hollow out American factories or off shore jobs once) and we have reached a new norm.

You can also read the story here

http://www.nytimes.com/2016/10/31/upshot/a-little-noticed-fact-about-trade-its-no-longer-rising.html

Blacks struggle to build wealth according to National Association of Real Estate Brokers

Home ownership has been the primary means of wealth building for the majority of Americans. Now its taking a beating.  All major groups in the US, except the wealthy, have lost homes since the peak ownership year of 2004. The trend accelerated during the last recession with the mortgage loan and foreclosure crisis.

Black home ownership continued to fall as the sub-prime/foreclosure crisis took its toll. Black home ownership has decreased to 41.3% in 2016 down from a high of 49.4% in 2003. That's a 16% decrease. Whites has a corresponding drop of 8%. The percentage is the second lowest ever measured for Blacks since the Census Bureau started keeping track in 1994. The lowest point was 41.2% in 1995.  The sharp decline reflects the disaster in sub prime loans and the crisis in foreclosures.

There are also been a huge shift from conventional mortgages to Federal Housing Administration(FHA) backed mortgages for Black mortgages.

Here is the press release from the National Association of Real Estate Brokers (NAREB) that discusses the issue in detail.

In addition the NAREB funds an annual study of Black home ownership called the State of Housing in Black America (SHIBA). The report is a detailed examination of trends in Black housing. The report gives a significant amount of detail regarding the home loan process, historic discrimination in the real estate market and recommendations for fixing the loan process.

Highlights in the report include:

* Spotlighting a virtual halt in mortgage lending to Blacks since the recession in 2007.

* The huge drop in Black mortgage applications and loan origination after the recession. The number of loan applications dropped from about 750,000 in 2005 to 120,000 in 2010 and the number of loans dropped from 400,000 to 75,000 during the same period.

* Blacks receive fewer conventional loans as compare to White Americans (30% Black vs. 44% White) and are more reliant FHA backed loans. (46% vs. 19%).

Here is a chart of US home ownership rates by race.  You can see the 17% drop in ownership by Blacks versus 8% drop by Whites. In the 3rd quarter of 2016 all rates posted improvements expect Black owner ship.

Black/White Wealth Gap Remains in Spite of Black Celebrities

In a great article posted on Inequality.Org, Antonio Moore writes that the small number of wealthy, highly-visible  Black celebrities serves to hide the huge racial wealth gap in the US between Blacks and Whites. Black sport figures and celebrities are about 5% of the top 0.1% of earners in the US. Yet their constant media presence deludes both Blacks and Whites about the lack of Black wealth.

The story, called: "Black Wealth in America Hardly Exists", discusses the real lack of progress in closing the Black/White difference in wealth.

The Institute for Policy Studies has found that it would take about 228 years to close the racial wealth gap in a previous study. The report is called "The Ever Growing Gap"