From the Washington Examiner:
IRS employees have a prominent role in Obamacare, but their union wants no part of the law.
National Treasury Employees Union officials are urging members to write their congressional representatives in opposition to receiving coverage through President Obama’s health care law.
The union leaders are providing members with a form letter to send to the congressmen that says “I am very concerned about legislation that has been introduced by Congressman Dave Camp to push federal employees out of the Federal Employees Health Benefits Program and into the insurance exchanges established under the Affordable Care Act.”
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Link: http://washingtonexaminer.com/irs-employee-union-we-dont-want-obamacare/article/2533520
Sunday, July 28, 2013
Chicago Tribune: Obamacare will push employers - and workers - to cut hours
Opponents of Obamacare have long predicted that the 2010 law would lead to reduced working hours for many Americans. We all know from high-profile announcements that some employers, notably restaurants, plan to avoid hiring full-time workers because of the new health care rules...
Under Obamacare, employers with 50 or more full-time workers will be required to offer health insurance to those putting in at least 30 hours a week, or pay a penalty. That's a big incentive to keep the staff at 49 full-timers or, if the business demands more bodies, a big incentive to have as many employees as possible working a maximum of 29 hours.
Turns out the incentives to go part time will be even greater than we suspected: Several million employees could work fewer hours for as much take-home pay by shifting to part-time labor.
University of Chicago economist Casey Mulligan has his finger on how that will work. As the law kicks in, the incentive for some workers will be so strong that free-market champion Mulligan says only "chumps" would resist it.
...He notes that a key advantage of most full-time jobs is access to company-provided health benefits. He estimates that a middle-income, full-time worker pays $4,667 a year, and his or her employer pays $9,333, for family medical insurance.
Under Obamacare, that advantage will be reversed for some workers. The law subsidizes health costs for families that earn up to 400 percent of the federal poverty line, which is about half of all U.S. households (excluding the elderly, who have Medicare and Medicaid). But the government subsidies only will go to workers whose employers don't offer insurance. That is, most people who work full time will be ineligible for subsidies. Those workers and their employers will be expected to keep paying a bundle for coverage.
Not so for the part-timer. The law limits premiums he or she will pay to $2,149 a year. His or her employer need pay nothing at all.
The Affordable Care Act also subsidizes part-timers' deductibles, co-payments and other out-of-pocket expenses, that exceed $2,193. By Mulligan's estimate, Washington could pay some $12,658 in premiums, and $2,907 in out-of-pocket costs, for a part-timer earning $42,000.
Hence Mulligan's revelation: This deal is so generous that several million workers will be able to earn as much take-home pay in part-time positions with lower pay as they would in higher-paying full-time jobs that don't get the federal health subsidies. The government — that is, taxpayers — will cover most of the part-timer's costs.
The law's potential economic distortions are so damaging, he says, that he never thought it would go into effect: "I guess I would have been (one of) those people in 1916 who said that communism would never happen."
We have yet to see Obamacare's full impact. The mandate requiring individuals to have coverage starts in January 2014; the mandate requiring employers to offer coverage has been postponed for at least another year. But if nothing changes, America will have a reason to go increasingly part time...
It's troubling, though, that ... too many part-timers who would rather have full-time jobs just aren't finding them. The question going forward is whether those workers ever will attain what they want — or whether they and their potential employers will decide that full-time jobs are too costly for both of them.
Part-time work does become a problem when Washington tilts the balance of incentives against full-time work. Not only will Obamacare raise costs for the government, it stands to make one of the most competitive features of the U.S. economy — a flexible labor market — less efficient.
One more reason to rewrite, or halt, Obamacare.
----
Link: http://www.chicagotribune.com/news/opinion/editorials/ct-edit-parttime-0728-jm-20130728,0,2990367.story
Under Obamacare, employers with 50 or more full-time workers will be required to offer health insurance to those putting in at least 30 hours a week, or pay a penalty. That's a big incentive to keep the staff at 49 full-timers or, if the business demands more bodies, a big incentive to have as many employees as possible working a maximum of 29 hours.
Turns out the incentives to go part time will be even greater than we suspected: Several million employees could work fewer hours for as much take-home pay by shifting to part-time labor.
University of Chicago economist Casey Mulligan has his finger on how that will work. As the law kicks in, the incentive for some workers will be so strong that free-market champion Mulligan says only "chumps" would resist it.
...He notes that a key advantage of most full-time jobs is access to company-provided health benefits. He estimates that a middle-income, full-time worker pays $4,667 a year, and his or her employer pays $9,333, for family medical insurance.
Under Obamacare, that advantage will be reversed for some workers. The law subsidizes health costs for families that earn up to 400 percent of the federal poverty line, which is about half of all U.S. households (excluding the elderly, who have Medicare and Medicaid). But the government subsidies only will go to workers whose employers don't offer insurance. That is, most people who work full time will be ineligible for subsidies. Those workers and their employers will be expected to keep paying a bundle for coverage.
Not so for the part-timer. The law limits premiums he or she will pay to $2,149 a year. His or her employer need pay nothing at all.
The Affordable Care Act also subsidizes part-timers' deductibles, co-payments and other out-of-pocket expenses, that exceed $2,193. By Mulligan's estimate, Washington could pay some $12,658 in premiums, and $2,907 in out-of-pocket costs, for a part-timer earning $42,000.
Hence Mulligan's revelation: This deal is so generous that several million workers will be able to earn as much take-home pay in part-time positions with lower pay as they would in higher-paying full-time jobs that don't get the federal health subsidies. The government — that is, taxpayers — will cover most of the part-timer's costs.
The law's potential economic distortions are so damaging, he says, that he never thought it would go into effect: "I guess I would have been (one of) those people in 1916 who said that communism would never happen."
We have yet to see Obamacare's full impact. The mandate requiring individuals to have coverage starts in January 2014; the mandate requiring employers to offer coverage has been postponed for at least another year. But if nothing changes, America will have a reason to go increasingly part time...
It's troubling, though, that ... too many part-timers who would rather have full-time jobs just aren't finding them. The question going forward is whether those workers ever will attain what they want — or whether they and their potential employers will decide that full-time jobs are too costly for both of them.
Part-time work does become a problem when Washington tilts the balance of incentives against full-time work. Not only will Obamacare raise costs for the government, it stands to make one of the most competitive features of the U.S. economy — a flexible labor market — less efficient.
One more reason to rewrite, or halt, Obamacare.
----
Link: http://www.chicagotribune.com/news/opinion/editorials/ct-edit-parttime-0728-jm-20130728,0,2990367.story
Saturday, July 27, 2013
Honest Tea: the most dishonest place in the US: Washington D.C.
From money.MSN.com:
Coca-Cola's Honest Tea tested whether Americans would pay for the drink at self-service kiosks.
One location ranked far below the others.
When Coca-Cola's (KO) Honest Tea tested whether Americans would voluntarily pay up for the drink at unmanned kiosks, one place fell far below the national average for honesty.
That turns out to be the nation's capital, Washington, D.C., where only 80% of people honored the test's system of putting a dollar in a box to pay for a bottle of the iced tea. In fact, the town was so dishonest that the CEO's bike was stolen during the test.
Overall, Americans are 92% honest...
----
Link:http://money.msn.com/now/post--heres-the-most-dishonest-place-in-the-us
Coca-Cola's Honest Tea tested whether Americans would pay for the drink at self-service kiosks.
One location ranked far below the others.
When Coca-Cola's (KO) Honest Tea tested whether Americans would voluntarily pay up for the drink at unmanned kiosks, one place fell far below the national average for honesty.
That turns out to be the nation's capital, Washington, D.C., where only 80% of people honored the test's system of putting a dollar in a box to pay for a bottle of the iced tea. In fact, the town was so dishonest that the CEO's bike was stolen during the test.
Overall, Americans are 92% honest...
----
Link:http://money.msn.com/now/post--heres-the-most-dishonest-place-in-the-us
Really? Half of Obama Care call center jobs will be part-time
From Contra Costa Times.com:
Earlier this year, Contra Costa County won the right to run a health care call center, where workers will answer questions to help implement the president's Affordable Care Act. Area politicians called the 200-plus jobs it would bring to the region an economic coup.
Now, with two months to go before the Concord operation opens to serve the public, information has surfaced that about half the jobs are part-time, with no health benefits -- a stinging disappointment to workers and local politicians who believed the positions would be full-time.
The Contra Costa County supervisor whose district includes the call center called the whole hiring process -- which attracted about 7,000 applicants -- a "comedy of errors."
"The battle for the call center was over jobs with good working wages and benefits; I never dreamed they would be part-time," said Karen Mitchoff, who has heard from complaining constituents and expressed her "extreme displeasure with how it was handled" to call center supervisors.
One recent hire, who last week learned the job would be part-time, said the new "intermittent" employees feel like they've been used as a political tool, and many now regret applying for the positions.
----
Link: http://www.contracostatimes.com/rss/ci_23733819
Earlier this year, Contra Costa County won the right to run a health care call center, where workers will answer questions to help implement the president's Affordable Care Act. Area politicians called the 200-plus jobs it would bring to the region an economic coup.
Now, with two months to go before the Concord operation opens to serve the public, information has surfaced that about half the jobs are part-time, with no health benefits -- a stinging disappointment to workers and local politicians who believed the positions would be full-time.
The Contra Costa County supervisor whose district includes the call center called the whole hiring process -- which attracted about 7,000 applicants -- a "comedy of errors."
"The battle for the call center was over jobs with good working wages and benefits; I never dreamed they would be part-time," said Karen Mitchoff, who has heard from complaining constituents and expressed her "extreme displeasure with how it was handled" to call center supervisors.
One recent hire, who last week learned the job would be part-time, said the new "intermittent" employees feel like they've been used as a political tool, and many now regret applying for the positions.
----
Link: http://www.contracostatimes.com/rss/ci_23733819
Why Tight U.S. Labor Markets Are Here to Stay
From Gary Shilling at Bloomberg.com:
The outlook for the labor market remains bleak. Older Americans are holding on to their jobs longer, limiting openings for newcomers, and employers are cutting costs by extending working hours and paying overtime, rather than hiring.
Layoffs and discharges remain low. Voluntary departures have risen a bit, but are still sluggish as workers stay put in uncertain times.
Meanwhile, job openings have risen rapidly after a collapse, though new hires have increased much more slowly. After firing so many people in the recession and since, employers are waiting to hire the right people with the right skills.
Declining real wages also discourage many from entering the labor force, as does the likelihood that if they do find work, it is often at lower pay. Surveys show that of those out of work six months or more, a third earn less when they find a new job. Those out of work for extended periods also tend to lose their skills...
----
Link: http://www.bloomberg.com/news/2013-07-23/why-tight-u-s-labor-markets-are-here-to-stay.html
The outlook for the labor market remains bleak. Older Americans are holding on to their jobs longer, limiting openings for newcomers, and employers are cutting costs by extending working hours and paying overtime, rather than hiring.
Layoffs and discharges remain low. Voluntary departures have risen a bit, but are still sluggish as workers stay put in uncertain times.
Meanwhile, job openings have risen rapidly after a collapse, though new hires have increased much more slowly. After firing so many people in the recession and since, employers are waiting to hire the right people with the right skills.
Declining real wages also discourage many from entering the labor force, as does the likelihood that if they do find work, it is often at lower pay. Surveys show that of those out of work six months or more, a third earn less when they find a new job. Those out of work for extended periods also tend to lose their skills...
----
Link: http://www.bloomberg.com/news/2013-07-23/why-tight-u-s-labor-markets-are-here-to-stay.html
Sunday, July 21, 2013
Different view: Most new jobs are full-time, but that doesn’t mean they’re good jobs
From Marketwatch.com:
...since the recession ended four years ago, the vast majority of new jobs have been full time: Full-time jobs have increased by 3.3 million, while part-time jobs are up by 564,000 (including 360,000 in June). The percentage of workers who are part-timers has declined from a peak of 20% to 19.5%.
That’s still way too high, considering that about 8 million part-timers would like to work full time. But the problem isn’t getting any worse. Contrary to what you hear from Durden et al, the economy is slowly becoming less of a part-time ghetto.
When we suggest that all part-time jobs are bad, we forget that the vast majority of part-timers want to work part-time. They prefer it.
Who are the part-timers? As of the end of 2012, there were 27.6 million part-time workers. Of that total, 30% were between the ages of 16 and 24, and another 25% were over 55. These are people who are easing into or easing out of full-time work. Most of the growth in part-time work since 2009 has been among people over 65.
What about people in their prime working years of 25 to 54? They account for about 65% of the labor force, but just 45% of part-time workers. Of the 12.4 million part-timers aged 25 to 54, 8.8 million were women and 3.6 million were men.
In other words, part-timers are largely students, housewives and retirees.
Hidden in the sky-is-falling rhetoric of Zuckerman, Ferrara and Durden is a real concern that must be addressed: The economy is not nearly creating enough good jobs that take advantage of all the skills our workers have. Anyone willing to work should be able to find a job, and should be adequately compensated for the work they do, including health-care benefits, overtime pay, a pension, and paid time off.
The chicken littles may have their facts wrong, but they have their finger on a real problem. The quality of jobs matters a lot, and the quality of jobs has been deteriorating for a while.
It’s not only part-time jobs that are terrible. Many full-time jobs also count as bad jobs: Low pay, dangerous or boring working condition, inadequate benefits, with no job security.
So by all means, let’s talk about how pathetic this recovery has been. But let’s not confuse things by complaining that we have too many part-time jobs. We have too few good jobs.
----
Link: http://www.marketwatch.com/story/no-part-time-jobs-arent-only-ones-being-created-2013-07-19
...since the recession ended four years ago, the vast majority of new jobs have been full time: Full-time jobs have increased by 3.3 million, while part-time jobs are up by 564,000 (including 360,000 in June). The percentage of workers who are part-timers has declined from a peak of 20% to 19.5%.
That’s still way too high, considering that about 8 million part-timers would like to work full time. But the problem isn’t getting any worse. Contrary to what you hear from Durden et al, the economy is slowly becoming less of a part-time ghetto.
When we suggest that all part-time jobs are bad, we forget that the vast majority of part-timers want to work part-time. They prefer it.
Who are the part-timers? As of the end of 2012, there were 27.6 million part-time workers. Of that total, 30% were between the ages of 16 and 24, and another 25% were over 55. These are people who are easing into or easing out of full-time work. Most of the growth in part-time work since 2009 has been among people over 65.
What about people in their prime working years of 25 to 54? They account for about 65% of the labor force, but just 45% of part-time workers. Of the 12.4 million part-timers aged 25 to 54, 8.8 million were women and 3.6 million were men.
In other words, part-timers are largely students, housewives and retirees.
Hidden in the sky-is-falling rhetoric of Zuckerman, Ferrara and Durden is a real concern that must be addressed: The economy is not nearly creating enough good jobs that take advantage of all the skills our workers have. Anyone willing to work should be able to find a job, and should be adequately compensated for the work they do, including health-care benefits, overtime pay, a pension, and paid time off.
The chicken littles may have their facts wrong, but they have their finger on a real problem. The quality of jobs matters a lot, and the quality of jobs has been deteriorating for a while.
It’s not only part-time jobs that are terrible. Many full-time jobs also count as bad jobs: Low pay, dangerous or boring working condition, inadequate benefits, with no job security.
So by all means, let’s talk about how pathetic this recovery has been. But let’s not confuse things by complaining that we have too many part-time jobs. We have too few good jobs.
----
Link: http://www.marketwatch.com/story/no-part-time-jobs-arent-only-ones-being-created-2013-07-19
Saturday, July 20, 2013
"Detroit is America’s future"
From Jonathan S. Tobin at CommentaryMagazine.com:
The collapse of what was once one of America’s great cities should also inform us about the way the liberal project is dooming municipal and state governments around the country as well as Washington to a sea of debt that cannot be sustained.
Detroit isn’t just the most spectacular example of urban blight. It’s the poster child for the consequences of liberal governance...
While other large cities, such as New York and Philadelphia, underwent crises that were met and overcome in the last generation before undergoing revivals, Detroit has been going downhill for more than 60 years. While Detroit had particular problems that may not have been faced elsewhere, the basic conundrum is not unique. But rather than face up to the need to change the old liberal formula of expanding government and letting corruption go unchecked, this bastion of liberalism refused to alter its course...
The lesson here is that a government that continued to overpromise and create unfunded liabilities to please political constituencies cannot survive indefinitely. And that goes straight to the glaring problem that was the foundation of President Obama’s false boasts about “saving Detroit” that caused Romney so much trouble last fall.
Detroit’s bankruptcy shows that federal bailouts for industries can’t solve all the country’s problems, especially when cities are sinking under the weight of generous municipal contracts for public employees. It’s true that many other cities that are facing shortfalls because of debts they’ve signed off on to pay off unions are working better than Detroit, where 40 percent of the street lights don’t work and it takes nearly an hour for police to arrive at an average high-priority emergency.
But unless the power of unions to bankrupt municipalities and state governments is cut back—much as Wisconsin’s Governor Scott Walker and New Jersey Governor Chris Christie have tried to do—everywhere, Detroit won’t be the last city to go bankrupt. The accumulation of debt to pay off the promises made by liberals is a problem that threatens cities all over the country, even some that are seemingly in much better shape than Detroit.
The Obama paradigm of building more entitlements like ObamaCare and throwing federal money at regional problems is based on the liberal assumption that the government piper will never have to be paid. Democrats have blasted their Republican counterparts as heartless Tea Party extremists and obstructionists for refusing to play along and let the system go on as it has for decades building debts that can’t ever be met.
But unless someone or some group is able to enact real change, Detroit is America’s future, not, as some are telling us, an exception to the rule.
----
Link: http://www.commentarymagazine.com/2013/07/19/didnt-obama-already-save-detroit/
The collapse of what was once one of America’s great cities should also inform us about the way the liberal project is dooming municipal and state governments around the country as well as Washington to a sea of debt that cannot be sustained.
Detroit isn’t just the most spectacular example of urban blight. It’s the poster child for the consequences of liberal governance...
While other large cities, such as New York and Philadelphia, underwent crises that were met and overcome in the last generation before undergoing revivals, Detroit has been going downhill for more than 60 years. While Detroit had particular problems that may not have been faced elsewhere, the basic conundrum is not unique. But rather than face up to the need to change the old liberal formula of expanding government and letting corruption go unchecked, this bastion of liberalism refused to alter its course...
The lesson here is that a government that continued to overpromise and create unfunded liabilities to please political constituencies cannot survive indefinitely. And that goes straight to the glaring problem that was the foundation of President Obama’s false boasts about “saving Detroit” that caused Romney so much trouble last fall.
Detroit’s bankruptcy shows that federal bailouts for industries can’t solve all the country’s problems, especially when cities are sinking under the weight of generous municipal contracts for public employees. It’s true that many other cities that are facing shortfalls because of debts they’ve signed off on to pay off unions are working better than Detroit, where 40 percent of the street lights don’t work and it takes nearly an hour for police to arrive at an average high-priority emergency.
But unless the power of unions to bankrupt municipalities and state governments is cut back—much as Wisconsin’s Governor Scott Walker and New Jersey Governor Chris Christie have tried to do—everywhere, Detroit won’t be the last city to go bankrupt. The accumulation of debt to pay off the promises made by liberals is a problem that threatens cities all over the country, even some that are seemingly in much better shape than Detroit.
The Obama paradigm of building more entitlements like ObamaCare and throwing federal money at regional problems is based on the liberal assumption that the government piper will never have to be paid. Democrats have blasted their Republican counterparts as heartless Tea Party extremists and obstructionists for refusing to play along and let the system go on as it has for decades building debts that can’t ever be met.
But unless someone or some group is able to enact real change, Detroit is America’s future, not, as some are telling us, an exception to the rule.
----
Link: http://www.commentarymagazine.com/2013/07/19/didnt-obama-already-save-detroit/
Crisis for the very old: outliving their assets
From the LATimes.com:
As if you haven't been scared enough by the projections that most Americans haven't saved enough to maintain their lifestyles as they enter retirement, here's something even more terrifying:
Nearly half of all Americans will outlive their assets, dying with practically no money at all.
Even more worrisome, that's true even among households that met the traditional standards for secure retirement income. Economic factors and changes in employer pensions and in economic reality have made it much harder to stretch income and assets so they last, especially as people live longer....
Americans ages 75 and older lost one-third of their household financial assets and one-sixth of their net worth from 2007 to 2010, reflecting the devastation of the 2008 crash. Their balance sheets may have improved since then, but obviously they have less time than other age groups to make up the losses.
The 75-plus generation is struggling more than others to keep up....
Economist James Poterba of MIT put it all together with colleagues at Dartmouth and Harvard's Kennedy School and estimated that about 46% of Americans die with less than $10,000 in assets, many of them lacking even home equity and relying almost entirely on Social Security.
The results can be measured in more than merely dollars and cents. Poterba's paper found that this group is "disproportionately in poor health," in part because they have no resources to cover medical expenses outside Medicare.
Most shocking, many of these households were considered to have entered retirement in good financial shape; they didn't count on outliving their plans....
----
Link: http://www.latimes.com/business/la-fi-hiltzik-20130717,0,2211926.column
As if you haven't been scared enough by the projections that most Americans haven't saved enough to maintain their lifestyles as they enter retirement, here's something even more terrifying:
Nearly half of all Americans will outlive their assets, dying with practically no money at all.
Even more worrisome, that's true even among households that met the traditional standards for secure retirement income. Economic factors and changes in employer pensions and in economic reality have made it much harder to stretch income and assets so they last, especially as people live longer....
Americans ages 75 and older lost one-third of their household financial assets and one-sixth of their net worth from 2007 to 2010, reflecting the devastation of the 2008 crash. Their balance sheets may have improved since then, but obviously they have less time than other age groups to make up the losses.
The 75-plus generation is struggling more than others to keep up....
Economist James Poterba of MIT put it all together with colleagues at Dartmouth and Harvard's Kennedy School and estimated that about 46% of Americans die with less than $10,000 in assets, many of them lacking even home equity and relying almost entirely on Social Security.
The results can be measured in more than merely dollars and cents. Poterba's paper found that this group is "disproportionately in poor health," in part because they have no resources to cover medical expenses outside Medicare.
Most shocking, many of these households were considered to have entered retirement in good financial shape; they didn't count on outliving their plans....
----
Link: http://www.latimes.com/business/la-fi-hiltzik-20130717,0,2211926.column
Obama to Detroit: Drop Dead
From Walter Russell Mead at Via Meadia:
...This is where blue governance has brought Detroit in the end: not even a liberal Democratic administration will step in to save the pensions of thousands of public workers and African Americans, condemning countless innocents to having their pensions and health benefits gutted in bankruptcy court.
Blue model defenders will point to the cruel exodus of General Motors, the unjust outsourcing of American manufacturing, and the general unfairness of life in the big city as the culprits in the slaying of Detroit. But these champions of the marginalized should keep a few facts in mind.
Detroit has been spending on average $100 million more than it has taken in for each of the past five years. The city’s $11 billion in unsecured debt includes $6 billion in health and other retirement benefits and $3 billion in retiree pensions for its 20,000 city pensioners, who are slated to receive less than 10 percent of what they were promised. Between 2007 and 2011, an astounding 36 percent of residents lived below the poverty line. Last year, the FBI cited Detroit as having the highest violent crime rate for any major American city. In the first 12 years of the new century, Detroit lost more than 26 percent of its population.
And now Detroit’s desperate request for a bailout has been turned down by the Obama White House.
Progressive politicians, wonks, and activists can only blame big corporations and other liberal bogeymen for so long. The truth is that corrupt machine politics in a one-party system devoted to the blue social model wrecked an entire city and thousands of lives beyond repair. The sooner blues come to terms with this reality, the greater chance other cities will have of avoiding Detroit’s fate.
----
Link: http://blogs.the-american-interest.com/wrm/2013/07/18/obama-to-detroit-drop-dead/
...This is where blue governance has brought Detroit in the end: not even a liberal Democratic administration will step in to save the pensions of thousands of public workers and African Americans, condemning countless innocents to having their pensions and health benefits gutted in bankruptcy court.
Blue model defenders will point to the cruel exodus of General Motors, the unjust outsourcing of American manufacturing, and the general unfairness of life in the big city as the culprits in the slaying of Detroit. But these champions of the marginalized should keep a few facts in mind.
Detroit has been spending on average $100 million more than it has taken in for each of the past five years. The city’s $11 billion in unsecured debt includes $6 billion in health and other retirement benefits and $3 billion in retiree pensions for its 20,000 city pensioners, who are slated to receive less than 10 percent of what they were promised. Between 2007 and 2011, an astounding 36 percent of residents lived below the poverty line. Last year, the FBI cited Detroit as having the highest violent crime rate for any major American city. In the first 12 years of the new century, Detroit lost more than 26 percent of its population.
And now Detroit’s desperate request for a bailout has been turned down by the Obama White House.
Progressive politicians, wonks, and activists can only blame big corporations and other liberal bogeymen for so long. The truth is that corrupt machine politics in a one-party system devoted to the blue social model wrecked an entire city and thousands of lives beyond repair. The sooner blues come to terms with this reality, the greater chance other cities will have of avoiding Detroit’s fate.
----
Link: http://blogs.the-american-interest.com/wrm/2013/07/18/obama-to-detroit-drop-dead/
Jobs Disaster Continues
From the New York Times online:
Don’t worry about labor force participation. It’s not coming back....
The unemployment rate has dropped almost entirely because of this decline in labor force participation.
In other words, it has not fallen because people are finding jobs.
It has fallen because fewer people are looking for jobs.
----
Link: http://economix.blogs.nytimes.com/2013/07/18/labor-force-participation-is-not-coming-back/
Don’t worry about labor force participation. It’s not coming back....
The unemployment rate has dropped almost entirely because of this decline in labor force participation.
In other words, it has not fallen because people are finding jobs.
It has fallen because fewer people are looking for jobs.
----
Link: http://economix.blogs.nytimes.com/2013/07/18/labor-force-participation-is-not-coming-back/
Thursday, July 18, 2013
Detroit’s Greek tragedy
From Charles Lane at the WashingtonPost.com:
Liberal economists have a ready response to conservatives who fret that U.S. debt might spiral out of control, a la Southern Europe: “America is not Greece.”
It’s true. Greece has much more public debt than does the United States, relative to economic output...
Certain parts of the United States, however, are like Greece. Just read emergency manager Kevyn Orr’s134-page report on Detroit, which has $20 billion in unpayable debt.
...the document nevertheless tells a harrowing story of institutional rot and social collapse, brought on by decades of government of, by and for special-interest groups.
Prominent among them are public-employee unions — 47 in all, from organized crossing guards to the Association of Professional Construction Inspectors. Contracts permitted employees to “bump” from job to job based solely on seniority, “without regard to merit, relevant qualifications or experience,” the report says.
Generous pension and retiree health benefits gobbled up tax dollars — more than 38 percent of the city’s revenue in fiscal 2012 alone — that would otherwise have paid for public services.
Small wonder that, per the report, the effectiveness of Detroit’s police force is “extremely low” and the city’s rate of violent crime is five times the national average; or that the average fire station is 80 years old; or that the number of city parks has dwindled from 317 to 107 in the past half-decade.
Detroit could not have financed its bloat without Wall Street. Like German and French banks that bought Greek debt long past the point of reason, Detroit’s financial enablers cheerfully synthesized such securities as $1.43 billion in pension-funding “certificates of participation” — about whose “validity and/or enforceability” the Orr report expresses circumspect but ominous doubts.
Spare some blame for Detroit’s log-rolling and — it must be said — mostly Democratic politicians, including spectacularly corrupt former mayor Kwame Kilpatrick, who faces more than 20 years in prison on bribery and extortion charges related to rigging city contracts.
Greece’s state-owned money pits include a railroad and ports. The political class in Detroit saw fit to own water works and parking garages. Much as Greece ended up contemplating renting out the Acropolis, cheap, to foreign film crews, Detroit is pondering the sale of masterpieces in its art museum.
...difficult as Detroit’s economic issues were, bad governance made all of them worse. For too long, too many people whose first concern was supposed to be serving citizens concentrated instead on feeding off whatever public resources Detroit had.
...Of course, Detroit should never have reached the point where it needed an enlightened dictator. Motor City residents, public employees, financiers and politicians should have practiced the shared sacrifice Orr is belatedly attempting to impose.
...Maybe Americans have nothing to learn from Greece. Detroit, though, is closer to home, and its lessons are not so easily ignored.
----
Link: http://www.washingtonpost.com/opinions/charles-lane-detroits-greek-tragedy/2013/07/08/
Liberal economists have a ready response to conservatives who fret that U.S. debt might spiral out of control, a la Southern Europe: “America is not Greece.”
It’s true. Greece has much more public debt than does the United States, relative to economic output...
Certain parts of the United States, however, are like Greece. Just read emergency manager Kevyn Orr’s134-page report on Detroit, which has $20 billion in unpayable debt.
...the document nevertheless tells a harrowing story of institutional rot and social collapse, brought on by decades of government of, by and for special-interest groups.
Prominent among them are public-employee unions — 47 in all, from organized crossing guards to the Association of Professional Construction Inspectors. Contracts permitted employees to “bump” from job to job based solely on seniority, “without regard to merit, relevant qualifications or experience,” the report says.
Generous pension and retiree health benefits gobbled up tax dollars — more than 38 percent of the city’s revenue in fiscal 2012 alone — that would otherwise have paid for public services.
Small wonder that, per the report, the effectiveness of Detroit’s police force is “extremely low” and the city’s rate of violent crime is five times the national average; or that the average fire station is 80 years old; or that the number of city parks has dwindled from 317 to 107 in the past half-decade.
Detroit could not have financed its bloat without Wall Street. Like German and French banks that bought Greek debt long past the point of reason, Detroit’s financial enablers cheerfully synthesized such securities as $1.43 billion in pension-funding “certificates of participation” — about whose “validity and/or enforceability” the Orr report expresses circumspect but ominous doubts.
Spare some blame for Detroit’s log-rolling and — it must be said — mostly Democratic politicians, including spectacularly corrupt former mayor Kwame Kilpatrick, who faces more than 20 years in prison on bribery and extortion charges related to rigging city contracts.
Greece’s state-owned money pits include a railroad and ports. The political class in Detroit saw fit to own water works and parking garages. Much as Greece ended up contemplating renting out the Acropolis, cheap, to foreign film crews, Detroit is pondering the sale of masterpieces in its art museum.
...difficult as Detroit’s economic issues were, bad governance made all of them worse. For too long, too many people whose first concern was supposed to be serving citizens concentrated instead on feeding off whatever public resources Detroit had.
...Of course, Detroit should never have reached the point where it needed an enlightened dictator. Motor City residents, public employees, financiers and politicians should have practiced the shared sacrifice Orr is belatedly attempting to impose.
...Maybe Americans have nothing to learn from Greece. Detroit, though, is closer to home, and its lessons are not so easily ignored.
----
Link: http://www.washingtonpost.com/opinions/charles-lane-detroits-greek-tragedy/2013/07/08/
Detroit files for bankruptcy
From the Associated Press:
DETROIT (AP) -- Once the very symbol of American industrial might, Detroit became the biggest U.S. city to file for bankruptcy Thursday, its finances ravaged and its neighborhoods hollowed out by a long, slow decline in population and auto manufacturing.
The filing, which had been feared for months, put the city on an uncertain course that could mean laying off municipal employees, selling off assets, raising fees and scaling back basic services such as trash collection and snow plowing, which have already been slashed....
----
Link: http://hosted.ap.org/dynamic/stories/U/US_DETROIT_BANKRUPTCY
DETROIT (AP) -- Once the very symbol of American industrial might, Detroit became the biggest U.S. city to file for bankruptcy Thursday, its finances ravaged and its neighborhoods hollowed out by a long, slow decline in population and auto manufacturing.
The filing, which had been feared for months, put the city on an uncertain course that could mean laying off municipal employees, selling off assets, raising fees and scaling back basic services such as trash collection and snow plowing, which have already been slashed....
----
Link: http://hosted.ap.org/dynamic/stories/U/US_DETROIT_BANKRUPTCY
Monday, July 15, 2013
Economy dangerously close to contraction
From MarketWatch.com:
U.S. economic growth has again slowed sharply, skidding dangerously close in the second quarter to an outright contraction in gross domestic product.
Following the releases Monday of tepid reports on retail sales and inventory accumulation, forecasters marked down their GDP expectations from 1.4% to 1.1%. It’s probable that U.S. GDP rose less than 2% for the third quarter in a row, and it’s possible that growth was less than 1% for the second quarter in the last three....
But we thought that the household sector was holding up a little better. The surprise Monday was that U.S. consumers were more cautious as well. Retail sales rose 0.4% in June, with most of the growth coming from automobile sales. Most retailers reported weak sales for the month....
----
Link: http://www.marketwatch.com/story/economy-skids-dangerously-close-to-contraction-2013-07-15
U.S. economic growth has again slowed sharply, skidding dangerously close in the second quarter to an outright contraction in gross domestic product.
Following the releases Monday of tepid reports on retail sales and inventory accumulation, forecasters marked down their GDP expectations from 1.4% to 1.1%. It’s probable that U.S. GDP rose less than 2% for the third quarter in a row, and it’s possible that growth was less than 1% for the second quarter in the last three....
But we thought that the household sector was holding up a little better. The surprise Monday was that U.S. consumers were more cautious as well. Retail sales rose 0.4% in June, with most of the growth coming from automobile sales. Most retailers reported weak sales for the month....
----
Link: http://www.marketwatch.com/story/economy-skids-dangerously-close-to-contraction-2013-07-15
Sunday, July 14, 2013
Key Statistic of the Year
From the WSJ.com:
For the entire U.S. workforce, employers have added far more part-time employees in 2013—averaging 93,000 a month, seasonally adjusted—than full-time workers, which have averaged 22,000.
----
Link: see next story
For the entire U.S. workforce, employers have added far more part-time employees in 2013—averaging 93,000 a month, seasonally adjusted—than full-time workers, which have averaged 22,000.
----
Link: see next story
WSJ: Restaurant Jobs - Sorry, Just Part-Time
From the WSJ.com:
Ken Adams has been turning to more part-time workers at his 10 Subway sandwich shops in Michigan to avoid possibly incurring higher health-care costs under the new federal insurance law.
He added approximately 25 part-time workers in May and June as he reduced some employees' hours and replaced other workers who left. The move showed how efforts by some restaurant owners and other businesses to remake their workforces because of the Affordable Care Act may be turning the country's labor market into a more part-time workforce.
Restaurants and bars have been adding an average of 50,000 jobs monthly since April—about double the rate from 2012.
In June, they added a seasonally adjusted 51,700 jobs, up from May's 47,900 tally, but below April's 51,800.
Overall, leisure-and-hospitality establishments hired more workers than any other industry in June, accounting for 75,000 of the 195,000 jobs added last month...
----
Link: http://online.wsj.com/article/SB10001424127887324694904578601922653718606.html
Ken Adams has been turning to more part-time workers at his 10 Subway sandwich shops in Michigan to avoid possibly incurring higher health-care costs under the new federal insurance law.
He added approximately 25 part-time workers in May and June as he reduced some employees' hours and replaced other workers who left. The move showed how efforts by some restaurant owners and other businesses to remake their workforces because of the Affordable Care Act may be turning the country's labor market into a more part-time workforce.
Restaurants and bars have been adding an average of 50,000 jobs monthly since April—about double the rate from 2012.
In June, they added a seasonally adjusted 51,700 jobs, up from May's 47,900 tally, but below April's 51,800.
Overall, leisure-and-hospitality establishments hired more workers than any other industry in June, accounting for 75,000 of the 195,000 jobs added last month...
----
Link: http://online.wsj.com/article/SB10001424127887324694904578601922653718606.html
Friday, July 12, 2013
Poverty rarely mentioned by president
From James Rosen at Foxnews.com:
...Barack Obama partly used his 2008 nomination acceptance speech in Denver to showcase a subject he has mostly seen fit, ever since, to avoid. "We are more compassionate," he said back then, "than a government that lets veterans sleep on our streets and families slide into poverty."
But since then, the poverty rate has increased: from 13.1 percent in 2008 to 15.1 percent in the most recent measurements released by the U.S. Census Bureau. And while he is widely seen as an ally of those Democratic constituencies most apt to focus on the plight of the underclass, Obama has actually mentioned the poor less frequently than any of his modern predecessors in the Oval Office.
A new study by Georgetown University's Center for Applied Research in the Apostolate, a non-profit center whose social scientists study issues of concern to Catholics, tabulated all references to an economic class that have appeared in the public papers of each president dating back to John F. Kennedy, the nation's first -- and to date only -- Catholic president.
The study found that Lyndon B. Johnson, architect of the 1960s "War on Poverty," was most apt, among the modern presidents, to mention the poor in some form or fashion: 84 percent of the time he made reference to any economic class. Kennedy and Jimmy Carter came next, with both mentioning the underclass approximately three-quarters of the time. Presidents Ford, Reagan, and George W. Bush all rated in the mid-to-high 60s, with Richard Nixon and Bill Clinton not far behind. George Herbert Walker Bush, the study found, was apt to speak about the poor fully half the time.
Only then -- dead last in the Georgetown rankings -- comes Barack Obama, who mentions the nation's least well-off only 26 percent of the time....
----
Link: http://www.foxnews.com/politics/2013/07/12/obama-avoids-discussing-poverty-study-finds/
...Barack Obama partly used his 2008 nomination acceptance speech in Denver to showcase a subject he has mostly seen fit, ever since, to avoid. "We are more compassionate," he said back then, "than a government that lets veterans sleep on our streets and families slide into poverty."
But since then, the poverty rate has increased: from 13.1 percent in 2008 to 15.1 percent in the most recent measurements released by the U.S. Census Bureau. And while he is widely seen as an ally of those Democratic constituencies most apt to focus on the plight of the underclass, Obama has actually mentioned the poor less frequently than any of his modern predecessors in the Oval Office.
A new study by Georgetown University's Center for Applied Research in the Apostolate, a non-profit center whose social scientists study issues of concern to Catholics, tabulated all references to an economic class that have appeared in the public papers of each president dating back to John F. Kennedy, the nation's first -- and to date only -- Catholic president.
The study found that Lyndon B. Johnson, architect of the 1960s "War on Poverty," was most apt, among the modern presidents, to mention the poor in some form or fashion: 84 percent of the time he made reference to any economic class. Kennedy and Jimmy Carter came next, with both mentioning the underclass approximately three-quarters of the time. Presidents Ford, Reagan, and George W. Bush all rated in the mid-to-high 60s, with Richard Nixon and Bill Clinton not far behind. George Herbert Walker Bush, the study found, was apt to speak about the poor fully half the time.
Only then -- dead last in the Georgetown rankings -- comes Barack Obama, who mentions the nation's least well-off only 26 percent of the time....
----
Link: http://www.foxnews.com/politics/2013/07/12/obama-avoids-discussing-poverty-study-finds/
The Economic Blunders Behind the Arab Revolutions
From the Wall Street Journal online:
....Half a century of socialist mismanagement has left the two Arab states [Egypt and Syria] unable to meet the basic needs of their people, with economies so damaged that they may be past the point of recovery in our lifetimes.
This is the crucial background to understanding the state failure in Egypt and civil war in Syria. It may not be within America's power to reverse their free falls; the best scenario for the U.S. is to manage the chaos as best it can.
Of Egypt's 90 million people, 70% live on the land. Yet the country produces barely half of Egyptians' total caloric consumption. The poorer half of the population survives on subsidized food imports that stretch a budget deficit close to a sixth of the country's GDP, about double the ratio in Greece...
Egyptians are ill-prepared for the modern world economy.
Forty-five percent are illiterate.
Nearly all married Egyptian women suffer genital mutilation.
One-third of marriages are between cousins, a hallmark of tribal society.
Only half of the 51 million Egyptians between the ages of 15 and 64 are counted in the government's measure of the labor force.
If Egypt counted its people the way the U.S. does, its unemployment rate would be well over 40% instead of the official 13% rate.
Nearly one-third of college-age Egyptians register for university but only half graduate, and few who do are qualified for employment in the 21st century.
That is the tragic outcome of 60 years of economic policies designed for political control rather than productivity....
----
Link: http://online.wsj.com/article/SB10001424127887323740804578597502771627238.html
....Half a century of socialist mismanagement has left the two Arab states [Egypt and Syria] unable to meet the basic needs of their people, with economies so damaged that they may be past the point of recovery in our lifetimes.
This is the crucial background to understanding the state failure in Egypt and civil war in Syria. It may not be within America's power to reverse their free falls; the best scenario for the U.S. is to manage the chaos as best it can.
Of Egypt's 90 million people, 70% live on the land. Yet the country produces barely half of Egyptians' total caloric consumption. The poorer half of the population survives on subsidized food imports that stretch a budget deficit close to a sixth of the country's GDP, about double the ratio in Greece...
Egyptians are ill-prepared for the modern world economy.
Forty-five percent are illiterate.
Nearly all married Egyptian women suffer genital mutilation.
One-third of marriages are between cousins, a hallmark of tribal society.
Only half of the 51 million Egyptians between the ages of 15 and 64 are counted in the government's measure of the labor force.
If Egypt counted its people the way the U.S. does, its unemployment rate would be well over 40% instead of the official 13% rate.
Nearly one-third of college-age Egyptians register for university but only half graduate, and few who do are qualified for employment in the 21st century.
That is the tragic outcome of 60 years of economic policies designed for political control rather than productivity....
----
Link: http://online.wsj.com/article/SB10001424127887323740804578597502771627238.html
Saturday, July 6, 2013
Jobs - just not well paying jobs
From Felix Salmon at Reuters.com:
America is creating jobs — but they’re not well-paid jobs, and they don’t seem to be going to the previously unemployed.
Today’s headline figure is certainly impressive: 195,000 new jobs were created in June, in the wake of a super-strong 207,000 new jobs in May. But the headline unemployment rate went nowhere, stuck at 7.6%, while the broadest measure of underemployment, the U6 unemployment rate, saw a worrying and substantial rise, to 14.3% from 13.8%.
Good jobs, like those in government, continue to get cut, while most of the jobs growth came in the most low-wage sectors, like hospitality. And while the data on wages was pretty healthy, remember that wage data applies overwhelmingly to people who have been employed for some time, rather than to people newly entering the workforce.
Basically, if you’re employed, you’re doing OK, but if you’re underemployed, the options available to you — the new jobs being created — are pretty underwhelming. Partly as a result, the number of discouraged workers — people who have given up looking for work because they can find nothing available — has gone up, sharply, to more than 1 million....
----
Link: http://blogs.reuters.com/felix-salmon/2013/07/05/when-the-government-outsources-employment-policy/
America is creating jobs — but they’re not well-paid jobs, and they don’t seem to be going to the previously unemployed.
Today’s headline figure is certainly impressive: 195,000 new jobs were created in June, in the wake of a super-strong 207,000 new jobs in May. But the headline unemployment rate went nowhere, stuck at 7.6%, while the broadest measure of underemployment, the U6 unemployment rate, saw a worrying and substantial rise, to 14.3% from 13.8%.
Good jobs, like those in government, continue to get cut, while most of the jobs growth came in the most low-wage sectors, like hospitality. And while the data on wages was pretty healthy, remember that wage data applies overwhelmingly to people who have been employed for some time, rather than to people newly entering the workforce.
Basically, if you’re employed, you’re doing OK, but if you’re underemployed, the options available to you — the new jobs being created — are pretty underwhelming. Partly as a result, the number of discouraged workers — people who have given up looking for work because they can find nothing available — has gone up, sharply, to more than 1 million....
----
Link: http://blogs.reuters.com/felix-salmon/2013/07/05/when-the-government-outsources-employment-policy/
Obamacare Strikes: Part-Time Jobs Surge To All Time High; Full-Time Jobs Plunge By 240,000
From Zero Hedge.com:
As a reminder: jobs have quantity and quality components.
The quantity component was good enough to convince the 10 Year [Treasury Bond] the taper is imminent (if not stocks, which continue to trade dislocated from any and all fundamentals).
But how about the quality? In a word: not good.
In June, the household survey reported that part-time jobs soared by 360,000 to 28,059,000 - an all time record high.
Full time jobs? Down 240,000. And looking back at the entire year, so far in 2013, just 130K Full-Time Jobs have been added, offset by a whopping 557K Part-Time jobs.
And there is your jobs "quality" leading to today's market euphoria (if only for now)....
----
Link: http://www.zerohedge.com/news/2013-07-05/obamacare-strikes-part-time-jobs-surge-all-time-high-full-time-jobs-plunge-240000
As a reminder: jobs have quantity and quality components.
The quantity component was good enough to convince the 10 Year [Treasury Bond] the taper is imminent (if not stocks, which continue to trade dislocated from any and all fundamentals).
But how about the quality? In a word: not good.
In June, the household survey reported that part-time jobs soared by 360,000 to 28,059,000 - an all time record high.
Full time jobs? Down 240,000. And looking back at the entire year, so far in 2013, just 130K Full-Time Jobs have been added, offset by a whopping 557K Part-Time jobs.
And there is your jobs "quality" leading to today's market euphoria (if only for now)....
----
Link: http://www.zerohedge.com/news/2013-07-05/obamacare-strikes-part-time-jobs-surge-all-time-high-full-time-jobs-plunge-240000
Black Unemployment Rate Rose in June to 13.7 Percent
From BET.com:
The African-American unemployment rate rose from 13.5 percent in May to 13.7 percent in June, according to figures released by the U.S. Labor Department....
Bob Johnson, chairman of the RLJ Companies and founder of Black Entertainment Television, continued to call on the private sector to do its part to decrease the African-American unemployment rate, which is nearly double the national rate.
“Demographic trends clearly indicate that minorities are quickly becoming the largest employee pool and consumer base in the United States and with this, corporate America should view diversity as a business imperative, no less important than financial performance, succession planning and shareholder relations," Johnson told BET.com. "I am encouraging companies to voluntarily adopt a policy that I call the RLJ Rule, which, if implemented properly, is designed to further enhance a company’s already established commitment to diversity and inclusion.”
----
Link: http://www.bet.com/news/national/2013/07/05/june-black-unemployment-report.html
The African-American unemployment rate rose from 13.5 percent in May to 13.7 percent in June, according to figures released by the U.S. Labor Department....
Bob Johnson, chairman of the RLJ Companies and founder of Black Entertainment Television, continued to call on the private sector to do its part to decrease the African-American unemployment rate, which is nearly double the national rate.
“Demographic trends clearly indicate that minorities are quickly becoming the largest employee pool and consumer base in the United States and with this, corporate America should view diversity as a business imperative, no less important than financial performance, succession planning and shareholder relations," Johnson told BET.com. "I am encouraging companies to voluntarily adopt a policy that I call the RLJ Rule, which, if implemented properly, is designed to further enhance a company’s already established commitment to diversity and inclusion.”
----
Link: http://www.bet.com/news/national/2013/07/05/june-black-unemployment-report.html
More Hamburger Flippers in Obama Economy
More from the WSJ.com:
Would you like fries with that jobs report?
Restaurants and bars account for nearly one of every 10 American jobs. They have driven a disproportionate share of employment growth over the past three months, accounting for more than a fourth of all new payroll spots.
The latest gains have been especially strong, with June seeing the fastest year-over-year growth in restaurant jobs in nearly 18 years, according to the Labor Department's employment report released Friday.
The boost in restaurant hiring reflects a strengthening in consumer spending as more Americans choose to eat out.
It is also a sign of where the economy is adding many of its new jobs: lower-paying, lower-skilled roles....
----
Link: http://online.wsj.com/article/SB10001424127887324260204578588023984664786.html
Would you like fries with that jobs report?
Restaurants and bars account for nearly one of every 10 American jobs. They have driven a disproportionate share of employment growth over the past three months, accounting for more than a fourth of all new payroll spots.
The latest gains have been especially strong, with June seeing the fastest year-over-year growth in restaurant jobs in nearly 18 years, according to the Labor Department's employment report released Friday.
The boost in restaurant hiring reflects a strengthening in consumer spending as more Americans choose to eat out.
It is also a sign of where the economy is adding many of its new jobs: lower-paying, lower-skilled roles....
----
Link: http://online.wsj.com/article/SB10001424127887324260204578588023984664786.html
What about looking deeper into the jobs report?
From James Pethokoukis at the American Enterprise Institute:
June Jobs: An employment report only a central banker could love
1. The economy lost 240,000 full-time workers last month, according to the more volatile household survey, while gaining 360,000 part-time workers. In other words, the entire increase in the household measure of employment was accounted for by persons working part-time for economic reasons. The underemployment rate surged to 14.3% from 13.8%.
2. Does Obamacare explain the poor jobs mix? From the econ team at First Trust:
Given the volatility in these data series, we would not put too much emphasis on one month’s worth of data. However, it’s consistent with the large payroll gains for retail as well as restaurants & bars and probably shows some firms who would be hiring full-timers are hiring part-timers to avoid Obamacare.
3. Part-time America: There are 28 million part-time workers in the US today vs. 25 million before the Great Recession. There are 116 million full-time workers in the US today vs. 122 million before the Great Recession. In other words, 19% of the (smaller) US workforce is part time vs. 17% before the Great Recession
4. Some context: Even at 195,000 jobs a month, the US would not, according to Brookings, return to pre-Great Recession employment levels until 2021. The “jobs gap” remains huge.
5. If the labor force participation rate were back to prerecession levels, the unemployment rate would be 11.1%. And even accounting for America’s aging, the U-3 rate would be roughly 9.1%, according to Goldman Sachs.
----
Link: http://www.aei-ideas.org/2013/07/june-jobs-an-employment-report-only-a-central-banker-could-love/
June Jobs: An employment report only a central banker could love
1. The economy lost 240,000 full-time workers last month, according to the more volatile household survey, while gaining 360,000 part-time workers. In other words, the entire increase in the household measure of employment was accounted for by persons working part-time for economic reasons. The underemployment rate surged to 14.3% from 13.8%.
2. Does Obamacare explain the poor jobs mix? From the econ team at First Trust:
Given the volatility in these data series, we would not put too much emphasis on one month’s worth of data. However, it’s consistent with the large payroll gains for retail as well as restaurants & bars and probably shows some firms who would be hiring full-timers are hiring part-timers to avoid Obamacare.
3. Part-time America: There are 28 million part-time workers in the US today vs. 25 million before the Great Recession. There are 116 million full-time workers in the US today vs. 122 million before the Great Recession. In other words, 19% of the (smaller) US workforce is part time vs. 17% before the Great Recession
4. Some context: Even at 195,000 jobs a month, the US would not, according to Brookings, return to pre-Great Recession employment levels until 2021. The “jobs gap” remains huge.
5. If the labor force participation rate were back to prerecession levels, the unemployment rate would be 11.1%. And even accounting for America’s aging, the U-3 rate would be roughly 9.1%, according to Goldman Sachs.
----
Link: http://www.aei-ideas.org/2013/07/june-jobs-an-employment-report-only-a-central-banker-could-love/
U.S. Employers Added More Workers in June Than Forecast
Bloomberg.com:
Payrolls rose by 195,000 workers for a second month, the Labor Department reported today in Washington, exceeding the 165,000 gain projected by economists in a Bloomberg survey. The jobless rate stayed at 7.6 percent, close to a four-year low.
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Link: http://www.bloomberg.com/news/2013-07-05/payrolls-in-u-s-increased-195-000-in-june-unemployment-7-6
Payrolls rose by 195,000 workers for a second month, the Labor Department reported today in Washington, exceeding the 165,000 gain projected by economists in a Bloomberg survey. The jobless rate stayed at 7.6 percent, close to a four-year low.
----
Link: http://www.bloomberg.com/news/2013-07-05/payrolls-in-u-s-increased-195-000-in-june-unemployment-7-6
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