Posts tagged with: unemployment

Seattle-mystWhen I was growing up I had a buddy—let’s call him “Bob”—who was constantly asking, “What happens if we do . . . ?” Bob’s curiosity, however, only led him to wonder about foolish actions. He never pondered, for example, what would happen if we all volunteered at the senior citizens center. Instead, his thinking ran more along the lines of what would happen if we jumped off the senior citizens center.

The reaction of me and the rest of my friends was always, “Let’s find out!” But we were more prudent than Bob (or maybe just more cowardly) so we’d encourage him to try whatever reckless idea he had in mind so we could learn from his experience. We learned, for instance, that if jump off the 3-story senior citizens center, a stack of cardboard boxes will not be enough to sufficiently break your fall.

Bob’s shenanigans would daily provide for us what social scientists would call a “natural experiment.” A natural experiment is a study of the effect of an independent variable, which has not been planned or manipulated by the researchers, on a dependent variable. (The word ‘natural’ in the term natural experiment therefore refers to an event that is not planned by the researchers.)

The city of Seattle is about to pull a Bob, by foolishly raising the minimum wage to $15 per hour. The effect on the citizens of Seattle will be almost entirely harmful. But it will provide a natural experiment on the effect of raising the minimum wage laws that the rest of American can learn from. Anyone who isn’t already convinced that increasing the minimum wage has a detrimental impact on employment and harm minority workers will, in a few years, have solid proof. We will all be able to look to Seattle to see the difference between good, albeit naive, intentions and sound economic policy.

Here are some of the effects I predict the policy will have in the next three years:
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keep-calm-and-expect-the-unexpected-18Today at Bloomberg we find this unexpected news about unemployment:

Applications for U.S. unemployment benefits unexpectedly climbed to a nine-week high, underscoring the difficulty adjusting the data for seasonal variations such as the Easter holiday and spring recess at schools.

Jobless claims rose by 14,000 to 344,000 in the period ended April 26, the highest level since Feb. 22, Labor Department data showed today in Washington. The median forecast in a Bloomberg survey of economists called for 320,000.

There are two things the media never expects: (1) The Spanish Inquisition and (2) increases in jobless claims. Over the past five years, in 30 of the past 60 months,  the media has considered it “unexpected” when jobless claims increase:

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“When People Give Up Looking for Work, What Do They Do?” A Wall Street Journal story looks at the “millions of working-age men” sidelined by the economic slump, and warns that “the longer they’re out of work, the more their skills deteriorate and the harder it is to land the next job.”

“Those who can’t find work often turn to safety net programs, such as food stamps, unemployment benefits and disability — programs that have ballooned since the recession began,” the article continues. “Once people start receiving disability benefits, they rarely leave the program.”

The take home: take any ethical job. Consider self-employing yourself, offering to do work others find unpleasant. Some potential employers in your preferred career may look down on you for having done grubby work, but others will admire your willingness to roll up your sleeves and get your hands dirty while you’re waiting for a job in your chosen field.

The Bible condemns willful idleness and enjoins us to labor so that we can have the means to help those truly in need. If after pursuing any ethical job available, you’re still underemployed, cut your living expenses to the bone, minimize your use of the government dole, and use your idle week days to volunteer long hours doing something beneficial for society, including time on your knees in intercessory prayer.

The Christian community talks so much about pursuing your vocational passion and calling that we often neglect that gritty reality that sometimes God uses circumstances to call us into work that doesn’t use all of our talents, but instead exercises our fortitude, selflessness, and humility.

I remember when I was 22. (more…)

Subway at True Bethel Baptist Church

I have previously expressed my appreciation for the popular TV show, Undercover Boss, in which business leaders from large corporations spend several days working alongside lower-level employees.

In an episode on Subway, Don Fertman, the restaurant chain’s Chief Development Officer, goes undercover at several locations across the United States. Most of the episode includes your typical Undercover Boss fare — a bumbling executive, dedicated workers, teer-jerker employee recognitions — but I was struck by a particular branch that Fertman visits along the way.

Located in the heart of Buffalo, New York, the restaurant is located in the same building as True Bethel Baptist Church, and further, is owned and operated as a franchise by the church itself. The reason? To provide employment and job training to the surrounding neighborhood. (more…)

A recent report from the CBO contains an appendix detailing updated estimates of the labor market effects of the Affordable Care Act (ACA). Pundits for and against the ACA have wasted no time in putting their own particular spin on the projections. Republicans and some other opponents have seemingly celebrated the idea that these estimates may show that the ACA is “a job-killing, economy-crushing villain,” while Democrats and some other supporters have claimed that in times of high unemployment, it’s “an economic benefit” that some will be voluntarily reducing hours or dropping out of the labor force because that means greater demand for labor — those currently unemployed would therefore have more options.

So who’s right? These are mutually contradictory claims, or so it appears. The report is ultimately limited and mixed, but nevertheless raises some serious concerns, caused, in part, by the polarization of Congress both when the law was passed and up to the present. (more…)

jobs-reportThis morning the federal government released the latest jobs report. You may have noticed confusing headlines and reporting about the data, such as this story from NPR, “Job Growth Less Than Expected, But Unemployment Hits 5-Year Low.” What does that mean? Is that bad news mixed with good news? How should we interpret the jobs report?

Here’s what you need to know to understand what the job report is, what it tells us, and what it means for the economy:

What is the “jobs report”?

The “Jobs Report” is the term often used to refer to the Employment Situation Summary, a monthly report issued by the Bureau of Labor Statistics that is based on surveys used to monitor the labor market. This report is released on the first Friday of every month.

Why is the jobs report considered so important?
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A new study by Grand Valley State University professors Leslie Muller and Paul Isely suggests that the Affordable Care Act has already cost West Michigan 1000 jobs. Muller summarized the results in a Wood TV story:

“Firms are actually holding off on hiring or their reducing their hiring that they were thinking they were going to be doing because of the ACA,” said Muller.

The 1,000 jobs lost does not include the number of workers in West Michigan that have lost hours to ensure that they are kept as part-time employees. Nearly one-third of companies said they have cut employees’ hours.

“We’re talking about a thousand jobs in West Michigan that would have been here absent the ACA,” Muller said.

The study found lower-skilled jobs tend to be suffering the most.

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Senator Jeff Sessions (R. – Ala.) is frustrated with the latest job report, saying more people are leaving the workforce than joining it:

Today’s jobs report underscores a deeper problem facing our economy: a large and growing block of people who are chronically jobless and completely outside the workforce. In December, the economy added only 74,000 jobs – not nearly enough to keep up with population growth –and 347,000 left the workforce. That means for every one job added, nearly 5 people left the workforce entirely. There are now nearly 92 million Americans outside the workforce, resulting in the lowest participation rate in 36 years.

This chart illustrates the December report, and includes figures on those who are unemployed yet still looking for work, and those who’ve given up searching. (more…)

Blog author: jballor
Wednesday, December 11, 2013
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Broken bank 02In yesterday’s edition of The Transom, which I highly recommend, Ben Domenech included a discussion that places the debates over raising the minimum wage within the broader context of the effects of inflation more generally.

Here’s a section:

There shouldn’t be any debate about the reality of the problem that the costs of basic staples, health care, and higher education are chewing up ever-increasing portions of the median family budget which is, in inflation-adjusted terms, smaller than it’s been since 1995. According to the Bureau of Labor Statistics, over the past five years, the average prices for all goods are 7.7% higher; the average price of bread is 10.4% higher; and the average price of meat/poultry/fish/eggs is 16.2% higher. In the past decade, the average worker has paid 89 percent more toward their health care benefits, while their wages grew 31 percent. The rising costs of the government-fueled higher education bubble makes American parents concerned they can no longer afford to send their kids to college. On top of it all, Americans no longer feel confident about their ability to find a new job which can pay them enough to make up for the costs of these goods and services.

The problem is not that the cost of unskilled labor is too low. The problem is the costs of what workers can buy with the fruits of that labor are too high. And the reason for that is largely due to government and systems which socialize risk and insulate producers from reality, not the realities of a competitive marketplace. http://vlt.tc/16×9 Those who favor a free market response to these inequality-related concerns ought to view the minimum wage push as an opportunity to put forward an agenda that speaks to these real concerns with a gas & groceries agenda. This is not going to be solved by more government requirements which raise the cost of labor and will absolutely lead to more low-skilled unemployment: it is with an agenda that would smash the insulated systems which have led to these higher costs.

Ben goes on to outline in some detail what an agenda might look like, which includes “ending the government’s management Soviet-style programs of dairy and raisins.” Horror of horrors, the Daily Beast and dairy producers would have us believe that the result would be $8/gallon milk. I can’t be the only one who wonders what the market price of commodities from milk to oil and sugar might be without various protectionist measures and subsidy schemes.

Ben ends the section with a key question: “Some Republicans have taken up more populist anti-corporatist and anti-cronyist arguments in recent months, because they can read the same polls we do. But will they stand up to cronyism, or are they just interested in demagoguery on the issue until they hold the reins of power again?”
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grouchomarxThe Obama Administration seems to think that moving money from one place to another constitutes economic stimulus. A Washington Times editorial points this out. First, the administration is pushing food stamps, or SNAP (Supplemental Nutrition Assistance Program), as a way to get the economy moving.

“I should point out,” Agriculture Secretary Tom Vilsack said on MSNBC two years ago, “when you talk about the SNAP program or the food-stamp program, you have to recognize that it’s also an economic stimulus … . If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It’s the most direct stimulus you can get in the economy during these tough times.”

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