Tag: Labor Markets

Scott Walker Talks Turkey on Labor Market Reform

 

shutterstock_280248305One of the central questions of the current Republican presidential campaign is when potential candidates will talk about important issues of political economy. That talk has thus far been in short supply because of the intellectual oxygen that is sucked out of the room every time Donald Trump walks into it. The recent remarks by Wisconsin Governor Scott Walker in union-dominated Las Vegas, however, have begun to change that. They represent his effort to breathe some life into his faltering campaign by harking back to his successful effort to take on public unions in Wisconsin.

High-stakes gambles like this usually lose. Indeed, to everyone’s surprise, Walker seems to have become a long-shot at this point. Nonetheless, even if his latest proposals don’t revive his candidacy, other Republicans should take up this cause. The union movement is powerful and united, but it is also vulnerable to political attack. The forces that led to the adoption of right-to-work laws in Wisconsin, Indiana, and Michigan are good evidence that many voters, including union members, realize that powerful unions are as bad for working people as they are for employers in the long run

Walker is not a theoretical type, so his speech does not offer the intellectual justifications for curbing the union power that has pervaded American life since the passage of the National Labor Relations Act of 1935. The major problem with unions is that they are monopolies. Employment markets need to be competitive, with ease of entry and exit by both firms and individuals. If you keep tabs on employer efforts to monopolize through the antitrust laws and otherwise leave the process free to function, the interplay of market forces will give both workers and employers the opportunity to work together to maximize their joint welfare by figuring ways to expand the pie and then divide the proceeds.

Conservatives Are too Quick to Dismiss the Rise of the Robots

 

shutterstock_177607106-e1437573570674Much like the suits at  Cyberdyne Systems, James Sherk and Lindsey Burke of Heritage do not fear the rise of the robots. From their new paper “Automation and Technology Increase Living Standards”:

Automation reduces both labor costs and prices. Lower prices leave customers with more money to spend elsewhere, increasing the demand for labor elsewhere in the economy. Automation changes where and how people work, but it has not historically reduced the overall need for human employees. Little empirical evidence suggests this time is different. … Businesses do not appear to be automating human tasks at a faster rate than before. If they were, this would increase measured labor productivity growth. This has not happened.

And their chart to partially support the above point:

The Libertarian Podcast: Should We Worry About Income Inequality?

 

This week on The Libertarian podcast, I’m leading Richard Epstein through a discussion of income inequality. Is it the disaster that liberals are making it out to be? What do progressive proposals to address the situation get wrong? What are some free market approaches that could help the poor? And are conservatives destined to lose this fight because of the Left’s appeal to emotion? All that below or on your mobile device if you subscribe to The Libertarian via iTunes or your favorite podcast service.

The End of the Obama (Teeny,Tiny) Boom(let): Is That All There Is?

 

040315jobs3The streak is over. After twelve consecutive months of 200,000-plus jobs gains — the longest run since 1994 — the US economy added just 126,000 jobs in March, according to the Labor Department. That’s about half what Wall Street was looking for. Even worse, jobs gains for January and February were revised lower by a combined 69,000. So far this year, monthly jobs gains have averaged just 197,000 vs. 324,000 for the final three months of last year and 260,000 for all of 2014. “March US employment lays an egg” is how Barclays bank put it.

Sure, the unemployment rate remained unchanged at 5.5%, while the broader U-6 unemployment/underemployment measure fell to 10.9%, from 11.0%. Then again, you can thank a 95,000 drop in the labor force for that. Also, no progress on the employment rate, which stayed steady, or the labor force participation rate, which dipped a bit. And same-old, same-old on wages. Although average hourly earnings of private-sector workers rose 0.3% in March from February, to $24.86, growth over the past year is still just a meager 2.1%. Average hourly earnings for production and nonsupervisory workers were up 0.2% and 1.8% over the past year. Meanwhile, look for first-quarter GDP growth beginning with a “1” or a “0.”

If you are a believer in secular stagnation, 2015 has been a year of affirmation so far. Over at Politico, ace reporter Ben White explores whether an economic downshift could “seriously complicate matters for Obama’s would-be successor, Hillary Clinton, who could wind up squaring off against a GOP opponent promising — fairly or not —an end to the desultory growth rates of the Obama years.” And Democrats surely don’t like headlines like this one from Yahoo News: “Except for rich, Americans’ incomes fell last year.” As I see it, 2016 will revolve around voters answering “Will you be better off eight years from now?” rather than “Are you better off than eight years ago?”

Robopocalypse, Not Yet?

 

shutterstock_187027727You can believe there’s a Lieutenant Commander Data in our future without also believing he’ll be visiting soon. Economist Robin Hanson agrees with the former speculation, not so much the latter. Hanson thinks “super-robots are likely to arrive eventually” and will  “eventually get good enough to take pretty much all jobs.”

Eventually, eventually. But what about right now or pretty soon? What about IBM’s Jeopardy champ WatsonBaxter the flexibly programmable robot, and the Google driverless car? And what about that scary Oxford paper that predicts 47% of US jobs are just a decade or two from being automated away?

Well, there is evidence that automation is already having a big impact on workers, particularly those in middle-skill jobs composed of “routine, codifiable tasks,” according to economist David Autor. And this may be contributing to the “jobless” recoveries of the past three recessions. What’s more, you can thank automation for this simple chart looking at manufacturing employment and output:

Employment Paralysis in the Obama Economy — Doug Kimball

 

As many of you know, I’m in the midst of a job search. It became clear early on that I needed to temper my expectations; which is to say consider taking a few giant steps backwards in order to get a paycheck.

The first headhunter I met with tried to sell me on a “retained search.” That’s a euphemism for paying them a fee up front to represent me. I politely told them, no, but I wanted to ask them if they saw “SUCKER” tattooed on my forehead. This is where the job market is. Poor unemployed dinosaurs like me are rubes to be deprived of their IRA savings.