Tag: jobs

The Last Time Unemployment Got This Low, the Economy Got Weird

 

The US unemployment rate fell to 3.7 percent in September, the lowest rate since December 1969. That’s even lower than the jobless rate during the 1990s internet and productivity boom. Other bits of good news in the report include decent monthly job growth of 134,000 — probably a depressed number because of Hurricane Florence. With upward revisions to the previous two reports, job gains have averaged 190,000 per month over the past three months. Such gains are consistent with “steady declines in the unemployment rate and solid increases in aggregate household income,” according to Barclays. There was also a 0.3 percent gain in average hourly earnings, a tick higher employment rate, and a 420,000 rise in the household measure of employment easily outpaces a 150,000 rise in the labor force.

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Jim Geraghty of National Review and Greg Corombos of Radio America celebrate the booming economy that hit second quarter growth of 4.1 percent. They also notice the Democrats want to institute five years of jail time for spreading false information about elections dates and locations. And they see that Michael Avenatti was invited to speak to Iowa Democrats and they hope the party won’t take him seriously simply because he hates President Donald Trump.

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Jim Geraghty of National Review and Greg Corombos of Radio America give credit to Senate Majority Leader Mitch McConnell for countering Democratic demands for a million pages of documents on Supreme Court nominee Brett Kavanaugh by suggesting the Senate vote on him may come just days before the election. They also mourn the impending loss of many entry-level jobs at places like McDonald’s due to minimum wage hikes and technological advancements. And they roll their eyes at the NFL’s inability to enforce a policy on kneeling during the anthem just days after the Miami Dolphins threatened to suspend players for not standing.

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Jim Geraghty of National Review and Greg Corombos of Radio America appreciate the June jobs report that shows more people entering the work force, a slight uptick in wages, and 213,000 new jobs. They also bid a bitter farewell to EPA Director Scott Pruitt’s excellent conservative policies but happily watch his self-aggrandizing attitude exit the agency. And they believe President Trump has a legitimate concern about China’s trade policies, but they are unsure that the solution lies in tariffs and a trade war.

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It’s Great Disability Rolls Are Finally Shrinking, But the System Still Needs Pro-Work Reform

 

Have Americans gotten way healthier over the past several years? Seems dubious. But the US economy sure has strengthened. And America’s hot job market seems to be finally draining a reservoir of hidden slack: disability rolls. The New York Times notes the number of Americans receiving Social Security disability benefits has declined to 8.63 million from a September 2014 peak of 8.96 million.

Now there might be other things going on as well, such as the big expansion of Medicaid and the Social Security Administration tightening the approval process for benefits. But as interesting as all these numbers are, more compelling is the story of Christian Borrero, told at the end of the Times piece. Born with cerebral palsy, Borrero until 2015 received disability benefits as he worked at a part-time job answering phones. The salary was low enough that he still qualified for benefits.

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$10,000 Is Not Nearly Enough to Compensate for Living in Vermont

 

(I’m posting this from the Josiah Bartlett Center for Public Policy’s weekly email newsletter, which you can get for free each Friday by signing up here: https://www.jbartlett.org/about-us/email-sign-up)

Moonlighting in Vermont

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For First Time Ever, US Has More Job Openings Than Unemployed Workers

 

While the DC press corps worries whether Trump was booed at a White House event and curates elaborate conspiracy theories about Melania, a slightly more important story isn’t getting enough pixels. The economy is doing so well that, for the first time ever, there are now more job openings in the US than unemployed Americans:

With employers struggling to fill openings, the number of available jobs in April rose 1 percent to 6.7 million from 6.6 million in March, the Labor Department said Tuesday. That’s the most since records began in December 2000.

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Jobs Are Booming, and Democrats Are Puzzled

 

Is it overstating things to say the US economy is, well, booming? After all, the May jobs report was pretty impressive, including a) 223,000 new jobs, b) an uptick in average hourly earnings growth to 2.7% from a year ago, c) a downtick in the jobless rate to 3.8% — at 3.755% unrounded, the lowest since 1969 — and d) a two-tenths decline in the U6 underemployment to 7.6% — its lowest level since 2001. JPMorgan economist Michael Feroli titled his Jobs Friday report this way (while alluding to President Trump’s controversial pre-report tweet): “The secret’s out: job growth is booming.” And some economists think a jobless rate with a two-handle is hardly out of the question.

True, overall economic growth is still stuck in Two Percentland. That’s the other, less-encouraging two-handle. But maybe not for much longer. GDP estimates for the second quarter are rising across Wall Street, and this report may boost that momentum. “Nearly all aspects of this report were positive and consistent with solid growth of wage-and-salary income in the second quarter,” notes the IHS Markit econ team. “The details in this report added one-tenth to our forecast of Q2 GDP growth, which now stands at 4.1%.”

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Jim Geraghty of National Review and Greg Corombos of Radio America toast better-than-expected unemployment numbers, the best in 18 years. They also lambaste Virginia Republicans for rolling over and approving the Obamacare Medicaid expansion they claimed to oppose for years. And they dig through more eye-opening posts from Joy Reid’s supposedly hacked blog, including her likening of John McCain to the Virginia Tech shooter, endorsing the removal of the Israeli government to Europe, and likening illegal immigration to slave labor for multinationals.

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The New Battle in Seattle: Don’t Blame Amazon for the City’s Housing Woes

 

Seattle has decided to be a last-minute entrant into the competition for Amazon’s HQ2. But while most cities — such as Boston and Washington — are trying to land the retailing giant’s second headquarters, Seattle is doing its best to make Amazon reconsider the importance of its current home base. The company “will continue to evaluate its long-term plans for Seattle after the City Council passed a bill to tax large businesses to fund homelessness services,” according to the Seattle Times. Recall that when a larger tax was being considered, Amazon had halted planning one new office building and was considering subleasing the office space on another that’s under construction.

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Just How Tight Is the US Job Market?

 

If I were funnier, I would do a classic Johnny Carson call-and-response, “How hot is it” joke on the job market. “How tight is it? It’s so tight….” So tight that it’s at full employment? Well, that’s the debate. Goldman Sachs, for one, points to a host of factors suggesting the job market is beyond full employment. From GS:

This assessment rests less on the sub-4% unemployment rate—there’s nothing special about round numbers—than on the whole range of indicators that now signal a historically tight labor market, which also includes the underemployment rate U6, job openings, quits, skill shortages, and household job market perceptions. These signals refute the still-widespread belief in large amounts of labor market slack hidden in a depressed participation rate. Just to pick one example, it is all but impossible to reconcile that belief with the fact that the net share of US households—including both labor force participants and nonparticipants—who say that jobs are “plentiful” as opposed to “hard to get” now stands at +23pp, a full 10pp above the peak of the prior cycle in 2007.

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Thinking About (Much) Better Pro-Work Ideas Than a Cartoonish Federal Jobs Guarantee

 

The idea of a federal jobs guarantee, perhaps last seen in the enjoyable 1993 film Dave, is the hot-take economic policy on the left at the moment. (Sorry, universal basic income, your 15 minutes appear to be up.)

Now there are many, many problems with a federal jobs guarantee. In a recent blog post, economist Timothy Taylor highlights lots of them, at least regarding the undercooked Bernie Sanders version. There’s a government managerial problem, a jobs-skills mismatch problem, a geographical mismatch problem, a worker displacement problem, a worker discipline and incentive problem, a “what happens to existing anti-poverty programs” problem, and, of course, a budgetary problem. Lots of problems. You really can’t hand-wave these away.

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How Technology Affects Jobs and Wages, in Two Graphics

 

The Asian Development Bank has issued a lengthy report on technology and jobs. And it’s a pretty upbeat one, as described by the Financial Times:

The ADB’s analysis of 12 developing Asian economies between 2005 and 2015 found that rising demand had more than compensated for jobs lost to automation. The adoption of new technologies, such as modern machine tools and computer systems in factories and offices, had stimulated higher productivity and economic growth. That transformation, it estimated, had created 134m new jobs, compared with the 101m jobs lost to technology.

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Make America Safe Again: A Steel of a Deal

 

President Trump knows more about structural steel than any president since the great civil engineer Herbert Hoover. Media of every flavor took the President’s comments, about requiring the use of US steel in petroleum pipeline construction, at face value, as only a jobs program. While “free” trade advocates got the vapors about protectionism and warned of harm to the US economy from artificially high prices, no one bothered digging into the critical assumption.

A year later, President Trump threatened to impose steel tariffs. There was much back-slapping and hand-wringing, all having to do with the price of steel and supposed resulting gains and losses in jobs. In the midst of this noise, Mark Davis, a Texas radio talk show host, took a call from a welder. (Starts at 23:50.)

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The Healing US Job Market and How We All Forgot About the Great Recession

 

The January jobs report suggests the nearly nine-year-old economic expansion remains plenty capable of generating solid job growth: 200,000 last month and an average of 192,000 over the past three months. More interesting, it provided fresh evidence that a tightening labor market is also capable of accelerating wage growth. The 0.3% monthly rise in average hourly earnings, following an upwardly-revised 0.4% in December, pushed the 12-month rate up to 2.9%, the highest reading in nearly eight years.

All good enough for Capitol Economics to declare, “the acceleration in average hourly earnings isn’t an outlier.” And JPMorgan thinks it “now looks like the tightness in labor markets is showing through to a gradual acceleration in wage growth.” Indeed, it seems the Wall Street consensus is that before long, we’ll start seeing month-after-month of 3-handle jobless rates. And hopefully even stronger wage growth.

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Yes, we’re talking about Trump’s immigration comments but no, you don’t have to worry about your kids hearing bad language. Today, Jim Geraghty of National Review and Greg Corombos of Radio America cheer great news in the automotive industry as Fiat Chrysler announces it is investing a billion dollars in Michigan and planning to add 2,500 jobs to build Ram pickup trucks again. This follows earlier news that Toyota and Mazda will team to build a $1.6 billion plant in Alabama and employ up to 4,000 people. They also recoil at President Trump’s attitude towards people in deeply troubled nations, noting that it’s fair to point out there are many horribly corrupt and crime-ridden nations in various parts of the world and re-evaluate immigration policy but deeply wrong to suggest those people have no value. At the same time, many Trump critics suggest that diversity is what makes America great, and Greg and Jim set them straight. And they shake their heads as Nancy Pelosi dismisses congressional immigration negotiators as “five white guys” – including her top deputy among House Democrats – as she called for more diversity in the group.

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Yes, AI Can Create More Jobs Than It Destroys

 
Sophia, a robot integrating the latest technologies and artificial intelligence developed by Hanson Robotics.

The Luddites and technophobes have a point. Machines do displace workers. Always have. From the cotton gin, machine tools, and punch cards to combine harvesters, industrial robots, and business software. And it is this “displacement effect” that leads to scary forecasts about AI and robots leading to mass technological unemployment and underemployment.

But MIT’s Daron Acemoglu and Boston University’s Pascual Restrepo argue in a rich new paper, “Artificial Intelligence, Automation and Work,” that there is far more to the story. For starters, automation may allow tasks to be performed more cheaply, increasing demand for them. The introduction of ATMs was followed by more jobs for tellers because it reduced the costs of banking, and banks opened more branches. Or the productivity effect could be broader: Agricultural mechanization lowered food prices and created more demand for non-agricultural goods and the workers producing them.

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December Jobs Report: Maybe America’s “Great Stagnation” Isn’t So Bad

 

When you’re nearly nine years into an economic expansion, it’s probably asking a lot for job growth to accelerate. Steady-as-she-goes seems a rather more reasonable expectation. And that is pretty much what the December jobs report delivered.

While net new payrolls underperformed Wall Street expectations — 148,000 actual vs. 190,000 forecast — everything else was business usual. No change in the jobless rate, participation rate, employment rate, or wage growth. And even the payroll number wasn’t so bad if you smooth it out. Over the past three months, jobs gains have averaged 204,000. (For the year, the US economy added 2.1 million new jobs, just a tick below 2016.) And if you are looking for a new reason to be optimistic, you can’t do much better than the continuing rise in the prime-age employment rate — despite all those great, distracting video games. What’s more, JPMorgan notes, “The gap between white and African American unemployment rates narrowed to 3.1%, the lowest on record going back to the early 1970s.”

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Then the Gods of the Markets Tumbled

 

Early on in one of my harder math courses at the university, the professor stood up in front of the room, writing on a chalkboard. He proved that all possible problems of the class we were studying had a solution. He was quick to point out though, that no one was guaranteeing that you could find it. I spent the rest of that semester increasingly frantic as I couldn’t find those solutions.

All too often, when presented with a problem, conservatives will wave our hands and say “the market will provide a solution.” The certainty of our inevitable triumph absolves us of any need to bother with anything in the meantime. And make no mistake; I believe in the inevitable triumph of market forces as much as anyone. But we should spend a little time thinking about what all that implies.

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