Tag Archives: Unemployment

Why So Many Without Work

Help Wanted

It’s not there aren’t good jobs – it’s that there aren’t good candidates:

Durham, N.C. — U.S. job openings are at a record high of 5.8 million, and a new survey from Duke University provides a key reason: Employers say they can’t find workers with required skills for many openings. As a result, employers are planning to boost pay in an attempt to find workers. They also continue to push for more foreign workers through high-tech visas known as H-1Bs. The risks of a workers’ skills gap? A less competitive U.S. economy, and companies might be forced to relocate overseas if they can’t find workers here, warns a Duke economics professor.

*Mostly they are saying they can’t find employees with the required skills,” Duke finance professor John Graham tells WRAL TechWire, referring to the just-released Duke-CFO Global Business Outlook survey.

It’s just not high-tech, either. Graham says companies need more mechanics, more people who can work in the “trades” like welders.

Affirming U.S. government data released Wednesday about the millions of open jobs, 93 percent of companies participating in the Duke survey say they have job openings.

Why? Finding talent.

 

North Carolina Unemployment Debt

Unemployment

When the crisis hit in 2008 a ton of people lost their jobs and went on unemployment benefits.  During that time, the Feds loaned money to states to extend unemployment eligibility and to increase the amount of benefit.

Well, until that money is paid off, North Carolina businesses have been forced to pay higher unemployment taxes in order to service that debt.  Of course, this makes it tougher on folks providing jobs.  In response to this, North Carolina refused to continue extended benefits and instead work to pay off that debt.

And now we have:

— North Carolina no longer owes $2.75 billion it borrowed from the federal government pay first-time unemployment claims during the recent recession, action that will translate into lower taxes for employers.

“This is not just about repaying debt we owe to the federal government. This is about creating jobs,” Gov. Pat McCrory told a gathering of lawmakers, business leaders and cabinet officials Tuesday in the old House chambers at the historic State Capitol.

Businesses pay two basic types of unemployment taxes – federal and state. The federal, or FUTA, taxes state employers will pay on Jan. 1, 2016, will be about $280 million less than they were this year. State unemployment taxes, or SUTA, are going to remain steady for roughly another year until the state’s unemployment reserve fund tops $1 billion, then they will drop as well.

All told, North Carolina employers can figure to pay $700 million less a year in unemployment taxes starting in 2017 than they paid in 2014.

Bernie Sanders And Economics

Bernie Sanders

There is no doubt that Bernie Sanders is not alone when it comes to inconsistencies in his world view.  But he’s such an interesting character, at least he honestly identifies as socialist, that it’s impossible not to find humor in his policies.

Bernie feels that certain economic laws apply to conditions while believing, seemingly randomly, that others don’t.

For example, Sanders feels that open trade agreements move work over seas; the idea being that corporations will flow where the less expensive labor exists.  A concept that I whole heatedly agree with – YEAH Bernie!  On the other hand Mr. Sanders does NOT feel that raising the minimum wage will have much the same impact on marginally skilled workers – BOO Bernie!

All this came to mind when I discovered Mr. Sanders’ objection to open borders:

“What they are talking about is completely opening up the border,” Sanders responded. “That was the question. Should we have a completely open border so that anyone can come in the United States of America? If that were to happen, which I strongly disagree with, there is no question in my mind that that would substantially lower wages in this country.”

Good for Bernie.  He’s right, of course, that allowing unskilled workers in from our neighbors to the south to bid on and compete for jobs will reduce the rate at which employers will need to pay.  Further, it will erode the most marginal, the less educated and least skilled, workers.  So yeah, he’s right – and I’m surprised.

Further, Mr. Sanders continues and is able to point out exactly who those folks might be:

“When you have 36-percent of Hispanic kids in this country who can’t find jobs and you bring a lot of unskilled workers in the country what do you think happens to that 36-percent of kids of today who are unemployed? 51% of African-American kids [are unemployed],” Sanders said.

“I frankly do not believe we should be bringing in significant numbers of unskilled workers to compete with those kids,” Sanders made clear.

In addition to pointing out that Bernie is right, I would also like to point out two other facts.  One – Bernie is supporting an unpopular position because he cares about the folks most in need.  He gets the fact that it won’t be high tech jobs impacted.  Two – Bernie is supporting a position because he CARES about the people most likely to be impacted.  This is a very similar situation that conservatives find themselves in when we offer support for lower taxes, reduced government dependency programs and oppose the minimum wage.

North Carolina Unemployment – January 2014

North Carolina continues to see positive movement in unemployment numbers:

RALEIGH, N.C. — North Carolina’s unemployment rate continued improving in January to near the national average, falling to 6.7 percent, the state Commerce Department reported Monday.

The report was the latest to contain mixed messages about how well the state’s economy was shaping up for workers and why. While the report found the number of people employed increased by 17,407 between December and January, another survey found nonfarm payrolls recorded 7,200 fewer jobs.

While like to see the unemployment rate go down, we need to acknowledge that we are fighting serious headwinds as related to that number going down due to discouraged workers leaving the job market.  But there might be reason for a positive outlook there too:

The release of the January data was delayed by about a month as researchers revised and updated previous information, an annual process. The results of the revision indicate that the steady drop in North Carolina’s unemployment rate had less to do than previously thought with discouraged workers quitting their struggle to find jobs and no longer being counted, Brod said.

North Carolina Unemployment Benefits: Governor

Pat McCrory

North Carolina Cuts Unemployment Benefits

About a week ago I posted on North Carolina’s unemployment dilemma:

By itself, the news is good news, heck, even GREAT news.  But it rarely is “by itself”:

Economists say the fast drop in the unemployment rate could be because so many people have become discouraged, are giving up on finding a job and are no longer being counted.

The state’s population of working-age adults who are looking for jobs shrank by 111,000 in 2013.

This is, of course, the same phenomenon that nation republicans use to knock Obama.  There the big story is that the national labor force participation rate has plummeted to lows that we haven’t seen in decades.

While the unemployment rate in North Carolina is dropping, there is significant reason to believe that this is due to folks dropping out of the labor force.

Governor McCrory Interview

While the drop in the unemployment rate is largely due to a reduction of folks in the labor force, Governor McCrory has an answer:

While I agree that the rate is subject to the numbers in the work force, the fact that the work force is dropping nationally is important.  I’ll have to go back and dig through the state numbers, but if the labor force participation rate loss didn’t change as a result of the end of benefits, you can’t blame the law.

UI isn’t meant to be a social welfare program – in theory it’s INSURANCE that is meant to carry over an individual for a discreet amount of time.

Minimum Wage – Europe Style

Minimum Wage with without

A quick look at unemployment in Europe with and without minimum wages.

Democrats Fail To Allow Amendments

Delta No No No

Senate Defeats Unemployment Benefits Extension

Thus afternoon the senate voted to defeat a bill that would extend the 99 weeks of extended unemployment benefits:

The Senate voted 58-40 Thursday on a proposal that would have continued unemployment insurance for three months, just short of the 60 votes needed to end debate.

“I’m beginning to believe there is nothing that will get Republicans to yes,” Senate Majority Leader Harry Reid (D-Nev.) said. “It’s a ‘no’ vote because they don’t want to extend unemployment insurance.”

“We’re one Republican vote away from restoring benefits to 1.7 million Americans,” Reid said. “There is one Republican vote standing in the way of a lifeline to these 1.7 million people.”

Reid is, of course, not being totally honest.  There is ONE thing that will get republicans to yes.

North Carolina Employment – The Obama Dilemma

Glass Half FullNorth Carolina Unemployment Falls

The big headlines here in North Carolina, at least if you’re a republican, is that the unemployment rate has fallen further and faster in North Carolina than anywhere else:

“Federal jobs data shows that North Carolina’s unemployment rate dropped further in one year than any other state in the nation,” Tillis said. “We will continue to implement policies that will enable our citizens to get back to work.”

By itself, the news is good news, heck, even GREAT news.  But it rarely is “by itself”:

Economists say the fast drop in the unemployment rate could be because so many people have become discouraged, are giving up on finding a job and are no longer being counted.

The state’s population of working-age adults who are looking for jobs shrank by 111,000 in 2013.

This is, of course, the same phenomenon that nation republicans use to knock Obama.  There the big story is that the national labor force participation rate has plummeted to lows that we haven’t seen in decades.

What Do The Numbers Mean

So, what does it mean?  Are the policies in North Carolina really working?

Well, first, the policies in North Carolina really describe the new laws regarding how benefits are paid out to unemployed workers here in the Old North State.  For example, North Carolina recently revamped the laws that allowed extended benefits to 99 weeks – we now only offer benefits extending up to 20 weeks – much less than the 99 weeks being suggested by the feds.

Now, in my mind, the unemployment insurance is meant as a bridge to sustain an individual during a reasonable job search.  And if that search hasn’t produced fruit after 20 weeks,  5 months, the job search needs to be reconsidered and adjusted.  But the program should come to an end.  The insurance was not created to sustain an out of work individual for perpetuity.

Now, if after the “job search” is over or run its course, that individual in still in need of assistance then other methods should be utilized.  And, in North Carolina, that is the case:

A different federal survey that interviews households instead of businesses found the size of North Carolina’s labor force shrunk by 111,000 in 2013.

Where did all those people go? Some died or retired, others left the state and still others may have found other means of financial support, such as a family member.

More people also sought welfare or disability benefits. The number of people using food stamps in North Carolina, for example,  surged by nearly 50,000 in October, according to the latest federal figures. The 3.2% spike was the biggest in the nation and was at least twice as large as the increase in every other state except for New Jersey.

So yeah, the unemployment picture isn’t all that the republicans would have us believe it; there are people out there that are struggling.  But, BUT, without the extended benefits under the federal version, at least the incentives are in the right place.

Entitlement Programs

Julia Mom

Entitlement Programs

The welfare state is a divide between the Liberal and the Conservative.  In fact, it’s one of the main fault lines that defines the two ideologies.  Imagine what could be accomplished if the two sides would try and come together.

1.  It would take the right to acknowledge that there is a place for a safety net for the nation.

2.  It would take the left to treat the problem in the same way that organizations treat problems.

First, we have to admit and acknowledge that there are folks living around us who, through the normal vagrancies and winds of life, find themselves in need.  Little or no money, food is a struggle and a home safe from the elements is a luxury.  For the spiritual, our faith calls us to come to the aid and assistance.  For others, it isn’t a matter of faith, it’s simply the mark of a moral and caring human being.

Regardless of how you get to the conclusion, the reasonable individual wants to help those in need.

The Divergence.

There are three aspects of the programs that, in my mind, create and fuel the differences between the two sides.  They are:

  1. How do we measure
  2. Do they end
  3. Are they moral and consistent with the concept of Liberty

The first divide is crucial in my mind.  Given that we are all invested and wanna help, it now becomes important to identify strategies that work and separate them from the ones that don’t.  In my world, failing ideas are shut down and thrown away allowing the resources engaged in those activities to be re-purposed into the programs that DO work.

Too often in the public sector a certain dogma exists within the programs creating an element of “faith” that becomes personal and results in long time failing programs to continue.  And, perversely,  it is never admitted that the program isn’t working.  Rather, the argument is made that not enough money has been funneled to the failed attempt.  This creates the very undesirable effect of funneling more and more money to the absolute worst ideas.

The second difference between the right and the left is the concept that, while life does present difficulties in ratios that can be difficult to manage, at some point the individual must assume responsibility for himself.  That is, any program designed to provide a “hand-up” must, by definition, end.

Period.

And the program needs to be built with that in mind.  Not only in its funding structure but in its charter goal.  Consider unemployment.  I can buy the argument that we should provide benefits. [though I wash that unemployment insurance could be managed privately] But the program must have a defined end date after which the individual leaves the program and is allowed to manage his own life again.

This isn’t just from a funding perspective, as I mentioned, but as a design element.  As part of the unemployment program, we should ask ourselves when designing it, “what is going to happen to Pino when the time is up?  Will we have prepared him or life without benefits?”

If those questions aren’t answered and addressed, we’ve not helped the man but rather delayed the inevitable condition of permanent joblessness.

Last is the concept of morality or of Individual Liberty.

I love seeing those cute pictures on Facebook from my Liberal friends.  The ones where Jesus is commanding us to feed the poor and care for the sick.  The message, obviously, is that programs like food stamps and Obamacare are explicitly our obligation.

I’ve always thought them funny though.  Because while we are required, as decent caring  human beings, to care for others, the whole concept is that WE care for the less fortunate.  It was never assumed that I would take money from my neighbor to the West and give it to my needy neighbor to the East.

In other words, while government necessarily requires the concept of a tax, there comes a time when the confiscation of wealth for my own charities shifts from proper and necessary government to theft.  No one would think it moral if 3 people to vote to “tax” of their companion’s money.

I would leave you with this.  By failing to address issue 1 we are left with a system that cannot handle issue 2.  And now it becomes a horse race every election to draw the line in issue 3.  The result?

 

Julia’s Mother.  A citizen who comes to the very rational conclusion that the perverse system has created incentives that are not normal:

The U.S. welfare system sure creates some crazy disincentives to working your way up the ladder. Benefits stacked upon benefits can mean it is financially better, at least in the short term, to stay at a lower-paying jobs rather than taking a higher paying job and losing those benefits. This is called the “welfare cliff.”

Let’s take the example of a single mom with two kids, 1 and 4. She has a $29,000 a year job, putting the kids in daycare during the day while she works.

As the above chart  – via Gary Alexander, Pennsylvania’s secretary of Public Welfare — shows, the single mom is better off earning gross income of $29,000 with $57,327 in net income and benefits than to earn gross income of $69,000 with net income & benefits of $57,045.

The Value Of Employment’s First Rung

Minimum WageMuch has been discussed with jobs, minimum wage, poverty, the income gap and unemployment.  One of my central themes is that wages are not the full story when it comes to compensation.  Another is that minimum wage jobs are NOT meant to be careers and certainly are not meant to be a means by which we raise a family.

Rather, these jobs are meant to be the first rung in the employment ladder.  In addition to modest wages they teach job skills; customer service, scheduling, listening, task completion and plain old “boss respect”.

An old story that emphasizes this point:

Here’s one reason why Volkswagen likes hiring former fast-food employees for its 2.5 million-square-foot plant here in the heart of the Tennessee Valley.

“Inexperience is a key,” said Gary Booth, director of the Volkswagen Academy training operation. “Some of our best employees came from McDonald’s. They know standardized work.”

Booth, strolling the halls of Volkswagen’s 163,000-square-foot training facility connected to the plant, said he doesn’t want to hire assembly-line workers who have developed “bad habits” at previous manufacturing jobs.

I work at a highly specialized center and I continually advocate hiring local McDonald managers to fill our centers.

Just sayin’.