Article 43


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Monday, June 29, 2015

Two More Companies I’ll Never Do Business With Again

Did you read about my dealings with AMAZON and TAMOSOFT ?

Both companies lost a 20 year customer for good.

Here’s two more that recently did:


Why?  The last thing I bought from them arrived smashed. The box looked fine. The thing inside was messued up. I got an RMA from their website for hidden damage, and spent $27 of my own money mailing it back, What did they do?  Sent me an email they won’t accept the return because they got it back damaged.  What did I do?  Called and explained over and over again to half a dozen people what happened, who all told me they won’t accept a return damaged, insisting that I file a claim with the shipper.  I finally filed a claim with the credit card company who helped get my money back.

Discount Electronics

Why? Because they sold me a refurbished Dell computer with a OEM copy of Windows and a restore partition instead of reinstall disk.  I used the restore partion that can only be used once, leaving me no way to reinstall again. Dell and Microsoft told me to call Discount Electronics for a reinstall disk. Discount Electronics refused. So I’m left with a windows license, but no media to install it.

Posted by Elvis on 06/29/15 •
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Friday, September 12, 2014

Will the Real Unemployment Rate Please Stand Up?

By B. Rose Huber
Woodrow Wilson School
September 10, 2014

America’s unemployment rate—most recently reported as 6.1 percent—has long been used to gauge the country’s economic well-being. But a new working paper released by Princeton University’s Woodrow Wilson School of Public and International Affairs highlights the difficulty in estimating the exact unemployment rate, though changes in the official measure still signal important movements in the economy.

THE RESEARCH, published by the NATIONAL BUREAU OF ECONOMIC RESEARCH, finds that the true unemployment rate may be higher or lower than recent reports indicate. In fact, the authors writethat published unemployment rates have gradually become more difficult to interpret over time, especially in the last two decades. The researchers cite survey design changes as a likely culprit, in large part because the changes corresponded with an increase in nonresponse rates by Americans.

“It is potentially a huge issue,” said ALAN KREUGER, the Bendheim Professor in Economics and Public Policy at the Wilson School and former chairman of President Barack Obama’s Council of Economic Advisers. “But our results do suggest several important avenues for future research and improvements in the data.”

To calculate the unemployment rate, the U.S. CENSUS BUREAU and U.S. BUREAU OF LABOR STATISTICS administer the Current Population Survey (CPS), which collects extensive demographic data to better understand labor market fluctuations and economic conditions. The CPS consists of a sample of nearly 60,000 households in all U.S. states and the District of Columbia. Households are surveyed monthly for four consecutive months, left alone for eight months and then surveyed again monthly during the final four months. In any given month, there are eight “rotation groups,” depending on how many months the households have been in the survey so far. Each rotation group is designed to be representative of the population. The official unemployment rate is a weighted average of the eight groups.

Krueger and his collaborators—Alexandre Mas, professor of economics and public affairs at Princeton’s Wilson School, and Xiaotong Niu, an analyst at the Congressional Budget Office—found that in the first half of 2014, the unemployment rate among people in the first month of being interviewed was 7.5 percent. However, for those in the final month of being interviewed, it was only 6.1 percent. Because the Bureau of Labor Statistics weights the first interview more heavily, the official unemployment rate for this period was 6.5 percent.

This disparity between interview groups, known technically as “rotation group bias,” isn’t new. But Krueger’s paper is the first since 1975 to explore the growing magnitude and evolution of such discrepancies. This new paper shows that rotation-group bias has doubled since 1994, when the CPS underwent a major redesign.

“It is unclear which rotation group provides the most accurate measure of the unemployment rate,” said Krueger. “The unemployment rate for each rotation group tends to rise or fall together over time.”

Two decades ago, the CPS moved from pen-and-paper questionnaires to computer-assisted phone interviews. They also changed the language and logic behind some of the questions. Shortly after the redesign, CPS began seeing a large rise in nonresponse rates.

Interestingly, the study shows that this same kind of bias isn’t found when looking at data from the United Kingdom and Canada, which also use rotating groups to measure their unemployment rates. This finding suggests several avenues for future research including examining the details of the surveys themselves, like the nature of the questionnaire, the interviewing methods and the survey response rates. All, Krueger said, play a pivotal role in shaping the unemployment figure outcomes.



How Temp Workers Are Padding the Country’s Unemployment Rate

By Jason Notte
September 15, 2014

Roughly 2.8 million temporary jobs are propping up the U.S. economy and constituting 2% of total employment, according to a report.

The National Employment Law Project found that temporary help agencies, staffing agencies, professional employer organizations and employment placement agencies fill 2.5% of all jobs, up from 1.4% in 1990. More than 12 million workers moved in and out of staffing agencies in 2013 alone.

While the Department of Labor notes that the unemployment rate dropped from 7.2% in August 2013 to 6.1% last month, the percentage of temporary labor currently in the workforce underscores some of the reasons Federal Reserve Chair Janet Yellen, among others, view that percentage with caution. About 92.3 million U.S. citizens were out of the workforce in August, up from 90.5 a year ago. Meanwhile, the 6.3 million Americans looking for a job is actually up from 6.2 million a year ago.

Increasingly, those temp jobs aren’t just clerical positions or seasonal and holiday help. In 2013, material-moving workers made up nearly 20% of all temporary workers. Assemblers and fabricators constituted another 9%, while construction trades workers were 3%. Altogether, workers in the industrial and manufacturing sector accounted for 42% of all temp work in 2013. Administrative assistants, clerks, computer workers and other office workers accounted for just 21%.

Roughly 77% of all Fortune 500 companies use temporary workers of some kind. Waste Management employs them for waste removal, recycling and other tasks. Philips Norelco uses them to package razors. Doubletree Hotels rely on them to clean rooms. Dunkin’ Donuts and Pizza Hut use them to fill orders and Costco and Wal-Mart employ them to make frozen pizzas. They’re an efficient way to fill positions and complete tasks, but they’re also employed at a discount.

The median temp worker takes home $12.40 an hour, compared with an hourly wage of $15.84 earned by all private-sector workers, regardless of industry. That’s a 22% disparity that varies broadly by position. Temporary administrative assistants average $16.13 an hour compared with the $16.97 earned by their more permanent private-sector counterparts, while the difference in pay for clerks and office support staff can be less than $1 per hour for temp workers. For construction trades workers, however, taking a temp job earns them only $14 an hour compared with more permanent workers taking in nearly $19 an hour for the same tasks.

“The shift towards temp work is creating an economy in which working people who move and produce products for some of our nations largest and most profitable corporations are treated like any other input, to be acquired at the cheapest cost,” says Rebecca Smith, who co-wrote the NELP report. “Staffing agencies not only fail to provide livable wages, benefits or job security for their workers, but their influence in an industry can lower standards for all workers in that industry.”

It’s not only less pay: It’s often less safe. A ProPublica analysis of worker’s compensation claims in California, Florida, Massachusetts, Minnesota and Oregon found that the incidence of temporary worker workplace injuries was between 36% to 72% higher than for non-temporary workers. Those concerns and reports of worker deaths, especially on the first day of work, has the Occupational Safety and Health Administration ramping up efforts to crack down on enforcement within the temporary staffing industry through its Temporary Worker Initiative. OSHA is concerned employers may use temporary workers to avoid compliance obligations and skirt worker protections.

The economy, meanwhile, is seeing a lot more of those “temporary jobs,” become a permanent reality for workers. The number of U.S. workers employed part-time because their hours had been cut back or because they couldn’t find full-time work sat at 7.3 million in August. Another 2.1 million considered “marginally attached” to the labor force have been looking for work for roughly a year.

David Fields, a 45-year-old father of four who worked for Linc Logistics in a Wal-Mart consolidation center in Hammond, Ind., is among the temp workers who have become reliant on a series of temporary jobs. Fields has worked at various warehouses in Chicago and Northwest Indiana for several years and notes that working through injury is just part of maintaining job security.

“You haven’t felt cold until you’ve worked an overtime shift in sub-zero temperatures on a warehouse loading dock during the Christmas rush,” Fields told NELP. “It’s dangerous to move heavy equipment when you can’t feel your hands and you’re walking on ice. Frostbite was a common. But as temp workers, we were expendable, so we just kept on working.”


Posted by Elvis on 09/12/14 •
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Friday, August 15, 2014

Clear Routine Phone Home

There’s always something NEW and INTERESTING in the SERVER LOGS.

Ever hear of clear-routine dot net?

A system generated email was addressed to them last month and another yesterday. 

The body is a bunch of numbers.

What did I download that’s trying to tell THEM something?

What is that SOMETHING they want to learn?

Am I an unwitting victim of some flyby download that’s phoning home?

Posted by Elvis on 08/15/14 •
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Thursday, July 31, 2014

Engineers - Education Isn’t Their Answer

Next time somebody tries to tell you the problem with jobs in America is people are too stupid, or education is the answer - maybe you can steer them to this collection of articles.


Many engineers remain unemployed despite reported tech skills shortages

Tech Journal
February 3rd, 2012

During a recent video chat session, President Obama told a woman that he could not understand why her engineer husband was unemployed because industry tells me that they don’t have enough highly skilled engineers.

However, in an analysis by the Center for Immigration Studies of the data from the American Community Survey collected by the Census Bureau show that there are a total of 1.8 million U.S.-born individuals with engineering degrees who are either unemployed, out of the labor market, or not working as engineers.

This is true for those with many different types of engineering degrees.

For a complete review of the American Community Survey, including a table containing detailed employment figures for specific engineering degrees, visit the Center for Immigration Studies website HERE.

The 2010 American Community Survey shows:

There are 101,000 U.S.-born individuals with engineering degrees who are unemployed.

There are an additional 244,000 U.S.-born individuals under age 65 who have a degree in engineering but who are not in the labor market. This means they are not working nor are they looking for work, and are therefore not counted as unemployed.

In addition to those unemployed and out of the labor force, there are an additional 1.47 million U.S.-born individuals who report they have an engineering degree and have a job, but do not work as engineers.

President Obama specifically used the words ԓhighly skilled. In 2010, there were 25,000 unemployed U.S.-born individuals with engineering degrees who have a MasterԒs or Ph.D. and another 68,000 with advanced degree not in the labor force. There were also 489,000 U.S.-born individuals with graduate degrees who were working, but not as engineers.

Relatively low pay and perhaps a strong bias on the part of some employers to hire foreign workers seems to have pushed many American engineers out their profession.

There are many different types of engineering degrees. But unemployment, non-work, or working outside of your field is common for Americans with many different types of engineering degrees.

The key policy question for the United States is how many foreign engineers should be admitted in the future. Contrary to President Obamas statement, the latest data from the Census Bureau indicate there is a very large supply of American-born engineers in the country. It would be better for the president to seek more diverse sources of information than simply relying on ғindustry to determine what is going on in the U.S. labor market.

Data Source: Figures for the above analysis come from a Center for Immigration Studies analysis of the public-use file of the 2010 American Community Survey (ACS) collected by the U.S. Census Bureau.

Figures on degrees and employment are based on self-reporting in the survey and have been rounded to their nearest thousand.

The survey asks about undergraduate degrees, so some of the individuals who have a Masters or Ph.D. may not have their graduate degree in engineering. Also, those who indicated that they have a professional degree are not included in the discussion of those with Masters and Ph.D.s because a large share have law degrees. The 2010 data is the most recent ACS available.



Unemployment and the ‘Skills Mismatch’ Story: Overblown and Unpersuasive

By Gary Burtless
Brookings Institute
July 29, 2014

The jobless rate has dipped to 6.1 percent, and businesses are already complaining about a skills shortage. Earlier this month the Wall Street Journal reported rising complaints by small business owners about their inability to fill critical job openings. Their complaints are not new. Two years ago, when unemployment topped 8%, personnel managers in manufacturing companies grumbled that it was impossible to fill positions requiring specialized skills. The Manufacturing Institute claimed that 600,000 job openings were going unfilled.

We shouldn’t be surprised when shrinking unemployment makes it harder for employers to fill job vacancies. If fewer people are trying to find work, fewer job seekers will show up for interviews and a smaller percentage will come with the skills employers need. In some cases, failure to fill job vacancies will limit how much or how fast a business can expand. Even if customers are eager to buy more of a firm’s products, the companys willingness to accept new orders may be weakened by its failure to fill key vacancies.

Throughout the recovery following the Great Recession we saw an abnormally high rate of job vacancies given the level of the unemployment rate. If past experience was a guide, the job vacancy rate we saw was consistent with an unemployment rate that was 1.5 to 2.0 percentage points lower than the one we actually experienced. The high rate of vacancies relative to unemployment suggests either that employers have become less efficient in filling vacancies or are facing more difficulties uncovering applicants with the skills they need. Their hiring methods may need an overhaul. Alternatively, today’s job seekers do not have the mix of skills needed by the nations expanding employers.

So far as I know, few researchers have looked carefully into the efficiency of company personnel departments. There is little information about whether employers nowadays process job applications more slowly or less effectively than they did in the past.

The second theory - the skills mismatch hypothesis - has received greater scrutiny. Economists have examined the skill mix of workers laid off from shrinking industries and compared it with the mix of occupational skills needed in industries that are growing. The available research on this topic is a long way from definitive. For what it is worth, most credible studies do not find a bigger mismatch than what we saw in past recoveries. However, our information about the skills of job seekers is not detailed enough to know whether their qualifications equip them to fill new positions in expanding industries. In the past 10 years, manufacturing companies have cut their payrolls by 2.2 million workers. The manufacturing workers who lost their jobs and are seeking new ones may lack the specific skills needed by expanding companies, even if their former jobs were in occupations closely related to the occupations that are now growing.

Employers who receive few applications from qualified job seekers might consider making an INVESTMENT IN TRAINING. Companies can pay for re-training current employees or training new ones. If the skill needed by the employer is highly specialized, there may be no other practical way to obtain a worker who possesses the needed skill. It makes no sense for unemployed workers to invest in specialized expertise that has no practical value except at one firm. Unfortunately, there is little reliable evidence about employers’ investment in skills or its trend in the current and past recoveries.

To an economist, the most accessible and persuasive evidence demonstrating a skills shortage should be found in wage data. If employers urgently need workers with skills in short supply, we expect them to offer higher pay to prospective new employees who possess the skills. When workers with crucial skills are offered better wages by expanding employers, they are in a strong position to demand better pay from their current employers, even if their own employer is not expanding. Current employers must match the wage offers of growing employers or risk losing their key employees.

Where is the evidence of soaring pay for workers whose skills are in short supply? We frequently read anecdotal reports informing us some employers find it tough to fill job openings. What is harder to find is support for the skills mismatch hypothesis in the wage data. Last week the BLS released its quarterly report on the pay of full-time wage and salary workers. The median full-time worker earned $782 a week in spring 2014 (see Charts 1 and 2). That wage was $6, or 0.8%, more than the median earnings received by workers one year ago. While other wage series show modestly faster gains in pay, there is little evidence wages or compensation are increasing much faster than 2% a year. Even though unemployment has declined, there are still 2.5 times as many active job seekers as there are job vacancies. At the same time, there are between 3 and 3 million potential workers outside the labor force who would become job seekers if they believed it were easier to find a job. The excess of job seekers over job openings continues to limit wage gains, notwithstanding the complaints of businesses that cannot fill vacancies.

It is cheap for employers to claim qualified workers are in short supply. It is a bit more expensive for them to do something to boost supply. Unless managers have forgotten everything they learned in Econ 101, they should recognize that one way to fill a vacancy is to offer qualified job seekers a compelling reason to take the job. Higher pay, better benefits, and more accommodating work hours are usually good reasons for job applicants to prefer one employment offer over another. When employers are unwilling to offer better compensation to fill their skill needs, it is reasonable to ask how urgently those skills are really needed.



Bill Gates’ Tech Worker Fantasy

Ron Hira, Paula Stephan et al.
USA Today
July 27, 2014

Business executives and politicians endlessly complain that there is a “shortage” of qualified Americans and that the U.S. must admit more high-skilled guest workers to fill jobs in STEM fields: science, technology, engineering and math. This claim is echoed by everyone from President Obama and RUPERT MURDOCH to MARK ZUCKERBERG and Bill Gates.

Yet within the past month, two odd things occurred: Census reported that only one in four STEM degree holders is in a STEM job, and Microsoft announced plans to downsize its workforce by 18,000 jobs. Even so, the House is considering legislation that, like the Senate immigration bill before it, would increase to unprecedented levels the supply of high-skill guest workers and automatic green cards to foreign STEM students.

As longtime researchers of the STEM workforce and immigration who have separately done in-depth analyses on these issues, and having no self-interest in the outcomes of the legislative debate, we feel compelled to report that none of us has been able to find any credible evidence to support the IT industry’s assertions of labor shortages.

Stagnant wages

If a shortage did exist, wages would be rising as companies tried to attract scarce workers. Instead, legislation that expanded visas for IT personnel during the 1990s has kept average wages flat over the past 16 years. Indeed, guest workers have become the predominant source of new hires in these fields.

Those supporting even greater expansion seem to have forgotten about the hundreds of thousands of American high-tech workers who are being shortchanged - by wages stuck at 1998 levels, by diminished career prospects and by repeated rounds of layoffs.

The facts are that, excluding advocacy studies by those with industry funding, there is a remarkable concurrence among a wide range of researchers that there is an ample supply of American workers (native and immigrant, citizen and permanent resident) who are willing and qualified to fill the high-skill jobs in this country. The only real disagreement is whether supply is two or three times larger than the demand.

Unfortunately, companies are exploiting the large existing flow of guest workers to deny American workers access to STEM careers and the middle-class security that should come with them. Imagine, then, how many more Americans would be frozen out of the middle class if politicians and tech moguls succeeded in doubling or tripling the flow of guest workers into STEM occupations.

Redundant reforms

Another major, yet often overlooked, provision in the pending legislation would grant automatic green cards to any foreign student who earns a graduate degree in a STEM field, based on assertions that foreign graduates of U.S. universities are routinely being forced to leave. Such claims are incompatible with the evidence that such graduates have many paths to stay and work, and indeed the “stay rates” for visiting international students are very high and have shown no sign of decline. The most recent study finds that 92% of Chinese Ph.D. students stay in the U.S. to work after graduation.

The tech industry’s promotion of expanded temporary visas (such as the H-1B) and green cards is driven by its desire for cheap, young and immobile labor. It is well documented that loopholes enable firms to legally pay H-1Bs below their market value and to continue the widespread age discrimination acknowledged by many in the tech industry.

When considering the credibility of the industry’s repetitive claims of “shortages,” it is worth recalling its history of misbehavior in hiring and employment. The most recent example was the proposed $300 million legal settlement of a class action against companies such as Google, Apple, Intel and Adobe for anti-competitive collusion to suppress the pay of highly skilled employees, including unlawful agreements to not recruit each others’ workers.

IT industry leaders have spent lavishly on lobbying to promote their STEM shortage claims among legislators. The only problem is that the evidence contradicts their self-interested claims.

Ron Hira is a professor of public policy at Howard University. Paula Stephan is a professor of economics at Georgia State University.Hal Salzman is a Rutgers University professor of planning & public policy at the J.J. Heldrich Center for Workforce Development. Michael Teitelbaum is senior research associate at the Harvard Law School’s Labor and Worklife Program. Norm Matloff is a professor of computer science at the University of California-Davis.


Posted by Elvis on 07/31/14 •
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Saturday, July 26, 2014

Is Long-Term Unemployment Declining?

Long-term unemployment, which was a much larger problem during the recent recession than during the 1980s downturns, has finally begun to fall rapidly. The problem cuts across virtually all parts of society, with a substantial proportion of the unemployed in all education and age categories being out of work for more than six months.

A Drop in the Long-Term Unemployed

By Floyd Norris
NY Times
July 25, 2014

The LONG-TERM UNEMPLOYMENT rate, which soared in 2009 to heights not seen since the Great Depression, is finally declining rapidly. The proportion of the work force that has been unemployed for at least 27 weeks has fallen to 1.98 percent, less than half the record high of 4.4 percent reached in 2010.

"Since the end of 2013, the long-term unemployment rate dropped 0.5 percentage point, thereby accounting for almost the entire decline in the overall unemployment rate,” pointed out two Federal Reserve Board economists, Tomaz Cajner and David Ratner, in a NOTE published by the Fed this week.

As a result, for the first time in five years, less than a third of all unemployed workers have been out of work for at least six months. In the first six months of 2014, that figure dropped at the fastest rate in more than half a century.

“The improvement in the labor market is reaching the long-term unemployed,” said Heidi Shierholz, an economist at the Economic Policy Institute. “They are benefiting from the modest but measurable improvement in the labor market.”

And yet the level of long-term unemployment remains high by historical standards. During the double-dip recessions of the early 1980s, the overall unemployment rate peaked at 10.8 percent, well above the 10 percent peak in the recent recession. And now, more than six years after the recession began, the overall unemployment rate of 6.1 percent is significantly lower than at a comparable point after the 1980s downturns began. But the long-term unemployment rate remains much higher than it was at this point in the earlier cycle.

“The problem of long-term unemployment has not been limited to only certain kinds of workers. It is not just the problem of people who don’t have any skills and cant find work,” said Katharine G. Abraham, a former commissioner of the Bureau of Labor Statistics who now is a professor at the University of Maryland.

The bureau, which collects the statistics through its monthly survey of households, produces detailed figures for various groups each month but does not estimate what they would be when adjusted for seasonal factors. The lower two sets of charts show 12-month averages, ending in the month shown, for each group. The higher set of charts shows seasonally adjusted figures for the entire work force and therefore reflects changes in conditions more rapidly.

As might be expected, the long-term unemployment rate is lower for those with the most education. But over the most recent 12 months, about 37 percent of unemployed workers with advanced degrees had been out of work for more than six months a figure that was almost identical with every other level of education except one. Only 32 percent of unemployed high school dropouts had been unemployed for that long.

Similarly, there seems to be little difference among age groups, with the exception of the youngest workers, aged 16 to 24. They have a higher long-term unemployment rate, but a smaller percentage of young unemployed workers have been jobless for an extended period.

But race does appear to make a difference. Whites are far less likely to face long-term unemployment (this white guy and his friends would beg to differ. ed) than blacks, with Hispanics somewhere in between. Even after falling recently, the black long-term unemployment rate of 5.1 percent over the last 12 months is considerably higher than the 3.4 percent peak rate for whites, reached in 2010.



Five Years into Recovery, State Jobs Picture Improves Across the Country, Though Many States still Have a Long Way to Go

By David Cooper
Economic Policy Institute
July 18, 2014

The REGIONAL AND STATE AND EMPLOYMENT SUMMARY, released this morning by the Bureau of Labor Statistics, showed the same general improvement in state labor market conditions that we’ve seen in most states over the past year. While this is good news and echoes this month’s strong national jobs report, there are still reasons for concern, as the labor force shrank in many states, and the majority of states have still not reached their pre-recession employment levels.

In the three month period from March 2014 to June 2014, 41 states (plus the District of Columbia) saw job growth, with the largest percentage gains occurring in Delaware (+1.3 percent), Texas (+1.2 percent), and the District of Columbia (+1.2 percent). Nine states lost jobs, with the largest percentage declines occurring in Vermont (-0.9 percent), Wyoming (-0.9 percent), and Alaska (-0.8 percent). Importantly, all of the four major regions and nine Census divisions of the country experienced strong job growth over this period, with the oil and gas boom fueling the largest growth (+1.0 percent) in the West South Central division that contains Texas, Oklahoma, Arkansas, and Louisiana.

Over the same timeframe, the unemployment rate fell in 34 states (plus the District of Columbia). The largest decreases occurred in Illinois (-1.3 percent), Massachusetts (-0.8 percent), Nevada (-0.8 percent), and Rhode Island (-0.8 percent). While these declines are generally good news, the labor force shrank in three of these top four states (Illinois, Massachusetts, and Nevada), and in 21 states overall, suggesting that not all of the improvement in state unemployment rates was due to job seekers finding jobs. The unemployment rate increased in 12 states, led by Louisiana (+0.5 percent), Georgia (+0.4 percent), and Virginia (+0.4 percent). Four states saw no change.

Even with this improving picture across the country, many states still have a long way to go. As of June, 31 states have yet to recoup the jobs they lost in the Great Recession. Moreover, there are still too many workers who have been sidelined from the workforce for an exceptionally long period of time. As EPI’s new long-term unemployment data tool shows, in most states the share of the labor force that is long-term unemployed (unemployed for six month or more) is still as high, or higher, than it has ever been.



Across US job market, layoffs are becoming rare

By The Associated Press
July 25, 2014

The risk of losing your job is getting smaller and smaller.

As the U.S. economy has improved and employers have regained confidence, companies have been steadily shedding fewer workers. Which is why applications for unemployment benefits have dwindled to their lowest level since February 2006 nearly two years before the Great Recession began - the government said Thursday.

The trend means greater job security and suggests a critical turning point in the economic recovery. It raises the hope that workers’ pay will finally accelerate after grinding through a sluggish recovery for the past half-decade.

When the economy sank into recession at the end of 2007, employers cut deeply into their staffs. And then during the recovery, they hired only hesitantly. Instead, they sought to maximize the productivity of their existing employees.

But in recent months, the picture has brightened. Employers have added 200,000-plus jobs for five straight months, and the unemployment rate has reached 6.1 percent, the lowest since 2008.

“Now, the steadily declining level of layoffs suggests that employers may have to hire even more aggressively and raise pay if they want to expand their businesses,” said Joel Naroff, president of Naroff Economic Advisers.

“They’ve been continually working their workers harder and longer,” Naroff said. “As a result of that, we have consistent growth and you can’t lay off people anymore.”

The shortage of laid-off workers searching for jobs means that more companies may need to pay more to attract talent. Thus far, wage growth has essentially only kept pace with inflation, and household incomes remain below their 2007 levels.

Most businesses have so far been hesitant to raise wages, so there may be a lag before workers see higher paychecks.

“But when the dam breaks, it’s really going to break,” Naroff predicted.

Some firms say they’re already dealing with wage pressures.

Cleveland-based Applied Medical Technology has raised hourly pay for warehouse employees from $8.25 to $10. It did so both to attract new hires and because it heard that some of its employees had quit for raises elsewhere, said Jeff Elliott, the company’s chief financial officer.

The company also started holding pizza parties and summer cookouts. Elliott said it’s cheaper and easier to keep existing employees than to find and train new ones.

Throughout the economy, layoffs have fallen so much that the number of people seeking unemployment benefits plunged last week to a seasonally adjusted 284,000, a low last achieved in February 2006. And after accounting for U.S. population growth, the number of people applying for unemployment aid has reached its lowest point since 1999.

The four-week average of applications, which smooths out week-to-week fluctuations, has dropped to 302,000 from 348,500 when the year began.

“In the weeks that follow,” said Michelle Girard, chief economist at the Royal Bank of Scotland, “claims look likely to hold at or below the 300,000 mark.”

The sharp decline has paralleled healthy monthly employment reports. Employers added a net 288,000 jobs in June, capping the first five-month stretch of gains above 200,000 since 1999 at the height of the dot-com boom.

The consensus forecast of economists is that the government will announce next week that employers added 225,000 jobs in July, according to a survey by the data firm FactSet.

Not every company is avoiding layoffs. Earlier this month, Microsoft announced that it would cut 18,000 workers the biggest layoffs in its 39-year history. But layoff announcements now mainly reflect strategic changes within individual companies, rather than broader economic conditions, Naroff said.

Other data confirm that across the economy, job cuts have reached unusually low levels. Total layoffs in May dropped below pre-recession levels, the government said in a separate report that reveals how many people were hired, fired or quit jobs.

Just 1.58 million people were laid off in May, according to the Labor Department. That was the third-lowest monthly figure since the government began tracking the data in 2001.

Still, while layoffs have fallen 7.5 percent this year, actual hiring has increased just 3 percent. That’s a big reason the job market might not seem as healthy as the series of strong monthly net job gains might suggest.

Even so, more people with jobs means more people with paychecks, which tends to boost consumer spending and growth. After a sharp contraction in the economy in the first three months of the year, most economists expect growth to exceed a 3 percent annual pace in the second half of 2014.



Long-Term Unemployment Shrinking For Good Reasons: Fed Economists

By Arthur Delaney
Huffington Post
July 22, 2014

An improving job market is shrinking the ranks of the long-term jobless, economists for the Federal Reserve said in a Monday blog post.

Slightly more than 3 million Americans had been out of work six months or longer as of June, according to the Labor Department, down from 4.3 million this time last year. But it hasn’t been clear whether the picture is truly improving or the long-term jobless are just disappearing from the data because they’ve despaired of ever finding work, since only those who continue looking count as unemployed.

The Fed economists, Tomaz Cajner and David Ratner, say that with the labor force participation rate holding steady at 62.8 percent, the decline in the rate of long-term unemployment accounts for most of the drop in the overall unemployment rate, which has fallen from 6.7 percent last December to 6.1 percent in June.

“These encouraging developments appear consistent with rising employment of those previously reported as long-term unemployed,” Cajner and Ratner write.

Without delving much into the underlying data, Republican lawmakers have said the declining jobless rate proves the wisdom of discontinuing long-term unemployment benefits, which Congress dropped in December and Democrats have been unable to revive. If the long-term jobless are getting their mojo back, both Congress and the Fed may be even less likely to try to help them.

Some analysts have said the jobs picture is gloomier, citing the Bureau of Labor Statistics’ monthly data on labor market flows—people coming and going from jobs to unemployment, and from unemployment to nonparticipation. The monthly flows data suggest the long-term jobless aren’t finding much work.

Cajner and Ratner take a longer view, checking annual transitions instead of monthly ones, and like what they see. “Importantly, at the yearly frequency, the long-term unemployed are currently more likely to transition to employment than to nonparticipation, in stark contrast with the monthly flows data,” they write.


Posted by Elvis on 07/26/14 •
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