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Just how bad must wages and benefits be for most people?

9:15 am in Economy by dakine01

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In my post from a couple of days ago, I linked to and quoted from this from Yahoo quoting former Labor Secretary Robert Reich:

In addition, while the economy has been expanding for nearly three years and hiring is picking up, Reich notes, “we also see some major declines in terms of median wage. And that’s particularly true for the bottom 90 percent.”

In the past, economists argued that wage growth lagged in part because employers were spending more on benefits like health care and pensions. But that hasn’t been the case in the past few years. A recently released study from the National Institute for Health Care Reform shows that in 2010, the percentage of Americans with insurance who got insurance from employers fell to 53.5 percent, down sharply from 63.6 percent in 2007. “At the top of the talent chain, employers are providing very generous health insurance, deferred compensation, and everything you can imagine,” notes Reich. “But as you go down the job ladder, particularly to people who are doing routine jobs, they’re getting less and less. There has been a substantial erosion of health care benefits for the bottom 90 percent.

As I surfed the various news sites this morning though, I did find a couple of articles pointing out that some groups are still seeing their salaries and benefits go up, so all is not lost.

In the “No CEOs Left Behind” category, we have this article from today’s (April 4) USA Today, “CEO pay soars while workers’ pay stalls”:

At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010 as the executives’ compensation started working its way back to prerecession levels, a USA TODAY analysis of data from GovernanceMetrics International found. Workers in private industry, meanwhile, saw their compensation grow just 2.1% in the 12 months ended December 2010, says the Bureau of Labor Statistics.

Two years of scaling back amid tough economic times proved temporary as three-quarters of CEOs got raises in 2010 — and, in many cases, the increases were substantial.

This blog post from Reuters written by a corporate board member points out a few of the problems with executive pay:

There are several factors at play as the remunerations committee and the board as a whole try to weave together pay packages.

Compensation consultants.
…snip…
Personal feelings.
…snip…
A disconnect from today’s reality.
…snip…
A lack of direct accountability.

I especially like that third point. A disconnect from today’s reality indeed. And speaking of disconnects from today’s reality, we have this from Bloomberg today on rising Wall Street salaries for most:

Most Wall Street (S5FINL) employees got higher salaries in 2011, with the biggest bumps going to those at boutique banks and alternative asset managers, according to a survey by eFinancialCareers.com.

The online survey of 2,860 financial professionals found that 54 percent received salary increases — excluding bonus — and 40 percent reported no change from 2010, according to an e- mailed description of the survey’s findings. Workers at so- called bulge-bracket banks got an average increase of 3 percent, compared with a 14 percent gain for people at boutique banks and a 13 percent raise for those at fund managers.

When year-end bonuses were included, average pay last year fell for workers at companies including Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM)’s investment bank amid declining revenue. As year-end bonuses dropped, some banks raised base salaries that in past years contributed just a fraction of pay for senior employees.

But no matter what happens, we can be assured that Jamie Dimon will find something to whine about. Why just this morning, the Commodities Futures Trading Commission has fined JPMorgan the astronomical sum of $20M to settle charges related to the Lehman Brothers bankruptcy. TWENTY MILLION DOLLARS! (/Dr Evil voice) Why based on JPMorgan’s reported profit from 2011 of $19B, that’s a whopping .1%. By my rough math, that is less than a half day’s worth of profits.

And because I can:

Cross posted from Just A Small Town Country Boy by Richard Taylor

How does an interconnected global economy avoid a global recession?

1:04 pm in Economy, Jobs, Unemployment by dakine01

(photo: athoshun/flickr)

(photo: athoshun/flickr)

Author’s Note: Please take a few minutes and Join the Firedoglake Membership Program today. FDL provides the tools that help me and others extend our reach with our rants so we need to support FDL when we can.

As I was surfing through various news sites this morning (April 2), I noticed a number of articles discussing problems with the European and US economies which lead directly to the question I have posed in the title of this post:

How does an interconnected global economy avoid a global recession?

Unfortunately, I do not know the answer but if I had to guess, it would be to say “It can’t.”

The first article I noticed was from tha AP via Yahoo titled, “Euro unemployment spikes to record 10.8 percent.” Reuters reported it as “Euro zone unemployment reaches near 15 year high“:

Unemployment in the euro zone reached its highest level in almost 15 years in February, with more than 17 million people out of work, and economists said they expected job office queues to grow even longer later this year.

Joblessness in the 17-nation currency zone rose to 10.8 percent – in line with a Reuters poll of economists – and 0.1 points worse than in January, Eurostat said on Monday.

Economists are divided over the wisdom of European governments’ drive to bring down fiscal deficits so aggressively as economic troubles hit tax revenues, consumers’ spending power and business confidence which collapsed late last year.

As a companion to these was this blog post from Reuters on youth unemployment across Europe: Read the rest of this entry →

I really do want to believe in the economy…

2:56 pm in Uncategorized by dakine01

I want to believe (photo: xyotiogyo, flickr)

I want to believe (photo: xyotiogyo, flickr)

Author’s Note: Please take a few minutes and Join the Firedoglake Membership Program today. FDL provides the tools that help me and others extend our reach with our rants so we need to support FDL when we can.

In the coming up on two years that I have been writing about the economy, jobs, un and underemployment at this little corner of the Intertoobz, I’ve tried to admit when my predictions have been a bit off. Like here and here where last summer I predicted we would be in a double-dip recession by the end of 2011. While we didn’t fall back into recession on the time frame I envisioned, I still see it as quite possible.

I do hope I get to admit being wrong on that. I so very much want to believe the economy is really improving and the jobs picture will brighten but I just can’t shake the feeling that it is all smoke and mirrors.

Today, (Thursday, January 19), the report of Initial Jobless Claims for last week came out and once again, the economists are surprised. Via Bloomberg:

Claims plunged by 50,000 to 352,000 in the week ended Jan. 14, the lowest level since April 2008, Labor Department figures showed today in Washington. The median forecast of 41 economists in a Bloomberg News survey projected 384,000. A Labor Department spokesman said the decrease reflected volatility seen during this time of year. The four-week average, which smoothes out fluctuations, decreased to 379,000 last week from 382,500.

…snip…

Jobless claims were projected to decrease from 399,000 initially reported for the prior week, according to the Bloomberg survey. Estimates ranged from 363,000 to 405,000. The Labor Department revised the previous week’s figure up to 402,000.

I am not at all surprised that last week’s figures were revised upwards as that is the pattern over the last few months at least. I did not make an official prediction but will admit that I thought this week’s number would be back well above 400K. Once again, I do prefer to be wrong on these.

But then I see articles across the Toobz like this from Tuesday from US News (via Yahoo) with the headline “Are We Entering a Jobless Recovery?” and I just want to weep at the incredible combination of stoopid and duplicity to that gives us such a headline. Read the rest of this entry →

It’s Not the Bad Economic News that Surprises Me

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

Author’s Note: Please take a few minutes and Join the Firedoglake Membership Program today. FDL provides the tools that help me and others extend our reach with our rants so we need to support FDL when we can.

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.

Read the rest of this entry →

The Need For Jobs Cuts Across All Groups

9:54 am in Economy, Financial Crisis, Government, Jobs, Unemployment by dakine01

photo: inoneear via Flickr

There are roughly 25M to 30M Un and Underemployed people in the United States today. Some of the millions show up in the base statistics provided by the Bureau of Labor Statistics while other groups do not. Among the groups that do not show are people who have been declared “self-employed” as well as new college grads, yet both groups are full of people trying to find gainful employment in professional fields.

Yesterday (Monday, May 9) Business Week (via Yahoo) had this article on how wonderful things are for the 2011 new college grads:

The class of 2011 is enjoying the best job market for new grads since the 2008 financial crisis, according to the National Association of Colleges and Employers. It’s being driven by gains in finance, energy, and technology, says Edwin W. Koc, NACE’s research chief, who foresees younger workers filling a backlog of jobs after two years of stagnant hiring. 

In Silicon Valley, postings have doubled from two years ago at technology career website operator Dice Holdings (NYSE:DHX – News). “It’s quite a stunning comeback,” says Lance Choy, director of the career development center at Stanford University. Postings on Stanford’s online job board for full-time positions surged 36 percent to 1,900 in the fourth quarter of last year compared with a year earlier.

Sounds wonderful for those new grads, right? Well, not so fast there Bunky. A few weeks ago, USA Today had a similar article but while also mentioning the percent increase of new jobs for new grads this year, also let slip the unpleasant reality:

The increase in open positions means employers have half as many applicants per job now than at this time last year: 21.1 applicants this year vs. 40.5 in 2010. 

Yes, it is a good thing that the percent of new jobs available to new grads is up but that good news has to be tempered by the reality that there are still so many applicants for each job. My SWAG is that the 2011 applicants are competing with the 2010, 2009, and 2008 applicants as well.
Read the rest of this entry →

Life in an Alternative Universe

2:24 pm in Economy, Jobs, Unemployment by dakine01

I am becoming more and more convinced that there are multiple parallel universes occupying life on this one planet we call Earth. It is seemingly the only even remotely rational explanation for the disconnect between the views of most people in the United States (and the World) versus the views of the Beltway Villagers, Media Courtiers, and the excessively affluent.

Friday’s NY Times presented the results of a poll of the “Nation’s Mood”:

Americans are more pessimistic about the nation’s economic outlook and overall direction than they have been at any time since President Obama’s first two months in office, when the country was still officially ensnared in the Great Recession, according to the latest New York Times/CBS News poll.

Amid rising gas prices, stubborn unemployment and a cacophonous debate in Washington over the federal government’s ability to meet its future obligations, the poll presents stark evidence that the slow, if unsteady, gains in public confidence earlier this year that a recovery was under way are now all but gone.

Capturing what appears to be an abrupt change in attitude, the survey shows that the number of Americans who think the economy is getting worse has jumped 13 percentage points in just one month. Though there have been encouraging signs of renewed growth since last fall, many economists are having second thoughts, warning that the pace of expansion might not be fast enough to create significant numbers of new jobs.

So what are the Media Courtiers reporting on? The Washington Post had this report on the “Biden deficit task force”:

A congressional task force launched by President Obama last week to help cut the federal deficit is off to a rocky start, with some members complaining that the agenda is destined to provide political theater, not a sweeping rewrite of spending and tax policy.

Set to begin discussions May 5, members already hit a dispute this week, disagreeing over how many people should have seats at the table. Some are asking what’s the point of meeting at all.

“I’m at a loss to understand what the purpose is,” House Majority Leader Eric Cantor (R-Va.) said Thursday in an interview. He said Obama had not set a timeline for any decisions, although lawmakers from both parties are calling for some agreement on deficit reduction before the government reaches a limit in the coming months on how much money it can borrow.

We have 14M to 15M unemployed, roughly 25M to 30M un and underemployed combined, millions more who are now “self-employed/independent contractors” or who have just given up and when they become eligible, are taking early Social Security and politicians are arguing over how many people will be “at the table?” This shit reminds me of nothing so much as the stories of the early negotiations on the Korean War where supposedly they had to vote on the size of the fucking table used for the negotiations before they could actually negotiate an end to the fighting.
Read the rest of this entry →

The Rush to Declare “Recovery” and Move On

9:03 am in Economy, Financial Crisis, Jobs, Unemployment by dakine01

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.

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