Category Archives: Jobs

Census data favors liberty, capitalism, and small government

Michael Barone’s analysis of the 2010 census data is worth reading. His conclusion:

The states, said Justice Brandeis, are laboratories of reform. The 2010 Census tells us whose experiment worked best. It’s the state with the same name as the county that’s the center of the nation’s population: Texas.

But it’s not just Texas:

  • The eight states with no state income tax grew 18 percent in the last decade. The other states (including the District of Columbia) grew just 8 percent.
  • The 22 states with right-to-work laws grew 15 percent in the last decade. The other states grew just 6 percent.
  • The 16 states where collective bargaining with public employees is not required grew 15 percent in the last decade. The other states grew 7 percent.

People naturally move to states where the economies are good, jobs are plentiful, and the cost of living tends to be lower. States with low taxes and workers rights (the opposite of union rights) provide the environment people want. If states like New York, California, and Illinois want to balance their budget and avoid bankruptcy, raising taxes only drives people away and makes the situation worse. It’s time for states and the federal government to open their eyes.

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Teachers Unions only care about money

With the massive teachers strikes and protests in Wisconsin, I am very afraid for this country. The Bolshevik Revolution began with protests and union strikes. The Fascists in Italy and Nazis in Germany took over in part to stop the socialist/communist strikes. This country hasn’t seen strikes like these since the 1920s.

The teachers in Wisconsin don’t care about their customers: the students. We hear the cry over and over that “it’s for the children,” but when the teachers’ benefits are called into questions, they abandon the children during the school year to protest about money.

Just so you know, US Airways is protesting today down at Phoenix Sky Harbor over some contract dispute. Airline employees complain they aren’t making enough money. What about your customers? Airfares have gone up and quality of service has declined as we are packed into planes like cattle, and we now are poked, prodded, scanned, and molested to get through airport security. And through taxes and airfares, we pay for the right to do so.

Teachers unions. Airline unions. All other unions. All you care about is money, so stop pretending otherwise. “Fairness.” “Quality education.” “Safety.” You don’t care about any of that. You just want your share, more than your share, of the money.

Why should those struggling to make ends meet subsidize unions. Why can’t union employees compete in the free market like the rest of us? Because they are not worth what they are being paid? When did the land “of the people, by the people, for the people” become the land of “from the people, against the people, at the expense of the people?”

Jobs reports: US versus Canada

As mentioned in the previous post, the United States economy created fewer jobs than expected, but the unemployment rate unexpectedly declined. In Canada, the exact opposite occurred:

Canada’s job creation in January was more than four times the median forecast, pushing the Canadian dollar to its strongest level since May 2008 and adding to evidence the country’s economic recovery may be accelerating.

Employment rose by 69,200 and the labor force increased by 106,400, Statistics Canada said today in Ottawa. The jobless rate rose to 7.8 percent from December’s 7.6 percent, as more people sought work. Economists forecast 7.6 percent unemployment and job growth of 15,000, according to the median estimates of 25 and 26 economists surveyed by Bloomberg News.

So which would you rather have?

  • US: Unemployment rate declines but few jobs are created.
  • Canada: Many jobs were created but unemployment rate rose.

Let me know what you think in the comments.

Jobs report not as good as the unemployment rate implies

Being the lazy person that I am and not wanting to reinvent the wheel, I decided to wait until some other blogger analyzed the latest employment report data. The people at No Money No Worries explains how today’s report showed a small increase in jobs but a large decline in the unemployment rate:

Today’s unemployment headline proclaims that the “Unemployment Rate Falls to 9.0%.” However, the number of nonfarm jobs increased very little (+36,000).

So, unless we’ve all changed careers to become farmers, something doesn’t add up.

All else being equal – with roughly 153 million in the US labor force – a 0.1% drop in the unemployment rate would require the creation of 153,000 jobs. A decline of 0.4% would require payroll employment to increase by 4x that amount, or 612,000 jobs.

So, one suspects that the headline unemployment rate fell because these workers dropped out of the labor force entirely – and BLS data confirms that is indeed what happened.

According to the BLS, the civilian labor force in Dec 10 was 153,690,000.  January 2011′s dropped to 153,186,000 – a difference of 504,000 workers.

So, to sum it up, the 0.4% drop in unemployment was due to:

1.   36,000 new jobs; and

2. 504,000 workers dropping out of the labor force.

Not exactly a stellar report.

I think that sums it up well. If you enjoy economics and statistics (and some cool charts), I highly recommend No Money No Worries.

Britain to fire 500,000 public sector employees. But not really.

As mentioned earlier, Britain is finally taking action to stave off a credit crisis and possible bankruptcy. Some are reporting that Britain will be firing 500,000 public sector employees.

For example, The Week reports:

David Cameron is laying off 500,000 government employees.

However, that will not be the case. As the Mail reports:

500,000 public sector jobs to go

1 in 10 public sector jobs to go as government gambles on private recovery

According to the story, this 10% reduction will take 4 or 5 years:

But they make clear that the Government has adopted the Office for Budget Responsibility’s forecast that 490,000 jobs in the public sector will go by 2014/15.

If the average public sector employee works for 40 years, 10 percent of them would retire within 4 years. In other words, the government will likely lay off very few people. Instead, the British government simply will not fill vacant positions.

This is great news, on the one hand, because the British are working to solve their financial problems and this job reduction it is quite easily achievable because it does not actually require firing many people. However, let us not be under the misapprehension that the British government is making a tough choice here. Do not believe the talk that half a million will be laid off. That is simply untrue.

No sovereign debt crisis here in the U.S., but we’ve got other problems, namely jobs.

The United States may not be experiencing a sovereign debt crisis like Europe, which I have written about quite often recently, but we have our own problems. In Europe, 20 percent unemployment is making it very difficult to balance budgets. While unemployment is not as bad here, we are experiencing the worst economic recovery since the Great Depression. And today’s ADP report proves it:

Private employers unexpectedly cut 39,000 jobs in September after an upwardly revised gain of 10,000 in August, a report by a payrolls processor showed on Wednesday.

The August figure was originally reported as a loss of 10,000.

The median of estimates from 38 economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was for a rise of 24,000 private-sector jobs in September.

Employment fell 63,000 short of expectations, though last month was revised up by 20,000. ADP only measures private employment. The government report due out Friday also includes public sector jobs, which is expected to decline as census workers were recently laid off after the census was completed.

The ADP figures come ahead of the government’s much more comprehensive labor market report on Friday, which includes both public and private sector employment.

That report is expected to show overall nonfarm payrolls were unchanged in September, based on a Reuters poll of analysts, but a rise in private payrolls of 75,000.

Woh! These economists expect 75,000 private sector jobs were created last month when ADP said 39,000 were lost? Seems like somebody is way off the mark here.

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Did World War II lift us out of the Great Depression?

We are constantly told that the economy was lifted out of its Great Depression because of World War II. While it is certainly true that the economic production recovered thanks to war production, I do not believe that the economy actually “recovered” during the war. Of course, it all depends on how you define an economic recovery. The statistical method of doing so is to look at Gross Domestic Product (GDP) or industrial production. However, looking at those figures, even adjusting for inflation, ignores things such as changes in population and demographics.

When World War II began, millions joined or were drafted into the armed forces. Their production was lost as they fought overseas. To make up for that loss, women entered the workforce and men worked longer hours. Yes, economic production rose, but the number of hours worked rose even more so. Americans were forced to work instead of spending their time in leisure or raising their families. This was of course good for the many who had previously been unemployed, but bad for those who had already had jobs, housewives who were caring for their children, the elderly who held off on retirement, and the young who skipped college to enter the army.

While hours worked were up, most of the increase in production went to war manufacturing. The United States churned out planes, ships, tanks, guns, and bullets. Japan and Germany had a ten-year head start in military production, but the United States quickly caught up once its economic wheels moved forward. Furthermore, much of the food, clothing, and other staples required for day-to-day living were shipped to troops overseas instead of staying within the country’s borders. The domestic economy of the United States was dominated by rations and shortages. This was not your typical economic recovery with new products available to consumers and increasing wealth. Instead, it was economic production designed to destroy (though for a good cause) instead of create. The billions of dollars spent on bombs, downed planes, sunk ships, shattered tanks, and bullets was capital forever lost to mankind.

With longer work hours, families separated for years, hundreds of thousands of killed soldiers, and production devoted to the military instead of consumers, the standard of living of the average American was no better during World War II than it was during the Great Depression and worse than it was in the 1920s.

But what about unemployment which went from 25% down to 1%? Gene Smiley writes, “The number of unemployed workers declined by 7,050,000 between 1940 and 1943, but the number in military service rose by 8,590,000. The reduction in unemployment can be explained by the draft, not by the economic recovery.” He continues, “Most estimates show declines in real consumption spending, which means that consumers were worse off during the war. Business investment fell during the war. Government spending on the war effort exceeded the expansion in real GNP.” Smiley does admit that economic measurement during this time was exceedingly difficult, asking “How can we establish a consistent price index when government mandates eliminated the production of most consumer durable goods?” Smiley concludes, “For consumers, the recovery came with the war’s end, when they could again buy products that were unavailable during the war and unaffordable during the 1930s.”

* All this says nothing about the need to enter the war against the Japanese and Germans. However, the idea that a war could lift an economy out of depression is tenuous. The economic recovery following World War II was the result of the newfound economic freedom in the United States but even more so overseas where countries such as Germany, Italy, and Japan experienced true freedom for the first time in many years.

UPDATED: Germany and Italy also “boosted” their economies with military production and conscription. Few would argue that their “economic recoveries” were sustainable or good.