Thursday, December 31, 2015

Labor Line

May 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 May 8, 2015.

American Job Market The Chronicle

Current Job and Employment Data

Jobs
Total Non-Farm Establishment Jobs up 223,000 to 141,367,000
Total Private Jobs up 213,000 to 119,460,000
Total Government Employment up 10,000 to 21,907,000

Employment Note
Civilian Non-Institutional Population up 186,000 to 250,266,000
Civilian Labor Force up 166,000 to 157,072,000
Employed up 192,000 to 148,523,000
Employed Men up 189,000 to 79,203,000
Employed Women up 3,000 to 69,320,000
Unemployed down 26,000 to 8,549,000
Not in the Labor Force up 19,000 to 93,194,000

Unemployment Rate down .1% at 5.4%, or 8,549/157,072
Labor Force Participation Rate up .1% to 62.8%, or 157,072/250,266

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

The April CPI report for the 12 months ending with March, shows the

CPI for All Items was down .1%
CPI for Food and Beverages was up 2.3%
CPI for Housing was up 1.9%
CPI for Apparel was down .5%
CPI for Transportation including gasoline was down 8.7%
CPI for Medical Care was up 2.5%
CPI for Recreation was up .1%
CPI for Education was up 3.7%
CPI for Communication was down 2.5%

This Month's Establishment Jobs Press Report

BACK TO A NORMAL INCREASE

The Bureau of Labor Statistics published its May report of jobs in April. The May report shows an increase in employment of 192,000 with a small decrease of 26,000 in the number of unemployed. Almost all of the increase in employment was for men with 189,000 increase while employed women were up just 3,000. The higher employment and lower unemployment combined to help lower the unemployment rate by .1 percent to 5.4 percent. The unemployed total continues to remain low at 8.549 million for April. The labor force participation rate was up .1 percent as a result of more employment. The new rate is 62.8 percent.

The seasonally adjusted total of establishment jobs was up 223 thousand for April. The increase was 182 thousand more private sector service jobs combined with an increase of 31 thousand goods production jobs and an increase of 10 thousand in government service jobs.

The goods production sector improved after last month's decline, but natural resources and mining employment continues to drop. Mining was down 15 thousand jobs where mining includes oil and gas extraction and the industries that support mining and oil and gas extraction. Construction revived after last month's losses for a net increase of 45 thousand jobs. Most of the increase, 41 thousand, was for specialty trade contractors. Manufacturing was up a thousand jobs where 6 thousand new jobs in automotive manufacturing and parts production were offset by small declines in durable and non-durable production industries.

Combined government service employment was up 10 thousand jobs for April. Federal, state and local government all had job gains, but most of the state and local gains were in public education, up 3.3 thousand at the state level and 3.4 thousand at the local level. Private education added 5.2 thousand jobs for net gain of 11.9 thousand jobs in public and private education.

Professional and business services had the biggest job increase among private service industries with 62 thousand new jobs for April, up from last month. The professional and technical services sectors share of the increase was 20.7 thousand new jobs compared to 41.3 thousand new jobs in the administrative and support services sub sectors. Accounting and bookkeeping services were off 1.5 thousand jobs as the tax season winds down, but other services for architecture and engineering, computer systems design, and management and technical consulting added more jobs at above average rates. Computer systems design and related services added 9.1 thousand new jobs for April, a healthy increase. Among the administrative and support service sub sectors temporary help services picked up 16.1 thousand new jobs. Services to buildings and dwelling added 15.7 thousand jobs.

Health care picked up 56 thousand new jobs for April, a bigger increase than recent months. Ambulatory care had 25.3 thousand of the jobs and hospital care another 11.8 thousand jobs. Growth rates around 2.5 percent are typical for health care, but this month's health employment growth rate of 3.63 percent jumped well above long term trends.

Trade, transportation and utilities services had 24 thousand new jobs for April. Wholesale trade was off 4.5 thousand jobs that offset 12.1 thousand new jobs in retail trade. The increase came in spite of a decline in department store employment of 6.4 thousand jobs.

Transportation was up again with 15.2 thousand new jobs, more than last month's increase. The big job gains came in transportation support activities where 4.8 thousand new jobs were at establishments doing port, terminal, harbor and airport operations that include loading, unloading, navigation, logistics, packing, crating, and towing. Utilities picked up 1.3 thousand jobs, more than usual.

Leisure and hospitality service had a net increase of 17 thousand new jobs for April, a modest gain but more than last month. Jobs were up 26 thousand jobs in food services and drinking places while accommodations were down 7.1 thousand jobs, a large decrease for a sector that keeps losing jobs. The arts, entertainment and recreation sector was off as well, down 2.2 thousand jobs.

Information services had a net gain of 3 thousand jobs with principal gains in motion picture and sound recording, up 3.2 thousand jobs. Those gains offset other smaller losses. Financial activities added 9 thousand jobs for April with gains primarily in the insurance industry, which added 5.1 thousand jobs for a fourth month of increase. Other services had 6 thousand new jobs with personal services adding 4.4 thousand jobs. Non-profit associations added 1.2 thousand jobs.

The April increase of 223 thousand jobs for non-farm establishment employment restores a normal job increase after last month's pause. Manufacturing continues to lag and mining keeps losing jobs. Restaurants did poorly, but the bigger increase in health care is encouraging and professional services keeps turning out new jobs. The growth rate for jobs if they grow at 223 thousand a month for 12 months equals 1.9 percent. The growth rate for the 12 months just ended was 2.15 percent. Both rates are good enough to keep America employed.

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April Details

Non Farm Total +223
The Bureau of Labor Statistics (BLS) reported Non-Farm employment for establishments increased from March by 223 thousand jobs for a(n) April total of 141.367 million. (Note 1 below) An increase of 223 thousand each month for the next 12 months represents an annual growth rate of 1.90%. The annual growth rate from a year ago beginning April 2014 was +2.15%; the average annual growth rate from 5 years ago beginning April 2010 was +1.68%; from 15 years ago beginning April 2000 it was .46%. 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 -15
Natural Resources jobs including logging and mining were down 15 thousand from March at 865 thousand jobs in April. A decrease of 15 thousand jobs each month for the next 12 months would be an annual growth rate of -20.45 percent. Natural resource jobs are down 21 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 +45
Construction jobs were up 45 thousand from March at 6.344 million jobs in April. An increase of 45 thousand jobs each month for the next 12 months would be an annual growth rate of +8.52 percent. Construction jobs are up 280 thousand for the last 12 months. The growth rate for the last 5 years is +2.83%. Construction jobs rank 9th among the 12 sectors with 4.5 percent of non farm employment.

3. Manufacturing +1
Manufacturing jobs were up 1 thousand from March at 12.322 million jobs in April. An increase of 1 thousand jobs each month for the next 12 months would be an annual growth rate of +.1 percent. Manufacturing jobs were up for the last 12 months by 180 thousand. The growth rate for the last 5 years is +1.41%. 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 +24
Trade, both wholesale and retail, transportation and utility employment was up by 24 thousand jobs from March to 26.815 million jobs in April. These jobs tend to increase at a slower rate than the total of non-farm jobs, but an increase of 24 thousand each month for the next 12 months would be an annual growth rate of +1.07 percent. Jobs are up by 555 thousand for the last 12 months. Growth rates for the last 5 years are +1.76 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 +3
Information Services employment were up by 3 from March to 2.783 million jobs in April. An increase of 3 thousand each month for the next 12 months would be an annual growth rate of +1.29 percent. (Note 2 below) Jobs are up by 55 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 +9
Financial Activities were up 9 thousand jobs from March to 8.093 million in April. An increase of 9 thousand each month for the next 12 months would be an annual growth rate of +1.34 percent. Jobs are up 151 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 +.97 percent, and a 15 year growth rate of
+.28 percent. Financial activities rank 8 of 12 with 5.7 percent of establishment jobs.

7. Business & Professional Services +62
Business and Professional Service jobs went up 62 thousand from March to 19.605 million in April. An increase of 62 thousand each month for the next 12 months would be an annual growth rate of +3.81 percent. Jobs are up 654 thousand for the last 12 months. Note 4 The annual growth rate for the last 5 years was 3.36 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 +12
Education jobs went up 12 thousand jobs from March at 13.692 million in April. These include public and private education. An increase of 12 thousand each month for the next 12 months would be an annual growth rate of +1.04 percent. Jobs are up 97 thousand for the last 12 months. (note 5) The 15 year growth rate equals 1.05 percent, faster than the national average. Education ranks 4th among 12 sectors with 9.7 percent of establishment jobs.

9. Health Care +56
Health care jobs were up 56 thousand from March to 18.452 million in April. An increase of 56 thousand each month for the next 12 months would be an annual growth rate of +3.23 percent. Jobs are up 506 thousand for the last 12 months. (note 6) The current month was above long term trends and greater than growth from a year ago when the annual growth rate was +2.82 percent. Health care has been growing at +2.47 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 +17
Leisure and hospitality jobs went up 17 thousand from March to 15.044 million in April. An increase of 17 thousand each month for the next 12 months would be an annual growth rate of +1.36 percent. Jobs are up 434 thousand for the last 12 months. (note 7) The 5 year growth rate is 3.0%. 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 +6
Other Service jobs, which include repair, maintenance, personal services and non-profit organizations went up 6 thousand from March to 5.633 million jobs in April. An increase of 6 thousand each month for the next 12 months would be an annual growth rate of +1.28 percent. Jobs are up 66 thousand for the last 12 months. (note 8) Other services had +1.09 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 +3
Government service employment was up 3 thousand jobs from March to 11.679 million in April. An increase of 3 thousand each month for the next 12 months would be an annual growth rate of +.31 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 .12 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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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.

Friday, May 1, 2015

Jobs for Attorneys

Lawyer

Standard Occupational Classification #23-1011 Lawyers

SOC Definition -- Lawyers #23-1011 Represent clients in criminal and civil litigation and other legal proceedings, draw up legal documents, and manage or advise clients on legal transactions. May specialize in a single area or may practice broadly in many areas of law. Examples of common names in use include Attorney; Real Estate Attorney; Corporate Counsel; Public Defender.

There is a famous line in Shakespeare. "First thing, kill all the lawyers." We have to be glad no one is talking that way now but not everyone feels happy with the modern day legal services industry. People would appreciate lawyers more if they would think about the different legal specialties: bankruptcy, divorce, crime, personal injury, medical malpractice. As we can see lawyers spend their professional life in the middle of somebody else’s argument. Bickering, wrangling, hectoring fill their days. And who ever tries to shore up their morale? Even the winning plaintiffs can be hostile. “I should’a got a better settlement.”

Arguments and other legal business employed 603,300 as lawyers in 2014. Jobs are up since 2000 when jobs were 489,500. The annual average job increase equals 8,127 per year since 2000 at a growth rate of 1.50 percent. The Bureau of Labor Statistics is forecasting job growth for lawyers at 7,480 per year through 2022 with a growth rate of 1.19 percent a year.

It is important to know that only lawyers working as lawyers in jobs at establishments are counted in the totals above. Lawyers can maintain bar membership, but if they work as managers or in another occupation their job will not be counted as a lawyer. A 51 percent majority of employed attorneys work in the Legal Services industry, another 18 percent work in government with small percents scattered in many other industries working as in-house counsel.

The totals above do not include lawyers working as self-employed attorneys in their own business. They have to be counted separately because the Bureau of Labor Statistics checks all their employment numbers with the unemployment insurance rolls. The self employed with no payroll do not have to be in the unemployment insurance system so they cannot be checked and counted in establishment employment, but have to be counted separately. The self-employed census estimate is 166,218, which brings the total of lawyers doing lawyer’s work to 769,528.

Job openings for establishment jobs give a better measure of new hiring than job growth. Job openings are job growth and the number of net replacements. Net replacements count people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be job growth. Job openings for lawyers are forecast to be 19.6 thousand a year through 2022.



The basic wage data from the BLS occupational employment survey includes a wage distribution. Averages are not used much in wage data. A few high wages pull up the average and make it unrepresentative. Instead a distribution range of wages is published with the 10th, 25th, median, 75th, and 90th percentiles of wages. A 10th percentile wage means 10 percent working in this job have wages equal to or less than the 10th percentile wage and so on. Annual wages are converted to hourly wages by dividing annual wages by 2080 hours.

The entry wage for lawyers in the national market equals the 10th percentile reported as $55,400 in 2014. The 25th percentile wage equals $75,630. The median wage is $114,970, the 75th percentile wage equals $172,540 and the 90th percentile wage is $187,200.

The wages of lawyers have not kept up with inflation during the last decade. For example, to have the buying power of the 2006 median wage of $102,470 in 2014, the lawyers wage would need to be $120,329.10. In stead it was $114,970, a 4.45 percent decrease in the real wage for those six years.

The wages of lawyers have not kept up with inflation from 2013 to 2014. For example, to have the buying power of the 2013 median wage of $114,300.00 in 2014, the lawyers wage would need to be $116,154.20. In stead it was $114,970.00, a 1.02 percent decrease in the real wage for those six years.

Back in Abe Lincoln’s day, Abe and other aspiring lawyers studied the law working in law offices and learned through the mentoring system. Now we have three years of postgraduate law school and the summer bar exam. This system helps keep people out of the work force a full seven years and generates jobs in law schools.

The National Center for Education Statistics (NCES) reports degree data for law schools as well as the American Bar Association (ABA). Both report recent law school degree totals for 205 accredited law schools to be in the 46 thousand range. The ABA reports 43,979 degrees for 2011, 46,364 for 2012 and 46,776 for 2013. Degrees can be compared with job growth and openings. With 46,776 law degrees in June 2013, the last year of complete degree data, the ratio of relevant JD degrees to openings equals 2.39, or 46,776/19,600, assuring a large surplus of qualified candidates to fill job openings.

The ABA also reports current tuition for accredited law schools, which tends to be in the $30,000 range, but varies widely. Some tuition is under $1,000 such as the University of Dayton with reported tuition of $910, while at prestigious Yale tuition rings in at $43,750. High law school tuition has the potential to make law school quite profitable, but colleges including law schools do negotiate reductions for especially promising students.

The difference in tuition puts significant but different financial pressures on graduates. Investing three years worth of $43,750 tuition at 4 percent a year would generate $276,665.80 after 20 years. Current interest rates are less than 4 percent but long term stock market returns are higher so 4 percent represents a defensible middle of the road return. It will be necessary to earn $19,574.57 a year more in wages to justify the tuition investment, again over 20 years and discounting the additional wages at 4 percent interest and annual compounding. Thanks go to Excel spreadsheet functions for these calculations.

Graduates of the high priced and well known schools like Yale and Stanford can find jobs in the largest law firms at salaries of $140,000 to $160,000, which is enough to make the three year investment in tuition payoff quite well. Large law firms pay better than smaller law firms, typically at least double small ones. Recent data show 21 law firms have more than 1,000 attorneys and a couple have over three thousand, but there are typically no more than 300 United States law firms with more than a hundred attorneys.

While the newly hired associates at large law firms can expect $140 to $160 thousand salaries, their numbers are small compared to the number of graduates each year. Large law firms can be expected to employ 60-65 thousand associate attorneys, the number varies some year to year, but that represents no more than 10 percent of jobs for associate attorneys.

The 10th percentile wage of $55,400 should be thought of as a realistic entry wage for new law school graduates. The lower entry salaries for most of the graduates makes the law school payoff more uncertain. A safe calculation should compare three years of law school tuition with any increase in salary based on a wage of $45 to $65 thousand. As of 2014 it is quite possible that law school can be a bad investment.

To be a lawyer representing clients before a court requires admission to a state bar association and the payment of bar dues. Some lawyers decide to practice law in several states but that requires passing more bar exams and paying bar dues to multiple state bar associations. Bar association dues are like the union dues paid by machinists or electricians who have to demonstrate their skills to belong to the International Association of Machinists, or International Brotherhood of Electrical Workers.

People in associations with common skills, like bar associations for lawyers, have successfully cultivated a different image for themselves than the public perception of people in unions like machinists or electrical workers. Machinists and electrical workers join a union. Lawyers support a prestigious professional association, but lawyers, machinists, and electrical workers have an identical set of needs and goals.

Each has a need to assure that people who enter the practice of law, machinist, or electrician have a common set of essential skills. Imposters are bad for practitioners and consumers alike, but the time and expense learning the skills of a lawyer, machinist, or electrician has to be covered in higher wages. Partly higher wages give the incentive to learn new skills, but incentive alone is not enough. That is because not everybody can afford the time and expense it takes to learn a skilled profession unless they can pay for the investment later with higher wages.

The median wages reported for lawyers are among the highest median wages in the Occupational Employment Survey. Physicians are generally higher, and a few other occupations like chief executive and selected actors and entertainers. Trouble is lawyers who are already lawyers have two reasons to limit entry. In addition to maintaining high skills those already qualified and licensed have the incentive to prevent too many new entrants from lowering wages.

In America, law courts do not allow partial license that would let someone represent others in divorce law, or real estate law, or other legal specialty. The requirement for a three year law degree, the bar exam and bar dues as prerequisite to represent anybody amounts to a one size fits all lawyer that limits the number of lawyer jobs. Comparison with court practices in other countries might show that America’s restrictions are not necessary, except to limit entry and keep earnings higher for lawyers.

Law firms usually charge clients by the hour with charges of $300 an hour or more, which limits legal access to the well-to-do and corporations and government, but it also limits jobs. The Legal Services industry employment in all its occupations has remained at about 1.1 million since about 2002 with a 20 year record of slow growth. Actually it is .72 percent a year since 1990; .36 percent a year since 2000; -.75 percent for last year 2013 to 2014; the worst record among professional service sub sectors. America needs jobs, more legal services and a broader approach legal representation could help.

Friday, April 24, 2015

The IRS and Ted Cruz

The IRS and Ted Cruz

Recently the Washington Post ran an editorial by Catherine Rampell discussing the Ted Cruz proposal to get rid of the IRS. [Cruz’s Anti-IRS illogic Washington Post, 3/24/15] “Imagine abolishing the IRS” he tells his audience, where they “have more words in the IRS code than there are words in the bible.”

Congress makes the tax law, which is so complicated the collection process generates additional problems unrelated to the taxes Congress expects us to pay. Since the IRS only operates with forms Americans are forced to pay their taxes by filling out forms filled with details that often require additional forms and sub-forms all governed by thousands of pages of tax law.

The process is error prone and not only by taxpayers. The IRS computers get confused and generate false accusations and hostile demands for incorrect tax payments, penalty and interest. The computer and IRS force taxpayers to answer and prove their innocence, not the other way around that we are innocent until proven guilty, like it says in the constitution. The process generates a hatred for the IRS quite apart from actual tax payments.

In the Rampell piece she worries someone has to collect the taxes and she can’t quite decide if Cruz wants to “zero out” the IRS or just make it simpler so we could have a “postcard” size tax return.

I can think of ways to eliminate the IRS in personal income tax collection. One alternative recognizes the current tax law has created categories of income to be taxed in different ways and at different rates. Wages are taxed one way and dividends and capital gains in another and so on. As well, the IRS requires withholding of wage income from each paycheck but not interest, dividends or capital gains.

It is therefore possible, and reasonable, to have all categories of income withheld, the tax paid by the source of the transaction and to have the annual tax rates converted to weeks, months or quarters as appropriate. There is absolutely no reason why tax rates have to be by the year. A 12 percent annual tax rate applied each month generates the same tax at one percent a month. Any and all exemptions and deductions can easily be converted to the same weeks, months or quarters to match income earning transactions.

Collecting income taxes at the source eliminates the IRS from the personal income tax; the IRS will be left to enforce the tax laws through business account audits: a tiny job by comparison. Individuals with tax disputes will settle them with the businesses that compute them.

Ted Cruz is a media star who knows how to huff and puff in indignation at our complicated tax system and get press attention, but he knows perfectly well the vested interests that benefit from the IRS and have the power and the will to make it more complicated, not less. Rampell reports there are 4,100 changes in the tax code since 2004, or more than one per day.

Too many people make too much money from the tax system, either directly with accounting jobs and legal services, or with one of the cottage industries like printing, software, books, courts, the Post Office and advice, in addition to those in a position to exploit its complicated features.

The tax law Congress creates reflects the American mania for competition and a money making contest. In tax matters fighting favors the wealthy who can afford attorneys and accountants who help write the law and know how to exploit it. I have read there are 65 thousand pages in the tax code. Over the years I have read less than 100, but I do know what the other 64,900 pages are intended to do. So does Ted Cruz.


Tuesday, April 14, 2015

Unions, the Supreme Court and the Ruling in Harris v. Quinn

In the Supreme Court Case of Harris v. Quinn the National Right to Work Legal Defense Foundation, an anti-union group, financed a challenge to the common law doctrine in labor law established in the case of Abood v. Detroit Board of Education [431 U. S. 209] from 1977. In the Abood case some public school teachers objected to the requirement in the Detroit Public School’s collective bargaining agreement that required non-union members to pay a service charge in lieu of union dues. The Supreme Court allowed the requirement as payment for a non-member’s “fair share” 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.

The National Labor Relations Act (NLRA) of 1935 as amended and administered by the National Labor Relations Board requires a majority vote in a democratic election to establish a union, and requires the union to represent all employees in the bargaining unit not just its members. Because United States labor law forces a certified union to represent all employees the Supreme Court declared a compulsory surcharge fairly distributes “the cost of the union among those who benefit” and “counter acts the incentive that employees might otherwise have to become ‘free riders.’ ” The court acknowledged in its Abood opinion that such a “fair share” provision has an impact on public employee first amendment rights of free speech; employees might object to policies adopted by the union in its role of exclusive representative.

Service Employees International Union

In the case of Harris v. Quinn concluded in 2014 Illinois used federal funds for a Medicaid Rehabilitation Program designed for Americans unable to live in their own homes without assistance but unable to afford the expense of in-home care. The Rehabilitation program provides federal funds for states to pay personal assistants chosen from a state approved pool of personal assistants who provide the in-home care.

In the 1980’s a majority of Illinois personal assistants voted to have Service Employees International Union represent them as their exclusive bargaining agent. SEIU petitioned the Illinois Labor Relations Board for permission to represent the Personal Assistants as their union, which at first the Board declined to allow. After some delay and discussion the Illinois legislature amended the state’s Public Labor Relations Act by declaring personal assistants working in the Medicaid program to be public employees for purposes of collective bargaining. The Public Labor Relations Act specifically permits a collective bargaining agreement whereby non-union members in the bargaining unit pay an agency fee as their fair share.

In 2010 three personal assistants in the bargaining unit petitioned a federal court for an injunction to end the non-union agency fee as a violation of their rights to free speech under the constitution. Petitioners wanted the court to abandon the common law doctrine established in the Abood case. The District Court and the seventh court of appeals dismissed the petition, but the Supreme Court agreed to hear the case.

Labor and Free Speech

The labor movement has endured 150 years of free speech attacks; nothing is new in Harris v. Quinn. A hundred years ago business owners blamed strikes on outside agitators. Outsiders would come in and stir up the benevolent owner’s happy and contented employees and cause a strike, but he was not going to speak with any labor agitators. Instead he would faithfully defend and protect the liberty and free speech for his loyal employees who did not want to join a union.

There is suspicion that U.S. Courts treat free speech rights for labor unions differently than other free speech rights. A union under U.S. labor law needs a majority vote of employees in a union representation election. It is a democratic vote in a democratic society that elects representatives by majority vote to serve in legislative bodies that in turn make decisions by majority vote. If the U.S. Congress votes to declare war as they sometimes do, not everyone agrees with the vote to go to war. If Courts worried about free speech for the minority who oppose war in the same way Courts worry about free speech for those who oppose unions, then those who oppose war, or other matters of government, could withhold a percentage of their taxes in proportion to federal budget expenditures on a war.

Full-Fledged Employment

In Harris v. Quinn the Supreme Court voted 5 to 4 to strike down the “fair share” fee for SEIU, but only for the Rehabilitation Program. The majority of five included a long discussion ridiculing the Abood opinion of the 1977 Supreme Court majority, but they decided not to overturn it. Instead they decided to restrict the “fair share” rules to what they called “full-fledged” employees. To have the “fair share” rules apply to personal assistants, they wrote, “. . . asks us to approve a very substantial expansion of Abood’s reach.” Such an expansion has “important practical consequences” which “would invite problems.”

The mention of practical consequences and problems came on page 20 of the 39 page majority opinion. Much of the remaining 19 pages described the conditions of employment as full-fledged employees and how they differed from those of personal assistants they claimed to be partial public employees, but additional discussion infers problems. The majority wrote “Suppose, for example that a customer fires a personal assistant because the customer wrongly believes that the assistant stole a fork. Or suppose that a personal assistant is discharged because the assistant shows no interest in the customer’s favorite daytime soaps. Can the union file a grievance on behalf of the assistant? The answer is no.”
The majority worried that requiring a “fair share” fee for personal assistants in Illinois could bring an expansion beyond full-fledged employees to “individuals who follow a common calling and benefit from advocacy or lobbying conducted by a group to which they do not belong and pay no dues.”

The majority admitted “the wages and benefits of personal assistants have been substantially improved; orientation and training programs, background checks, and a program to deal with lost and erroneous paychecks have been instituted; and a procedure was established to resolve grievances arising under the collective-bargaining agreement . . . and we will assume that this is correct.” But the majority added that “the agency-fee provision cannot be sustained unless the cited benefits for personal assistants could not have been achieved if the union had been required to depend for funding on the dues paid by those personal assistants who chose to join.” The majority did not reference a previous case for their authority or give an example application for their assertion.

A blunt dissent of 25 pages written for the minority by Justice Kagen treats the majority opinion as a ramble of irrelevant excuses. Kagen would apply the Abood ruling as common law doctrine because “The only point in dispute is whether it matters that the personal assistants here are employees not only of the State but also of the disabled persons for whom they care.” . . . Yet “Illinois sets all the workforce-wide terms of employment. Most notably, the State determines and pays the employees’ wages and benefits, including health insurance (while also withholding taxes).”
Justice Kagan argues that Supreme Court “decisions have long afforded government entities broad latitude to manage their workforces, even when that affects speech they could not regulate in other contexts. . . . The “deci¬sion also enables the government to advance its interests in operating effectively—by bargaining, if it so chooses, with a single employee representative and preventing free riding on that union’s efforts.”

In a more blunt point, the minority argued, the majority declined to overrule the Abood doctrines as requested by the National Right to Work Legal Defense Foundation because it has been used for so long the Supreme Court has come to apply the rule as “a general First Amendment principle.” As such the court has relied on “fair share” rules in deciding cases involving compulsory fees outside the labor context, although not for wars.

Maybe the majority decided it would be too difficult to write a legal justification to throw out compulsory fees just for labor unions, but needless to say they did not write that in their opinion. Ultimately they did accept when a federal law requires a union to provide union services, the government can make a collective bargaining contract to allow the union to be re¬imbursed for their required services. Five justices needed some excuses why it should only apply to “full fledged” employees. It is worth noting that four Supreme Court justices, one district judge and at least two appeals court justices make a majority of federal judges voting to uphold the Abood ruling. However five Supreme Court Justices made up a little bit of law to help their anti-union constituents; just politics as usual.

Wednesday, February 18, 2015

Fighting Chance

Elizabeth Warren, A Fighting Chance, (New York: Metropolitan Books, Henry Holt & Co. 2014), 277 pages, $28.00

Elizabeth Warren’s latest book, Fighting Chance, has the label Political Science on the back cover, but librarians catalog it in biography. It is a little of both, but more the politics of banking and finance and her two-decade role in it. The first chapter does chronicle her growing up in Oklahoma in typical fashion for a biography. It includes education, marriages, children, divorce, college, law school, teaching, and early interest in bankruptcy as a professor of law. Narrative is sprinkled with some personal stories and anecdotes.

One story occurred when her young son Alex attended a law school class at the University of Texas. Walking out with Alex, Mom asked “What did you think?” Alex answered, “Mom you’re not that funny.” “But they all laughed,” she defended. “They had to, Mom.” We can figure Mom has a sense of humor, but obviously Alex knows the truth. Trust me, all teachers learn that eventually.

The rest of the book explores national finance issues beginning in the mid-1990’s with a few more family stories and biographical asides thrown in to the narrative. Mostly though the remaining five chapters are serious politics beginning with Chapter 2 that covers her early career as a professor writing about bankruptcy law and practice.

The move from professor into politics came when Warren was invited to join the National Bankruptcy Review Commission in 1995 at the age of 46: a non-partisan commission appointed by Bill Clinton to review the bankruptcy law over 2 years and write a review and recommendations. Readers learn about her life on the commission and then afterward when she meets Senator Kennedy and gets to participate on work to draft and pass a new bankruptcy law.

From the late 1990’s until the 2008 financial collapse Warren was a professor who gained notoriety outside academia by authoring and co-authoring books and articles as part of an on-going analysis of bankruptcy, especially the book the Two Income Trap. She also appeared on talk shows to describe the family and personal hardships of bankruptcy. This part of the story has a bad ending when President Bush signed a new Bankruptcy law in 2005, gutting many protections for personal bankruptcy.

Another big change and chance for Warren occurs in Chapter 3. After the financial meltdown and crisis of 2008 Warren was invited by Senator Reid to be on a Congressional Oversight Panel, COP, intended to monitor and report on the congressional recovery plan known as the Troubled Asset Relief Program (TARP).

Here readers get more into the grimy character of politics and the personal tussles that go with it. On page 96 Warren writes “Yes, the crisis involved complicated financial dealings, but a lot of the supposed complication was nothing more than BS designed to cover up what was going on.” We visit meetings and discussions with President Bush’s Secretary of the Treasury Secretary, Henry Paulson, President Obama’s Treasury Secretary Timothy Geithner, and economist Larry Summers. In a lunch meeting with Summers he tells Warren that only insiders have influence if they follow the rule for insiders: They don’t criticize other insiders. Touche.

Chapter 4 begins discussion of Warren’s vision for an independent Consumer Protection Agency but there is more on negotiations for the financial reform bill known as the Dodd-Frank Act signed into law July 21, 2010. The new law included a Consumer Protection Agency, but another whole chapter describes the trials of getting it going. The bankers did not want Warren named to head the agency out of fear she would make it work.

Warren details a succession of meetings with President Obama who would praise her work but would not appoint her to run agency, once telling her “ . . .for some reason you are like a red hot poker in the eye of the Republicans.” We see the cautious side of Obama who would only offer her an interim position to get the agency going, which she finally accepted. She worked until July 18, 2011; the date someone else was nominated to head the Consumer Financial Protection Bureau, which she organized. From there it was onto to chapter 6 and her run for the Senate from Massachusetts and her eventual victory over incumbent Scott Brown.

Senator Warren uses an easy to read conversational style with many personal asides intended for a broad audience. Many of her human interest stories read like things the voters of Massachusetts might like to know about their Senator. Even though she is an academic she leaves out academic jargon and virtually all of the technical details of the financial topics and legislation she covers in a general way. Except for biographical material the book covers political negotiations and gives feelings and impressions of the many people who took part in national financial problems and crisis over the last twenty years.

The book has 57 pages of footnotes, some of them quite long and in small print. The notes have some of the technical legal and financial material left out of the narrative. We can almost hear the discussion with her editor of her target audience. That’s too technical for a general audience; put it in a footnote. She did.

By the end of the book I am comfortable that Elizabeth Warren will never be the cynical politician, or for that matter, the cynical Democrat, who talks a good game and sells out behind closed doors. She might lose a fight but not her work to have what is ethical and fair minded, and to end what is not.

One of her stories was about a congressman who spoke to Warren about some of his constituents who got swindled by the rogues and scoundrels sprinkled around the financial world. Then he said “if he stood up for the families who’d been hurt, he could find himself sidelined in Congress by the leadership of his own party.” Well, that will not happen with Senator Warren.