Brad DeLong's Semi-Daily Journal (2004)

Indeed, Brad--but, to paraphrase you, Why Oh Why Can't We Have Better Blog Headline Writers? Hasn't it been the Brad DeLong line that our problem isn't the lost jobs, it's the lack of newly created ones to replace them? If the cost of job loss is high, we can minimize the cost by minimizing the losses--say, by trimming productivity, or cutting the fiber-optic cables to India. But we don't want to go there, right? We want a vibrant economy that moves people into new positions quickly, and indeed actually winds up improving their potential. Isn't that what we want the headline to point to? I fear this is grist for the anti-globalizers.

This data confirms what I've seen elsewhere.

The situation in Silicon Valley is probably atypical, but perhaps not to an extreme. The massive loss of well-paying jobs over the past three years has resulted very, very long periods of unemployment (often over a year) for workers who are usually very skilled. Many people leave the area altogether (population of the larger area has dropped), others take lower wage work (anecdote: the people in the Home Depot electrical department are suddenly far more skilled than they were a few years ago). Many are pursuing additional education (anecdote: there are waiting lists at almost all community college trade programs, unlike a few years ago).

But, again anecdotally, it's nowhere near as bad as 1982. Minimum wage jobs are widely available, unlike back then, although they are once again truly minimum wage. And the low interest rates have triggered a residential construction boom that has offset the bust in office construction, so apprentice jobs at construction sites are easy to get.

So Reagan is still the king. Bush has something to shoot for.

I used to have a quote around from a Secretary of the Treasury (can't remember who, but it was early XX c., maybe Mark Hanna??) explaining that unemployment is good for "labor discipline". People don't say that out loud any more, but some of them think it.

As I remember, the quote included gloating about the workers who were ruined because they'd lived beyond their means and failed to save. Of course, that was before shop-till-you-drop had become a patriotic obligation.

http://jobwatch.org/

Greatest sustained job loss since the Great Depression

Since the recession began 35 months ago in March 2001, 2.4 million jobs have disappeared, a 1.8% contraction. The Bureau of Labor Statistics began collecting monthly jobs data in 1939 (at the end of the Great Depression). In every previous episode of recession and job decline since 1939, the number of jobs had fully recovered to above the pre-recession peak within 31 months of the start of the recession. Today's labor market would have 3.3 million more jobs if jobs had grown by the 0.8% rate that occurred in the early 1990s recession and so-called "jobless recovery," the worst record prior to this current period. The picture is bleaker for private-sector jobs, which have dropped by 3.0 million since March 2001, a 2.5% contraction.

"If the cost of job loss is high, we can minimize the cost by minimizing the losses--say, by trimming productivity, or cutting the fiber-optic cables to India. But we don't want to go there, right?"

How about asking from this Administration to manage aggregate demand like grown-ups? And stop pretending that it can afford making its 200K+ tax cuts permanent? And deliver economic policy that actually gets firms to believe in the future?

Jobs losses ARE costful when workers don't have the opportunity to find alternative jobs of reasonably comparable quality before their skills begin to deteriorate, that is just a fact. There is no point to go in denial of that, unless one is in the business to give a blank check to those who have been appointed to stir the economy away from this kind of mess.

And denial of such human costs is only going to hurt the brotherhood and sisterhood of economists by casting us, once more, as irrelevant political philosophers whose concerns are light years away from the real life of our consumers-workers-voters.

Similarly, it's one (good) thing to tell Americans that protectionism isn't going to help them over time, but it's another (bad) thing to act as if Americans weren't loosing their jobs in some sectors. The difficulty comes in explaining that the needs of the US capital account surplus imply a growing trade deficit, thanks in large part to federal dificits.

If the tax base had / was about the recover, and hence government deficits on their way out, we could then reasonably tell American workers that there are good chances that trade deficits are expected to also be shriking over time, and their jobs coming back in finite time. And if the federal governement spent its money where it creates consumption and growth, it would be all the easier to say so.

http://www.nytimes.com/2004/02/28/nyregion/28employ.html

Nearly Half of Black Men Found Jobless
By JANNY SCOTT

It is well known that the unemployment rate in New York City rose sharply during the recent recession. It is also understood that the increase was worse for men than for women, and especially bad for black men. But a new study examining trends in joblessness in the city since 2000 suggests that by 2003, nearly one of every two black men between 16 and 64 was not working.

The study, by the Community Service Society, a nonprofit group that serves the poor, is based on data from the federal Bureau of Labor Statistics and focuses on the so-called employment-population ratio - the fraction of the working-age population with a paid job - in addition to the more familiar unemployment rate, the percentage of the labor force actively looking for work.

Mark Levitan, the report's author, found that just 51.8 percent of black men ages 16 to 64 held jobs in New York City in 2003. The rate for white men was 75.7 percent; for Hispanic men, 65.7; and for black women, 57.1. The employment-population ratio for black men was the lowest for the period Mr. Levitan has studied, which goes back to 1979....

http://www.epinet.org/content.cfm/webfeatures_econindicators_jobspict

The impact of the weak job market on wage growth was also evident in today's BLS report. The 1.6% annual growth rate of the hourly wages of blue-collar workers in manufacturing and non-managers in services is tied with the lowest rate on record (posted in December 1986), going back to 1964.

http://www.nytimes.com/2004/03/08/opinion/08HERB.html

In the current environment, even apparent good news can have its troubling aspects. An article in The Wall Street Journal a couple weeks ago indicated that Latino workers have been doing well, taking a "disproportionate share" of new jobs, especially in the construction and service sectors, since the economy began its recovery.

The article referred to a demand for young, male Latino workers.

It then went on to say: "Typical of them is Jorge Alberto, a 22-year-old Guatemalan, who doesn't speak English, didn't complete high school and had never held a job — until he slipped across the border into California from Mexico last year. In Los Angeles, `I found a job almost immediately,' he says, pushing a cart through the muddy lot where he and five other Hispanic men are laying the foundation for a house."

Finding jobs after layoff is more difficult because the economy is restructuring. That means similar jobs are not available either. Workers are faced with extensive retraining or flipping burgers for a fraction of their previous income and some do both.

Not made explicit in Bob Herbert's example of young Latino men finding jobs: Guatemalan Jorge is an undocumented worker who'll work for whatever he can get. Just down the street from where I work in Hillsboro, OR yet another mall is being built with workers willing to accept way sub-standard wages, while skilled workers picket.

Outside my window, young latinos mow the lawn, wash the windows, and down the street, they're doing same for Stepford-like apt and condo complexes offering 3 months free rent and no move in costs to lure renters. Around our location are many more empty office complexes than filled...

So what's wrong with this picture? Is it the race of the workers? I don't think that's what we should be noticing. What I see are the mechanisms of corporatism just grinding on regardless, making money on transactions for the high level movers and shakers to build commercial projects already doomed to founder because the number of consumers left to support them is dwindling daily. Okay, so Intel is just down the way...but how long before this area goes the way of Silicon Valley...?

http://www.epinet.org/content.cfm/webfeatures_econindicators_jobspict

Only the current recovery shows a decline in the rate of labor force participation.

For minorities, the declines in participation rates are much larger: down 2.7 points for Hispanics and 2.6 points for African-Americans, with African-American men exhibiting a decline of -3.2 points. Interestingly, participation rate declines are larger for the more highly educated, underscoring the difficult job market for college graduates. Their labor force participation rate last month was 77.7%, down 1.6 points since the recession and the lowest level on record since BLS began publishing this series in 1994.

http://www.epinet.org/content.cfm/webfeatures_econindicators_jobspict

The missing labor force includes workers from all demographic groups but disproportionately consists of black men and women and Hispanic women.

Here's a question for you all.

I (along with a lot of other people) chose to go to school, got student loans, and got degrees that are now pretty much worthless, thanks to the double whammy of outsourcing and the overall malaise in the economy.

However, Fannie May doesn't give a ****. Those loans are binding, even through bankruptcy. Now, I'm lucky, and have a job that will (kind of) keep me going, but there's a lot of people out there who are barely making enough money (if any at all) to cover their student loans, and that's before you cover their housing, food, medical care, etc.

Only three things can save these people (and possibly me, if I get downsized) - debt forgiveness, hyperinflation (so that the debt level shrinks relative to their income, but not a good solution overall, 'cause it kills everybody else) or some real job growth.

Since option #3 doesn't seem to be happening, and we really don't want to see option #2, how hard would it be to convince The Powers That Be that option #1 is a good idea? IS option #1 a good idea? Is part of the problem with the New Global Economy that education in other countries is effectively "free" to the students themselves, and we've priced ourselves out of the job market, or something else?

Can anybody answer these questions for me?

What puzzles me is why we blame out-sourcing for job problems rather than an Administration that has not opted for fiscal policy with a large jobs impact. Jobs have crossed borders for decades, but we have had programs to create jobs here. Why not now? Why not the type of jobs problem that FDR would have opted for to build infra-structure? We can fully employ Americans even as there is re-structuring.

"What puzzles me is why we blame out-sourcing for job problems rather than an Administration that has not opted for fiscal policy with a large jobs impact."

Because the Administration draws its support from those who reject Darwinism in favor of Creationism. Iow, or rather in the words of Schumpeter, the hammering in of that amazing thing, the Fact, will take much longer with a population that finds itself squarely in the precincts of pre-rational thought.

The cost of job loss? But Patrick Sullivan told me that the costs really come when you have a job. I am so confused by the liberal bias on show at this blog. Jobs are good, pshaw, keep deluding yourselves.

zizka: "I used to have a quote around from a Secretary of the Treasury (can't remember who, but it was early XX c., maybe Mark Hanna??) explaining that unemployment is good for "labor discipline". People don't say that out loud any more, but some of them think it."

More importantly, a large number of (mostly higher-level) managers act on it. Where I work, you can hear certain things these days (not very loudly though) that 3+ years ago were definitely out of the question.

Thane Walkup: Is the payback of student loans not tied to minimal income requirements? I.e. you have to pay back only if you make more than X and have eligible expenses less than Y, and then only a monthly portion roughly proportional to (X-Y)? (But then even that may not allow you a dignified living if you are in a high-living-cost area.)

Regarding hyperinflation: it will help you only if your income rises at least at the inflation rate. Looking at the current situation, measured inflation is low, people get aggregate raises somewhere close to zero, but the cost of living still goes up (healthcare, groceries -- your mileage may vary depending on where you live).

strawman
Patrick told all of us that("the costs really come when you have a job."). Meant for those of us who suppose the government is supposed to give us a job. And the health care benefits. And the pension.
It was cute. Even cheeky.
The conservative slant ignores the gifts (dividend tax reductions and...) to the wealthy. But now I am confused. "Jobs are good, pshaw, keep deluding yourselves." What are you saying?

" But Patrick Sullivan told me that the costs really come when you have a job. I am so confused by the liberal bias on show at this blog. Jobs are good, pshaw, keep deluding yourselves."

That would be just about the clearest demonstration of intellectual confusion I've seen here. When the usual suspects can't understand the difference between a cost and a benefit, abandon all hope, ye who enter.

The interests of big business are driving the off shoring of jobs. EVERY professional job is at risk of being off shored due to labor arbitrage NOT free market dynamics!

Silence Or Compliance
Raymond Donald Pairan Jr.
Copyright (c) 2004 All rights reserved.

INTRODUCTION
This paper is just a further elaboration on some of the topics that I presented in my work entitled “The Economy” which I hope has inspired the moral, the passionate, and displaced future working slave class to start inquiring about their ultimate condition within the hands of the business/political elite. It is absolutely wonderful that certain members of the media have started to question the direction and motives of the business/political elite and have beat the bushes where they’ve been hiding thus exposing their true motives to the clear light of day. But make no mistake the business/political elite will stop at nothing to eliminate any opposition be it ethical government, the media, or any other encumbrance that inhibits them from achieving their goal of creating a subservient working class and a contrasting unencumbered business/political elite power base.

SILENCE/COMPLIANCE
At this point in time the media has the business/political elite (forgoing referred to as the controllers) on the defensive at least within the United States, which is in the mist of a presidential election year. Make no mistake the controllers would like to and will eventually silence all media dissent against their planned worldwide domination of all elements that can negatively effect their goal of sucking every last drop of revenue from the world into their realm. If this means devising a means of quelling dissent from those within the media that don’t wish to go quietly with the controllers view – so be it. Keep in mind that money and power are the driving force of the controllers and everything and anything that inhibits their eventual control over these elements in their eyes must be eliminated. This could mean the off shoring of media jobs to compliant outlets such as India where in the case of the English speaking world there exists a future working slave class that speaks English rather decently. The controllers could then eliminate media disseminated descent to their plans of complete global control over all the factors of production including the eventual working slave class. This means that no job is safe from the plans by the controllers to evolve all jobs into mere subservient, compliant, malleable factors of production. Time is limited for the controllers and others that support the free trade (code word – free) subjugation over all workingmen and women. The ideologue's within the future working slave class will blindly follow one another lock step onto the slave ship that will set sail for their future of no dissent, compliance, no morality, no freedom, no future but one of subservience. The time is very near at hand so those within the media that are the moral voice of dissent must take our case to a fever pace in order to expose and keep all rouses from becoming the new molded distorted facts that can be espoused by the controllers. For the controllers their religion is money and power because for them nothing else matters. If they can gain control over not only you the educated working, the hard factory working, the service sector working, then they will be free to build a truly worldwide free market economy where they are free to do what they wish when they wish it.

BEND THE TRUTH LIKE LIGHT THROUGH A PRISM
If you say something enough and if you change the dynamics and distort the facts to your liking then eventually it will be believed by enough people to become the truth. Basically, the controllers just prior to taking complete control over all media dissent will be hard pressed to dispute facts such as 3 million jobs lost in under 3 years, poverty within the United States at record high levels, whole town centers across rural America with a preponderance of vacant store fronts, a trillion dollar deficit, most states within budget crisis, a college education now getting further from the reach of most Americans, and the list goes on and on. Historically speaking when facts don’t convey what the power elite (in our case the controllers) wish than they just change the way those facts are presented so they convey a distorted picture favorable to those in control. This is nothing new and has been employed quite successfully by those in power many times in the past in the form of propaganda. We must maintain focus on the standard measures used within the past and not let the seeping of new measures (touted by the controllers) distort the facts.

THE TIME IS NOW
It is imperative that we work with the media while it is still free to convey the truth about the controller’s objectives and goals. Time is quickly running out for the average working citizen to maintain some semblance of influence over their respective governments. The controllers will and are gaining control over these governments covertly, directly, and through draining the government treasuries converting partially effective governments into impotent shells of past power. Once the controllers are finished with governments than even the political elite will be at jeopardy of becoming obsolete. So those within the political elite may be enjoying the fruits of soiled money conveyed to them by the business controllers but make no mistake once the business controllers have achieved their objectives they will dispose of even the political elite thus eliminating this drain on their coveted profits. There exists one goal of the controllers and that is to extract and drain as much wealth from the world as is possible. The controllers have no God, no religion, no morals, no scruples, and no conscience but only one overriding unquenchable desire – the complete control over all aspects of their bottom line. They will stop at nothing to satisfy their additive need to acquire more and more wealth at the expense of anything that gets in their way. Any worker that is currently employed by a firm that has global reach over its factors of production (and this doesn’t include many small to medium sized firm’s playing by the rules) are at risk of being eliminated. This includes every imaginable profession since there currently exists the technology and desire (by the controllers) to out source any profession – first and foremost the media (the thorn within the controllers side). It is imperative that in the next few weeks and months that all of us that count ourselves among the working class keep abreast of issues, meaningful relevant facts, and not be swayed by propaganda spewing from the controllers. We must make our voices heard through written, vocal, and peaceful dissent to the path that the controllers are leading us down. We must not and cannot follow the controllers blindly into a future of no government and working slave subservience. Remember the controllers will use key phrases such as “free market”, “household survey”, patriotism, and many others to sway global opinion towards their way of reasoning. Also, keep in mind there are many honest, decent, caring employers (mostly small, medium, and large sized businesses) that are playing by the rules and respect their workers, and communities. It is probably only a few but powerful firms making up the Fortune 500 that are the real controllers of a destiny of worker subservience. I will continue to write the unpopular truth be it what may come. You should continue to question, reason, and judge the facts and not be swayed by propaganda. Let the facts speak for themselves because they surely will if given the chance!

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