The ranks of the jobless swelled by 60,000 to a record 19.45 million, according to Eurostat, the European Union’s statistics agency. Though the unemployment rate remained steady at 12.2 percent, the previous month was revised up from 12 percent.
In light of the ongoing discussion over fast-food wages, I recently wrote that prices are not play things, urging that we reach beyond the type of minimum mindedness that orients our imaginations around artificial tweaking at the bottom instead of authentic value creation toward the top. Prices don’t equip us the whole story, but they do tell us something valuable about the needs of others and how we might maximize our service to society.
But though I have a hearty appreciation for the role that low-wage employers like McDonald’s play — due in large part to my 5-year stint working for The Ronald — I’m also grateful that other companies like Costco are able to provide higher wages to many low-skilled workers.
When we observe such differences — one prosperous company paying $7 per hour while another pays $12 — it can be easy to get worked up, pointing our fingers at greedy executives, idols of efficiency, unwise allocation of company funds, etc. Yet while any assortment of these drivers may indeed contribute to how wages are set, and though executives bear heavy moral responsibility on such matters, it’s helpful to remember that (1) we’re greatly limited in understanding the books of the companies we critique, and (2) executives aren’t the only ones influencing prices.
Over at Bloomberg, Megan McCardle does a marvelous deep-dive on this very sort of thing, starting with a comparison of Costco and Walmart wherein she ponders why the former offers higher wages than the latter.
[This post was co-authored with Chris Horst, director of development at HOPE International. He is a This is Our City fanboy and is grateful that Christianity Today has given him freedom to write about manufacturers, mattress sellers, and solar product designers, all working for the common good in Denver, where he lives with his family. Chris blogs at Smorgasblurb, and you can connect with him on Twitter at @chrishorst. His first book, Mission Drift, will hit shelves this spring. The views expressed in this essay are his own.]
In a marvelous profile for This is Our City, Brandon Rhodes explores how a 25-member church is contributing to its neighborhood through farmer’s markets, block parties, and yarn-bombings. “They made a decision to radically localize how they practice being church with the common good and the gospel in mind,” Rhodes writes. “…They take a ‘nearby-first’ approach to living it out.”
James K.A. Smith responds at Cardus, and though he, too, celebrates the slow-and-artsy, he also emphasizes the importance of the macro-and-dirty. Decrying what he describes as “a sort of vague Anabaptism” among younger evangelicals, Smith challenges “Portlandia Christians” to consider the systemic challenges that either hinder or empower our cities. “We have scaled our expectations and our efforts as if the rejection of triumphalism means a retreat from systemic change,” he writes. “It’s like we’ve decided we should make lovely art not culture war.”
Turning his focus toward Detroit, which he describes as a “colossal disaster of municipal government,” Smith concludes that “farmer’s market’s won’t rescue the city” but “good government will.” Yet as he goes on to note, the solution is not either/or, but both/and: “It’s peach preserves and policy making. Coffee shops and court nominations. Block parties and bills in Congress.” (more…)
It sounds like a late-night tv scam: make tens of thousands of dollars and don’t work at all! And yet, it turns out that the U.S. government is offering just such a deal. For instance, a welfare recipient in the state of Connecticut can make up to $38,761, according to a new Cato Institute study. In Hawaii, the figure is $49,175, over 200 percent above the Federal Poverty Level. As The Heritage Foundation has pointed out, nearly half of Americans pay no income tax at this point in history.
Michael Tanner and Charles Hughes have written “Work versus Welfare Trade-off 2013: An Analysis of the Total Level of Welfare Benefits by State.” Tanner has this to say about paying people not to work:
To be clear: There is no evidence that people on welfare are lazy. Indeed, surveys of them consistently show their desire for a job. But they’re also not stupid. If you pay them more not to work than they can earn by working, many will choose not to work.
While this makes sense for them in the short term, it may actually hurt them over the long term. One of the most important steps toward avoiding or getting out of poverty is a job.Only 2.6 percent of full-time workers are poor, vs. 23.9 percent of adults who don’t work. And, while many anti-poverty activists decry low-wage jobs, even starting at a minimum-wage job can be a springboard out of poverty.
Thus, by providing such generous welfare payments, we may actually not be helping recipients.
Paychecks are the vehicle for upward mobility, wealth and personal fulfillment in life, says Mike Varney. So why aren’t we doing everything in our power to create more of the jobs that are the source of those paychecks?
It’s all very simple. Companies create jobs. Jobs are what create paychecks. Paychecks are what gives individuals and families purchasing power and choice in their lives. Jobs and paychecks create futures and give humans a sense of purpose, contribution and connection. Jobs are the ticket that enable people to climb from survival to self-actualization on psychologist Abraham Maslow’s Hierarchy of Needs.
Joblessness creates the opposite effect: a downward spiral from hope to despair. Aspiration to desperation. In speaking with many of our local non-profit leaders, I have developed a real appreciation for the link between joblessness and insidious societal problems such as domestic abuse, drug and alcohol abuse, child abuse, homelessness and destruction of the human spirit. Societal ills are generally reported to increase and decrease in direct correlation to employment. Poverty and joblessness have no place to take root in a society where opportunity abounds and where people have a strong work ethic.
Alejandro Chafuen, president and chief executive officer of the Atlas Economic Research Foundation and board member of the Acton Institute, recently wrote a piece for Forbes.com discussing youth unemployment in the United States. According to the latest report, U.S. youth unemployment is at 16.2 percent which is more than double the adult unemployment rate. The unemployment rate for youth in Europe is currently at 24 percent. Chafuen asks, “Can we learn from the European experience?”
Using data compiled by the economic freedom indices of the Fraser Institute in Canada, and the Heritage Foundation, in the United States, we recently looked at how economic freedom, labor regulations, social spending, and regulatory climate, correlated with youth unemployment. Against our preconceptions, at least as shown with our simple static analysis, there were no convincing results. I will spare the reader the statistical jargon and graphs and focus on apparent contradictions. (more…)
German Finance Minister Wolfgang Schaeuble is a frustrated man. With unemployment rates in Germany hovering at around 8 percent, and Greece and Spain at almost 60 percent, he believes the EU is on the brink of “revolution.” His answer is not to scrap the welfare model however; he wants to preserve it.
While Germany insists on the importance of budget consolidation, Schaeuble spoke of the need to preserve Europe’s welfare model.
If U.S. welfare standards were introduced in Europe, “we would have revolution, not tomorrow, but on the very same day,” Schaeuble told a conference in Paris.
Not everyone agrees. Italian Labour minister Enrico Giovannini says European youth are being asked to put their lives on hold, and that this is “unacceptable.” Werner Hoyer, head the European Investment Bank, acknowledged that there is no plan at this point to direct the spiraling downturn of the EU economy. There is, instead, a country-by-country “patchwork” approach. For instance, Greece is attempting to focus on job training and entrepreneurship for 350,000 young people, and France is working on a similar plan within its own borders. (more…)
If you’re a young American adult (the 25-to-34 age range), and you have a good job, count yourself blessed. Most of your peers aren’t so lucky. The New York Times reports that “[o]ver the last 12 years, the United States has gone from having the highest share of employed 25- to 34-year-olds among large, wealthy economies to having among the lowest.”
Of course, young Europeans have been dealing with this for years. Greece, Spain and Portugal have unemployment rates between 17-27% (Greece being the highest), and the outlook is grim for most of the European Union (EU). Even taking into account that many young people may be studying or raising families and therefore not looking for full-time work, the deterioration of the EU’s economies is obvious. But it’s not just lack of jobs. As Samuel Gregg, Acton’s Director of Research, points out in his book Becoming Europe, “Europe’s social systems are under considerable internal strain from the remorseless deterioration associated with unaffordable welfare states, population decline, low productivity levels, and the preferential treatment of politically connected insiders.” (more…)
The United States isn’t just gliding towards a continental European-style future of vast welfare systems, economic decline, and massive debts – it is accelerating towards it at full speed. Or as Acton Institute research director Samuel Gregg puts it in his excellent new book published today [January 8] by Encounter, America is already “becoming Europe,” with the United States moving far closer to a European-style welfare state than most Americans realize.
The American Interest spins a further tale of woe, citing an 11.8 percent unemployment rate for the 17-nation Eurozone. Pity Spain: they have a 27 percent unemployment rate. Yes, you read that correctly: 27 percent. And young people (those under 25) are especially hard hit: 24 percent unemployment in the E-zone, with over 50 percent unemployment for young people in Spain and Greece.
Is it too late for America to reverse course? Read “Becoming Europe” by Samuel Gregg.
The Congressional Research Service (CRS), a group that works exclusively for the U.S. Congress, issued a report with one of the greatest titles I’ve ever seen on a government document:
Receipt of Unemployment Insurance by Higher-Income Unemployed Workers (“Millionaires”)
Now the first nine words are nothing special, typical policy-wonk speak. But whoever added in the word “millionaires” with scare quotes and parentheses is a genius. Most people would have been nodding off around the word “Insurance” but seeing millionaires (that’s such a quaint word nowadays) in the title makes you wake up and ask, “Wait, are they saying that millionaires got unemployment insurance?”
The answer: Yes. Yes they did. Millionaires have indeed been getting unemployment insurance. In fact, almost 3,000 of them in 2008 were on the dole: