Saturday, June 7, 2014

Saturday Morning Reading Room: The Jobs Report

Saturday mornings are my favorite time of the week.  I get up early and have the whole house to myself.

Here's what's caught my eye:

217,000 Jobs Added, Nudging Payrolls to Levels Before the Crisis (NY Times)
"Em­ploy­ers hired 217,000 work­ers in May, the La­bor De­part­ment re­port­ed on Fri­day, enough to fi­nal­ly lift to­tal pay­rolls above where they were be­fore the fi­nan­cial col­lapse near­ly six years ago...  

For the fourth con­sec­u­tive month... em­ploy­ers added more than 200,000 po­si­tions, the first time that has hap­pened in 14 years."

We now have the same number of jobs we did back before the financial meltdown in 2008, but the country's population has increased by 15 million.  The unemployment rate has fallen to 6.3%, but the labor participation rate is still stuck at 62.8%--about where it was in the 1970s.  That's good news if you want to see a lot of stay-at-home moms and dads.  It's not so good if you're a young person trying to get a job that pays more than $15/hour.

The labor market moves according to supply and demand.  Despite low figures on unemployment, there's still quite a lot of excess capacity in the market--as seen in the participation rate--and that makes it a buyers' market for those looking to hire cheap labor.  Sellers (i.e. workers) have to sort of take what they can get in terms of prices (i.e. wages).  The country has seen a surge in corporate profits, but until that translates to tougher supply conditions in the labor market, real wages will stay stagnant for all but a few Americans in select industries.

The good news is that wages are rising in China, and that's driving manufacturing back to the Western Hemisphere, mostly to Mexico.  This not only simplifies logistics, it also tightens the labor market for the entire NAFTA region.  Add this to the development of cheap domestic natural gas, and you have the makings of a real, prolonged economic resurgence.  I'm not sure it's gonna help Europe, but Mexico, Canada, and America look to be in decent shape for the next few decades.

We still have to deal with the costs of the Baby Boomers leaving the labor force, however, and those costs may be significant.  America and Canada are jointly blessed by a culture that accepts newcomers and offers hope, and in the best possible world, immigrants make up for the shortfall created by Boomers retiring and help pay our Social Security costs without depressing wages, especially for skilled positions.  I'd personally argue that wages are depressed by outsourcing more than by immigration, however, so if you're asking me, I say, "Give me your tired, your poor, your huddled masses yearning to breathe free..."

That's America.  We get away from that at our peril.

"Petro Olek­siy­ovych Poroshenko, a pro-Eu­ro­pean, bil­lion­aire con­fec­tion­er, was sworn in as the fifth pres­i­dent of Ukraine on Sat­ur­day."

He may be nominally pro-Europe, but he is also fully acceptable to the Kremlin.  This is why the Russian Army backed off, and why Putin threw the Ukranian Separatists to the wolves a few weeks ago.

"The cries of protest have been fierce, warn­ing that Pres­i­dent Oba­ma’s plan to cut green­house gas­es from pow­er plants will bring soar­ing elec­tric­i­ty bills and even plunge the na­tion in­to black­outs. By the time the ad­min­is­tra­tion is fin­ished, one promi­nent crit­ic said, 'mil­lions of Amer­i­cans will be freez­ing in the dark.'

Yet cuts on the scale Mr. Oba­ma is call­ing for — a 30 per­cent re­duc­tion in emis­sions from the na­tion’s elec­tric­i­ty in­dus­try by 2030 — have al­ready been ac­com­plished in parts of the coun­try."

What follows is my personal opinion:
This issue has seen excellent hyperbole on both sides.  These "cuts" are 30% from 2005 levels, which means that other regulations have caused most of them to happen already.  I would personally prefer to cut other types of emissions, especially SO2 and mercury, because those are more pressing health concerns and because cutting those will achieve the same purpose but in a way that is more broadly acceptable to the scientific and political communities.  However, the only people who ever ask me about it are people who already live and work in a state that has been moving in that direction for decades.


Heather R is my new favorite follow on Twitter.  She doesn't draw these, she just digs them up.

Respect the epic battle of unicorn versus dragon.  We get so cozy thinking of unicorns belonging only on t-shirts for little girls.  The unicorn is a deadly creature of fey origin.


Have I mentioned that I'm up to 88 followers?  I need 12 more. 

That's your cue to follow me.  Do it now.

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