Computer Support Specialists have two occupations
Standard Occupational Classification #15-1151 Computer User Support Specialists
Standard Occupational Classification #15-1152 Computer Network Support Specialists
SOC Definition for #15-1151-- Provide technical assistance to computer users. Answer questions or resolve computer problems for clients in person, or via telephone or electronically. May provide assistance concerning the use of computer hardware and software, including printing, installation, word processing, electronic mail, and operating systems.
Examples of other common names in use -- Computer Customer Support Specialist, Help Desk Representative, Help Desk Specialist, Desktop Support Specialist, End-User Support Specialist, Help Desk Analyst, Help Desk Technician, PC Support Specialist.
SOC Definition for #15-1152-- Analyze, test, troubleshoot, and evaluate existing network systems, such as local area network (LAN), wide area network (WAN), and Internet systems or a segment of a network system. Perform network maintenance to ensure networks operate correctly with minimal interruption.
Examples of other common names in use -- Network Diagnostic Support Specialist, Network Support Technician, Network Technician; excludes Network and Computer Systems Administrators #15-1142 and Computer Network Architects #15-1143.
National 2012 employment as Computer User Support Specialists was 525,630 and for Computer Network Support Specialists were 167,980 for a combined total 693,610. Both jobs were reported together as a combination in the years from 2000 to 2011. The combined category had growth of 14 thousand new jobs a year since 2000 at growth rates well above the national average. The Bureau of Labor Statistics is forecasting modest job growth of 11 thousand per year through 2020 for the combined category.
Job growth is not the only measure of new hiring. Job openings equal job growth and the number of net replacements. Net replacements are people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be any job growth. Job openings for Computer User and Network Specialists have been around 26.9 per year in recent years.
The recently updated BLS Education and Training Classification assignments for network and user support specialists list some college training in computer sciences without necessarily have a degree as the entry level education minimum. However, percentages from survey data are published for the network and user support occupations showing an educational distribution where 29 percent have some college, but no degree, and almost 41 percent have an associate’s degree, or baccalaureate degree and 8 percent above the BA. Previous experience is considered unnecessary, but moderate on-the-job training is expected to be necessary for new hires.
Computer User Support Specialists
Computer User Support Specialists have at least some employment in almost every industry, but a dozen selected industries have almost 60 percent of the jobs. Computer design and related activities has almost 20 percent, 103 thousand jobs. Education, including colleges, has another 12.5 percent, a little over 65 thousand jobs. Software publishers and data processing employ 6.5 percent, or 34 thousand jobs. Management of Companies have 28 thousand jobs, combined employment services and business support services another 28 thousand, and Federal, state and local governments 23.6 thousand.
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 by 2080.
The 2012 entry wage for the national market in the 10th percentile for Computer User Support Specialists is reported as $27,620 in 2012. The 25th percentile wage equals $35,790. The median wage is $46,240, the 75th percentile wage equals $60,400 and the 90th percentile wage is $77,430.
For the 103,820 Computer User Support Specialists in Computer Design and Related Services the 2012 10th percentile entry wage is $27,230. The 25th percentile wage equals $35,290. The median wage is $46,690, the 75th percentile wage equals $62,630 and the 90th percentile wage is $83,030.
Computer Network Support Specialists
Computer Network Support Specialists also have some employment in almost every industry but a dozen industries have a little over 60 percent of the jobs. Computer design and related activities has almost 21 percent, or 34.7 thousand jobs. Software publishers, communications carriers and data processing have another 13.2 percent, or 22.3 thousand jobs. Education, including colleges, employ 11 thousand; government another 11 thousand; Management of Companies 9.6 thousand jobs. About 5,000 are employed through employment agencies.
The entry wage for the national market in the 10th percentile for Computer Network Support Specialists is reported as $34,930 in 2012. The 25th percentile wage equals $44,530. The median wage is $59,090, the 75th percentile wage equals $76,450 and the 90th percentile wage is $96,850.
For the 34,700 Computer Network Support Specialists in Computer Design and Related Services the 2012 10th percentile entry wage is $34,140. The 25th percentile wage equals $44,960. The median wage is $60,050, the 75th percentile wage equals $79,890 and the 90th percentile wage is $101,170.
Wednesday, June 26, 2013
Friday, May 24, 2013
A Shortage of Manufacturing Skills?
President Carter’s domestic policy advisor, Stuart Eizenstat, and Robert Lerman, an Urban Institute Fellow, claim there is a skills gap in manufacturing that threatens America’s manufacturing comeback. [“Bring back the apprentice”, Washington Post, May 5, 2013, and republished on yahoo] Readers are asked to accept a citation from an unnamed survey that claims 600,000 jobs go unfilled because the skills gap is real and America needs an apprenticeship program. They worry “We are at risk of squandering this historic opportunity – mainly because firms interested in investing in the United States are finding too few workers with the skills needed . . .”
Really?
American manufacturing dropped 2.2 million jobs in the recession months from January 2008 until February 2010. Every single manufacturing sub-sector lost jobs. Since February 2010 the manufacturing recovery is confined to primary and fabricated metals, manufacturing for machinery, and transportation equipment but nothing else. All other sub-sectors combined had a net loss of jobs as small job gains in a few sub-sectors were not enough to offset losses in others. From February 2012 to the end of last year manufacturing is up only 491 thousand jobs, less than a quarter of the recessionary losses. With 2.2 million jobs lost in the recession and 491 thousand new jobs in the recovery, the difference suggests a surplus of production workers available for hire, not a shortage.
The Bureau of Labor Statistics lists just four occupations in primary and fabricated metals, machinery and transportation equipment manufacturing that require 12 months or more of on-the-job training: machinist, metal and plastic model makers, metal and plastic pattern makers, and tool and die makers.
Machinists were reported to have 388 thousand jobs as of 2012, but there were 419 thousand machinist jobs in 2008. The authors cite “a dearth of machinists” when 31 thousand machinists laid off in the recession appear available to hire now: a surplus not a shortage.
Model makers had 5,700 jobs in 2012; pattern makers 4,130 jobs. In 2008 there were almost 9,000 jobs as model makers; over 6,000 pattern makers. These are small niche jobs but recessionary layoffs suggest a surplus available to hire, not shortage.
Tool and die makers were reported with 76 thousand jobs as of 2012, but there were almost 86 thousand in 2008. Tool and die maker jobs are up from 70 thousand in 2011, but the increase disguises a long term decline. There were 100 thousand tool and die maker jobs in 2005 and 131 thousand in 2000. Bureau of Labor Statistics reported jobs suggest a surplus of tool and die makers, not a shortage.
The four occupations above that need long term on-the-job training are among 26 production occupations the Bureau of Labor Statistics includes in a category called metal and plastic workers. In 2008, 2.15 million had jobs in these 26 occupations; only 1.84 million in 2012. These 26 occupations require no more than a high school degree as defined and published in the Bureau of Labor Statistics education and training classification. An apprenticeship requirement is defined in the training classification but not necessary for any of the 26 occupations.
The other 22 metal and plastic work occupations require no more than moderate-on-the-training defined as “competency in an occupation that can be acquired during 1 to 12 months of combined on-the-job experience and informal training. The 22 include welders, cutters, solderers, and brazers, and computer numerically controlled machine tool programmers the authors cite as needing an apprentice program.
Assemblers and fabricators are another major category of production worker with 10 occupations and 1.98 million jobs in 2008 but only 1.72 million jobs in 2012. That leaves 260,000 available to hire, another surplus. None of these ten occupations require long term on-the-job training: six need moderate term on-the-job training, four need only short term on-the-job training defined as a month or less of combined on-the-job experience and informal training.
Eizenstat and Lerman make no use of Bureau of Labor Statistics data to support their claims because the data shows a surplus with no need for apprenticeship programs. When a business complains about a shortage of labor, they mean a shortage at the low wage they expect to offer. Instead of bidding up the wage to get the help they want, business moves to far off places like Bangladesh, and then finds a willing or gullible economist to blame the unemployed, who would have a job if they just had the right skills.
Alan Greenspan, the former Fed chair, perfected the “Get some training” propaganda in his capital hill testimony. He was calm and self assured when he placed the blame for unemployment on the unemployed. These guys like drama: “squandering this historic opportunity.” Oh Please! Where is Oprah when we need her?
Really?
American manufacturing dropped 2.2 million jobs in the recession months from January 2008 until February 2010. Every single manufacturing sub-sector lost jobs. Since February 2010 the manufacturing recovery is confined to primary and fabricated metals, manufacturing for machinery, and transportation equipment but nothing else. All other sub-sectors combined had a net loss of jobs as small job gains in a few sub-sectors were not enough to offset losses in others. From February 2012 to the end of last year manufacturing is up only 491 thousand jobs, less than a quarter of the recessionary losses. With 2.2 million jobs lost in the recession and 491 thousand new jobs in the recovery, the difference suggests a surplus of production workers available for hire, not a shortage.
The Bureau of Labor Statistics lists just four occupations in primary and fabricated metals, machinery and transportation equipment manufacturing that require 12 months or more of on-the-job training: machinist, metal and plastic model makers, metal and plastic pattern makers, and tool and die makers.
Machinists were reported to have 388 thousand jobs as of 2012, but there were 419 thousand machinist jobs in 2008. The authors cite “a dearth of machinists” when 31 thousand machinists laid off in the recession appear available to hire now: a surplus not a shortage.
Model makers had 5,700 jobs in 2012; pattern makers 4,130 jobs. In 2008 there were almost 9,000 jobs as model makers; over 6,000 pattern makers. These are small niche jobs but recessionary layoffs suggest a surplus available to hire, not shortage.
Tool and die makers were reported with 76 thousand jobs as of 2012, but there were almost 86 thousand in 2008. Tool and die maker jobs are up from 70 thousand in 2011, but the increase disguises a long term decline. There were 100 thousand tool and die maker jobs in 2005 and 131 thousand in 2000. Bureau of Labor Statistics reported jobs suggest a surplus of tool and die makers, not a shortage.
The four occupations above that need long term on-the-job training are among 26 production occupations the Bureau of Labor Statistics includes in a category called metal and plastic workers. In 2008, 2.15 million had jobs in these 26 occupations; only 1.84 million in 2012. These 26 occupations require no more than a high school degree as defined and published in the Bureau of Labor Statistics education and training classification. An apprenticeship requirement is defined in the training classification but not necessary for any of the 26 occupations.
The other 22 metal and plastic work occupations require no more than moderate-on-the-training defined as “competency in an occupation that can be acquired during 1 to 12 months of combined on-the-job experience and informal training. The 22 include welders, cutters, solderers, and brazers, and computer numerically controlled machine tool programmers the authors cite as needing an apprentice program.
Assemblers and fabricators are another major category of production worker with 10 occupations and 1.98 million jobs in 2008 but only 1.72 million jobs in 2012. That leaves 260,000 available to hire, another surplus. None of these ten occupations require long term on-the-job training: six need moderate term on-the-job training, four need only short term on-the-job training defined as a month or less of combined on-the-job experience and informal training.
Eizenstat and Lerman make no use of Bureau of Labor Statistics data to support their claims because the data shows a surplus with no need for apprenticeship programs. When a business complains about a shortage of labor, they mean a shortage at the low wage they expect to offer. Instead of bidding up the wage to get the help they want, business moves to far off places like Bangladesh, and then finds a willing or gullible economist to blame the unemployed, who would have a job if they just had the right skills.
Alan Greenspan, the former Fed chair, perfected the “Get some training” propaganda in his capital hill testimony. He was calm and self assured when he placed the blame for unemployment on the unemployed. These guys like drama: “squandering this historic opportunity.” Oh Please! Where is Oprah when we need her?
Wednesday, May 15, 2013
Executive Administrative Assistants
Executive Secretaries and Executive Administrative Assistants
Standard Occupational Classification #43-6011 Executive Secretaries and Executive Administrative Assistants
SOC Definition--Provide high-level administrative support by conducting research, preparing statistical reports, handling information requests, and performing clerical functions such as preparing correspondence, receiving visitors, arranging conference calls, and scheduling meetings. May also train and supervise lower-level clerical staff.
Examples of other common names in use—Executive Assistant, Administrative Assistant
Executive Secretaries and Executive Administrative Assistants excludes jobs as
43-6012 Legal secretaries, as 43-6013 medical secretaries and as 43-6014 other types of secretaries such as alumni secretary, department secretary, office secretary, personal secretary, school secretary, real estate assistant.
Executive secretaries and executive administrative assistants are sprinkled through almost every sector and sub-sector of the economy. They typically account for only a half percent or less of firm staffing, but selected service sectors are as high six and seven percent. Securities, commodity contracts, and other financial investments establishments have an average of 5.5 to 7 percent staffing of executive secretaries and executive administrative assistants. Various real estate specialty service firms, grant making and giving services, social advocacy organizations, business, professional, labor, political, and similar organizations all have 4 to 6 percent staffing with executive secretaries and executive administrative assistants.
National employment as executive secretaries and executive administrative assistants dropped to 803,040 in 2012. Jobs are down from 1.37 million since 2000 in a steady decline, but job totals for medical secretaries and secretaries except executive, legal and medical are up enough to maintain employment totals for the combined category. The job total for all secretarial and administrative assistant categories continues to hold at 3.6 to 3.7 million in the national market since 2000. The Bureau of Labor Statistics is forecasting modest job growth of 15.6 thousand per year in spite of the decade long decline.
The recently updated BLS Education and Training Classification assignments for Executive Secretaries and Executive Administrative Assistants list high school diploma or equivalent as the entry level education minimum. However, percentages from survey data are published for the executive secretary and executive administrative assistant occupation. Results show an educational distribution where 35 percent have some college, but no degree, and almost 30 percent have an associate’s degree, or baccalaureate degree and a few percent above the BA. Many executive assistants need computer skills beyond word processing that add to necessary education and enhance employability. In general on-the-job training is expected to be minimal for this occupation; applicants need to bring the skills and experience to the job.
Job growth is not the only measure of new hiring. Job openings equal job growth and the number of net replacements. Net replacements are people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be any job growth. Job openings for Executive Secretaries and Executive Administrative Assistants are expected to average around 32,180 per year in the years up to 2020..
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 by
The entry wage for the national market in the 10th percentile for Executive Secretaries and Executive Administrative Assistants is reported as $31,310 in 2012. The 25th percentile wage equals $38,030. The median wage is $47,500, the 75th percentile wage equals $60,130 and the 90th percentile wage is $73,530. Yearly reported wage increases are keeping up with inflation across the whole salary distribution with a small increase in buying power over the last decade.
There are 27,380 Executive Secretaries and Executive Administrative Assistants jobs in the Washington Metropolitan area for 2012. The entry wage for the Washington Metropolitan market in the 10th percentile for Executive Secretaries and Executive Administrative Assistants is reported as $36,640 in 2012. The 25th percentile wage equals $43,790. The median wage is $55,420, the 75th percentile wage equals $69,460 and the 90th percentile wage is $83,360. Legal secretaries earn more; medical and other secretaries earn less than executive secretaries and executive administrative assistants in the Washington metropolitan area.
There are 9,740 Executive Secretaries and Executive Administrative Assistants jobs in the Washington DC for 2012. The entry wage for the Washington DC market in the 10th percentile for Executive Secretaries and Executive Administrative Assistants is reported as $34,180 in 2012. The 25th percentile wage equals $41,100. The median wage is $51,470, the 75th percentile wage equals $66,970 and the 90th percentile wage is $84,440. Legal secretaries earn more; medical and other secretaries earn less than executive secretaries and executive administrative assistants in Washington DC.
Standard Occupational Classification #43-6011 Executive Secretaries and Executive Administrative Assistants
SOC Definition--Provide high-level administrative support by conducting research, preparing statistical reports, handling information requests, and performing clerical functions such as preparing correspondence, receiving visitors, arranging conference calls, and scheduling meetings. May also train and supervise lower-level clerical staff.
Examples of other common names in use—Executive Assistant, Administrative Assistant
Executive Secretaries and Executive Administrative Assistants excludes jobs as
43-6012 Legal secretaries, as 43-6013 medical secretaries and as 43-6014 other types of secretaries such as alumni secretary, department secretary, office secretary, personal secretary, school secretary, real estate assistant.
Executive secretaries and executive administrative assistants are sprinkled through almost every sector and sub-sector of the economy. They typically account for only a half percent or less of firm staffing, but selected service sectors are as high six and seven percent. Securities, commodity contracts, and other financial investments establishments have an average of 5.5 to 7 percent staffing of executive secretaries and executive administrative assistants. Various real estate specialty service firms, grant making and giving services, social advocacy organizations, business, professional, labor, political, and similar organizations all have 4 to 6 percent staffing with executive secretaries and executive administrative assistants.
National employment as executive secretaries and executive administrative assistants dropped to 803,040 in 2012. Jobs are down from 1.37 million since 2000 in a steady decline, but job totals for medical secretaries and secretaries except executive, legal and medical are up enough to maintain employment totals for the combined category. The job total for all secretarial and administrative assistant categories continues to hold at 3.6 to 3.7 million in the national market since 2000. The Bureau of Labor Statistics is forecasting modest job growth of 15.6 thousand per year in spite of the decade long decline.
The recently updated BLS Education and Training Classification assignments for Executive Secretaries and Executive Administrative Assistants list high school diploma or equivalent as the entry level education minimum. However, percentages from survey data are published for the executive secretary and executive administrative assistant occupation. Results show an educational distribution where 35 percent have some college, but no degree, and almost 30 percent have an associate’s degree, or baccalaureate degree and a few percent above the BA. Many executive assistants need computer skills beyond word processing that add to necessary education and enhance employability. In general on-the-job training is expected to be minimal for this occupation; applicants need to bring the skills and experience to the job.
Job growth is not the only measure of new hiring. Job openings equal job growth and the number of net replacements. Net replacements are people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be any job growth. Job openings for Executive Secretaries and Executive Administrative Assistants are expected to average around 32,180 per year in the years up to 2020..
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 by
The entry wage for the national market in the 10th percentile for Executive Secretaries and Executive Administrative Assistants is reported as $31,310 in 2012. The 25th percentile wage equals $38,030. The median wage is $47,500, the 75th percentile wage equals $60,130 and the 90th percentile wage is $73,530. Yearly reported wage increases are keeping up with inflation across the whole salary distribution with a small increase in buying power over the last decade.
There are 27,380 Executive Secretaries and Executive Administrative Assistants jobs in the Washington Metropolitan area for 2012. The entry wage for the Washington Metropolitan market in the 10th percentile for Executive Secretaries and Executive Administrative Assistants is reported as $36,640 in 2012. The 25th percentile wage equals $43,790. The median wage is $55,420, the 75th percentile wage equals $69,460 and the 90th percentile wage is $83,360. Legal secretaries earn more; medical and other secretaries earn less than executive secretaries and executive administrative assistants in the Washington metropolitan area.
There are 9,740 Executive Secretaries and Executive Administrative Assistants jobs in the Washington DC for 2012. The entry wage for the Washington DC market in the 10th percentile for Executive Secretaries and Executive Administrative Assistants is reported as $34,180 in 2012. The 25th percentile wage equals $41,100. The median wage is $51,470, the 75th percentile wage equals $66,970 and the 90th percentile wage is $84,440. Legal secretaries earn more; medical and other secretaries earn less than executive secretaries and executive administrative assistants in Washington DC.
Saturday, May 11, 2013
The $9.00 an hour minimum
The Obama Administration recently proposed an increase in the minimum wage to $9.00 an hour. The current minimum continues at $7.25 an hour where it has been since July 24th 2009, the date of the last of three planned increases passed by Congress. The proposed increase is a little over 24 percent over the three years from 2009 to 2012, more than inflation but still hardly a self supporting wage.
At $9.00 an hour per full time employee the increase converts $3,640 [$1.75 x 2,080] of profit to cost per full time minimum wage employee. To employers of low wage jobs like ushers, lobby attendants, ticket takers, shampooers, or child care workers higher wage costs bring pressure to experiment with higher prices, and fewer work hours or jobs. Raising prices might raise revenue and restore profits as long as sales don’t fall by much. Otherwise cutting jobs or hours in response to a higher minimum wage should help restore profits.
Since everyone agrees higher wages do pressure employers to cut work hours or jobs for employees paid below the minimum wage that part makes for easy agreement. However, it represents a small part of the minimum wage debate, unless economists and their business clients expect job losers to disappear, never to work again.
In their book Minimum Wages economists David Neumark and William L. Wascher write on page 116, “. . . as we emphasized earlier in this chapter the potential for minimum wage increases to affect wages higher in the wage distribution is also important in assessing the effects of minimum wage policy.” (1)
When the minimum wage jumped by $2.10 an hour from 2006 to 2009, jobs as fast food cooks dropped from 612 thousand to 539 thousand. (2) During the same period there were other jobs as cashiers, retail salespersons, rental and counter clerks and others with wage ranges above the minimum. An increase in applications for these other jobs quite likely holds down wages as economists like to predict from any increase in supply, but in wage ranges above the minimum. As people find other jobs in other industries and occupations the higher minimum wage can work to increase employment at higher wages.
In spite of their conclusions, Neumark and Wascher “. . . find it very difficult to see good economic rationale for continuing to seek a higher minimum wage.” In this they are like all economists who have been reciting conclusions like that for decades. Telling people they are worse off with a higher wage makes it necessary to quickly convince the public that jobs will be lost.
Neumark and Wascher and other economists try to convince people by theorizing in the specialized terminology of the economics fraternity. At page 254 they write “In the model, an increase in the nominal wage that raises the wage rate of unskilled labor not only induces substitution of skilled for unskilled labor, it also leads to substitution of unionized skilled labor for non-unionized skilled labor because the union sector expands and the nonunion sector contracts.” Their predictions come without mention of occupations like cashier, clerk or fast food cook and lead to conclusions applied to generic markets of products and jobs. The authors might recognize the millions of opportunities to move from low wage to higher wage employment by looking at wage distributions by occupation reported by the U. S. Bureau of Labor Statistics in their Occupational Employment Survey.
Business predictably opposes a higher minimum wage year after year. For individual business a higher minimum wage always converts profits to costs, even though the economy needs people with income to put back in the spending stream. Economists repeatedly offer theoretical support as though they are paid spokesmen or women.
Telling people they are better off with lower wages remains a tough sell among wage earners. The continued popularity of a higher minimum wage suggests there are many that work for wages who understand employers and employees have opposite economic interests. Employees outnumber employers by enough to expect a raise, but politics is a messy business. Will Congress go with the numbers?
[1] David Neumark and William L. Wascher, Minimum Wages, (Cambridge, MA: The MIT Press, 2008), 295 pages.
[2] U. S. Bureau of Labor Statistics, Occupational Employment Survey
At $9.00 an hour per full time employee the increase converts $3,640 [$1.75 x 2,080] of profit to cost per full time minimum wage employee. To employers of low wage jobs like ushers, lobby attendants, ticket takers, shampooers, or child care workers higher wage costs bring pressure to experiment with higher prices, and fewer work hours or jobs. Raising prices might raise revenue and restore profits as long as sales don’t fall by much. Otherwise cutting jobs or hours in response to a higher minimum wage should help restore profits.
Since everyone agrees higher wages do pressure employers to cut work hours or jobs for employees paid below the minimum wage that part makes for easy agreement. However, it represents a small part of the minimum wage debate, unless economists and their business clients expect job losers to disappear, never to work again.
In their book Minimum Wages economists David Neumark and William L. Wascher write on page 116, “. . . as we emphasized earlier in this chapter the potential for minimum wage increases to affect wages higher in the wage distribution is also important in assessing the effects of minimum wage policy.” (1)
When the minimum wage jumped by $2.10 an hour from 2006 to 2009, jobs as fast food cooks dropped from 612 thousand to 539 thousand. (2) During the same period there were other jobs as cashiers, retail salespersons, rental and counter clerks and others with wage ranges above the minimum. An increase in applications for these other jobs quite likely holds down wages as economists like to predict from any increase in supply, but in wage ranges above the minimum. As people find other jobs in other industries and occupations the higher minimum wage can work to increase employment at higher wages.
In spite of their conclusions, Neumark and Wascher “. . . find it very difficult to see good economic rationale for continuing to seek a higher minimum wage.” In this they are like all economists who have been reciting conclusions like that for decades. Telling people they are worse off with a higher wage makes it necessary to quickly convince the public that jobs will be lost.
Neumark and Wascher and other economists try to convince people by theorizing in the specialized terminology of the economics fraternity. At page 254 they write “In the model, an increase in the nominal wage that raises the wage rate of unskilled labor not only induces substitution of skilled for unskilled labor, it also leads to substitution of unionized skilled labor for non-unionized skilled labor because the union sector expands and the nonunion sector contracts.” Their predictions come without mention of occupations like cashier, clerk or fast food cook and lead to conclusions applied to generic markets of products and jobs. The authors might recognize the millions of opportunities to move from low wage to higher wage employment by looking at wage distributions by occupation reported by the U. S. Bureau of Labor Statistics in their Occupational Employment Survey.
Business predictably opposes a higher minimum wage year after year. For individual business a higher minimum wage always converts profits to costs, even though the economy needs people with income to put back in the spending stream. Economists repeatedly offer theoretical support as though they are paid spokesmen or women.
Telling people they are better off with lower wages remains a tough sell among wage earners. The continued popularity of a higher minimum wage suggests there are many that work for wages who understand employers and employees have opposite economic interests. Employees outnumber employers by enough to expect a raise, but politics is a messy business. Will Congress go with the numbers?
[1] David Neumark and William L. Wascher, Minimum Wages, (Cambridge, MA: The MIT Press, 2008), 295 pages.
[2] U. S. Bureau of Labor Statistics, Occupational Employment Survey
Monday, April 15, 2013
Minimum Wages - A Review
David Neumark and William L. Wascher, Minimum Wages, (Cambridge, MA: The MIT Press, 2008), 295 pages.
The two economist authors wrote Minimum Wages for economists; that is except for a couple of sentences in the last chapter. The title of the last chapter, Summary and Conclusions, signals politicians and business types to the pages where they will find the conclusions they want to hear: “Based on the evidence from our nearly two decades of research on minimum wages . . . we find it very difficult to see good economic rationale for continuing to seek a higher minimum wage.”
Chapter two has the history and law of minimum wages and there are chapters describing changes on employment, wage distribution, income distribution, prices, profits and training incentives. A political economy of minimum wages chapter precedes the summary.
Chapter three has 70 pages reviewing 43 studies of the minimum wage effects of a higher minimum wage on employment. The summary reviews come after a section titled the neoclassical model where the authors narrate a description of the “textbook” neoclassical model in its “simplest” form. It assumes competition for labor and product markets, one type of labor, output produced with a mix of capital and labor, and minimum wage coverage for all. A minimum wage above the market wage creates two causes for declining employment. First, it raises establishment costs and market prices that cause falling product demand and ultimately falling employment. Second it raises wages leading to a substitution of capital for labor.
Paragraphs that begin with extensions of the model add or change selected assumptions. In one extension, minimum wages can be covered or uncovered. In a second, labor can be skilled or unskilled. In the first extension the authors assert “. . . the uncovered sector may provide alternative opportunities to workers who cannot finds jobs in the covered sector and thus can potentially mitigate the overall employment losses associated with the minimum wage.”
In the second extension the authors assert “. . . the neoclassical model’s prediction of a reduction in labor demand applies unambiguously only to less-skilled workers whose wages are directly raised by the minimum wage. The effects on other workers depend on the nature of the production process and, indeed, the minimum wage can generally be expected to lead to an increase in the employment of slightly higher-skilled workers who are good substitutes for minimum wage workers.”
To employers of dishwashers, ushers, lobby attendants, ticket takers, shampooers, and child care workers higher wage costs reduce profits pressuring employers to experiment with higher prices, and fewer work hours or jobs. Raising prices might raise revenue and restore profits as long as sales don’t fall by much. Otherwise cutting jobs or hours in response to a higher minimum wage should help restore profits. Since everyone agrees higher wages do pressure employers to cut work hours or jobs for sub-minimum wage employees that part makes for easy agreement. However, it represents a small part of minimum wage policy, unless the authors expect job losers to disappear, never to work again.
The authors do worry about what else happens after low wage employees lose their jobs. Repeatedly they pose different options with new assumptions and another chain of deductive model building. On page 50 they write under an assumption of partial minimum wage coverage “. . . the minimum wage raises the supply of labor to the uncovered sector, which lowers the wage and increases employment in that sector, thus offsetting some of the job loss in the covered sector.” Again in similar fashion on page 116, “. . . as we emphasized earlier in this chapter the potential for minimum wage increases to affect wages higher in the wage distribution is also important in assessing the effects of minimum wage policy.”
Both of these citations from the authors contradict their conclusion that a higher minimum wage necessarily harms employment. They agree if people lose their minimum wage job they do not disappear, but begin looking for other jobs in other occupations with wages higher in the wage distribution. Forced to leave a sub-minimum wage job the newly unemployed increase the supply of labor in other occupations where they moderate higher wages and add to employment. The authors might recognize the millions of opportunities to move from low wage to higher wage employment by looking at wage distributions by occupation reported by the U. S. Bureau of Labor Statistics in their Occupational Employment Survey.
Obsessive model building quickly turns the book into a tedious slog through neoclassical constructs in the specialized terminology of the economics fraternity. The authors use characterizations for model building like covered and uncovered, skilled and unskilled, union and non-union without mention of occupations like lawyer, engineer, clerk or cashier.
Many times the authors describe models that bring a “substitution of skilled for unskilled labor,” and vice versa. At page 254 readers find “In the model, an increase in the nominal wage that raises the wage rate of unskilled labor not only induces substitution of skilled for unskilled labor, it also leads to substitution of unionized skilled labor for non-unionized skilled labor because the union sector expands and the nonunion sector contracts.” Most people think of lawyers and engineers as skilled labor and clerks and cashiers as unskilled labor but not substitutes. Substitutes have characteristics similar enough to be interchangeable, but the authors repeatedly treat substitutes as different enough to be in separate markets.
A succession of models and assertions lead to conclusions of up, down, higher, lower applied to generic markets of products and jobs. The authors report regression estimates with tables of numerical coefficients, but these estimates came from aggregated data of many occupations and markets. Aggregated data doesn’t tell us what happens to fast food cooks after a minimum wage increase.
When the minimum wage jumped by $2.10 an hour from 2006 to 2009, jobs as fast food cooks dropped from 612 thousand to 539 thousand. During the same period there were jobs as cashiers, retail salespersons, rental and counter clerks and others with wage ranges above the minimum. An increase in applications for these other jobs quite likely holds down wages as economists like to predict from any increase in supply, but quite possibly in wage ranges above the minimum. A higher minimum wage might work out to higher employment, higher wages and lower wage inequality.
In the policy chapter the authors suggest some special interest groups support a higher wage because it helps them. Others who support raising the minimum wage are confused or uninformed; not clued into the power of neoclassical market forecasts. Economists have been reciting these conclusions for decades, but if you are a stickler for details and want to know how to support that view, you will not find it in this book. If you always want to oppose a higher minimum wage, do as the authors do, say it’s a bad thing that hurts employment.
The two economist authors wrote Minimum Wages for economists; that is except for a couple of sentences in the last chapter. The title of the last chapter, Summary and Conclusions, signals politicians and business types to the pages where they will find the conclusions they want to hear: “Based on the evidence from our nearly two decades of research on minimum wages . . . we find it very difficult to see good economic rationale for continuing to seek a higher minimum wage.”
Chapter two has the history and law of minimum wages and there are chapters describing changes on employment, wage distribution, income distribution, prices, profits and training incentives. A political economy of minimum wages chapter precedes the summary.
Chapter three has 70 pages reviewing 43 studies of the minimum wage effects of a higher minimum wage on employment. The summary reviews come after a section titled the neoclassical model where the authors narrate a description of the “textbook” neoclassical model in its “simplest” form. It assumes competition for labor and product markets, one type of labor, output produced with a mix of capital and labor, and minimum wage coverage for all. A minimum wage above the market wage creates two causes for declining employment. First, it raises establishment costs and market prices that cause falling product demand and ultimately falling employment. Second it raises wages leading to a substitution of capital for labor.
Paragraphs that begin with extensions of the model add or change selected assumptions. In one extension, minimum wages can be covered or uncovered. In a second, labor can be skilled or unskilled. In the first extension the authors assert “. . . the uncovered sector may provide alternative opportunities to workers who cannot finds jobs in the covered sector and thus can potentially mitigate the overall employment losses associated with the minimum wage.”
In the second extension the authors assert “. . . the neoclassical model’s prediction of a reduction in labor demand applies unambiguously only to less-skilled workers whose wages are directly raised by the minimum wage. The effects on other workers depend on the nature of the production process and, indeed, the minimum wage can generally be expected to lead to an increase in the employment of slightly higher-skilled workers who are good substitutes for minimum wage workers.”
To employers of dishwashers, ushers, lobby attendants, ticket takers, shampooers, and child care workers higher wage costs reduce profits pressuring employers to experiment with higher prices, and fewer work hours or jobs. Raising prices might raise revenue and restore profits as long as sales don’t fall by much. Otherwise cutting jobs or hours in response to a higher minimum wage should help restore profits. Since everyone agrees higher wages do pressure employers to cut work hours or jobs for sub-minimum wage employees that part makes for easy agreement. However, it represents a small part of minimum wage policy, unless the authors expect job losers to disappear, never to work again.
The authors do worry about what else happens after low wage employees lose their jobs. Repeatedly they pose different options with new assumptions and another chain of deductive model building. On page 50 they write under an assumption of partial minimum wage coverage “. . . the minimum wage raises the supply of labor to the uncovered sector, which lowers the wage and increases employment in that sector, thus offsetting some of the job loss in the covered sector.” Again in similar fashion on page 116, “. . . as we emphasized earlier in this chapter the potential for minimum wage increases to affect wages higher in the wage distribution is also important in assessing the effects of minimum wage policy.”
Both of these citations from the authors contradict their conclusion that a higher minimum wage necessarily harms employment. They agree if people lose their minimum wage job they do not disappear, but begin looking for other jobs in other occupations with wages higher in the wage distribution. Forced to leave a sub-minimum wage job the newly unemployed increase the supply of labor in other occupations where they moderate higher wages and add to employment. The authors might recognize the millions of opportunities to move from low wage to higher wage employment by looking at wage distributions by occupation reported by the U. S. Bureau of Labor Statistics in their Occupational Employment Survey.
Obsessive model building quickly turns the book into a tedious slog through neoclassical constructs in the specialized terminology of the economics fraternity. The authors use characterizations for model building like covered and uncovered, skilled and unskilled, union and non-union without mention of occupations like lawyer, engineer, clerk or cashier.
Many times the authors describe models that bring a “substitution of skilled for unskilled labor,” and vice versa. At page 254 readers find “In the model, an increase in the nominal wage that raises the wage rate of unskilled labor not only induces substitution of skilled for unskilled labor, it also leads to substitution of unionized skilled labor for non-unionized skilled labor because the union sector expands and the nonunion sector contracts.” Most people think of lawyers and engineers as skilled labor and clerks and cashiers as unskilled labor but not substitutes. Substitutes have characteristics similar enough to be interchangeable, but the authors repeatedly treat substitutes as different enough to be in separate markets.
A succession of models and assertions lead to conclusions of up, down, higher, lower applied to generic markets of products and jobs. The authors report regression estimates with tables of numerical coefficients, but these estimates came from aggregated data of many occupations and markets. Aggregated data doesn’t tell us what happens to fast food cooks after a minimum wage increase.
When the minimum wage jumped by $2.10 an hour from 2006 to 2009, jobs as fast food cooks dropped from 612 thousand to 539 thousand. During the same period there were jobs as cashiers, retail salespersons, rental and counter clerks and others with wage ranges above the minimum. An increase in applications for these other jobs quite likely holds down wages as economists like to predict from any increase in supply, but quite possibly in wage ranges above the minimum. A higher minimum wage might work out to higher employment, higher wages and lower wage inequality.
In the policy chapter the authors suggest some special interest groups support a higher wage because it helps them. Others who support raising the minimum wage are confused or uninformed; not clued into the power of neoclassical market forecasts. Economists have been reciting these conclusions for decades, but if you are a stickler for details and want to know how to support that view, you will not find it in this book. If you always want to oppose a higher minimum wage, do as the authors do, say it’s a bad thing that hurts employment.
Saturday, March 23, 2013
Some Flaws in Health Care
Recently the Obama Administration announced the time has arrived to appoint health care experts to an Independent Payment Advisory Board as part of its duties under the Affordable Care Act. The legislation gives the advisory board authority to change Medicare reimbursements for doctors and determine new ways to deliver quality health care. The flaws in health care go much deeper than reimbursements.
One of the flaws the advisory board cannot address with reimbursements comes because physician services operate as a separate component of the health care industry. Some of America’s physicians work as salaried employees. However, Bureau of Labor Statistics reports almost 67 percent of physicians practice medicine at over 306 thousand offices of physicians, not including 123 thousand offices of dentists, and still more offices of chiropractors, podiatrists, and a few others. These offices function as independent small businesses where physicians double as doctors and entrepreneurs in a physician services industry.
Combining business and medicine not only diverts physician time and energy away from medicine, it generates many small establishments that need a steady volume of patients to cover overhead expenses for office space, equipment and supplies, to minimize costs and to keep their business financially solvent.
A separate and decentralized physician services industry negotiates billions of transactions, first to provide necessary services, and then to collect payment from patient health care plans. Patients have no incentive, or ability, to be consumers when patient charges will be small co-pays or deductibles. Physician entrepreneurs avoid quoting prices when so many payments come from billed charges to a health plan rather than patients. Physicians decide necessary services and patients generally go along, but suspicion runs high that questionable tests and procedures might be ordered to maintain steady revenues into the firm.
The 306 thousand offices of physicians had employment of 2.3 million in 2011 with almost 820 thousand jobs in office and administrative support. The 820 thousand are more office and administrative support jobs than those reported for the entire hospital industry that has 5.7 million jobs; the 820 thousand are more the 4 times the office and administrative support jobs for the entire nursing and residential health care industry that has 3.1 million jobs.
Offices of physicians have 35 percent of staffing in office and administration support occupations, higher than any other sector or sub sector in health care. By comparison, outpatient care centers have 18.8 percent in office staff. With 2.3 million jobs spread among 306 thousand offices the average office has 7 or 8 staff including physicians. Out of 534.6 thousand physicians working in the health care industry 355 thousand work in offices of physicians suggesting the typical office has a doctor and 6 or 7 support staff. Staffing data implies a sub sector bloated with office staff, much of it underutilized.
Physicians services and all the other disparate sectors could be merged into regional or metropolitan health care providers like we organize school districts. Combining the offices of physicians and dentists with medical laboratories, imaging centers, blood banks, dialysis centers, urgent care clinics, hospitals and other services would eliminate billions of unnecessary transactions between bureaucratic offices of strategizing adversaries.
Regional health care helps squeeze bloated overhead office staff and allows health care providers to concentrate on combining necessary services to fully utilize equipment and personal to minimize costs. Regional health care with salaried physicians and staff available to discuss medical options with other salaried physicians and staff helps reduce the incentive to over prescribe tests or treatment and makes second and third opinions readily available. Regional health care has the potential to introduce a measure of choice like public school choice as long as residents can compare annual or monthly premiums, co-pays and deductibles with neighboring districts.
Solving America’s health care problems will require significant changes in health care delivery such as medical school tuition at public expense, converting doctors to salaried employment and expanding regional health care into HMO style delivery systems. But if the appointed advisory board members are really experts, they will know how hard and how frustrating the job will be.
One of the flaws the advisory board cannot address with reimbursements comes because physician services operate as a separate component of the health care industry. Some of America’s physicians work as salaried employees. However, Bureau of Labor Statistics reports almost 67 percent of physicians practice medicine at over 306 thousand offices of physicians, not including 123 thousand offices of dentists, and still more offices of chiropractors, podiatrists, and a few others. These offices function as independent small businesses where physicians double as doctors and entrepreneurs in a physician services industry.
Combining business and medicine not only diverts physician time and energy away from medicine, it generates many small establishments that need a steady volume of patients to cover overhead expenses for office space, equipment and supplies, to minimize costs and to keep their business financially solvent.
A separate and decentralized physician services industry negotiates billions of transactions, first to provide necessary services, and then to collect payment from patient health care plans. Patients have no incentive, or ability, to be consumers when patient charges will be small co-pays or deductibles. Physician entrepreneurs avoid quoting prices when so many payments come from billed charges to a health plan rather than patients. Physicians decide necessary services and patients generally go along, but suspicion runs high that questionable tests and procedures might be ordered to maintain steady revenues into the firm.
The 306 thousand offices of physicians had employment of 2.3 million in 2011 with almost 820 thousand jobs in office and administrative support. The 820 thousand are more office and administrative support jobs than those reported for the entire hospital industry that has 5.7 million jobs; the 820 thousand are more the 4 times the office and administrative support jobs for the entire nursing and residential health care industry that has 3.1 million jobs.
Offices of physicians have 35 percent of staffing in office and administration support occupations, higher than any other sector or sub sector in health care. By comparison, outpatient care centers have 18.8 percent in office staff. With 2.3 million jobs spread among 306 thousand offices the average office has 7 or 8 staff including physicians. Out of 534.6 thousand physicians working in the health care industry 355 thousand work in offices of physicians suggesting the typical office has a doctor and 6 or 7 support staff. Staffing data implies a sub sector bloated with office staff, much of it underutilized.
Physicians services and all the other disparate sectors could be merged into regional or metropolitan health care providers like we organize school districts. Combining the offices of physicians and dentists with medical laboratories, imaging centers, blood banks, dialysis centers, urgent care clinics, hospitals and other services would eliminate billions of unnecessary transactions between bureaucratic offices of strategizing adversaries.
Regional health care helps squeeze bloated overhead office staff and allows health care providers to concentrate on combining necessary services to fully utilize equipment and personal to minimize costs. Regional health care with salaried physicians and staff available to discuss medical options with other salaried physicians and staff helps reduce the incentive to over prescribe tests or treatment and makes second and third opinions readily available. Regional health care has the potential to introduce a measure of choice like public school choice as long as residents can compare annual or monthly premiums, co-pays and deductibles with neighboring districts.
Solving America’s health care problems will require significant changes in health care delivery such as medical school tuition at public expense, converting doctors to salaried employment and expanding regional health care into HMO style delivery systems. But if the appointed advisory board members are really experts, they will know how hard and how frustrating the job will be.
Wednesday, March 13, 2013
Unemployment Benefits in North Carolina
A Washington Post article [N.C. looks to cut jobless benefits, WP, 2/13/13] describes cuts in unemployment benefits as a drastic proposal from North Carolina lawmakers. Under the new plan benefits would drop from 26 weeks to 20 and the maximum benefits from $535 a week to $350.
The governor believes they have little choice, they have a budget crisis, but the quotations from business supporters give another reason: cuts are needed to improve the economic climate and rebuild unemployment insurance funds. Lew Ebert, the president of the North Carolina Chamber of Commerce told journalist Michael Fletcher “Everywhere I travel, there are companies that have jobs and want to hire, but I hear two things: people don’t have the skills, or that it is tough to compete with $500 plus per week in benefits.”
Unemployment benefits are always competition for employers while the unemployed receive benefits. Therefore the duration and amount of the benefits reflect a states political attitude and policy toward cheap labor. If benefits are $535 per week for 26 weeks then the unemployed have incentive to stay on unemployment for wages under $13.37 an hour and for the whole 26 weeks. They will be unlikely to become a part of the labor force until after 26 weeks unless an offer comes above $13.37, assuming a 40 hour week. If the benefits are $350 per week for 20 weeks then the unemployed have incentive to stay on unemployment but only for wages under $8.75 an hour for 20 weeks.
By lowering the benefits North Carolina will, as they intend to do, increase the supply of cheap labor. However, $350 is the maximum when few make the maximum. Benefits are always scaled back for filers who had lower wages than those eligible for the maximum. The article cites $296 a week as the average benefit, which is $7.40 an hour. The Bureau of Labor Statistics reports the median wage for cashiers was $8.80 an hour in 2011. At $7.40 an hour we can be sure the Chamber of Commerce has jobs as their president told the Washington Post, but only if the Legislature will help them to hire at lower wages.
The governor believes they have little choice, they have a budget crisis, but the quotations from business supporters give another reason: cuts are needed to improve the economic climate and rebuild unemployment insurance funds. Lew Ebert, the president of the North Carolina Chamber of Commerce told journalist Michael Fletcher “Everywhere I travel, there are companies that have jobs and want to hire, but I hear two things: people don’t have the skills, or that it is tough to compete with $500 plus per week in benefits.”
Unemployment benefits are always competition for employers while the unemployed receive benefits. Therefore the duration and amount of the benefits reflect a states political attitude and policy toward cheap labor. If benefits are $535 per week for 26 weeks then the unemployed have incentive to stay on unemployment for wages under $13.37 an hour and for the whole 26 weeks. They will be unlikely to become a part of the labor force until after 26 weeks unless an offer comes above $13.37, assuming a 40 hour week. If the benefits are $350 per week for 20 weeks then the unemployed have incentive to stay on unemployment but only for wages under $8.75 an hour for 20 weeks.
By lowering the benefits North Carolina will, as they intend to do, increase the supply of cheap labor. However, $350 is the maximum when few make the maximum. Benefits are always scaled back for filers who had lower wages than those eligible for the maximum. The article cites $296 a week as the average benefit, which is $7.40 an hour. The Bureau of Labor Statistics reports the median wage for cashiers was $8.80 an hour in 2011. At $7.40 an hour we can be sure the Chamber of Commerce has jobs as their president told the Washington Post, but only if the Legislature will help them to hire at lower wages.
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