Economy

Jobs: The Bigger Picture

flickr/woodleywonderworks
The government’s April jobs report produced some happy headlines and a big stock market rally. The dismal March jobs tally was revised upwards from under 100,000 new jobs to a still feeble 138,000. In April, the economy created 165,000 jobs. The nominal unemployment rate dropped all the way from 7.9 percent to 7.5 percent. But look a little deeper and you’ll appreciate just how crummy these numbers are. The typical new job pays far less than the jobs that have been lost. We are still down a net 2.8 million jobs from the number of people who were employed in 2007 before the recession started. All told, there are 22 million Americans either unemployed or under-employed—looking for full-time work and not finding it. One telling indicator is the very low percentage of people who are in the labor force. Before the recession, in 2007, the employment-to-population ratio was above 63 percent, down slightly from its peak of over 64 percent in 2000. Since the great collapse, the ratio has been...

How Low Can Part-Timers' Hours Go?

AP Images/Adam Richard
flick/ Carol Green S ay you’re an employer with an employee who works 30 hours a week. If you have 50 employees or more come next year, you’ll be required either to provide her with health-care coverage, which the Affordable Care Act will by then mandate for all employees who work at least 30 hours a week, or you’ll have to pay a $2,000 penalty for failing to cover her. Or, you could just cut her weekly hours to 29. That way, you won’t have to pay a dime, in either insurance costs or penalties. This thought, not surprisingly, has crossed the minds of quite a number of employers. Right now, the average number of hours an employee in a retail establishment works each week is 31.4 . And a whole lot of Americans work in retail—just slightly over 15 million, according to the latest employment report , out Friday, from the Bureau of Labor Statistics (BLS). Not all of them work hours that hover just over 30, of course, but the UC Berkeley Labor Center has calculated that 10.6 percent of...

You've Got Sales Tax

flickr/Chris_Hancock
flickr/ Mr. Boger I n 1984, CompuServe launched the first “Electronic Mall,” a Pleistocene-era Amazon with which owners of a TRS-80 personal computer could browse and buy goods over the Internet. Such modern retailers as “The Record Emporium” and “The Book Bazaar” were given prominent virtual storefronts. A full page ad in the May 1984 issue of Online Today boasted, “By the year 2000, the world may catch up with the way CompuServe’s new Electronic Mall lets you shop today.” The world took less time to catch up than that: By 1995, eBay and Amazon had been incorporated; in Amazon’s first two months as an online bookstore, it averaged $20,000 per week in sales. Americans would go on to spend around $700 million online in 1996, and by 1999 sales had grown to $20 billion. Figures released earlier this year by the Commerce Department revealed that Americans spent $225 billion online in 2012—a 400 percent increase in only a decade. That number represents about 5 percent of the $4 trillion in...

A Roaring Jobs Report

Barack Obama/Flickr
Here is the thing to remember about every jobs report from the Bureau of Labor Statistics: You have to wait for the revisions. Remember, the monthly jobs report is a scientific survey of households and employers. That doesn’t mean it’s inaccurate, but for any given survey, there are ways to improve the accuracy and reach a higher degree of precision. Month after month, this is what the BLS does—it tests and adjusts, in order to get the most accurate account of the where the economy stands. With all of that said, this month was a solid one for jobs; April employment grew by 165,000 jobs, a decent number, though not as good as it should be given population growth and the still-sluggish economy. The number of long-term unemployed declined 258,000 to 4.4 million (around 37 percent of all unemployed Americans). Joblessness dropped to a four-year-low of 7.5 percent. But more important than this is the revisions. As it turns out, February was the biggest month for job growth in years—the BLS...

Bad Flight Plan

Flickr/vmarta, Kent Wein
Flickr/vmarta T he decision by Senate Democrats last week to restore funding to the Federal Aviation Administration (FAA)—money that was cut when the “sequester” took effect in March and led to flight delays that angered a wide swath of Americans—was a clear loss for Democrats in the ongoing budget wars. Rather than cave and reverse the cuts, Democrats should have used the public discontent as leverage to pressure Republicans. They squandered this opportunity. Unlike cuts from sequestration that affect the poor or will be felt down the line—cuts to Head Start or infrastructure, for example—the FAA cuts were both highly visible and affected wealthier and middle-class voters whom members of Congress tend to listen to. Sequestration was designed to slash programs important to both Democrats (broadly speaking, social programs) and Republicans (mainly, defense spending). By cutting bluntly, sequestration would force cuts to high and low-priority programs even if everyone agreed on which...

A Crossroads for Hillary

Titanic Belfast / Flickr
Titanic Belfast / Flickr H illary Clinton is making all the early moves of someone preparing to run for president, though she has given herself plenty of time to rest, rejuvenate, and review a final decision. Now, however, President Obama’s ill-conceived plan to cut Social Security benefits via a “technical” change in the inflation index will force Clinton to make an awkward choice. Most Democrats in both houses of Congress are not happy with this backdoor cut in Social Security. It is both fiscally unnecessary and spectacularly bad politics. Republican leaders are already bashing Obama for selling out retirees. After Obama released his budget, Republican Congressional Committee Chairman Greg Walden of Oregon went on CNN to accuse the president of "a shocking attack on seniors." Resolutely defending Social Security in the face of periodic Republican forays at cutting or privatizing America’s most popular program has always been one of the Democrats’ great appeals. Obama gave that away...

The Sequester v. The Sixth Amendment

Flickr/David Baron/Mark Fischer
Fifty years ago, the Supreme Court famously declared in Gideon v. Wainwright that the government was required to supply counsel to defendants who cannot afford it. The noble ideals of the Bill of Rights, Justice Hugo Black wrote in that case, "cannot be realized if the poor man charged with crime has to face his accusers without a lawyer to assist him." Unfortunately, as journalist Karen Houppert demonstrates in exhaustive detail in her terrific new book, Chasing Gideon , in practice the requirements of Gideon have often been flouted by governments. This week provides two excellent examples of the way in which the dysfunctions of American government have translated into inadequate legal representation for those accused of crimes. First of all, the sequester that resulted from Republican hostage-taking in 2011 is undermining both public safety and the rights of defendants. Because of the sequester, people working in the federal public defender's office in Boston will face furloughs—...

Public Debt and Economic Growth

Flickr/gentlepurespace
In the election of 1952 my father voted for Dwight Eisenhower. When I asked him why he explained that “FDR’s debt” was still burdening the economy—and that I and my children and my grandchildren would be paying it down for as long as we lived. I was only six years old and had no idea what a “debt” was, let alone FDR’s. But I had nightmares about it for weeks. Yet as the years went by my father stopped talking about “FDR’s debt,” and since I was old enough to know something about economics I never worried about it. My children have never once mentioned FDR’s debt. My four-year-old grandchild hasn’t uttered a single word about it. By the end of World War II, the national debt was 120 percent of the entire economy. But by the mid-1950s, it was half that. Why did it shrink? Not because the nation stopped spending. We had a Korean War, a Cold War, we rebuilt Germany and Japan, sent our GI’s to college and helped them buy homes, expanded education at all levels, and began constructing the...

The Shame of Pension-Advance Loans

http://rapidpensionadvances.com/
The financial services industry is second to none in dreaming up ways to rip off Americans. Show me a a financial product—credit cards, mortgages, checking accounts, 401(k)s, annuities—and I'll show you a stack of consumer complaints documenting how banks and other firms have sought to bleed dry the American public. The latest alarming example are "pension-advance loans." Never heard of these nifty loans? Well, I hadn't either until The New York Times ran a shocking expose Saturday about firms that offer workers and retirees a chance to "convert tomorrow’s pension checks into today’s hard cash"—but with annual interest rates that have "ranged from 27 percent to 106 percent—information not disclosed in the ads or in the contracts themselves." The story focused on loans against defined benefit pensions, the kind you get if you serve in the military or civil service. Unlike 401(k)s, which are a failed retirement vehicle in part because so many people borrow against their nest eggs, DB...

The STEM-Shortage Myth

Flickr/jasonandrebecca09
Flickr/jasonandrebecca09 The Economic Policy Institute published a report yesterday on the supposed shortage of professionals in science, technology, engineering, and math (STEM). You've probably heard of the crisis by now. America is not producing enough STEM degrees. This will be the death of innovation and global competitiveness. We must reorient higher education to convert more liberal arts students into STEM students. And so on. The problem with this alleged crisis is that it is not real. As the EPI report lays bare, the common wisdom about our STEM problem is mistaken: We are not facing a shortage of STEM-qualified workers. In fact, we appear to have a considerable STEM surplus. Only half of students graduating with a STEM degree are able to find STEM jobs. Beyond that, if there was an actual shortage of STEM workers, basic supply and demand would predict that the wages of STEM workers would be on the rise. Instead, wages in STEM fields have not budged in over a decade. Stagnant...

Why Kids Still Can't Have It All

AP Photo/The Hutchinson News, Travis Morisse
AP Photo/The Star, Bill Wilson W hen Anne Marie Slaughter launched the latest battle in the Mommy Wars with her Atlantic cover story “ Why Women Still Can’t Have It All ,” which inspired a barrage of features about retro wives—young, high-achieving professionals leaving their careers to take care of children at home—the subtext was that work often isn’t worth it for women. Not only do women face real barriers to advancement, but their paychecks barely cover the cost of child care. Quality child care costs more in most states than tuition at public universities. In 22 states and D.C., the average cost of infant care in a center was more than the median rent in 2012. For low-income families, the costs are extreme, and the quality of providers is effectively unregulated. In a recent cover story for The New Republic , Jonathan Cohn wrote about an extreme case in which the proprietor of a daycare center in Houston left children at home while food was cooking on the stove; four children...

How Unions Are Getting Their Groove Back

flickr/ Chris Dilts
Yesterday—April 24th — was a red-letter day in the annals of worker mobilization in post-collective-bargaining America. In Chicago, hundreds of fast-food and retail employees who work in the Loop and along the Magnificent Mile called a one-day strike and demonstrated for a raise to $15-an-hour and the right to form a union. At more than 150 Wal-Mart stores across the nation, workers and community activists called on the chain to regularize employees’ work schedules. And under pressure from an AFL-CIO-backed campaign of working-class voters who primarily aren’t union members, the county supervisors of New Mexico’s Bernalillo County voted to raise the local minimum wage. The Chicago demonstration, which began in the dawn’s early light of 5:30 a.m., included workers at McDonald’s, Dunkin’ Donuts, and Subway, as well as Macy’s, Sears, and Victoria’s Secret, all of whom make the state minimum wage ($8.25) or just slightly more. Roughly one-third of the jobs in Chicago are low-wage, and...

Banking Regulation: Closed for Business

Flickr/Vittorio Ferrari
T hese are heady times for the bipartisan group of reformers seeking a safer and more manageable U.S. financial system. The leaders of this movement, Senators Sherrod Brown and David Vitter, introduced legislation yesterday to force the biggest banks to foot the bill for their own mistakes by imposing higher capital requirements. The bill would increase equity (either retained earnings or stock) in the financial system by $1.1 trillion and incentivize mega-banks to break themselves up, according to a Goldman Sachs report . Brown and Vitter previewed the legislation earlier this week at the National Press Club, insisting that the new regulations on risky mega-banks would diminish threats to the U.S. economy and prevent taxpayers from having to bail out banks in the future . Vitter also said the legislation would “level the playing field and take away a government policy subsidy, if you will, that exists in the market now favoring size.” With momentum, broadening support, and tangible...

As Wal-Mart Swallows China's Economy, Workers Fight Back

Strikes continue to erupt in Asia.

Imaginechina via AP Images
Imaginechina via AP Images O n any given day, go to the Shenzhen Wal-Mart in the city's Yuanling neighborhood, and you may find a stocky man in his early fifties in front of its doors, draped in a banner that reads, in Chinese characters, “Support the just demands of workers.” Ask him why he's there, and he will tell you that he used to work at the Wal-Mart, that he was unjustly fired for organizing other workers and protesting deteriorating work conditions, and that he's fighting to get his job back. “A lot of people said I should just leave. But my skin is really thick, and I didn’t want to leave the company. I still had faith that things could and would change,” Wang said. “I asked myself, how should I protect my rights? How can this unfair situation be made right?” The answer he found, he said, was organizing along with his fellow workers and now, continuing to stage his weekly protests. While he usually protests alone, Wang Shishu's is one of a growing number of Wal-Mart workers...

The Fed’s Foreclosure-Relief Fail

AP Photo/Paul Sakuma, File
AP Photo/Don Ryan L ike far too many Americans, Debbie Marler of South Point, Ohio has her own foreclosure horror story. It involves one house, seven fraudulent mortgage assignments, three foreclosures, as many states, and five years. It ruined her career prospects, threatened her retirement security, and turned her life into what she calls “a living nightmare.” This week, Debbie walked to her mailbox and found what the federal government considers appropriate compensation for this odyssey of suffering at the hands of JPMorgan Chase, the nation’s largest bank. A check for $800. “I was speechless, just a complete shock,” Debbie said. “That doesn’t even pay for the damn U-Haul from when I moved out of the house in the first place.” The money is a product of the Independent Foreclosure Reviews, part of an enforcement action against 14 banks for crimes committed in the foreclosure process. The IFRs, shepherded by the Office of the Comptroller of the Currency (OCC) and the Federal Reserve...

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