Re: [Futurework] FW: Labor market in full retreat

[D and N]

Something picked up from from the Progressive Review spells out simple 
solutions that keep getting obscured by those looking for unique 
answers, those too often generated by highly overpaid banksters and 
economists. The root cause of overspending is greed, pursued by those 
who consider any means including war to ensure its manifestations. When 
jobs are scarce, we should only look to how taxes are being spent, not 
continue to beat our brains trying to come up with the ideal compromise. 
It's government's problem for compromising with corporate interests in 
the first place. Then we, who originally funded the follies due to poor 
representation, further fragment already truncated compromises, and get 
left with less and less.

Natalia
*
The Debt Ceiling Play:*
*Jim Walis, Sojourners -*  The United States has the best credit rating 
in the world, for now. For years the safest investment in the world has 
been buying U.S. debt. But there is a legal limit on how much we can 
borrow, and we are about to max out. What's driving our deficits? If you 
look at the drivers of the budget deficit from 2009 to 2019, you'll see 
that there is a sharp increase from recovery measures for a few years. 
But by 2019, more than half of the deficit will be from the wars in 
Afghanistan and Iraq, and the tax cuts enacted under President Bush and 
extended under President Obama.

What had been a routine procedure is now center stage. Unless you were 
paying very close attention, you probably didn't hear about the seven 
times the debt ceiling was raised under President Bush and 17 times 
under President Reagan. But don't think using the debt ceiling as a 
partisan tool is anything new. These votes often fall along partisan 
lines, and President [then Senator] Obama voted against raising the debt 
ceiling under President Bush.

Yes, a default would be disastrous. None of the main characters is even 
considering it. It could set off a row of economic dominoes that could 
result in more than 600,000 jobs lost, a lot more debt than we have 
right now, and at a significantly higher interest rate. President Reagan 
put it like this: "Congress consistently brings the government to the 
edge of default before facing its responsibility. This brinksmanship 
threatens the holders of government bonds and those who rely on Social 
Security and veterans benefits. Interest rates would skyrocket, 
instability would occur in financial markets, and the Federal deficit 
would soar." Not raising the federal debt limit isn't like cutting up 
your credit card. It's like cutting up your credit card bill. We have a 
long-term spending problem, but that doesn't mean we can stick our heads 
in the sand. And the most serious economists, from both parties, say 
that spending cuts alone cannot solve our deficit problem. Part of the 
solution has to be increasing revenues. Tax revenues are the lowest they 
have been in recent history. In 1980, federal revenue was around 19 
percent of the GDP; in 1990 it was a little over 18 percent; in 2000 it 
was over 20 percent; and in 2010 it was just over 14 percent of GDP. 
Taxes, especially on the wealthy, are relatively low (historically and 
internationally) and need to be raised.

This play would be amusing to watch if it was just on a stage. Instead, 
these decisions will have real-world consequences. Should we end farm 
subsidy checks to millionaires in Manhattan, or baby formula rebates for 
new mothers? Should we end mortgage deductions for second homes, or 
house the homeless? Should we end a military tank program that no longer 
has use, or stop providing malaria bed nets for children?

The actors who are center-stage right now would have the audience 
believe that it is all much more complicated than that. The directors 
behind the scenes would like us to stay out of the way of the plot and 
leave it to them. But as a Christian, I can't sit quietly by while the 
audience of the poor watch silently and suffer.

http://blog.sojo.net/2011/07/07/the-debt-ceiling-play-my-cliffsnotes-version/

and as well from the Progressive Review:
*
War and Debt*
*by Sam Smith

*The fantasy parading as serious negotiations over the nation's debt 
collapses on the recognition of one fact: our absurdly expensive wars 
are not even on the table.

A Brown University study finds that the figure just for our post 9/11 
misbegotten escapades approaches $4 trillion. That's about 25% of our 
whole national debt accrued in just one decade of badly distorted 
policies. Add in the Bush tax cuts and you have an explanation for 
one-third of our total fiscal deficiency.

Given the hawkish inclinations of our media, with even MSNBC owned by 
GE, this is not something you're about to hear much about, so instead 
it'll have to be paid for out of things like food stamps and Social 
Security.

Further, enabling the denial is a myth that wars are good for the 
economy. This is only true, however, if you engage in one or two factor 
analysis.

David Henderson looked at World War II from an economic -- not moral - 
perspective and made some important points:

*[][]* Imagine that somehow the United States had avoided entering World 
War II. . . Millions of cars would have been produced; people would have 
been able to travel much more widely; and there would have been no 
rationing of meat, tires, nylons, eggs, butter, and sugar. In short, by 
the standard measures of prosperity, Americans would have been much more 
prosperous. . .

Much of the capital and labor would have been producing cars and trucks 
for the domestic economy. In fact, the assembly lines in Detroit, which 
had churned out 3.6 million cars in 1941, were retooled to produce the 
vehicles of war. By 1942, auto production was down to under 1 million. 
For the years 1943 to 1945, auto production was so low that Wikipedia 
does not even report it. During the period from late 1942 to the 1945, 
in other words, almost the whole of U.S. participation in the war, 
production of civilian cars was essentially shut down.. .

Consider fuel. Because the government wanted to buy fuel at an 
artificially low price, it imposed price controls on gasoline and put 
itself first in line. Then it issued ration cards to Americans, 
dramatically reducing the amount that normal Americans could buy at the 
controlled prices. . . Even railroad seats were rationed, writes 
Brinkley, with priority given to military personnel. *[][]

*There's another cost that hardly ever gets discussed: war typically has 
little or no spin off benefit. A good economy creates new economies. For 
example, if you build a rail line to a town that hasn't had one, you not 
only have the benefit of the public works project but all the good that 
line does for the town's economy and the economic opportunities it opens 
up for its residents.

But if the same amount of money is spent in Afghanistan on roads, tanks 
and Humvees the spin off benefit will be essentially non-existent. War 
creates economies with a greatly reduced lifespan and greatly reduced 
benefits.

Another way to look at this is to consider what happens after wars are over.

Roughly two thirds of all deficit eduction in the past century occurred 
following World War I and World War II.
Jermie D. Cullip described what happened after World War II:

*[][] *From 1950 to 1959, the total number of females employed increased 
by 18%. The standard of living during the fifties also steadily rose. 
Most people expected to own a car and a house, and believed that life 
for their children would be even better. . . The number of college 
students doubled. Getting a college education was no longer for the rich 
or elite
Over the decade the housing supply increased 27 percent . . . Growth in 
the economy also led to increasing popularity of other financial 
intermediaries. . .

Over the decade, GNP per capita almost doubled and the public welfare 
reacted accordingly as the cost of living index rose by just 1 percent 
and unemployment dropped to 4.1 percent. *[][]

*Much as World War Ii may have aided Roosevelt close out the Depression, 
it was the end of the war that created the boom.

The other one third of the past century's deficit reduction occurred 
during the Clinton administration, but as Dean Baker perceptively noted 
in 2003:

"The Clinton boom was built on three unsustainable bubbles. One of them, 
the stock bubble, has already burst. The other two bubbles­the dollar 
bubble and the housing bubble­are still with us."

In part, and in no small part, we are paying for Clinton's boom today.

There are lots of moral grounds on which to oppose war, especially those 
as mindless and futile as those Iraq and Afghanistan. But we shouldn't 
lose sight of another fact: wars are a gigantic waste of money, they 
damage the economy, and they undermine its growth. The failure of our 
leaders of both parties to give this more than passing notice is a sign 
of total incompetence or of total indenture to the military machine. In 
either case, they are wrecking the country about which they 
pretentiously claim such patriotism.

n...@prorev.com <mailto:n...@prorev.com>


On 7/10/2011 5:49 AM, Sally Lerner wrote:
________________________________________
From: Portside Labor [labor-modera...@portside.org]
Sent: Friday, July 08, 2011 9:22 PM
To: portsidela...@lists.portside.org
Subject: Labor market in full retreat

Labor market in full retreat

Heidi Shierholz

July 8, 2011

http://www.epi.org/publications/entry/7272/

Economic Policy Institute


This morning's release of the June 2011 Employment
Situation report by the Bureau of Labor Statistics
showed a labor market in retreat.  Virtually every
single measure was weak:  only 18,000 payroll jobs were
added, nominal wages fell, unemployment was up in almost
all age groups, more than 250,000 workers dropped out of
the labor force altogether, and the public sector
continued to bleed jobs.  Furthermore, a downward
revision to last month's data means that this is the
second month in a row with job growth at 25,000 or less.
This is a remarkable, across-the-board backslide.

Of particular concern is that measures we look to for
signs of future growth - average hours and temporary
help employment - both declined.  Average hours declined
by one-tenth of an hour to 34.3, and temporary help lost
12,000 jobs, its third straight month of declines.
Somewhat ironically, this report marks the two-year
anniversary of the "official" end of the Great Recession
(June 2009) and it is the weakest report since the
recovery began.  The unemployment rate increased to 9.2%
in June 2011, and has been at 8.8% or above for the
entire recovery thus far.   By comparison, the highest
the unemployment rate ever reached in the two recessions
prior to the Great Recession was 7.8% (for one month,
June 1992).

One of the most useful measures in capturing the broad
nature of the recovery so far is the
employment-to-population ratio, which is simply the
share of the working-age population that has a job. This
measure declined in June to 58.2%, matching its lowest
point of the downturn so far.  As the accompanying chart
shows, from the start of the recession in December 2007,
through the 18 months of the recession itself, passed
the official end of the recession in the summer of 2009
and through the end of 2009, the labor market continued
to deteriorate significantly.   At the end of 2009, the
labor market stopped its decline, but since then it has
simply held steady.  (The recent EPI papers Ten Facts
About the Recovery and Historically Deep Job Loss, but
not an Unusual Recovery go into further depth in
assessing the recovery so far.)

Long-term unemployment still near record high

The share of unemployed workers who have been unemployed
for more than six months  was one thing that improved in
June, from 45.1% to 44.4%.  However, that improvement
was due entirely to a large influx of newer unemployed
workers, not a decline in the long-term unemployed.  The
number of workers who have been unemployed for more than
six months increased by 89,000 to 6.3 million.

Earnings and Industry breakdowns

With persistent high unemployment, wage growth is
extremely low.  Average hourly wages were relatively
flat in June (down by 1 cent), and have grown at a 1.8%
annualized rate over the last three months and 1.9% over
the last year, far below the growth rate in the period
before the recession started.   With the decline in
average hours and the lack of hourly wage growth, weekly
earnings dropped by an annualized rate of 3.9% in June.

No sectors showed robust growth.  The public sector
again displayed the ongoing drag of state and local
budget problems, with state government employment losing
7,000 jobs and local government employment dropping by
18,000.  Since the end of the recession two years ago,
the public sector has shed nearly half a million jobs,
while the private sector has added one million jobs.  In
other words, nearly 50% of the private sector jobs gains
in this recovery have been canceled out by job losses in
the public sector.

The private sector added 57,000 jobs in June. Of these
gains, 53,000 were in private service-providing
industries and 4,000 were in goods-producing industries.
Manufacturing gained just 6,000 jobs, while construction
dropped 9,000 in June.  Temporary help services jobs
dropped by 12,000, the third straight month of declines,
not a promising sign for future hiring.  Leisure and
hospitality was one bright spot, adding 34,000, though
some of that was likely positive rebound from an
uncharacteristic drop in May.  Employment in retail
trade increased by just 5,000 in June, and some of that
also may have been positive rebound after a surprising
drop of 4,000 in May.  Financial services shed 15,000
jobs after adding 7,000 on average in the prior three
months.  Health care added 14,000 jobs, a drop from the
27,000 jobs it added, on average, in the prior three
months.

The labor force and unemployment

The labor force participation rate declined to 64.1% in
June, a new low for the downturn, as 272,000 workers
dropped out of the labor force.  The labor force is 1.3
million workers smaller than it was at the end of the
recession, although the working-age population has
continued to grow in that time.  Consequently, the
proportion of the population that is in the labor force
is now 1.6 percentage points below where it was when the
recession ended in June 2009. If the labor force
participation rate had held steady over the last two
years, there would be roughly 3.9 million more workers
in the labor force right now.  Instead, they are on the
sidelines. If these workers were in the labor force and
were counted among the unemployed, the unemployment rate
would be 11.4% right now instead of 9.2%.

Underemployment

The underemployment rate (i.e., the U-6 measure of labor
underutilization) is a more comprehensive measure of
labor market slack than the unemployment rate because it
includes not just the officially unemployed but also
jobless workers who have given up looking for work and
people who want full-time jobs but have had to settle
for part-time work. This measure increased in June from
15.8% to 16.2%, due in large part to a nearly
half-a-million increase in the number of "marginally
attached" workers (workers who want a job, are available
to work, but have stopped actively seeking work). In
June there were a total of 25.3 million workers who were
either unemployed or underemployed.

Demographic breakdowns

All major groups of workers have experienced substantial
increases in unemployment over the Great Recession and
its aftermath. However, some segments have gotten hit
particularly hard: young workers, workers with lower
levels of schooling, racial and ethnic minorities, men,
and workers with disabilities.

* In June, unemployment was 17.3% among workers age
16-24, 8.2% among workers age 25-54, and 7% among
workers age 55+ (up 5.6, 4.1, and 3.8 percentage points,
respectively, since the start of the recession in
December 2007).

* Among workers younger than age 25 who are not enrolled
in school, unemployment over the last year averaged
21.5% for those with a high school degree, and 9.6% for
those with a college degree (reflecting increases of 9.5
and 4.2 percentage points, respectively, since 2007).

* Among workers age 25 or older, unemployment in June
was 10% for those with a high school education and 4.4%
for those with a college degree (up 5.3 and 2.3
percentage points, respectively, since the start of the
recession).

* Unemployment in June was 16.2% for African American
workers, 11.6% for Hispanic workers, and 8.1% for
non-Hispanic white workers (up 7.2, 5.3, and 3.7
percentage points, respectively, since the start of the
recession). * Unemployment was 9.7% for men, compared
with 8.6% for women (up 4.6 and 3.7 percentage points,
respectively, since the start of the recession).

* Workers with a disability had an unemployment rate of
16.9% in June, compared with 9.0% for workers without a
disability (up 7.6 and 3.4 percentage points,
respectively, since June 2008). (Data on labor market
outcomes by disability status are not seasonally
adjusted and are only available back to June 2008.)

Conclusion

The labor market is currently 7 million payroll jobs
below where it was at the official start of the
recession three and a half years ago, and this number
hugely understates the size of the gap in the labor
market by failing to take into account the fact that
simply keeping up with the growth in the working-age
population would have required the addition of 4.1
million jobs since the recession started in December
2007. This means the labor market is now 11.1 million
jobs below the level needed to restore the prerecession
unemployment rate (5.0% in December 2007, the official
start of the recession).   It has been three and a half
years since the start of the recession in December 2007.
To get back to the pre-recession unemployment rate by
December 2014, another three and a half years from now,
we would need to add more than 350,000 jobs every single
month between now and then.   We added only 43,000 jobs
in the last two months combined.

Given this situation, it must be our top priority to do
everything we can to stimulate demand and generate jobs,
including providing fiscal relief to states; expanding
the safety net (which, by getting money into the hands
of people who will spend it, stimulates demand and
generates jobs); approving additional spending on
infrastructure; implementing direct job creation
programs in particularly hard-hit communities;
supporting work-sharing to avoid layoffs; having the
Federal Reserve do more quantitative easing and/or
target a somewhat higher inflation rate (e.g., 3-4%) to
both reduce real interest rates and erode debt; and
lowering the price of the dollar to boost net exports.
The president and Congressional leaders need to stop
talking about deficit reduction and start talking about
job creation.

--Kathryn Edwards, Nicholas Finio, and Hilary Wething
provided research assistance.

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