Article 43

 

Sunday, January 15, 2012

Job Growth A Long Time Away

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If we add 200,000 jobs a month, will recovery take 7 years or 12 years?

By Ezra Klein
Washington Post
January 11, 2012

On Friday, we got the December jobs number: +200,000. Thats good, but NOT GOOD ENOUGH. I POSTED a graph from the HAMILTON PROJECT showing that, at that rate, the labor market wouldn’t recover till 2024.

But perhaps thats too pessimistic. The Economic Policy Institute took a look at the same numbers and concluded that a growth rate of 200,000 jobs per month would lead to a full recovery in seven years or so. That’s nothing to celebrate, but its better than the Hamilton Project’s estimate of 12 years. Its also a bit odd: Isn’t this a simple matter of taking job losses and dividing by monthly job gains? Well, no. The date of our eventual recovery depends on some crucial unknowables about the future of the American labor force.

I asked Heidi Shierholz, a labor economist at EPI, to explain how she got to seven years. “My method is really straightforward,” she e-mailed. “Assume an annual job growth rate of 1.8% (which is the annualized growth rate of the 200,000 we got last month) and given that growth rate, see how long it takes to get back to the December 2007 ratio of payroll to working-age population, (assuming the working-age population continues to grow as it has been growing recently).”

Note the assuming the working-age population continues to grow as it has been growing recently in Shierholz’s explanation. That’s about to become important.

Next, I asked Michael Greenstone, director of the Hamilton Project, how that equation could shave five years off the expected time it will take the labor market to recover. Their calculation assumes a lower growth rate in the labor force and hence fewer jobs needed to get back to normal.

Heres the issue: Before the recession, the economy needed to produce 120,000 jobs a month just to keep up with new entrants into the labor market. Lately, that number has been closer to 90,000. Part of this is that immigration has fallen and many immigrants are leaving. Part of it is that some workers are leaving the labor force җ either they cant find a job and have given up, or they have decided to stay home with the kids or focus on other pursuits rather than take the sort of jobs they can get right now.

The question is whether the growth of the labor force bounces back or holds steady. And it turns out, this question matters a lot. The table that Greenstone sent along shows how long it will take to reverse the jobs losses at different rates of payroll and employment growth. As you can see, if we’re adding 200,000 jobs a month, it will take almost twice as long to recover if were adding 125,000 workers a month rather than 90,000.

That said, this is a case where a longer recovery could mean a better recovery. If we continue growing at 90,000 jobs a month, it likely means that many of the long-term unemployed never made it back into the labor force, and that the economy is producing less than it otherwise could. It means, in other words, that the recovery is proving unable to reverse some of the deepest wounds inflicted by the recession. If we get catch-up growth in the labor market, that may push back the return of full employment, and it may even temporarily increase the unemployment rate, but it will mean we’re seeing a fuller recovery.

SOURCE

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2012 job market brightens, but unemployment won’t fall fast

By Paul Davidson and Barbara Hansen
USA Today
January 11, 2012

After nearly three years of unemployment, David Mote will be back at work next week, overseeing construction of a medical school building in Dothan, Ala.

Mote, whose $2,000 weekly salary was cut to $360 in unemployment benefits before he lost even that 10 months ago, can again contemplate going out for dinner and taking in a weekend football game. “It feels great,” says Mote, 52. “I’ve got a job. I got my (health) insurance back.”

His employer, Batson-Cook of Atlanta, called Mote back to work amid a surge in health care and apartment construction as young adults who had doubled up with relatives find jobs and move into their own homes.

After losing 2.2 million jobs in the economic downturn, the construction industry is projected to add 113,000 this year, more than doubling last year’s pace and placing it among the fastest-growing sectors, according to a 2012 job market forecast by Moody’s Analytics. Even a moderate rejuvenation of the troubled sector thanks largely to a multifamily building boom ח helps the economy because of its ripple effects across industries such as furniture, steel and concrete.

The job outlook has brightened the past two months as higher consumer spending, improved business confidence and a stock market rally have somewhat eased concerns about further shocks from Europe’s financial turmoil.

Strong job gains this year are crucial for President Obama’s re-election campaign. But many economists expect the unemployment rate 8.5% ח to remain above 8% this year possibly to his opponent’s advantage.

Economists recently surveyed by the Associated Press expect employers to add 2.1 million jobs in 2012, an average of 175,000 a month. That would top the monthly pace of 136,000 last year and 78,000 in 2010, though still fall short of the 250,000 to 300,000 needed to cut unemployment quickly. The USA has recovered just 2.6 million of the 8.8 million jobs lost in the recession.

“It’s not going to be a breakout year,” says Mark Zandi, chief economist of Moody’s Analytics. Moody’s projects job gains of about 130,000 a month ח about 1.6 million for the year in line with 2011.

Moody’s also predicts:

- Three categories - professional and business services, education and health care, and leisure and hospitality will lead job gains, collectively producing more than 1 million. The booming energy sector will also continue to hire.

- Sun Belt states hammered by the recession ח Florida, Arizona, Georgia and Nevada will rebound some as an easing of the foreclosure crisis lets homeowners move more easily. All four are projected to be among the 10 fastest-growing job markets.

- Rust Belt manufacturing bastions such as Illinois, Ohio and Indiana will generate jobs more slowly as the European financial crisis hampers exports.

Driving the improvement in overall job growth is a pickup in hiring and confidence among small businesses as banks modestly ease credit standards. Small firms, particularly start-ups, typically account for two-thirds of the new jobs created in a recovery. Also, productivity gains that have allowed companies to do more with fewer workers are slowing, government reports show.

“Small businesses are being more aggressive” than large ones, says consultant Harry Griendling of DoubleStar.

A wild card: The retirement of BABY BOOMERS could help TRIM the jobless rate even without blockbuster job growth, says Dean Maki, chief U.S. economist for Barclays Capital.

The optimism is heavily tinged by caution. Many experts expect payroll growth to slow the first half of the year amid an expected drop in exports and a pullback in consumer spending. With real income growth running at a tepid 1% annual rate, Americans had to dip into savings to fuel their holiday buying binge ח a trend that many analysts say can’t be sustained.

And many businesses are hesitant to ramp up hiring significantly amid lingering concerns about Europe’s debt crisis and a presidential election year that will leave battles over taxes and regulation unresolved.

A survey of 18,000 employers released last month by staffing giant Manpower underscores both buoyancy and prudence. Employers’ hiring outlook for the first quarter was at its highest since 2008. At the same time, the level of employers unsure of their hiring plans was the most since 2005.

Big companies cautious

Many large companies, in turn, are holding off on permanent hiring and relying heavily on CONTRACTORS and temporary workers to complete projects, says Janette Marx, senior vice president of staffing company Adecco. The good news: That’s fattening payrolls for third-party providers, such as engineering and accounting firms.

While big corporations are hiring cautiously, they’re sitting on record cash reserves and driving job growth more than consumers, who make up 70% of the economy but remain burdened by debt. Companies, for instance, are boosting travel budgets and shifting their computer software systems to remote, cloud-based networks.

The expenditures are forcing professional and business services to beef up staffing. Cleveland-based accounting firm Cohen & Co. is enlarging its 250-employee staff by about 10% this year as highly profitable corporations seek to reduce taxes, weigh mergers and navigate increasingly complex banking rules stemming from financial reform, says CEO Randall Myeroff.

Engineering firm Black & Veatch, of Kansas City, with about 6,000 U.S. employees, plans to add several hundred this year as utilities retrofit power plants to meet stricter pollution limits and smartphone carriers expand networks, says CEO Len Rodman. Yet that’s far less than the 1,000 U.S. employees the firm added last year. Rodman worries that electricity providers could rein in spending if the European crisis hurts their customers’ exports. “We have taken a conservative approach,” he says.

Health care providers are scrambling to meet the needs of an aging population. Philadelphia-based Genesis HealthCare, whose 40,000 employees provide rehab services in nursing homes in the Eastern U.S., is expanding to Arizona, New Mexico and Oklahoma, hiring 10,000 workers. “The Baby Boomers are getting older,” says Vice President Mike Guglielmo.

Hotels, meanwhile, are looking for bellhops, front desk clerks and maids as companies replenish travel budgets slashed in the recession and tourism picks up moderately. That’s a boon for Texas, where a population boom and business growth are feeding off each other. Joseph DePalma, president of DePalma Hotel Corp., says occupancy at his eight franchise hotels in Texas has risen to about 65% from 55% the past year. “Companies are back to traveling again,” he says. DePalma plans to increase his Texas staff of 1,200 by more than 100 this year.

Texas is again projected to top the nation in total job gains, with more than 200,000.

Meanwhile, North Dakota, home to one of the nation’s biggest untapped oil reserves, is expected to lead in the pace of job growth, at 2.8%. Continental Resources is adding 50 to 75 workers to its existing base of about 160 in the Bakken oil field as it drills about 240 new wells, says Chief Financial Officer John Hart. Much of the activity has been fueled by benchmark crude oil prices that have hovered around $100 a barrel. “I have a better return that enables me to take a risk,” Hart says.

The frenzy has turned North Dakota, with a population of 684,000, into a job hunter’s magnet that added 17,000 workers last year, a 4.5% gain. Continental’s recent advertisement for a computer specialist drew 518 applicants from as far away as South Africa.

Uneven job growth

Not every sector is expected to grow robustly. Retailers likely will pull back hiring as consumer spending moderates, according to the Moody’s study. State and local governments will continue to shed jobs amid budget constraints, though likely at a slower pace than last year. And factory payrolls could flatten or even contract slightly amid a slowdown in exports.

That could hurt Obama in four Rust Belt states that Moody’s says will grow jobs more slowly than the nation as a whole and that USA TODAY has identified as swing states that could vote Democratic or Republican in the election: Michigan, Ohio, Pennsylvania and Wisconsin. Yet other swing states Florida, Nevada, New Mexico and Colorado ח are projected to be among states generating jobs most rapidly.

Some manufacturers plan to add workers because they can’t wring more output from existing ones. Paulson Manufacturing in Temecula, Calif., laid off more than half its 220 employees in the recession, though revenue fell just 25%. The company, which makes face shields for industrial and public safety use, installed automated technology to boost efficiency and got more out of each worker, helping it increase profits, says CEO Roy Paulson.

But with sales expected to rise about 15% this year, Paulson plans to hire 12 to 15 employees.

“We might have worn out some of these people a little bit,” he says. If he forced his workers to shoulder a still bigger burden, “Worker compensation costs go up and your sick rate goes up.”

Even more encouraging: Small businesses which create an outsize share of jobs ח appear to be launching and expanding again. The number of establishments opening hit a record low of 1.1 million in 2011’s first quarter, the most recent data available, according to the Labor Department. But anecdotal evidence suggests the pace of business start-ups has increased lately, says Dane Stangler, research director for the Kauffman Foundation, which studies entrepreneurship. The International Franchise Association expects the number of U.S. franchise locations to rise 2% this year after dipping three years in a row.

Franchise company Driven Brands, which owns Meineke and Maaco, sold more franchise licenses in November than in the past five years combined, says CEO Ken Walker. “We are beginning to get businesses financed,” he says.

Franchisee Stephen Keel, who owns a Maaco auto body outlet in Catonsville, Md., sought for a year to move it to nearby Randallstown and add a Meineke auto repair shop at the new site. But he couldn’t get a $1.7 million loan from seven banks despite a $2.2 million appraisal of his planned new land and building. Recently, he snared a loan from Susquehanna Bank and plans to add four to seven workers to his 12-employee staff after he opens the new location in April.

“I was tickled to death,” Keel says. “It was a very long, dreadful, painful process.”

SOURCE

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Forecast 2012 Small gains ahead, but no leaps and bounds for region’s economy

By Jim Stratton
Orlando Sentinel
January 8, 2012

At the very least, no one will ever accuse Central Florida’s economic recovery of being too flashy.

It has flown largely below the radar, at times imperceptible to most everyone except the data crunchers and forecasters paid to track changes in the region’s financial performance.

Its progress has been excruciatingly slow and spotty, with improving indicators in one area often muddied by declines in another. But there has, in fact, been forward movement - and in 2012 that’s expected to continue.

Just not at a pace that’s going to get anyone too excited.

“We think the overall economy will grow a little bit more rapidly in 2012,” said Mark Vitner, a senior economist with Wells Fargo. “But it’s not going to be typical of what we were accustomed to in Florida.”

First, a few numbers to recap Metro Orlando’s decidedly modest gains of 2011:

The average annual unemployment rate declined to 10.3 percent, down more than 1 percentage point from 2010, according to the University of Central Florida’s annual economic forecast. The year-end jobless rate was 10 percent.

Total personal income grew by 4.7 percent, and total employment increased by 1.3 percent.

Housing starts - while still puny by Central Florida standards rose 28 percent to about 6,400.

Analysts and business owners expect more of the same for the year ahead, especially when it comes to unemployment. The single-most salient measure of most people’s economic well-being faces a healing process measured in years, not months.

UCF predicts it will take until the fourth quarter of 2014 before the statewide jobless rate falls below 9 percent. For Metro Orlando, unemployment is forecast to average 9.7 percent this year.

“There’s been a lot of damage,” said UCF economist Sean Snaith. “It’s going to take time to repair that.”

In part, that’s simply a function of math.

Since 2007 - the region’s peak employment period almost 90,000 jobs have been eliminated in metro area. Even if employers began adding jobs at boom-time rates, it would take until 2014 or 2015 to replace those lost during the bust.

Statewide, the numbers are just as ugly.

Job growth in 2012 is forecast to come in at 1.8 percent, according to UCF forecasters. And no one should be surprised if the monthly jobless rate rises a bit as workers who had given up looking for jobs - and consequently aren’t counted as “unemployed” plunge back into the labor pool.

“The size of the labor force is a huge wild card,” Snaith wrote in the UCF forecast.

Job growth will drive virtually every political campaign in the state as Florida rumbles toward the 2012 elections. It will also affect the popularity of Gov. Rick Scott, who won’t be up for re-election until 2014.

Scott has touted recent numbers, pointing to almost 135,000 private-sector jobs created since he took office. When government job losses are factored in, Florida is up a total of 120,000 new jobs.

Scott recently said the state was moving “in the right direction” by reducing the size of government and eliminating regulations.

“I am hopeful,” he said, “that we will see Florida’s unemployment rate continue to decline as jobs grow and more Floridians find work.”

That’s likely to happen only when the state’s real-estate market finally finds its footing. Jobs and real estate are inextricably linked, and the state’s housing collapse is largely to blame for the severity of its recession and its sluggish recovery.

Heading into 2012, analysts forecast a slow increase in existing home prices here and across the state. Housing starts are expected to pick up, but only marginally. That means there won’t be waves of new hiring in the construction sector ח a field that during the fat times provided solid middle-class incomes to tens of thousands of blue-collar workers.

The job losses in construction have been stunning. In 2006, more than 91,000 people in Metro Orlando made a living in the field. Today, the number is roughly half that.

Brian Butler, board chairman of Central Florida’s Associated Builders and Contractors, said he’s begun to see more projects, mostly commercial, go out to bid in recent months. But progress is incremental and Butler, owner of JCB Construction, still has to furlough workers until the next job comes along.

“We’ll know things have gotten better,” he said, “when we lose a person or two because they’ve gotten on somewhere else.”

Analysts say the sector will eventually rebound, but, for now, that prospect seems like a fuzzy image in the distance.

“The long-suffering construction sector still has another five quarters of job losses before it too joins in the labor market’s recovery,” the UCF forecast predicts. “Job growth will not return to the construction sector until the second quarter of 2013.”

The retail sector expects another tough year too. Despite a solid holiday season, analysts think middle-class Floridians will remain cautious in 2012 even as well-to-do consumers spend more freely. In part, that reflects continued skittishness over job security and concern about wealth lost to the real estate bust.

Rollins College economist Bill Seyfried expects consumers to pull back a bit in the first part of 2012. The recent uptick in spending outpaced income growth, he said, so he thinks Floridians will try to put more into savings.

With construction and retail still lagging, Central Florida’s tourism industry will be forced to carry the economic load. Fortunately, it’s expected to post respectable numbers.

Visit Orlando expects tourism will grow by 1.8 percent with more than 54 million people coming to the area. International tourism will rise by more than 4 percent.

All bets are off, though, if the European debt crisis can’t be contained. A collapse of the euro would rattle markets here undermining much of the progress such as it is - of the last year. A default by a major European bank or much worse - a country, could bring on another financial crisis, freezing global credit.

“That would set off shock waves,” Snaith said. “It could knock us back into a recession.”

SOURCE

Posted by Elvis on 01/15/12 •
Section Dying America • Section Next Recession, Next Depression
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Recipe For Voting Fraud

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Global Internet Voting Firm Buys US Election Results Reporting Firm

By Bev Harris
Black Box Voting
January 12, 2012

In a major step towards global centralization of election processes, the world’s dominant Internet voting company has purchased the USA’s dominant election results reporting company.

When you view your local or state election results on the Internet, on portals which often appear to be owned by the county elections division, in over 525 US jurisdictions you are actually redirected to a private corporate site controlled by SOE software, which operates under the name ClarityElections.com.

The good news is that this firm promptly reports precinct-level detail in downloadable spreadsheet format. As reported by BlackBoxVoting.org in 2008, the bad news is that this centralizes one middleman access point for over 525 jurisdictions in AL, AZ, CA, CO, DC, FL, KY, MI, KS, IL, IN, NC, NM, MN, NY, SC, TX, UT, WA. And growing.

As local election results funnel through SOE’s servers (typically before they reach the public elsewhere), those who run the computer servers for SOE essentially get “first look” at results and the ability to immediately and privately examine vote details throughout the USA.

In 2004, many Americans were justifiably concerned when, days before the presidential election, Ohio Secretary of State Ken Blackwell redirected Ohio election night results through the Tennessee-based server for several national Republican Party operations.

This is worse: This redirects results reporting to a centralized privately held server which is not just for Ohio, but national; not just USA-based, but global.

A mitigation against fraud by SOE insiders has been the separation of voting machine systems from the SOE results reports. Because most US jurisdictions require posting evidence of results from each voting machine at the precinct, public citizens can organize to examine these results to compare with SOE results. Black Box Voting spearheaded a national citizen action to videotape / photograph these poll tapes in 2008.

With the merger of SOE and SCYTL, that won’t work (if SCYTL’s voting system is used). When there are two truly independent sources of information, the public can perform its own “audit” by matching one number against the other.

These two independent sources, however, will now be merged into one single source: an Internet voting system controlled by SCYTL, with a results reporting system also controlled by SCYTL.

With SCYTL internet voting, there will be no ballots. No physical evidence. No chain of custody. No way for the public to authenticate who actually cast the votes, chain of custody, or the count.

SCYTL is moving into or already running elections in: the United Kingdom, France, Canada, Norway, Switzerland, United Arab Emirates, South Africa, India and Australia.

SCYTL is based in Barcelona; its funding comes from international venture capital funds including Nauta Capital, Balderton Capital and Spinnaker.

Here is the LINK to the press release regarding SYCTL’s acquisition of SOE.

SOURCE

Posted by Elvis on 01/15/12 •
Section Privacy And Rights
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