Getting jobbed on jobs

To hear some tell it, one month of happy job news is the end of all economic woes. I even heard one pundit say it was something approaching the end of John Kerry's ability to use the economy as an issue.

Well, to be sure, there was some good news.

The economy added 308,000 jobs in March, the Labor Department estimated, pulling out of a pattern of tepid employment growth to clock the largest number of new jobs in a single month since April 2000. ...

"There is only a silver lining," said Mickey Levy, chief economist at Banc of America Securities. "There are very few gray clouds."

In addition, the Department of Labor revised its estimate of job creation in January and February to a combined 205,000. The average monthly job growth in the first quarter of the year worked out to about 171,000, the best in nearly four years.

However, when you look a little deeper, it becomes clear that Levy's enthusiasm should not be so unbridled.

First, unemployment, measured by a different survey, also rose slightly, from 5.6% to 5.7%. (Not surprisingly, that was dismissed as irrelevant by the same sorts of voices that in previous months were telling us that slow job growth was not a problem because after all, unemployment was not rising.)

Second, even with the upswing, job creation remains extremely slow by historical standards. After the last serious recession in the early 1990s, it took 14 months for job numbers to return to their pre-recession levels. It's now 28 months since the official end of the last recession in November 2001 and we're still nowhere near back where we were.

And despite those recent increases, we're still 1.8 million jobs short of where we were when Bush took office. It would take six more months of unbroken growth at the same rate as March just to get back to where we'd been nearly three years before. And even that wouldn't really be a recovery, since roughly 140,000-150,000 new jobs are needed per month to accommodate population (and thus labor force) growth. That is, we'd have the same number of jobs available as in November 2001 - but with three years' growth in the labor force.

There were other "grey clouds" as well.

According to the household survey, almost 24 percent of all the people listed as jobless have been unemployed for at least half a year, a full percentage point above the level in February and the highest level since July 1983, when unemployment soared to 9.3 percent.

At the same time, the average workweek of nonsupervisory workers slipped by 0.1 hour, to 33.7 hours. And average weekly earnings fell by 0.2 percent over the month to $523.70 — barely 1.8 percent higher than it was a year ago. [Which was about the same as the inflation rate; that is, real wages basically went nowhere.]

Indeed, despite the employment increase, the index of aggregate weekly hours of production or nonsupervisory workers — which measures the aggregate amount of work outside of farms in the private sector — fell by 0.1 percentage point in March to 99 percent.

Now, if jobs are up but if the average workweek, average weekly earnings, and the aggregate amount of weekly work are all down, doesn't that indicate either that a lot of these new jobs are part-time or that a lot of existing full-time jobs have been turned into part-time ones? Does the payroll survey distinguish full-time from part-time jobs?

The jobs report, I expect, is giving accurate numbers based on its survey, but it seems to me that the reportage includes a hell of a lot of inc-spin that makes things sound much better than they are. ("Inc-spin" is a term I just made up. It's short for "incompetence spin" and it refers to that sort of unintentional spin that arises when members of the media simply act as stenographers to official reports instead of analyzing what they get and putting it into a larger context. That is, they're not consciously spinning, but the result of their incompetence and/or laziness is to produce spin anyway.)

Of course, beyond the inc-spin there was real spin. For example, N. Gregory Mankiw, chairman of the President's Council,

argued that President Bush's tax cuts had been vital to stabilizing the economy in recent years, suggesting that raising taxes, as Senator Kerry has proposed to do for people on the highest incomes, could derail the employment recovery. "The key is not to reverse course," Mr. Mankiw said. "We should not reverse the tax cuts but make them permanent."

Reading that reminded me of the early years of the Reagan administration, when after initially promising Reaganomics would produce an "immediate" improvement in the economy they kept pushing the "start date" back further and further as things went from bad to worse. At one point, I noted that they were creating a built-in excuse: So long as the economy remained in the dumps, they would say the effect hasn't set in yet. "The economy improves at any point in the future," I wrote, "and they say 'see, it worked.'" So it is, it seems, with Bush's welfare for the rich tax schemes.

On the other hand, the DNC claim that if we just elect John Kerry everything will be fine and 10 million jobs will appear by virtue of the sheer dynamism of his administration is an equally empty claim.

The lack of jobs - and more, the lack of good jobs - is neither because of nor in spite of Bush's tax plans and the same would be true of a Kerry White House. The lack of jobs is because corporations don't want to pay people. They want profits, not expenses, and as long as they can increase revenue without increasing payroll that's exactly what they'll do.

Washington, March 30 (Reuters) - U.S. corporate profits are on the upswing but firms have squeezed wages like never before, and some economists fear excluding workers from the recovery could undermine economic growth.

Wage growth normally slows during, and in the wake of, a recession as high unemployment gives companies more bargaining strength and enables them to raise productivity.

But the pull-back is bigger this time, in part because U.S. workers' ability to negotiate has been sapped by foreign competition and the outsourcing of U.S. jobs. And in the long run, this could undermine consumer spending. ...

The culprit is soaring productivity, as new technology enables firms to boost output without adding workers. Hourly worker output grew 9.5 percent in the third quarter last year and a still-strong 2.6 percent in the fourth.

Of course, back in the 80s and 90s we were being told that the lack of wage increases was because of slow productivity growth; now we're being told that the lack of jobs is because of high productivity growth. In short, in previous years we were being told to do what would wind up cutting our own throats later on. Right now, after-tax corporate profits are at 14.8% of Gross Domestic Product, the highest ever. But the jobs still aren't there.

Is anyone surprised by this?

The fact is, the only way this cycle of ratcheting up the pressure on our living standards with every flicker of the economy is going to be broken is to take on the corporations directly. No tinkering with the tax code, no "incentive package to keep jobs at home," no promise to "enforce the rules" is going to make more than the smallest difference as long as the rules we're going to "toughly enforce" are written by the corporations themselves.

The major parties are both in hock to corporate America - or, more accurately in these days of "integrated global economy" buzzphrases, corporate Transnational - to a degree that renders them incapable of more than slowing the decline of our living standards, even assuming the best of intentions. Which I don't.

I refuse to get into one of those time-wasting, idiotic, self-defeating debates about who's "worse." I'm not saying that there is no difference at all between the proposals of George Bush and John Kerry. In fact, I'll even say that given the narrow confines within which they think, Kerry's are clearly better: Bush's will accelerate the long-term decline, Kerry's will slow it. But neither will stop it. So no, I'm not saying there is no difference, but I am saying that Kerry no more than Bush solves the basic problem of shrinking presents and shriveling futures and that while Bush wants to hand the government over to corporate America outright, Kerry relies on using what amount to public subsidies to encourage Big Business to "do the right thing." And in the longer run, that's still playing the game by the corporations' rules, making it a game we can't win.

You want me to get excited about a candidate with a long-term view of our economic future? Show me one who for a start

- supports universal, single-payer health care and endorses adequate housing and productive work as human rights.
- supports some form of guaranteed national income (That's a .pdf file; you can view it as .html here.) - sometimes known as a "social wage."
- opposes globalization, and I don't mean just wants to add a few codicils making nice about labor rights and the environment but I do mean including shutting down the FTAA talks and withdrawing from NAFTA and the WTO.
- supports economic development in poor nations by supporting domestic (that is, domestic to those nations) economic and technological development with a focus on "appropriate-level technology."
- supports a "corporate responsibility law" that would, as I put it when I proposed such a law back in 1980, state that "corporations are civilly, and their officers civilly and criminally, liable for actions they knowingly take and policies they knowingly pursue," and openly advocates a "corporate death penalty" for sufficiently criminal behavior, that is, revoking its charter, firing its officers and Board of Directors, and placing it into receivership.

That would get me interested. Utopian, you say? Too radical, you say? Never get adopted, you say? That just shows how far in the hole we are and who is actually in charge of our economic futures.

Spinning the Spin Dept.: Randall Kroszner, a former member of President George W. Bush's Council of Economic Advisers, says it's true that the share of income going to labor has dropped compared to that going to capital - that is, more of the value produced by the economy is going to investors and bankers and less to workers.

But he said corporate bias toward profits was necessary because companies would not invest without being confident of making profits.

"You can't be certain of the recovery until you see robust business investment ... Ultimately, this will be good for labor because as you get more investment, labor works with the new capital and wages go up in the long-term," he said.

William Poole, President of the St. Louis Fed, took a similar line, telling reporters last Thursday a profit surge boosts investment and beefs up corporate cash flow.

"Good corporate cash-flows means corporates are not raising large amounts in financial markets and that of course is part of the reason that interest rates remain relatively low which feeds back ... to help support the household sector," he said.

In other words, having no jobs and no wage growth is actually a good thing for us.

That makes it all clear. Thank you, gentlemen.

Addendum One: From Daily News Online, quoting an AP story for April 5:

The share of the U.S. population working or actively seeking a job has fallen to 65.9 percent, the lowest level in 16 years. ...

If those people who want jobs but aren't looking were counted, the unemployment rate would be more than 7 percent, said Mark Zandi, chief economist at Economy.com. "To me, that is much more representative of the state of the job market," he said. "It doesn't feel like a 5.6 percent job market. It feels like more of a 7 or a 7 and a half percent job market."

Addendum Two: Again from DNO, this time quoting a story from CNNMoney, again from Monday:

More than 60% of U.S. corporations didn't pay any federal taxes for 1996 through 2000, years when the economy boomed and corporate profits soared, Tuesday's Wall Street Journal reported, citing the investigative arm of Congress.

The disclosures from the General Accounting Office are certain to fuel the debate over corporate tax payments in the presidential campaign. Corporate tax receipts have shrunk markedly as a share of overall federal revenue in recent years, and were particularly depressed when the economy soured. By 2003, they had fallen to just 7.4% of overall federal receipts, the lowest rate since 1983, and the second-lowest rate since 1934, federal budget officials say.

But remember, it's all for your own good.