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This past week, President Obama was in Pittsburgh to tout a government/industry/academia initiative for technology. CNN had this to say:

President Barack Obama — whose poll numbers have dipped in recent weeks amid a stubbornly sluggish economic recovery — touted the hard-hit manufacturing sector Friday, saying the country’s best production days may well lie ahead.

“We are inventors, we are makers, and we are doers. If we want a robust growing economy, we need a robust manufacturing sector,” Obama told a crowd at Carnegie Mellon University, the school founded by steel industrialist Andrew Carnegie nearly 100 years ago.

The NY Times:

President Obama visited a university research center in Pittsburgh on Friday to announce a new partnership between the government, industries and leading universities to speed the movement of technological advances to commercial users. The trip was the latest of his increasingly frequent travels to battleground states to showcase administration efforts to create manufacturing jobs.

After touring the National Robotics Engineering Center at Carnegie Mellon University, a high-technology facility adjacent to a rusted factory symbolic of the area’s industrial past, Mr. Obama said federal agencies would invest more than $500 million to seed the initiative. Of that, $70 million is to go to robotics projects like one he viewed at the center: a boom-box-size robot that inspects sewer pipelines, made by a company started by a Carnegie Mellon professor.

Now, I am all for technological advances. My professional field is Software Quality Assurance and Testing and I have worked in every phase of software development projects. I remember all the “world of the future” type stories that Disney and other film makers would do, showing their visions of how robots would affect the world of the 21st century, making life so much easier for everyone from the assembly line worker to the housewife in her kitchen. Yet for all the potential this initiative may have for the long term future, it does nothing for the “stubbornly sluggish economic recovery.” The US economy needs something along the lines of $500B investment (and that is probably no where near enough) in initiatives that bring jobs now, not five or ten or twenty years from now.

We need good jobs for people so that they don’t need to juggle four jobs just to eke out a living (via the NY Times):

Some of these workers are patching together jobs out of choice. They may find full-time office work unfulfilling and are testing to see whether they can be their own boss. Certainly, the Internet has made working from home and trying out new businesses easier than ever.

But in many cases, necessity is driving the trend. “Young college graduates working multiple jobs is a natural consequence of a bad labor market and having, on average, $20,000 worth of student loans to pay off,” said Carl E. Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers.

…snip…

An entry-level salary often doesn’t go very far these days. According to a study by the Heldrich Center, the median starting salary for those who graduated from four-year degree programs in 2009 and 2010 was $27,000, down from $30,000 for those who graduated in 2006 to 2008, before the recession. (Try living on $27,000 a year — before taxes — in a city like New York, Washington or Chicago.)

Many earn even less than $27,000. Maureen McCarty, 23, who graduated from American University in 2010 with a journalism degree, makes $25,000 before taxes as managing editor of TheNewGay.net, a blog focusing on gay issues, with no benefits like health insurance or a 401(k). The salary doesn’t cover her expenses, so she often baby-sits five nights a week for six families in the Washington area.

See this for my wag on trying to survive on minimum wage – and I was not describing trying to do so in New York City or Dee Cee.

MSNBC had this the other day on how people who are un and underemployed pay their bills:

Transamerica enlisted polling firm Harris Interactive to survey 668 people who had been fully employed but are now unemployed or underemployed, meaning they are working part-time but would like to be working full-time.

Not surprisingly, the most common source of funds were savings and unemployment benefits, with half of those surveyed reporting that they rely on each of those. About one-third also reported relying on credit cards and/or a partners’ income.

When the unemployment runs out, the retirement funds don’t last a whole lot longer either, believe me.

MSNBC also had this article last week on jobs going unfilled due to “lack of qualified applicants:

Despite an unemployment rate of 9.1 percent in May, nearly three million job openings went unfilled — up from roughly 2.1 million when the recession ended in June 2009. To be sure, that’s not nearly enough jobs for the roughly 15 million Americans who are out of work.

But many of those positions remain unfilled because employers can’t find qualified candidates to do the work. From manufacturing to health care, employers report that they can no longer rely on hiring entry level workers and training them on the job.

…snip…

Darlene Miller, CEO of Permac Industries in South Burnsville, Minn., said the days are long gone when a new hire could learn how to operate machinery on the job. Miller said she would add another half-dozen workers to her payroll of 38 workers — if she could find people skilled at operating the high-tech equipment she recently purchased to boost productivity.

…snip…

Miller is a member of President Barack Obama’s Council on Jobs and Competitiveness, which recently announced a goal of turning out an additional 10,000 American engineers annually by leaning on the private sector to boost university funding, add internships and create other incentives.

So apparently while sitting on record amounts of cash, industry is willing to invest in technology but not people. Again from the MSNBC article:

“In the ’60s and ’70s you could go from an entry level job on the loading dock to manufacturing engineer or accountant to maybe a manager in a corner office,” said Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce. “It doesn’t work that way anymore. The qualifications have gone up. The commitment between employer and employee has gone down. And (employers) don’t want to take five years to get you ready. They want you ready to start working — and learning — the day you walk in the door. “

What this article conveniently misses is that a lot of businesses, in their search for a better deal in a new location, create these types of problems for themselves. They want the state and local governments to subsidize the building of new facilities; they want the long term tax breaks and credits to “create new jobs” in the new locale but they are still not willing to bring a corresponding level of investment in the people to develop the necessary skills themselves. Friday’s Hartford Courant had the results of a poll of area businesses:

Fully 25 percent of the firms in the Hartford-Springfield region said they had been approached by other states, according to a report issued Friday by the Connecticut Business and Industry Association. More than 650 firms participated in the 2011 Hartford-Springfield Business survey.

…snip…

Forty-three percent of respondents said the region’s quality-of-life is its greatest asset; 30 percent of firms surveyed said the area’s best asset is its proximity to customers, while 17 percent cited the area’s skilled work force as its primary asset.

If management does not actually value proximity to a skilled labor force, then management should probably not whine about not being able to find workers with appropriate skills.

Now, poaching of businesses has long been a staple of life in the US. Growing up in small town Kentucky, I remember when the factories first came to town from the upper parts of the Midwest. I also recall how easily a factory could shut down and move on if a union were brought in.

I saw this story this week on the governor of the state in which I reside wooing of the Chicago Mercantile Exchange. Of course, if the CME were to move from Chicago to Florida, it would not help the overall economy of the US as it would destroy a corresponding job in Illinois for every job it created in Florida. And how soon would it take for the CME folks to start whining about not being able to find qualified workers in Florida.

It just seems that too many corporate executives look only at the next quarterly profit statement rather than at a long term sustainable future, for their companies and for their workers.

And because I can:

Cross posted from Just A Small Town Country Boy

While there hasn’t been a lot of economic news for me to rant about today, there have been a few articles I came across in my search of news sites that help to continue to paint the not-so-pretty picture of life in the US these days. First up is this from today’s (Wednesday, May 11) Hartford Courant about layoff notices for Connecticut state employees:

HARTFORD—
On a somber day in state government, the first employees started receiving layoff notices Tuesday in a process that could eventually reach more than 5,000 state workers under a worst-case scenario.

Gov. Dannel P. Malloy ordered the layoffs of 4,742 employees in more than 40 agencies, but that number could increase by hundreds if more cuts in state programs are approved by the legislature.

Because many of the employees are being notified individually and in person, the process of notifying all of them could take weeks. Tuesday was marked by confusion among state employees as many did not receive a notice and they remained unsure if they would have a job in the coming months.

I and many others have concentrated mainly on the actions of the Republican governors but the reality is, most all of the states are struggling to balance their budgets and have been forced to cut jobs. Probably the biggest difference between states with Democratic governors and legislatures and those run by Republicans is the Democrats aren’t (at least outwardly) aren’t cutting the jobs while simultaneously cutting taxes for their campaign contributors.

The Hartford Courant’s Rick Greene offered five reasons why the layoff notices are a good thing. I find the first reason quite telling in itself:

1. Republicans will be forced to admit they actually do like some aspects of government when they realize services they want will be eliminated — like teachers or actually finding someone to answer the phone at the DMV.

Of course, I also have no belief that any Republicans anywhere will actually admit to there being valid government services. It does highlight one of the aspects of the US political systems where (theoretically) there are negotiations between the two dominant parties with compromises and all folks working toward the common good. Yeah, I know, but I still have to believe it is possible for the system to work as otherwise, it means we are all wasting our time and I refuse to give in to that belief.

MSNBC’s Alison Lin had this report from the government on job openings in March:

The government reported Wednesday that there were 3.1 million job openings in March, up slightly from the previous month. About 4 million people were hired in March, also a slight increase over the previous month.

Still, the Economic Policy Institute reports that there continues to be more than four jobseekers for every job opening.
Read the rest of this entry →

I would like to start today by pointing out an error I made yesterday. I assumed that since March was not finished with us, that the ADP jobs report for March would not be issued until next Wednesday. I guess ADP figures the last few days of the month don’t matter so long as they get a report out two days prior to the BLS report for the overall economy issued on the first Friday of the new month.

From Reuters on today’s (Wednesday, March 30) ADP report:

(Reuters) – Private employers added 201,000 jobs in March, while February’s figure was revised down slightly, a report by a payrolls processor showed on Wednesday.

The data was largely in line with expectations. Economists surveyed by Reuters had forecast the ADP Employer Services report would show a gain of 203,000 jobs. The report is jointly developed with Macroeconomic Advisers LLC.

February’s figure was revised down to 208,000 from 217,000.

“Basically the number was very much in line with expectations and shows that the labor recovery continues at a reasonable pace,” said David Katz, chief investment officer at Matrix Asset Advisors in New York.

Of course, Mr Katz is not accounting for the loss of jobs in the public sector. And there have been job losses in the public sector this past month.

But there have been a few articles I’ve seen during my daily surfing of the toobz, from today and earlier, that tell us a bit more about the state of the economy than the ADP report and the words of Mr Katz can tell us.

First up is this article from today’s Hartford Courant on New London, CT schools that are now providing free suppers (to go with free breakfasts and lunches) for students from low income families. From the article:

While many schools across Connecticut provide free or reduced lunch and breakfast to students from low-income homes, New London was the first to provide supper, too. Bridgeport recently launched a similar program, and Norwich is considering it.
Read the rest of this entry →

There are times that I begin to despair a bit about all the crap going on all over. I can’t do anything about earthquakes, tsunamis, and nuclear disasters (all in one) but I can address some of the reporting I’ve seen in the TradMed the last couple of days.

Apparently the Beltway Village Idiots Pundits are anxious to stop writing all those bummer articles about the un and underemployed and the destruction of the global economy. I guess it’s just too Debbie Downer for them. So they’ve started the “Everything’s Getting Better” articles. The NY Times and Floyd Norris started with this headline:

Crisis Is Over, but Where’s the Fix?

Of course, without anything being fixed, it’s rather difficult for the “crisis” to be over. And to be fair, Norris does address some of this in the article:

When the financial system began to crumble more than three years ago, the world rushed to rescue it. Country after country went deeply into debt to keep banks afloat and prevent a deep recession from turning into something worse.

…snip…

But the world has changed since then. The economic recovery in most developed countries is stuttering at best, and governments are struggling with their own finances. It is time for remorse and second-guessing.

A surprising citadel of that second-guessing is at the International Monetary Fund, where researchers this week concluded that the rescues “only treated the symptoms of the global financial meltdown.”

The researchers, Stijn Claessens and Ceyla Pazarbasioglu, warned that “a rare opportunity is being thrown away to tackle the underlying causes. Without restructuring financial institutions’ balance sheets and their operations, as well as their assets — loans to over-indebted households and enterprises — the economic recovery will suffer, and the seeds will be sown for the next crisis.”

…snip…

In retrospect, it is clear that the bailouts came with too little pain for those responsible. Bondholders who financed banks that failed largely escaped pain. That was true even in Ireland, where the bailout would have led to a default of government debt had Europe not stepped in. It is still not clear how Ireland will pay its national debt, but the bank bondholders did fine.

Norris goes on to point out that one of the problems is the lack of accountability. Imagine that?

Next up with the Let’s Declare Victory Recovery crowd is Ben Smith at Politico, though he projects it on to President Obama as the President’s “dilemma” about when to declare Recovery:

The economy has been growing for 18 months after the longest recession since the Great Depression – but public opinion has yet to fully reflect what economists generally agree are incipient signs of hope. One truism of presidential politics that actually happens to be true is that voters’ perception of the economy trumps just about any other issue, so Obama, acutely aware of both the need to present a successful economic record and the dangers of prematurely declaring victory, is treading very, very carefully.

…snip…

Yet despite several quarters of real — if uninspiring — growth, the pessimism remains deep. A Bloomberg National Poll conducted in early March found that more than a third of Americans continue to believe that the U.S. is in a recession, more than a year after it ended, and 63 percent of Americans say the nation is on the “wrong track.”

Yeah. Gee. Now why ever would folks not be inspired with unemployment still hovering around 9% and un and underemployment nearly double that? There are still nearly five applicants for every job opening. But that’s only because all the people without jobs just lack the pertinent skills right? Well, no, that is not right:

Structural unemployment – unemployment stemming from a mismatch of workers’ skills and job requirements – has been cited in mainstream media as the main cause of current, high unemployment. Data from the National Federation of Independent Business (NFIB), however, suggest that structural unemployment is not what is ailing the economy. The graph below draws on data from the NFIB’s monthly survey from December 2007 (the official start of the recession) to January 2011. Each month, the NFIB asks its sample of small businesses to state the single most important problem facing their business today. Since the recession began, respondents overwhelmingly have cited “poor sales,” suggesting that today’s unemployment is primarily due to a lack of demand. “Quality of labor,” the factor most consistent with structural unemployment, barely made the list.

And this from Yahoo’s The Lookout:

Why the shortage? Many of the people who were laid off from factory jobs and are looking for work don’t have the specialized skills companies are looking for, manufacturing execs say. And they’re not eager to acquire them, because, having been laid off from one manufacturing job, they’re convinced that the whole sector is on the decline. So they don’t want to spend time retraining for jobs that they fear could soon be shipped overseas.

Some say those fears are misplaced, arguing that skilled manufacturing jobs are difficult to outsource. But the numbers tell a different story. As we’ve reported, middle-wage, middle-skill jobs — a category that includes both skilled manufacturing jobs and white-collar clerical work — are shrinking rapidly as a percentage of total U.S. jobs, thanks to the effects of offshoring and mechanization. So it may make sense for a worker to decide against spending a year retraining himself to learn these skills.

My bold. Today’s (Saturday, March 11) Hartford Courant had three articles that reflect the reality of things today.

Hamilton Sundstrand Proposes Moving Production Work Out Of Connecticut; 300 Jobs At Stake

UTC: Cost-Cutting From A Position Of Strength

United Technologies Corp. CEO Nets $24 Million In 2010 Compensation

Links to the articles are embedded in the titles but there we have it. UTC is laying off workers and moving the jobs elsewhere. They are doing it because they can (profitable but want more profits) and they reward the CEO with $24M in compensation to oversee these cuts and outsourcing. And the CEO likes to brag about it (from prepared remarks delivered in Mumbai to NASSCOM):

…snip…
Today, we have almost 5,000 employees in India. Our Otis factory in Bangalore has produced more than 30,000 elevators since the 1990s. Our Carrier factory in Gurgaon produces 200,000 air conditioning systems per year. In addition, Pratt & Whitney engines power the aircraft of many Indian airlines, including Air India, Kingfisher, and Indigo – as well as more than 225 turboprop aircraft, business jets and helicopters in India.

From our perspective, this is really just the beginning of our relationship with India. Before talking about some of the big macro forces that will shape the global economy over the next decade, I’d like to share just a little data that highlights the size of the opportunities in both the infrastructure and aerospace markets. Last year, UTC’s sales in India were $500M. We expect this to grow to $2.5B by 2015. I’m confident in this level of growth based, in part, on the current per-capita consumption rates. As countries like India become more urban, consumption levels for air conditioners, security systems and air travel will increase toward the levels seen in more mature markets.
…snip…

But surely there are folks in the US working to see US workers employed, building things useful to all citizens, right? Just today there were two more articles on Republican governors attempting to justify killing rail projects within their states. First up is John Kasich in Ohio refusing to put up $52M for a project estimated to cost $128M for streetcars in Cincinnati:

Gov. John Kasich said he can’t justify spending $52 million in state money for Cincinnati’s streetcar – the new governor’s most emphatic statement on what Cincinnati leaders consider a major economic development project.

…snip…

Without the state money, the project could be up to $30 million short of the $128 million needed to build a streetcar route from Downtown’s central riverfront to the Uptown communities near the University of Cincinnati. The city could seek that money from Washington or other sources, say backers.

Then the NY Times tried to paint Florida Governor Rick Scott’s rejection of high speed rail funds as a rejection of President Obama’s planning:

The federal government had agreed to pay $2.4 billion of its estimated $2.6 billion in construction costs, railroad companies were vying to build and operate it, and state transportation planners had even dummied up proposed timetables: Train 7092 would depart Tampa at 8:10 a.m. and arrive in Orlando at 9:04 a.m.

The fast train was sought, and won, by Florida’s former Republican governor, Charlie Crist. But it was killed last month by his successor, Rick Scott, who joined several other Republican governors in spurning federally financed train projects over fears that their states could be on the hook for future costs. The final nail in its coffin came last week when a Florida court ruled that the new governor could not be forced to accept the federal money and start building it.

Of course, buried w-a-y down in the Times article is this little nugget that negates the article’s premise (and Scott’s justification for canceling):

Last month, Mr. Scott decided to scuttle the project after reading a report by the Reason Foundation that questioned its ridership estimates. The foundation is a prominent libertarian policy research organization that employs several respected transportation analysts, but it gets some of its funding from donors with ties to the oil industry, including foundations related to Koch Industries, which owns oil refineries.

“The truth is that this project would be far too costly to taxpayers, and I believe the risk far outweighs the benefits,” Mr. Scott said.

But a state-sponsored ridership study, which was released this week, concluded that the proposed line would actually have been a money-maker from the start.

Regardless of the complaints that Tampa and Orlando are too close together and as cities are “virtually unnavigable without cars,” the line would have been a money maker. It would have eventually been extended south to Miami as well.

So here we sit. Private industry destroys jobs because they can. Governors destroy jobs because of ideology even though those jobs could eventually help people get around cities and states without buying gas, contributing to pollution and auto gridlock. Saving gasoline that has spiked in price once again, chewing up more financial resources that the long term un and underemployed could use on things like, oh food or medical care.

Let’s let the Village Idiots Pundits declare Victory Recovery and move on so they can cover such news as Newt Gingrich’s Patriotic Affairs.

And because I can:

Cross posted from Just A Small Town Country Boy