Showing posts with label labor. Show all posts
Showing posts with label labor. Show all posts

Thursday, September 14, 2023

Framing

The New Yorker's great press critic, A.J. Liebling, observed during a New York newspaper strike in 1963 that "the employer, in strike stories, always 'offers,' and the union 'demands.'"
The stories never say that the employer "'demands' that the union men agree to work for a two-bit raise; the union never 'offers' to accept more." The reason, Liebling conjectured, is that "'demand,' in English, is an arrogant word; 'offer,' a large, generous one." 

Thursday, February 25, 2021

Kill the filibuster

That raising the minimum wage would not pass muster in the budget reconciliation process is not unexpected. I'm not sure $15 is the right minimum wage for a low-wage state like Arkansas or Mississippi, but given the tradeoffs I'd say let's give it a try. Not gonna happen.

Sunday, May 10, 2020

The education-unemployment gap

Less-educated workers have been hammered by the COVID depression. The four-year degree seems to make the difference between workers who can keep their jobs from home and those who cannot.


Coronavirus and the racial unemployment gap

Dean Baker calls attention to the unusual fact that the unemployment rate actually rose more for white workers than for black workers in April. For decades, the unemployment rate for African Americans has tended to be about twice that for whites, with the differential typically widening during recessions so as to preserve or even expand the proportional gap.

The experience during the current debacle has been a little different. Here are some selected numbers, comparing January with April, stratified by race and gender (BLS data, civilian non-institutional population, seasonally adjusted).

Over this period, the percentage-point increase in the unemployment rate was pretty similar for blacks and whites, with the gap increasing by an extra point for black men and by about a point less for black women. For both men and women, the ratio of black to white unemployment rates fell quite a bit, defying the typical 2:1 pattern. The pattern is similar for the ratio of non-employed to population, which takes account of labor-force "dropouts."

Among the three racial groups here, the most dramatic increase in the unemployment rate was for Latino workers. Given the importance of food-service and related jobs for Hispanic workers, this may not be too surprising. Up next: breakdown by educational attainment.



Friday, March 15, 2019

"Higher returns on education can’t explain growing wage inequality"

The college wage premium remains very high in the United States, but its role in explaining recent inequality trends is negligible. A very insightful post from EPI's Elise Gould.

Friday, March 9, 2018

Happy 242nd Birthday, WoN!

That is, Adam Smith's An Inquiry Into the Nature and Causes of the Wealth of Nations, published on this day in 1776. I often tell my students that this was the most important event of that year.

Smith was undoubtedly a libertarian of a sort, but also a pragmatist with a definite progressive streak. His support of free markets depended on competition reining in the tendencies toward collusion, and nowhere was he more eloquent on the threat of collusion than in his excellent Chapter 8 (on wages). Monopsony (buyer-side market power) is, for Smith, the natural state of affairs in the labor market:
What are the common wages of labour, depends every where upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour. 
It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorises, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, or merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long-run the workman may be as necessary to his master as his master is to him, but the necessity is not so immediate. 
We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and every where in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is every where a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things which nobody ever hears of. Masters too sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy, till the moment of execution, and when the workmen yield, as they sometimes do, without resistance, though severely felt by them, they are never heard of by other people. Such combinations, however, are frequently resisted by a contrary defensive combination of the workmen; who sometimes too, without any provocation of this kind, combine of their own accord to raise the price of their labour. Their usual pretences are, sometimes the high price of provisions; sometimes the great profit which their masters make by their work. But whether their combinations be offensive or defensive, they are always abundantly heard of. In order to bring the point to a speedy decision, they have always recourse to the loudest clamour, and sometimes to the most shocking violence and outrage. They are desperate, and act with the folly and extravagance of desperate men, who must either starve, or frighten their masters into an immediate compliance with their demands. The masters upon these occasions are just as clamorous upon the other side, and never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combinations of servants, labourers, and journeymen. The workmen, accordingly, very seldom derive any advantage from the violence of those tumultuous combinations, which, partly from the interposition of the civil magistrate, partly from the superior steadiness of the masters, partly from the necessity which the greater part of the workmen are under of submitting for the sake of present subsistence, generally end in nothing, but the punishment or ruin of the ringleaders.

Wednesday, March 7, 2018

Oops...

Still, not the most lucrative line of work once you count the costs (source).
A researcher at the Massachusetts Institute of Technology says he's revising a study he co-authored after admitting that "criticism is valid" of initial findings that Uber and Lyft drivers are making a median pretax profit of $3.37 an hour and a vast majority are making less than minimum wage.
Uber said the working paper had "a major error in the authors' methodology."
Using one new method of calculating the median profit that incorporates Uber's criticism, the figure "rises to $8.55 / hour from the $3.37 initially reported," the lead author Stephen Zoepf wrote in a statement posted to Twitter on Monday. And using another alternate method, the median profit goes up to $10 an hour.

Wednesday, July 5, 2017

Coffee country, Part 2

The small producers we visited in the Segovias region of northern Nicaragua mainly belong to PRODECOOP, a consortium of local coffee co-ops. In addition to certifying and marketing coffee at a fair-trade price, the organization has a number of social programs to support local development and food security.

The variation in the scale of operation along the coffee supply chain, especially in the small-producer specialty market, is striking. The process may start with the seedlings on a farm with an acre or two under cultivation...



I think most of the farms have moved beyond this old equipment for removing the husks...



The green beans are brought to a processing facility for final drying, sorting, and shipping. PRODECOOP has a big modern facility in Palacagüina...





This impressive machine uses a laser to test the color of the beans as they fly by and with a small puff of air culls the ones not up to standard. It is the noisiest place in a noisy factory...




Despite mechanical and optical sorting technologies, the final sort is done by hand, by women...



From there, into shipping containers and off to port for export. Most of the roasting is done at the destination...

Monday, March 27, 2017

Yes, robots will take your job... and yours too...

"These numbers are large but not implausible. For example, they imply that one more robot in a commuting zone reduces employment by 6.2 workers..."

So says Professor Acemoglu. He doesn't cite Marx, which is an unfortunate oversight, since Marx had a lot to say about technological unemployment. Myself, I'm a robot pessimist/ optimist. Pessimist because I am very confident that AI/robotics will displace workers in a way that lowers equilibrium wages for a large majority, by a lot. Optimist because all of this liberates humans from toil, if only we can see our way to a mode of distribution that decouples consumption from labor. That's called socialism.

Thursday, December 15, 2016

Eduardo Porter epic fail

Usually I find Eduardo Porter's columns in the NY Times interesting and thoughtful. But this one is sadly misleading, as Kevin Drum and others have been quick to point out. Here's Porter's main point:
There are almost nine million more jobs than there were at the previous peak in November 2007, just before the economy tumbled into recession. But the gains have not been evenly distributed. 
Despite accounting for less than 15 percent of the labor force, Hispanics got more than half of the net additional jobs. Blacks and Asians also gained millions more jobs than they lost. But whites, who account for 78 percent of the labor force, lost more than 700,000 net jobs over the nine years.
The problem is that this disparity largely disappears when one accounts for differential population growth across these groups. Hispanics have experienced a lot of the job growth because they account for a lot of the population growth. Employment and unemployment rates, taking account of the denominator as well as the numerator, show rather little difference in the experience by ethnic group, as Drum shows.

A disaffected white male might still argue that his job prospects would be that much better today had he not had to compete with an expanded nonwhite workforce. We can debate that point, but not using Porter's statistics or argument, which is unexpectedly below his standard.

Tuesday, October 18, 2016

Andy Stern on basic income

Sure, organized labor has sometimes been a mixed bag, but we need it more than ever, and Andy Stern has been a force for good in the modern labor movement. I think his views on the future of labor and the need for a universal basic income (UBI)– what I have previously referred to as a BIG– are spot-on, as is his sober realism about the political prospects of getting there anytime soon. Like young Payton Foy, seventh grader, Andy worries about a Hunger Games future...
Q: If we don’t implement something like a UBI, what does work and the middle class look like in 30 years? 
Andy Stern: It looks like the Hunger Games. It’s more of what we’re beginning to see now: an enclave of extremely successful people at the center and then everyone else on the margins. There will be fewer opportunities in a hollowed out and increasingly zero-sum economy. 
If capital trumps labor, the people who own will keep getting wealthier and the people who supply labor will become less necessary. And this is exactly what AI and robotics and software are now doing: substituting capital for labor.
Andy is less pessimistic than some about how Americans will fare in a world without wage labor...
Q: Work has always been tethered to identity in this country. Do we have to completely rethink the concept of work in this new world? 
Andy Stern: Women have always worked historically raising families, which everyone sees as a great value, but it was not paid work. UBI will solve this problem. 
People have always taken care of their parents, which in some cases is a paid job and in other cases it’s not paid work. The same thing is true about tutoring your child, or volunteering at a hospital or as a Little League coach or with any other service organization. 
We need to decide that creative activity, such as learning a language, painting, writing plays or books, is work. Or that trying to build a business or solve a problem or learn new skills is work, even if you’re not being compensated. 
We’re also going to need to appreciate that there are many other things that people can do to self-actualize, which may be the most important adventure that people can travel to make life fulfilling, and it may not be what we now call work.
Something here rings a bell... The German Ideology...
... in communist society, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic. 

Monday, October 17, 2016

Tale of Two Clones

Tim Taylor reports on the latest take on U.S. income inequality by the labor economist Richard Freeman. Freeman notes that rising wage inequality coincides with rising inequality of wages across firms, which in turn coincides with growing inequality in productivity across firms. Thus two equally skilled workers might be paid vastly different wages depending on whether they happened to land a job at a high-paying or low-paying company.

This is an interesting and important recent finding about inequality. What is unclear to me is the extent to which the inter-firm wage differentials reflect differences in firm-specific productivity versus firm-specific rents. A firm can afford to pay a worker more to the extent that the worker adds more to output, but also to the extent that the revenue earned from each unit of product is greater. Differences in both productivity and market power in the product market could contribute to divergent wages across firms.

Here's the illustrative example Freeman provides, quoted by Taylor:
[C]onsider two indistinguishable workers, you and your clone. By definition, you/clone have the same gender, ethnicity, years of schooling, family background, skills, etc. In 2006 you/clone graduated with identical academic records from the same university and obtained identical job offers from Facebook and MySpace. Not knowing any more about the future than the analysts who valued Facebook and MySpace roughly equally in the mid-2000s, you/clone flipped coins to decide which offer to accept: heads – Facebook; tails – MySpace. Clone’s coin came up heads. Yours came up tails. Ten years later, Clone is in the catbird’s seat in the job market — high pay, stock options, a secure future. You struggle.
Fair enough. But is the difference between Facebook and MySpace a consequence of Facebook's much superior technology and organization– i.e., its productivity? Or were the initial differences in productivity somewhat marginal, and then the dynamic of network externalities led to a divergent, winner-take-all outcome? In the latter story, the lucky workers at Facebook are earning higher wages in large part because the winner, Facebook, is earning monopoly rents and sharing them with the workers. Why firms might share rents with workers is an interesting question, but there are certainly plausible reasons they might.

Whether it is productivity or rents driving interfirm variation in wages does not much matter for the argument that it is "luck" that accounts for the difference in fortunes of the clones. Whether, how, and how much society should reduce inequality arising from pure luck remain essential questions.

Wednesday, October 5, 2016

Why Are Politicians So Obsessed With Manufacturing?

Excellent piece by Binyamin Appelbaum. Two paragraphs of note...
From an economic perspective, however, there can be no revival of American manufacturing, because there has been no collapse. Because of automation, there are far fewer jobs in factories. But the value of stuff made in America reached a record high in the first quarter of 2016, even after adjusting for inflation. The present moment, in other words, is the most productive in the nation’s history. ....
According to the Bureau of Labor Statistics, there were 64,000 steelworkers in America last year, and 820,000 home health aides — more than double the population of Pittsburgh. Next year, there will be fewer steelworkers and still more home health aides, as baby boomers fade into old age. Soon, we will be living in the United States of Home Health Aides, yet the candidates keep talking about steelworkers. Many home health aides live close to the poverty line: Average annual wages were just $22,870 last year. If both parties are willing to meddle with the marketplace in order to help one sector, why not do the same for jobs that currently exist? 

Saturday, August 6, 2016

Skills beget skills

Why place a particular emphasis on early childhood education? There are two reasons. First, young kids' brains may be more plastic, in which case investments in education or good parenting would yield a higher return in terms of learning. Second, the ability to learn depends dynamically on the child's previously acquired capacity to learn. That is, skills beget skills. If so, early education earns a kind of "double dividend" by adding skills directly and facilitating later skill acquisition.

How important are these two effects? Not an easy question to answer, because we cannot directly observe or measure either investment in skills or the skills themselves. We do, however, have imperfect measures related to skills, such as test scores. These indicators may allow one to estimate the latent unobservables.

That's precisely the subject of this paper by Agostinelli and Wiswall, "Estimating the Technology of Children's Skill Formation." The dry title and dense methodology could be a little daunting, but the results are important. Here are my takeaways. First, identification of the latent variables and their effects is sensitive to modeling assumptions. Figuring out which assumptions are reasonable seems a high priority for future research. Second, under their preferred assumptions, they find the following, using data from the National Longitudinal Study of Youth (NLSY):
  • A child's skills are strongly affected by both investments and pre-existing skills.
  • Both effects are larger for younger kids. The results strongly favor early investment.
  • There is some evidence that early investments have a bigger effect—and thus presumably bigger bang for the buck—for less-skilled kids. This result differs from some past findings which had suggested a reinforcing effect between skills and investment.
  • Investment in skills is an increasing function of family income as well as the mother's cognitive and noncognitive skills—the latter having a particularly large impact. Noncognitive skills are measured using standard survey-based metrics conducted as part of the NLSY. 
  • Because investment is greater for children from advantaged backgrounds, "endogenous investment increases inequality in children’s skills." 
Finally, the authors use their results to estimate the benefits and costs of an income transfer of $1000 to a child's family in terms of its impact on childhood skill development. The only benefit accounted for is the impact of skills on the child's future income. The net benefits are substantial, as shown in the table below. 

It's tempting to read too much into this result, given the way it is presented. There is no attempt in the paper to show that the effect of income is causal. Rather, family income could be correlated with something else affecting investment in skills, such as neighborhood effects, or father's skills. So there is no evidence here that a simple money transfer would have these salutary effects. What they have demonstrated is that kids from disadvantaged backgrounds are at a very big disadvantage indeed in accumulating skills that affect life prospects in a big way. Given the dynamic of skill acquisition, figuring out how to level the playing field early in life is a compelling research and policy priority.

Saturday, June 4, 2016

Hard-working Americans

By this reckoning, U.S. work hours are about what you'd expect in a country with 1/15 of our income per capita, such as Indonesia. Time for summer vacation, everyone!

Tuesday, December 22, 2015

EPI top ten charts of 2015

You can find them here. Several are similar to last year's contenders. They acknowledge that the unemployment rate is looking a lot better, but the emphasis is on the (still) bad news: slow wage growth, and inequality. To me this one (#9) is the most interesting. Don't forget to send them some money...


Thursday, August 27, 2015

Trend vs. cycle in the employment-population ratio

Two stylized facts about U.S. labor markets are that (1) while the unemployment rate has fallen substantially since the Great Recession, the employment-population ratio (E/P) has not nearly recovered to its pre-recession level, suggesting to many observers continuing labor-market slack, perhaps due to discouraged workers and other labor-force dropouts; and (2) E/P has been trending down for some time, partly due to demographic factors (e.g., retiring baby boomers) and possibly also due to institutional factors, such as changes in disability insurance work incentives.

The issue matters, because E/P is often thought to be a more reliable metric for labor-market "slack" than the conventional unemployment rate, and if so the apparently weak recovery of E/P could suggest continuing weakness in labor demand and thereby strengthen the case for continuing relatively expansionary monetary policy. So... where is E/P relative to its long-run trend or "full-employment" level?

This interesting post from the NY Fed claims that a demographically-adjusted E/P has fallen far enough that "roughly 90 percent of the labor gap that opened up following the recession has been closed." The authors' adjusted series is supposed to remove the business cycle effect and leave just the changes due to demographic shifts, reflecting the changing age structure of the population and life-cycle employment rates for a series of cohorts. Here is the money chart:




Very interesting, indeed, but there are a couple of slightly strange things going on here. First, the authors had to use a normalization to set the level of the trend E/P. That is, they can only calculate the shape of the blue curve, not how high or low it is. Their approach was to assume that the average gap between the actual and adjusted E/P was zero over the entire period, so the red curve has to spend something like half the time above the blue curve, by assumption. If you thought the economy was around "full employment" during those episodes of peak actual E/P in the late 1990s and mid-2000s, a more logical normalization might be to shift the blue cure up so that it sat on or near the top of those peaks. But their assumption seems a reasonable alternative. I would be reluctant to conclude that the convergence of their curves implies a return to full employment... perhaps more neutrally, we could call it a return to E/P "normalcy."

What troubles me more, however, are the dramatic changes in slope of the blue trend, around 1994 and again around 2008 or 2009. The latter is particularly puzzling. If it reflects a cohort shift in E/P at each stage of the life-cycle, then how can we be sure this is not a consequence of the severe recession? If that's not the explanation, then what accounts for the sudden acceleration in the decline of adjusted E/P?

It does seem very likely that the trend in E/P has been downward over the past 15-20 years, and in that case the actual E/P has been closing in on a moving target and may be closer to "full employment" than the red line by itself might suggest. Just how much closer is a difficult question to answer.

Thursday, July 16, 2015

Hillary's plan for the middle class

This column by Eduardo Porter is kind of bizarro. After rehearsing the depressing statistics about labor-market trends in the United States and elsewhere—stagnant wages for most, growing inequality—he notes that many of Clinton's ideas for boosting middle-class incomes and strengthening the social safety net are sensible and have been effective in the past. But they are also completely politically infeasible in the current climate. Porter's solution? "A future Clinton administration might help change the norms of corporate governance to foster the kind of labor relations that everyday workers have not experienced in decades." He doesn't suggest how, or why the very people who have been riding high on recent inequality trends would want to go back. This approach is just as unrealistic as Hillary's old-school liberalism, and from a policy perspective completely unproven in its effectiveness. The only real hope he offers is labor-market tightness: declining labor-force participation coupled with pro-growth monetary policy. We shall see whether Dr. Yellen continues to administer the necessary treatment.

Wednesday, July 8, 2015

A few days in the lightning capital of the USA*...

     * Central Florida (see map below)
... and an exasperating day of lightning-related travel delays getting home from there got me to revisiting a question that came up recently while hiking in a Yosemite thunderstorm: How many people are killed by lightning? Well, not many: In recent years, an average of about 33 Americans per year. And what are people doing when they are killed by lightning? Our man at the National Weather Service, John Jensenius, has the goods. From the Executive Summary:
From 2006 through 2013, 261 people were struck and killed by lightning in the United States. Almost two thirds of the deaths occurred to people who had been enjoying outdoor leisure activities. The common belief that golfers are responsible for the greatest number of lightning deaths was shown to be a myth. During this 8-year period fishermen accounted for more than three times as many fatalities as golfers, while camping and boating each accounted for almost twice as many deaths as golf. From 2006 to 2013, there were a total of 30 fishing deaths, 16 camping deaths, and 14 boating deaths, and 13 beach deaths. Of the sports activities, soccer saw the greatest number of deaths with 12, as compared to golf with 8. Around the home, yard work (including mowing the lawn) accounted for 12 fatalities. For work-related activities, ranching/farming topped the list with 14 deaths.
... Work-related activities contributed to 15% of the total lightning fatalities.... Farming/ranching-related activities contributed most (37%) to the work-related deaths. Other activities included construction (11%), lawn care (8%), roofing (8%), military work (5%), barge work (5%), and other (24%).
At the Orlando Airport, American Airlines workers stop loading bags if there has been a lightning strike within 5 miles during the previous 20 minutes. As I discovered, this can lead to pretty long delays taking off on a typical summer afternoon in Lightning Alley. Looking out the plane window as we sat on the tarmac, we could see the Jet Blue planes being loaded and taxiing toward takeoff. We were told over the intercom that "some other airlines" may not care as much about worker safety.