Thursday, December 31, 2015

Labor Line

August 2015___________________________________

Labor line has job news and commentary with a one stop short cut for America's job markets and job related data including the latest data from the Bureau of Labor Statistics.

This month's job and employment summary data are below. This month's inflation data is below.

The Establishment Job Report and Establishment Job Details for data released August 7, 2015.

American Job Market The Chronicle

Current Job and Employment Data

Jobs
Total Non-Farm Establishment Jobs up 215,000 to 142,071,000
Total Private Jobs up 210,000 to 120,148,000
Total Government Employment up 5 to 21,923,000

Employment Note
Civilian Non-Institutional Population up 213,000 to 250,876,000
Civilian Labor Force up 69,000 to 157,106,000
Employed up 101,000 to 148,840,000
Employed Men up 182,000 to 79,202,000
Employed Women down 81,000 to 69,638,000
Unemployed down 33,000 to 8,266,000
Not in the Labor Force up 144,000 to 93,770,000

Unemployment Rate steady at 5.3%, or 8,266/157,106
Labor Force Participation Rate steady to 62.6%, or 157,106/250,876

Prices and inflation measured by the Consumer Price Index (CPI) for all Urban Consumers was down 1.62 percent for 2014.

The August CPI report for the 12 months ending with July, shows the

CPI for All Items was up .2%
CPI for Food and Beverages was up 1.6%
CPI for Housing was up 2.0%
CPI for Apparel was down 1.6%
CPI for Transportation including gasoline was down 6.6%
CPI for Medical Care was up 2.5%
CPI for Recreation was up .6%
CPI for Education was up 3.8%
CPI for Communication was down 3.1%

This Month's Establishment Jobs Press Report

JULY WAS LIKE JUNE, A MEDIOCRE MONTH

The Bureau of Labor Statistics published its August report of jobs in July. The employed were up 101 thousand in August while the unemployed dropped 33 thousand, but not enough people entered the labor force to lower the unemployment rate. It remained steady at 5.3 percent after last month's decline. The labor force participation rate remained steady at 62.6 percent. It continues at historic lows.

The seasonally adjusted total of establishment jobs was up 215 thousand for July, slightly less than last month. The increase was 193 thousand more private sector service jobs combined with an increase of 17 thousand goods production jobs, and an increase of 5 thousand in government service jobs.

The goods production sector did better than recent months with a net increase of 17 thousand jobs. Natural resources and mining employment dropped again, with a net loss of 4 thousand jobs. Mining was down 4.9 thousand jobs offset by a small increase in the logging industry. The construction employment revived slightly with 6 thousand new jobs, mostly in residential construction. Manufacturing was up a net of 15 thousand jobs as a combination of 23 thousand more jobs in non-durable goods offset by a decline of 8 thousand jobs in durable goods. Among non-durable goods, food manufacturing added 9.1 thousand jobs, along with jobs in paper products manufacturing, printing, plastics and rubber products.

Government service added 5 thousand jobs for July. The Federal government had no change, same as the last two months. State government dropped 3 thousand jobs offset by an increase of 8 thousand jobs in local government. The local public schools had a seasonally adjusted increase of 3.5 thousand jobs, the only bright spot for government jobs. State education jobs were down 1.9 thousand. Private school education added 6.6 thousand jobs to lift education job totals by 2 thousand more jobs.

Trade, transportation and utilities services had the biggest job increase among private service industries with 60 thousand new jobs for July. Retail trade dominated the increase with 35.6 thousand new jobs, although all four sub-sectors were up. Wholesale trade had 6.3 thousand new jobs; transportation another 14.4 thousand; utilities added 2.6 thousand jobs, an unusually large increase.

Professional and business services was second among private service industries with 40 thousand new jobs for July. The professional and technical services sector had 26.6 thousand of the new jobs compared to 13.7 thousand new jobs in the management of companies and a net loss 300 jobs in the administrative and support services sub sectors.

Among professional and technical services architecture and engineering had 6.4 thousand new jobs; computer design and related services each added another 8.7 thousand jobs. The management of companies and enterprises with jobs at head offices rarely has a large increase as it did in July with of 13.7 thousands. Among the administrative and support service sub sectors employment services were down 6.6 thousand new jobs, an unusually large loss and a sign other jobs are available. An increase of 7.1 thousand jobs in services to buildings kept the administrative support jobs to a loss of only 300 jobs, but any loss in of jobs in these sectors are rare.

Health care was up 30 thousand jobs for July, a truly average number. All four sub categories in health care had more jobs as they often do. Ambulatory care had 8.9 thousand of the new jobs, hospital care another 15.7 thousand jobs, nursing care 3.3 thousand jobs, and social assistance 2.2 thousand jobs. Growth rates around 2.5 percent are typical for health care, but this month's health employment growth rate was 1.94 percent, lower than last month, but still above the national average.

Leisure and hospitality services had a modest gain of 30 thousand jobs for July. Arts, entertainment and recreation had another month of losses that offset 29.3 thousand more jobs in food services, mostly restaurants, and another 4.3 thousand jobs in accommodations, although accommodations typically has small declines.

Information services added 2 thousand jobs with small gains in communications and data processing sub sectors. Publishing and motion picture and sound recording had small job losses. Financial activities added a net of 17 thousand jobs for July, another big gain, but like the last six months the gain comes primarily in the insurance industry, which added 9.6 thousand jobs. Real estate services did well with 4.6 thousand new jobs. The category, other services, added 7 thousand jobs after last month's gain of 10 thousand jobs. Both the increases are big gains for these sub-sectors; non profit associations added 3.9 thousand jobs.

The July increase of 215 thousand jobs for non-farm establishment employment was little different than the 223 thousand new jobs last month. There are a few more manufacturing jobs than usual, but everything on jobs looks like last month only slightly smaller. Last month I wrote June was a mediocre month for jobs. Given the similarity this month I am stuck with calling July a mediocre month for jobs. Ho hum.

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July Details

Non Farm Total +215
The Bureau of Labor Statistics (BLS) reported Non-Farm employment for establishments increased from June by 215 thousand jobs for a(n) July total of 142.071 million. (Note 1 below) An increase of 215 thousand each month for the next 12 months represents an annual growth rate of 1.82%. The annual growth rate from a year ago beginning July 2014 was +2.09%; the average annual growth rate from 5 years ago beginning July 2010 was +1.73%; from 15 years ago beginning July 2000 it was .48%. America needs growth around 1.5 percent a year to keep itself employed.

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Sector breakdown for 12 Sectors in 000's of jobs

1. Natural Resources -4
Natural Resources jobs including logging and mining were down 4 thousand from June at 836 thousand jobs in July. A decrease of 4 thousand jobs each month for the next 12 months would be an annual growth rate of -5.71 percent. Natural resource jobs are down 64 thousand for the 12 months just ended. Jobs in the 1990's totaled around 770 thousand. Job growth here will be small compared to America's job needs. This is the smallest of 12 major sectors of the economy with .6 percent of establishment jobs.

2. Construction +6
Construction jobs were unchanged thousand from June at 6.383 million jobs in July. An increase of 6 thousand jobs each month for the next 12 months would be an annual growth rate of 1.13 percent. Construction jobs are up 231 thousand for the last 12 months. The growth rate for the last 5 years is +2.99%. Construction jobs rank 9th among the 12 sectors with 4.5 percent of non farm employment.

3. Manufacturing +15
Manufacturing jobs were up 15 thousand from June at 12.350 million jobs in July. An increase of 15 thousand jobs each month for the next 12 months would be an annual growth rate of +1.46 percent. Manufacturing jobs were up for the last 12 months by 159 thousand. The growth rate for the last 5 years is +1.33%. In 1994, manufacturing ranked 2nd but now ranks 6th among 12 major sectors in the economy with 8.7 percent of establishment jobs.

4. Trade, Transportation & Utility +60
Trade, both wholesale and retail, transportation and utility employment was up by 60 thousand jobs from June to 26.977 million jobs in July. These jobs tend to increase at a slower rate than the total of non-farm jobs, but an increase of 60 thousand each month for the next 12 months would be an annual growth rate of +2.67 percent. Jobs are up by 564 thousand for the last 12 months. Growth rates for the last 5 years are +1.81 percent. Jobs in these sectors rank first as the biggest sectors with combined employment of 19.0 percent of total establishment employment.

5. Information Services +2
Information Services employment were up by 2 from June to 2.793 million jobs in July. An increase of 2 thousand each month for the next 12 months would be an annual growth rate of +.86 percent. (Note 2 below) Jobs are up by 53 thousand for the last 12 months. Monthly employment in information services gyrates month to month and has been doing so for over a decade. Information jobs reached 3.7 million at the end of 2000, but started dropping, reaching 3 million by 2004 and continues below 2.7 million now. Information Services is a small sector ranking 11th of 12 with 2.0 percent of establishment jobs.

6. Financial Activities +17
Financial Activities were up 17 thousand jobs from June to 8.140 million in July. An increase of 17 thousand each month for the next 12 months would be an annual growth rate of +2.51 percent. Jobs are up 156 thousand for the last 12 months. (Note 3 below)This sector also includes real estate as well as real estate lending. Financial Services has been declining with negative annual growth rates, a 5 year growth rate of +1.18 percent, and a 15 year growth rate of
+.31 percent. Financial activities rank 8 of 12 with 5.7 percent of establishment jobs.

7. Business & Professional Services +40
Business and Professional Service jobs went up 40 thousand from June to 19.790 million in July. An increase of 40 thousand each month for the next 12 months would be an annual growth rate of +2.43 percent. Jobs are up 666 thousand for the last 12 months. Note 4 The annual growth rate for the last 5 years was 3.43 percent. It ranks as 2nd among the 12 sectors. It was third in May 1993, when manufacturing was bigger and second rank now with 13.9 percent of establishment employment.

8. Education including public and private +9
Education jobs went up 9 thousand jobs from June at 13.694 million in July. These include public and private education. An increase of 9 thousand each month for the next 12 months would be an annual growth rate of +.78 percent. Jobs are up 80 thousand for the last 12 months. (note 5) The 15 year growth rate equals 1.06 percent, faster than the national average. Education ranks 4th among 12 sectors with 9.7 percent of establishment jobs.

9. Health Care +30
Health care jobs were up 30 thousand from June to 18.606 million in July. An increase of 30 thousand each month for the next 12 months would be an annual growth rate of +1.94 percent. Jobs are up 527 thousand for the last 12 months. (note 6) The current month was below long term trends and less than growth from a year ago when the annual growth rate was +2.14 percent. Health care has been growing at +2.50 percent annual growth rate for 15 years, a rate greater than the national rate. Health care ranks 3rd of 12 with 13.0 percent of establishment jobs.

10. Leisure and hospitality +30
Leisure and hospitality jobs went up 30 thousand from June to 15.157 million in July. An increase of 30 thousand each month for the next 12 months would be an annual growth rate of +2.38 percent. Jobs are up 436 thousand for the last 12 months. (note 7) The 5 year growth rate is 3.04%. More than 80 percent of leisure and hospitality are accommodations and restaurants assuring that most of the new jobs are in restaurants. Leisure and hospitality ranks 4th of 12 with 10.6 percent of establishment jobs. It moved up from 7th in the 1990's to 5th in the last few years.

11. Other +7
Other Service jobs, which include repair, maintenance, personal services and non-profit organizations went up 7 thousand from June to 5.653 million jobs in July. An increase of 7 thousand each month for the next 12 months would be an annual growth rate of +1.49 percent. Jobs are up 84 thousand for the last 12 months. (note 8) Other services had +1.20 percent growth for the last 5 years. These sectors rank 10th of 12 with 4.0 percent of total non-farm establishment jobs.

12. Government, excluding education +2
Government service employment was up 2 thousand jobs from June to 11.691 million in July. An increase of 2 thousand each month for the next 12 months would be an annual growth rate of +.25 percent. Jobs are up 28 thousand for the last 12 months. (note 9) Government jobs excluding education tend to increase slowly but surely with a 15 year growth rate of +.07 percent. Government, excluding education, ranks 7th of 12 with 8.3 percent of total non-farm establishment jobs.

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Sector Notes___________________________

(1) The total cited above is non-farm establishment employment that counts jobs and not people. If one person has two jobs then two jobs are counted. It excludes agricultural employment and the self employed. Out of a total of people employed agricultural employment typically has about 1.5 percent, the self employed about 6.8 percent, the rest make up wage and salary employment. Jobs and people employed are close to the same, but not identical numbers because jobs are not the same as people employed: some hold two jobs. Remember all these totals are jobs. back

(2) Information Services is part of the new North American Industry Classification System(NAICS). It includes firms or establishments in publishing, motion picture & sound recording, broadcasting, Internet publishing and broadcasting, telecommunications, ISPs, web search portals, data processing, libraries, archives and a few others.back

(3) Financial Activities includes deposit and non-deposit credit firms, most of which are still known as banks, savings and loan and credit unions, but also real estate firms and general and commercial rental and leasing.back

(4) Business and Professional services includes the professional areas such as legal services, architecture, engineering, computing, advertising and supporting services including office services, facilities support, services to buildings, security services, employment agencies and so on.back

(5) Education includes private and public education. Therefore education job totals include public schools and colleges as well as private schools and colleges. back

(6) Health care includes ambulatory care, private hospitals, nursing and residential care, and social services including child care. back

(7) Leisure and hospitality has establishment with arts, entertainment and recreation which has performing arts, spectator sports, gambling, fitness centers and others, which are the leisure part. The hospitality part has accommodations, motels, hotels, RV parks, and full service and fast food restaurants. back

(8) Other is a smorgasbord of repair and maintenance services, especially car repair, personal services and non-profit services of organizations like foundations, social advocacy and civic groups, and business, professional, labor unions, political groups and political parties. back

(9) Government job totals include federal, state, and local government administrative work but without education jobs. back

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Notes

Jobs are not the same as employment because jobs are counted once but one person could have two jobs adding one to employment but two to jobs. Also the employment numbers include agricultural workers, the self employed, unpaid family workers, household workers and those on unpaid leave. Jobs are establishment jobs and non-other. back

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Monday, June 29, 2015

Millennials Weary from Overwork

Millennials Weary from Overwork

A recent article in the Washington Post reports on a Global Generations Research Survey by Ernst and Young. [Millennials want a work-life balance. Their bosses don't understand why, WP, 5-6-15] The report finds many work long hours. As a consequence they delay having children, discontinue education and struggle to pay tuition for their children. The article contrasts Millennials with older generations where the young expect technology to free them to work productively from anywhere, but the older bosses are “afraid people who don’t come to the office won’t work as hard.”

The article does not mention a prime source of overwork: unpaid overtime. The demand to have employees around warming up a chair to meet the expectations of the boss has a special hypocrisy since it is common now for business to issue laptop computers, cell phones, and Blackberry’s to employees for use away from the office. Using new technology makes staff available for overtime on evening, weekends, or the middle of the night. Few reports suggest business treat these additional hours of work as paid work much less time and a half for overtime required by the Fair Labor Standards Act.

Back in 2003 the Bush Administration quietly rewrote the overtime rules in the Fair Labor Standards Act. In theory working more than forty hours a week is entitled to pay at time and half the regular pay rate. The Fair Labor Standards Act rules start out with the time and half rule, but they are followed with pages and pages of exceptions that make it easy for management to avoid overtime pay whenever they want.

Three people working forty hours a week equal two people working sixty hours a week, but management pays less for the two when overtime rules allow unpaid overtime. The abuse violates more than the overtime rules because the Fair Labor Standards Act requires at least regular pay for time worked in all cases. Overtime rules exempt millions of America’s executive, administrative, professional, computer, outside sales employees, motion picture employees, and other more narrowly defined occupations from overtime pay, but quite often they work overtime hours for free. Millions confront regular pressure to donate hours of work to their employers while others looking for work find that difficult to do with others working for nothing.

The Code of Federal Regulations sections known as 29 CFR 541 governs overtime rules. The rules run over 15 thousand words after the Bush Administration revisions. The revisions make it possible to avoid overtime pay for almost any office and professional work as long as an employee receives a salary equal to or greater than $455 a week, or $23,660 on an annual basis. Notice that any employer has authority to pay by the week or pay by the hour to fit the regulations as they choose. In practice it turns out weekly, monthly or annual pay makes it easy to forget the total of hours worked.

The long detailed wording in the regulations allows an employer to define or adjust duties to meet the regulations. The wording for administrative employees explains that any employee employed in a bona fide administrative capacity who is “compensated on a salary or fee basis at a rate of not less than $455 per week, exclusive of board, lodging or other facilities, whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers, and whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance” can be exempt from overtime pay.

The regulations describe ways that discretion, independent judgement, and matters of significance might occur and then by changed by higher ups in order to exempt an employer from overtime pay. The regulations read “The exercise of discretion and independent judgment implies that the employee has authority to make an independent choice, free from immediate direction or supervision. However, employees can exercise discretion and independent judgment even if their decisions or recommendations are reviewed at a higher level. Thus, the term ‘discretion and independent judgment’ does not require that the decisions made by an employee have a finality that goes with unlimited authority and a complete absence of review.”

The Obama Administration, now well into a second term, has finally proposed amendments to the overtime rules. They want to raise the salary cap for overtime exemption from $23,660 to $52,000. Business opponents of the change worry and fret to Congress that the new law will cause more lawsuits.

Jamie Richardson, vice president of White Castle Restaurants, told Congress “The new regulations will only result in more complicated laws, and eventually more lawsuits.” He means that raising the threshold for exemption will give financial incentive for more people and groups to challenge the vague terminology used to avoid paying overtime since the Bush Administration amendments went into effect in 2004.

Lawsuits are already on the rise the government’s GAO (General Accounting Office) reports because more employees are tired of employers who expect them to be available to answer emails and cell phones out of business hours on weekends and evenings.

Some like Ryan Shaw, quoted in the Millennial article above, have taken the work hours issue one step further. If they can be expected to work part of the time away from the office then why not all of the time. Since his work was over the Internet and on computers he demanded to leave his employer’s home base in Los Angeles and move to Florida and do his work from there based on a salary disconnected from work hours. Now his work depends only on what he does and not how he does it. Some employers have a hard time recognizing work for what it is; they want control over time.

It’s hard to defend rules that keep employees at work for free. As the Obama Administration moves into its final years, it is about time they did something for working Americans. The proposed rule changes make changes in the right direction; the only question is why so little, so late.

Wednesday, June 17, 2015

City of Scoundrels

Gary Krist, City of Scoundrels: The 12 Days of Disaster That Gave Birth to Modern Chicago, (New York, NY: Crown Publishers, 2012), 273 pages.

Students and scholars of American history will remember how 1919 turned into a post war nightmare of bombings, strikes, riots and violence. The year started with the Seattle general strike. Random bombings started in February and continued around the country. There were the summer race riots, the worst one in Chicago, the fall strikes of the Boston police, steel workers and coal miners. The first raids of A. Mitchell Palmer’s red scare took place in November.

In City of Scoundrels, Gary Krist narrates the 1919 life and troubles for Chicago with special emphasis on twelve days from July 21 to August 1, 1919. The opening prologue narrates a burning exploding Goodyear blimp, the Wingfoot Express, that fell into the central court of the Illinois Trust bank in downtown Chicago on July 21. Bank employees were finishing their workday when the flaming mass dropped literally onto their heads, killing twelve and wounding many more.

Part I follows with eight chapters of background history and events of Chicago from January 1, 1919 until the July 21, 1919 crash of the blimp, which Krist assures readers was a miner mishap compared to what was coming. Chicago politics dominate these early chapters with a detailed account of Mayor Big Bill Thompson’s 1919 campaign for a second term and his rivalry with Illinois Governor Frank Lowden.

Krist mentions events and careers of a number of famous or notorious people with Chicago connections like attorney Clarence Darrow, journalist Ring Lardner, poet and journalist Carl Sandberg, black activist Ida Wells-Barnett, and the new Chicago White Sox manager, “Kid” Gleason.

Discussion includes the newspaper rivalries of the Chicago Tribune and its editor Robert McCormack with the Chicago Daily News and its editor Victor Lawson. Bombings in black neighborhoods and the death of Ernestine Ellis foreshadow the race riots to come. Krist had access to several diaries, which helped him give readers a feel for the Chicago social life of the era that includes discussion of the 1919 new years’ eve celebration and the onset of prohibition.

Krist titles part II, Crisis. It narrates four crisis sprinkled through ten chapters, one chapter for each day starting with Tuesday, July 22 and so on until August 1. Part II picks up the aftermath of the blimp crash, the abduction and murder of a young girl named Janet Wilkinson, a citywide transit strike, and south side race riot.

The Blimp crash brought hearings with charges and counter charges that open part II. The best quote for me came from a Chicago Evening Post editorial. The crash “is due, as so many other disasters are due, to the American habit of taking no preventive action till the disaster as occurred.” Still true I would say.

The blimp crash and its aftermath are one thread through recurring narrative of the four crisis. Krist covers the Janet Wilkinson case in great detail: the disappearance, suspects, arrests, interrogation, a confession, the trial, and execution by hanging, but over half of the 100 plus pages of part II narrate the riots and transit strike which occur on the same July days.

Readers confront the extraordinary violence and bitterness of the riots and the determination of the black community to fight back. Many in the black community served in the armed forces and fought in France during World War I. Narrative highlights the role of white youth gangs in the violence. Like the St. Louis riots before it arson wiped out whole neighborhoods and spread to downtown areas.

Readers will have to evaluate the political and personal rivalry of Mayor Thompson and Illinois Governor Frank Lowden, who acted as competitors rather than allies in spite of the riot. Narrative describes how Mayor Thompson succeeded in keeping Governor Lowden from calling out the National Guard until the Mayor decided it was time on the fourth day, after most of the 23 blacks and 15 whites killed in the riots, were already dead.

Four chapters and an epilogue cover the post riot period from August 1, 1919 through the end of 1920. Much of it recounts the continuing rivalry of the Mayor and the Governor. The Mayor was determined to sabotage the governor’s plan to end the transit strike. The 1920 Republican National Convention was in Chicago and Mayor Thompson had control of key Illinois delegates he used against one of the presidential front runners: Illinois
Governor Frank Lowden. The epilogue follows the major characters in the narrative with a “where they are now” wrap up.

It should be no surprise journalist Krist writes smooth journalistic narrative. The book makes easy reading with sources well documented and a useful and varied bibliography. There are also some fun black and white pictures of the people we meet in the book.

The title of the book, City of Scoundrels, fits for a book length account of grimy Chicago politics and berserk violence, but the sub title, the 12 days of disaster that gave birth to modern Chicago, doesn’t fit as well for me. It could be he means modern Chicago still lives by the me-first principles of “Big Bill" Thompson. I took the mention of the 17 year old Richard J. Daley as a member of one of the white street gangs to be a hint in that direction, but Krist doesn’t follow up too well with what he means by modern Chicago. After you finish this book you might feel better if you just think about Chicago as the windy city!







Monday, June 8, 2015

2014 – A Bad Year for Wages

The Inflation rate for 2014 was low at 1.62 percent, but generally more than dollar wage increases. America has 26 occupations with at least a million people employed in 2014, which the Bureau of Labor Statistics reports have total employment of 50.5 million. Among the 26 occupations 18 of them had a decrease in real wages; eight had an increase, but the highest increase of the 8 was only .58 percent.

Occupations with lower buying power for 2014 include jobs from management, finance, education, health care, sales, office administration, maintenance and repair, manufacturing and transportation. One of the 26 occupations mentioned is in management: general and operations managers. Its percentage increase in median wages from 2013 to 2014 was .87 compared to the inflation rate of 1.62 percent. If the 2013 median wage of $96,460 for general and operations managers increased by the rate of inflation through 2014 it would be $97,994.31. Instead it is $97,270, a -.74 percent decrease in the real wage.

Accountants and auditors had 1.2 million employed in 2014 with a reported 2014 median wage of $65,940, more than the 2013 median wage of $65,080, but not enough to keep up with inflation. Buying power declined by -.3 percent.

Elementary school teachers had 1.4 million employed in 2014 with a median wage of $54,120, more than the 2013 median wage of $53,540, but real wages declined -.62 percent as a result of inflation. Registered nurses had 2.7 million employed with a 2014 median wage of $66,640, the 2014 increase did not keep up with inflation and registered nurses had a -.97 percent decrease in buying power for 2014.

America’s two biggest occupations are retail salesperson with 4.6 million jobs and cashier with 3.4 million jobs. For retail salespersons the percentage increase in median wages from 2013 to 2014 was 1.18 percent compared to the inflation rate of 1.62 percent. If the 2013 median wage of $21,140 for retail salesperson increased by the rate of inflation through 2014 it would be $21,482.94. Instead it is $21,390, a -.43 percent decrease in the real wage.

For cashiers the median wages from 2013 to 2014 were up .53 percent compared to the inflation rate of 1.62 percent. If the 2013 median wage of $18,960 for cashiers increased by the rate of inflation through 2014 it would be $19,267.57. Instead it is $19,060,
a –1.08 percent decrease in the real wage.

Comparing other years than 2013 with 2014 can give a more complete picture of wage changes. For example, with accountants and auditors the real wage declined from 2013 to 2014, but comparing 2000 wages with 2014 looks much better. For accountants and auditors the 2000 median wage of $45,380 would need to increase to $60,687.98 in 2014 to keep up with the rate of inflation through 2014. Instead it is $65,940, an 8.65 percent increase in the real wage for the 14 years.


For accountants and auditors the decline from 2013 to 2014 looks like a temporary set back in a general upward trend of real wages. In contrast for cashiers real wages are down in 2014 compared to any year of the last 15 years. Median wages adjusted for inflation were down 1.08 percent from 2013 to 2014, down 2.56 percent from 2012 to 2014, down 3.77 percent from 2011 to 2014, down 5.1 percent for 2010 to 2014, down 4.12 percent from 2000 to 2014. For cashiers the 2000 median wage of $14,460 would need to increase to $19,879.23 in 2014 to keep up with the rate of inflation. Instead it is $19,060, hence the 4.12 percent decline.

None of the major occupational categories escaped a decline in wages compared to inflation. In the 34 managerial occupations 13 had real wage declines for 2014 over 2013. However, 53 percent of those employed as managers lost buying power including all of those in education administration.

Food preparation and serving related occupations had the broadest losses with 16 of 18 occupations losing compared to inflation, or 98 percent of food service and restaurant jobs out of a total of 11.9 million in food service occupations losing ground on inflation. Cashier and retail salespersons are two sales occupations, but 14 out of 22 sales occupations show a real wage decline where 85 percent of jobs in sales lost buying power because wage increases did not keep up with inflation.

In health care 26 out of 62 occupations showed a real wage decline. Because some of the more important jobs like registered nurse show real wage declines, almost 73 percent of health care jobs did not keep up with inflation from 2013 to 2014. Computing occupations did relatively well, but some had real wage declines. Web developers had a 2013 median wage of $63,160, but needed to increase to $64,184.60 to equal the rate of inflation through 2014. Instead it is $63,490, a –1.08 percent decrease in the real wage.

The data used here comes from the Occupational Employment Survey of the Bureau of Labor Statistics. It offers a comprehensive and consistent method to survey and compare wage data. It is not infallible, but it shows broad and troubling losses in buying power for millions of wage earners.

The past year was a good year for jobs with 3.1 million new jobs for the 12 months ending December 2014. The press and other media discussed the new jobs as a good thing, generally without reservation. However, stagnant or falling wages encourages new hiring in the short run and so the new jobs went with stagnant wages. Millions more work but their jobs contribute to wage and income inequality. Productivity, output per hour of work, continues to rise. Wages need to rise by the amount of inflation plus at least the annual increase in productivity to be a good year for wages. More jobs are good, but a good year needs more jobs with more buying power. It did not happen in 2014. Maybe another year?

Saturday, May 23, 2015

Salary Sharing Taboos and the Memory of Gordie Howe

The title of the article reads “Salary-sharing taboo a big hurdle for pay equity.” [Washington Post, 5-10-15] No single bit of American pretension, vanity and egotism does more to harm the common cause of labor than pay secrecy. It harms more than pay equity; it lowers wages for all.

The article cites a linkedIn survey of a thousand full-time U.S. workers that found 73 percent aren’t comfortable discussing their pay with anyone at their office. Only 13 percent said they were completely comfortable while 14 percent said they could discuss salary with close colleagues but not their wider team.

Pay differentials create the incentive to replace higher paid labor with lower paid labor. If Harry makes more than Barry, business has the incentive to replace Harry with Larry and pay him like Barry. Some people seem to understand this when they complain that union negotiators sell out their members by agreement to have a two-tier wage system. If Harry knows Barry makes less, it is their mutual self interest to negotiate the higher pay for both.

The article cites women as less comfortable than men when discussing pay. How foolish when women have a long history of pay discrimination. Some managers take their discrimination seriously and do not hire women at any wage, but the more unscrupulous know women are employable and productive and can be hired at low wages to replace Harry, Barry or Larry. If women would discuss pay with their male colleagues they would learn lots about the men around them, or any claims they offer about equality.

In a recent sports book about Hockey Legend Gordie Howe, he discusses some of his contract negotiations with the Detroit Red Wings. Howe admitted he and his teammates were in the dark about team salaries and for other players in the NHL. Their contracts committed them to secrecy and forbid comparing pay with teammates or players on other teams.

During contract negotiations General Manager Jack Adams would always tell Howe he was the highest paid player in the league, which would be appropriate for one the finest players ever to play hockey. Trouble is he wasn’t. It was years later that he learned from a player on another team who was head of the players association that he was not even the highest paid player on his team. With that information he negotiated a raise. There was no sign management was embarrassed by their deception.

If pay secrecy appeals to your vanity, remember Gordie. Pay differentials and pay secrecy hold wages down for everyone; they are one of many enemies of better wages.

Wednesday, May 13, 2015

Governor Scott Walker, Wisconsin Unions and the Plans Ahead

America’s National Labor Relations law as amended governs private sector unions, but not public sector unions. Public sector unions organize and operate under state enabling legislation. Some states like Virginia do not permit public sector unions. In 2011 the state of Wisconsin repealed legislation that allowed public sector unions and cut health insurance and pension benefits at the same time.

In an article from the Washington Post author Robert Samuels reported membership in unions of Wisconsin public school teachers dropped by 50 percent; Wisconsin public employee unions plummeted by as much as 70 percent. [Wis. Unions crippled by clash with governor, WP, 2-23-15] A local AFSME member quoted in the article is out knocking on doors trying to get former members to rejoin and telling them dues will be reduced from $59 a month to $36.

A union has to negotiate and administer a collective bargaining contract to serve its members. Few employers agree to an employment contract when they hire employees. Without a written contract employment is said to be “at will,” a euphemistic term for a job with no rights at all. At will employees can be fired, demoted or laid off at anytime and without recourse.

A union collective bargaining contract establishes written procedures for internal due process and terms for dismissal for cause and seniority in addition to a wage scale and other rights. Without recognition by management or a contract, there is next to nothing that remains of the unions to justify taking $36 a month in dues from members. Maybe those who have dropped out of Wisconsin unions understand that, but it is less clear what those who hang on hope to accomplish.

Without labor law, unions can only get recognition if they have the economic power and the solidarity to strike. Before 1935 and the passing of the National Labor Relations Act the government took no formal role in labor relations. There were strikes and boycotts that tested a union’s economic power to fight the dictates of employers. Win or lose strikes disrupted the economy and cut production.

The National Labor Relations Act created an official body with the National Labor Relations Board to administer and interpret the law. Several specific aims and policies emerged in just a few years and continue today. Government primarily aims to prevent strikes and economic disruptions. In that role government helped create union contract administration that eliminate strikes with a union bureaucracy that can and does act with little or no involvement from the rank and file membership.

The Washington Post article mentioned above has several quotations to illustrate working class isolation and indifference to unions. “If you do a good job everything will take care of itself. The money I’d spend on dues is way more valuable to buy groceries for my family.”

One quotation expressed bitterness with “Everyone knows teachers’ insurance was some of the best you could get. They do fairly well around here, and they do a good job teaching. But everyone in this town has had to tighten their belts. They should too.”

The Federal government and many states offer collective bargaining rights as a voluntary and practical concession to organized labor. Governor Walker and the Wisconsin legislature repealed their voluntary offer to bargain in good faith, but that does not prevent union organizing. Labor laws like those in Wisconsin suggest to the unwary they need a special law to grant rights they already have in the constitution: the right of free speech and free association.

In effect Governor Walker and his promoters want to debase the working class for personal or political purposes, but they did not acknowledge that doing so turns the clock back to the days when unions had to strike, picket and rampage to force bargaining and recognition. Governor Walker cannot eliminate the right to organize a union or its ability to disrupt the economy.

There was a time when unions did not worry about labor law. From 1905 to 1917 it took military force to end picketing and break strikes of the Industrial Workers of the World (IWW). They worked for One Big Union of all workers. Men and women of any race, creed, color or immigrants of any national origin found low fees and dues, immediate rank and file participation, and direct action on wages and working conditions.

The IWW rejected dues check off as a conflict of interest for leaders who might compromise member interests for a steady income. The IWW did not promote legislation or worry about elective politics. They wanted negotiations at the work place, not legislation, seldom enforced.

The IWW considered strikes as a necessary test of their economic power. Strike early and strike often; use mass picketing, parades and demonstrations as a show of solidarity for themselves and others.

The IWW had no use for grievance procedures that replaced rank and file action with private negotiations between employers and labor leaders. Everyone was a leader in the IWW.

The IWW did not worry about a signed contract. They expected employers to repudiate contracts unless the union had the economic power to enforce them. No terms with an employer were ever settled or final; the IWW regarded every battle as a continuing part of a working class struggle they lived with day to day.

There were plenty in business and politics in the last century who liked to taunt organized labor exactly like Scott Walker and the Koch brothers do today. In some of the more celebrated strikes in mining, railroading and steel the tycoons of industry like Henry C Frick, William R Grace, and Elbert H Gary got the working class so angry their strikes could not be broken without the armed intervention of state militia and the federal government.

At least the working class of 1910 and 1920 understood they were working class and what solidarity could do them, even when they lost. The limp and pathetic response of the people in the Samuels piece describes a divided class of people embarrassed to admit they are working class. People without an identity cannot fight; instead they slobber on the people who cheat them.

If the defunct unions of Wisconsin understand their circumstance they will change their name to “Union of Wisconsin” open to everyone who works for wages. They will lower their dues to a dollar or two a year and organize rank and file participation while accepting there cannot be full time paid staff. They must organize and support a selection of strikes. Pick out some chains or a school district to walk out and shut down for a day, or longer, and be ready to give financial support to those with the courage to do it. Of course, this assumes solidarity. What class are you in?






Thursday, May 7, 2015

The Right to Work Campaign and the Open Shop

The Right to Work Campaign and the Open Shop

The Right to Work keeps making the news. A recent Yahoo report [5-5-15] quoted Wisconsin Governor Scott Walker campaigning in Iowa where he said “He would champion a federal version of the controversial ‘right to work’ law he signed earlier this year.”

Another Yahoo piece by Sara Burnett [5-1-15] reports that Illinois Republican Governor Bruce Rauner travels from town to town to promote “cutting unions down to size.” He wants to expand the right to work in “empowerment zones” in which voters could approve making union membership voluntary, rather than mandatory, at unionized workplaces in their communities.”

Management has always promoted the right to work they just called it the open shop in the years before the National Labor Relations Act of 1935 and the Taft-Hartley Amendments of 1947. In the open shop era management expected to hire and fire anyone at any time whereas a union wanted recognition that required management to hire only union members: the open shop versus the closed shop.

In the open shop era unions typically had to strike to get recognition and bargain for a closed shop because management doubted unions had the solidarity to justify giving in to a union. During a Senate investigation after the 1919 steel strike Senator Thomas Walsh questioned former Judge Elbert H. Gary of United States Steel. Senator Walsh wanted to know why Judge Gary refused to negotiate with the steelworkers union. He asked “Did you decline because they were officials of organized labor or because you believed they did not represent the true feelings and sentiments of your employees?”

Judge Gary answered that he did not believe the union leaders “represent the sentiment of the large majority of our people, if any of them.” His statement came after the steel strike when 365,000 steelworkers walked off their jobs; many were not even union members.

Senator Walsh asked if there were any other reasons he refused to talk with labor leaders. He said “Well, I want to be frank enough to say that it has been my policy, and the policy of our corporation, not to deal with union labor leaders. … We are not willing to do anything, which we believe, after consideration, amounts to the establishment of a closed shop as against an open shop, or that tends to do that. We stand firmly on the proposition that industry must be allowed to proceed untrammeled by the dictates of labor unions or anyone else except the employer and the employees and the government.”

It was an age before any restrictions from labor relation’s law so a union could strike and shut down production of any industry if it had the solidarity and the economic power to support members in a strike. Judge Gary doubted steel unions had the economic power to win strikes, but with an open shop he had no restrictions from labor relations law either. He could fire anyone for joining a union if he could find more labor to replace them.

In the open shop era managers would tell the press they wanted to protect the right to work of loyal employees. In his testimony to Senator Walsh Judge Gary declared his opposition to the closed shop in those exact terms. He said “When an employer contracts with the union labor leaders he immediately drives all of his employees into the unions. Otherwise they cannot get employment.”

So true, except union leaders know they cannot maintain a wage scale for anyone if management can fire high wage union employees and replace them with low wage non-union employees as they can do with the open shop.

In the modern era the right to work discussion is the equivalent to the open shop with slight differences caused by the passage and evolution of U.S. labor law after 1935. Collective bargaining agreements start by setting union security that defines who will be in the bargaining unit and the requirements for employees to be in the union and pay union dues. Unions want the closed shop as the best possible way to control membership in their union.

Other forms of union security evolved as a compromise between the extremes of a closed shop and the open shop. The union shop requires new hires to join the union in 60 to 90 days. An agency shop requires payment of a non-member fee as long as the union used the non-member funds only for contract negotiations, contract administration and grievance procedures rather than for political or ideological activities.

However, the closed shop was banned with the 1947 Taft-Hartley Amendments and Section 14b gives authority to state governments to eliminate the union shop, and the agency shop for unions within their state. Twenty-five states have eliminated the union shop, agency shop and all dues check off, which makes them right to work states in the popular jargon of union hating business and their politicians everywhere.

Once a state legislature passes Section 14b legislation it becomes much more difficult to organize a new union because the new union has to be an open shop with no control over its membership. For established unions dues check off ends and union members can volunteer to pay union dues. Union members and nonmembers alike have the same rights under an existing collective bargaining contract and so no one has the incentive to pay dues for what they get for free.

Because American labor law requires a union to represent all workers in the bargaining unit existing private sector unions with collective bargaining contracts can continue after Section 14b legislation, but without control over new members or the right to collect dues, they will be in a fight to survive.

The wording of Section 14b does not have “right to work” anywhere in it. Those who oppose unions characterize the conditions of union security as a violation of individual rights and personal freedom. Governor Walker said “As much as I think the federal government should get out of most of what it’s in right now, I think establishing fundamental freedoms for the American people is a legitimate thing and that would be something that would provide that opportunity in the other half of America to people who don’t have those opportunities today,”

Governor Rauner said “These special interests have got to be stopped. That’s the key to turning our state around.”

The wealthy classes and their politicians call unions a special interest group because it helps divide the working class just as it did back in Judge Gary’s day. America’s working class is so big it could be the dominant class but only if Americans understand what class they are in, which some do not. In the last few years Governor Walker has convinced the low paid working class of Wisconsin that union members are in a separate privileged class. Instead of recognizing the common interests of everyone who works for wages and the need to raise everyone’s wages, they identify with Judge Gary and Governor Walker as though they could benefit from the intentions of the wealthy. Do they prefer to work for low wages?

In the piece mentioned above by Sara Burnett she quoted a guy named Joe Steichen, a board member of a union in Illinois: Operating Engineers Local 150. When talking about Governor Rauner’s plans, he said “the county has a healthy budget surplus and business environment achieved without trying to "destroy" the working class.” Here is a guy who knows what class he is in. For those who work for a living and support right to work legislation, they should be known as the class of fools.