Dean Baker: Auto Manufacturing Gives Big Boost to Jobs Growth
We asked economist Dean Baker, co-director of the Center for Economic and Policy Research (CEPR), to expand upon recent reports that show a marked improvement in the nation’s jobs picture. In January, 243,000 jobs were created and unemployment dropped significantly for some of the hardest-hit workers. Baker’s intepretation of the data presents a still-mixed economic picture, but one bright point stands out clearly: President Obama’s support of the U.S. auto industry has been key to improving job creation for America’s workers. Be sure to pick up a copy of Baker’s latest book, The End of Loser Liberalism: Making Markets Progressive.
Q.: As you’ve noted, the January drop in unemployment was especially sharp for African American and Latino workers. The jobless rate for black workers fell by 2.2 percentage points to 13.6 percent, the lowest level since March 2009. For Latino workers, the jobless rate dropped by 0.5 to 10.5 percent, the lowest since January 2009. What’s behind this good news?
A.: My best guess is that much of this is a statistical quirk. These numbers are always erratic and can and do jump around month to month. However, part of the drop is probably real. I suspect that with the African American population much of the story is related to the increase in manufacturing and construction employment, which is likely clustered in the Midwest. These are sectors that disproportionately employ African American workers.
The improvement for Latinos is less easily explained. Of course, many Latinos are employed in construction, but more in the West and South than Midwest, which has seen the biggest gains.
Anyhow, I suspect that part of the improvement in the employment picture is weather related. We had unusually warm weather across the Northeast/Midwest in December and January, which means that construction and manufacturing were not disrupted as much as usual. That would make it appear that we are adding jobs.
Q.: Employment in manufacturing and construction also showed strong growth in January. You attribute the construction job hike to unseasonably warm weather. But what about manufacturing? It’s been one area of job growth for several months now. What’s behind its resurgence and can it continue? Read the rest of this entry »
Politics Major Factor in Decreased Unionization
Many economists and policymakers say the drop in unionization rates is an inevitable consequence of the changing global economy and advancing technology. But a new report finds that national politics plays a bigger role than globalization or technology in the decline in unionization in the United States and the 20 other nations studied.
The report from the Center for Economic and Policy Research (CEPR) looked at 21 countries with advanced economics facing the same globalization and technology changes. It found that economies with few labor protections such as the United States showed a higher decline in unionization rates than nations with economic and national policies where workers’ rights have a more prominent place in the market.
National politics are a major determinant of national unionization rates and changes in those rates in recent decades. At the same time, the data contradict the view that a decline in unionization rates is an inevitable implication of “globalization” or technological change.
Click here for the full report.
Republican Report: Solve Job Crisis by Cutting Wages and Public Employees
Last week, House Speaker John Boehner (R-Ohio) spent a great deal of effort touting an economic report from the Republican staff of the Joint Economic Committee. That should be your first warning to step back, take a deep breath and adjust your skepticism meter.
In a nutshell, it argues—using the examples of several small national economies—that huge spending cuts, massive layoffs of public employees and the weakening of unions will create jobs by lowering wages. As Tim Fernholz and Jim Tankersley at the National Journal write:
The paper predicts that cutting the number of public employees would send highly-skilled workers job hunting in the private sector, which in turn would lead to lower labor costs and increased employment. But “lowering labor costs” is economist-speak for lowering wages—does the GOP want to be in the position of advocating for lower wages for voters who work in the private sector?
Dean Baker, co-founder of the Center for Economic and Policy Research (CEPR), points out that the examples of the nations that followed the Republican economic prescription the report uses to back up its claims have been discredited by the International Monetary Fund (IMF) and the Organization for Economic Co-Operation and Development (OECD).
8.9 Percent Jobless Rate Not ‘Normal’ nor Structural
Put this under the heading of “voodoo economics.” The argument goes that the nation’s 8.9 percent unemployment rate—after nearly two years between 9 and 10 percent—is the new “normal” unemployment rate. Proponents of this absurd claim say it’s workers’ fault because they don’t have the skills to fill the jobs or don’t live near the jobs that are available.
A new study by the Center for Economic and Policy Research (CEPR) takes this theory—also known as “structural unemployment”—and blows it out of the water.
Says CEPR senior Economist John Schmitt:
We are not in a national employment crisis because the available workforce is not well-matched with the available jobs. We are in a crisis because the economy is not producing enough jobs. Read the rest of this entry »
Washington Wrecks the Economy: More Evidence
This a cross-post from TPM by Dean Baker, economist and co-director of the Center for Economic and Policy Research.
We now have even more evidence that inept policies from Washington are causing enormous suffering across the country. It is not quite the line that the right-wingers are pushing. The new evidence is that the stimulus worked and was, in fact, more effective than had been predicted.
The new evidence comes in the form of a study by two Dartmouth professors, James Feyrer and Bruce Sacerdote. Past estimates of the impact of the stimulus on jobs and the economy relied on simply plugging the tax breaks and spending into standard macro models and reporting the predicted effect. In this sense, the impact of the stimulus was actually built into the model. However this new study directly measures the impact of stimulus spending on employment across states, comparing the number of jobs created to the amount of spending.
New Social Security Calculator Helps Set Retirement Income Goals
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In his State of the Union address, President Obama insisted on the need to protect Social Security and ensure that future generations can depend on it, and he urged bipartisanship in strengthening Social Security, “without slashing benefits” or privatization.
The Center for Economic and Policy Research (CEPR) has made it easy to determine how much of your retirement income will come from Social Security. The CEPR’s new Social Security Calculator also enables you to compare your Social Security retirement income with other households with similar demographics.
The calculator lets users enter their planned date of retirement, current income, estimated mortgage debt, savings and stocks and pension to calculate their future household retirement income. Users also can enter demographic information such as age, race and marital status and compare their total retirement income to similar households in their area. The data used in the calculator is drawn from the U.S. Census Bureau’s American Community Survey (ACS).
California’s Paid Family Leave Law Is Working, New Study Finds
California’s paid family leave law “has been remarkably successful” and received high marks from both employers and workers, according to a new study released yesterday by researchers from UCLA/City University of New York (CUNY) and the Center for Economic and Policy Research (CEPR).
Study co-author Ruth Milkman, a professor of sociology at UCLA and the CUNY, says the law, one of just two paid family leave laws in the nation,
has helped hundreds of thousands of workers—especially in low-wage jobs—balance the costs and challenges of tending to family and work and it has begun to close the gap in access to paid leave benefits.
New Jersey is the only other state with a paid family leave law.
The business community vigorously fought against the now six-year-old law, claiming it would be costly and easily abused. But paid family leave has disproved opponents’ claims that the program would be a “job killer,” says Eileen Applebaum, the other co-author and senior economist at CEPR.
Deliberate Distortions Create False Sense of Urgency for Social Security Cuts
There is so much inaccurate information—much of it deliberately cultivated—about the solvency of Social Security, that it’s leading policymakers, analysts and lawmakers to believe there is an urgent need to make major changes to Social Security.
Add to that a cadre of newly elected representatives and senators who back raising the retirement age, privatizing Social Security or making other cuts to the nation’s most successful social safety net program, and it becomes even more important to make sure the real picture of Social Security’s future is not distorted.
A new issue brief from the Center for Economic and Policy Research (CEPR) calls attention to the fact that Social Security will be fully solvent for the next 27 years and any premature action to make changes to the program will have a severe impact on millions of near retirees. Says CEPR Co-Director Dean Baker:
Misinformation about Social Security has led many to believe that Social Security is in immediate danger of insolvency but the program will be fully solvent for almost three more decades. Furthermore, even if no changes are ever made, a child born in 2010 can expect to see a benefit that is more than 50 percent larger in real terms than what current retirees receive today.
Raising Retirement Age Is Deal Breaker and Back Breaker
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It’s a sure bet that none of the members of the federal budget deficit commission has spent his or her career lifting, carrying, digging or otherwise doing hard physical work for a paycheck.
Because if they had, it’s another sure bet they wouldn’t even be considering raising the Social Security retirement age, as committee co-chair Alan Simpson and House Minority Leader John Boehner (R-Ohio) support. In an eye-opening piece in The New York Times, John Leland profiles 58-year-old Jack Hartley who works at a Cooper Tire plant in Findlay, Ohio. Here’s his typical workday.
A 12-hour shift assembling tires: pulling piles of rubber and lining over a drum, cutting the material with a hot knife, lifting the half-finished tire, which weighs 10 to 20 pounds, and throwing it onto a rack.
Mr. Hartley performs these steps nearly 30 times an hour, or 300 times in a shift. “The pain started about the time I was 50” he said. “Dessert with lunch is ibuprofen. Your knees start going bad, your lower back, your elbows, your shoulders.”
Imagine doing that until you’re 70 years old as Boehner suggests? Hartley is not alone Leland points out.
Paychecks Higher for Asian Pacific Women in Unions
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According to a new report by the Center for Economic and Policy Research (CEPR), being a member of a union adds about $2 an hour to an Asian Pacific American woman’s paycheck compared with her nonunion counterpart.
That jibes with a previous CEPR study, which shows immigrant workers who belong to unions have a large wage and benefit advantage over their nonunion counterparts. (Click here to read CEPR’s previous report, “Unions and Upward Mobility for Immigrant Workers.”
One of eight Asian Pacific American women—12.8 percent—are union members or are represented by a union at their workplace.
Based on the latest report, the average Asian Pacific American woman union member also is:
- Better educated—59.6 percent have a college degree—a higher rate than for Asian Pacific American male union members and the union membership overall.
- An immigrant (more than two-thirds) and about half (46.6 percent) work in the public sector.
- Living and working in a Pacific state.
Read the CEPR study here.
