Article 43
Wednesday, October 30, 2013
Ignored Reality
The impending credit crisis cant be avoided, but it could be mitigated by taking radical steps to soften the blow. Emergency changes to the federal tax code could put more money in the hands of maxed-out consumers and keep the economy sputtering along while efforts are made to curtail the ruinous trade deficit. We should eliminate the Social Security tax for any couple making under $60, 000 per year and restore the 1953 tax-brackets for Americans highest earners so that the upper 1%-- who have benefited the most from the years of prosperity---will be required to pay 93% of all earnings above the first $1 million income. At the same time, corporate profits should be taxed at a flat 35%, while capital gains should be locked in at 35%. No loopholes. No exceptions.
Congress should initiate a program of incentives for reopening American factories and provide generous subsidies to rebuild US manufacturing. The emphasis should be on reestablishing a competitive market for US exports while developing the new technologies which will address the imminent problems of environmental degradation, global warming, peak oil, overpopulation, resource scarcity, disease and food production. Off-shoring of American jobs should be penalized by tariffs levied against the offending industries.
The oil and natural gas industries should be nationalized with the profits earmarked for vocational training, free college tuition, universal health care and improvements to then nations infrastructure.
- Mike Whitney, August, 2007“I’m challenging CEOs from some of America’s best companies to hire more Americans who’ve got what it takes to fill that job opening, but have been laid off so long no one will give their resume an honest look.”
- Pressident Obama, July, 2013
Ignored Reality Is Going To Wipe Out The Human Race
By Paul Craig Roberts
October 28, 2013
To inform people is hard slugging. Everything is lined up against the public being informed, or the policymakers for that matter. News is contaminated by its service to special interests and hidden agendas. Many scientists or their employers are dependent on federal money. Even psychologists and anthropologists were roped into the governments torture and occupation programs. Economists tell lies for corporations and Wall Street. Plant and soil scientists tell lies for agribusiness and Monsanto. Truth tellers are slandered and persecuted. However, persistence can eventually win out. In the long-run, truth sometimes emerges. But not always. And not always in time.
I have been trying to inform the American people, economists, and policymakers for more than a decade about the adverse impacts of jobs offshoring on the US economy. The word has eventually gotten out. Last week I was contacted by 8th grade students competing for their school in CSPANs StudentCam Documentary Contest. They want to interview me on the subject of jobs offshoring for their documentary film.
America is a strange place. Here are eighth graders far ahead of the economics profession, the President, the Congress, the Federal Reserve, Wall Street, and the financial press in their understanding of one of the fundamental problems of the US economy. Yet, people say the public schools are failing. Obviously, not the one whose students contacted me.
Is it too late? I know much, but not all. So this is not the final word. I think it might be too late. When SKILLED JOBS ARE SENT ABROAD, the skills disappear at home. So do the supply chains and the businesses associated with the skills. Things close down, and abilities are lost. Why take a major in college for a job that is offshored. A culture disappears.
But we can start them back up, right? Perhaps not. When a First World country exports its technology and know-how abroad to a Third World country in order to benefit from lower cost labor, how does the First World country get the work back? Living standards and the cost of living in Third World countries are much lower than in First World countries. The populations of First World countries cannot pay their mortgages, car payments, student loans, medical care, and grocery bills with the wages of Third World countries.
When First World wages drop, mortgage, car, credit card, and student loan payments do not drop. Americans cannot live on Chinese, Indian, and Indonesian wages. Once the technology and know-how IS TRANSFERRED, the low wage country has the advantage in the absence of tariff protection.
For America to revive, our economy would have to be walled off with high tariffs, and subsidies would have to be provided in order to recreate US industry and manufacturing. But many corporations now produce offshore, and America is broke. The government has been $1 trillion dollars in the hole each year for the last 5 years.
Jobs offshoring diminished the US tax base. When a job is sent abroad, so is that job’s contribution to US GDP and tax base. When millions of jobs are sent abroad, US GDP and tax base cannot support government spending levels. To the extent that there are any replacement jobs, they are in lowly paid domestic services, such as waitresses, bartenders, retail clerks, and hospital orderlies. These jobs do not provide a tax base or consumer spending power comparable to manufacturing jobs and tradable professional services such as software engineering and information technology.
Republicans and increasingly Democrats, as both parties are dependent on the same sources of campaign contributions, blame “entitlements.” By entitlements they mean welfare.</b>
In fact, entitlements consist of Social Security and Medicare. Entitlements are funded by the payroll tax, approximately 15% of payroll. The fact that a person pays the payroll tax all his working life is why the person is entitled to Social Security and Medicare if they live to retirement age. Welfare, such as food stamps and housing subsidies, are a small part of the federal budget and are not entitlements.
Every since President Reagan was betrayed three decades ago by Alan Greenspan and David Stockman, both of whom sold out to Wall Street and raised the Social Security payroll tax above what was needed to pay Social Security benefits in order to protect Wall Streets stock and bond portfolios from exaggerated deficit fears, Social Security payroll tax revenues have exceeded Social Security payments. As of today, Social Security revenues exceed payments to beneficiaries by an accumulated $2 trillion. The money was used by the federal government to pay for its wars and other spending programs. The Social Security Trust Fund holds non-marketable IOUs from the Treasury. These IOUs can only be made good from an excess of tax revenues over expenditures or by the Treasury selling $2 trillion in bonds, notes, and bills and paying off its IOUs to the Social Security Trust Fund. This is not going to happen.
The Federal Reserve could not care less about the US population. The Fed was established for the purpose of protecting and aiding banks. Currently, the Fed, as if America were a Banana Republic which America appears to be becoming, is printing one thousand billion dollars per year in order to support the banks and to finance the federal deficit.
This is bad news for Americans, as it means that their fiat money is being created at a far greater rate than the demand for the dollar. The implication for our future is a drop in the dollar’s value. As there are no jobs, a drop in the dollars value means high inflation on top of unemployment and double the misery of the Great Depression.
As bad as this is, it is minor compared to the destruction of the planet’s environment. Online information shows that the Gulf of Mexico ecosystem is in crisis after the BP OIL SPILL AND THE ISE OF COREXIT, a dispersant used to hide, not clean up, the spilled oil.
The Fukushima catastrophe has hardly begun. Yet already the radioactive water pouring into the Pacific Ocean has made fish dangerous to eat unless a person is willing to accept a higher risk of cancer.
Fukushima has the potential of making Japan uninhabitable and of polluting the air, water, and soil of the US with radioactivity. Yet the crisis is seldom mentioned in the US media. In Japan the government just passed a law that could be used to imprison Japanese journalists who report truthfully on the dire situation.
Take the time to familiarize yourself with the online information about Fukushima.. According to the presstitute media, Americans face threats from Iran and Syria and from whistleblowers such as Edward Snowden. The real threats are simply not in the news.
If you search FUKUSHIMA, you will find information that the presstitute media hides from you.
There are a number of other threats to the environment on which our lives depend. One is the effort to extract more productivity from the soil by use of GMOs. MONSANTO has altered the genes of several crops so that the crops can be sprayed with RoundUp to eliminate weeds. The results have been to deplete the soil of nutrients, to destroy the micro-biology of the soil so that new plant diseases and funguses are activated, and to produce superweeds that require heavier doses of the glyphosate in RoundUp. The heavier dose of RoundUp worsens the aforementioned problems. US agricultural soil is losing its potency.
Now we come to CHEMTRAILS, branded another CONSPIRACY THEORY. However, the US governments efforts to GEO-ENGINEERING weather as a military weapon and as a preventative of global warming appear to be real. The DARPA and HAARP programs are well known and are discussed publicly by scientists. See, FOR EXAMPLE, Search Chemtrails, and you will find much information that is kept from you.
Some describe chemtrails as a plot by the New World Order, the Rothchilds, the Bilderbergers, or the Masons, to wipe out the “useless eaters.” Given the amount of evil that exists in the world, these conspiracy theories might not be as farfetched as they sound.
However, I do not know that. What does seem to be possibly true is that the scientific experiments to modify and control weather are having adverse real world consequences. The claim that aluminum is being sprayed into the atmosphere and when it comes to earth is destroying the ability of soil to be productive might not be imaginary. Those concerned about chemtrails say that weather control experiments have deprived the western United States of rainfall, while sending the rain to the east where there have been hurricane level deluges and floods.
In the West, sparse rainfall and lightening storms without rain are resulting in forests drying out and burning down. Deforestation adversely affects the environment in many ways, including the process of photosynthesis by which trees convert carbon dioxide into oxygen. The massive loss of forests means more carbon dioxide and less oxygen. Watershed and species habitat are lost, and spreading aridity further depletes ground and surface water. If these results are the consequences of weather modification experiments, the experiments should be stopped.
In North Georgia where I spend some summers, during 2013 it rained for 60 consecutive days, not all day, but every day, and some days the rainfall was 12 inches--hurricane level--and roads were washed out. I received last summer 4 automated telephone warnings from local counties not to drive and not to attempt to drive through accumulations of water on the highways.
One consequence of the excess of water in the East is that this year there are no acorns in North Georgia. Zilch, zero, nada. Nothing. There is no food for the deer, the turkeys, the bear, the rodents. Starving deer will strip bark from the trees. Bears will be unable to hibernate or will be able only to partially hibernate, forced to seek food from garbage. Black bears are already invading homes in search of food.
Unusual drought in the West and unusual flood in the East could be coincidental or they could be consequences of weather modification experiments.
The US, along with most of the world, already had a water problem prior to possible disruptions of rainfall by geo-engineering. In his book, Elixir, Brian Fagan tells the story of humankind’s mostly unsuccessful struggle with water. Both groundwater and surface water are vanishing. The water needs of large cities, such as Los Angeles and Phoenix, and the irrigation farming that depends on the Ogallala aquifer are unsustainable. Fagan reminds us that the world’s supply of freshwater is finite, just like the rest of nature’s resources. Avoiding cataclysm requires long-range thinking, but humanity is focused on immediate needs. Long-range thinking is limited to finding another water source to deplete. Cities and agriculture have turned eyes to the Great Lakes.
Los Angeles exists because the city was able to steal water from hundreds of miles away. The city drained Owens Lake, leaving a huge salt flat in its place, drained the Owens Valley aquifer, and diverted the Owens River to LA via aqueduct. Farming and ranching in the Owens Valley collapsed. Today LA takes water from the Colorado River, which originates in Wyoming and Colorado, and from Lake Perris 440 miles away.
Water depletion is not just an American problem. Fagan reports that underground aquifers in many places are shrinking so rapidly that NASA satellites are detecting changes in the earth’s gravity.
If the government is experimenting with weather engineering, scientists are playing God when they have no idea of the consequences. It is a tendency of scientists to become absorbed by the ability to experiment and to ignore unintended consequences.
Readers have asked me to writeabout Fukushima and chemtrails because they trust me to tell them the truth. The problem is that I am not qualified to writeabout these matters with anything approaching the same confidence that I bring to economic, war and police state matters.
The only ADVICE I can give is that when you hear the presstitute media smear a concern or explanation as “conspiracy theory,” HAVE A CLOSER LOOK. The divergence between what is happening and what you are told is so vast that it pays to be suspicious, CYNICAL even, of what “your government” and “your presstitute” MEDIA tell you. The chances are high that it is a lie.
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Book: Tackling Unemployment: The Legislative Dynamics of the Employment Act of 1946
By Ruth Wasem
2013
The 1930s and 1940s were a time when the role and responsibility of government in overseeing the nations economy were redefined. NEW DEAL PROGRAMS followed by wartime deficit spending showed that government could - and many felt should - play an active role in stabilizing the economy and creating opportunity for workers.
The EMPLOYMENT ACT OF 1946 was a dramatic step toward this goal. This sweeping legislation became the foundation on which the nationגs economic policy was built for years to come. It justified compensatory spending, tax cuts, job-creation tax credits, and other tools advocated by the English economist John Maynard Keynes, which were used by numerous administrations to buoy the U.S. economy. It also established the Presidents Council of Economic Advisers and the congressional Joint Economic Committee - key structures charged with the task of conducting national economic planning. As a result, the federal government assumed responsibility for the nations economic well-being.
In many ways the battle that raged then in the 79th Congress foretold the CURRENT SCHISM in Congress between Democrats and Republicans over management of the economy. As such, Wasem’s book, while serving as a detailed and illuminating look at a contentious period on Capitol Hill, also provides a valuable perspective on what is a decades-old debate in which the two sides continue to grapple with the tiller of U.S. jobs policy.
Indeed, some sixty years later, during a period of prolonged weak labor markets, it is worth noting that one of the most important aspects of the Employment Act of 1946 is its emphasis on full employment; that anyone willing and able to work is entitled to a job. As Ruth Ellen Wasem points out in her insightful recounting of the creation of this groundbreaking legislation, this is exactly the sort of focus needed today to spur hiring and strengthen the economy.
Tackling Unemployment provides valuable background for the establishment of twenty-first century employment policy. It is a well-written and cogent corrective for some common misconceptions about the forces transforming the Full Employment bill of 1945 into the Employment Act of 1946, as well as for advocates’ tendency to underestimate the importance of legislation that, in their view, is less than perfect.
- Ray Marshall, University of Texas; former Secretary of LaborWasem’s important work succeeds in reminding us of a time when full employment was a legitimate and worthy policy goal. In doing so, the author employs a mix of legislative historical analysis along with the use of a multivariate analysis of historical economic and public opinion data. The combination provides the contemporary reader with a rare and nuanced look at the politics of public policy without the limitations of standard institutional analysis. This book is a must read for students of employment policy, and a terrific guide for policymakers looking to understand standard challenges to putting people back to work.
-Roland V. Anglin, Director and Associate Research Professor, Joseph C. Cornwall Center, for Metropolitan Studies, Rutgers UniversityAs the United States currently confronts high rates of unemployment, Wasem’s timely study should influence the search for solutions.
-Julie Greene, University of MarylandTackling Unemployment is a masterful analysis of the Employment Act of 1946, when the U.S. government assumed responsibility for managing the economy in order to provide “maximum employment for Americans.”
-Philip Martin, University of California Davis
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Monday, October 28, 2013
The Long-Term Unemployed And The End Of The Layoff
By ExaByness
October 09, 2013
When describing the recovery in the labor market it is often said that the jobs picture has improved significantly since the depths of the recession but there still remains a sizeable amount of ground left to recover to get back to pre-crisis levels. That is certainly true but especially so for the long-term unemployed.
Indeed, long-term unemployment is one the scariest things for out of work Americans because employers tend to view these types of individuals as being unemployable. Specifically, employers look at job applicants that have been out of work for over 6 months or longer and typically assume that something must be wrong with them since nobody else was willing to hire them. Further, being out of work for extended periods can lead to skills erosion which employers are also less willing to risk taking on.
And data from the U.S. Department of Labor and the Bureau of Labor Statistics shows just how different this jobs recovery is compared to past recoveries. Just look at the first graphic showing the number of Americans unemployed for 27 weeks or longer. As a result of the recession, the total spiked to levels never seen during the previous 11 recessions that followed WWII. Although improved, over 4 million Americans have still been unable to find employment for 6 months or longer, equal to roughly 37.5 percent of all unemployed citizens. Bloomberg expands, It’s worth noting that it has always been much harder for the long-term unemployed to find jobs. You can get some EXCELLENT NUMBERS on this from the work of economist Randy Ilg at the Bureau of Labor Statistics.
By our back-of-the-envelope calculations, your chances of finding a job fall by half if you’ve been unemployed for 27 weeks; that has been broadly true for years, though recently it’s gotten a little worse. It has always been true that, sadly, 27+ weekers are less likely to find a job than to leave the labor force altogether than find a job.
It’s worth adding another data point to the long-term unemployment discussion, and it’s the decline of layoffs. The word layoff became a key part of the national economic vocabulary in the late 1970s and early 1980s, as factories shut down and workers were essentially told not to come in. Its still used frequently in the business press, but now when you read layoff it’s most frequently a euphemism for workforce-cut. When Blackberry or Merck cut workers theres no commitment to bring them back (and by the way, credit Bloomberg’s Drew Armstrong with avoiding the word and telling it like it is). You can see the diminishing role of genuine layoffs - ones that may just be temporary - over the decades in the chart below. At one time close to one quarter of the unemployed were on layoff and expecting to be called back to work. Now, in a post-union environment, that idea of layoff is RARELY APPLICABLE. Where once companies had formal commitments to bring back union workers, now they’d frequently rather AVOID REHIRING WORKERS, especially at lower pay. Worst off may be the folks who’ve worked longest for one employer. Decades ago, with years of seniority under their belts, they would have been the first to be hired back from layoffs. Now they may well be the those thrust deepest into the hole, with the fewest tools to climb outŔ
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Global Long-term Unemployment 2007-Now
Long-term unemployment increasingly plagues Europe and America
Waiting for work
By G.S. and G.D.
The Economist
October 22, 2013
More than a third of unemployed people in rich countries have been out of work for over a year. Since the financial crisis began the number of long-term unemployed people has doubled to almost 17m, according to data from the OECD, a think-tank. In Spain a staggering 3m people have been out of work for more than 12 months, about the same number as in America, whose labour force is considerably larger. The problem can be self-sustaining. Skills deteriorate when they are not used; the jobless become discouraged and employers are less inclined to hire them. Yet a few European countries have seen a decline in long-term joblessness. In Germany, an economic recovery and labour-market reforms means that there are almost 1m fewer people out of work now than at the end of 2007. And Switzerland, where the jobless rate barely edged above 4%, found work for those lingering on the dole. For most OECD countries, however, the high and growing proportion of long-term unemployed is a threat to their economic growth.
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Sunday, October 27, 2013
Milking The Public Pension Cow
4 Things You Need to Know About the Plot to Sell Off Your Pensions to Wall Street
What your state legislators actually mean when they start throwing around the Orwellian phrase pension reform.”
By David Sirota
Alternet
October 23, 2013
Less than a year ago, the Wall Street Journal ALERTED its national readership to what was happening in the tiny state of Rhode Island. In a story headlined “Small State Gets Big Pension Push,” the paper noted that the state rollback of public-employee retirement benefits has turned (it) into a national battleground over pensions. With the help of billionaire FORMER ENRON TRADER John Arnold and his PARTNERSHIP with the Pew Charitable Trusts, conservative ideologues and Wall Street profiteers who engineered Rhode Island’s big pension cuts were looking to export those “reforms” to other states. Now, after two huge revelations in the last few days, we know more about what that means in practice - we know the kind of corruption and damage the reforms mean for taxpayers and retirees, and we know what kind of new muscle is behind the effort to bring that corruption and destruction to other states.
The first set of revelations comes from a detailed forensic analysis of Rhode Island’s pension system by Forbes columnist and former SEC investigator Edward Siedle. Commissioned by groups representing PUBLIC PENSIONERS in the Ocean State, the data-driven analysis ends up reading like a criminal indictment of the speculator-turned-State-Treasurer Gina Raimondo (D), who is now cheerily touted by the Wall Street wing of the Democratic Party as a rising star. Raimondo has received such billing from corporatist Democrats in no small part because of her role in helping turn her states pension fund into a private profit center. Indeed, in 2012, this Wall Street-funded Democrat joined with Arnold to champion specific pension reforms that simultaneously slash guaranteed retirement income and give adisproportionate amount of retiree money to the hedge fund industry, thus enriching Raimondo’s old pals in the financial industry. According to Siedles report, they also potentially enrich Raimondo personally. Here are just some of his report’s key findings:
1. A sinister pall of secrecy: The report documents a “sinister pall of secrecy” about the pension funds new investments in hedge funds - a pall orchestrated by state officials and aided by key investment services providers. Siedle reports that the overwhelming majority of the information requested for this review (has) been withheld in apparent violation of state law. As Rolling Stone’s Matt Taibbi and I noted in our recent San Francisco Chronicle report, such secrecy is now the norm in states, as reformers have changed the law to prevent retirees from even seeing how much of their money is being handed over to hedge fund billionaires.
2. A transfer of retirement income to Wall Street, potentially costing taxpayers big money: The report documents a staggering, almost 700 percent planned increase in (pension) investment expenses from $11 million to an estimated $70 million - fees paid to Wall Street hedge fund and other alternative managers who control the so-called ԓalternative investments in hedge funds. In total, Siedle estimates that ԓthe projected cost to (the pension fund) of the Treasurers $2 billion alternative investments gamble over the next 20 years amounts to in excess of $3 billion.Ҕ Thats more than the total savings of the retirement benefit cuts, meaning those cuts arenҒt saving taxpayers money - they are beingused to finance a new Wall Street handout.
3. Profiting at the expense of the state: Raimondo came to the Treasurers office from a financial firm backed by billionaire hedge funder Paul Tudor Jones. According to the report, ғA significant portion of (her) wealth and income relates to shares she owns in two illiquid, opaque venture capital partnerships she formerly managed at that firm Ԗ one of which she convinced the state (pension fund) to invest in.Ӕ Siedle notes that during Raimondos time in office running the state’s pension system, the fees Rhode Island is paying to the fund she has an ownership stake in are significantly higher than the venture capital industry.Ӕ As the report concludes, “all of this means that the Treasurer may literally be profiting at the expense of the state.”
4. Worse returns that damage the pension fund even further: If all this graft was delivering better returns to the states pension system, it might be written off as merely a necessary cost of doing business and protecting taxpayers. But as Siedle documents, at the very moment Raimondo has handed over more retiree money to her hedge fund pals, The investment performance of the Fund has lagged behind its peers, earning a mere 11.07 percent versus 12.43 percent for the median public-sector pension. In total, the New York Times notes that for all of Raimondo’s insistence that giving Wall Street more taxpayer cash will generate better returns, neither set of hedge funds she has put state money into beat the returns of simply investing the cash in a simple S&P index fund - one that doesn’t incur massive fees paid to the financial industry that bankrolls Raimondos election campaigns.
Siedle’s report is worth reading in its entirety to understand what your state legislators actually mean when they start throwing around the Orwellian phrase “pension reform” and thanks to the second piece of news this week, we know that state legislators everywhere will almost certainly be throwing that seemingly innocuous phrase around. That news came from the St. Louis Beacon, which reports that none other than the American Legislative Exchange Council has decided to make cutting pension benefits one of its top goals in the 2014 state legislative sessions. They will be pushing to replicate Raimondo’s much-hyped reforms in legislatures throughout the country.
It is difficult to overstate the influence of ALEC in state policymaking. Bringing together the largest corporations, best-connected lobbyists, and most powerful state legislators, it calls the shots when it comes to state economic policymaking. So it is huge news that it is prioritizing the Plot Against Pensions and not surprisingly, its renewed involvement in the plot is connected to Enron John Arnold. That connection can be seen in the author of ALEC֒s new report urging state legislators to convert traditional defined-benefit pension plans into 401(k) style schemes and consequently reduce pensioners guaranteed retirement benefits. It is written by none other than Utah State Senator Dan Liljenquist (R), who was not only the failed Tea Party primary challenger against U.S. Sen. Orrin Hatch (R), but more important, a paid pension reform consultant for John Arnold’s foundation.
Like Siedles analysis, the ALEC report is worth perusing - but for different reasons. While Siedles report is all about indisputable data and numbers, ALEC’s is all about a kind of misinformation so dishonest its hard to believe even the most shameless propagandists could even think it, much less publish it. As just one example, notice the section of the ALEC report telling legislators to lie to public employees by telling them “that pension reform will increase take home pay and benefits” and then citing that claim as rationale to entitle pension slashing legislation a “wage liberation” act. Of course, in almost every state that has experienced pension reform, retirement benefits have been cut, giving a far different meaning to wage liberation. Workers’ wages havent been liberated to make higher wages - workers themselves have been liberated from their wages.
Why would ALEC involve itself in the effort to cut retirement benefits and replace cost-effective economically stimulative defined-benefit pensions with alternative investments and 401(k)-style systems? Part of it probably has to do with its connections to the financial industry which, as Rhode Island proves, see huge profit potential in reforms that let them raid public pension funds and bilk them with private investment fees.
The other part, no doubt, is about protecting the corporate welfare on which many of ALECs corporate members rely. By pushing to balance state budgets exclusively through cuts to pension benefits, ALEC helps create a budget discourse that solely blames public employees for state budget shortfalls, and thus leaves corporate subsidies off the chopping block. Ultimately, pension shortfalls become the boogeyman, even though the corporate subsidies that benefit ALEC members (but that often donҒt create jobs) are far larger than those pension gaps.
None of this should be particularly surprising in a pay-to-play political system, where there is cash under the control of industry-bankrolled public officials, there will always be the potential for graft and corruption. And where there is the potential to use state legislation to institutionalize graft and corruption, there has always been ALEC. What֒s different here is scale. Public pension funds are collectively worth almost $3 trillion. Though that is supposed to be money to fulfill sacred retirement promises to public workers, a coalition of right-wing ideologues, billionaire political activists, Wall Street profiteers and bankrolled politicians sees that nest egg as a lucrative private profit center. If they are successful in hiding their rip-off schemes in the argot of reform,Ӕ they will have accomplished one of the biggest heists in American history.
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Chicago’s Education Is The Answer
About a third of all manufacturing work, some 6 million jobs, has been lost since 2000. But the exporting of jobs fails to explain most of this. While many of these jobs were lost to competition with low-wage countries, even more vanished because of computer-driven machinery.
Those jobs are not coming back, but many believe that the industry’s future (and, to some extent, the future of the American economy) lies in training a new generation for highly skilled manufacturing jobs - the ones that require people who know how to run the computer that runs the machine.
The seven page article below was found in a local Chicago paper today.
The sad truth is there aren’t enough jobs for everyone - SKILLED OR UNSKILLED - and ACCORDING TO BLS PROJECTIONS - execpt for a couple of skilled positions like nurses - future jobs don’t need much of an education at all.
So I wouldn’t be so quick to THROW AWAY my food money on a COLLEGE DIPLOMA.
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Americans’ skill sets, good-paying jobs mismatched
Rockford Register
October 27, 2013
Four years after the Great Recession, jobs remain scarce and unemployment painfully high.
Yet good jobs that do exist CAN GO UNFILLED for lack of qualified workers, employers say.
The best jobs - jobs that pay well with benefits - are in health care, high-tech manufacturing, social services, finance and construction. All require sophisticated TRAINING or years of school.
The challenge is to find workers with the right skills, or quickly provide those skills, to nurture the economic recovery and lift the long-term unemployed out of a deepening hole. So far, that challenge is not being met.
One bright spot, PUBLIC AND PRIVATE PARTNERSHIPS for JOB RETRAINING, offers some hope for a solution, at least anecdotally. But the commitment to an overall solution is necessary to reverse some alarming trends.
Long-term joblessness was at a six-decade high in August, nearly 38 percent of all unemployed, according to the Center on Budget and Policy Priorities in Washington. The federal government defines long term as 27 or more weeks without work.
The longer people remain unemployed or underemployed working in low-paying jobs without benefits or opportunities for advancement ח the harder it will be for them to land good jobs. National studies of hiring practices show that six months of unemployment can hurt prospects for good job offers. And workers 55 and older have less time to recover in what should have been peak earning years before retirement.
Without aggressive public and private investment in job retraining, experts warn of a permanent underclass of workers trapped in low-skill, low-wage jobs. Long-term costs to the economy, health care, social services and communities will be high, according to private and government forecasts.
Federal spending on unemployment benefits was estimated at $99 billion for the federal fiscal year ended Sept. 30, 2012. About half was for emergency and extended unemployment benefits, according to an analysis by Pew Charitable Trusts. Similar spending was running at $33 billion before the start of the recession in 2007, and rose to $159 billion at the height of the economic crisis in 2010.
Long-term unemployment forces workers to postpone the very schooling needed to improve job skills. Research also shows that the long-term jobless are especially at risk of chronic unemployment or underemployment. Families are at greater risk of falling into poverty. Small businesses are less likely to expand and hire when consumer demand is soft.
The Great Recession was unlike any other since World War II, said William Dickens, interim chairman of the economics department at Northeastern University in Boston. The usual pattern of recovery-then-hiring surge did not happen. As of August, the nation was 1.9 million jobs short of prerecession levels.
Older and better-educated workers were least likely to be laid off in past recessions and were the first to return to work when recessions ended. The numbers of unemployed have risen for both groups this time.
Older workers still on the job are staying longer to make up for the losses from the financial crisis.
Low-wage retail, restaurant and service jobs have accounted for much of the job growth since the end of the recession, according to federal data. Millions more are working part time who would prefer to work full time. Demographers say underwater mortgages have made it difficult for workers to follow the jobs.
“We had a big shock,” Dickens said, “that was different than shocks we had before.”
The sheer depth of the Great Recession shattered the old patterns. Jobs disappeared fast and for good as technology left industries struggling to adapt. Even as the economy picked up and callbacks began, the workforce numbers were smaller.
Jobs moved where workers could not, in some cases overseas, and the good jobs that remained required new skills.
Rick Christie, 40, was forced to close his martial arts and fitness business in Decatur when many of his students lost jobs. Fitness training was a luxury they would no longer afford.
He still entertains the idea of self-employment. But Christie, too, is back in school, studying machine-tool operations.
“At a certain point, I just had to close it down and recoup from that,” he said. “I decided to go back to school and complete my education.”
The federal government has placed new emphasis on job training and education at community colleges as one way to provided targeted help quickly. Federal spending on community colleges runs about $9.9 billion a year. In 2010, $2 billion in federal money was approved to help community colleges retrain workers displaced by the recession. Early this year, President Barack Obama proposed spending $8 billion more.
Federal job-training money helps, educators say, but it is a relatively small component. The largest portion of their college budgets comes from state funding. Money for education was cut by states struggling with post-recession budgets.
Public-private partnerships have emerged as another source of support for retraining workers. Companies will help colleges offer job training specific to their industry and often hire the graduates. Microsoft, Caterpillar, Burlington Northern-Santa Fe railroad, McDonald’s, the Gap, United Technologies and energy giant PG&E are a few of the companies involved in job training.
Community college job-training programs take months, not years, to ready workers for the most promising fields. Displaced workers must be willing to commit time and money, often switching to new lines of work. Assembly-line workers become nurses. Former small-business owners learn high-tech manufacturing. Older workers facing retirement study bill coding for health care providers.
The future of many workers, communities and regions will depend on how quickly people seeking new careers can make the transition.
Long-term unemployed
At the end of 2012, The Urban Institute policy research center in Washington studied the demographics of the long-term unemployed people without a job for 27 weeks or more. The findings presented a new portrait of the unemployed as older and better educated compared with past recessions.
The study collected demographic data from 2007, at the start of the recession, to the end of 2012.
The young, poor, minorities and the less educated ח traditionally the most vulnerable groups were hardest hit by the recession.
But there were also a growing number of older workers among the long-term unemployed.
Comparing education levels among the long-term unemployed also revealed new trends. According to the Urban Institute study:
Long-term unemployed with less than a high school education fell from 23.5 percent in 2007 to 18.1 percent in 2012.
Long-term unemployed with some college education rose from 24.2 percent in 2007 to 28.6 percent in 2012.
Long-term unemployed with a bachelor’s degree rose from 11.4 percent in 2007 to 12.7 percent in 2012.
People with more education were having a harder time finding work, in contrast to previous recessions where education was an advantage. Urban Institute analysts said faster growth in low-wage jobs drove the disparity.
Getting people back to work has been hard. As of August, joblessness among workers 55 and older remained lower than the general population at 5.2 percent, according to the U.S. Bureau of Labor Statistics. But the number of unemployed 55-and-older workers continues to rise.
Older workers also have more trouble finding a new job.
Also in August, teen unemployment was at 22.7 percent compared with the 7.3 percent overall rate, according to the U.S. Bureau of Labor Statistics. Unemployment for blacks was at 13 percent, Hispanics at 13 percent and whites at 6.4 percent.
Without aggressive intervention, the trends threaten to tip entire classes of workers ח older, better educated, the young, poor and minorities into a long-term cycle of unemployment and underemployment. Even worse, they give up.
Kind of hard out there
For Troy Neal, two manufacturing layoffs in three years and a futile yearlong job search left him no choice but to retrain. At age 41, he is back in school at a community college in Decatur.
Neal expects to graduate from a two-year program in 2014 qualified to operate automated machine-tooling systems that have taken over the assembly-line work he once performed.
“It’s kind of hard out there,” he said, “but I found I’m good at this.”
National surveys and individual employers say good jobs are available, but sufficient numbers of qualified workers are not.
Express Employment Professionals, one of the nation’s largest private staffing firms, released a report this summer that 3.8 million U.S. jobs were unfilled for lack of qualified workers.
Pay ranged from $11 to $30 an hour in such hard-to-fill jobs as manufacturing engineers, welders, machinists, accounting, sales, commercial truck drivers, information technology, engineers, health care and social services, and office administrative assistants.
The company based its estimates on federal data.
“If we had 10,000 welders, we could probably put them to work tomorrow,” founder and CEO Robert Funk said.
The U.S. Bureau of Labor Statistics predicts millions of new jobs will be created in health care, social services, construction, education, high-tech manufacturing and retailing in the next decade. Nearly all require training beyond high school.
Funk, who served in 2006-07 as chairman of the Kansas City Federal Reserve Bank, said community colleges have more flexibility than four-year institutions to provide the short-term training required for new jobs. Local colleges, he said, often work directly with employers and high schools to design curriculums tailored to specific industries or jobs.
In his call for $8 billion in job training funds, Obama set a goal of 5 million additional community college students by 2020 to meet the skills demands.
Filling jobs can create more jobs. The National Manufacturing Institute this summer estimated filling 600,000 openings nationwide would create 406,000 additional support jobs.
The institute also warned that failure to provide American workers with the right skills could result in billions of dollars in economic losses to foreign competition.
The other side of the coin
Not all economists and workforce experts agree on the skills gap. Employers, according to critics of the theory, say the notion is just an excuse to postpone hiring, hold down wages and shift training costs to taxpayers.
Marc Levine, founder of the University of Wisconsin-Milwaukee Center for Economic Development, has released a series of papers on the topic. He says a real skills gap would force employers to compete for scarce workers by raising wages.
The true culprits, he says, are slow economic growth, offshoring of U.S. jobs and corporate unwillingness to INVEST IN WORKERS.
Looming over the debate is the threat of individuals and families trapped in a cycle of unemployment and underemployed, unable to contribute significantly to the local, state and national economies.
“Unemployment can become a self-fulfilling prophecy,” said Josh Mitchell, a researcher at the Urban Institute, “where being unemployed makes it less likely employers will even consider you.”
Rapid retraining and return to the workforce is vital for workers with obsolete skills and the long-term unemployed, say workforce experts and educators. And the sooner those workers are back on their feet, the faster the larger economy will recover.
At Spoon River College in Canton, diesel-mechanic students can earn certification to work on train engines in just two semesters. The program started this fall through a partnership with Carl Sandburg Community College in nearby Galesburg.
Burlington Northern-Santa Fe railroad donated mock engines, pieces of locomotive engines, special tools and replacement components to the colleges. College president Curt Oldfield said the railroad donations covered about half the $300,000 to $400,000 start-up cost.
Most importantly, he said, jobs should be waiting for graduates.
“BNSF said we’re going to have a pretty massive turnover pretty soon, once the economy picks up and people start retiring again,” said Oldfield. “It’s really industrywide.”
Spoon River is just southwest of Peoria, home of Caterpillar, and about 80 miles south of Moline, home of John Deere Co. Oldfield said diesel-mechanic training traditionally focused on heavy construction and agricultural equipment produced by Caterpillar and John Deere.
Oldfield said, in addition to traditional students, the diesel mechanic classes are popular with laid-off manufacturing workers from the region.
The value of community college job training programs was also on the mind of U.S. Sen. Dick Durbin, D-Ill., in September, when he paid a visit to Richland Community College to promote the president’s proposed $8 billion increase in funding for job training programs. Durbin said the additional money would allow businesses and two-year schools to retrain 2 million workers for high-demand jobs.
“Our programs, particularly online courses, allow adult students to have the freedom to take courses from anywhere,” said Pete Willging, director of marketing and communication at HCC.
The central Illinois community of 75,400 has been hit by a series of manufacturing layoffs this year, including Caterpillar. The 13.1 percent unemployment rate in July was the highest in 30 years and seventh highest among 372 metropolitan areas nationwide.
John Jackson is vice president of operations for Barton Manufacturing in Decatur. The company provides machine tooling, fabrication and assembly work for major manufacturers such as Caterpillar. Barton also partners with the local community college for classes in technical skills needed by the company.
Jackson said the partnership works well in providing workers trained for jobs at Barton. But he said the private and public sectors must do more to reach workers in need of new skills.
“We can be better than we are,” said Jackson.
Along with more community college programs, the federal government wants to help support technological innovations that can be quickly turned into new businesses.
In Youngstown, Ohio, Darrell Wallace is vice president of the National Additive Manufacturing Innovation Institute. The not-for-profit institute is coordinating research into the use of 3D printer technology that would transform 3D designs into finished products. The process would further speed replacement of traditional assembly lines.
The president has proposed a network of 15 such research institutes nationwide to move technical innovations from the lab to commercial production and create more jobs.
Wallace said long-term economic recovery requires a new workplace model. The old concept of the workplace as a fixed location with fixed production processes can be replaced, with the right technology, by more fluid processes and decentralized production, even mobile production. Products designed in Ohio can come off the line as finished goods in Illinois.
Wallace said the fastest job growth based on new technology likely would be at small- and medium-sized suppliers to major manufacturers. No smokestacks or sprawling production facilities required.
“It might be some guy named Bob with three printers in his garage,” said Wallace.
Denise Kirgan is an HR manager for Cook Medical Inc. The family-owned medical device manufacturer based in Bloomington, Ind., has 15,000 employees worldwide. The company makes 16,000 products for 40 medical specialties.
Kirgan said new jobs in her industry require strong reading, writing and math skills. Workers must be able to interpret technical manuals that run to 40 pages. There is frequent training on new processes.
“All of our manufacturing work has become very detailed,” she said.
Competition for the jobs is tough. Kirgan said Cook received 1,000 applications for the first 30 jobs when Cook Medical opened a new Canton plant in 2009. The plant now has a work force of 180.
The cost of delay
The challenges of retraining workers in a rapidly evolving, global economy are difficult, say work-force experts, and time is short.
Consistent state and federal funding is a major challenge. State budgets have begun to stabilize, according to the National Conference of State Legislatures, but the return to pre-recession levels of education funding will take time.
The federal government, meanwhile, lurches from budget crisis to budget crisis.
Changes in technology and global competition seem to come faster than new training programs can be designed. But waiting adds to the cost of catching up.
Some analysts believe the permanent class of unemployed and underemployed workers is already a reality, and is hurting the economic recovery.
Among 4,800 fictitious resumes submitted to prospective employers, workers identified as out of work for six or more months seldom were considered, regardless of qualifications.
Add that to that the $10.3 billion in unemployment insurance claims, $17.6 billion in lost income taxes and $6.6 billion in lost corporate taxes.
Two-year and shorter programs are an interim solution for putting the unemployed back to work as quickly as possible, according to workforce experts. Partnerships shown to work must be expanded.
But there must be a fundamental, long-term rethinking of jobs and job training - accompanied by a strong public and private commitment to reverse the costs of millions of workers already falling behind.
Tim Landis, business editor for the State Journal-Register in Springfield, spent four weeks researching the skills gap for a GateHouse Media national reporting project.
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