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McJobs: Bad and Getting Worse

1:37 pm in Economy, Jobs, Media, Politics, Unemployment by dakine01

A couple of years ago, you might remember that McDonalds got a lot of publicity out of a one day hiring binge. I wrote about it here with a follow-up about the Washington Post noticing that it was a “McJobs” economic recovery a couple of weeks later. So here we are, two years later and where exactly are we?

At best, we are treading water. At best.

Today, NBC News‘ web site had this article titled ”In tough economy, fast food workers grow old” discussing the reality of older workers working in the fast food world. They had a companion article on fast food jobs as portrayed in the movies over the past couple of years (presumably in an attempt to off-set the negative implications of the original) but the stories in the first article should be heeded:

In many ways, she is a typical fast-food worker: She’s older than you’d expect, has more years of schooling and works in the industry not for entry-level experience, but to try to keep her head above the financial storm that threatens to swamp her.

Due to the lingering effects of the Great Recession, the Hollywood image of the care-free, freckle-faced, teenage hamburger flipper is no longer the norm. Only 16 percent of fast food industry jobs now go to teens, down from 25 percent a decade ago.

And many of the older workers are educated. More than 42 percent of restaurant and fast-food employees over the age of 25 have at least some college education, including 753,000 with a bachelor’s degree or higher, according to the U.S. Bureau of Labor Statistics.

Jobs: Recovery is at Hand!

Jobs: Recovery is at Hand!

Yes, fast food jobs are not just for teenagers anymore.

I’ve actually noticed a few articles these past few months discussing working poor, low wage jobs, and the on-going unemployment crisis. First up is this from the Washington Post in January on the growing ranks of working poor:

Nearly a third of the nation’s working families earn salaries so low that they struggle to pay for their necessities, according to a new report.

The ranks of the so-called working poor have grown even as the nation has created new jobs for 27 consecutive months and is showing other signs of shaking off the worst effects of the recession.

As I discussed a couple of years ago, minimum wage is not a salary where someone is going to get ahead.

At the end of March, NBC News had an article looking at the growing ranks of poor families in the suburbs:

The number of suburban residents living in poverty rose by nearly 64 percent between 2000 and 2011, to about 16.4 million people, according to a Brookings Institution analysis of 95 of the nation’s largest metropolitan areas. That’s more than double the rate of growth for urban poverty in those areas.

At the end of this article, there were links to some further articles including, “‘By the grace of God’: How workers survive on $7.25 per hour” and “Media coverage of poverty: Why ‘so little’?” (coverage of a Dan Froomkin essay.)

On April 1 (and not an April Fools Day joke) CNN had an article on the lousy pay at the 10 most common jobs in the US:

Food prep workers are the third most-common job in the U.S., but have the lowest pay, at a mere $18,720 a year for 2012. Cashiers and waiters are also popular professions, but the average pay at these jobs tallies up to less than $21,000 annually. There are 4.3 million retail sales workers out there, making them the most common job, but the position pays only $25,310 for the year.

As a companion to the incredibly shrinking pay checks and the increase in the working poor, there are also the stresses put on workers by the jobs. First up here is this article from NBC News in early January, “Temp employees more likely to succumb to workplace hazards: Read the rest of this entry →

Let’s Play With Some Numbers, Social Security Edition

1:03 pm in Social Security by dakine01

We need to get this to the Fiscal Cliff! What could go wrong?

We need to get this to the Fiscal Cliff! What could go wrong?

Boy howdy, but did I make a mistake this morning. I made the mistake of allowing myself to become distracted while I was “multi-tasking” and surfing the cable channels at the same time I was checking my emails AND getting a phone call. All of a sudden, I realized I was on MSNBC and listening to Moanin’ Joe where the topic of the day appeared to be whining about how those dastardly libruls just wouldn’t get with the program and worship at the altar of Pete Peterson (as Joe declared he does.)

Then I saw someone by the name of Rick Stengel talking about how “entitlements” needed to be cut in order for everyone to show how “serious” they are with the “fiscal cliff.”

Of course, everyone that was on that show this morning (it included Harold Ford, Steven Rattner, Michael Steele, Disco Dave, Tweety, and Chuck Todd) as well as everyone on all the various talking head shows watched by the Beltway Village Idiots Courtiers are people who will never have to worry about living on Social Security as the only thing keeping them from poverty and homelessness, so they are all fine with most any and all changes being discussed. After all, they are all Very Serious People, often wrong but never in doubt. Why, we could almost call them all “economists” they are wrong so often.

A couple of years ago, I wrote this post, “Let’s Play With Some Numbers” as a “what-if” about the mythical person working the mythical full time, minimum wage job and what that person might be able to afford as far as a place to live, and associated costs.

Why is this pertinent?

Well, the current average monthly Social Security payment (for October 2012) is $1,237 per month which works out to be $14,844 per year. This will go up to $1,261 in 2013. Where I had my mythical full time minimum wage earner paying FICA/Medicare taxes, other taxes (and some healthcare costs) and missing work on the “Big 6″ holidays (New Years Day, Memorial Day, July 4, Labor Day, Thanksgiving, and Christmas) before getting into the actual available funds to pay bills (lowering the income from $15,080 by $2,570 to $12,510), the mythical average Social Security recipient pays $99.90 per month for Medicare Part B starting at age 65, going up to $104.90 for 2013.

The point of all this is that a mythical person collecting average Social Security benefits is in roughly the same position financially as the mythical person who works a mythical full time minimum wage job. My WAG is that for every person who is collecting Social Security and also has the benefits of a defined pension, 401K, or robust savings, there is another person who is relying solely and completely on Social Security and Medicare to stay alive. With the Great Recession having taken its toll these past few years, I imagine there are many people just trying to hold on until they reach age 62 and can start collecting something. I imagine there are many more, like myself, who have had to cash in their 401k/IRAs early just to try to stay alive for these past few years.

So let’s remind the Beltway Village Idiots Politicians, Pundits, and Courtiers that there are real world consequences when they so blithely toss around “cut entitlement spending” as a “solution to the deficit.” As Mr Pierce puts it so eloquently, “Fck the deficit. People got no jobs. People got no money.”
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Is the Greece Crisis a Preview of Coming Attractions?

4:39 pm in Economy by dakine01

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Let me start this by stating right up front that I do not pay near enough attention to happenings around the world and the Greek debt crisis is just one of those issues that I am aware of without really knowing all the ins and outs of the situation.

Nevertheless, I saw a headline this weekend that has me in full on WTF mode. Saturday morning a NY Times headline said “Greek Premier Faces Impasse Over Demand to Cut Private Wages.”:

ATHENS — Lucas Papademos faced his most difficult test as Greece’s interim prime minister on Friday when his three-month-old government reached an impasse over proposed demands by the country’s foreign lenders to reduce private-sector wages drastically in exchange for the aid the country needs to prevent default.

Now, I can understand why lenders would demand wage cuts for Public Sector employees. I can think it is incredibly stupid, short-sighted, and penalizing the wrong group of people but I can understand the logic behind it. But Euro zone leaders and banks requiring private sector wage cuts before restructuring debt for Greece just makes no sense at all.

A bit further down in the article though I do get a small hint here:

It was unclear exactly what sort of wage cuts the troika was demanding. Some news reports said the lenders were seeking changes that would reduce most private-sector salaries by as much as 25 percent; others said the group was insisting on a cut in the minimum wage that, at least directly, would affect fewer than 300,000 people.

The goal of any pay cuts would be to help make Greek workers, who are generally less productive than workers elsewhere in Europe, able to compete more effectively inside the euro zone, where countries share a common currency that does not allow devaluations to help even out differences in labor costs.

My bold. And I think that is the goal right there. Cut minimum wage. Read the rest of this entry →

Economically, ‘Good for Business’ Is Usually Bad for People

11:38 am in Uncategorized by dakine01

François, it's just good business

"François, it's just good business" by dawpa2000 on Flickr

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“Business Friendly Climate” is one of the buzz phrases we see and hear a bit more frequently these days. I guess it is a phrase that may have always been around to some extent but is not just limited to the business press. But what exactly does “Business Friendly Climate” actually mean? Googling the phrase brings up millions of pages of hits with apparently every state, city, and town in the country making the claim for themselves. President Obama says the US must become Business Friendly to create jobs. But to me, the more often I see and hear the phrases “business friendly” or “good for businesses,” the more I become convinced that the end result will be something that is bad for humans and bad for living, breathing entities.

In case you are curious as to what precipitated this, it was a few articles the last week or so on both sides of the “it’s good for business” divide. First up is this article from CNN on Tuesday, July 12 on businesses “fleeing” California:

Buffeted by high taxes, strict regulations and uncertain state budgets, a growing number of California companies are seeking friendlier business environments outside of the Golden State. 

…snip…

While not all companies investing elsewhere are doing so for economic reasons, some are shopping around for lower costs, lighter regulations, stable leadership and government assistance and incentives.

The most popular places to go? Texas, Arizona, Colorado, Nevada, Utah, Virginia and North Carolina, said Vranich. All rank in the Top 13 places to do business, according to Chief Executive.

Carly Fiorina, failed former CEO of Hewlett-Packard and failed California Senate candidate continued the theme of “business friendly” in this opinion piece at Politico, also from Tuesday. Then McClatchy had this from Wednesday, asking in the title “Would looser environmental regulations help the economy?”

And there it is. “Looser environmental regulations…” From the article:

WASHINGTON — Republicans in the House of Representatives are waging an all-out war to block federal regulations that protect the environment. 

They loaded up a pending 2012 spending bill with terms that would eliminate a broad array of environmental protections, everything from stopping new plants and animals from being placed on the endangered species list to ending federal limits on water pollution in Florida,

The terms also include a rollback of pollution regulations for mountaintop mining and a red light on federal plans to prevent new uranium mining claims near the Grand Canyon.

Another Republican-sponsored bill that’s before Congress would weaken the nation’s 1972 Clean Water Act, taking away the Environmental Protection Agency’s authority to step in when it finds state water-pollution rules too loose.

It’s OK to poison the earth, air, and water but doG forbid anything should be done to stop businesses, right? Just today, the NY Times had this article on how a recently approved herbicide may be killing trees:

Manufactured by DuPont and conditionally approved for sale last October by the federal Environmental Protection Agency, Imprelis is used for killing broadleaf weeds like dandelion and clover and is sold to lawn care professionals only. Reports of dying trees started surfacing around Memorial Day, prompting an inquiry by DuPont scientists. 

…snip…

In a June 17 letter to its landscape customers, Michael McDermott, a DuPont products official, seemed to put the onus for the tree deaths on workers applying Imprelis. He wrote that customers with affected trees might not have mixed the herbicide properly or might have combined it with other herbicides. DuPont officials have also suggested that the trees may come back, and have asked landscapers to leave them in the ground.

Mr. McDermott instructed customers in the letter not to apply the herbicide near Norway spruce or white pine, or places where the product might drift toward such trees or run off toward their roots.

…snip…

Imprelis is not approved for use in New York and California because both states have separate review procedures for such products. New York State officials say they have told DuPont that it has detected two problems: the herbicide does not bind with soil, and it leaches into groundwater. The state has told DuPont it will therefore not allow Imprelis to be sold unless the company provides evidence to the contrary.

Good for New York and California. And this leads me right to the point. With all the articles around the Toobz on “business friendly” there are a couple I’ve found, pointing out some of the fallacies of the phrase. Both Bloomberg with this opinion piece from last Friday and the Fiscal Times also from last Friday had pieces pointing out how the “Texas Economic Miracle” so often touted by Gov Goodhair isn’t so much of a miracle after all. From the Bloomberg piece:

It’s easy to be charmed by Texas, but it would be a mistake to think the state might serve as a national model. Texas created almost 250,000 jobs in the past two years, nearly as many as the other 49 states combined. Texas leaders, including Republican Governor Rick Perry, credit that success to low taxes and a business-friendly regulatory approach. 

Yes and no. Those factors played a role. To a sizable degree, however, the state’s booming payrolls are the result of hard-to-duplicate factors, such as a fast-growing population, and unusually low wages.

Of course, the businesses surely do love the low wages aspect. But even in Texas, try living on minimum wage. And I have to be honest, there are many parts of the opinion piece conclusions (passing the so-called “Free Trade Agreements” and repatriating overseas profits at a much lower rate for example) that I find just as wrong as touting low wages as something that is good for people.

The Fiscal Times piece offers a different set of reasons for how maybe Texas isn’t quite the shining star:

There’s just one problem with that portrayal. While Texas has created more jobs than any other state in the past two years, the increase is far less than advertised, and the rate is not much higher than a number of other states, including former rustbelt centers like Pennsylvania or liberal sanctuaries like Vermont. In fact, the Lone Star State’s unemployment rate of 8 percent is ranked 24th among states, placing it squarely in the middle of the pack. 

Moreover, to the extent Texas has done better than other areas of the country, most of its good fortune rests on conditions that are not replicable elsewhere: soaring oil prices have provided a substantial number of new jobs and tax revenue even as higher gas prices put pressure on other state budgets, and an influx of new government defense spending has pumped up revenue. Moreover, the state has used oil revenue to postpone a sharp cutback in state and local government employment, which is about to hit in full force.

In addition, Texas eluded the housing price bubble and thus did not suffer as much from price declines and foreclosures. After the savings and loan crisis of the early 1990s, which hit Texas hard, the state legislature tightened mortgage regulations. Even though Perry touts a free market economy, the new mortgage rules saved Texas from the worst effects of the national housing bust, even as construction employment fell by 95,000 and remains 14% below its pre-recession peak.

Why imagine that! Those dastardly, no good, very bad regulations that seem to be the root of all evil for businesses actually protected people in Texas from the very worst parts of the Great Recession.

Too bad the Beltway Village Idiots Politicians, Pundits, and Courtiers can’t see how eviscerating environmental regulations, banking regulations and such will not protect them from the effects of un-breathable air, poisoned ground and water or destroyed financial markets. I think it may just be a matter of finding which Dystopian or Apocalyptic fiction winds up being closest to the eventual reality of life on earth. Any predictions?

And because I can:

Cross posted from Just A Small Town Country Boy

It’s Not the Bad Economic News that Surprises Me

12:08 pm in Economy, Government, Jobs, Unemployment by dakine01

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Unlike economists, I can in no way ever claim to be surprised at all the continuing bad news on the economy (and yeah, I will continue to link to and milk that schtick). Just today, we have the Initial Unemployment Claims report (via CNN):

In the week ended May 28, 422,000 Americans filed for their first week of unemployment benefits, the Labor Department said Thursday.

While that marked a 6,000 decrease from the revised 428,000 initial claims filed the week before, it was worse than economists’ expectations for 413,000 claims.

…snip…

Next up is the government’s monthly jobs report due Friday. Economists surveyed by CNNMoney say they’re expecting to see that 170,000 jobs were created in May and that the unemployment rate eased to 8.9% from 9% in April.

In case you’re wondering, that “revised” figure from last Thursday’s Initial Unemployment Claims report was revised upward from 424K. Given how woefully inaccurate the economists’ predictions have been, I will go out on a limb as I stated yesterday and predict that the BLS numbers for May will be much lower than 170K. I’m thinking more likely closer to a quarter of that (42.5K) but I do hope that I’m wrong. As far as the “unemployment rate” easing, this article from the AP (via Yahoo) this morning (Thursday June 2) goes a long way to explaining why the “official” unemployment rate may drop. Good way to make the figures look better by not counting those who get frustrated and give-up.

Now what does surprise me, still, even after all the evidence that has been provided these last few years, is the apparent drive to push most folks’ wages down to minimum wage (while trying to knock minimum wages down even lower). Back in December, I wrote a “what-if” post based on one person trying to survive living on minimum wage. Of course, the fallacy of my post is minimum wage jobs usually are not 40 hours per week, 52 weeks a year type jobs.

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Washington Post Notices It Is a McJobs Recovery

9:29 am in Economy, Government, Jobs, Unemployment by dakine01

In today’s (Sunday, April 24) Washington Post, Annie Lowrey mentions that maybe the economy might just not be in such great shape if the best jobs news is McDonald’s trumpeting their McJobs Fair this past Tuesday where they were looking to hire 50k workers in one day. For what it’s worth, I’m fairly certain that McDonalds goes through a hiring exercise of this nature most every spring; they just consolidated it all to one day this year and apparently received the hoped for public relations splash.

I actually took a look at the McJobs Fair situation almost three weeks ago when the news first came out of the “big” hiring push by Mickey Ds, so it’s nice of the Post and Ms Lowrey to catch up to the blogosphere. Yet for every point Ms Lowrey gets correct, she still winds up missing the point in the end.

Indeed, the McHiringSpree raises the question: What kind of jobs has the recovery ginned up? The Bureau of Labor Statistics offers a host of month-by-month information on who is working where, for how much and for how long. The data show that a few industries are at or above their level of employment before the recession. The federal workforce is slightly bigger, once you factor out job losses at the Postal Service and ignore Census hiring. Employment is up in some niches, like computer systems design. And health care remains the nation’s strongest growth industry, with tons of new jobs for workers like home health aides and physicians’ office workers.

…snip…

Despite the gains, though, it all adds up to a fairly bleak picture: The jobs we’re adding, for the most part, aren’t great ones. The National Employment Law Project took a closer look at employment and jobs-growth data in February. It says that just 14 percent of recent job growth comes from high-wage industries. About half comes from low-wage industries. Restaurants and food services businesses, “especially” fast-food outlets, made up 7 percent. The picture contributes to a larger story: The country has produced far too few stable, middle-income jobs over the past 20 years, not just the past three.

Given the deficit hysteria and drive for budget cuts, I wouldn’t hold out much hope for that “federal workforce” gain to remain for very long. And only “14 percent of recent job growth comes from high-wage industries” means 86% of the jobs are not in high-wage industries. Growth industries of “home health aides and physicians’ office workers” are also not particularly well paying by anyone’s imagination. I can pretty much guarantee you that the growth in health care costs have not been driven by these types of jobs. Minimum wage or just above minimum wage jobs are not enough to build a long term, sustainable recovery that revitalizes the middle-class.
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