What’s Holding Back the Job Market

Huffington Post republished an article from the New York Times that outlines the impact of austerity on the job market.  Deficit-cutting mania has impacted the unemployment rate by as much as 1%.  It has also hurt economic growth, which would generate even more jobs.  Without taking sides, the article describes inaction by the Republican Party, which has contributed to the current state of the economy.  For my part, I would also take the President to task for not doing a better job of communicating the problem to the American people.  His willingness to compromise and look for a “Grand Bargain” has made a confusing situation worse.  Bottom line:  Government action – not deficit reduction – will generate jobs.

Getting Out of the Unemployment Hole

We fret about unemployment in the U.S., but we seldom consider the problem in other countries.  Huffington Post linked to an article at 247wallst.com that lists European countries with the highest unemployment.  Japan and the U.K. have slight higher unemployment.  Countries like Greece (26.4%) and Spain (26.3%) face much higher, rates which are similar to estimates for the U.S. in the Depression of 1930s.

What if the U.S. had 25% unemployment?  We would have a major problem.  Even at the current rate, many job seekers are having problems finding jobs.  Worse still, wages have flat and in some cases declined.  Like Paul Krugman, I believe the government should play some role as an employer of last resort.  It’s not a matter of the clichéd attack on Keynes that one worker fills a hole and another fills it.  There is work to be done:  infrastructure, public safety, education, and healthcare.  We need to invest to build good country where everyone has opportunity.  We have the wealth.  We need the will.

Corporate Winners and Working Losers – Round 2 (or 3)

Paul Krugman offers a great chart and equally wise commentary about the growth of corporate profits at a time of minimal salary increase.  I’ll let Krugman and his chart speak for itself.

Looking behind the Job Numbers Conspiracy

Common Dreams reposts an article by Paul Krugman on the controversy over the unemployment numbers.  Krugman’s response to the conspiracy thinker is priceless.  He shows Jack Welch for what he is, a clown.

Krugman on Productivity and Earnings.

Paul Krugman has posted two very disturbing blogs on wages.  In one, he demonstrates that median earnings for full-time male employees have been flat since the 1970s.  How do people compensate for inflation?  Krugman answers this question with a second graph that shows rising levels of debt from the 1980s-2010.  In his second post, Krugman contrasts a steady growth in productivity over 40 years with a flat line for hourly compensation since the 1970s.  If this graph is accurate, who benefited from the increase in productivity?  It wasn’t hourly workers.

Fireworks from Dean Baker: Americans Should Work Less

Economist Dean Baker is featured on today’s July 4^th Common Dreams.  His message is simple:  Follow Germany’s example – ask people to work less, not more.  The average worker in Germany (and the Netherlands) works 20% less than the average U.S. worker, which means those countries generate more jobs.  Germany also subsidizes companies that cut workers’ hours and hire other employees.  As Baker notes, this model would never work in Washington today (I’m sure some conservative would read Baker’s article and call the German model “French.”).  Something more than tax cuts needs to be done.  Baker and his fellow economist Paul Krugman are clearly on the side of government intervention.  Hopefully, the Democrats will be brave enough to follow their example as they campaign in the fall.

Have a safe, happy (and cool) 4^th.

Krugman on the Meaning of 200,000 New Jobs

Whether you love him or hate him, Nobel Prize winning economist Paul Krugman states his opinions in language that is clear and concise.  In a recent blog post, he explains why the December job growth number of 200,000 is not necessarily good news.  Taken in relation to recent news, it sounds good.  However, Krugman contrasts the growth number with job growth in the 1990s and what should have come from that period.  Taken in context, the news is not good.  We’re still in the ditch.

Krugman on Income Inequality

In his blog for the New York Times, Paul Krugman takes on claims that over-regulation has led to income inequality.  In the period immediately after WWII, when regulations were strongest, average family income outpaced the top 1%.  Since 1980, the top 1% has exceeded average family income by a rate that is near 4 to 1.

Does anyone wonder why the Occupy movement is so widespread?  There are two Americas:  One where the top slice gets most of the wealth and income; the other where people work to support the top slice.  Is this what was meant by “to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity”?

Software, Automation, Education, and Jobs

Paul Krugman has written a very interesting editorial in the New York Times on the belief that education will drive jobs in the future.  Krugman points out that more and more white collar jobs are being lost to software and automation.  Any routine, repetitive task can be done better by a machine.  Krugman thinks the only solutions are rights for labor unions and better health care.  I’m much more pessimistic.  What good are unions if  machines do the work?  How will the unemployed pay for health care?  I fear that at some point we will have too many people and not enough jobs – unless you are a machine.

America in Decline

Paul Krugman outlines why America is falling apart and how we can fix the problem.