Article 43
Monday, April 21, 2014
Rise Of The Temp Workers Part 4 - Permatemps
The structure of the labour market has fundamentally changed, and what we used to think of as “unemployment” has been replaced by mass part-time work, much of it unwanted.
- Business Insider, December 2019
Nine years ago I WROTE ABOUT my experience as a long-term contracted temp outsourced to a telco doing the same work I did at AT&T, and LET GO LIKE A HOT POTATO the day before Thanksgiving.
I PREDICTED the ”FLEXIBLE WORKFORCE” would DECIMATE TELECOMM WORKERS.
Little did I know things would get much worse than FEARED BACK THEN.
And there is no end in sight.
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Forever Temp?
Once a bastion of good jobs, manufacturing has gone gaga for temps.
BY Sarah Jaffe
January 6, 2014
Betty McCray, 53, has moved around a bit in her lifetime. Shes worked as a chef, a nursing home attendant and a welder. Throughout, she says proudly, she has “worked union,” even in states with anti-labor right-to-work laws, such as Tennessee, where she moved in 2010 to be closer to her son.
That changed in 2011, when she found work at a Nissan AUTO PLANT in Smyrna, Tenn., preparing parts for the assembly line. Not only is this job non-union, but McCray doesn’t technically work for Nissansheגs employed through Yates Services, a temporary staffing agency. Shes one of a growing number of people who do the physically demanding work of manufacturing, but who, as temps, have none of the job security and few of the benefits that many Americans still associate with the sector.
McCray found the job through the local UNEMPLOYMENT OFFICE, which REFERRED her to Yates. As an “associate” (the firm’s preferred term for temp), she works alongside permanent Nissan employees, but she is TREATED DIFFERENTLY. She says she is paid less, gets no personal days and has to bring a doctors note if she is sick. Her job feels precarious, like she could be LET GO AT ANY TIME.
The path to becoming an “employee,” that elusive goal, is far from clear. Tracy Logan, 34, worked through Yates on Nissan’s assembly line for a year before winning a promotion to a position as a robot tender, overseeing the robots that spray paint on the car parts. To his surprise, he remained a temp. When I first arrived at Nissan, that position was considered “Class A - only Nissan personnel can hold that position,” he says. “I put in for it, thinking that would be a way of getting on with Nissan. Somewhere in there, they changed the classification of the job, but didnt let us know.”
Such experiences are increasingly common, according to Leone José Bicchieri, executive director of the Chicago Workers Collaborative (CWC), a non-profit workers center that organizes low-wage and temp workers. “Not only has temporary employment expanded into sectors that used to be sources of stable full-time employment,” he says, “but its often no longer really temporary. Some temps are brought on for only days or weeks, others work for years at the same plant through the same agency.”
Organizers in the field, Bicchieri says, now talk about “staffing agencies” rather than “temp agencies,” and “direct-hire” workers rather than “permanent” employees. “It’s not a temp job,” Logan says, “but it’s temp status.”
So is permatemping the new model in manufacturing? Nissan spokesperson Justin Saia maintains that temporary jobs can provide a route to direct employment. “Having contract workers enables us to further develop the skill sets of these employees to position them for direct employment opportunities with Nissan through our Pathways program,” he writes in an email. “But on the other hand,” he notes, “The contract jobs in our business model are designed to be long-term, stable jobs with competitive pay and benefits.”
Or, as Logan puts it: They want us to be permanent temps.”
From “Kelly Girls” to “strapping men”
Kelly Girl Service, a staffing agency founded in 1946, pioneered the temp industry. “Temping was originally framed as a way for white middle-class housewives to earn a bit of extra money,” says Erin Hatton, a sociologist at the State University of New York at Buffalo and author of The Temp Economy: From Kelly Girls to Permatemps in Postwar America. Married women weren’t perceived as breadwinners in need of full-time hours or family-sustaining wages. “That’s how [temp agencies] gained entry into the labor market,” says Hatton, “but once they gained legitimacy, they were able to spread out.” She says that from the beginning, “temp agencies had a toehold in manual labor and manufacturing, but they deliberately played up the “girls,” in part to avoid conflicts with then-powerful unions. By the 1970s, though, they began openly targeting men. One ad campaign from Kelly read, “Obviously, we can’t call ourselves Kelly Girl Service any more,” as it touted its stable of “big, strapping” male workers.
Kelly Girl Service became Kelly Services in 1966, and today its work placements range from offices to universities to banks to factoriesincluding another Nissan plant, in Canton, Miss. The temp business has ballooned, comprising some 17,000 staffing firms in the United States with a combined 2012 revenue of $117 billion.
A 2010 report from the Bureau of Labor Statistics (BLS) found that ӗwhile manufacturings share of total national employment fell from 16.2 percent in 1990 to 9.8 percent in 2008, manufacturing’s use of temporary workers greatly intensified. Because the BLS categorizes temp workers as service employees regardless of the kind of work they do, the agency has no good data on how many of those ”lost manufacturing jobs simply migrated over to staffing agencies.” But according to a 2004 report from the Council of Economic Advisers, a third of all temp service employees work in the manufacturing sector. “If the official manufacturing employment statistics are adjusted by this amount,” the authors found, “the decline in the level of manufacturing employment in the 1990s is eliminated. In other words, a good number of jobs were simply outsourced right here at home, offloaded from company payrolls onto staffing agencies.”
For manufacturers, says Hatton, the logic is simple: ӔThey have none of the costs of outsourcing with all of the benefits of outsourcing and all of the benefits of a native-English-speaking local workforce.
In many cases, that workforce is highly skilled, comprised of workers like McCray who have years of manufacturing experience under their belts. While temp agencies once emphasized unskilled labor, these days some openly recruit skilled labor on the cheap. A job application obtained this fall from the Smyrna, Ga., facility of gun manufacturer Glock lists six separate staffing agencies through which one can apply for a manufacturing or warehouse job. One of the agencies, Automation, recently posted a skilled machinist position on its website for an (unnamed) gun manufacturing company in Smyrna. The listing called for an array of skills:
Applicants must have experience operating the robotic machine, must be mechanically inclined, must have metal working experience. Applicants must also be able to read specs and be technically skilled.
Applicants would also have to be extremely flexible: “This position rotates weekly between 1st and 2nd shift (this is a requirement), meaning day and evening shifts. And the wages on offer for all those skills and flexibility? $10 hour to start, but depending on experience, may go up to $13. According to the BLS, the mean hourly wage for a machinist last year was $19.65.
So much for the value of skilled labor.
Automation did not respond to repeated requests for comment.
“This should remind us that manufacturing jobs weren’t good jobs because of the inherent value of the job,” says Amy Traub, a senior policy analyst at the non-partisan think tank Demos. “They were terrible jobs until people organized.”
From the employers perspective, the temp revolution is driven more by a desire for a flexible, contingent workforce than by a desire to save money on worker wages. According to Steve Berchem, COO of the temp-industry trade group the American Staffing Association (ASA), ”once the staffing agency’s fees are factored in, the hourly cost of a temp employee to a client firm is about the same as a direct hire. Where the cost savings come in,” he says, “is being able to size the businesss’ workforce to the demand of the day, so theyre not paying for idle labor that’s not productive. It just makes for a more efficient business operation.”
But data indicate that firms also save on benefits. While according to the BLS, 55 percent of private-sector workers get health insurance from their employers (and 79 percent of manufacturing workers do), the most recent survey data from the ASA indicates that just 17 percent of temps get healthcare coverage from their agencies. Berchem says that whether a temp agency offers benefits depends on whether the work is “higher skilled.” A computer programmer might get a 401(k), paid sick days and vacation that Ӕwould not be available to a carpenter. Berchem says many temp agencies are gearing up to provide health plans to their hires through the Affordable Care Act, but according to a 2013 ASA report authored by Berchem, most agencies plan to pass the costs on to employees or client companies.
CWC’s Bicchieri says manufacturers may be playing a long game by building up a temp workforce to throw up obstacles to unionization, thus suppressing wages overall. “Some of these companies, they’ll have two, three, four different temp agencies at the same place, and some direct hires,” he says. “Now go try to organize that! Its impossible.”
Berchem says there is little data to support this conclusion, but notes that its rare for one of ASA’s clients with a union workforce to use temporary workers.
Despite the many drawbacks of a temp job, anemic job growth during the economic recovery has meant that many blue-collar workers have few options beyond putting in their time as a temp in the hope that theyll get hired full-time one day.
The lure of that elusive job is used to keep permatemps around. One of Nissan’s direct hires, Matthew Thornberry, 51, describes morning meetings at the companys Canton plant, where Ғtemporary workers keep getting told, Nissanӑs going to hire you, Nissans going to hire you.Ғ The ASA claims that 43 percent of temp workers get brought on as permanent hires, but the temp workers and advocates I spoke to, such as Betty McCray in Smyrna, doubt thatҔs true.
We were promised to be hired on,ғ she says. Yet she and her fellow workers have remained temps for years.Lots of temp workers have lost hope.ԓ
Taxpayer-funded temping
It’s not enough that companies are widening profit margins on the backs of low-paid temps - in some cases, taxpayers are helping them do it.
A 2013 report from the policy center Good Jobs First, commissioned by the United Auto Workers (UAW), which is seeking to unionize Nissan’s Canton, Miss., and Smyrna, Tenn., plants, calculated that Mississippi handed Nissan nearly $1.3 billion in state and local subsidies to build the Canton plant in 2001. That includes a controversial type of subsidy in which Nissan gets a rebate on part of the taxes the state withholds from workers’ paychecks - in effect, as Good Jobs First puts it, this means workers are paying taxes to the boss. According to the report, “this portion of the package alone” - a 25-year, $160 million deal - was the largest such subsidy ever awarded, anywhere. The report calculates that taxpayers are paying more than $10,000 per job per year at the Canton plant that in many cases start at $12 an hour.
Nissan spokesperson Saia declined to disclose workers’ wages, but said, Nissan has more than met the requirements for job creation called for in the stateғs incentive package. Our 5,600 team members in Canton hold some of the most secure jobs in Mississippi and enjoy competitive pay well above the state average for manufacturing jobs and strong benefits. This seems unlikely, as, according to BLS data, the median pay for a production worker in Mississippi is $13.71 an hour.
Glock, on the other hand, doesn’t get subsidies, but it does get public sector contracts. Lots of them. Most of the Glocks made in this country go to government agents, the military or police. In just the last two years, federal contracts to Glock topped $250 million.
Either way, PUBLIC MONEY IS SUBSIDIZING these jobs. And that means the government should have some leverage over employment practices. The federal Service Contract Act requires contractors to pay service workers the prevailing wage and benefits for the area where they work, and the Davis-Bacon Act requires the same for federally funded construction and repair projects. By contrast, the only federal law covering manufacturing workers at government contractors required just the federal minimum wage plus time-and-a-half for overtime, and it was invalidated by a 1963 court decision. But Scott Amey, general counsel for the nonprofit Project on Government Oversight, says that “before awarding any contract, federal officials are required to look at whether a firm has a satisfactory record of integrity in business ethics.”
That could be questionable if they’re using [a] temp agency, he says.
Traub, who co-authored the 2013 Demos report “Underwriting Bad Jobs,” points out that several states and municipalities have passed ordinances that require COMPANIES RECEIVING TAXPAYER SUBSIDIES to pay decent wages. The White House could go further and propose a “high-road contracting initiative,” Traub says, by making it a criteria in an award that we can pick by those who pay more, have better benefits, have a better environmental or labor compliance record.
A way out
Meanwhile, the workers at Nissan aren’t waiting - they have reached out to the UAW and are in the midst of protracted union drives in both Canton and Smyrna. Thornberry was one of the original group of workers at the Canton plant to reach out to the union in 2002, after seven months on the job. Temps, too, have been involved in the unionization effort from the earliest stages - a refreshing contrast to a historic use of temps by employers to bust union efforts, which dates back to a 1986 ruling letting employers legally lock out permanent workers and replace them with temps.
Logan, whos been part of the union drive in Smyrna since last winter, says that the working conditions at Nissan are the best argument for unionization - including the temp status of a substantial portion of the workforce. “He was particularly upset,” he says, “when he asked to take a day off to preach in his church only to be told his religion was an unacceptable reason to miss work.”
Solidarity between temps like Logan and direct hires like Thornberry is key to the UAWs Nissan campaign, which calls for giving workers of all statuses a voice on the job. The long-term goal of unionization, Logan says, is to do away with the use of temp agencies entirely.
“They face an uphill battle” McCray, Logan and Thornberry all told me of one-on-one and group meetings where management pressured them to stop supporting the union. Thornberry says management hinted that the plant would move to Mexico if workers voted to organize. Since he got active in the campaign, Logan says, supervisors have threatened to send him back to the assembly line. (Nissan spokesperson Justin Saia writes in an email, Nissan does not tolerate employee intimidation. Our history reflects that we respect the right of our employees to decide who should represent them.) Conversely, as union talk grew stronger, some workers recently got a raise.
Meanwhile, CWC has moved into the legislative arena. It helped push through the Illinois Day Laborer and Temporary Services Act, which requires, among other things, detailed notification for workers of the terms of their employment and where and for whom they will be working. The group has won several class-action suits on behalf of temps as well. And CWC helped found a national staffing workers alliance, to unify temp worker organizing across the country.
“We view it like ending child labor,” Bicchieri says, “something that’s really going to take a social movement.”
This article was reported in partnership with The Investigative Fund at The Nation Institute, with support from The Puffin Foundation.
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For Many Americans, ‘Temp’ Work Becomes Permanent Way of Life
By Martha C White
NBC News
April 20, 2014
For Americans who can’t find jobs, the booming demand for temp workers has been a path out of unemployment, but now many fear it’s a dead-end route.
With full-time work hard to find, these workers have built temping into a de facto career, minus vacation, sick days or insurance. The assignments might be temporary - a few months here, a year there - but labor economists warn that companies growing hunger for a workforce they can switch on and off could do permanent damage to these workers’ career trajectories and retirement plans.
“It seems to be the new norm in the working world,” said Kelly Sibla, 54. The computer systems engineer has been looking for a full-time job for four years now, but the Amherst, Ohio, resident said she has to take whatever she can find.
“I know a lot of people who are doing this temping. It seems to be the way this is going,” she said.
Sibla’s husband, 67, got a buyout offer from his former employer and is now retired, but she has minimal retirement savings in her own name. “When you’re working as a temp you don’t get any of that. Nothing,” she said. The couple is downsizing to a smaller home and trying to sell the one they live in now to reduce expenses.
“There are a lot of perverse incentives for employers to use temps.”
“You don’t get any benefits to speak of, you only get paid for what you work no sick time, no paid vacation,"said Brian Dupuy, a computer technician in Des Moines who lost his last full-time job five years ago and has been temping since 2011.
Dupuy, 56, said heŔs paid hourly, and the rate comes to about 40 percent less than he was earning at his last full-time job. After a year, theyғll sign you up for a 401(k) but the salary is so low you have trouble making ends meet to begin with, he said.
Economists say itҔs typical for temporary hiring to rise initially as the economy recovers, before businesses are ready to commit to hiring full-time employees. But Susan Houseman, senior economist at Upjohn Institute for Employment Research, said the current pattern doesnt fit historic norms.
“Right now we’re seeing something interesting,” she said. “We’ve seen it surpass its previous highs, so it looks like there could be a structural shift going on, too. There’s a reason to believe we might see some increase in the use of temporary help in general.”
In March, the temp industry added 28,500 jobs, and about 2.8 million workers are employed currently in temporary or contract positions, according to the Bureau of Labor Statistics. This is a little more than 2 percent of the workforce, a peak last reached in April 2000, said Steve Berchem, chief operating officer of the American Staffing Association, an industry trade group.
Berchem cautioned that drawing conclusions from one month or even a few months worth of data could be misleading because the BLS frequently revises its data, but he said the shift to companies using more temporary workers is already under way.
“We argued when the recovery began that there would be a structural shift,” he said. “We were hearing that from members who were hearing that from their clients, (that) they were more likely to use temp and contract workers.”
“There are a lot of perverse incentives for employers to use temps,” said Erin Hatton, an assistant professor of sociology at the State University of New York, Buffalo, and author of “The Temp Economy: From Kelly Girls to Permatemps in Postwar America.” For one thing, it’s cheaper. Using temporary labor lets companies avoid the cost of providing benefits like health insurance, workers comp, paid sick leave and the like.
“It allows them to increase or reduce their workforce more easily, and in an uncertain environment, that can be very valuable to the firm,” Houseman said.
More kinds of businesses seem to be drawing that conclusion, as industries not thought of as traditional temp work territory are using more contract workers. Hatton pointed out that adjunct college professors face much of the same uncertainty and lower wages than their full-time counterparts. And manufacturing companies make up around 40 percent of the current demand for temp workers, Houseman said.
“In the government data, you see that 17 percent of assembly line workers are hired through the staffing industry,” Houseman said.
“With organized labor losing its clout, there’s little to check companies ability to shed workers the moment they perceive an economic chill,” said Eileen Appelbaum, a senior economist at the Center for Economic and Policy Research. “In the private sector theres no counterbalancing power,” she said. “The decisions are almost costless to them.”
Appelbaum added that domestic outsourcing - when companies contract with third-party firms to handle everything from their janitorial to their payroll services needs - is on the rise.
“Your job is dispensable. That’ss why youre a temp.”
Its all part of a broader shift to an everyone-for-themselves workforce, labor economists say. Business services firm MBO Partners says there were 17.7 million independent workers last year, up 10 percent from 2011.
Berchem called this shift in the labor market a “win-win” for companies as well as workers. “We’ve seen an increase in workers preferring flexibility,” he said. “Family is a big priority for temporary and contract employees and they prefer the flexibility such work allows.”
Lynn Monaghan, 33, began temping after a transition away from her former career in event planning and says there are pros and cons.
The pros are, “it’s given me a great amount of flexibility,” she said of her current job, which is also nearby where she lives in suburban Boston."Being a working mother, that has been really beneficial to me. Theres less pressure,” she said.
But flexibility is relative.
There is certainly a small segment of the workforce ... that does want real flexibility in their lives. “The thing is, though, that temp work is very flexible for employers and not that flexible for workers,” Hatton said. “It gives them a profound sense of insecurity.”
As a temp, even something as innocuous as personalizing a workstation can be a gamble. With her unemployment benefits exhausted and no calls whatsoever, Dayton, Ohio-area resident Ronda Roberts said she took a temp job in December 2012 doing clerical work that paid a quarter of what she previously made as a developer of training materials. I kind of felt like I didn’t have a choice, said Roberts, 55.
A year later, even that rug was pulled out from under her. Roberts said she took a rare sick day, only to get a phone call from the temp agency that evening, telling her that her contract had been ended, effective immediately.
When she asked if she could retrieve her computer case and other personal items, the agency told her she wasn’t allowed back into the office where she had worked for roughly a year, and that she had to wait for the company’s corporate human resources department to contact her.
In the end, it took Roberts two months of waiting and an hour’s drive to the company’s headquarters to get her things back. “If I ever got a temp job again, I would not leave anything on site,” she said. “It bothers me that I wouldn’t be able to go and get my own things.”
Roberts said she had gotten along well with her full-time co-workers and that she felt like part of the team, but her abrupt dismissal and the hoops she had to jump through to retrieve her belongings reminded her of her outsider status. “Your job is dispensable. That’s why youre a temp,” she said.
This is just one of many ways Hatton said temp workers are marginalized in corporate culture. ThereӒs a very deep level of unfairness, she said. ԓThose workers feel profoundly bitter.
“When you’re just a contractor at a company - your ID badge is a different color. People treat you differently. They say they don’t, but they just do,” Sibla said.
More alarming to economists, long-term temps also miss out on the opportunity to develop a nest egg for a comfortable retirement.
It’s almost entirely the burden of the individual, said Kevin Cahill, a labor economist with the Sloan Center on Aging & Work at Boston College.
“The potential hit to Social Security benefits is two-fold,” he said. “Since Social Security benefits are based on your earnings over your work history, both low-paying temp work or a gap in employment - a combination many of todays permatemps face - can drag down a workers future payments.
These workers also may not have access to a corporate 401(k) plan. Even if they do, they might not be paid enough to be able to put any away for retirement. There’s certainly no employer match.
Folks who turn to temporary employment because full-time employment is lacking have been hit extra hard. They’ve lost time to accumulate savings and could very well bleed down their savings during their job search.
This is what happened to Dupuy, who said he used his 401(k) funds to stay afloat during his unemployment. “I figure I’m going to be working way beyond 65 or 67 or whatever it is these days,” he said. “I just know it’s going to be really hard.”
“This has broad effects,” Hatton warned, “not just on the legions of temp workers today, but on the next generation. Their tenuous employment situation can make it harder for them to send their children to college,” she said. “The effects ripple out.”
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P.S. To Jill Abramson: Grads, You Must Learn The Word “Fungible”
NY Times
May 20, 2014
On Monday, ousted New York Times editor Jill Abramson began her post-firing public life by SPEAKING at the Wake Forest University commencement, and shared her fathers buck-up maxim for when youҒre dumped or disappointed: Show what youӒre made of. Here, I add one other bit of advice: Learn the word ԓfungible.
Dear soon-to-be-college grads:
I regret to inform you that at the last minute, we at the University of Hard Knocks have added one additional graduation requirement: You must learn the meaning of the word ԑfungible.
But not to worry. We’ll help you out with the dictionary definition:
fungible [fuhn-juh-buhl]: adjective.
(especially of goods) being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.
And here’s the deeper meaning: When you enter the working world, you will almost certainly be fungible. That is, no matter how hard you work, you will remain, at base, replaceable. Disposable.
This is not a cynical-making thing. It’s just a hard fact that its important to know as you plan your life and make decisions along the way. You might love your work as much as Jill Abramson loved hers, to the point that you wear your love not just on your sleeve but in a tattoo on your shoulder. But your work may not - cannot love you back the same way.
I use “work” here as a collective noun, and your working-world fate will likely rest in collective hands, just as Jill Abramson’s firing stemmed from rejection not only by the publisher but by the “masthead” the newspaper equivalent of nobility. Youגll never know all the structural constraints and financial challenges and personal machinations that could converge into a pink slip for you. You just need to know, deep down, that its possible.
What to do with that knowledge?
First, you need to watch for the signs. Is your industry in trouble? Is your company hemorrhaging cash or known as a brutal shucker of staff? Have you noticed that you have no higher-level manager who seems invested in you, who has your back?
Second, live your life accordingly. There are some people for whom you are not fungible. Your parents. Your partner, if you’re lucky. Most of all, your children, if and when you have them. The currency of love is time,Ӕ they say. Work can suck you in and make you forget that. But there are unpaid tasks that only you can perform.
Third, you need to know that you can never fully map your life out in advance. You major in a subject, you land your first job, you may think youre set. But you must remain ever fast and nimble and flexible, always learning and upgrading your skills. A young Jill Abramson could never have imagined that her chosen profession would implode as it has.
Mainly, if it happens җ and it very well may you can take a page from Abramsonגs book. What mattered about her Wake Forest commencement speech was only that she gave it wryly, candidly, acknowledging that she had just taken a big hit. The fact of her presence before a gigantic crowd said ח indeed, shouted דI am not ashamed. I soldier on.
Because if you ever meet her fate, you will be prone to feel shame, to feel publicly branded as someone who was found lacking. When I heard recently that some hard-working young people I know had lost their jobs, I found myself writing a fantasy staff memo about their layoff, including this:
“There is no shame in this. Please don’t blame yourselves. Please let us help you find new jobs. And though I know a pink slip may not seem like much of a thank you, I do want to commend you and thank you - in this public form - for the years of your work-lives you gave.”
Grads, if you’re laid off, no boss will ever writeyou that memo. But you should know now for the future - that some of the very best professionals I know have lost jobs at some point, from book editors to psychiatrists to other media chiefs. One of the best journalists I know was laid off just this week. Its not a reflection of your intrinsic value. It just happens, if you’re fungible. And we are.
For many people, particularly older people, being laid off means financial ruin from which they never fully recover. It can be devastating. But the good news is, for many of us especially if we have safety nets and resources - a job loss catalyzes change that leaves us happier than we ever would have been otherwise.
So here’s your post-graduation assignment: Watch Jill Abramson reinvent herself. Watch the social capital that she has built up over the years flow back toward her in the form of support and opportunities. You can bet your tuition that in the not-so-distant future, you’ll hear her say that the only thing better than working at The New York Times is to have worked at the New York Times.
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Friday, April 18, 2014
Democracy Hollowed Out Part 32 - Oligarchs Rule
Princeton Concludes What Kind of Government America Really Has, and It’s Not a Democracy
By Tom McKa
Policy Mic
April 16, 2014
A new SCIENTIFIC STUDY from Princeton researchers Martin Gilens and Benjamin I. Page has finally put some science behind the recently popular argument that the United States isn’t a democracy any more. And they’ve found that in fact, America is basically an OLIGARCHY.
An oligarchy is a system where power is effectively wielded by a small number of individuals defined by their status called oligarchs. Members of the oligarchy are the rich, the well connected and the politically powerful, as well as particularly well placed individuals in institutions like banking and finance or the military.
For their study, Gilens and Page compiled data from roughly 1,800 different policy initiatives in the years between 1981 and 2002. They then compared those policy changes with the expressed opinion of the United State public. Comparing the preferences of the average American at the 50th percentile of income to what those Americans at the 90th percentile preferred, as well as the opinions of major lobbying or business groups, the researchers found out that the government followed the directives set forth by the latter two much more often.
It’s beyond alarming. As Gilens and Page write, “the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.” In other words, their statistics say your opinion literally does not matter.
That MIGHT EXPLAIN WHY mandatory background checks on gun sales supported by 83% TO 91% of Americans aren’t in place, or why Congress has taken no action on greenhouse gas emissions even when such legislation is supported by the vast majority of citizens.
This problem has been steadily escalating for four decades. While there are some limitations to their data set, economists Thomas Piketty and Emmanuel Saez constructed income statistics based on IRS data that go back to 1913. They found that the gap between the ultra-wealthy and the rest of us is much bigger than you would think, as mapped by THEE GRAPHS from the Center On Budget and Policy Priorities.
Piketty and Saez also calculated that as of September 2013 the top 1% of earners had captured 95% of all income gains since the Great Recession ended. The other 99% saw a net 12% drop to their income. So not only is oligarchy making the rich richer, it’s driving policy that’s made everyone else poorer.
What kind of oligarchy? As Gawker’s Hamilton Nolan explains, Gilens and Page’s findings provide support for two theories of governance: economic elite domination and biased pluralism. The first is pretty straightforward and states that the ultra-wealthy wield all the power in a given system, though some argue that this system still allows elites in corporations and the government to become powerful as well. Here, power does not necessarily derive from wealth, but those in power almost invariably come from the upper class. Biased pluralism on the other hand argues that the entire system is a mess and interest groups ruled by elites are fighting for dominance of the political process. Also, because of their vast wealth of resources, interest groups of large business tend to dominate a lot of the discourse. America, the findings indicate, tends towards either of these much more than anything close to what we call “democracy.”
In either case, the result is the same: Big corporations, the ultra-wealthy and special interests with a lot of money and power essentially make all of the decisions. Citizens wield little to no political power. America, the findings indicate, tends towards either of these much more than anything close to what we call “democracy” systems such as majoritarian electoral democracy or majoritarian pluralism, under which the policy choices pursued by the government would reflect the opinions of the governed.
Nothing new: And no, this isn’t a problem that’s the result of any recent Supreme Court cases ח at least certainly not the likes FEC v. Citizens United or FEC v. McCutcheon. The data is pretty clear that America has been sliding steadily into oligarchy for decades, mirrored in both the substantive effect on policy and in the distribution of wealth throughout the U.S. But cases like those might indicate the process is accelerating.
“Perhaps economic elites and interest group leaders enjoy greater policy expertise than the average citizen does,” Gilens and Page write. “Perhaps they know better which policies will benefit everyone, and perhaps they seek the common good, rather than selfish ends, when deciding which policies to support.
“But we tend to doubt it.”
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Tuesday, April 08, 2014
Long-Term Unemployed - No Different Than You Or Me
“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
- Albert Einstein
Long-Term Unemployed Make for Just as Strong Hires: Study
By Aki Ito
Bloomberg
April 4, 2014
People who have been out of work for an extended period, once hired, tend to be just as productive on the job as those with more typical work histories, according to an analysis of almost 20,000 employees.
The research, provided to Bloomberg News by San Francisco-based Evolv Inc., shows no statistically significant difference in measures of job performance between two pools of entry-level call center agents: those who hadnt held a single full-time job in at least five years before they applied for the position, and the rest. Evolv, which helps large companies assess and manage hourly workers, analyzed data collected from six employers in about 90 locations in the U.S.
The findings buttress President Barack Obama’s call to American businesses to give the long-term unemployed a “fair shot” amid growing evidence that employers have preferred to hire candidates without prolonged jobless spells. Some 3.7 million workers have been out of work for 27 weeks or more as of March, according to Labor Department data released today.
“We have statistical proof that hiring somebody among the long-term unemployed is equal to somebody who is not long-term unemployed,” said Max Simkoff, chief executive officer and co-founder of Evolv.
Evolv tracked four measures of job performance, each collected every day of the workers tenure. The variables included the average time it took for the agent to complete a transaction, customer satisfaction ratings, supervisor evaluations, and the percentage of the workday spent at his or her desk.
No Worse
About 14 percent of the employees in the sample reported having had no full-time job for the five years leading up to the time they applied for the position. After excluding people who had been in school for the year up to the time they applied for the job, EvolvҒs analysts found that the long-term unemployed still performed no worse than those without an extended jobless spell.
The findings are encouraging news for Federal Reserve policy makers, provided that recruiters heed Evolvs findings. The U.S. central bank has deployed record stimulus to bring down unemployment, even as some critics have warned that further accommodation wonҒt help because a prolonged period of high joblessness has made some workers permanently unemployable.
The concern is that the long-term unemployed may remain on the sidelines, ultimately dropping out of the workforce,Ӕ Fed Chair Janet Yellen said March 31 in her first speech as the head of the central bank as she highlighted the plight of struggling Americans. But the data suggest that the long-term unemployed look basically the same as other unemployed people in terms of their occupations, educational attainment, and other characteristics.Ӕ
Qualified Candidates
For employers, Evolvs results suggest that theyҒre missing out on qualified candidates, Simkoff said. In one experiment, researchers at the University of Toronto, the University of Chicago and McGill University submitted about 12,000 fake resumes to apply for about 3,000 jobs. At eight months of unemployment, callbacks were about 45 percent lower than at one month of unemployment, the study showed.
Among those struggling to find work is Vincent Ramsey, 56, who lost his security job at Villanova University in Pennsylvania in May 2012 and has been looking since. He said hes applied for about 30 positions a week mostly in areas in which he’s had experience, such as customer service and childcare.
Positive Traits
“With all the positive traits that I have, somebody’s still finding fault with me,” said Ramsey, referring to his punctuality and work ethic as well as the breadth of his work record. “I don’t understand it. Wherever you put me at any job, I connect with people. I’ve done this successfully everywhere.”
More than 300 companies including Wal-Mart Stores Inc. and automaker Ford Motor Co. signed a White House pledge to develop initiatives for hiring and recruiting job-seekers who have been out of work for an extended period.
“It’s a cruel Catch-22—the longer you’re unemployed, the more unemployable you may seem, Obama said Jan. 31. “They just need a chance.”
To contact the reporter on this story: Aki Ito in San Francisco at aito16 at bloomberg dot net
To contact the editors responsible for this story: Chris Wellisz at cwellisz at bloomberg dot net
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Monday, April 07, 2014
The Jobs Picture - Facts and Fiction
Last month, there were 10.5 million job seekers, but only 4.2 million job openings. Do the math.
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No Sustained Increase in Hires Rate in Two Years
By Heidi Shierholz
Economic Policy Institute
April 8, 2014
The Job Openings and Labor Turnover Survey (JOLTS) data released this morning by the Bureau of Labor Statistics showed that the hires ratethe share of total employment accounted for by new hires - held steady at 3.3 percent in February. The hires rate is one of the best comprehensive measures of the strength of job opportunities because it incorporates two components: 1) net new hires, and 2) new hires that are replacing people who quit their jobs (discussed below). Figure A shows the hires rate each month over time. It fell dramatically in the Great Recession, improved very modestly between the middle of 2009 and early 2012, but has made no sustained improvement since February 2012, two years ago.
Low voluntary quits
Todays JOLTS report shows that many employed workers remain locked in their jobs, unable or unwilling to quit the job they have because other job opportunities remain so scarce. In 2006, nearly 3 million workers voluntarily quit their jobs each month. That dropped to a low of 1.6 million in August 2009. It has since been generally increasing, but it is still extremely low relative to before the Great Recession, and progress is bumpy and slow. In February, the number of voluntary quits held steady (increased by 14,000) at 2.4 million, 20 percent below its prerecession level. Furthermore, the level of quits has made no sustained improvement in five months. ItҒs worth noting that the low level of voluntary quits in the aftermath of the Great Recessionwhich means fewer people experiencing a short bout of unemployment between jobsחis likely one of the reasons the short-term unemployment rate has seen greater improvement in recent years than the long-term unemployment rate.
Job openings
Job openings showed more strength in February, increasing by 299,000. This brought the total number of job openings to 4.2 million. In February, there were 10.5 million job seekers (unemployment data are from the Current Population Survey), meaning that there were 2.5 times as many job seekers as job openings. Put another way: Job seekers so outnumbered job openings that 60 percent of job seekers were not going to find a job in February no matter what they did. In a labor market with strong job opportunities, there would be roughly as many job openings as job seekers.
Furthermore, the 10.2 million unemployed workers understates how many job openings will be needed when a robust jobs recovery finally begins, due to the existence of 5.3 million would-be workers who are currently not in the labor market, but who would be if job opportunities were strong. Many of these “missing workers” will become job seekers when we enter a robust jobs recovery, so job openings will be needed for them, too.
Todays labor market weakness is not due to workers lacking the right skills
Figure B shows the number of unemployed workers and the number of job openings by industry. This figure is extremely useful for diagnosing whatҒs behind our sustained high unemployment. If our current elevated unemployment were due to skills shortages or mismatches, we would expect to find some sectors where there are more unemployed workers than job openings, and some where there are more job openings than unemployed workers. What we find, however, is that unemployed workers dramatically outnumber job openings across the board. There are between 1.3 and 7.7 times as many unemployed workers as job openings in every industry. In other words, even in the industry with the most favorable ratio of unemployed workers to job openings (health care and social assistance), there are still nearly 30 percent more unemployed workers than job openings. In no industry does the number of job openings even come close to the number of people looking for work. This demonstrates that the main problem in the labor market is a broad-based lack of demand for workersnot, as is often claimed, available workers lacking the skills needed for the sectors with job openings. For more on this, see this post.
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Another Fraudulent Jobs Report
By Paul Craig Roberts
April 5, 2014
The March payroll jobs report released April 4 claims 192,000 new private sector jobs.
Here is what John Williams has to say about the claim:
The Bureau of Labor Statistics (BLS) deliberately publishes its seasonally-adjusted historical payroll-employment and household-survey (unemployment) data so that the numbers are neither consistent nor comparable with current headline reporting. The upside revisions to the January and February monthly jobs gains, and the relatively strong March payroll showing, reflected nothing more than concealed, favorable shifts in underlying seasonal factors, hidden by the lack of consistent BLS reporting. In like manner, consistent month-to-month changes in the unemployment rate or labor force simply are not knowable, because the BLS cloaks the consistent and comparable numbers.
Here is what Dave Kranzler has to say: ”the employment report is probably the most deceptively fraudulent report produced by the Government.”
As I have pointed out for a decade, the “New Economy” jobs that we were promised in exchange for our manufacturing jobs and tradable professional service jobs that were offshored have never shown up. The transnational corporations and their hired shills among economists lied to us. Not even a jobs report as deceptive and fraudulent as the BLS payroll jobs report can hide the fact that Congress, the White House, and the American people have sat sucking their thumbs while corporations maximized profits for the one percent at the expense of everyone else in the United States.
Let’s look at where the alleged jobs are. The BLS jobs report says that 28,400 jobs were created in March in wholesale and retail sales. March is the month that Macy’s, Sears, JC Penny, Staples, Radio Shack, Office Depot, and other retailers announced combined closings of several thousand stores, but more retail clerks were hired.
The BLS payroll jobs report claims 57,000 jobs in professional and business services. Are these jobs for lawyers, accountants, architects, engineers, and managers? No. The combined new jobs for these middle class professional skills totaled 10,400. Employment services accounted for 42,000 of the jobs in professional and business services of which temporary help accounted for 28,500.
Education and health services accounted for 34,000 jobs or which ambulatory and home health care services accounted for 28,000 of the jobs.
The other old standby, waitresses and bartenders, accounted for 30,400 jobs. The number of Americans dependent on food stamps who cannot afford to go out to eat or to purchase a six-pack of beer has almost doubled, but the demand for restaurant meals and bar drinks keeps rising.
There you have it. This is Americas “New Economy.” It the jobs exist at all, they consist of lowly paid, largely part-time employment that fails to produce enough income to prevent the food stamp rolls from doubling.
Without growth in consumer income, there is no growth in aggregate consumer demand. Offshoring jobs also offshores the income associated with the jobs, resulting in the decline in the domestic consumer market. The US transnational corporations, pursuing profits in the short-run, are destroying their long-run consumer base. The transnational corporations are also destroying the outlook for US universities, as it makes no sense to incur large student loan debt when job prospects are poor. The corporations are also destroying US leadership in innovation as US corporations increasingly become marketeers of foreign-made goods and services.
As I predicted in 2004, the US will have a third world work force in 20 years.
The unemployment figures are as deceptive as the employment figures. The headline unemployment rate of 6.7% does not include discouraged workers. When discouraged workers are included among the unemployed, the US rate of unemployment is 3.4 times higher than the announced rate.
How many times has John Williams written his report? How many times have I written this article? Yet the government continues to issue false reports, and the presstitute financial media continues to ask no questions.
The US, once a land of opportunity, has been transformed into an aristocratic economy in which income and wealth are concentrated at the very top. The highly skewed concentration at the top is the result of jobs offshoring, which transformed Americans’ salaries and wages into bonuses for executives and capital gains for owners, and financial deregulation, which produced financial collapse and the Federal Reserves bailout of banks too big too fail. The trillions of dollars of new money created by the Federal Reserve has produced massive inflation of stock prices, making owners even richer.
Sooner or later the dollar’s value will suffer as a result of the massive creation of new dollars. When that occurs, the import-dependent American population will suffer a traumatic drop in living standards. The main cost of the bank bailout has yet to hit.
As I writeI cannot think of one thing in the entire areas of foreign and domestic policy that the US government has told the truth about in the 21st century. Just as Saddam Hussein had no weapons of mass destruction, Iran has no nukes, Assad did not use chemical weapons, and Putin did not invade and annex Crimea, the jobs numbers are fraudulent, the unemployment rate is deceptive, the inflation measures are understated, and the GDP growth rate is overstated. Americans live in a matrix of total lies.
What can Americans do? Elections are pointless. Presidents, Senators, and US Representatives represent the interest groups that provide their campaign funds, not the voters. In two decisions, the Republican Supreme Court has made it legal for corporations to purchase the government. Those who own the government will decide what it does, not those who vote.
All Americans can do is to accept the serfdom imposed on them or take to the streets and stay in the streets despite being clubbed, tasered, arrested, and shot by the police, who protect the power structure, not the public.
In America, nothing is done for the public. But everything is done to the public.
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This Is What Employment In America Really Looks Like
By Michael Snyder
The Economic Collapse Blog
April 6, 2014
The level of employment in the United States has been declining since the year 2000. There have been moments when things have appeared to have been getting better for a short period of time, and then the decline has resumed. Thanks to theOFFSHORING OF MILLIONS OF JOBS, the replacement of millions of workers WITH TECHNOLOGY and the overall weakness of the U.S. economy, the percentage of Americans that are actually working is significantly lower than it was when this century began. And even though things have stabilized at a reduced level over the past few years, it is only a matter of time until the next major wave of the economic collapse strikes and the employment level goes even lower. And the truth is that more good jobs are being lost every single day in America. For example, as you will read about below, Warren Buffett is shutting down a Fruit of the Loom factory in Kentucky and moving it to Honduras just so that he can make a little bit more money. We see this kind of betrayal over and over again, and it is absolutely ripping the middle class of America to shreds.
Below I have posted a chart that you never hear any of our politicians talk about. It is a chart that shows how the percentage of working age Americans with a job has steadily declined since the turn of the century. Just before the last recession, we were sitting at about 63 percent, but now we have been below 59 percent since the end of 2009…
We should be thankful that things have stabilized at this lower level for the past few years.
At least things have not been getting worse.
But anyone that believes that “things have returned to normal” is just being delusional.
And nothing is being done about the long-term trends that are absolutely crippling our economy. One of those trends is the offshoring of middle class jobs. As I mentioned above, Fruit of the Loom (which is essentially owned by Warren Buffett) has made the decision to close their factory in Jamestown, Kentucky and lay off all the workers at that factory by the end of 2014…
Clothing company Fruit of the Loom announced Thursday that it will permanently close its plant in Jamestown and lay off all 600 employees by the end of the year.
The Jamestown plant is the last Fruit of the Loom plant in a state where the company had once been a manufacturing titan second only to General Electric.
This isn’t being done because Fruit of the Loom is going out of business. They are still going to be making t-shirts and underwear. They are just going to be making them in Honduras from now on…
The company, owned by Warren Buffett’s Berkshire Hathaway but headquartered in Bowling Green, said the move is “part of the company’s ongoing efforts to align its global supply chain” and will allow the company to better use its existing investments to provide products cheaper and faster.
The company said it is moving the plant’s textile operations to Honduras to save money.
So what are those workers supposed to do?
Go on welfare?
The number of Americans that are dependent on the government is already at an all-time record high.
And doesn’t Warren Buffett already have enough money?
In business school, they teach you that the sole responsibility of a corporation is to maximize wealth for the shareholders.
And so when business students get out into “the real world”, that is how they behave.
But the truth is that corporations have a responsibility to treat their workers, their customers and the communities in which they operate well. This responsibility exists whether corporate executives want to admit it or not.
And we all have a responsibility to our fellow citizens. When we stand aside and do nothing as millions of good paying American jobs are shipped overseas so that the “one world economic agenda” can be advanced and so that men like Warren Buffett can stuff their pockets just a little bit more, we are failing our fellow countrymen.
Because so many of us have fallen for the lie that “globalism is good”, we have allowed our once great manufacturing cities to crumble and die. Just consider what is happening to Detroit. It was once the greatest manufacturing city in the history of the planet, but now foreign newspapers publish stories about what a horror show that it has become…
Khalil Ligon couldnׅt tell if the robbers were in her house. She had just returned home to find her front windowsmashed and a brick lying among shattered glass on the floor. Ligon, an urban planner who lives alone on Detroits east side, stepped out and called the police.
It wasnҒt the first time Ligons home had been broken into, she told me. And when Detroit police officers finally arrived the next day, surveying an area marred by abandoned structures and overgrown vegetation, they asked Ligon a question she often ponders herself: why is she still in Detroit?
Of course this kind of thing is not just happening to Detroit. The truth is that it is happening all over the nation. For example, this article contains an incredible graphic which shows how the middle class of Chicago has steadily disappeared over the past several decades.
Once again, even though we have never had a “recovery”, it is a good thing that things have at least stabilized at a lower level for the past few years.
But now there are all sorts of indications that we are rapidly heading toward yet another economic downturn. The tsunami of retail store closings that is now upon us is just one sign of this. The following is a partial list of retail store closings from a recent article by Daniel Jennings…
Quiznos has filed for bankruptcy, USA Today reported, and could close many of its 2,100 stores.
Sbarro which operates pizza and Italian restaurants in malls, is planning to close 155 locations in the United States and Canada. That means nearly 20 percent of SbarroҒs will close. The chain operates around 800 outlets.
Ruby Tuesday announced plans to close 30 restaurants in January after its sales fell by 7.8 percent. The chain currently operates around 775 steakhouses across the US.
An unknown number of Red Lobster stores will be sold. The chain is in such bad shape that the parent company, Darden Restaurants Inc., had to issue a press release stating that the chain would not close. Instead Darden is planning to spin Red Lobster off into another company and sell some of its stores.
Ralphs, a subsidiary of Kroger, has announced plans to close 15 supermarkets in Southern California within 60 days.
Safeway closed 72 DominickҒs grocery stores in the Chicago area last year.
And the following are some more signs of trouble for the retail industry from one of my recent articles entitled “20 Facts About The Great U.S. Retail Apocalypse That Will Blow Your Mind”...
#1 As you read this article, approximately a billion square feet of retail space IS SITTING VACANT in the United States.
#2 Last week, RADIO SHACK announced that it was going to close more than a thousand stores.
#3 Last week, STAPLES announced that it was going to close 225 stores.
#4 Same-store sales at OFFICE DEPOT have declined for 13 quarters in a row.
#5 J.C. PENNEY has been dying for years, and it recently announced plans to close 33 more stores.
#6 J.C. Penney lost 586 million dollars during the second quarter of 2013 alone.
#7 SEARS has closed about 300 stores since 2010, and CNN IS REPORTING that Sears is “expected to shutter another 500 Sears and Kmart locations soon”.
#8 Overall, sales numbers have declined at Sears for 27 QUARTERS IN A ROW.
#9 Target has announced that it is going to eliminate 475 jobs and not fill 700 positions that are currently empty.
#10 It is being projected that Aropostale will close about 175 stores over the next couple of years.
#11 Macy’s has announced that it is going to be closing five stores and eliminating 2,500 jobs.
#12 The Childrens Place has announced that it will be closing down 125 of its “weakest” stores by 2016.
But it isn’t just the retail industry that is deeply troubled.
All over America we are seeing economic weakness.
In this economic environment, it doesn’t matter how smart, how educated or how experienced you are. If you are out of work, it can be extremely difficult to find a new job. Just consider the case of Abe Gorelick…
Abe Gorelick has decades of marketing experience, an extensive contact list, an Ivy League undergraduate degree, a masterҩҒs in business from the University of Chicago, ideas about how to reach consumers young and old, experience working with businesses from start-ups to huge financial firms and an upbeat, effervescent way about him. What he does not have and has not had for the last year ח is a full-time job.
Five years since the recession ended, it is a story still shared by millions. Mr. Gorelick, 57, lost his position at a large marketing firm last March. As he searched, taking on freelance and consulting work, his familys finances slowly frayed. He is now working three jobs, driving a cab and picking up shifts at Lord & Taylor and Whole Foods.
So what does Abe need in order to find a decent job?
More education?
More experience?
No, what he needs is an economy that produces good jobs.
Sadly, the cold, hard reality of the matter is that the U.S. economy will never produce enough jobs for everyone ever again.
The way that America used to work is long gone, and it has been replaced by a cold, heartless environment where the company that you work for could rip your job away from you at a moment’s notice if they decide that it will put a few extra pennies into the pockets of the shareholders.
You may have worked incredibly hard for 30 years and been super loyal to your company.
It doesn’t matter anymore.
All that matters is the bottom line, and in the process the middle class is being destroyed. But by destroying the middle class, those corporations are destroying the consumer base that their corporate empires were built upon in the first place.
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