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This is the “new normal”

12:19 pm in Economy, Jobs, Unemployment by dakine01

Roadside 'Jobs' sign stuck in an old couch

Photo: Doug Geisler / Flickr

The ADP Report on private sector jobs came out today and showed an increase of 158K jobs. David Dayen at the FDL News Desk discusses this report and the Bureau of Labor Statistics report that will be issued tomorrow morning (Friday, November 2):

Plug this all in and what have you got? The consensus forecast calls for an increase in 125,000 jobs. That would be an increase from last month’s increase of 114,000, but below the increases in July and August (August and September will get revised in the report). This generally matches what we’re seeing in the ancillary reports, and shouldn’t be a number that would arouse joy or sadness in either Presidential campaign. However, with the volatility of last month’s topline unemployment rate, derived from the household survey, I wouldn’t be surprised if you saw it increase from the current level of 7.8%.

Either way, it’s a preliminary report, and we probably shouldn’t put as much weight on it as we will, especially with the political implications headed into the election.

While the weekly report of initial unemployment claims was lower than expected (economists surprised!), even this moderately good news is not all that great.

The reality for many millions of us among the long term un and underemployed is the good jobs just are not there. At the end of August, Catherine Rampell of the NY Times had an article headlined “Majority of New Jobs Pay Low Wages, Study Finds.” As I noted in this post, it was very similar to an earlier post from April ’11 I had written that was based on a Washington Post article. Both the Times article and the Post article were based on reports from the National Employment Law Project.

Sunday in the NY Times, Steven Greenhouse had this article on how employers in retail and hospitality industries use (and abuse) part time workers:

But in two leading industries — retailing and hospitality — the number of part-timers who would prefer to work full-time has jumped to 3.1 million, or two-and-a-half times the 2006 level, according to the Bureau of Labor Statistics. In retailing alone, nearly 30 percent of part-timers want full-time jobs, up from 10.6 percent in 2006. The agency found that in the retail and wholesale sector, which includes hundreds of thousands of small stores that rely heavily on full-time workers, about 3 in 10 employees work part-time….snip…

A 2011 survey of 436 employees at retailers in New York City, as diverse as luxury establishments on Fifth Avenue and dollar stores in the Bronx, found that half of the city’s retail workers were part-time and only one in 10 part-time workers had a set schedule week to week. One-fifth said they always or often had to be available for call-in shifts, according to the survey, which was overseen by researchers at City University of New York.


Mr. Flickinger, the retail consultant, said companies benefited from using many part-timers. “It’s almost like sharecropping — if you have a lot of farmers with small plots of land, they work very hard to produce in that limited amount of land,” he said. “Many part-time workers feel a real competition to work hard during their limited hours because they want to impress managers to give them more hours.”

What? Could someone have actually spoken a truth here? The modern day wage slave, complete with sharecropping as the ideal.

While CNN has an article this morning attempting to paint the rosy glasses scenario on how the jobs are not all part time minimum wage, even they have to acknowledge the reality of the lower wage since 24% of the “new” jobs are in hospitality and retail:

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Dispatches From the Economic War Frontlines

10:22 am in Uncategorized by dakine01

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The weekly report of Initial Unemployment Claims is out today (via Reuters):

Initial claims for state unemployment benefits dropped 24,000 to a seasonally adjusted 398,000, the Labor Department said.

Economists polled by Reuters had forecast claims falling to 415,000. The prior week’s figure was revised up to 422,000 from the previously reported 418,000.

I do hope the Beltway Village Idiots Pundits, Politicians, and Courtiers don’t make too much of this news however. The 400K figure does seem to be a magic line for most but my guess/prediction is that after revision (which may or may not be reported), it will wind up back over 400K for the week. The upward revision of the numbers from the week before has seemingly become a staple on the reporting of this metric.

While the DeeCee folks do their Debt Ceiling/Deficit/Austerity Danse Macabre, there have been a few reports in the TradMed to remind the clueless of the realities being faced by millions of people who are not cocooned within the fog of life in the Beltway. Not that these articles penetrate the consciousness of most Villagers, given how they seem to always like to double down on the policy while “improving the messaging,” but we can still hope they might see the light at some point, if only to protect their careers.

First up is this from the NY Times’ Catherine Rampell from Tuesday (July 26), pointing out once again that many employers refuse to hire the unemployed, serving only to make things that much worse for the millions of long term un and underemployed:

A recent review of job vacancy postings on popular sites like, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off.


Legal experts say that the practice probably does not violate discrimination laws because unemployment is not a protected status, like age or race. The Equal Employment Opportunity Commission recently held a hearing, though, on whether discriminating against the jobless might be illegal because it disproportionately hurts older people and blacks.


Government incentives for companies to hire unemployed workers have met with limited success. One such tax incentive from last year was poorly publicized, so most employers did not know about it. Better publicity may not suffice, either. An experiment from the 1980s found that telling companies that the unemployed were eligible for generous wage subsidies actually made employers less likely to hire such workers.

I’m not sure if this blog post from Rampell at the NY Times Economix from Monday (July 25) was intended as a companion to the Tuesday article, but there is some reinforcement of the themes:

One of many reasons blamed for (Western) Europe’s stagnant growth in recent decades has been that so many European adults are not working, and are effectively not employable because they have been out of jobs for so long. The United States, on the other hand, has had a much higher share of its population in gainful employment. In fact, between 1980 and 2000, the percent of adults working was on average about 10 percentage points higher in the United States than in Europe.


It’s not clear whether the gap between employment-population ratios in the United States and Europe will continue to shrink. Certainly it does not help that the United States has been accumulating a huge underclass of long-term unemployed workers. As we’ve noted before, the longer people are out of work, the harder it is to find them a new job.

Which is exactly the experience Europe had seen, and that the United States hadn’t learned from, in decades past.

Amazing! US politicians not learning from all the previous economic problems across the world. Hoocoudanode? Of course, one glaringly large difference between Western Europe and the US is that Western Europe has a far more robust social safety net protecting its citizens.

Tuesday’s Washington Post had this article on polling showing dissatisfaction with President Obama’s handling of the economy. Of course, in a slightly buried lede, the polling shows even more dissatisfaction with Congressional Republicans:

More than a third of Americans now believe that President Obama’s policies are hurting the economy, and confidence in his ability to create jobs is sharply eroding among his base, according to a new Washington Post-ABC News poll.

But Americans’ discontent does not stop there. The survey also found that Americans harbor negative feelings toward congressional Republicans. Roughly as many people blame Republican policies for the poor economy as they do Obama. But 65 percent disapprove of the GOP’s handling of jobs, compared to 52 percent for the president.

Now whatever could the elected officials do that could improve their standing with their nominal constituents? Well, this article from the Washington Post just might offer a small clue:

As Congress debates how to meet the nation’s long-term transportation needs, decaying roads, bridges, railroads and transit systems are costing the United States $129 billion a year, according to a report issued Wednesday by a professional group whose members are responsible for designing and building such infrastructure.

Complex calculations done for the American Society of Civil Engineers indicate that infrastructure deficiencies add $97  billion a year to the cost of operating vehicles and result in travel delays that cost $32 billion.


Thomas J. Donohue, president of the U.S. Chamber of Commerce, said the necessary spending was “not just transportation for transportation’s sake.”

“Without more robust economic growth, the U.S. will not create the 20 million jobs needed in the next decade to replace those lost during the recession and to keep up with a growing workforce,” he said.

Ultimately, Americans would get paid less, the ASCE report says. The economy would lose jobs, and the paychecks of those who are able to find work would be cut by nearly 30 percent.

It is not often that I find myself even remotely close to agreeing with Mr Donohue but in this instance he is correct. I’m sure we would not be remotely close on how to go about fixing things but still, it’s a start. And in reality, it’s not as if this should be coming as a surprise to people. The collapse of the I35 bridge in Minneapolis a few years ago brought the infrastructure issue to the fore but as seems to be the norm these days, even if there is agreement on an issue, the solution(s) seem to defy agreement.

It does seem to me though that an investment in repairing the US infrastructure (bridges, roads, dams, sewers, etc) could go a long way to repairing the US economy. Yes, it would require a $2T – $3T investment by governments at all levels. But this investment would start to be recouped immediately by the taxes paid by the newly hired workers and by the further economic ripple of jobs throughout local economies all over the country. Not to mention the savings of the $129B in not having to cover vehicle repairs and lost time from the decaying infrastructure.

It is such a simple solution isn’t it? So very simple that we can pretty much guarantee that nothing like it will be done since it would benefit millions of people without necessarily bringing immediate partisan benefit to one party or the other.

And because I can:

Cross posted from Just A Small Town Country Boy

More Mixed Jobs Messages

6:27 pm in Economy, Financial Crisis, Jobs, Unemployment by dakine01

In the last few days since the release of the official employment number for January, there have been a variety of jobs related articles I’ve found as I surf through various news sites and the articles have been all over the map in conclusions. Some of the articles have even recognized that things really aren’t getting better for the long term un and under employed while others keep trying to provide more spin at things getting better.

Saturday’s (Feb 4, 2011) NY Times had Floyd Norris attempting to reconcile the weak job creation numbers withe the drop in the official Unemployment Rate. His conclusion shows just how ef’fed up the numbers are:

Over all, from January 1979 through March 2010, the first estimate was off — either higher or lower — from the final figure by a median of 74,000 jobs. If that holds true now, there is a 50 percent chance that the final number for January will be somewhere between a loss of 38,000 and a gain of 110,000. And there is an equal chance that it will be outside that range.

None of that reduces the importance of jobs data, particularly in the months after a recession ends. But it does serve as a reminder that the first attempt at estimating employment is far from authoritative.

Of course, there’s Catherine Rampell in today’s (Tuesday Feb 8) Economix blog from the NY Times showing there are still nearly five applicants for each job:

During the recession, the pain in the job market was initially caused by a surge in layoffs. More recently, layoffs have returned to their recession levels before the recession, and the problem instead has become a reluctance to hire workers (including, of course, the millions laid off during the recession). This can be seen in the disappointing trends in job openings and new hires.

In July 2009, right after the recession officially ended, the ratio of unemployed workers to job openings peaked at 6.3. It has fallen since, to about 4.7 in both November and December of 2010. That’s better, of course, but it’s still historically high and doesn’t provide much hope that the labor market can quickly absorb the nation’s millions of idle workers.

As a companion to the above, the Labor Department reported that in December the number of job openings fell (via Reuters) though the spin is that it is getting better because there weren’t quite as many lay-offs:

U.S. job openings slipped in December, a government report showed on Tuesday, but a decline in layoffs supported views of a gradual labor market recovery.

Job openings, a measure of labor demand, eased 139,000 to a seasonally adjusted 3.1 million, the Labor Department said in its monthly Job Openings and Labor Turnover Survey.

The job openings rate — a gauge of how many jobs were still open at the end of the month — fell to 2.3 percent from 2.4 percent in November. Job openings have risen about 31 percent from their record low in July 2009.

The Boston Globe had an article on Saturday Feb 5 about firms in the Boston area using lay-offs as a means to boost stock prices and make themselves less appealing as take over targets. Once again, one of the most salient points is at the end of the article:

It is difficult to know whether such companies would have cut workers if they weren’t under outside pressure. Even after being sold, companies are often forced to make cuts. Anheuser-Busch, for example, was sold before its executives carried through on the cost cuts, but InBev wound up eliminating 1,400 US workers after the deal.

Outside observers said it is usually impossible to tell whether takeover candidates are making sound business moves or inadvertently sabotaging their future business in a panicked effort to bolster shares and fight off a takeover.

That article combines with this from MSNBC yesterday:

The U.S. manufacturing sector is roaring back after the worst recession in generations. So why aren’t factory jobs coming back as quickly?

One big reason: Business executives like Drew Greenblatt, owner of Baltimore-based Marlin Steel Wire Products, have figured out how to make more widgets with the same number of workers. To do so, he’s had to upgrade the skills — and wages — of his employees. But his profits are bigger than ever.

This leads us to President Obama’s speech to the Chamber of Commerce yesterday, February 7 (via the NY Times The Caucus):

President Obama urged American businesses on Monday to “get in the game” by letting loose trillions of dollars being held in reserves, saying that they can help create a “virtuous cycle” of more sales, higher demand and greater profits that will put people back to work and turn around the sluggish economy.

“If there is a reason you don’t believe that this is the time to get off the sidelines — to hire and invest — I want to know about it. I want to fix it,” Mr. Obama said in a speech to business leaders at the U.S. Chamber of Commerce.

Noble sentiments to be sure. Yet not helped at all when the President of the Richmond, VA Federal Reserve Bank proclaims (via Reuters) that things are “getting better” so the Fed should abandon efforts at stimulus:

The Federal Reserve should seriously consider pulling back on its $600 billion stimulus program given stronger growth and a brighter jobs picture, Richmond Fed President Jeffrey Lacker said on Tuesday.

Despite a report last week showing only 36,000 jobs were created in January, Lacker said other measures were pointing to a firmer economic recovery and better employment prospects.

Fortunately, the BenBernank, while not doing much, at least seems to recognize that doing as Mr Lacker recommends might not be a good idea:

Fed Chairman Ben Bernanke made clear in remarks last week he does not consider progress on jobs sufficient to declare victory and begin withdrawing monetary support.

With all the millions of people un and under employed, it is rather astounding that there are states willing to forego Federal Unemployment aid for extended benefits (via Yahoo)

Despite record levels of long-term unemployment, some states are choosing to walk away from a total of almost $1 billion in federal jobless benefits, according to a new report (pdf).

The 2009 American Reinvestment and Recovery Act, better known as the stimulus law, extends unemployment benefits to the fast-growing number of Americans who have been without work for six months or more. In addition to helping the jobless, the federal funds offer a much-needed economic stimulus for states.

So apparently these states must believe that a miracle will occur.

For what it’s worth, MSNBC’s Alison Linn had a report today on the affects for long term unemployed when they do finally find employment:

The recession and its aftermath have been brutal for jobseekers, not just because there are so many of them but also because it is taking them so long — an average of nearly nine months — to find new work.

As the economy starts slowly to add jobs again, many of those who are finding a job again say the psychological relief of returning to work is as important as the paycheck.

All that any of the long term un and under employed (including myself) have asked is for a modicum of support while searching for a position in our fields and the opportunity to be a productive member of the work force. Is that so much to ask?

And because I can:

Cross posted from Just A Small Town Country Boy