July 2009___________________________________
Labor line has job news and commentary with a one stop short cut for America's job markets and job related data including the latest data from the Bureau of Labor Statistics.
American Job Market Labor News
This month's job and employment summary data are below. This month's inflation data is below.
The Establishment Job Report and Establishment Job Details for data released July 2, 2009.
This month's featured job is Biology Technician. Other College Job Reviews are here.
Current Job and Employment Data
Jobs
Total Non-Farm Establishment Jobs down -467,000 to 131,692,000
Total Private Jobs down 415,000 to 109,138,000
Total Government Employment down 52,000 to 22,554,000
Employment Note
Civilian Non-Institutional Population up 203,000 to 235,655,000
Civilian Labor Force down 155,000 to 154,926,000
Employed down 374,000 to 140,196,000
Employed Men down 256,000 to 73,777,000
Employed Women down 118,000 to 66,419,000
Unemployed up 218,000 to 14,729,000
Not in the Labor Force up 358,000 to 80,729,000
Unemployment Rate up .1% to 9.5%, or 14,729/154,926
Labor Force Participation Rate down .2% to 65.7% or 154,926/235,655
Prices and inflation measured by the Consumer Price Index (CPI) for all Urban Consumers was up 3.8 percent for 2008.
The June CPI report for the 12 months ending with May 2009, shows the
CPI for All Items was down 1.3%
CPI for Food and Beverages was up 2.7%
CPI for Housing was up .5%
CPI for Apparel was up .8%
CPI for Transportation including gasoline was down 14.3%
CPI for Medical Care was up 3.2%
CPI for Recreation was up 1.1%
CPI for Education was up 5.5%
CPI for Communication was up 1.3%
This Month's Establishment Jobs Press Report JOBS LOSSES UP AGAIN AFTER ONE MONTH OF DECLINE
The Bureau of Labor Statistics published its July report of jobs in June. Jobs are down 467,000 for the month while the unemployment rate increased .1 tenth of a percent to 9.5 percent. The labor force went down 155,000 after an increase last month. The employed were down 374,000 with the unemployed up 218,000 to 14,729,000, the second month the unemployed have gone above 14 million since 1990. The decrease in the labor force with a smaller increase in the unemployed combined to raise the unemployment rate for June.
The loss of 467,000 jobs is a mixture of a 223,000 decrease in goods production jobs, a 192,000 decrease in private service providing jobs, and a 52,000 decrease in government services employment, including education. Government activities are services, which mean service providing jobs dropped by net of 244,000 jobs.
In goods production, construction dropped 79,000, but more this month than last month. Mining and logging is down 8,000 jobs; manufacturing is off 136,000 jobs. Both are down a little less than last month.
Among the nine service-providing sectors six had a decrease totaling 296,000 jobs for June, and three had an increase totaling 52,000 jobs. Despite the loss of service jobs the percentage of service jobs went up again with an increase of 1.37 percent over the last 12 months.
The loss of 467,000 jobs reverses last month's moderation where job losses were down from the month before. The seasonally adjusted June decrease is 122 thousand more than last month.
The steady erosion of jobs continues in similar pattern to job losses for all of 2009. Trade, transportation and utilities dropped 51 thousand jobs. Information services dropped 21 thousand jobs; finance and insurance was off 27 thousand jobs. All were down about the same as last month. These three sectors are off 1.7 million jobs for June a year ago.
Professional and business services took another steep drop, off 118,000 jobs, and with losses across all of professional services and administrative support sub-sectors. Legal services, architecture, engineering, computing services and management consulting services all have reported job losses. Architecture and engineering showed the biggest declines, down 13,500 jobs. Law firms lost 6,200 jobs.
Among administrative support services, temporary help services topped the list of losses dropping 37,600 jobs. Service to buildings was down 16,500 and even jobs in waste management and waste remediation were off 700 jobs. Apparently a slow economy generates less trash.
Health care and education continue to have more jobs despite the recession. Health care was up 19,000 jobs for June with this month's growth rate about half its 15 year growth rate: 1.38 percent compared to a 2.66 percent over the last 15 years. Education was up 24,000 jobs with private school and state and local education jobs all showing an increase.
The Federal government was off 49,000 jobs, an unusually large drop, but almost the entire net decline in government employment. State and local government jobs, excluding education, were down about the same number as state and local education jobs were up.
The seasonally adjusted job losses for the 12 months just ended climbed for the 18th month in a row. It is slightly over 5.66 million. Education and health care continue to be good news for jobs, but unfortunately the only good news. The stimulus funds from Congress show little sign of reviving construction or the economy so far. The U.S. economy continues to lack sufficient total spending to keep itself employed.
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June Details
Non Farm Total -467
The Bureau of Labor Statistics (BLS) reported Non-Farm employment for establishments decreased from May by 467 thousand jobs for a June total of 131.692 million. (Note 1 below) It represents an annual growth rate of -4.24% if monthly decreases were to average 467 thousand a month for the next 12 months. The annual growth rate from a year ago beginning June 2008 was
-4.12%; the average annual growth rate from 5 years ago beginning June 2004 was .04%; from 15 years ago beginning June 1994 it was .96%. America needs growth around 1.5 percent a year to keep itself employed.
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Sector breakdown for 12 Sectors in 000's of jobs
1. Natural Resources -8
Natural Resources including logging and mining were down 8 thousand jobs from May to 721 thousand in June. A decrease of 8 thousand each month for the next 12 months would be an annual growth rate of -13.17 percent. Natural resource jobs are down 49 thousand for the 12 months just ended. Jobs were in the 1990's were 770 thousand. Job growth here is a possibility but it will be small compared to America's job needs. This is the smallest of 12 major sectors of the economy with .55 percent of establishment jobs.
2. Construction -79
Construction jobs were down 79 thousand from May to 6.240 million in June. A decrease of 79 thousand jobs each month for the next 12 months would be an annual growth rate of -15.00 percent. They are down for the last 12 months by 992 thousand, a very large decrease relatively speaking. The growth rate for the last 5 years is -1.93%. Construction jobs rank 9th among the 12 sectors with 4.74 percent of non farm employment.
3. Manufacturing -136
Manufacturing jobs were down again by 136 thousand from May to 11.854 million in June. A decrease of 136 thousand each month for the next 12 months would be an annual growth rate of -13.61 percent, a faster rate of decline than is typical for manufacturing which has been declining almost every month for more than 15 years. Jobs were down for the last 12 months by 1.651 million. In 1994, manufacturing ranked 2nd but now ranks 6th among 12 major sectors in the economy with 9.0 percent of establishment jobs.
4. Trade, Transportation & Utility -51
Trade, both wholesale and retail, transportation and utility employment was down by 51 thousand jobs from May to 25.263 million jobs in June. These jobs almost always increase at a slower rate than the total of non-farm jobs, but a decrease of 51 thousand each month for the next 12 months would be an annual growth rate of -2.42 percent. Jobs are down by 1.204 million for the last 12 months. Growth rates for the last 5 years are -.22 percent. Jobs in these sectors rank first as the biggest sectors with combined employment of 19.18% of total establishment employment.
5. Information Services -21
Information Services employment was down 21 thousand jobs from May to 2.838 million jobs in June. A decrease of 21 thousand each month for the next 12 months would be an annual growth rate of -8.81 percent. (Note 2 below) Jobs are down by 168 thousand for the last 12 months. Monthly employment in information services gyrates up and down and has been doing so for most of 2006 and 2007. Information jobs reached 3.7 million at the end of 2000, but started dropping and jobs have been just over 3 million since 2004. Information Services is a small sector ranking 11th of 12 with 2.16 percent of establishment jobs.
6. Financial Activities -27
Financial Activities was down 27 thousand jobs from May to 7.754 million in June. A decrease of 27 thousand each month for the next 12 months would be an annual growth rate of -4.16 percent. Jobs are down 408 thousand for the last 12 months. (Note 3 below)This sector also includes real estate as well as real estate lending. Financial Services has been growing at annual rates below the overall non-farm with a 5 year growth rate of -.72 percent and a 15 year growth rate of .79 percent. Financial activities rank 8 of 12 with 5.89 percent of establishment jobs.
7. Business & Professional Services -118
Business and Professional Service jobs went down 118 thousand from May to 16.617 million in June. A decrease of 118 thousand each month for the next 12 months would be an annual growth rate of -8.46 percent. Jobs are down 1,207 thousand for the last 12 months. Note 4 The annual growth rate for the last 5 years from June 2004 was .27%. It ranks as 2nd among the 12 sectors. It was third in May 1993, when manufacturing was bigger and second rank now with 12.62 percent of establishment employment.
8. Education including public and private +24
Education jobs went up 24 thousand from May to 13.579 million in June. These include public and private education. An increase of 24 thousand each month for the next 12 months would be an annual growth rate of 2.13 percent. Jobs are up 73 thousand for the last 12 months. (note 5) Most monthly educational employment goes up. It goes down occasionally, but the tendency is to go up, where the 15 year growth rate equals 2.0 percent, faster than the national average. Education ranks 4th among 12 sectors with 10.3 percent of establishment jobs.
9. Health Care +19
Health care jobs were up 19 thousand from May to 16.158 million in June. An increase of 19 thousand each month for the next 12 months would be an annual growth rate of 1.38 percent. Jobs are up 364 thousand for the last 12 months, the biggest increase of any sector over the last 12 months. (note 6) The current month is less than long term trends and less than growth from a year ago when the annual growth rate was 2.3 percent. Health care has been growing at 2.66 percent annual growth rate for 15 years, a rate nearly double the national rate. Health care ranks 3rd of 12 with 12.27 percent of establishment jobs.
10. Leisure and hospitality -18
Leisure and hospitality jobs went down 18 thousand from May to 13.168 million in June. A decrease of 18 thousand each month for the next 12 months would be an annual growth rate of -1.64 percent. Jobs are down 322 thousand for the last 12 months. (note 7) The 5 year growth rate is 1.05%. More than 80 percent of leisure and hospitality are accommodations and restaurants assuring that most of the new jobs are in restaurants. Leisure and hospitality ranks 4th of 12 with 10.0 percent of establishment jobs. It moved up from 7th in the 1990's to 5th in the last few years.
11. Other +9
Other Service jobs, which include repair, maintenance, personal services and non-profit organizations went up 9 thousand from May at 5.427 million in June. An increase of 9 thousand each month for the next 12 months would be an annual growth rate of 1.99 percent. Jobs are down 108 thousand for the last 12 months. (note 8) Other services has 0.03 percent growth for the last 5 years. Other services are trending up over the longer term. This sector ranks 10th of 12 with 4.12% of total non-farm establishment jobs.
12. Government, excluding education -61
Government service employment went down 61 thousand from May to 12.073 million in June. A decrease of 61 thousand each month for the next 12 months would be an annual growth rate of -6.07 percent. Jobs are up 7 thousand for the last 12 months. (note 9) Government jobs excluding education tend to increase slowly but surely with a 15 year growth rate of .63 percent. Government, excluding education ranks 7th of 12 with 9.17% of total non-farm establishment jobs.
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Sector Notes___________________________
(1) The total cited above is non-farm establishment employment that counts jobs and not people. If one person has two jobs then two jobs are counted. It excludes agricultural employment and the self employed. Out of a total of people employed agricultural employment typically has about 1.5 percent, the self employed about 6.8 percent, the rest make up wage and salary employment. Jobs and people employed are close to the same, but not identical numbers because jobs are not the same as people employed: some hold two jobs. Remember all these totals are jobs. back
(2) Information Services is part of the new North American Industry Classification System(NAICS). It includes firms or establishments in publishing, motion picture & sound recording, broadcasting, Internet publishing and broadcasting, telecommunications, ISPs, web search portals, data processing, libraries, archives and a few others.back
(3) Financial Activities includes deposit and non-deposit credit firms, most of which are still known as banks, savings and loan and credit unions, but also real estate firms and general and commercial rental and leasing.back
(4) Business and Professional services includes the professional areas such as legal services, architecture, engineering, computing, advertising and supporting services including office services, facilities support, services to buildings, security services, employment agencies and so on.back
(5) Education includes private and public education. Therefore education job totals include public schools and colleges as well as private schools and colleges. back
(6) Health care includes ambulatory care, private hospitals, nursing and residential care, and social services including child care. back
(7) Leisure and hospitality has establishment with arts, entertainment and recreation which has performing arts, spectator sports, gambling, fitness centers and others, which are the leisure part. The hospitality part has accommodations, motels, hotels, RV parks, and full service and fast food restaurants. back
(8) Other is a smorgasbord of repair and maintenance services, especially car repair, personal services and non-profit services of organizations like foundations, social advocacy and civic groups, and business, professional, labor unions, political groups and political parties. back
(9) Government job totals include federal, state, and local government administrative work but without education jobs. back
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Notes
Jobs are not the same as employment because jobs are counted once but one person could have two jobs adding one to employment but two to jobs. Also the employment numbers include agricultural workers, the self employed, unpaid family workers, household workers and those on unpaid leave. Jobs are establishment jobs and non-other. back
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Thursday, December 31, 2009
Wednesday, July 8, 2009
The Health of Social Security
first published on Automaticfinances.com
A committee of Social Security trustees has published another report on the financial health of the Social Security System. The new report tells us what social security reports always tell us; the social security system is failing, or headed for collapse “Alarm Sounded, on Social Security” the caption reads on the Washington Post article of May 13th.
New Social Security reports allow politicians to reassure retirees of their commitment to shore up the system and make sure it remains solvent. It also allows these same politicians to recite the status quo by telling us they have only two choices: cut benefits or add another percent on to the steeply regressive payroll tax.
This time is the same as always. The article quotes unnamed administration sources who say Congress can save the system by raising payroll taxes from 12.4 to 14.4 percent, or it can cut benefits 13 percent or a combination.
As of 2009 the payroll tax for Social Security, the OASDI(Old Age Survivors and Dependents Insurance) deduction on pay stubs, continues to be 6.2 percent with an additional Medicare tax of 1.45 percent for employees. The OASDI tax is actually 12.4 because the employer has to match the employee contribution. The same matching occurs with the Medicare portion of the payroll tax, but there is a difference because OASDI has a wage cap, which stops the tax for wages over the cap.
In 2009 the cap is $106,800; in 2008 the cap was $102,000; in 2007 it was $97,500. Beginning in 1991 Congress doubled the cap on the Medicare part of the tax. In 1994 the rising cost of health care convinced a majority of Congress to lift the cap for the Medicare portion of the tax, but they did not do so for the 6.2 percent of payroll taxes going to OASDI.
The Social Security Administration reports data for the distribution of workers by compensation. The year 2007 is the most recent year reported, which shows 146.7 million workers with wages of $99,999.99 or less. It shows 8,869,798 with wages above $100,000 including 151 who earned wages of $50 million or more. In other words, 146.7 million pay a 6.2 percent payroll tax on all of their wages while 8.9 million get a special privilege and pay nothing on wages over the cap.
Someone earning a salary of $25,000 already pays $1,912.50 of payroll tax for Social Security. Raising the tax as proposed would bring it to $2,162.50, before any other taxes are paid.
If the Congress adds another percent to the employee half of the payroll tax, making it 7.2 percent, then the extra revenue will be $51.3 billion, using the same data as above.
If the Congress treated America’s wage earners equally and applied the 6.2 percent tax to all of America’s wages reported by the Social Security administration, then the additional OASDI revenue from the employee half of the tax comes to $103.9 billion dollars. Dropping the wage cap would end a lucrative privilege for the well to do and the very rich and raise lots of money for the allegedly failing Social Security system, but as always that is a topic the politicians refuse to talk about.
A committee of Social Security trustees has published another report on the financial health of the Social Security System. The new report tells us what social security reports always tell us; the social security system is failing, or headed for collapse “Alarm Sounded, on Social Security” the caption reads on the Washington Post article of May 13th.
New Social Security reports allow politicians to reassure retirees of their commitment to shore up the system and make sure it remains solvent. It also allows these same politicians to recite the status quo by telling us they have only two choices: cut benefits or add another percent on to the steeply regressive payroll tax.
This time is the same as always. The article quotes unnamed administration sources who say Congress can save the system by raising payroll taxes from 12.4 to 14.4 percent, or it can cut benefits 13 percent or a combination.
As of 2009 the payroll tax for Social Security, the OASDI(Old Age Survivors and Dependents Insurance) deduction on pay stubs, continues to be 6.2 percent with an additional Medicare tax of 1.45 percent for employees. The OASDI tax is actually 12.4 because the employer has to match the employee contribution. The same matching occurs with the Medicare portion of the payroll tax, but there is a difference because OASDI has a wage cap, which stops the tax for wages over the cap.
In 2009 the cap is $106,800; in 2008 the cap was $102,000; in 2007 it was $97,500. Beginning in 1991 Congress doubled the cap on the Medicare part of the tax. In 1994 the rising cost of health care convinced a majority of Congress to lift the cap for the Medicare portion of the tax, but they did not do so for the 6.2 percent of payroll taxes going to OASDI.
The Social Security Administration reports data for the distribution of workers by compensation. The year 2007 is the most recent year reported, which shows 146.7 million workers with wages of $99,999.99 or less. It shows 8,869,798 with wages above $100,000 including 151 who earned wages of $50 million or more. In other words, 146.7 million pay a 6.2 percent payroll tax on all of their wages while 8.9 million get a special privilege and pay nothing on wages over the cap.
Someone earning a salary of $25,000 already pays $1,912.50 of payroll tax for Social Security. Raising the tax as proposed would bring it to $2,162.50, before any other taxes are paid.
If the Congress adds another percent to the employee half of the payroll tax, making it 7.2 percent, then the extra revenue will be $51.3 billion, using the same data as above.
If the Congress treated America’s wage earners equally and applied the 6.2 percent tax to all of America’s wages reported by the Social Security administration, then the additional OASDI revenue from the employee half of the tax comes to $103.9 billion dollars. Dropping the wage cap would end a lucrative privilege for the well to do and the very rich and raise lots of money for the allegedly failing Social Security system, but as always that is a topic the politicians refuse to talk about.
Wednesday, June 24, 2009
Computer Billing in Health Care
First published on Automaticfinances.com
The Obama Administration is described as computer savvy. They apparently made excellent use of computer technology during the election campaign and continue to apply computer technologies in their White House duties. They have suggested over hauling America’s health care records system by computerizing records and billing, and reducing or eliminating paper billing and records. America’s health care system has lots of paper to save, but there is reason to worry about jobs.
Monthly employment in health care establishments averaged 14.6 million jobs in 2008 for health care sectors in ambulatory care, hospital care, nursing and residential care. The jobs in these sectors can be divided among three groups of occupations. The first is health care practitioners who are mostly doctor, dentist, pharmacist, nurse, therapy and technology jobs. Health care practitioners actually deliver health care to patients and the jobs tend to have college and professional degree requirements. Few can be performed without a license.
Health care practitioners are the biggest segment of health care with 5.7 million jobs, 2.2 million of them nurses. Next are health care support occupations. All of them have aide, assistant or attendant in their job title: nurses aide, therapy assistant and so on. Jobs in support occupations are 3.1 million of the 14.6 million of the health care total. The third segment might be called administration and overhead, which are jobs in managing, record keeping and billing. These are 5.8 million jobs.
In other sectors of the economy, bills tend to be a two party transaction between a customer and a vender, but seldom so in health care. One illness or injury starts a billing shuffle through separate bureaucracies at hospitals, laboratories, clinics, HMO’s, PPO’s, IPO’s, but also private insurance companies, independent billing agencies and bureaucracies at Medicare, Medicaid, Social Security, workmen’s compensation or the Veterans Administration. Medicare, Medicaid and workmen’s compensation are federal programs with federal bureaucracy, but also administered by the states through 50 separate bureaucracies.
More health care in a paper world brings growth to jobs as financial clerks and information and records clerks, which are bill and account collectors, billing and posting clerks, bookkeepers, office clerks, receptionists, and secretaries. Those jobs exceed 2.6 million for those who work within the health care industry sending out the bills. It doesn’t count the insurance company or government bureaucracy jobs for the people who take them in.
Computerized billing would lead to standardization and cost saving efficiency and better and more detailed records. It should be done, but like many good things it will have noticeable side effects. At the Obama administration jobs will be a bigger problem than they may realize.
The Obama Administration is described as computer savvy. They apparently made excellent use of computer technology during the election campaign and continue to apply computer technologies in their White House duties. They have suggested over hauling America’s health care records system by computerizing records and billing, and reducing or eliminating paper billing and records. America’s health care system has lots of paper to save, but there is reason to worry about jobs.
Monthly employment in health care establishments averaged 14.6 million jobs in 2008 for health care sectors in ambulatory care, hospital care, nursing and residential care. The jobs in these sectors can be divided among three groups of occupations. The first is health care practitioners who are mostly doctor, dentist, pharmacist, nurse, therapy and technology jobs. Health care practitioners actually deliver health care to patients and the jobs tend to have college and professional degree requirements. Few can be performed without a license.
Health care practitioners are the biggest segment of health care with 5.7 million jobs, 2.2 million of them nurses. Next are health care support occupations. All of them have aide, assistant or attendant in their job title: nurses aide, therapy assistant and so on. Jobs in support occupations are 3.1 million of the 14.6 million of the health care total. The third segment might be called administration and overhead, which are jobs in managing, record keeping and billing. These are 5.8 million jobs.
In other sectors of the economy, bills tend to be a two party transaction between a customer and a vender, but seldom so in health care. One illness or injury starts a billing shuffle through separate bureaucracies at hospitals, laboratories, clinics, HMO’s, PPO’s, IPO’s, but also private insurance companies, independent billing agencies and bureaucracies at Medicare, Medicaid, Social Security, workmen’s compensation or the Veterans Administration. Medicare, Medicaid and workmen’s compensation are federal programs with federal bureaucracy, but also administered by the states through 50 separate bureaucracies.
More health care in a paper world brings growth to jobs as financial clerks and information and records clerks, which are bill and account collectors, billing and posting clerks, bookkeepers, office clerks, receptionists, and secretaries. Those jobs exceed 2.6 million for those who work within the health care industry sending out the bills. It doesn’t count the insurance company or government bureaucracy jobs for the people who take them in.
Computerized billing would lead to standardization and cost saving efficiency and better and more detailed records. It should be done, but like many good things it will have noticeable side effects. At the Obama administration jobs will be a bigger problem than they may realize.
Tuesday, June 16, 2009
Parkinson's Law
Parkinson’s Law and America’s Labor Markets
"Work expands so as to fill the time available for its completion."
-C. Northcote Parkinson
Back in the 1950’s Mr. Parkinson published a book that started with Parkinson’s Law cited above. It was a thin book with big fonts and bigger margins. He had some stories with anecdotal material to support the law. I cannot remember a single one of the stories but they were unnecessary. No one contradicted Parkinson’s Law.
Notice if you reverse the first two words Parkinson’s Law becomes a policy. Expand work so as to fill the time available for its completion. Now we have a directive not a prediction. A slight variation might be, expand expenditures so as to fill your whole life with work.
Writing Parkinson’s Law as Parkinson’s Policy is important because a law usually feels like something natural and inevitable and not a decision. Policy is a decision and people make decisions. The federal government is in the best position to expand work so as to fill the time available for completion because it can tax and spend, and controls money and credit, both of which allow increasing the country’s total spending as necessary to create jobs.
Back on August 11, 2005 the Associated Press reported President Bush’s comments on a transportation-spending bill. “President Bush calls the massive $286.4 billion transportation spending bill he signed into law Wednesday a job creator.” The article goes on to describe the bill that pays for 6,000 favored projects in the districts of nearly every member of Congress. Even though the legislation is $30 billion more than the President recommended he is quoted as “proud to sign it.”
Imagine my surprise at the candor of Mr. Bush with his reputation as a devotee of free enterprise. Free enterprisers expect jobs to be part of free markets where supply and demand determine output, prices and wages as if guided by an “invisible hand” and with the Adam Smith condition that society’s bread will not be due to the benevolence of the baker, but to his self-interest.
It is easier for those outside elected office to favor free markets and its policy of waiting since they do not have to take responsibility for the unemployed. It is different for politicians like Mr. Bush who apparently understand that a job in America is a requirement.
Over the last twenty years America’s total spending and Gross Domestic Product(GDP) are up, which helps meet that job requirement, and helps counter the mordant, mournful decline of 4.3 million manufacturing jobs since 1990.
The economist's way of looking at this reality is to say "Wow, this is terrific because the economy has growth with more goods and less hours of work and now 4.3 million people can be released to produce more products and services in other industries." Economists like to talk about alternative uses and labor released for alternative employment can help raise economic growth.
Economists see a natural flow of reallocation as inevitable, but the Obama administration is not prepared to wait for the economist’s reallocation. They have adopted the Parkinson policy of filling the time available for work.
The new stimulus package is loaded up with job creating building projects: roads, rail, solar panels, windmills and plenty more. Adopting building projects as a Parkinson Policy will create jobs, as it did for Mr. Bush, and it has the advantage that Americans will have something to use when the projects are finished.
When Mr. Parkinson published his book he was more concerned about the growth of rigmarole in bureaucracies, especially government. He saw bureaucracies growing with the growth in transactions, which are recorded, counted, and taxed through many bureaucracies.
America administers dedicated taxes and charges through multiple bureaucracies for federal, state and local taxes on income, sales, property, utilities, alcohol, tobacco and charges for workmen’s compensation, unemployment insurance, social security, Medicare and a few more. Every new job in America brings action at tax bureaucracies of work and jobs in recording, filing, collecting and dispersing. There is no natural law that requires each little tax to go with each little service, but it sure is good for jobs.
Filling bureaucracies with Parkinson’s policy helps moderate the relentless tide of jobs lost to labor saving technologies and computer use in the economist’s reallocation. Ominous trends for jobs in information services, especially publishing and telecommunications, finance, even retail and wholesale trade add trouble to the jobs disappearing in manufacturing, natural resources, and agriculture.
From 2000 through 2008 publishing jobs dropped over 150 thousand while broadcasting jobs went down 27 thousand. Telecommunications jobs are off 375 thousand where jobs lost in landline service are not replaced by the trickle of new jobs in cell phones. In today’s digital world landline, cell, and cable companies offer phone services as well as Internet and cable TV services using the same or similar technologies. Their low cost to the incremental customer and the ability of individual companies to offer multiple services through one network pressures firms to consolidate, cut costs, and eliminate jobs.
It is much the same story in finance where jobs have dropped back to 2000 totals. Bank mergers and consolidations typically go with layoffs, but money and finance are nothing but computer code, which can be managed by ever fewer people. On-line banking wipes out jobs even though not everybody likes the efficient digital world. Some still want to drive to the bank and exchange paper with a teller. America now employs 600 thousand tellers. If Americans decide to go digital, America will have fewer tellers, a lot fewer.
Retail jobs are down 633 thousand for the twelve months ending April 2009, but retail job growth has been sluggish for years. Computers raise productivity especially with barcodes and inventory management, raising sales volumes per employee and reducing employment opportunities. Growth in on-line sales will reduce jobs further.
Economists continue to tell anyone who listens that jobs lost to reallocation will be replaced as more Americans resolve to “get some training” for the new high tech jobs of their future. The Bureau of Labor Statistics publishes industry and occupational data that tell a different story. Count 370 thousand new jobs in landscaping services, 300 thousand new jobs in security guard companies and investigation services, 242 thousand new jobs in janitorial services, 471 thousand new jobs in child day care, 151 thousand new jobs at telephone call centers, all since 1990. Include 90 thousand new jobs at parking lots and car washes, 92 thousand new jobs at collection agencies. No one should forget 1.187 million more jobs for those employed through temporary help agencies.
Restaurant jobs are up 3.1 million also since 1990 along with 172 thousand new jobs in gambling and casino hotels, 273 thousand new jobs at amusement parks, arcades, golf courses, country clubs, ski hills, and marinas. Include fitness centers with more jobs than all of gambling and 236 thousand new jobs since 1990. Count 255 thousand more jobs in pet supply stores, and pet care services, including veterinarian services.
These are the industries where America works when technology saves labor and we create jobs with the Parkinson policy. More jobs in computing technologies relieve the decline, but not much. If we look at all the job growth in the multiple of computing industries, by adding new jobs since 1990 in software publishers, data processing, Internet service providers, web search portals, custom computer programming, computer system design, computer services management and related services, computer and office machinery rental and leasing and computer and office machinery repair, the gain comes to 1.334 million new jobs; less than half of jobs lost in manufacturing or jobs gained in restaurants in the same period.
Engineers are high tech, but the majority of them need work in manufacturing. The just published Bureau of Labor Statistics occupational data for 2008 shows 1.516 million engineering jobs just 65 thousand more than 2000. Education jobs are up with 4.1 million more jobs since 1990, but those are mostly public jobs. As such they are part of the Parkinson Policy, hardly the economist’s solution.
The Obama administration will have nightmares trying to replace the jobs already lost, just since taking office. Economists have faith in reallocation, but America needs jobs. The Parkinson Policy will create jobs. Long live Parkinson, only he is not the solution, but solutions are topics for other articles.
"Work expands so as to fill the time available for its completion."
-C. Northcote Parkinson
Back in the 1950’s Mr. Parkinson published a book that started with Parkinson’s Law cited above. It was a thin book with big fonts and bigger margins. He had some stories with anecdotal material to support the law. I cannot remember a single one of the stories but they were unnecessary. No one contradicted Parkinson’s Law.
Notice if you reverse the first two words Parkinson’s Law becomes a policy. Expand work so as to fill the time available for its completion. Now we have a directive not a prediction. A slight variation might be, expand expenditures so as to fill your whole life with work.
Writing Parkinson’s Law as Parkinson’s Policy is important because a law usually feels like something natural and inevitable and not a decision. Policy is a decision and people make decisions. The federal government is in the best position to expand work so as to fill the time available for completion because it can tax and spend, and controls money and credit, both of which allow increasing the country’s total spending as necessary to create jobs.
Back on August 11, 2005 the Associated Press reported President Bush’s comments on a transportation-spending bill. “President Bush calls the massive $286.4 billion transportation spending bill he signed into law Wednesday a job creator.” The article goes on to describe the bill that pays for 6,000 favored projects in the districts of nearly every member of Congress. Even though the legislation is $30 billion more than the President recommended he is quoted as “proud to sign it.”
Imagine my surprise at the candor of Mr. Bush with his reputation as a devotee of free enterprise. Free enterprisers expect jobs to be part of free markets where supply and demand determine output, prices and wages as if guided by an “invisible hand” and with the Adam Smith condition that society’s bread will not be due to the benevolence of the baker, but to his self-interest.
It is easier for those outside elected office to favor free markets and its policy of waiting since they do not have to take responsibility for the unemployed. It is different for politicians like Mr. Bush who apparently understand that a job in America is a requirement.
Over the last twenty years America’s total spending and Gross Domestic Product(GDP) are up, which helps meet that job requirement, and helps counter the mordant, mournful decline of 4.3 million manufacturing jobs since 1990.
The economist's way of looking at this reality is to say "Wow, this is terrific because the economy has growth with more goods and less hours of work and now 4.3 million people can be released to produce more products and services in other industries." Economists like to talk about alternative uses and labor released for alternative employment can help raise economic growth.
Economists see a natural flow of reallocation as inevitable, but the Obama administration is not prepared to wait for the economist’s reallocation. They have adopted the Parkinson policy of filling the time available for work.
The new stimulus package is loaded up with job creating building projects: roads, rail, solar panels, windmills and plenty more. Adopting building projects as a Parkinson Policy will create jobs, as it did for Mr. Bush, and it has the advantage that Americans will have something to use when the projects are finished.
When Mr. Parkinson published his book he was more concerned about the growth of rigmarole in bureaucracies, especially government. He saw bureaucracies growing with the growth in transactions, which are recorded, counted, and taxed through many bureaucracies.
America administers dedicated taxes and charges through multiple bureaucracies for federal, state and local taxes on income, sales, property, utilities, alcohol, tobacco and charges for workmen’s compensation, unemployment insurance, social security, Medicare and a few more. Every new job in America brings action at tax bureaucracies of work and jobs in recording, filing, collecting and dispersing. There is no natural law that requires each little tax to go with each little service, but it sure is good for jobs.
Filling bureaucracies with Parkinson’s policy helps moderate the relentless tide of jobs lost to labor saving technologies and computer use in the economist’s reallocation. Ominous trends for jobs in information services, especially publishing and telecommunications, finance, even retail and wholesale trade add trouble to the jobs disappearing in manufacturing, natural resources, and agriculture.
From 2000 through 2008 publishing jobs dropped over 150 thousand while broadcasting jobs went down 27 thousand. Telecommunications jobs are off 375 thousand where jobs lost in landline service are not replaced by the trickle of new jobs in cell phones. In today’s digital world landline, cell, and cable companies offer phone services as well as Internet and cable TV services using the same or similar technologies. Their low cost to the incremental customer and the ability of individual companies to offer multiple services through one network pressures firms to consolidate, cut costs, and eliminate jobs.
It is much the same story in finance where jobs have dropped back to 2000 totals. Bank mergers and consolidations typically go with layoffs, but money and finance are nothing but computer code, which can be managed by ever fewer people. On-line banking wipes out jobs even though not everybody likes the efficient digital world. Some still want to drive to the bank and exchange paper with a teller. America now employs 600 thousand tellers. If Americans decide to go digital, America will have fewer tellers, a lot fewer.
Retail jobs are down 633 thousand for the twelve months ending April 2009, but retail job growth has been sluggish for years. Computers raise productivity especially with barcodes and inventory management, raising sales volumes per employee and reducing employment opportunities. Growth in on-line sales will reduce jobs further.
Economists continue to tell anyone who listens that jobs lost to reallocation will be replaced as more Americans resolve to “get some training” for the new high tech jobs of their future. The Bureau of Labor Statistics publishes industry and occupational data that tell a different story. Count 370 thousand new jobs in landscaping services, 300 thousand new jobs in security guard companies and investigation services, 242 thousand new jobs in janitorial services, 471 thousand new jobs in child day care, 151 thousand new jobs at telephone call centers, all since 1990. Include 90 thousand new jobs at parking lots and car washes, 92 thousand new jobs at collection agencies. No one should forget 1.187 million more jobs for those employed through temporary help agencies.
Restaurant jobs are up 3.1 million also since 1990 along with 172 thousand new jobs in gambling and casino hotels, 273 thousand new jobs at amusement parks, arcades, golf courses, country clubs, ski hills, and marinas. Include fitness centers with more jobs than all of gambling and 236 thousand new jobs since 1990. Count 255 thousand more jobs in pet supply stores, and pet care services, including veterinarian services.
These are the industries where America works when technology saves labor and we create jobs with the Parkinson policy. More jobs in computing technologies relieve the decline, but not much. If we look at all the job growth in the multiple of computing industries, by adding new jobs since 1990 in software publishers, data processing, Internet service providers, web search portals, custom computer programming, computer system design, computer services management and related services, computer and office machinery rental and leasing and computer and office machinery repair, the gain comes to 1.334 million new jobs; less than half of jobs lost in manufacturing or jobs gained in restaurants in the same period.
Engineers are high tech, but the majority of them need work in manufacturing. The just published Bureau of Labor Statistics occupational data for 2008 shows 1.516 million engineering jobs just 65 thousand more than 2000. Education jobs are up with 4.1 million more jobs since 1990, but those are mostly public jobs. As such they are part of the Parkinson Policy, hardly the economist’s solution.
The Obama administration will have nightmares trying to replace the jobs already lost, just since taking office. Economists have faith in reallocation, but America needs jobs. The Parkinson Policy will create jobs. Long live Parkinson, only he is not the solution, but solutions are topics for other articles.
Monday, June 15, 2009
Labor News
Ruling Upends Race's Role in Hiring
from the Wall Street Journal June 30, 2008 7/1/09
Jess Bravin and Suzanne Satoline write "The Supreme Court set a new standard for Employee's use of race in hiring decisions, . . ."
The New Haven, Connecticut city government wrongly discriminated against a group of mostly white fire fighters when it threw out a promotions exam when no black people scored well enought to be promoted.
Justice Kennedy wrote that employers must show a "strong basis in evidence" before ignoring results of empoyment-related tests so as not to frustrate other applicants.
The court concluded the city violated Title VII of the 1964 Civil Rights Act because the city made its decision based on race by rejecting test results solely because higher scoring candidates were white. The only reason to negate an exam is if there is evidence the exam discriminates.
What Helps New Ph.D.s Land Jobs in Academia? A Passport
from the Wall Street Journal June 19, 2008 6/20/09
Erica Alini writes "The scramble for faculty jobs is prompting graduate students and newly minted Ph.Ds to look overseas."
Cuts in government spending and shrinking endowments are taking a toll on many U.S. Universities. Hiring in English and foreign languages fell 20 percent this year.
Jack Schuster of Claremont Graduate School is quoted "The supply -demand ratio is a bit out of whack in the academic job market in general."
June Inflation Report Shows No Inflation
from Bureau of Labor Statistics(BLS) May 17, 2009 6/18/09
The BLS published its new consumer price index numbers for May 2009. Prices for the all items index dropped 1.3 percent. Price changes are for the 12 months ending in May 2009. Some prices were up but those increases were offset by a 14.3 percent decrease in fuel prices for transportation. Food and beverages were up 2.7 percent. The two industry sectors that have been doing well with increaseing jobs also had prices increases. These were medical care with 3.2 percent price increases from May a year ago and 5.5 percent increases for education. Housing and apparel were up but less than one percent.
Unions Look to Labor Board Picks to Reverse Bush Rulings
from the Wall Street journal June 3, 2009 6/7/09
Melanie Trottman writes "Unions are counting on President Obama's new appointees to the National Labor Relations Board to reverse Bush era rulings they sya hamper their efforts to organize workers."
The National Labor Relations Board(NLRB) has a 5 member board that oversees elections and resolves labor disputes. The new chair Wilma Liebman is already on the board and there are two new Obama nominees, Craig Becker and Mark Pearce. Together they will create a majority favorable toward labor and labor union needs and arguments.
Ms. Liebman is former legal counsel to the Teamsters and Bricklayers union. Mr. Becker is legal counsel to the Service Employees International Union. Mr Pearce is a founding partner of a law representing unions.
Many issues of conduct during union organizing are likely to come before the board.
Labor Department Suspends Farmworker Rules
The Labor Department proposed suspending the Bush Administration rules in March. The proposals described earlier on this link were suspended as the U.S. Labor Department restored old regulations governing the H-2A guest worker program. Officials will write new rules.
The announcement was for May 30, 2009. 6/1/09
Layoff Update
Layoff announcments dating from May 19th to May 21, 2009. 5/26/09
American Express said it will eliminate 4,000 jobs in the process of cutting costs by $800 million. It is 6 percent of its global workforce. American Express cut 7,000 jobs in October 2008.
Lockheed announces 130 job cuts from defense department budget cuts for helicopters.
Capital One of McClean to cut 180 jobs in Baton Rouge, LA as part of a consolidation of credit card operations and telephone sales.
Despite Stimulus Funds States to Cut More Jobs
Budget Shortfalls Prompt Mass Layoffs
from the Washington Post May 12, 2009 5/14/09
Alec MacGillis writes "Eleven weeks after Congress settled on a stimulus package that provided $135 billion to limit layoffs in state governments, many states are finding that the funds are not enough and are moving to lay off thousands of public employees."
Layoffs mentioned are Washington State public colleges, 1000; Massachusetts 250 layoffs; Arizona already had 800 layoffs; Maine cut 250 jobs; Florida cut 200 jobs in the last 18 months; Virginia layoffs eliminated 1,500 jobs. California, Georgia and New Jersey are reported as ordering furloughs.
They better try more simulus with the private sector still sinking and jobs falling elsewhere.
Under Restructuring, GM To build More Cars Overseas
from the Washington Post May 10, 2009 5/12/09
Peter Whoriskey writes "The U.S. government is pouring billions into General Moters in hopes of reviving the domestic economy, but when the automaker completes its restructuring plan many ofthe company's new jobs will be filled by workers overseas."
The company admits the number of cars that GM sells in the United States and builds in Mexico, China and South Korea will roughly double. The percentage of cars sold domestically and manufactured in the above low wage countries will rise to 23 Percent from 15 percent. Labor costs are lower in those countries, which may not have health care, workman's compensation, unemployment insurance and social security burdens quite so big as the United States.
Initial Unemployment Claims
Unemployment Claims are Starting to Decline 5/8/09
The initial unemployment claims reached a high of 659 thousand in the 4 weeks ending March 28, 2009. The have been dropping and reached 622 thousand by the week of May 2, 2009. Because unemployment goes up and down along a straight line of graph with initial unemployment claims the future suggests some dropping unemployment in the future. This month it is 8.9 percent, but let's be optimistic and let the numbers do the talking a predict the unemployment rate will stop rising.
Plan to Cut Weapons Programs Disputed
Defense Supporters Say 100,000 Jobs are in Jeopardy
from the Washington Post April 28, 2009 4/29/09
Dan Eggen writes "Some of the nation's largest defense contractors, labor unions and trade groups are banding together to argue that the Obama Administration is putting 100,000 or mor3e jobs at risk by proposing deep cuts in weapons programs." Some of the contractors are quoted from Lockheed and a place called the Aerospace Industries Association. They express worry about jobs but have little to say about defense. Defense sounds like an expensive jobs program.
GM's New Road Map: Partial Nationalization
Automatker to Shed Brands and Workers; Future Hinges on Deal With Bondholders
from the Washington Post April 28, 2009 4/29/09
Steven Mufson writes "... under new sweeping plan that would also shut down GM's Pontiac operations, lay off 21,000 workers and impose harsh terms on the company's bondholders." It is hard to keep up with auto layoffs there have been so many such announcments. Gm announced layoffs of 10,000 on February 11th and then 50,000 on February 18th.
Delta Air Ends Use of India Call Centers
from the Wall Street Journal April 18, 2009 4/24/09
Paulo Prada aned Niraj Sheth write that Delta Airlines has stopped using India based call centers to hadle sales and reservations. Cusomters complained they had trouble with communicating with Indian Agents. The company said it was fundamentally cheapter to use Indian agents, but the article suggested moving the jobs back to America could be a smart public relations move. "The customer acceptance of call centers in foreign countries is low," said Richard Anderson, Delta's chief executive. Delta also has call centers in Jamaica, Soth Africa El Salvador and Guatemala.
GM set to Trim 1600 More Jobs
from the Washington Post from April 21, 2009 4/23/09
Kendra Marr writes that GM's president plans are for layoffs of whitecollar workers in the next few days to speed cost cutting to qualify for more federal loans. Separate negotiations have begun to cut 47,000 blue collar workers by the end of
the year. The GM will spare engineers working on the new Chevrolet Volt, but otherwise reductions will be targeted to marketing and communicatins personnel.
Labor-Management Partnerships Poised to Revive
from the Federal Diary in the Washington Post from April 15, 2009 4/17/09
Apparently partnerships in the Federal government date from 1993 as an executive order of Bill Clinton. The aim was to "build a more cooperative relationship at the workplace between management and employees, which could reduce tensions and formal complaints, including grievances and charges of unfair labor practice." George W. Bush issued hs own order revoking Clinton's less than a month after taking office. It was always hard to think of George Bush as cooperating with anybody.
GAO Report Faults Labor Dept. on Wage Complaints
Division Failed to Take Action from the Washington Post April 7, 2009 4/8/09
Chris Jenkins writes about the General Accounting Office nine-month investigation of worker claims filed with the Labor Department's Wage and Hour Division. The report is titled "Wage and Hour Division’s Complaint Intake and Investigative Processes Leave Low Wage Workers Vulnerable to Wage Theft." GAO investigators posed as frustrated workers filing claims. The Wages and Hours division mishandled cases 9 out of 10 times. Caseworkers discouraged the undercover investigators from filing complaints, instead telling them to hire attorneys. Child labor law violations were not investigated. Cases were not entered into agency databases.
"This investigation clearly shows that Labor has left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn."
The report covered years of the Bush Administration and Elaine Chao as Labor Secretary. Some may regard this report is their intended legacy.
SLM Transfers Overseas Jobs to U.S.
Reston Student Lender to Move 2,000 Jobs Out of Asia from the Washington Post April 7, 2009 4/8/09
Thomas Heath writes "Sallie Mae yesterday announced plans to move 2,000 overseas jobs back to the United States from India and the Philippines, reversing a cost saving measure the company took a year ago."
Sallie Mae makes private student loans and loans backed by the federal government. It bundles the loans and sells them as securities to outside investors. Sallie Mae's chief executive Albert Lord said the company moved the jobs overseas about a year ago when the credit crisis was hurting Sallie Mae's bottom line. "It was a tough decision to move these jobs overseas," Lord said. "It was a lot easier to make the decision to bring them back."
However, all is not well in the student lending and President Obama has proposed an end to subsides for student loan providers such as Sallie Mae and Citi-Group. Government would be the sole provider.
Rep. Paul Kanjorski described the decision as a patriotic act, but the article noted his district will get 600 of the new Sallie Mae jobs. Kanjorski chairs the House Financial Services subcommitte that oversees securities. It was further reported that Sallie Mae is the biggest contributor to Rep. kanjorski's political campaigns, giving $86,000.
Initiative on Worker Safety Gets Poor Marks
IG's Report Links Weak Enforcements to Job Fatalities from the Washington Post April 2, 2009 4/4/09
R. Jeffery Smith writes "A special government program to improve worker safety in hazardous industries rarely fulfilled its promise, a Labor Department audit concluded yesterday[4/1/09], and over the past six years, dozens of deaths occurred at firms that should have been subjected to much tighter federal safety enforcement."
Apparently the program was started by the Bush Administration, but assistant inspector General Elliot P Lewis who did the above mentioned audit cited a failure of enforcement that did not correct workplace hazards of 45 emloyers where 58 fatalities occurred. The audit also concluded that more than half of the 282 workplace fatalities should have been included in the Enhanced Enforcement Program were not properly logged, partly because of poor training at Occupational Health and Saftety Administration.
Donald Shalhoub at the Occupational Health and Saftety Administration acknowledges "the program may not have been consistently accomplishing its purpose and intent." Maybe the program was just a public relations scam, but officials didn't say that.
Union Bill's Declining Chances Give Rise to Alternatives
from the Washington Post March 29th 4/2/09
Alec MacGillis writes about the Employee Free Choice Act, a law that makes it easier for unions to organize new union representation. The law would allow active employees to sign cards rather than sign cards and wait to vote in representation election. The law continues to make the news and draw comments and new proposals.
"This is not the time or the place" for card check, said Sen. Blanche Lincoln (D-Ark.), who backed the bill in 2007. "To continue to attempt to bring up something that has already worked its way into being so divisive and distracting is unproductive."
"Labor law reform is long overdue," said Mike Asensio, a Columbus, Ohio, lawyer with Baker Hostetler who represents corporations. However, he says the debate will not advance until union supporters scrap the bill and start over. "If they make it all or nothing, they enhance their chances of getting nothing."
Joel Rogers, a pro-labor law professor at the University of Wisconsin, called the rules "ossified." Rogers supports card check but said there may be other ways to limit intimidation by employers, such as exceedingly high penalties. "The problem is not secret ballot versus card check, it's the fear that workers have."
But Robert Bruno, a labor relations professor at the University of Illinois at Chicago, doubts reforms short of card check can work. It is unrealistic, he said, to create neutral, civic-style elections in workplaces dominated by employers. Employers "would have to agree to an environment where they give up a lot of control, a lot of prerogative."
David Radelet, a Chicago lawyer who represents corporations, said Sen Arlen Specter's 2010 warnings [that he might be replaced with a democrate] should be heeded. "It does create pressure for the business community to get something done now," he said.
Keith Smith, director of employment policy at the National Association of Manufacturers, said his group is asking its members which reforms they might accept. "We're going to see something again soon. It's all a matter of what it will look like and how it will move," he said.
EEOC Willfully Violated Pay Law, Arbitrator Rules from the Washington Post March 31th 4/1/09
Steve Vogal writes "The Equal Employment Opportunity Commisssion, responsible for ensuring that the nation's workers are treated failry, has itself willfully violated the Fair Labor Standards Act on a nationwide basis with its own employees, an arbitrator has rule."
The arbitrator's ruling stated that the EEOC offered compensatory time off rather than overtime pay, which amounted to "forced volunteering" and was a knowing violation of the law and went beyond mere negliegence. The employees were pressured into working extra hours but not offered extra pay.
Further readers learn the agency has an unprecendented increase in discrimination claims after 8 years of budget cuts and a reduction of 25 percent of staff; all a legacy of the Bush Administration.
Artictects the Latest Dominoes to Fall
Slowdown Signals a Static Horizon from the Washington Post March 28th 3/29/09
Paul Schwartzman chronicles Washington area jobs for architects describing projects halted and the discouraging job search for laid off architects. Construction layoffs get more media attention but architecture layoffs are a slow down of planning for projects in the future.
The Bureau of Labor Statistics reports 217 thousand jobs at Architecture firms in 2008, up slightly from 214 thousand in 2007. Over 90 percent of architects work in architecture firms or as self employed individuals. Since 2000 architecture jobs have been growing at faster than the national average growth for jobs and adding an average of 4,600 jobs a year. There are up to 4,500 architecture jobs in the Washington Metropolitan area according to analysts at the District's Department of Employment Services.
Times Co. Announces Temporary Salary Cuts from the NY Times March 27th 3/29/09
Richard Perez-Pena writes "The New York Times Company budget plans announced Thursday, including a temporary 5 percent salary cut for most employees, should avert newsroom staff cuts at the flagship Times newspaper this year . . . "
Cuts are for management and non-union and Newspaper Guild staff in the newsroom. The pay cuts are for 9 months.
In addition, the Times annouceed 100 layoffs in business operations or about 5 percent of business operations staff. The company laid off 27 in the advertising department last month and about 500 people in January. Other parts of the company including about.com will have 2.5 percent cuts and 5 days of furlough.
By the end of 2008, the company had 9,346 employees, down from 10,710 working the same operations two years ago.
IBM to Cut 5,000 Jobs; D.C. Area Largely Not Affected from the Washington Post March 27th 3/28/09
Kim Hart writes "IBM has told its employees that the company plans to cut about 5,000 jobs this week, according to industry sources with knowledge of the layoffs."
IBM is reported to be shifting a large number of jobs to lower cost regions, such as India. Most of the jobs being eliminated come from the global services division, which ranges from software developers to data center managers. IBM has been shifting jobs abroad for about a decade. Layoffs come two months after previous layoffs of 4,000 in sales jobs.
Post Offers Another Round of Buyouts from the Washington Post March 27th 3/27/09
Frank Ahrens writes "The Washington Post offered employees another round of early retirement packages yesterday - the fourth since 2003 and second within a year - as part of its ongoing effort to cut costs to compensate for declining circulation and advertising revenue."
The Washington Post continues to lose money despite its reputation as quality journalism. Jobs in newspaper publishing are down from 422,600 to 325,900 in the years since 2000. Jobs in all publishing industries are down from 774,000 in 2000 to 619,000 in 2008. Paper will soon be obsolete.
Specter Will Vote To Block Union Bill
Decision is a Blow to 'Card Check' from the Washington Post March 25th 3/27/09
Alec MacGillis writes that "Sen Arlen Specter (Pa.), the only Republican senator who did not actively oppose the Employee Free Choice Act in the previous Congress, said yesterday that he will vote to block it this year, dealing a blow to the pro-labor legislation."
While Specter agrees with unions that the current system is broken, he prefers more limited reforms. Only if more limited reforms prove ineffective will he reconsider when the economy returns to normalcy.
Business keeps saying they don't like so called 'card check' because they want democracy in unions. With current rules there is a lengthy delay after a majority of the workforce requests a certification election and before union members vote for representation. It is reported that business uses the time to bully, threaten and intimidate their workforce. Perhaps Mr. Specter would support immediate elections without delay.
Job Related Stimulus Funds Fuel Debate
Expanded Unemployment Benefits Would Hurt Business, Va. Republicans Say from the Washington Post, March 25th 3/26/09
Chris Jenkins writes "Thousands of jobless Virginians could be eligible for enhanced unemployment benefits under the stimulus package passed by Congress last month, but a group of Republican lawmakers is urging the state to reject the $125 million in federal money saying it will mean higher taxes for businesses once the money is exhausted."
Virginia business only spends $98 a year per employee to provide the meager Virginia unemployment benefits compared to a national average of $258. The federal money comes with the requirement that states expand their benefits somewhat to be eligible and the Republicans don't want their business friends to have pick up the tab later on, after two years, when the federal money is scheduled to stop.
Apparently they are worried they won't be able to eliminate those extra benefits two years along when Virginia business might have to pay so they would rather throw away $125 million of economic revival money rather than risk it. These particular Republicans seem to forget that money goes round and round; when they unemployed with wages spend their benefits it goes back to business. Only a small detail.
Consumer Price IndexThe Bureau of Labor Statistics released its Consumer Price Index for February on 3/20/09
The overall price increase for all urban consumer was up .2 percent for the 12 months ended Februrary 2009. Small but the price index for food and beverages was up 4.7 percent. Transportation was down -11 percent, mostly because fuel prices are way down from a year ago. Details on the labor line.
Local Tech Community In Uproar over Labor Rights Bill from the Washington Post 3/16/09
Kim Hart writes about the Washington area reaction to the Employee Free Choice Act, which makes it easier for unions to organize by using a system whereby workers can organize union representation after a majority of active employees sign cards instead of having an election.
Business opponents say such things as "The legislation would undermine efforts to attract businesses to Virginia, which is a right to work state." Also ". . . it will embolden unions to try to overturn right-to-work laws." And "If all of a sudden you have a layer of bureaucracy that has a different set of rules for hiring, firing and rewarding employees, that's going to stifle creativity and our ability to innovate."
Labor proponents say "By allowing more workers the ability to bargain for better wages, benefits and retirement security, the Employee Free Choice Act will put more money in the pockets of consumers so they can purchase needed goods and services from companies on Main Streets across our nation." And ". . . Millions of working families are a step closer to gaining real bargaining rights that will enable them to have a better life and will help move our nation along the road to economic recovery."
Labor Secretary Proposes Suspending Farm Rules from the NY Times 3/14/09
Steven Greenhouse writes that Labor Secretary Hilda Solis announced that she would suspend regulations that the Bush administration introduced in December 18, 2008 to make it easier and cheaper for agricultural employers to use foreign workers in temporary jobs. Last year tens of thousands of foreign workers were brought in under the temporary agricultural program, known as H-2A to harvest lettuce, sweet potatoes, cucumbers, sugar cane and other crops. The Bush rules cut the wages that many of these workers will receive, reduced the amount growers had to reimburse workers for travel and eliminated other administrative burdens.
Labor unions applauded the bill. A growers representative said "A lot of people have placed orders for these workers, and this will cause some panic in the industry."
Corporations Up Drive Against Bill to Ease Unionization from the Wall Street Journal, March 7, 2009 3/11/09
Kris Mahler writes President Obama's public backing this week of a bill that would make union organizing easier is driving companies to step up opposition. The bill is called the Employee Free Choice Act, which allows workers to opt for unioinization by signing cards, rather than through secret-ballet elections.
Business sources were quoted who don't want the bill claiming it will hurt their ability to boost productivity and keep their work forces flexible enough to respond to changine markets. At Wal-Mart they complained it "effectively eliminates free choice and the right to a secret-ballet election."
Labor and some businesses were quoted as supporting the bill. Labor argues unions can contribute to productivity, safety and training. The AFL-CIO has been able to find some corporate supporters.
The article does not discuss the issue of business interference in union elections and organizing.
Unemployment Rate by Fred Siegmund 3/7/09
On February 17th last month I forecast the unemployment rate to rise from 7.6 percent to 8.2 percent for the March 6th release date. It turned out to be 8.1 percent. I got the unemployed almost exactly but I thought the labor force would decline just slightly, when in fact those not in the labor force entered and began looking for jobs. That held down the rate slightly.
How I do my forecast is not a mystery because as I mentioned the initial unemployment claims in the 4 to 8 weeks ahead give a good indication of next month's unemployment rate. A rise of the 4 week moving average of 1000 claims will bring a 20 to 21 thousand increase in the unemployed for the next month. In forecaster talk it is a tight linear trend.
The bad news is that the 4-week moving average is going up, up, up and now the same tight linear trend is forecasting 8.9 percent unemployment for March. Stay tuned.
Many Hires Needed for Budget Goals
Tens of Thousands Could Be Added to Government Payroll Washington Post 3/3/09
Philip Rucker writes President Obama's budget is so ambitious, with vast new spending on health care, energy independence, education and services for veterans, that experts say he probably will need to hire tens of thousands of new federal government workets to realize his goals.
The article discusses how many jobs might be created. Officials at the Department of Veterans Affairs are going to hire 17,000 new employees, which they say will be 7,900 new nurses, 3,300 new doctors, 3,800 new clerks, and 2,400 new practical nurses.
Those are the only specific job numbers mentioned, other increases are speculations. The Heritage Foundation says 100,000 more jobs, the Center for Data Analysis suggest 230 to 260 thousand more jobs.
Federal Government employment including postal employees has an annual average of 2.777 million jobs. Exclude postal jobs and the total is just a few over 2 million, with about 343 thousand of those jobs in the Washington DC metropolitan area. Federal jobs have not changed much, up or down, for more than a decade. They were 3.2 million in 1990.
Based on published staffing in the federal government with a general increase of 200,000 jobs expect 19 thousand new managerial jobs, 10 to 11 thousand new Management Analysts, 22.1 thousand new Business Operations Specialists, 11.3 new Computer Specialists, 9 thousand new Lawyers, and 17 to 18 thousand new jobs in office administration.
Extended Mass Layoffs 3/2/09
The Bureau of Labor Statistics reported 3,140 employer initiated mass layoff events for the fourth quarter of 2008, which resulted in the separation of 508,859 workers from their jobs for at least 31 days. It is the highest reported total of extended mass layoffs reported for a single quarter and 1,326 higher than the fourth quarter a year ago.
Extended mass layoffs are 50 or more initial claims for unemployment insurance benefits from an employer during a 5-week period, with at least 50 workers separated for more than 30 days. In effect, extended mass layoffs are layoffs of 50 or more initial unemployment claims filed against a single employer that go on a long time.
Manufacturing had 35.1 percent of the 508,859 separations and construction was next with 26.8 percent, which combined is 286,658 of the mass layoff separations.
The 369 metropolitan areas had 42.7 percent, or 217,268 of the 508,859 separations. The midwest had the most of any Census region with 202,392 separations. Include 55,229 in Illinois, 38,820 in Michigan and 30,295 in Ohio.
Of the 508,859 separations 13.7 percent, or 69,471 came in just 36 layoff events with over a 1,000 separations; 19.8 percent came in 1,447 layoffs of 50 to 99; 66.4 percent came in 1,657 layoffs of 100 to 99 separations.
Of the 508,859 separations 16,061 were separations that included the movement of work to new locations within the company or to work taken over by another company; 12,206 to domestic companies, 3,775 to foreign locations.
GM, Chrysler Seek Billions More in Aid
Firms to Cut 50,000 Jobs, Drop 6 brands from Washington Post 2/1/09
Peter Whoriskey and Kendra Marr write about the continued decline of the auto industry, which is requesting aid from the U.S. government, Canada, Germany, Great Britain, Sweden and Thailand. Labor issues cover reductions in wages, benefits and retiree health benefits as well as the 50,000 job cuts. There has been not agreement for how the companies will pay $20 billion of health care obligations to retirees. Both companies have been asked to consider bankruptcy.
Once-Mighty UAW Yields to MarketWage
Reductions, Job cuts and Loss of Benefits Among Likely Recorvery Concessions From Washington Post February 18, 2009
V. Dion Haynes and Kendra Marr write "The United Auto Workers, which once set the standard for organized labor for wages and job protection, said it is making concessions as part of the recovery plan submitted by General Motors and Chrysler." ... UAW President Ron Gettlefinger said "These changes will help these companies face the extraordinarily difficult economic climate in which they operate." ... Other views are quoted. Some at Universities expressed optimism that current conditions could bring a resurgence of the labor movement. The financial world is blaming the labor movement for dragging down the recovery.
It is hard to understand how lower wages will help increase buying power in country that expects to spend its way out of recession.
Initial Unemployment Claims from Fred Siegmund February 18, 2009
The average of the previous4 weeks of initial unemployment claims went up from 526 to 583 thousand for the week ending January 31. That might not sound like much but during those 4 weeks there were 2.3 million inital unemployment claims. The unemployed will not go up by 2.3 million in February because many previously unemployed find a job and go back to work, or leave the labor force.
As you might expect though the unemployment reported the first Friday of each month is closely related to initial unemployment claims. Based strictly on past performance I know that a rise of the 4 week moving average of 1000 claims will bring a 20 to 21 thousand increase in the unemployed for the next month, which will be reported the first Friday of the new month. Even though its just an average, which could be more or less, the average is the best forecaster. Therefore, I forecast 12.6 million unemployed and 8.2 percent unemployment rate for February. We'll just have to wait and see.
Congress Passes Stimulus Package
After Voting Largely Along Party Lines from the Washington Post, February 14, 2009
Shailagh Murray and Pane Kane write Congress approved a $787 billion stimulus package that aims to spur millions of jobs through massive new investments in energy, transportation, education and health care projects, while reviving the social safety-net programs that have been shrinking for nearly three decades.
The package combines tax cuts with new spending and three quarters of the money is planned to reach state capitals, businesses and individual taxpayers by the end of 2010.
The stimulus package is 5.5% of Gross Domestic Production, or $787/$14,267 (in billions of Seasonally Adusted dollars).
Gross Domestic Product went up $770.8 billion for 2006 over 2005. It was a time that establishment jobs were up 2,139,000.
Gross Domestic Product went up $646.6 billion for 2007 over 2006. Jobs were up 1,152,000 in that same period. 3.5 million new jobs?
Trim to Stimulus Carves Into Goals for Job Creation from Washington Post Feb 13, 2009
Lori Montgomery writes the Obama stimulus bill sold as a jobs bill. Congressional negotiators have trimmed the final bill to $789 billion, which "is not going to pack the same jobs punch." Estimates cited vary from 1.5 to 3.5 million jobs. There are many quotes of the optimisitic and the pessimistic.
Employers Fighting Unemployment Benefits
More Firms Contest Workers Claims by Alleging Wrongdoing, Quitting from the Washington Post 2/12/09
Peter Whoriskey writes that proportion of claims disputed by former employers and state agencies has reached record levels in recent years according to Labor Department numbers tallied by the Urban Institute. Under state and federal laws, employees who are fired for misbehavior or quit are ineligible for unemployment compensation. Employers save money when claims are blocked because unemployment insurance rates are based on the amount of claims. Disputed claims have reached 26%.
The Audacity of Hope Meets the Enormity of Inequality from the website Extremeinequality/ February 9, 2009
Sam Pizzigati writes about the symbolic value of President Obama's $500,000 pay cap on executive pay at bailed-out banking giants and the growing inequality of America's income and wealth. The article cites recently release IRS data showing the top 400 tax returns with an average of $263,000,000 of income with an average tax rate of 17.2%.
Labor Bill Targets Builders
Low-Wage Workers a worry from the Washington Post 2/9/08
Lisa Rein writes Building contractors are not paying SS taxes claiming their workforce are independent contractors. The state of Maryland hints it might take legislative action.
Deluge is Holding up Benefits to Unemployed
Decline in Funding Forces Staff Cuts as Claims Swell from the Washington Post 2/5/09
Chris L Jenkins writes that thousands of people in the Washinton Area and hundreds of thousands more across the cuntry are waiting longer than they should for unemployment benefits at a time when they need the money the most because rising joblessness is overwhelming claims offices, records show. The problem is compounded by a simultaneous decrease in federal funding, which has reduced staffing at some local government offices.
American Union Ranks Grow After "Bottoming Out"
First Significant Increase in 25 Years from the Washington Post Jan 29 2009
Peter Whoriskey writes The Percentage of American Workers belonging to a union has jumped in 2008, the first statistically significant increase in 25 years. union workers represent 12.4% of the workforce up from 12.1%.
Breakaway Union Exposes Labor Rift
Some Fear Loss of Unity at Crucial Times from the Washington Post Jan 29 2009
Alec MacGillis writes The leaders of one of the largest chapters of the Service Employers International Unions, the nation's fastest growing and most influential labor organization, broke off from the parent organization yesterday. ... A California chapter of SEIU is resisting changes made to officers and board memebers by SEIU president Andy Stern.
More than a Day Job from the Washington Post Jan 4, 2009
Nancy Trejos writes With a grim economic outlook for 2009 more Americans are not just cutting costs, but are finding ways to make more money by taking part time or odd jobs employers and economists said. Many are doing it because their wages have stalled while the cost of living has gone up. Others are pickng up extra work to pay off debt or cushion their savings. for others, it's a backup plan in case they get laid off from their full time jobs.
from the Wall Street Journal June 30, 2008 7/1/09
Jess Bravin and Suzanne Satoline write "The Supreme Court set a new standard for Employee's use of race in hiring decisions, . . ."
The New Haven, Connecticut city government wrongly discriminated against a group of mostly white fire fighters when it threw out a promotions exam when no black people scored well enought to be promoted.
Justice Kennedy wrote that employers must show a "strong basis in evidence" before ignoring results of empoyment-related tests so as not to frustrate other applicants.
The court concluded the city violated Title VII of the 1964 Civil Rights Act because the city made its decision based on race by rejecting test results solely because higher scoring candidates were white. The only reason to negate an exam is if there is evidence the exam discriminates.
What Helps New Ph.D.s Land Jobs in Academia? A Passport
from the Wall Street Journal June 19, 2008 6/20/09
Erica Alini writes "The scramble for faculty jobs is prompting graduate students and newly minted Ph.Ds to look overseas."
Cuts in government spending and shrinking endowments are taking a toll on many U.S. Universities. Hiring in English and foreign languages fell 20 percent this year.
Jack Schuster of Claremont Graduate School is quoted "The supply -demand ratio is a bit out of whack in the academic job market in general."
June Inflation Report Shows No Inflation
from Bureau of Labor Statistics(BLS) May 17, 2009 6/18/09
The BLS published its new consumer price index numbers for May 2009. Prices for the all items index dropped 1.3 percent. Price changes are for the 12 months ending in May 2009. Some prices were up but those increases were offset by a 14.3 percent decrease in fuel prices for transportation. Food and beverages were up 2.7 percent. The two industry sectors that have been doing well with increaseing jobs also had prices increases. These were medical care with 3.2 percent price increases from May a year ago and 5.5 percent increases for education. Housing and apparel were up but less than one percent.
Unions Look to Labor Board Picks to Reverse Bush Rulings
from the Wall Street journal June 3, 2009 6/7/09
Melanie Trottman writes "Unions are counting on President Obama's new appointees to the National Labor Relations Board to reverse Bush era rulings they sya hamper their efforts to organize workers."
The National Labor Relations Board(NLRB) has a 5 member board that oversees elections and resolves labor disputes. The new chair Wilma Liebman is already on the board and there are two new Obama nominees, Craig Becker and Mark Pearce. Together they will create a majority favorable toward labor and labor union needs and arguments.
Ms. Liebman is former legal counsel to the Teamsters and Bricklayers union. Mr. Becker is legal counsel to the Service Employees International Union. Mr Pearce is a founding partner of a law representing unions.
Many issues of conduct during union organizing are likely to come before the board.
Labor Department Suspends Farmworker Rules
The Labor Department proposed suspending the Bush Administration rules in March. The proposals described earlier on this link were suspended as the U.S. Labor Department restored old regulations governing the H-2A guest worker program. Officials will write new rules.
The announcement was for May 30, 2009. 6/1/09
Layoff Update
Layoff announcments dating from May 19th to May 21, 2009. 5/26/09
American Express said it will eliminate 4,000 jobs in the process of cutting costs by $800 million. It is 6 percent of its global workforce. American Express cut 7,000 jobs in October 2008.
Lockheed announces 130 job cuts from defense department budget cuts for helicopters.
Capital One of McClean to cut 180 jobs in Baton Rouge, LA as part of a consolidation of credit card operations and telephone sales.
Despite Stimulus Funds States to Cut More Jobs
Budget Shortfalls Prompt Mass Layoffs
from the Washington Post May 12, 2009 5/14/09
Alec MacGillis writes "Eleven weeks after Congress settled on a stimulus package that provided $135 billion to limit layoffs in state governments, many states are finding that the funds are not enough and are moving to lay off thousands of public employees."
Layoffs mentioned are Washington State public colleges, 1000; Massachusetts 250 layoffs; Arizona already had 800 layoffs; Maine cut 250 jobs; Florida cut 200 jobs in the last 18 months; Virginia layoffs eliminated 1,500 jobs. California, Georgia and New Jersey are reported as ordering furloughs.
They better try more simulus with the private sector still sinking and jobs falling elsewhere.
Under Restructuring, GM To build More Cars Overseas
from the Washington Post May 10, 2009 5/12/09
Peter Whoriskey writes "The U.S. government is pouring billions into General Moters in hopes of reviving the domestic economy, but when the automaker completes its restructuring plan many ofthe company's new jobs will be filled by workers overseas."
The company admits the number of cars that GM sells in the United States and builds in Mexico, China and South Korea will roughly double. The percentage of cars sold domestically and manufactured in the above low wage countries will rise to 23 Percent from 15 percent. Labor costs are lower in those countries, which may not have health care, workman's compensation, unemployment insurance and social security burdens quite so big as the United States.
Initial Unemployment Claims
Unemployment Claims are Starting to Decline 5/8/09
The initial unemployment claims reached a high of 659 thousand in the 4 weeks ending March 28, 2009. The have been dropping and reached 622 thousand by the week of May 2, 2009. Because unemployment goes up and down along a straight line of graph with initial unemployment claims the future suggests some dropping unemployment in the future. This month it is 8.9 percent, but let's be optimistic and let the numbers do the talking a predict the unemployment rate will stop rising.
Plan to Cut Weapons Programs Disputed
Defense Supporters Say 100,000 Jobs are in Jeopardy
from the Washington Post April 28, 2009 4/29/09
Dan Eggen writes "Some of the nation's largest defense contractors, labor unions and trade groups are banding together to argue that the Obama Administration is putting 100,000 or mor3e jobs at risk by proposing deep cuts in weapons programs." Some of the contractors are quoted from Lockheed and a place called the Aerospace Industries Association. They express worry about jobs but have little to say about defense. Defense sounds like an expensive jobs program.
GM's New Road Map: Partial Nationalization
Automatker to Shed Brands and Workers; Future Hinges on Deal With Bondholders
from the Washington Post April 28, 2009 4/29/09
Steven Mufson writes "... under new sweeping plan that would also shut down GM's Pontiac operations, lay off 21,000 workers and impose harsh terms on the company's bondholders." It is hard to keep up with auto layoffs there have been so many such announcments. Gm announced layoffs of 10,000 on February 11th and then 50,000 on February 18th.
Delta Air Ends Use of India Call Centers
from the Wall Street Journal April 18, 2009 4/24/09
Paulo Prada aned Niraj Sheth write that Delta Airlines has stopped using India based call centers to hadle sales and reservations. Cusomters complained they had trouble with communicating with Indian Agents. The company said it was fundamentally cheapter to use Indian agents, but the article suggested moving the jobs back to America could be a smart public relations move. "The customer acceptance of call centers in foreign countries is low," said Richard Anderson, Delta's chief executive. Delta also has call centers in Jamaica, Soth Africa El Salvador and Guatemala.
GM set to Trim 1600 More Jobs
from the Washington Post from April 21, 2009 4/23/09
Kendra Marr writes that GM's president plans are for layoffs of whitecollar workers in the next few days to speed cost cutting to qualify for more federal loans. Separate negotiations have begun to cut 47,000 blue collar workers by the end of
the year. The GM will spare engineers working on the new Chevrolet Volt, but otherwise reductions will be targeted to marketing and communicatins personnel.
Labor-Management Partnerships Poised to Revive
from the Federal Diary in the Washington Post from April 15, 2009 4/17/09
Apparently partnerships in the Federal government date from 1993 as an executive order of Bill Clinton. The aim was to "build a more cooperative relationship at the workplace between management and employees, which could reduce tensions and formal complaints, including grievances and charges of unfair labor practice." George W. Bush issued hs own order revoking Clinton's less than a month after taking office. It was always hard to think of George Bush as cooperating with anybody.
GAO Report Faults Labor Dept. on Wage Complaints
Division Failed to Take Action from the Washington Post April 7, 2009 4/8/09
Chris Jenkins writes about the General Accounting Office nine-month investigation of worker claims filed with the Labor Department's Wage and Hour Division. The report is titled "Wage and Hour Division’s Complaint Intake and Investigative Processes Leave Low Wage Workers Vulnerable to Wage Theft." GAO investigators posed as frustrated workers filing claims. The Wages and Hours division mishandled cases 9 out of 10 times. Caseworkers discouraged the undercover investigators from filing complaints, instead telling them to hire attorneys. Child labor law violations were not investigated. Cases were not entered into agency databases.
"This investigation clearly shows that Labor has left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn."
The report covered years of the Bush Administration and Elaine Chao as Labor Secretary. Some may regard this report is their intended legacy.
SLM Transfers Overseas Jobs to U.S.
Reston Student Lender to Move 2,000 Jobs Out of Asia from the Washington Post April 7, 2009 4/8/09
Thomas Heath writes "Sallie Mae yesterday announced plans to move 2,000 overseas jobs back to the United States from India and the Philippines, reversing a cost saving measure the company took a year ago."
Sallie Mae makes private student loans and loans backed by the federal government. It bundles the loans and sells them as securities to outside investors. Sallie Mae's chief executive Albert Lord said the company moved the jobs overseas about a year ago when the credit crisis was hurting Sallie Mae's bottom line. "It was a tough decision to move these jobs overseas," Lord said. "It was a lot easier to make the decision to bring them back."
However, all is not well in the student lending and President Obama has proposed an end to subsides for student loan providers such as Sallie Mae and Citi-Group. Government would be the sole provider.
Rep. Paul Kanjorski described the decision as a patriotic act, but the article noted his district will get 600 of the new Sallie Mae jobs. Kanjorski chairs the House Financial Services subcommitte that oversees securities. It was further reported that Sallie Mae is the biggest contributor to Rep. kanjorski's political campaigns, giving $86,000.
Initiative on Worker Safety Gets Poor Marks
IG's Report Links Weak Enforcements to Job Fatalities from the Washington Post April 2, 2009 4/4/09
R. Jeffery Smith writes "A special government program to improve worker safety in hazardous industries rarely fulfilled its promise, a Labor Department audit concluded yesterday[4/1/09], and over the past six years, dozens of deaths occurred at firms that should have been subjected to much tighter federal safety enforcement."
Apparently the program was started by the Bush Administration, but assistant inspector General Elliot P Lewis who did the above mentioned audit cited a failure of enforcement that did not correct workplace hazards of 45 emloyers where 58 fatalities occurred. The audit also concluded that more than half of the 282 workplace fatalities should have been included in the Enhanced Enforcement Program were not properly logged, partly because of poor training at Occupational Health and Saftety Administration.
Donald Shalhoub at the Occupational Health and Saftety Administration acknowledges "the program may not have been consistently accomplishing its purpose and intent." Maybe the program was just a public relations scam, but officials didn't say that.
Union Bill's Declining Chances Give Rise to Alternatives
from the Washington Post March 29th 4/2/09
Alec MacGillis writes about the Employee Free Choice Act, a law that makes it easier for unions to organize new union representation. The law would allow active employees to sign cards rather than sign cards and wait to vote in representation election. The law continues to make the news and draw comments and new proposals.
"This is not the time or the place" for card check, said Sen. Blanche Lincoln (D-Ark.), who backed the bill in 2007. "To continue to attempt to bring up something that has already worked its way into being so divisive and distracting is unproductive."
"Labor law reform is long overdue," said Mike Asensio, a Columbus, Ohio, lawyer with Baker Hostetler who represents corporations. However, he says the debate will not advance until union supporters scrap the bill and start over. "If they make it all or nothing, they enhance their chances of getting nothing."
Joel Rogers, a pro-labor law professor at the University of Wisconsin, called the rules "ossified." Rogers supports card check but said there may be other ways to limit intimidation by employers, such as exceedingly high penalties. "The problem is not secret ballot versus card check, it's the fear that workers have."
But Robert Bruno, a labor relations professor at the University of Illinois at Chicago, doubts reforms short of card check can work. It is unrealistic, he said, to create neutral, civic-style elections in workplaces dominated by employers. Employers "would have to agree to an environment where they give up a lot of control, a lot of prerogative."
David Radelet, a Chicago lawyer who represents corporations, said Sen Arlen Specter's 2010 warnings [that he might be replaced with a democrate] should be heeded. "It does create pressure for the business community to get something done now," he said.
Keith Smith, director of employment policy at the National Association of Manufacturers, said his group is asking its members which reforms they might accept. "We're going to see something again soon. It's all a matter of what it will look like and how it will move," he said.
EEOC Willfully Violated Pay Law, Arbitrator Rules from the Washington Post March 31th 4/1/09
Steve Vogal writes "The Equal Employment Opportunity Commisssion, responsible for ensuring that the nation's workers are treated failry, has itself willfully violated the Fair Labor Standards Act on a nationwide basis with its own employees, an arbitrator has rule."
The arbitrator's ruling stated that the EEOC offered compensatory time off rather than overtime pay, which amounted to "forced volunteering" and was a knowing violation of the law and went beyond mere negliegence. The employees were pressured into working extra hours but not offered extra pay.
Further readers learn the agency has an unprecendented increase in discrimination claims after 8 years of budget cuts and a reduction of 25 percent of staff; all a legacy of the Bush Administration.
Artictects the Latest Dominoes to Fall
Slowdown Signals a Static Horizon from the Washington Post March 28th 3/29/09
Paul Schwartzman chronicles Washington area jobs for architects describing projects halted and the discouraging job search for laid off architects. Construction layoffs get more media attention but architecture layoffs are a slow down of planning for projects in the future.
The Bureau of Labor Statistics reports 217 thousand jobs at Architecture firms in 2008, up slightly from 214 thousand in 2007. Over 90 percent of architects work in architecture firms or as self employed individuals. Since 2000 architecture jobs have been growing at faster than the national average growth for jobs and adding an average of 4,600 jobs a year. There are up to 4,500 architecture jobs in the Washington Metropolitan area according to analysts at the District's Department of Employment Services.
Times Co. Announces Temporary Salary Cuts from the NY Times March 27th 3/29/09
Richard Perez-Pena writes "The New York Times Company budget plans announced Thursday, including a temporary 5 percent salary cut for most employees, should avert newsroom staff cuts at the flagship Times newspaper this year . . . "
Cuts are for management and non-union and Newspaper Guild staff in the newsroom. The pay cuts are for 9 months.
In addition, the Times annouceed 100 layoffs in business operations or about 5 percent of business operations staff. The company laid off 27 in the advertising department last month and about 500 people in January. Other parts of the company including about.com will have 2.5 percent cuts and 5 days of furlough.
By the end of 2008, the company had 9,346 employees, down from 10,710 working the same operations two years ago.
IBM to Cut 5,000 Jobs; D.C. Area Largely Not Affected from the Washington Post March 27th 3/28/09
Kim Hart writes "IBM has told its employees that the company plans to cut about 5,000 jobs this week, according to industry sources with knowledge of the layoffs."
IBM is reported to be shifting a large number of jobs to lower cost regions, such as India. Most of the jobs being eliminated come from the global services division, which ranges from software developers to data center managers. IBM has been shifting jobs abroad for about a decade. Layoffs come two months after previous layoffs of 4,000 in sales jobs.
Post Offers Another Round of Buyouts from the Washington Post March 27th 3/27/09
Frank Ahrens writes "The Washington Post offered employees another round of early retirement packages yesterday - the fourth since 2003 and second within a year - as part of its ongoing effort to cut costs to compensate for declining circulation and advertising revenue."
The Washington Post continues to lose money despite its reputation as quality journalism. Jobs in newspaper publishing are down from 422,600 to 325,900 in the years since 2000. Jobs in all publishing industries are down from 774,000 in 2000 to 619,000 in 2008. Paper will soon be obsolete.
Specter Will Vote To Block Union Bill
Decision is a Blow to 'Card Check' from the Washington Post March 25th 3/27/09
Alec MacGillis writes that "Sen Arlen Specter (Pa.), the only Republican senator who did not actively oppose the Employee Free Choice Act in the previous Congress, said yesterday that he will vote to block it this year, dealing a blow to the pro-labor legislation."
While Specter agrees with unions that the current system is broken, he prefers more limited reforms. Only if more limited reforms prove ineffective will he reconsider when the economy returns to normalcy.
Business keeps saying they don't like so called 'card check' because they want democracy in unions. With current rules there is a lengthy delay after a majority of the workforce requests a certification election and before union members vote for representation. It is reported that business uses the time to bully, threaten and intimidate their workforce. Perhaps Mr. Specter would support immediate elections without delay.
Job Related Stimulus Funds Fuel Debate
Expanded Unemployment Benefits Would Hurt Business, Va. Republicans Say from the Washington Post, March 25th 3/26/09
Chris Jenkins writes "Thousands of jobless Virginians could be eligible for enhanced unemployment benefits under the stimulus package passed by Congress last month, but a group of Republican lawmakers is urging the state to reject the $125 million in federal money saying it will mean higher taxes for businesses once the money is exhausted."
Virginia business only spends $98 a year per employee to provide the meager Virginia unemployment benefits compared to a national average of $258. The federal money comes with the requirement that states expand their benefits somewhat to be eligible and the Republicans don't want their business friends to have pick up the tab later on, after two years, when the federal money is scheduled to stop.
Apparently they are worried they won't be able to eliminate those extra benefits two years along when Virginia business might have to pay so they would rather throw away $125 million of economic revival money rather than risk it. These particular Republicans seem to forget that money goes round and round; when they unemployed with wages spend their benefits it goes back to business. Only a small detail.
Consumer Price IndexThe Bureau of Labor Statistics released its Consumer Price Index for February on 3/20/09
The overall price increase for all urban consumer was up .2 percent for the 12 months ended Februrary 2009. Small but the price index for food and beverages was up 4.7 percent. Transportation was down -11 percent, mostly because fuel prices are way down from a year ago. Details on the labor line.
Local Tech Community In Uproar over Labor Rights Bill from the Washington Post 3/16/09
Kim Hart writes about the Washington area reaction to the Employee Free Choice Act, which makes it easier for unions to organize by using a system whereby workers can organize union representation after a majority of active employees sign cards instead of having an election.
Business opponents say such things as "The legislation would undermine efforts to attract businesses to Virginia, which is a right to work state." Also ". . . it will embolden unions to try to overturn right-to-work laws." And "If all of a sudden you have a layer of bureaucracy that has a different set of rules for hiring, firing and rewarding employees, that's going to stifle creativity and our ability to innovate."
Labor proponents say "By allowing more workers the ability to bargain for better wages, benefits and retirement security, the Employee Free Choice Act will put more money in the pockets of consumers so they can purchase needed goods and services from companies on Main Streets across our nation." And ". . . Millions of working families are a step closer to gaining real bargaining rights that will enable them to have a better life and will help move our nation along the road to economic recovery."
Labor Secretary Proposes Suspending Farm Rules from the NY Times 3/14/09
Steven Greenhouse writes that Labor Secretary Hilda Solis announced that she would suspend regulations that the Bush administration introduced in December 18, 2008 to make it easier and cheaper for agricultural employers to use foreign workers in temporary jobs. Last year tens of thousands of foreign workers were brought in under the temporary agricultural program, known as H-2A to harvest lettuce, sweet potatoes, cucumbers, sugar cane and other crops. The Bush rules cut the wages that many of these workers will receive, reduced the amount growers had to reimburse workers for travel and eliminated other administrative burdens.
Labor unions applauded the bill. A growers representative said "A lot of people have placed orders for these workers, and this will cause some panic in the industry."
Corporations Up Drive Against Bill to Ease Unionization from the Wall Street Journal, March 7, 2009 3/11/09
Kris Mahler writes President Obama's public backing this week of a bill that would make union organizing easier is driving companies to step up opposition. The bill is called the Employee Free Choice Act, which allows workers to opt for unioinization by signing cards, rather than through secret-ballet elections.
Business sources were quoted who don't want the bill claiming it will hurt their ability to boost productivity and keep their work forces flexible enough to respond to changine markets. At Wal-Mart they complained it "effectively eliminates free choice and the right to a secret-ballet election."
Labor and some businesses were quoted as supporting the bill. Labor argues unions can contribute to productivity, safety and training. The AFL-CIO has been able to find some corporate supporters.
The article does not discuss the issue of business interference in union elections and organizing.
Unemployment Rate by Fred Siegmund 3/7/09
On February 17th last month I forecast the unemployment rate to rise from 7.6 percent to 8.2 percent for the March 6th release date. It turned out to be 8.1 percent. I got the unemployed almost exactly but I thought the labor force would decline just slightly, when in fact those not in the labor force entered and began looking for jobs. That held down the rate slightly.
How I do my forecast is not a mystery because as I mentioned the initial unemployment claims in the 4 to 8 weeks ahead give a good indication of next month's unemployment rate. A rise of the 4 week moving average of 1000 claims will bring a 20 to 21 thousand increase in the unemployed for the next month. In forecaster talk it is a tight linear trend.
The bad news is that the 4-week moving average is going up, up, up and now the same tight linear trend is forecasting 8.9 percent unemployment for March. Stay tuned.
Many Hires Needed for Budget Goals
Tens of Thousands Could Be Added to Government Payroll Washington Post 3/3/09
Philip Rucker writes President Obama's budget is so ambitious, with vast new spending on health care, energy independence, education and services for veterans, that experts say he probably will need to hire tens of thousands of new federal government workets to realize his goals.
The article discusses how many jobs might be created. Officials at the Department of Veterans Affairs are going to hire 17,000 new employees, which they say will be 7,900 new nurses, 3,300 new doctors, 3,800 new clerks, and 2,400 new practical nurses.
Those are the only specific job numbers mentioned, other increases are speculations. The Heritage Foundation says 100,000 more jobs, the Center for Data Analysis suggest 230 to 260 thousand more jobs.
Federal Government employment including postal employees has an annual average of 2.777 million jobs. Exclude postal jobs and the total is just a few over 2 million, with about 343 thousand of those jobs in the Washington DC metropolitan area. Federal jobs have not changed much, up or down, for more than a decade. They were 3.2 million in 1990.
Based on published staffing in the federal government with a general increase of 200,000 jobs expect 19 thousand new managerial jobs, 10 to 11 thousand new Management Analysts, 22.1 thousand new Business Operations Specialists, 11.3 new Computer Specialists, 9 thousand new Lawyers, and 17 to 18 thousand new jobs in office administration.
Extended Mass Layoffs 3/2/09
The Bureau of Labor Statistics reported 3,140 employer initiated mass layoff events for the fourth quarter of 2008, which resulted in the separation of 508,859 workers from their jobs for at least 31 days. It is the highest reported total of extended mass layoffs reported for a single quarter and 1,326 higher than the fourth quarter a year ago.
Extended mass layoffs are 50 or more initial claims for unemployment insurance benefits from an employer during a 5-week period, with at least 50 workers separated for more than 30 days. In effect, extended mass layoffs are layoffs of 50 or more initial unemployment claims filed against a single employer that go on a long time.
Manufacturing had 35.1 percent of the 508,859 separations and construction was next with 26.8 percent, which combined is 286,658 of the mass layoff separations.
The 369 metropolitan areas had 42.7 percent, or 217,268 of the 508,859 separations. The midwest had the most of any Census region with 202,392 separations. Include 55,229 in Illinois, 38,820 in Michigan and 30,295 in Ohio.
Of the 508,859 separations 13.7 percent, or 69,471 came in just 36 layoff events with over a 1,000 separations; 19.8 percent came in 1,447 layoffs of 50 to 99; 66.4 percent came in 1,657 layoffs of 100 to 99 separations.
Of the 508,859 separations 16,061 were separations that included the movement of work to new locations within the company or to work taken over by another company; 12,206 to domestic companies, 3,775 to foreign locations.
GM, Chrysler Seek Billions More in Aid
Firms to Cut 50,000 Jobs, Drop 6 brands from Washington Post 2/1/09
Peter Whoriskey and Kendra Marr write about the continued decline of the auto industry, which is requesting aid from the U.S. government, Canada, Germany, Great Britain, Sweden and Thailand. Labor issues cover reductions in wages, benefits and retiree health benefits as well as the 50,000 job cuts. There has been not agreement for how the companies will pay $20 billion of health care obligations to retirees. Both companies have been asked to consider bankruptcy.
Once-Mighty UAW Yields to MarketWage
Reductions, Job cuts and Loss of Benefits Among Likely Recorvery Concessions From Washington Post February 18, 2009
V. Dion Haynes and Kendra Marr write "The United Auto Workers, which once set the standard for organized labor for wages and job protection, said it is making concessions as part of the recovery plan submitted by General Motors and Chrysler." ... UAW President Ron Gettlefinger said "These changes will help these companies face the extraordinarily difficult economic climate in which they operate." ... Other views are quoted. Some at Universities expressed optimism that current conditions could bring a resurgence of the labor movement. The financial world is blaming the labor movement for dragging down the recovery.
It is hard to understand how lower wages will help increase buying power in country that expects to spend its way out of recession.
Initial Unemployment Claims from Fred Siegmund February 18, 2009
The average of the previous4 weeks of initial unemployment claims went up from 526 to 583 thousand for the week ending January 31. That might not sound like much but during those 4 weeks there were 2.3 million inital unemployment claims. The unemployed will not go up by 2.3 million in February because many previously unemployed find a job and go back to work, or leave the labor force.
As you might expect though the unemployment reported the first Friday of each month is closely related to initial unemployment claims. Based strictly on past performance I know that a rise of the 4 week moving average of 1000 claims will bring a 20 to 21 thousand increase in the unemployed for the next month, which will be reported the first Friday of the new month. Even though its just an average, which could be more or less, the average is the best forecaster. Therefore, I forecast 12.6 million unemployed and 8.2 percent unemployment rate for February. We'll just have to wait and see.
Congress Passes Stimulus Package
After Voting Largely Along Party Lines from the Washington Post, February 14, 2009
Shailagh Murray and Pane Kane write Congress approved a $787 billion stimulus package that aims to spur millions of jobs through massive new investments in energy, transportation, education and health care projects, while reviving the social safety-net programs that have been shrinking for nearly three decades.
The package combines tax cuts with new spending and three quarters of the money is planned to reach state capitals, businesses and individual taxpayers by the end of 2010.
The stimulus package is 5.5% of Gross Domestic Production, or $787/$14,267 (in billions of Seasonally Adusted dollars).
Gross Domestic Product went up $770.8 billion for 2006 over 2005. It was a time that establishment jobs were up 2,139,000.
Gross Domestic Product went up $646.6 billion for 2007 over 2006. Jobs were up 1,152,000 in that same period. 3.5 million new jobs?
Trim to Stimulus Carves Into Goals for Job Creation from Washington Post Feb 13, 2009
Lori Montgomery writes the Obama stimulus bill sold as a jobs bill. Congressional negotiators have trimmed the final bill to $789 billion, which "is not going to pack the same jobs punch." Estimates cited vary from 1.5 to 3.5 million jobs. There are many quotes of the optimisitic and the pessimistic.
Employers Fighting Unemployment Benefits
More Firms Contest Workers Claims by Alleging Wrongdoing, Quitting from the Washington Post 2/12/09
Peter Whoriskey writes that proportion of claims disputed by former employers and state agencies has reached record levels in recent years according to Labor Department numbers tallied by the Urban Institute. Under state and federal laws, employees who are fired for misbehavior or quit are ineligible for unemployment compensation. Employers save money when claims are blocked because unemployment insurance rates are based on the amount of claims. Disputed claims have reached 26%.
The Audacity of Hope Meets the Enormity of Inequality from the website Extremeinequality/ February 9, 2009
Sam Pizzigati writes about the symbolic value of President Obama's $500,000 pay cap on executive pay at bailed-out banking giants and the growing inequality of America's income and wealth. The article cites recently release IRS data showing the top 400 tax returns with an average of $263,000,000 of income with an average tax rate of 17.2%.
Labor Bill Targets Builders
Low-Wage Workers a worry from the Washington Post 2/9/08
Lisa Rein writes Building contractors are not paying SS taxes claiming their workforce are independent contractors. The state of Maryland hints it might take legislative action.
Deluge is Holding up Benefits to Unemployed
Decline in Funding Forces Staff Cuts as Claims Swell from the Washington Post 2/5/09
Chris L Jenkins writes that thousands of people in the Washinton Area and hundreds of thousands more across the cuntry are waiting longer than they should for unemployment benefits at a time when they need the money the most because rising joblessness is overwhelming claims offices, records show. The problem is compounded by a simultaneous decrease in federal funding, which has reduced staffing at some local government offices.
American Union Ranks Grow After "Bottoming Out"
First Significant Increase in 25 Years from the Washington Post Jan 29 2009
Peter Whoriskey writes The Percentage of American Workers belonging to a union has jumped in 2008, the first statistically significant increase in 25 years. union workers represent 12.4% of the workforce up from 12.1%.
Breakaway Union Exposes Labor Rift
Some Fear Loss of Unity at Crucial Times from the Washington Post Jan 29 2009
Alec MacGillis writes The leaders of one of the largest chapters of the Service Employers International Unions, the nation's fastest growing and most influential labor organization, broke off from the parent organization yesterday. ... A California chapter of SEIU is resisting changes made to officers and board memebers by SEIU president Andy Stern.
More than a Day Job from the Washington Post Jan 4, 2009
Nancy Trejos writes With a grim economic outlook for 2009 more Americans are not just cutting costs, but are finding ways to make more money by taking part time or odd jobs employers and economists said. Many are doing it because their wages have stalled while the cost of living has gone up. Others are pickng up extra work to pay off debt or cushion their savings. for others, it's a backup plan in case they get laid off from their full time jobs.
Wednesday, June 3, 2009
Banks and Nationalization
First published on Automaticfinances.com
In the current banking crisis there continue to be people in banking and business calling for nationalizing banks. One recent example was an article in the Atlantic Magazine titled “The Quiet Coup.” It turns out the author is from the International Monetary Fund with experience from international financial crises. He writes nationalization would not mean permanent state ownership. “It would allow the government to wipe out bank shareholders, replace failed management clean up the balance sheets, and then sell the banks back to a private sector.”
Nationalization does not solve one problem that could not be solved without it. America has to have a banking system and wiping out one to replace it with another does nothing to address the political causes of the banking crisis. America’s bankers played the central role in creating America’s banking crisis, but their influence continues to prevent the reforms that are needed.
Bankers and the financial community gained extra political power beginning in the Reagan administration, but continuing through the Clinton years and to the present. Congress slowly changed or abandoned regulatory protections that began as far back as 1933 with the Glass-Steagall Banking Act.
America’s banking regulations previously recognized the unique and paramount responsibility of commercial banks. That is to provide customers with checking account services and guarantee reserves are available to pay on customer checks. Congress passed the Glass-Steagall Act to prohibit commercial banks from diversification into other financial services such as using loanable funds to underwrite corporate security offerings.
In 1933 Congress feared a bank’s security offerings department would pressure the bank’s lending department to take risks that could lead to bank failure. They feared banks could manipulate stock prices or pressure their loan customers to buy stock offerings, or take control of other non-financial corporations.
By the 1980’s and 1990’s, the relentless pressure of financial groups and plenty of campaign contributions turned caution into compliance; Congress allowed banks to diversify and consolidate into giant risk takers too big to fail.
Million bought bank stocks because banks will never be obsolete and they had the reputation of being steady, safe and conservative investments paying steady but modest dividends. Even without nationalization those millions have lost dividend income that will never be recovered and 50 to 90 percent of stock value. Those same millions had nothing to do with the gambling and risk taking of the banks they supposedly own but do not control.
Wiping them out with no further chance to recover some of their losses is unfair but also unnecessary. The so-called toxic assets will have to be written off with or without nationalization. Reserves will have to be restored to the banking system with or without nationalization. Nationalization does not reform the banking laws but just starts the whole thing over. Nationalization does nothing to encourage anyone to invest in banks, ever.
We can be thankful the Obama Administration has been resisting these calls. We hope they continue and we hope they will get around to proposing the necessary return to cautious banking practices. Perhaps the time is not right in their political judgment. We will wait, but in the mean time nationalizing banks is a loser.
In the current banking crisis there continue to be people in banking and business calling for nationalizing banks. One recent example was an article in the Atlantic Magazine titled “The Quiet Coup.” It turns out the author is from the International Monetary Fund with experience from international financial crises. He writes nationalization would not mean permanent state ownership. “It would allow the government to wipe out bank shareholders, replace failed management clean up the balance sheets, and then sell the banks back to a private sector.”
Nationalization does not solve one problem that could not be solved without it. America has to have a banking system and wiping out one to replace it with another does nothing to address the political causes of the banking crisis. America’s bankers played the central role in creating America’s banking crisis, but their influence continues to prevent the reforms that are needed.
Bankers and the financial community gained extra political power beginning in the Reagan administration, but continuing through the Clinton years and to the present. Congress slowly changed or abandoned regulatory protections that began as far back as 1933 with the Glass-Steagall Banking Act.
America’s banking regulations previously recognized the unique and paramount responsibility of commercial banks. That is to provide customers with checking account services and guarantee reserves are available to pay on customer checks. Congress passed the Glass-Steagall Act to prohibit commercial banks from diversification into other financial services such as using loanable funds to underwrite corporate security offerings.
In 1933 Congress feared a bank’s security offerings department would pressure the bank’s lending department to take risks that could lead to bank failure. They feared banks could manipulate stock prices or pressure their loan customers to buy stock offerings, or take control of other non-financial corporations.
By the 1980’s and 1990’s, the relentless pressure of financial groups and plenty of campaign contributions turned caution into compliance; Congress allowed banks to diversify and consolidate into giant risk takers too big to fail.
Million bought bank stocks because banks will never be obsolete and they had the reputation of being steady, safe and conservative investments paying steady but modest dividends. Even without nationalization those millions have lost dividend income that will never be recovered and 50 to 90 percent of stock value. Those same millions had nothing to do with the gambling and risk taking of the banks they supposedly own but do not control.
Wiping them out with no further chance to recover some of their losses is unfair but also unnecessary. The so-called toxic assets will have to be written off with or without nationalization. Reserves will have to be restored to the banking system with or without nationalization. Nationalization does not reform the banking laws but just starts the whole thing over. Nationalization does nothing to encourage anyone to invest in banks, ever.
We can be thankful the Obama Administration has been resisting these calls. We hope they continue and we hope they will get around to proposing the necessary return to cautious banking practices. Perhaps the time is not right in their political judgment. We will wait, but in the mean time nationalizing banks is a loser.
Friday, May 29, 2009
Snowball
The SnowBall: Warren Buffett and the Business of Life, by Alice Schroeder, (New York: Bantam Dell Books, 2008), 837 pages, $35.00.
The Snowball begins in 1999 at a Sun Valley conference: an annual series of discussions and seminars. We hear a new term “elephant-bumping,” a quip defined by Buffett as getting big shots together to reassure them they are really big shots. Readers begin by meeting Buffett at retirement age and get the highlights of his conference presentation, where he confronts the big shots with some financial ideas they do not all want to hear.
Following the introduction the book chronicles Buffett’s life and career from the beginning in 1930 through September 2008. His father, Howard Buffett, was a successful stockbroker in depression era Omaha where Buffett grew up delivering papers and collecting stamps. He purchased his first stock in the spring of 1942: 3 shares of Cities Service Preferred.
Buffet graduated from Woodrow Wilson High School in Washington, DC, where he lived and spent most of his time after his father was elected to Congress in November 1942. We hear about his Washington life and go with him for his two years at the University of Pennsylvania, but then back to Nebraska where he finished college at the University of Nebraska.
It is about this time readers get the strongest whiff of the Buffett obsession with money making as a competition in itself. He was turned down at Harvard Business School but gets a special late admission to Columbia to study finance and stock analysis under Benjamin Graham and others well known in Security Analysis.
His business studies at Columbia turned out to be a transition into his lifelong career in investing. By the time he took a job on August 2, 1954 with the Graham-Newman investment partnership in New York he already had considerable knowledge and experience despite his young age of 24.
At Graham-Newman he studied Standard and Poors and Moody’s manual looking for companies his mentor, Ben Graham called Cigar butts. Cigar butts Graham defined as cheap and unloved stocks that had been cast aside like the sticky mashed stub of a stogie left on the sidewalk; a stogie that might have one last free puff.
One example turned out to be a company run as a pubic utility in New Bedford Massachusetts called the Union Street Railway. His review of the company showed it was selling for half the value of its cash in the bank. It was a real cigar butt but there would be more.
After several years Graham and Newman retired and the Graham-Newman partnership was shut down. Buffett decided to form his own partnership, which started May 1, 1956 as Buffett Associates, Ltd. It was set up as an investment partnership based in, and operated from, Omaha, Nebraska and not New York city. He had seven partners.
The author’s discussion of the partnership begins on page 201. The remaining 636 pages describe Buffett’s businesses, his investments and investment strategies over 53 years. We learn about Berkshire-Hathaway, GEICO, Kay Graham and the Washington Post and all his well known and not so well known investments, but there is much more in what is a very long book.
Business principles surface through pithy slogans and aphorisms and sometimes by example. He was one of the first to warn about, and object to, the use of derivatives and other speculations. He got to see how correct he was when he worked to rescue Salomon Brothers and Long Term Capital Management. He avoided leverage and the risk that goes with it. He was never a passive investor, but exerted his influence directly and by finding the right people to manage the companies he acquired.
Buffett sayings: Rule number one, don’t lose money. Rule number two, don’t forget rule number one. Rule number three, don’t go in to debt. There are more rules and principles.
Business issues and career decisions mix through the book with long narrative discussions of family members and their personal lives: relationships, careers and interests. Readers meet many business and personal friends, often with lengthy asides and narrative profiles. Readers go to parties and travel to many places. We learn Warren Buffet has simple tastes and the culinary habits of an eight year old, along with other personal matters.
Direct quotes from the author’s interviews run through the book and they are set in italics, an especially good feature. These interviews help the reader to understand the philosophy and strategies that brought personal and financial success. Extensive quotations from interviews let readers do more of their own interpretation unfiltered by the author.
His political views and social attitudes emerge in both the narrative and quotations. He supported civil rights when it mattered the most and progressive politics generally. He turned into a vocal opponent of the Bush tax policies and especially opposes eliminating the estate tax.
Throughout the book the author kept giving financial progress reports even from Buffett’s early years in Omaha. She wrote now Warren has $120; now Warren has $2 billion; now Warren has $7 billion and so on. It was unnecessary at least for me. I did not read the book to be counting money I wanted to learn something about a man who did something unusual that virtually no one else has ever done.
By the end of the book I felt the success of someone who is patient enough, cautious enough, hard working enough and savvy enough to do something extraordinary that he set out to do, and without losing his ethical compass. In an age of speculative failures where rogues and scoundrels are everywhere that makes him a unique success, at least in my book.
The Snowball begins in 1999 at a Sun Valley conference: an annual series of discussions and seminars. We hear a new term “elephant-bumping,” a quip defined by Buffett as getting big shots together to reassure them they are really big shots. Readers begin by meeting Buffett at retirement age and get the highlights of his conference presentation, where he confronts the big shots with some financial ideas they do not all want to hear.
Following the introduction the book chronicles Buffett’s life and career from the beginning in 1930 through September 2008. His father, Howard Buffett, was a successful stockbroker in depression era Omaha where Buffett grew up delivering papers and collecting stamps. He purchased his first stock in the spring of 1942: 3 shares of Cities Service Preferred.
Buffet graduated from Woodrow Wilson High School in Washington, DC, where he lived and spent most of his time after his father was elected to Congress in November 1942. We hear about his Washington life and go with him for his two years at the University of Pennsylvania, but then back to Nebraska where he finished college at the University of Nebraska.
It is about this time readers get the strongest whiff of the Buffett obsession with money making as a competition in itself. He was turned down at Harvard Business School but gets a special late admission to Columbia to study finance and stock analysis under Benjamin Graham and others well known in Security Analysis.
His business studies at Columbia turned out to be a transition into his lifelong career in investing. By the time he took a job on August 2, 1954 with the Graham-Newman investment partnership in New York he already had considerable knowledge and experience despite his young age of 24.
At Graham-Newman he studied Standard and Poors and Moody’s manual looking for companies his mentor, Ben Graham called Cigar butts. Cigar butts Graham defined as cheap and unloved stocks that had been cast aside like the sticky mashed stub of a stogie left on the sidewalk; a stogie that might have one last free puff.
One example turned out to be a company run as a pubic utility in New Bedford Massachusetts called the Union Street Railway. His review of the company showed it was selling for half the value of its cash in the bank. It was a real cigar butt but there would be more.
After several years Graham and Newman retired and the Graham-Newman partnership was shut down. Buffett decided to form his own partnership, which started May 1, 1956 as Buffett Associates, Ltd. It was set up as an investment partnership based in, and operated from, Omaha, Nebraska and not New York city. He had seven partners.
The author’s discussion of the partnership begins on page 201. The remaining 636 pages describe Buffett’s businesses, his investments and investment strategies over 53 years. We learn about Berkshire-Hathaway, GEICO, Kay Graham and the Washington Post and all his well known and not so well known investments, but there is much more in what is a very long book.
Business principles surface through pithy slogans and aphorisms and sometimes by example. He was one of the first to warn about, and object to, the use of derivatives and other speculations. He got to see how correct he was when he worked to rescue Salomon Brothers and Long Term Capital Management. He avoided leverage and the risk that goes with it. He was never a passive investor, but exerted his influence directly and by finding the right people to manage the companies he acquired.
Buffett sayings: Rule number one, don’t lose money. Rule number two, don’t forget rule number one. Rule number three, don’t go in to debt. There are more rules and principles.
Business issues and career decisions mix through the book with long narrative discussions of family members and their personal lives: relationships, careers and interests. Readers meet many business and personal friends, often with lengthy asides and narrative profiles. Readers go to parties and travel to many places. We learn Warren Buffet has simple tastes and the culinary habits of an eight year old, along with other personal matters.
Direct quotes from the author’s interviews run through the book and they are set in italics, an especially good feature. These interviews help the reader to understand the philosophy and strategies that brought personal and financial success. Extensive quotations from interviews let readers do more of their own interpretation unfiltered by the author.
His political views and social attitudes emerge in both the narrative and quotations. He supported civil rights when it mattered the most and progressive politics generally. He turned into a vocal opponent of the Bush tax policies and especially opposes eliminating the estate tax.
Throughout the book the author kept giving financial progress reports even from Buffett’s early years in Omaha. She wrote now Warren has $120; now Warren has $2 billion; now Warren has $7 billion and so on. It was unnecessary at least for me. I did not read the book to be counting money I wanted to learn something about a man who did something unusual that virtually no one else has ever done.
By the end of the book I felt the success of someone who is patient enough, cautious enough, hard working enough and savvy enough to do something extraordinary that he set out to do, and without losing his ethical compass. In an age of speculative failures where rogues and scoundrels are everywhere that makes him a unique success, at least in my book.
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