Friday, January 8, 2021

Labor Line

January 2021___________________________________ 

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 January 8, 2021. American Job Market The Chronicle 

 Current Job and Employment Data 

Jobs 

Total Non-Farm Establishment Jobs down 140,000 to 142,624,000

Total Private Jobs down 95,000 to 121,223,000

Total Government Employment down 45,000 to 21,401 Note 

Civilian Non-Institutional Population up 145,000 to 261,230,000

Civilian Labor Force up 31,000 to 160,567,000

Employed up 98,000 to 149,830,000 

Employed Men up 214,000 to 79,481,000

Employed Women down 192,000 to 70,350,000

Unemployed up 8,000 to 10,736,000

Not in the Labor Force up 115,000 to 100,663,000

Unemployment Rate stayed the same at 6.7% or 10,736/160,567

Labor Force Participation Rate stayed the same 61.5%, or 160,567/261,230


Prices and inflation measured by the Consumer Price Index (CPI) for all Urban Consumers was up by a monthly average of 2.3 percent for 2019. 

The CPI December report for the 12 months ending with November shows the 

CPI for All Items was up 1.2% 

CPI for Food and Beverages was up 3.7% 

CPI for Housing was up 2.0% 

CPI for Apparel was down 5.2% 

CPI for Transportation including gasoline was down 3.3% 

CPI for Medical Care was up 2.4% 

CPI for Recreation was up 1.3% 

CPI for Education was up 1.3% 

CPI for Communication was up 2.4% 

 This Month’s Establishment Jobs Press Report 

A BADLY UNBALANCED DECLINE

The Bureau of Labor Statistics published its January report for jobs in December.  Only 31 thousand entered the labor force with barely 21 thousand finding employment and the rest adding to the unemployed. December was a very quiet month where those not in the labor force increased 115 thousand. Both the unemployment rate and labor force participation rate remained the same, 6.7 percent and 61.5 percent respectively. Employed men increased by 214 thousand while employed women dropped 192 thousand.

The seasonally adjusted total of establishment employment was down 140 thousand for December. The decrease was 188 thousand fewer jobs in the private service sector combined with a 93 thousand increase in jobs from goods production. The total of 95 thousand jobs lost in the private sector combined with a decrease of 45 thousand government service jobs accounts for the total increase.

Goods production picked up 93 thousand jobs with all three subsectors adding jobs, but nearly twice the increase of last month. Natural resources added 4 thousand jobs while construction picked up 51 thousand jobs for December. Manufacturing added 38 thousand jobs, more than last month. Durable goods had a net of 25 thousand new jobs with motor vehicles and parts adding 6.7 thousand of the jobs; non-durable goods added 13 thousand jobs with food processing accounting for 5.5 thousand of the jobs.

Government service employment decreased 45 thousand jobs, less than the last two months of decline. The Federal government added 6 thousand of jobs while state and local government lost a total of 51 thousand jobs. Local government hit by the pandemic lost 31.5 thousand jobs, although losses were not many in the local public schools, down only 500 jobs. State government education, mostly college and universities, also hit hard with the pandemic lost almost 20 thousand jobs. Private education was down 62.5 thousand, which added to the public education losses that brought a loss of 83 thousand education jobs.

Trade, transportation and utilities took first place among sub sector job gains for December with 191 thousand new jobs, a little better than last month. Both wholesale and retail trade had gains with a combined gain of 145.6 thousand jobs. Sector job gains came in transportation and warehousing with 7.3 thousand jobs in truck transportation. Couriers and messenger employment was up 37.2 thousand as delivery services continue to flourish and warehousing and storage up 8.2 thousand jobs.

Business and professional services added 161 thousand jobs, way up from last month. Professional and technical services gained 52.5 thousand jobs and management of companies dropped another 10.7 thousand jobs. Administrative and support services including waste management added 97.4 thousand jobs.  To the total. Among the professional and technical services computer design and related services did the best with 20.3 thousand more jobs after last month’s decline. Administrative support employment services had 88.4 thousand of the jobs in employment services along with small gains and losses in other support services.

Health care did badly adding only 32 thousand jobs, less than the last three months and another bad sign for recovery. Ambulatory care added only 20.1 thousand jobs; hospitals had 31.5 thousand more jobs accounting for the biggest share of health care gains but offset by job losses in nursing and residential care facilities, down 13.4 thousand jobs, and social assistance services down 6.8 thousand jobs. Individual and family services were down 7 thousand jobs offset by small gains in child care services. The 15-year growth rate for health care now stands at a much lower 1.90 percent way down as a result of pandemic job losses.

Leisure and Hospitality dropped 498 thousand jobs, as outdoor dining and travel cut backs in the pandemic take a severe toll on employment. The total job decline from December a year ago increased to 3.825 million jobs. Arts, entertainment and recreation lost 102.6 thousand jobs, about the same as last month with 91.6 thousand of the jobs lost in amusements, gambling and recreation. Restaurants were off 372 thousand jobs due to winter and the Pandemic. Restaurants remain 2.354.2 million jobs below December a year ago. Accommodations dropped 23.6 thousand jobs for December, an industry also reeling from the pandemic.

Information services dropped a thousand jobs and remains 257 thousand jobs below December a year ago. Financial activities picked up 12 thousand jobs, down a little from last month. Gains were about evenly split between finance and insurance with 6.9 thousand of the jobs and real estate and rental and leasing with 4.8 thousand new jobs. Financial activities remain 7.1 thousand jobs below December a year ago. The category, other jobs, lost 22 thousand jobs, way down from last month. Personal and laundry services lost 12.4 thousand of the jobs.

The job total for establishment employment is 142.624 million below the December 2019 total of 151.998 million jobs or 9.374 million jobs below a year ago. All industry subsectors without exception remain below their employment from a year ago. Couriers and messengers with 37.4 thousand new jobs continues to add pandemic related jobs, but couriers and messengers will not lead a job recovery. Health care had its smallest increase in jobs for any month going back well before the Pandemic. The loss of almost a half million jobs in leisure and hospitality and 372 thousand of them at restaurants shows clearly how unbalanced the hardship is for the working class as goods production and wholesale and retail trade hold on, but even these sectors will be below their pre-pandemic totals for at least several years.   

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December Details 

Non Farm Total -140

The Bureau of Labor Statistics (BLS) reported Non-Farm employment for establishments decreased from November by 140 thousand jobs for a(n) December total of 142.624 million. (Note 1 below) A decrease of 140 thousand each month for the next 12 months represents an annual growth rate of -1.18%. The annual growth rate from a year ago beginning December 2019 was –6.17%; the average annual growth rate from 5 years ago beginning December 2015 was -.07%; from 15 years ago beginning December 2005 it was +.36%. 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 up 4 thousand from November at 630 thousand jobs in December. An increase of 4 thousand jobs each month for the next 12 months would be an annual growth rate of +7.67 percent. Natural resource jobs are down 85 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 .44 percent of establishment jobs.

2. Construction +15

Construction jobs were up 15 thousand from November with 7.413 million jobs in December. An increase of 15 thousand jobs each month for the next 12 months would be an annual growth rate of +8.31 percent. Construction jobs are down 142 thousand for the 12 months just ended. The growth rate for the last 5 years is +2.36%. Construction jobs rank 9th among the 12 sectors with 5.2 percent of non-farm employment.

3. Manufacturing +38

Manufacturing jobs were up 38 thousand from November with 12.309 million jobs in December. An increase of 38 thousand jobs each month for the next 12 months would be an annual growth rate of +3.72 percent.  Manufacturing jobs were down for the last 12 months by 557 thousand. The growth rate for the last 5 years is -.02%; for the last 15 years by -.94%. In 1994, manufacturing ranks 6th among 12 major sectors in the economy with 8.7 percent of establishment jobs.

4. Trade, Transportation & Utility +191

Trade, both wholesale and retail, transportation and utility employment were up 191 thousand from November with 27.071 million jobs in December. An increase of 191 thousand jobs each month for the next 12 months would be an annual growth rate of +8.53 percent. Jobs are down by 738 thousand for the last 12 months. Growth rates for the last 5 years are -.03 percent. Jobs in these sectors rank first as the biggest sectors with combined employment of 18.7 percent of total establishment employment.

5. Information Services -1

Information Services jobs were down 1 thousand from November at 2.626 million jobs in December. A decrease of 1 thousand jobs each month for the next 12 months would be an annual growth rate of -.46 percent (Note 2 below) Jobs are down by 257 thousand for the last 12 months. Information jobs reached 3.7 million at the end of 2000, but started dropping, reaching 3 million by 2004 and has continued in slow decline for the last decade. Information Services is a small sector ranking 11th of 12 with 1.8 percent of establishment jobs.

6. Financial Activities +12

Financial Activities jobs were up 12 thousand from November at 8.743 million in December. An increase of 12 thousand each month for the next 12 months would be an annual growth rate of +1.65 percent. Jobs are down 71 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 growing slowly with many months of negative growth. The long term growth rates are now at a 5 year growth rate of +1.32 percent, and a 15 year growth rate of +.36 percent. Financial activities rank 8th of 12 with 6.2 percent of establishment jobs.

7. Business & Professional Services +161

Business and Professional Service jobs went up 161 thousand from November to 20.443 million in November. An increase of 161 thousand each month for the next 12 months would be an annual growth rate of 9.41 percent. Jobs are down 811 thousand for the last 12 months. Note 4 The annual growth rate for the last 5 years was +.70 percent. It ranks as 2nd among the 12 sectors now. It was 2nd in May 1993, when manufacturing was bigger and second rank now with 14.3 percent of establishment employment. 

8. Education including public and private -83

Education jobs went down 83 thousand jobs from November at 12.879 million in December. These include public and private education. A decrease of 83 thousand jobs each month for the next 12 months would be an annual growth rate of -7.66 percent. Jobs are down 1,452 thousand for the last 12 months. (note 5) The 15 year growth rate equals -.08 percent, slower than the national average. Education ranks 4th among 12 sectors with 9.6 percent of establishment jobs.

9. Health Care +32

Health care jobs were up 32 thousand from November to 19.914 million in December. An increase of 32 thousand each month for the next 12 months would be an annual growth rate of +1.93 percent. Jobs are down 740 thousand for the last 12 months. (note 6) The current month has not recovered health care job growth. The health care long term 15 year growth rate dropped from +2.31 percent to +1.90 percent from this month’s jobs. Health care ranks 3rd of 12 with 14.0 percent of establishment jobs.

10. Leisure and hospitality -498

Leisure and hospitality jobs went down 498 thousand from November to 12.959 million in December. A decrease of 498 thousand each month for the next 12 months would be an annual growth rate of -44.71 percent. Jobs are down 3,825 thousand for the last 12 months.  (note 7) The 5 year growth rate is –3.32%. 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 7th of 12 with 9.0 percent of establishment jobs. It moved up to 7th from 4th in the pandemic decline.

11. Other -22

Other Service jobs, which include repair, maintenance, personal services and non-profit organizations went down 22 thousand from November to 5.488 million in December. A decrease of 22 thousand each month for the next 12 months would be an annual growth rate of -4.79 percent. Jobs are down 437 thousand for the last 12 months. (note 8) Other services had +.10 percent growth for the last 15 years. These sectors rank 10th of 12 with 3.8 percent of total non-farm establishment jobs. 

12. Government, excluding education -25

Government service employment went down 25 thousand from October at 11.901 million jobs in November. A decrease of 25 thousand each month for the next 12 months would be an annual growth rate of -2.49 percent. Jobs are down 258 thousand for the last 12 months.  (note 9) Government jobs excluding education tend to increase slowly with a 15 year growth rate of
 +.11 percent. Government, excluding education, ranks 7th of 12 with 8.4 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, December 23, 2020

Washington Metro and the Dismal Side of Privatization


Washington Metro and the Dismal Side of Privatization

The Washington Post ran a story November 13, 2019 about an area bus strike, which perfectly and transparently illustrates the dismal side of privatization. [Justin George and Luz Lazo, “Bus Strike in N. Va. Poised to Spread”] It turns out a French company named Transdev, received privatization contracts from the Washington Metropolitan Area Transit Authority, usually referred to as Metro, to run a bus garage and a second one to Fairfax County, Virginia to operate its Fairfax Connector bus service.

Wednesday, the day the story ran, was the 20th day of a strike of 120 garage workers at the Cinder Bed Road garage. Strikers are former Metrobus employees and members of the Amalgamated Transit Workers Union local 689 on strike in protest of wage and benefit cuts by Transdev. The Fairfax Connector bus drivers and members of Amalgamated Transit Workers local 1764 voted to authorize a strike against Transdev with a likely strike date of November 30, the date the current contract expires. The strike of garage workers has shut down 15 routes in Northern Virginia affecting 8,500 riders. A strike at the Fairfax Connector would leave 30,000 without service.

All are unhappy with Transdev pay scales set below Metro employees and with cuts in health care and benefits. Transdev defends their pay as competitive because they are able to fill their positions, but not because the pay is the same. They have further issued the usual company boilerplate claiming to be negotiating in “good faith.”

The Metro director in Fairfax encourages both sides to reach agreement, but sits on the sidelines refusing to be involved. A metro spokesman Dan Stessel excused any responsibility Metro might have telling the Washington Post “This is a labor dispute between the union and Transdev, not Metro, so while we are concerned about the impact the strike has had on our customers, we are not a party to the negotiations and are limited in the role we can play as an outside party.” This transparent and disgusting evasion reflects their failure to write and enforce protections into the contract. The Metro contract calls for Transdev to have a plant to operate the routes during strikes, which they have not done.

Then we learn Metro elected to outsource bus operations to Transdev for $89 million that saves them $15 million over five years by not paying Metro pensions and benefits. They actually admit the savings are from cuts to their workforce. Striking employees complain there is no annual pay scale and they have never had a raise. Health benefits have a $6,000 deductible.

Transdev can expect to pay the same amount for equipment and fuel as Metro. As well a privatization contract adds the cost of a second bureaucracy. Any savings in a privatization contract comes from cutting pay and benefits. Metro director Paul Weidefeld defended privatization: “And there’s lots of examples of things that are run by the private sector that are good. Doesn’t mean its always good.” He did not offer examples, but Metro would not be an example of “things that are good.”



Tuesday, December 15, 2020

Andy Puzder and the Pandemic Unemployed

 

Andy Puzder, Secretary of Labor drop out and former chief executive of CKE Restaurants, does not like the enhanced unemployed benefits. In a Washington Post op-ed piece [Unemployment benefits are causing a worker shortage” WP June 3, 2020] he claims the Pandemic Unemployment Assistance Program creates a shortage of labor because benefits are too high.

He cites the National Federation of Independent Business (NFIB) June Jobs Report that 32 percent of all owners reported job openings they could not fill. NFIB’s chief economist, William C. Dunkelberg, complains “generous unemployment benefits are making it harder for some firms to recall workers and fill open positions.” Puzder goes on to tell us “Virtually anyone in business will tell you that this $600 per week bonus is discouraging work.” He concludes “It isn’t complicated. If you pay people more to stay home than to work, fewer people will work.”

How true, but irrelevant because his comments only tell us what we already know: millions worked for less than $600 a week before the pandemic and people like Puzder earned millions exploiting them. He expects public policy to be a priority for corporate America and ignores the dangers of the pandemic entirely; it interferes with his privileges. Since $600 a week is $15 an hour for full time work, or $30,000 a year, he demands that public policy must continue to promote salaries so low they convert people into the working poor.

Friday, April 3, 2020

A Good American Family - A Review

David Maraniss, A Good American Family: The Red Scare and My Father, (NY: Simon & Shuster, 2019)

In A Good American Family: the Red Scare and My Father, journalist David Maraniss writes three intermixed narratives: a history of the 1950’s Red Scare mixed with a biography of his parents, Elliot and Mary Cummins Maraniss with their extended family, and a memoir of his own growing up in the 1950’s.

The book opens March 12, 1952 with 34 year old Elliott Maraniss at the witness table in Room 740 of a Federal building in Detroit for an inquisition before the House Un-American Activities Committee (HUAC). A paid government informer has identified everyone subpoenaed as a communist. Elliot Maraniss dabbled in left wing politics for a period at the University of Michigan in the 1930’s and after college into the 1940’s and joined a group of devotees of the Communist Party. Now his son wants to know if there is “an essential radical tradition in America” . . . “propelled by a desire not to destroy but to realize something better and fairer?” Or if not, what?
The book has 26 chapters but these are grouped into clusters of subtopics of four parts. Part one – Watching One Another - includes four chapters devoted entirely to historical material from the Red Scare - Chapter 2, 4, 5, 6 – where we meet Bereniece “Toby” Baldwin, the informer, the operation of HUAC and its Chair, Congressman John Stephens Wood, a soft spoken racist from Georgia. Then readers get the flavor of committee hearings with the inquisition of two uncooperative black men: Attorney George Crockett and a Baptist minister, Charles A. Hill.

In Chapter 3 readers meet Elliot Maraniss growing up in Brooklyn and attending Abraham Lincoln High School from 1932 to 1936. There he encountered some especially progressive educators and socially conscious liberals who introduced people like Baruch Spinoza and Willa Cather. Then in Chapter 7 readers meet Robert Cummins who will become Elliot Maraniss brother in law and David Maraniss’ uncle. The older Cummins went to the University of Michigan three years before Elliot; both worked on the Michigan Daily and shared political views.

Cummins and several of his U of M friends volunteered to serve in the Spanish Civil War and fought to protect an elected government in Spain from fascist Franco. Maraniss devotes chapters 8 and 9 to the Spanish civil war and the sacrifice and death of American volunteers that contrast with a transcript of the testimony of Cummins before the HUAC. Questions ooze with contempt for volunteers since the elected Spanish government carries the communist label.

Chapters 10-12 return to the Maraniss family history. The narrative includes Elliot’s time writing for the Michigan Daily and his term as editor; his meeting Mary Cummins and their marriage in 1939. Here Maraniss provides the HUAC transcript of Bereniece Baldwin citing Elliot Maraniss as a communist in testimony February 29, 1952. Readers learn some family consequences that include immediate firing from his copy desk job at the Detroit Times.

Part Two – In Time of War – covers Elliot’s enlistment in the army and four years of service in World War II. It describes his work as the commander of the 4482nd company, an otherwise all black unit doing repair and salvage for the Quartermaster Corps in the Pacific. The war service narrative includes two significant family letters, one written to his infant son Jimmy describing his views and hopes for him and the future of America.

The first three chapters of Part Three – Trials and Tribulations – return to Red Scare History. Maraniss narrates post war efforts to exploit the fear of communism to suppress dissent and free speech. These chapters include biographical material of members and staff of the House Un-American Activities Committee and some of the events that define the era like the 1949 trial at the Foley Square Courthouse in New York. Red Scare events give background for the appearance of Elliot Maraniss before the HUAC on March 12, 1952. The remainder of the book includes the transcript of the March 12 testimony, the prepared statement he was not allowed to read and related family woes that include the direct consequences of his firings. The consequences involved forced family moves from Detroit to New York to Ann Arbor to Cleveland back to Detroit to Bettendorf Iowa and to Madison Wisconsin over five years. The book finishes with a synopsis of the family’s lives after the last move to Madison, where readers learn life mostly returned to normal and people settled in to live productive and enjoyable lives.

The book makes a good story by itself. It flows along and reads easily and includes notes and a bibliography as an academic history would and which it sometimes resembles. Readers will also feel the personal importance of the narrative to the author, which at times sounds like a resolution of long unfocused thoughts and emotions.

Toward the end at Chapter 22 “A Good American Family” includes a three generation picture of the Cummins-Maraniss clan on the front steps of a house at 1402 Henry Street in Ann Arbor in 1950. For me the picture pulls together the stories in the book as a question: What does it mean to be a “A Good American Family?” Compare the family in the picture to your own or to some generic ideal.

The stories and details in the book repeatedly raise the question “What is patriotism?” The question comes up numerous times. One, in particular, was the testimony of the informer Berenice Baldwin and the relationship she had with her victims and elected officials. Beginning in 1943 the FBI paid her a generous salary to join the communist party in Detroit solely to systematically inform on others she met.

Over nine years she befriended many while attending their parties, baby showers and social events. Then in 1952 she appeared before the House Un-American Activities Committee to betray all of them knowing full well the hardship she would cause. Congressman Charles E. Potter, a disabled war veteran, thanked her for serving her country. He could think of no person “more worthy of a decoration for gallantry than you, Mrs. Baldwin.” Congressman Donald Jackson declared “The American people have no way of expressing directly to you their thanks.”

For them patriotism means obedience to their views delivered with authoritarian power not to be challenged. For others, patriots might believe a paid stool pigeon that betrays friends betrays the ideals the country was founded to sustain. In Good American Family readers will find plenty of opportunities to consider patriotism and what it means.

The Economic Crash from Covid-19

The Economic Crash from Covid-19

A $2 trillion Corvid-19 spending bill is now law, but Congress better hope Trump gets the money pumped into the spending stream fast. There are roughly 17 million working in the leisure and hospitality industry with about 12 million of them working in restaurants or related food services. There are 22 million more working in wholesale and retail trade. The brunt of the layoffs will fall on them and without enough money for people in these industries to keep up rent or house payments, car payments, groceries, utility bills the economy will collapse, disintegrate.

Congress wants the IRS to send $1,200 to each of the furloughed workers. For someone furloughed earning $62,400 a year, $1,200 is one weeks pay. While its better than unemployment compensation its a one time check to pay bills that keep coming.

Apparently, unemployment compensation that currently averages $300 a week gets bumped up to $600 a week in the new survival bill, although it only goes for 13 weeks. Converted to annual pay $600 amounts to a raise from $15,600 a year to $31,200, which will not maintain spending power for millions. It must be extended. Since the unemployment compensation has an operating bureaucracy it would be wise to let those furloughed from a job earning more than $31,200 to produce their last pay stub and send them their net pay as unemployment compensation. That gives a better chance of sustaining buying power and the flow of transactions. It will now apply to the self employed and gig workers, helping to boost spending.

Unless the money handed over to corporations finds its way back into the spending stream the business subsidies will do nothing to stem the immediate potential for decline. If they pay wages to prevent layoffs that would help, but corporations are notoriously slow putting capital back into the spending stream.

The final bill restricts corporate stock buybacks, executive pay and dividend payments, but those were put there to restrict opportunists from capitalizing on the Pandemic; they will do nothing to sustain the economy. The bill does not add anything for those living on Social Security, nor cancel student loan payments, nor pay the health care bills for the uninsured and so these do nothing to sustain the economy.

The disruption creates a netherworld for economic policy but the astonishingly quick action to provide $2 trillion by a normally battling Congress suggests they at least understand they have to do something to avoid a collapse. I can’t imagine this will go well. They will have to do more to support the working class or the economy will go into a steep recession/depression. Good luck to all!

Wednesday, February 19, 2020

Incompetents at the Fed

Trump and Incompetents on the Fed

Trump keeps telling us how great the economy is doing and how we should all take a bow to his great skill. Well, the economy is doing quite well under the circumstances, for which Federal Reserve Board Chair Jerome Powell and his fellow board members deserve the credit. Trump is just going along for the ride and deserves no credit whatsoever. His abusive comments dashed out on Twitter sound like his usual angry response to anyone who does not follow orders, but the abuse has not deterred Powell from acting in good faith.

By now it is hard to think the Trump base would object to anything he might do after what has already transpired, but if ruining the economy accounts at all, then he might want to question his latest scheme to take over monetary policy. His current nomination for Federal Reserve Board, a women named Judy Shelton, wants to return to a gold standard and eliminate deposit insurance.

As every good capitalist knows the value of money is determined by the supply of it relative to its demand for needed transactions. Obsessives like Ms. Shelton want money to be a supply of something they can pick up and store like gold, but gold is a commodity like cars, clothes and corn flakes, all subject to rising prices.

When money was gold, changes in its price rippled through the economy causing inflation or recession. A gold standard requires giving the public the opportunity to exchange currency for gold at a fixed price making it necessary for the government to stabilize the price of gold by holding large inventories to sell in a shortage, or buy in a surplus. Managing gold inventories was subject to the erratic success or failure of mining ventures and the erratic whim of hoarders and speculators.

If Ms. Shelton would ask herself how the U.S. Treasury could remain ready to exchange gold at a fixed price if the market price of gold goes up, she might notice a problem with a gold standard. If the market price of gold starts to rise there will be speculators to show up at the U.S. Treasury to exchange their currency for an ounce of gold at the fixed price. They will speculate the government will eventually run of gold by having to sell it and have to let the price rise to a new level. Then they can resell their gold at the higher market price.

The need to buy or sell gold to hold the price changes the money supply the same way open market operations change the money supply now, except the buying and selling of gold to keep its price stable cannot be timed to meet the needs of stabilizing the economy.

In 1933, the United States left the gold standard, announcing it would no longer convert dollars to gold at any price. Banks were allowed to designate other assets than gold as reserves, which make it easier to manage the money supply. Other countries followed and in 1971 the gold exchange standard for international payments ended by mutual agreement of the international community.

Using gold as money creates many problems that have to be solved, but has no benefits of any kind. It does not impose discipline because money is always a human decision. Humans decide what it is and how much of it there will be. The Republicans know this, but they are willing to pander to Trump and his conspiratorial base.

A few Republican Senators express worry with a crackpot on the Fed. The Washington Post from February 9, 2020 quoted an insider who says “I don’t think she belongs on the [Fed] Board, but it’s not going to be an apocalypse. She’s not going to change the direction of monetary policy.” Don’t be too sure. Others think Trump is positioning her to be Fed Chair when Powell’s term ends in early 2022.

Republicans have their own agenda and while they are not against a stable well managed economy, it is not first on their agenda for economic policy. Recall the Bush recession of 2008-2010 following the 1999 Banking deregulation, which provided the wealthy and well placed unlimited opportunities for speculation and financial gambling. If the incompetent Trump gets control of monetary policy, it will be much worse than that.

Thursday, February 6, 2020

Beaten Down, Worked Up

Steven Greenhouse, Beaten Down, Worked Up: The Past, Present, and Future of American Labor, (NY: Alfred A Knopf, 2019) 340 pages

Journalist Steven Greenhouse has returned with a second book on American labor and the condition of life for the working class. This new book is partly an update of his 2008 book, the Big Squeeze, but there are also five chapters of narrative from American labor history, along with new current and emerging topics.

In the introduction Greenhouse tells readers the decline of labor unions has helped to generate income inequality, wage stagnation, declining mobility, low wage jobs and the skewing of politics to favor the wealthy. In this new book he pledges to focus far more on why so many Americans have been squeezed.

The first three chapters are part I – State of the Union - that give a warm up for the discussions to come. In Chapter one, entitled Losing Our Voice, we hear from eight people and their job experiences to show “something is fundamentally broken in the way many employers treat their workers.” After a data review readers get some quotations from corporate America and their self serving justification for what they do and believe, and then finally some news of new labor organizing. Chapter Two continues with this but has longer discussions with people and their work at Burger King, Caterpillar Inc. and General Motors. Chapter Three shifts to one of organized labor’s recent success stories, organizing the Culinary Workers Union and local 226 in Las Vegas.

Part II shifts to five significant episodes from labor history. First, there is the early 1900’s garment industry organizing, mostly in New York and mostly by women. We hear about Clare Lemlich and organizing for the International Ladies Garment Workers Union (ILGWU) and the courage of women to face assault, arrest and jail for picketing and striking. Next, in Chapter 5, we get an account of the deadly 1911 Triangle Shirtwaist fire in New York. This story introduces Francis Perkins, who was a witness to the fire. That story allows a transition to a biography of her career and work in the depression era Franklin Roosevelt administration. Greenhouse writes twelve pages of narrative of her work and life, wanting, I expect, to give her the recognition she deserves but does not usually get. Some of us argue she did more for labor and the working class than Franklin Roosevelt, anyone else.

Chapter 6 continues with the December 31, 1935 General Motors sit-down strike by the United Auto Workers (UAW) that allows an easy transition to Chapter 7 with Walter Reuther and the UAW during WWII and into the 1950’s. Chapter 8 moves on to a narrative of the 1968 Memphis Sanitation strike and the last campaign of Martin Luther King, Jr.

The history discussions in Part II ends in 1968, but Part III – Hard Times for Labor – continues with labor history’s events of the 1980’s. After accounts of the disastrous PATCO strike, and then on to the grimy Phelps-Dodge and Hormel strikes Greenhouse declares “In the 1980’s everything seemed to go wrong for labor.” He is sure right about that; it was a time of manufacturing moving abroad, demands for wage cuts, lockouts and union busting. Readers get short accounts of some of the companies and their union busting talk and tactics: T-Mobile, Menards, Staples, Amazon, and of course Walmart, or really Walmart again, since Greenhouse discussed them in his first book.

The title of chapter 12, Labor’s Self Inflicted Wounds, signals a critical look at labor leadership. This inevitably brings up the honest but opinionated George Meany and the always controversial Jimmy Hoffa and labor racketeering exposed in the 1957-59 McClellan committee hearings. Labor needs solidarity but George Meany refused to endorse the 1963 civil rights march on Washington, which represented a legacy of discrimination in the labor movement going back many decades. Unfortunately Meany was AFL-CIO president a long time: 1955 to 1979.

Greenhouse devotes the last two chapters of Part III to a narrative account of the attack on public sector unions by Wisconsin Governor Scott Walker, his union busting tactics and then a chapter to discuss the declining political influence of labor. In recent years the AFL-CIO has been unable to secure favorable legislation or prevent unfavorable legislation.

Part IV – Labor Today and Tomorrow – devotes seven chapters to current topics and trends in today’s labor. The sweatshops of the 19th and early 20th century have a new name: Gig economy. We hear about the abuses of Uber as a good example of the Gig economy although there are many others. After the Gig discussions we find some successes and a little optimism. There is a chapter devoted to raising the minimum wage. Here readers meet Adriana Alvarez, who tries to support herself and her infant child on $8.50 an hour working at McDonalds. She wants to help organize in the fight for a $15 an hour wage. She found out something legions of the oppressed and mistreated working class have learned before her: the owner of the McDonald’s franchise refused to speak with her. Management refusals to speak continue to be one of the clearest examples of class warfare in America.

Next we learn about some modestly successful farm worker organizing in Florida and the tactics applied to pressure the large vegetable purchasing fast food franchises and then move on to Los Angeles to review similar efforts there. In Los Angeles readers learn about the Los Angeles Alliance for a new economy (LAANE), an organizing group to push for social justice reforms.

Greenhouse devotes a chapter to labor relations at Kaiser-Permanente (KP), the giant, multi-state, health care provider and to the Saint Paul Federation of Teachers (SPFT) efforts to improve area public schools. KP did not always have good labor relations. From the 1970’s into the 1990’s KP had several disruptive walkouts but in the mid 1990’s management decided to work with their many unions in a Labor Management Partnership. Greenhouse reviews the workings of this Labor Management Partnership and its success.

The recent statewide teacher strikes get a whole chapter. Recall the first strike was in West Virginia, which spread to the Oklahoma teachers, to Arizona, to Los Angeles and a few more states not reviewed here. Teachers need college degrees and licensed certification, which makes them hard to replace with scabs and therefore the ideal employees to organize and strike if necessary. They make a good example for other occupations.

Author-Journalist Steven Greenhouse reports labor news for the New York Times and so has a salary, a travel budget and time to get some of the stories from the legions of under paid, over worked and over taxed Americans that slog along in America’s miserable jobs. Too often we cite and accept empirical data to show wage and price effects as a way to measure the changing fortunes of the working class. Interviews do not give a percentage change, but hearing the stories of people and their attempts to cope are empirical and valuable in every sense of the word.

The Beaten Down material in the book comes through clearly, but the Worked Up material points to more positive organizing than his previous book, the Big Squeeze. Too often labor unions start to act like the top down hierarchy of corporate America. Union officials make decisions on behalf of a barely involved rank and file, which has not worked well. The Worked Up material here shows the methods the rank and file can use to make progress organizing from the bottom up.

The last chapter makes a few suggestions for political organizing to change campaign finance laws, the National Labor Relations Act and a few more, but the book remains essentially free of legislative and party politics. It is well organized, reads easily and has detailed footnotes for those wanting to go a little deeper. Lets hope in the next book the Worked Up side will continue to show progress and a decline of the Beaten down; there are still plenty of them.