A record 93,626,000 Americans 16 or older did not participate in the nation’s labor force in June, as the labor force participation rate dropped to 62.6 percent, a 38-year low, according to the Bureau of Labor Statistics.
In June, according to BLS, the nation’s civilian noninstitutional population, consisting of all people 16 or older who were not in the military or an institution, hit 250,663,000. Of those, 157,037,000 participated in the labor force by either holding a job or actively seeking one.
Now, let me ask you this. Does paying people to not work cause more people to not work? It seems to me that whatever you subsidize, you get more of, and whatever you tax, you get less of.
Before this recession, most economists probably thought that some amount of unemployment benefits were just and compassionate, and offered a sense of security even to people who were lucky enough to retain their jobs, despite the fact that the program would raise unemployment rates and reduce both employment and economic output.
In other words, unemployment benefits shrink the economy to some degree, but shrinking the economy a bit may be a price worth paying.
Unemployment benefits were thought to reduce employment and output because, by definition, working people were ineligible for the benefits. In particular, an unemployed person who finds and starts a new job, or returns to working at his previous job, is supposed to give up his unemployment benefits. Economists had found that a large fraction of unemployed people delay going back to work solely because the unemployment insurance program was paying them for not working.
Here’s a new study explaining how the “generosity” of the big government Democrat Party actually encourages people to avoid working, and to remain dependent on the government for their “income”.
A study published by two labor economists, Stepan Jurajda and Frederick J. Tannery, looked at employment histories for unemployment insurance recipients in Pittsburgh in the early 1980s. Unemployment rates got quite high in Pittsburgh in those days, reaching 16 percent at one point, and staying over 10 percent for two and a half years.
The chart below summarizes their findings for Pittsburgh.
The chart displays the fraction of persons (in Pittsburgh) receiving unemployment benefits who began working again, as a function of the number of weeks until their unemployment benefits were scheduled to be exhausted. For example, a “hazard” value of “0.04″ for week “-14″ means that, among unemployed persons with 14 weeks remaining until their benefit exhaustion date, 4 percent of them either began working a new job or returned to their previous job.
The most troubling thing about this is what is not said in the chart or the study – think about the children growing up in these households where their parents, especially the fathers, are not working. What are they learning about self-sufficiency and the role of government? They are the ones who we are going to task with paying for our lavish entitlement programs in the future. Are people who think that dependency on government is normal being trained to pay for the exploding costs of Social Security and Medicare?
Today, the Supreme Court in Michigan v. EPA held that the Environmental Protection Agency improperly ignored costs when it decided to regulate hazardous air pollutants from power plants. The court, in this 5-4 opinion, struck down this extremely costly rule, known as Utility MACT or Mercury and Air Toxics Standards (MATS).
Under Section 112 of the Clean Air Act, which applies to power plants, the EPA administrator shall regulate if the regulation is found to be “appropriate and necessary.” According to the EPA, they didn’t have to consider cost when deciding to regulate, even though the statute specifically says that the regulation has to be “appropriate.”
Justice Antonin Scalia, writing for the majority, explained, “[a]gainst the backdrop of this established administrative practice [consideration of cost], it is unreasonable to read an instruction to an administrative agency to determine whether ‘regulation is appropriate and necessary’ as an invitation to ignore costs.”
The EPA was going to ignore an astonishing amount of costs. The EPA estimated the costs to be $9.6 billion annually. This compared to benefits of $4 million to $6 million annually. As pointed out by Scalia, “[t]he costs to power plants were thus between 1,600 and 2,400 times as great as the quantifiable benefits from reduced emissions of hazardous air pollutants.” As the court succinctly explained, “[n]o regulation is ‘appropriate’ if it does significantly more harm than good.”
Unfortunately, energy prices are still going to go up, and jobs are still going to be lost as a result of previous EPA regulations.
While this is a major legal win for the coal industry, it may have come too late. Power plant operators have already slated to retire 13 gigawatts of coal-fired power by the end of this year. Coal plant owners also must ready themselves to comply with upcoming ozone and greenhouse gas regulations.
Well, it’s been a rough week, but we have to take our victories where we can. A win’s a win. Hopefully, the next President will abolish the EPA and the Department of Energy entirely, so that those clowns have to get real jobs doing something useful for a change.
Bloomberg News discusses the “Professionalism in the Workplace” survey of human resources specialists from York College of Pennsylvania.
Forty-nine percent of [those surveyed] stated that less than half of new employees “exhibit professionalism in their first year.” More than half (53 percent) have noticed “a sense of entitlement” rising among younger workers; almost 45 percent have seen a “worsening of the work ethic,” including “too casual of an attitude toward work” and “not understanding what hard work is.”
Younger workers believe they can multitask and remain productive, the human-resources people told the York researchers. Thirty-eight percent of respondents blamed multitasking for the lack of “focus” among younger workers. The authors of the study explained that the younger generation “believes that it is possible to multi-task effectively” and that using social media, for example, is an efficient way to communicate. In interviews, the applicants check their phones for texts and calls, dress inappropriately and overrate their talents.
“The sad fact is some of these persons probably do not understand what is wrong with this,” the authors note.
Older workers have always complained about younger workers, of course, but there’s a difference: This time they attribute the youthful flaws not to ignorance or waywardness, but to a “sense of entitlement.”
We might forgive 18-year-olds fresh out of high school for lacking employability skills (the manufacturing sector hires many workers lacking undergraduate degrees). But when he or she reaches 23 and has four years of college, employers expect a white-collar worker to recognize basic norms of dress and deportment.
What happened in college, then? The survey by York College’s Center for Professional Excellence assigns colleges part of the blame, observing that letting students miss deadlines without penalty and assigning good grades for middling work only make them form the wrong expectations.
Young people’s unprecedented level of self-infatuation was revealed in a new analysis of the American Freshman Survey, which has been asking students to rate themselves compared to their peers since 1966.
Roughly 9 million young people have taken the survey over the last 47 years.
Psychologist Jean Twenge and her colleagues compiled the data and found that over the last four decades there’s been a dramatic rise in the number of students who describe themselves as being ‘above average’ in the areas of academic ability, drive to achieve, mathematical ability, and self-confidence.
But in appraising the traits that are considered less invidualistic – co-operativeness, understanding others, and spirituality – the numbers either stayed at slightly decreased over the same period.
Researchers also found a disconnect between the student’s opinions of themselves and actual ability.
While students are much more likely to call themselves gifted in writing abilities, objective test scores actually show that their writing abilities are far less than those of their 1960s counterparts.
Also on the decline is the amount of time spent studying, with little more than a third of students saying they study for six or more hours a week compared to almost half of all students claiming the same in the late 1980s.
Though they may work less, the number that said they had a drive to succeed rose sharply.
[…]Twenge is the author of a separate study showing a 30 per cent increase towards narcissism in students since 1979.
‘Our culture used to encourage modesty and humility and not bragging about yourself,’ Twenge told BBC News. ‘It was considered a bad thing to be seen as conceited or full of yourself.’
Just because someone has high self-esteem doesn’t mean they’re a narcissist. Positive self-assessments can not only be harmless but completely true.
However, one in four recent students responded to a questionnaire called the Narcissistic Personality Inventory with results pointing towards narcissistic self-assessments.
Narcissism is defined as excessive self-love or vanity; self-admiration, or being self-centered.
Twenge said that’s a trait that is often negative and destructive, and blames its boom on several trends – including parenting styles, celebrity culture, social media, and easy credit – for allowing people to seem more successful than they really are.
I think what I am seeing is that not only do they work less, but they work at things they “like”, rather than at things that will allow them to provide value to others. So, you’re not going to find a lot of computer programmers or petroleum engineers among young Americans, but you will find a lot of people gravitating to jobs that are easy that make them feel good about themselves, and look good to other people, too.
Obviously, there are policy reasons for youth unemployment being so high, but I think this attitude that young people have is definitely part of it.
Wisconsin is poised this week to become the 25th “right-to-work state,” ending forced unionization and allowing individual workers to decide if they want to join a union or not.
The Wisconsin Senate just recently passed right-to-work, and our sources in Madison say that the House, which is controlled by Republicans, will enact a similar law in the days ahead.
Republican Gov. Scott Walker, a leading presidential candidate, is sure to sign the bill when it gets to his desk. “This isn’t anti-union,” insists Walker. “It restores worker rights and brings jobs back to Wisconsin.”
Some 3,000 liberal protesters stormed the Capitol in Madison over the weekend to reverse the momentum for the new law. This isn’t Walker’s first dust-up with union bosses. Four years ago, nearly 100,000 activists grabbed nationwide headlines when they protested his reforms in Wisconsin’s collective bargaining process with public employee unions.
If the new law passes, Wisconsin would join two other blue-collar, industrial Midwestern states — Michigan and Indiana — to recently adopt right-to-work. “If you had told me five years ago that right-to-work would become law in Indiana, Michigan and Wisconsin, I wouldn’t have thought it was even remotely possible,” says economist Arthur Laffer.
Laffer and I have conducted substantial economic research showing three times the pace of jobs gains in right-to-work states than in the states with forced union rules that predominate in deep blue states such as California, New York and Illinois.
In the 2003-13 period, jobs were up by 8.6% in right-to-work states, and up only 3.7% in forced union states. Most of the southern states, with the exception of Kentucky, are right-to-work
Many auto jobs in recent decades have moved out of Michigan and Ohio and into states such as Texas, Alabama and South Carolina, due in part to right-to-work laws in Dixie.
But as union power recedes in the Midwestern states, many of the region’s governors see factory jobs returning to their backyards. “Right to work is already lowering unemployment in Indiana and causing a manufacturing revival here,” says Gov. Mike Pence.
Companies are more attracted to right-to-work states, and that means more jobs become available.
Here is Congressional testimony from James Sherk, senior policy analyst in labor economics at The Heritage Foundation. I really recommend bookmarking this article. Even though it is very long, it is up-to-date and comprehensive. I am linking to it because he responds to objections to right-to-work laws raised by unions.
Do right-to-work laws hurt the middle class?:
Union Strength and the Middle Class. Unions and their supporters frequently claim the opposite: that unions helped build the middle class and weaker unions hurt all workers—not just union members. To make this point they often juxtapose the decline of union membership since the late 1960s with the share of income going to the middle class. The Economic Policy Institute did exactly this when criticizing the possibility of RTW in Wisconsin. These comparisons suffer from two problems. First, the absolute standards of living for middle-class workers have risen substantially over the past generation. Inflation-adjusted market earnings rose by one-fifth for middle-class workers between 1979 and 2011. After-tax incomes rose at an even faster pace. Middle-class workers today enjoy substantially higher standards of living than their counterparts in the 1970s.
Secondly, these figures conflate correlation with causation. During the time period EPI examined union membership correlates well with their measure of middle-class income shares. Extending the graph back another two decades eliminates this correlation. U.S. union density surged in the late 1930s and during World War II. It peaked at about a third of the overall economy and private-sector workforce in the mid-1950s. During this time period America had few global competitors. From the mid-1950s onward global competition increased and U.S. union membership steadily declined. Between 1954 and 1970 union density dropped from 34.7 percent to 27.3 percent. Unions lost over a fifth of their support in just over a decade and a half.
During this period middle-class income and living standards grew rapidly. No one remembers the 1950s and 1960s as bad for the middle class, despite the substantial de-unionization that occurred. Over a longer historical period changes in U.S. union strength show little correlation with middle-class income shares. Liberal analysts come to their conclusion by looking only at the historical period in which the two trends align.
Do right-to-work states have lower wages?:
Unions Argue RTW Hurts Wages. In the same vein, unions argue that RTW laws lower wages. As the Wisconsin AFL-CIO recently claimed:
These anti-worker Right To Work laws just force all working families to work harder for lower pay and less benefits, whether they’re in a union or not. The average worker makes about $5,000 less and pensions are lower and less secure in Right to Work states.
This statement contains a degree of truth: average wages in right-to-work states are approximately that much lower than in non-RTW states. This happens because right-to-work states also have below-average costs of living (COL). Virtually the entire South has passed RTW, but no Northeastern states have passed an RTW law. The Northeast has higher COL and higher average wages; the South has lower living costs and lower wages.
[…]All but one right-to-work state has living costs at or below the national average. All ten of the states with the highest COL have compulsory union dues. Analyses that control for these COL differences have historically found that RTW has no deleterious effects on workers’ real purchasing power.
Recently the Economic Policy Institute has claimed that workers in RTW states make 3 percent less than workers without RTW protection, even after controlling for living costs. Heritage replicated this analysis and found that EPI made two major mistakes: it included improper control variables and did not account for measurement error in their COL variables. These mistakes drive their results. Correcting these mistakes shows that private-sector wages have no statistically detectable correlation with RTW laws. The supplement and the appendices to this testimony explain the technical details of this replication. Properly measured, RTW laws have no effect on wages in the private sector.
Although the history of unions shows that unions were a valuable and necessary check on the power of greedy corporations in times past, today unions are using the dues they collect from workers to elect Democrats. The vast majority of political contributions made by the big unions go to Democrats.
So if you oppose what Democrat politicians are doing, it makes sense to free workers from being forced to pay union dues for causes that are against their values. The average rank-and-file member of a union does not share Democrat values on things like abortion and gay marriage, in my opinion. Why should they be forced to pay union dues that go to elect politicians who oppose their values?
During her time as senator of New York, Hillary Rodham Clinton paid her female staffers 72 cents for every dollar she paid men, according to a new Washington Free Beacon report.
From 2002 to 2008, the median annual salary for Mrs. Clinton’s female staffers was $15,708.38 less than what was paid to men, the report said. Women earned a slightly higher median salary than men in 2005, coming in at $1.04. But in 2006, they earned 65 cents for each dollar men earned, and in 2008, they earned only 63 cents on the dollar, The Free Beacon reported.
[…]Mrs. Clinton has spoken against wage inequality in the past. In April, she ironically tweeted that “20 years ago, women made 72 cents on the dollar to men. Today it’s still just 77 cents. More work to do. #EqualPay #NoCeilings.”
Meanwhile, she is making “equal pay for women” her top priority.
Hillary Clinton lamented the number of women in the fields of science, technology, engineering and math at a Silicon Valley women’s conference on Tuesday, and called for more action to close the wage gap.
[…]In advocating for closing the pay gap, Clinton also endorsed the impassioned plea for wage equality made by Patricia Arquette in her Oscars acceptance speech for Best Supporting Actress.
“Up and down the ladder many women are paid less for the same work, which is why we all cheered at Patricia Arquette’s speech at the Oscars — because she’s right, it’s time to have wage equality once and for all,” Clinton said.
All right, let’s take a look at the facts on the so-called “pay gap” between men and women.
The official Bureau of Labor Department statistics show that the median earnings of full-time female workers is 77 percent of the median earnings of full-time male workers. But that is very different than “77 cents on the dollar for doing the same work as men.” The latter gives the impression that a man and a woman standing next to each other doing the same job for the same number of hours get paid different salaries. That’s not at all the case. “Full time” officially means 35 hours, but men work more hours than women. That’s the first problem: We could be comparing men working 40 hours to women working 35.
How to get a more accurate measure? First, instead of comparing annual wages, start by comparing average weekly wages. This is considered a slightly more accurate measure because it eliminates variables like time off during the year or annual bonuses (and yes, men get higher bonuses, but let’s shelve that for a moment in our quest for a pure wage gap number). By this measure, women earn 81 percent of what men earn, although it varies widely by race. African-American women, for example, earn 94 percent of what African-American men earn in a typical week. Then, when you restrict the comparison to men and women working 40 hours a week, the gap narrows to 87 percent.
But we’re still not close to measuring women “doing the same work as men.” For that, we’d have to adjust for many other factors that go into determining salary. Economists Francine Blau and Lawrence Kahn did that in a recent paper, “The Gender Pay Gap.”.”They first accounted for education and experience. That didn’t shift the gap very much, because women generally have at least as much and usually more education than men, and since the 1980s they have been gaining the experience. The fact that men are more likely to be in unions and have their salaries protected accounts for about 4 percent of the gap. The big differences are in occupation and industry. Women congregate in different professions than men do, and the largely male professions tend to be higher-paying. If you account for those differences, and then compare a woman and a man doing the same job, the pay gap narrows to 91 percent. So, you could accurately say in that Obama ad that, “women get paid 91 cents on the dollar for doing the same work as men.”
I believe that the remainder of the gap can be accounted for by looking at other voluntary factors that differentiate men and women.
Women are more likely than men to work in industries with more flexible schedules. Women are also more likely to spend time outside the labor force to care for children. These choices have benefits, but they also reduce pay—for both men and women. When economists control for such factors, they find the gender gap largely disappears.
A 2009 study commissioned by the Department of Labor found that after controlling for occupation, experience, and other choices, women earn 95 percent as much as men do. In 2005, June O’Neil, the former director of the Congressional Budget Office, found that “There is no gender gap in wages among men and women with similar family roles.” Different choices—not discrimination—account for different employment and wage outcomes.
The Department of Labor’s Time Use survey shows that full-time working women spend an average of 8.01 hours per day on the job, compared to 8.75 hours for full-time working men. One would expect that someone who works 9% more would also earn more. This one fact alone accounts for more than a third of the wage gap.
[…]Recent studies have shown that the wage gap shrinks—or even reverses—when relevant factors are taken into account and comparisons are made between men and women in similar circumstances. In a 2010 study of single, childless urban workers between the ages of 22 and 30, the research firm Reach Advisors found that women earned an average of 8% more than their male counterparts. Given that women are outpacing men in educational attainment, and that our economy is increasingly geared toward knowledge-based jobs, it makes sense that women’s earnings are going up compared to men’s.
When women make different choices about education and labor that are more like what men choose, they earn just as much or more than men.