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Today is Monday, September 5, 2011. Since it is the first Monday of September, it is the national holiday known as Labor Day. Supposedly, it is the day when our politicians and pundits proclaim their unrelenting love for all things worker related – even as they spend the other 364 days a year doing all in their power to destroy the lives of workers by cutting salaries, limiting benefits. Just today, the Washington Post’s Robert Samuelson had a column decrying the state of labor in the US:

On this Labor Day, there is little good news about labor. We have entered a long period of crushing unemployment and downward pressure on wages that may well transform the nation’s economic and political landscape. There was no job growth in August, and the overall numbers are stupefying: 14 million unemployed; nearly 9 million part-time workers wanting full-time jobs; 6.5 million who want jobs but have given up looking and are, therefore, not counted in the official labor force. People are only gradually recognizing the magnitude of the problem.

…snip…

It’s not only the jobless who will be affected. No one has yet repealed the law of supply and demand. At last count, there were 4.5 unemployed workers for every job opening. Bargaining power has shifted from labor to capital. Sure, some workers will get promotions and seniority raises. Otherwise, gains will be slim. Since September 2008, annual wage and salary increases have averaged 1.6 percent, the slowest pace in 30 years, reports EPI’s Lawrence Mishel.

…snip…

Still, the harshest effects of joblessness fall on the jobless. “We’re creating a bifurcated society,” worries Harvard economist Lawrence Katz. “We’re talking about a lost generation of younger workers and displaced workers.” Younger workers have a harder time starting careers. Because many skills are developed on the job, long unemployment spells can lower lifetime earnings. The same is true of older workers. Even when those who lose stable jobs get new work, they often suffer a 20 percent earnings loss for 15 years or more, reports economist Till von Wachter of Columbia University.

I find it somewhat interesting that Samuelson felt the need to write his column given how many times over the years he has extolled the death of unions, called for cuts to Social Security and Medicare, and called for leaving the minimum wage age at $5.15 per hour. As I noted here, trying to do much more than survive on minimum wage for one person is not really possible and that’s when it is at today’s $7.25 an hour.

Some folks in Wisconsin and Pennsylvania did actually tell anti-worker/anti-union politicians that they were not welcome at some local Labor Day parades and celebrations (although the folks in Wisconsin may have backed down from their initial non-invitation – I hope the folks in Wausau do have plenty of rotten tomatoes available for their oh so poor US Representative who cant make ends meet on $174K per year.)

Now I realize that to some folks there is no equating the attack on Unions as an attack on individual workers. Yet all those benefits that are available to individual workers are there precisely because of the unions. Whether it is the eight hour day/forty hour work week or paid sick time or worker safety, it is the action of unions that led to these worker benefits available to all. While recognizing that “correlation does not equal causation,” the flatness of wages in the US since the ’70s has at least been a companion to the attacks on unions. CEO and senior executive salaries have exploded while the wages for workers have gone down.

On this Labor Day 2011, we have millions of long term un and underemployed. In an economy that has to create roughly 90K jobs per month to stay even, August 2011 had zero jobs in total. Businesses are profitable so the economy appears to be growing even as the underside of the economy gets larger. Self-employed individuals are not counted among the unemployed nor are new graduates. State and local governments are cutting jobs while those folks with jobs worry that their jobs will be gone tomorrow.

This Thursday evening, President Obama is scheduled to give a speech to Congress on jobs. Yet for all the vaunted interest in creating jobs that has supposedly captured the attention of the Beltway Village Idiots Politicians, Pundits, and Courtiers (finally), all the proposals likely to receive attention are warmed over re-hashes of previously failed policies. Massive tax cuts in place since 2001 have not created jobs so why would further tax cuts create jobs? Regulations and taxes do not stifle small businesses yet we continue to hear how all regulations must be done away with in order for small businesses to thrive.

Short sighted actions by politicians and global businesses will eventually be their downfall (and ours). It would almost be fun to watch it happen if it weren’t causing so much pain and suffering for all the world.

And because I can:

Cross posted from Just A Small Town Country Boy

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I’m thinking this must be the week for education related news stories. Sunday, I wrote this post on how Education issues were being spun in the TradMed. Today, there are a few articles related to how an undergrad major reflects earnings. The first I saw was this one from the AP (via MSNBC) then saw that the Washington Post also had coverage:

Over a lifetime, the earnings of workers who have majored in engineering, computer science or business are as much as 50 percent higher than the earnings of those who major in the humanities, the arts, education and psychology, according to an analysis by researchers at Georgetown University’s Center on Education and the Workforce.

“I don’t want to slight Shakespeare,” said Anthony Carnevale, one of the report’s authors. “But this study slights Shakespeare.”

The report is based on previously unreported census data that definitively links college majors to career earnings. Earlier studies have looked at salaries immediately after graduation, but the new report covers earnings across a person’s working life and is based on a much larger survey.

Bloomberg’s article on the study though offers a little bit more perspective:

As a group, engineering majors of all disciplines reported the highest median earnings at $75,000, the study showed. The lowest pay, at $42,000, came from two groups — education and psychology and social work, which includes such categories as clinical psychology and communications disorders.

…snip…

Race and gender play a role in salary, according to the report. African-Americans who graduated with finance majors earned an average of $47,000 per year, less than Hispanics and Asians at $56,000 and whites at $70,000, it showed.

While women hold the majority of degrees in many lower- paying fields, even those with specialties that command the highest pay, such as chemical engineering, earned $20,000 less per year on average than men with the same education, according to the study.

…snip…

About 41 percent of undergraduates with humanities and liberal arts majors — including history, English language and literature and foreign languages — went on to earn a graduate degree, the study showed.

All this leads me to one major question – which came first? Are the higher engineering salaries due to the preponderance of men in the field or are the lower salaries for fields such as Social Work and Education due to the preponderance of women in the field? Contrary to the beliefs of some people, jobs in Social Work fields and Education are not easy nor are they stress free. In fact, both fields can be among the more stressful jobs going. Last year I wrote this post on how I consider Child Welfare work as the Most Thankless Job and one of the most stressful jobs around. They work long hours for low pay and are demonized from all sides. These jobs also require skills albeit skills that are often categorized as “soft skills” – defined as skills that require the ability to deal with humanity, often in the worst possible moments. Skills that a lot of engineers have no hope of ever acquiring.

Even within fields and career choices that are considered upper level, there are more and more two tier wage systems coming into play. This is not limited to unions, although we all know the stories now of businesses trying to break the unions via this ploy. No, today’s (Tuesday May 24) NY Times had an article on how law firms were setting up “non-partner track” niches:

Read the rest of this entry →

Over the last couple of months, we’ve seen an unprecedented attack on public sector unions across the nation. According to this article from the LA Times via the Sacramento Bee, nearly half of the states are in varying stages of attacking public and private sector unions.

Nearly half of the states are considering legislation to limit public employees’ collective bargaining rights. In New Hampshire, the House last week approved a measure that one union leader assailed as “Wisconsin on steroids.”

But it’s not just budgetary concerns driving Republican officeholders to take on unions, traditionally a strong Democratic ally.

In Maine, the newly elected Republican governor ordered the removal of a mural depicting the state’s labor history from a state building because, his spokeswoman said, it portrayed a one-sided message supporting organized labor.

A number of states are considering bills that would limit unions’ ability to collect dues from public employees. The Florida House approved a bill to ban dues deductions from government paychecks and require unions to obtain members’ permission before using dues for political activity. Similar legislation is under consideration in Kansas. Other bills would eliminate a requirement that workers covered by union contracts pay union dues or fees.

There is some push back going on as well, including the law suit in Wisconsin to block implementation of the anti union law there and in Ohio, opponents of Ohio’s Senate Bill 5 are collecting signatures for a ballot referendum to repeal the law there. Yesterday (Monday, April 4), there were rallies all across the country in support of Unions and worker rights.

Today, MSNBC had a couple of articles on public sector workers. The first is on workers in general:

They take away your trash. They protect your homes, your property and your families. They put out your fires and they educate your children. And somehow, in the past year or so, the uniforms many of them wear have grown a bull’s-eye on the back. Or at least that’s how they feel.
Read the rest of this entry →

Since today (Wednesday March 2) is the first Wednesday of the new month, Automatic Data Processing (ADP) has released their monthly report estimating the new jobs for February for the private sector. As always, the economists were surprised. From Reuters:

(Reuters) – Private sector employers added more jobs than expected last month in a sign of steady improvement in the labor market, ahead of the closely watched non-farm payrolls report from the Labor Department on Friday.

Employers added 217,000 jobs in February, the ADP Employer Services report showed on Wednesday, above expectations for a rise of 175,000. January’s figure was revised higher by 2,000 to 189,000.

Economists said the private-sector hiring indicates improvement in the labor market, though they noted the month-to-month changes in ADP’s report are not always good predictors of Friday’s larger jobs numbers.

There is a quite simple explanation for why the month-to-month changes in the ADP report do not predict the larger report from the DoL Bureau of Labor Statistics. The BLS reporting includes jobs from all levels including the public sector which has been laying people off even as the pace of hiring has picked up a bit in the private sector.

Of course, even as there was some new hiring in February, layoffs also continued with Reuters also reporting this morning on a report from consultants Challenger Gray & Christmas on an increase in February of the numbers of planned layoffs:

(Reuters) – The number of planned layoffs at U.S. firms rose in February to its highest level in 11 months as government and non-profit employers let workers go, a report showed on Wednesday.

Employers announced 50,702 planned job cuts last month, the highest level since March 2010 and a jump of 32 percent from January’s 38,519, according to the report from consultants Challenger, Gray & Christmas, Inc. Layoffs were 20 percent higher than the 42,090 announced in February of last year, marking the first year-over-year increase since May 2009.

This doesn’t even begin to get to the jobs that will be lost with the budget cuts pushed by the Republican controlled House of Representatives. According to a report by Moody’s Analytic’s Mark Zandi (via the Washington Post), these cuts will mean 700,00 jobs lost from now through 2012:

A Republican plan to sharply cut federal spending this year would destroy 700,000 jobs through 2012, according to an independent economic analysis set for release Monday.

The report, by Moody’s Analytics chief economist Mark Zandi, offers fresh ammunition to Democrats seeking block the Republican plan, which would terminate dozens of programs and slash federal appropriations by $61 billion over the next seven months.

Zandi, an architect of the 2009 stimulus package who has advised both political parties, predicts that the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year.

Being the good little doobie that he is, the Benbernank is quoted by Reuters as testifying earlier today that the cuts will cause only 200k jobs to be lost. Now isn’t that special. From the Reuters report:

(Reuters) – Federal Reserve Chairman Ben Bernanke said on Wednesday a Republican spending cut plan would not cause a big dent to U.S. economic growth, but could cost around 200,000 jobs.

Bernanke said that a $60 billion cut along the lines being pursued by Republican in the House of Representatives would likely trim growth by around two-tenths of a percentage point in the first year and one-tenth in the next year.

“That would translate into a couple of hundred thousand jobs. So it’s not trivial,” he said in response to questions from members of the House Financial Services Committee.

Don’t you just love the parsing of his words there. The cuts won’t make a big dent but they aren’t trivial. Nothing like trying to please everyone and pleasing no one.

Of course, things are also not helped when the Law of Unintended Side Consequences comes into play as it has with the recent extension of the Bush (now Bush/Obama) Tax Cuts. It seems the tax cuts are also hitting state budgets to the tune of $5.3B.

Struggling states could lose as much as $5.3 billion in tax collections during the next few years in an unintended consequence of one of the lower-profile federal tax cuts that President Obama signed in December, according to a report released Tuesday.

The tax-cut package the president signed in December is best known for extending the Bush-era tax rates for two years and giving a one-year payroll tax cut to most Americans. But it included a business tax cut that could blow a hole in state budgets: a provision allowing businesses to deduct the full value of new equipment purchases from their taxes through 2011.

That cut, intended to spur the economy by encouraging businesses to spend more money on equipment, could end up costing 19 states as much as $5.3 billion in lost revenue over the next few years, according to the report, by the Center on Budget and Policy Priorities, a research organization based in Washington.

The 19 states stand to lose money because they link their state tax laws to federal tax law. So the newly allowed federal tax deductions that businesses in those states take will lower their taxable incomes, which would in turn have the effect of driving down state corporate and income tax collections.

Oopsie.

So we wait until Friday for the official BLS Jobs Report. I usually don’t put a number on the figure of new jobs since I’m not an economist that is always surprised that my figure is wrong. I will however make the bold prediction that the number of new jobs reported Friday for February will be less than half the 217k reported by ADP today. But we shouldn’t worry, Tom Brokaw tells us that all we need are new skills and all will work out in the end.

And because I can:

Cross posted from Just A Small Town Country Boy

And then try to add in the cost of diapers, formula, baby food...(photo: phrenologist via Flickr)

Back in December, I wrote a post “Let’s Play With Some Numbers” based upon a mythical minimum wage worker and what that means in the line of taxes versus expenses. Today, I’d like to offer a similar “what if” based on teacher salaries.

Why you may ask?

Well, mainly because of some of the “ZOMG! Teachers get paid! And they receive benefits” gibberish I’ve seen the last few days concerning the “budget busting unions” and the “highly compensated teachers” of Wisconsin. As a side note, why are the anti-teachers people so adamant on tearing down the teachers and other public sector workers and their benefits? Shouldn’t we be trying to raise things up so that folks in the private sector are once again getting reasonable pay and benefits rather than tearing people down to a lower level? Whatever happened to the desire to see folks from all walks celebrated for their work and paid a living wage?

My reference data is from this state-by-state starting salary for teachers, average, and 10 year percentage increase (looks to be from 2008). This site offers median salaries for various grade levels of teachers but I offer it only for further discussion and will use mainly the first link.

My mythical teacher is going to be a graduate of Wisconsin Stevens Point. This person will be a Wisconsin resident so will receive instate tuition. We’ll pretend that our mythical teacher lived in a dorm for all four years (though I’d guess most juniors and seniors manage to find off campus housing with all of its attendant costs) and used the meal card. So our mythical student has costs of $6,304 per semester (rounding down), $12,608 a year and a minimum four year cost of $50,432. I’ll pretend this student worked and got some help from Mom and Dad and maybe a small scholarship or two but still needed loans for say $30K. I’m sure there are students who financed the whole amount as well as students who had full parental support to students who managed full time jobs as well as full time student loads.

So here we have our mythical Wisconsin Stevens Point graduate starting a career as a teacher with $30K debt and a starting salary of $25,222. We’ll assume our new teacher is getting paid twice a month for nine months so will have a pre-tax bi-weekly income of $1,401 (payday on the 15th and the end of the month). Taxes and such will probably pull that down to roughly $1K take home so we’ll say $2K per month. We’ll put our new teacher in a one bedroom apartment at $400 per month plus utilities which will average another $400 (gas, electric, heat and air conditioning, phone, and cable). I don’t know what the loan periods are for student loans now so we’ll pretend the loan period for the $30K debt is ten years and with interest our mythical teacher will pay back $45K. This works out to be $375 per month for ten years. And yes, that’s for those months when our teacher is not working in the summer. At this point, our teacher has $1,175 of $2K per month for nine months committed without buying any food, clothing, car payments, insurance payments, school supplies or savings to cover the three months with no salary. . . . Read the rest of this entry →

Today is Labor Day in the US. It is the day that was chosen (American Exceptionalism in operation) by the US so that it could be different from the traditional Labor Day celebrated in many other parts of the world.

Big ef’fin’ woop.

When you see politicians today speechifyin’ on how much Labor means to them, how much they owe to seein’ their papa and mama going off at 0′dark thirty and not gettin’ home ’til half past midnight, and how much they support all their hard working constituents, remember these few things.

The official unemployment rate in the United States on this Labor Day 2009 is 9.7%. Then you start to add in the "discouraged workers" and then you have those that are underemployed (that 20 hour a week job at the Quik-Mart paying minimum wage probably fits here), then the numbers start getting well up into double digits. I’m not up to going through all the various google searches, but let’s put a guess that the total of Unemployed, Discouraged Workers, and Under-employed is near 20%. One in five workers is most likely in these 3 worker categories.

One in five.

Have a good Labor Day, y’all.

And because I can:

Today’s McClatchy News DC has an article on the Cadillac pensions that Elizabeth Dole and Robin Hayes will soon be receiving as former members of Congress. Both were defeated in their recent bids for re-elections, Hayes by Blue America’s Larry Kissell.

WASHINGTON — When Sen. Elizabeth Dole and Rep. Robin Hayes leave office next month, they won’t leave empty-handed.

The North Carolina Republicans, both multimillionaires and among the richest in Congress, will be eligible immediately for congressional pensions.

Dole, who served a six-year term, is eligible for about $15,000 a year for life. Hayes, who served five two-year terms, would get about $25,500 a year, according to the National Taxpayers Union, a government watchdog group that’s been estimating congressional pensions for years.

Unlike some fixed pensions, the amounts will change with the cost of living adjustment.

That’s a pretty good deal, huh? Now normally, I wouldn’t get too awfully bent out of shape about this and would consider it a cost of doing business. But there’s this trouble in the auto industry that has been in the news lately that comes into play here. Today’s NY Times has an article explaining where the $70 to $77 Read the rest of this entry →