Wages for college graduates in the cross hairs of US business

Nancy Folbre reports at Economix that fewer than half of recent college graduates are employed in jobs that require college degrees and that their real entry level wages are lower now than they were in 2000.  US college graduates are facing stiff competition from foreign workers here under H-1b visas, as well as by offshoring, keeping wages for these jobs depressed.

Further, he [Professor Matloff] observes that high-tech companies insisting that there is a shortage of STEM workers with advanced degrees in the United States don't seem willing to invest much in increased financial support for graduate education.

Maybe college students should seek jobs that seem less vulnerable to global competition, in fields like health sciences. But I just read an article about health care companies sending jobs overseas that gave me palpitations.

The economist Alan Blinder asserts that high educational requirements can make a job more rather than less "offshorable." Most large American companies have already figured this out – but it's not clear how many college students have.

Not only have large American companies figured this out, but Lumina Foundation and the Bill and Melinda Gates Foundation funded a study at Georgetown University's Center on Education and the Workforce to calculate how many more college graduates the US would need to turn out in order to drive down the college-versus-high-school wage premium from 74% to 46%! Yep, that's the plan. Your college education, even in STEM—perhaps especially in STEM—may not be your ticket to a well-paying domestic job.

Update on Saturday, October 19, 2013 at 11:05AM by Skeptic

The same thing is happening in China as millions of young Chinese were drawn away from blue collar work into (mostly second-rate) colleges and now cannot find white collar work, according to Damien Ma and William Adams in Foreign Affairs.

The flip side of the dearth of blue-collar labor has been the glut of recent college graduates that scarcely qualify for work in China’s competitive job market. During the beginning of the market economy era in the 1980s, less than three percent of Chinese young people received a four-year university education. This exclusive cabal of credentialed elites was placed into high flying careers and lived lifestyles befitting their social status.

That was then. College graduates now face a life that would be totally unrecognizable to those a generation earlier, who had the fortune of first-mover advantage. Tripling the size of the higher education system in only a decade has meant a rapid proliferation of new institutions, most of which provide educations -- and professional prospects -- that can’t compare with those of the graduates of the top tier institutions. A massive riot in 2006 illustrated how different the prospects are for graduates of elite universities and those of newer ones: Some graduates of the satellite campus of a university in central China apparently went berserk when they discovered that their diplomas designated them graduates of the satellite, not of the parent university as they were originally promised.

In a situation that would sound familiar to Americans, graduates of new and lower-ranked universities have struggled to find good entry-level jobs. They live in small, crowded, shared apartments at the edge of major cities, scraping by to make rent. The plum jobs for university graduates at state-owned enterprises, in government, or at glitzy multinationals are no more attainable for these young people than for migrant laborers of the same age. And the college graduates won’t take the manufacturing jobs, perhaps to their detriment: average starting wages for college graduates were actually lower than average migrant worker salaries in 2011. Without a good employer to secure their place in urban China, these young people do not simply struggle economically; in many ways, they can be as marginalized from the economic and social fabric of their urban life as are migrant workers.

Most read Realitybase posts in July

The American Dream died in February 1973. With graphs showing stagnation of inflation-adjusted middle class incomes since the 1970s after strong and steady post-WWII growth

The Citigroup Plutonomy Memos With key quotations from documents that are being disappeared. This post has been the #1 response to a Google search for "plutonomy memo."

The Dysfunction and Corruption of Our Healthcare System, Its Damage to the National Economy and other Basic Healthcare Matters (Guest Post) Describing a system that is destroying American business global competitiveness, that violates fundamental insurance risk principles, and that has inherent conflicts of interest preventing quality national health care delivery and cost efficiency, and proposing a solution.

The history of US per-capita petroleum consumption will surprise you.  A graph and other data show US per-capita consumption of petroleum is down substantially from the 1970s, has been very stable since 1983 because of CAFE standards, and has fluctuated only slightly with retail price changes.

Still time for another not-Romney to enter the race? Campaign video promoting Wal-Mart for President.

U.S. aircraft carrier and 15 other Navy ships sunk in the Strait of Hormuz in 5-10 minutes Results of US war games when attacked by large numbers of speed boats and missiles such as Iran has in the hands of Revolutionary Guards reputed to be "cowboys," and suggesting still other ways we might accidentally get into a war with Iran.

Two hypotheses for why US CEO pay is so high Charts show that US CEO pay is about double that in other advanced countries, meaning there is either a shortage of talent in the US or the US CEO pay market is broken.

US job creation has been declining since April 2000 and is now in freefall. Discussion around a dramatic graph showing the US employment-to-population ratio strongly increasing until 2000 followed by a devastating loss in 10 years of all the gains made in the previous 20 years.  

Executives inflate their own compensation with stock repurchase programs. How corporations drive up stock prices by buying back stock instead of investing in the business, triggering a Warren Buffett rant quoted here.

American Exceptionalism, shake hands with Inconvenient Facts. Presenting data, and links to other data, showing USA ranks near the bottom of 30 OECD nations by a wide variety of middle class metrics including health, family, education, income, wealth, leisure, freedom and democracy, public order and safety, generosity, and access to internet and wireless technology.

American Exceptionalism, shake hands with Inconvenient Facts.

A big reason why America keeps drifting ever deeper into mediocrity is a misperception about how far we have already declined, how determined and effective our foreign competition is, and how ineffective minor tweaks to current policies are likely to be. I documented some measures of our decline, to which most Americans and apparently all politicians are oblivious, in Yeah! We're Number 40, 11, 16, 22, 24, 27, 48, and 29! and the updates to it.  Recently, Ed Fullbrook has published an e-book, Decline of the USA, which contains almost no text but shows in charts our ranking among 30 OECD nations in 56 indicators in seven categories. Overall USA ranked 29^th, ahead of only Mexico. Recall that before its expansion to 34 nations in 2010 OECD members included not only all the prosperous nations of western Europe, Canada, and Japan, but also unenviable nations like Portugal, Turkey, Poland, Greece, Hungary, Czech Republic, and Slovak Republic. USA ranked behind all of them.

Out of 56 rankings, USA was in the top ten only once (labor productivity in GDP per hour worked). USA was in the second ten only 11 times and was in the bottom ten 44 times. In the seven larger categories, USA was in the middle of the pack on education and last or near last in all other categories:

Health                              28/30

Family                              30/30

Education                         18/30

Income and Leisure            27/30

Freedom and Democracy    28/30

Public Order and Safety      30/30

Generosity                         24/24 (data not available for all 30)

Update on Friday, July 20, 2012 at 03:01PM by Skeptic

Large cities in America, where the digital age was invented, now have generally slower and more expensive internet services, according to this recent report from The New America Foundation:

The results indicate that U.S. consumers in major cities tend to pay higher prices for slower speeds compared to consumers abroad. For example, when comparing triple play packages in the 22 cities surveyed, consumers in Paris can purchase a 100 Mbps bundle of television, telephone, and high-speed Internet service for the equivalent of approximately $35 (adjusted for PPP). By contrast, in Lafayette, LA, the top American city, the cheapest available package costs around $65 and includes just a 6 Mbps Internet connection. A comparison of Internet plans available for around $35 shows similar results.  Residents of Hong Kong have access to Internet service with symmetrical download and upload speeds of 500 Mbps while residents of New York City and Washington, D.C. will pay the equivalent price for Internet service with maximum download speeds that are 20 times slower (up to 25 Mbps and upload speeds of up to 2 Mbps).

The results add weight to a growing body of evidence that suggests that the U.S. is lagging behind many of its international counterparts, most of whom have much higher levels of competition and, in turn, offer lower prices and faster Internet service. It suggests that policymakers need to re-evaluate our current policy approaches to increase competition and encourage more affordable high-speed Internet service in the U.S. 

Update on Monday, July 30, 2012 at 03:54PM by Skeptic

Ezra Klein reports that median net worth of Americans is lower than for 16 other developed countries:  Australia, Italy, Japan, UK, Switzerland, Ireland, France, Canada, Norway, Finland, Spain, New Zealand, Netherlands, Israel, China/Taiwan, and Germany.

The chart is based on Table 7.1 of this Credit Suisse report (pdf). Hat tip Angry Bear.

Update on Sunday, October 21, 2012 at 02:25PM by Skeptic

Mark Rice, Chair of American Studies at St. John Fisher College in Rochester, New York, maintains an interesting blog, Ranking America, in which he posts country rankings on an extraordinarily broad range of topics. Recent posts report that Americans are #2 (right behind Romania) among 35 advanced nations in childhood poverty.  The US ranks 45th in civil liberties, which is the "lowest of any fully democratic countries."  Perhaps the most devastating is that the US ranks 50th in measured lengths of erect penises.  How tiny is it?  Details here. 

Update on Friday, October 18, 2013 at 01:28PM by Skeptic

The 2013 Credit Suisse report is out.  Table 3.1 shows that 26 nations have higher median net worth per adult than the US. 

 

1	Australia	$219,505
2	Luxembourg	$182,768
3	Belgium	$148,141
4	France	$141,850
5	Italy	$138,653
6	United Kingdom	$111,524
7	Japan	$110,294
8	Iceland	$104,733
9	Switzerland	$95,916
10	Finland	$95,095
11	Norway	$92,859
12	Singapore	$90,466
13	Canada	$90,252
14	Netherlands	$83,631
15	New Zealand	$76,607
16	Ireland	$75,573
17	Spain	$63,306
18	Qatar	$58,237
19	Denmark	$57,675
20	Austria	$57,450
21	Greece	$53,937
22	Taiwan	$53,336
23	Sweden	$52,677
24	United Arab Emirates	$51,882
25	Germany	$49,370
26	Slovenia	$44,932
27	United States	$44,911

Hat tip to Kenneth Thomas, who did the sorting and has a good discussion here. 

Crony Capitalism is the common enemy of the Tea Party and the Occupy Movement.

Before the Occupy Movement appeared, I suggested in Common Ground for Tea Partiers and Liberals that both "feel that their lives are getting worse, not better, and that, rather than having control over their own lives, they are being dictated to and victimized by powerful people and institutions." Professor Luigi Zingales of the University of Chicago Booth School of Business concurs in an LAT op ed today, where he specifically identifies crony capitalism as the common enemy of the Tea Party and the Occupy Movement:

[Both major parties are ignoring] what unites the two movements: their fundamentally anti-elite, anti-establishment attitude.

The tea party and the Occupy movement both arose in response to pervasive frustration. As we've grown accustomed to hearing in recent years, Americans are angry. They're angry at bankers, who helped cause the financial crisis but paid no price for it. They're angry at Washington, which blamed the bankers but deserved as much blame, if not more, for failing to rein them in. And they're angry at an economy that seems to enrich the wealthy while leaving most everyone else standing still or falling behind.

This anger manifests itself in a strong anti-elite bias and a determination to resist an oppressive leviathan — though the monster takes different forms in the two movements. For the tea party, it's the federal government in Washington; for Occupy, it's bailout-addicted big business.

The difference is more apparent than real. The problem is not big business per se but monopolistic and politically powerful business. It is not government per se but intrusive and corrupt government. Is Fannie Mae inefficient, for example, because it is a large monopolistic company or because it is a state-sponsored enterprise? The answer is both.

Does the blame lie with the government or with the private sector? Neither. Their failures are the result of an increasingly corrupt system of crony capitalism, in which businesses succeed not through competitive merit but through government connections and favoritism such as tax breaks, subsidies and other preferential treatment.

For many people, the way big banks escaped the financial crisis with their profits intact (and often enhanced) epitomized American-style crony capitalism. Neither party has had the courage to confront it, for fear of losing campaign contributions and political power.

. . . .

The battle against crony capitalism is foremost a battle against anti-competitive, monopolistic corporations. Antitrust regulation should thus be extended to the political consequences of mergers. When companies become disproportionately big, they become disproportionately powerful, and as we have seen, their influence distorts the political system.

In no sector is this truer than in finance, where consolidation has made banks "too big to fail" and too powerful to combat. A reinstitution of the separation between commercial and investment banking, along the lines of the old Glass-Steagall Act (repealed in 1999), would help contain this excessive power.

It's worth keeping in mind that the patriots who threw English tea into Boston Harbor in 1773 were not revolting against higher taxes (the Tea Act, in fact, lowered the price of tea legally imported in America) but against the privileges granted to the British East India Co.. The American Revolution was a battle for political rights, but it was also a battle for economic freedom — and against an 18th century form of crony capitalism.

Corrupt arrangements of this kind have unfortunately endured to the present day, and their abuses finally sparked protest movements from the right and the left. The two political parties ignore these movements at their peril.

I agree.

Most read Realitybase posts in June

The Citigroup Plutonomy Memos With key quotations from documents that are being disappeared. This post has been the #1 response to a Google search for "plutonomy memo."

The American Dream died in February 1973. With graphs showing stagnation of inflation-adjusted middle class incomes since the 1970s after strong and steady post-WWII growth

The history of US per-capita petroleum consumption will surprise you.  A graph and other data show US per-capita consumption of petroleum is down substantially from the 1970s, has been very stable since 1983 because of CAFE standards, and has fluctuated only slightly with retail price changes.

Two hypotheses for why US CEO pay is so high Charts show that US CEO pay is about double that in other advanced countries, meaning there is either a shortage of talent in the US or the US CEO pay market is broken.

The Dysfunction and Corruption of Our Healthcare System, Its Damage to the National Economy and other Basic Healthcare Matters (Guest Post) Describing a system that is destroying American business global competitiveness, that violates fundamental insurance risk principles, and that has inherent conflicts of interest preventing quality national health care delivery and cost efficiency, and proposing a solution.

Still time for another not-Romney to enter the race? Campaign video promoting Wal-Mart for President.

Executives inflate their own compensation with stock repurchase programs. How corporations drive up stock prices by buying back stock instead of investing in the business, triggering a Warren Buffett rant quoted here.

One chart refutes three myths about US foreign trade. About Smoot-Hawley, the post-WWII export "boom," and "self-balancing" trade.

Comparative Advantage—The Unicorn of Free Trade Collection of sources and analyses demonstrating that the assumptions of classic Ricardian trade theory rarely if ever align with real-world conditions.

US job creation has been declining since April 2000 and is now in freefall. Discussion around a dramatic graph showing the US employment-to-population ratio strongly increasing until 2000 followed by a devastating loss in 10 years of all the gains made in the previous 20 years.  

Most read Realitybase posts in May

"The American Dream died in February 1973 With graphs showing stagnation of inflation-adjusted middle class incomes since the 1970s after strong and steady post-WWII growth

The Citigroup Plutonomy Memos With key quotations from documents that are being disappeared. This post has been the #1 response to a Google search for "plutonomy memo."

The Dysfunction and Corruption of Our Healthcare System, Its Damage to the National Economy and other Basic Healthcare Matters (Guest Post) Describing a system that is destroying American business global competitiveness, that violates fundamental insurance risk principles, and that has inherent conflicts of interest preventing quality national health care delivery and cost efficiency, and proposing a solution.

The history of US per-capita petroleum consumption will surprise you.  A graph and other data show US per-capita consumption of petroleum is down substantially from the 1970s, has been very stable since 1983 because of CAFE standards, and has fluctuated only slightly with retail price changes.

Comparative Advantage—The Unicorn of Free Trade Collection of sources and analyses demonstrating that the assumptions of classic Ricardian trade theory rarely if ever align with real-world conditions.

One chart refutes three myths about US foreign trade. About Smoot-Hawley, the post-WWII export "boom," and "self-balancing" trade.

US job creation has been declining since April 2000 and is now in freefall. Discussion around a dramatic graph showing the US employment-to-population ratio strongly increasing until 2000 followed by a devastating loss in 10 years of all the gains made in the previous 20 years.

Two hypotheses for why US CEO pay is so high Charts show that US CEO pay is about double that in other advanced countries, meaning there is either a shortage of talent in the US or the US CEO pay market is broken.

U.S. aircraft carrier and 15 other Navy ships sunk in the Strait of Hormuz in 5-10 minutes Results of US war games when attacked by large numbers of speed boats and missiles such as Iran has in the hands of Revolutionary Guards reputed to be "cowboys," and suggesting still other ways we might accidentally get into a war with Iran.

The US trade deficit is tribute paid to foreigners. And it's big. Nobel laureates Paul Samuelson and Paul Krugman and other prominent economists including Dani Rodrik, Alan Blinder, Martin Wolf, Larry Summers, Joseph Stiglitz, Dean Baker, and even Alan Greenspan have said that the US middle class is net worse off as a result of persistent trade deficits averaging 3% of GDP.

Most read Realitybase posts in April

The Citigroup Plutonomy Memos With key quotations from documents that are being disappeared. This post has been the #1 response to a Google search for "plutonomy memo."

The history of US per-capita petroleum consumption will surprise you.  A graph and other data show US per-capita consumption of petroleum is down substantially from the 1970s, has been very stable since 1983 because of CAFE standards, and has fluctuated only slightly with retail price changes.

"The American Dream died in February 1973 With graphs showing stagnation of inflation-adjusted middle class incomes since the 1970s after strong and steady post-WWII growth

The Dysfunction and Corruption of Our Healthcare System, Its Damage to the National Economy and other Basic Healthcare Matters (Guest Post) Describing a system that is destroying American business global competitiveness, that violates fundamental insurance risk principles, and that has inherent conflicts of interest preventing quality national health care delivery and cost efficiency, and proposing a solution.

Comparative Advantage—The Unicorn of Free Trade Collection of sources and analyses demonstrating that the assumptions of classic Ricardian trade theory rarely if ever align with real-world conditions.

Two hypotheses for why US CEO pay is so high Charts show that US CEO pay is about double that in other advanced countries, meaning there is either a shortage of talent in the US or the US CEO pay market is broken.

One chart refutes three myths about US foreign trade. About Smoot-Hawley, the post-WWII export "boom," and "self-balancing" trade.

US job creation has been declining since April 2000 and is now in freefall. Discussion around a dramatic graph showing the US employment-to-population ratio strongly increasing until 2000 followed by a devastating loss in 10 years of all the gains made in the previous 20 years.

What's the market alternative to this big government program? On a per-vehicle-mile-traveled basis, conventional command-and-control regulations have reduced deaths by 85%, tailpipe pollutants by 89%, and fuel consumption by 40%.

The Prius fallacy fallacy Data refute the claim that when people have more fuel efficient vehicles they tend to drive substantially more miles.

The Prius fallacy fallacy

In the never-ending attack on vehicle fuel efficiency regulations, "the Prius fallacy" has become shorthand for the argument that when one replaces his gas guzzler with a fuel efficient vehicle his gasoline consumption does not go down, or goes down only a little bit, because he will decide to use the lower cost per mile to drive many more miles. (Some economists refer to this more generally as the "rebound effect.") Although it's plausible to think this could happen, it turns out it doesn't. Afsah and Salcito at CO2 Scorecard, using data compiled by Yale professor Ken Gillingham for his doctoral research at Stanford, show that the distribution of vehicle miles traveled ("VMT") by Prius drivers is essentially the same as the average of all other vehicle owners in California.

After driving a series of Audi A4s for 11 years, last year I bought a Prius. Now, instead of 23 MPG, I get 46 MPG actual road mileage. So, do I drive more miles now? No. In fact, I drive fewer long distance miles because the Prius is a less comfortable road car. In our first trip of about 250 miles with three people in the car, we learned that the back seat has inadequate head room. On a 1,100 mile trip with two people, we learned that the seats are way less comfortable than the Audi seats. Also, the Prius has fewer features and a generally lower level of luxury and comfort, and is not, compared to the Audi, at all peppy, responsive, or "fun to drive." Since we still have an Audi in the family, we use it for long trips and trips with three or more adults. Bottom line: The differences that make the Prius more fuel efficient also make me drive it less—the Prius fallacy is a fallacy.

There's another factor countering the Prius fallacy—economy cars do not raise ones social status. The most conspicuous form of discretionary driving is "cruising," and it's really hard to imagine hundreds of Prius owners driving Woodward Avenue in Detroit or Whittier Boulevard in East LA to show off their rides. I don't think that could even happen on Wilshire Boulevard in the Peoples Republic of Santa Monica. Auto industry journalist, Jamie Lincoln Kitman, responds to the Prius fallacy proponents this way:

Although their math is often specious, these critics lose sight of the fact that for more than a century, the automobile industry has been based on selling people dreams to go with their mobility. We're used to drivers who want an S.U.V. or a sports car so they'll look virile, sporty or capable.

The Kitman link is to a forum where others espouse the Prius fallacy. The argument seems to arise out of an unexamined conviction that the only proper—and effective—way to influence social outcomes is by manipulating prices. The truth is sometimes that works, and sometimes it doesn't. As a result of government command-and-control regulations, tailpipe emissions of HC, NOx, and CO from new cars are down 89% since the early 1950s, fuel consumption per VMT is down 40% from 1975, and each VMT is 85% less likely to result in a fatality than it was in 1949. Take the challenge: What's the market alternative to this big government program?

Update on Saturday, April 7, 2012 at 11:09AM by Skeptic

It was probably Joe Romm who brought this issue to my attention here, where he has an extended analyis debunking other aspects of "the Prius fallacy." 

Update on Friday, February 28, 2020 at 01:10PM by Skeptic

Ken Gillingham has a related article here, in February 2020. 

Most read Realitybase posts in March

"The American Dream died in February 1973 With graphs showing stagnation of inflation-adjusted middle class incomes since the 1970s after strong and steady post-WWII growth

The Citigroup Plutonomy Memos With key quotations from documents that are being disappeared. This post has been the #1 response to a Google search for "plutonomy memo."

The history of US per-capita petroleum consumption will surprise you.  A graph and other data show US per-capita consumption of petroleum is down substantially from the 1970s, has been very stable since 1983 because of CAFE standards, and has fluctuated only slightly with retail price changes.

The Dysfunction and Corruption of Our Healthcare System, Its Damage to the National Economy and other Basic Healthcare Matters (Guest Post) Describing a system that is destroying American business global competitiveness, that violates fundamental insurance risk principles, and that has inherent conflicts of interest preventing quality national health care delivery and cost efficiency, and proposing a solution.

Two hypotheses for why US CEO pay is so high Charts show that US CEO pay is about double that in other advanced countries, meaning there is either a shortage of talent in the US, or that the US CEO pay market is broken.

Comparative Advantage—The Unicorn of Free Trade Collection of sources and analyses demonstrating that the assumptions of classic Ricardian theory rarely if ever align with real-world conditions.

US job creation has been declining since April 2000 and is now in freefall. Discussion around a dramatic graph showing the US employment-to-population ratio strongly increasing until 2000 followed by a devastating loss in 10 years of all the gains made in the previous 20 years.

All the way to Tampa? "Enhanced" pictures of the GOP Presidential candidates.

U.S. aircraft carrier and 15 other Navy ships sunk in the Strait of Hormuz in 5-10 minutes Results of US war games when attacked by large numbers of speed boats and missiles such as Iran has in the hands of Revolutionary Guards reputed to be "cowboys," and suggesting still other ways we might accidentally get into a war with Iran.

The Recession is Coming! The Recession is Coming! December 2007 post with charts showing America's middle class had been in recession for 7 years and asking if we really care.

Still a big shortage of jobs for college grads

The Great Recession officially ended as the college class of 2009 was graduating. Exactly two years later, real GDP was back to its pre-recession high, and the stock market indexes were above their pre-September 2008 crash levels. In stark contrast The New York Times Magazine interviewed 73% of those who graduated from Drexel University (a mid-tier liberal arts school) in June 2011 and reports that nearly half are not appropriately employed or in graduate school. The breakdown:

In graduate school           22%

Working full time             39% (includes jobs not requiring college)

Working part time            22% (includes jobs not requiring college)

Unemployed                    17%

The article also reports that only 5 of the 20 jobs projected by BLS to grow the fastest in the next decade require bachelor's degrees. Policy makers, you are failing. The necessary jobs aren't creating themselves. Fix it or get out of the way.

Still time for another not-Romney to enter the race?

[If you don't see the embedded video in the RSS or email feed, click here.]

Ironically, Romney couldn't object to this. H/t Christine and Kenneth Quinnell at Crooks and Liars.

All the way to Tampa?

Update on Monday, March 19, 2012 at 07:42PM by Skeptic

Because not everybody is a Futurama fan, but everybody loves Star Wars:

The Trees and the Forest of Unemployment

The BLS February employment report is out today, and the headline unemployment rate (U-3) is steady at 8.3%. By September, it could be 7.9% or less, which might be low enough to get Obama reelected.

However, we are a long, long, LONG way from full employment. The employment population ratio remains below where it was two years ago—and below where it was 34 years ago when women were just starting to enter the work force in large numbers:

Where are the 13 million jobs we need to get back to 64%, and how long will it take? US employment back to normal in 2016, 2027, or never?

Update on Monday, March 12, 2012 at 08:19AM by Skeptic

Richard Eskow at OurFuture.org uses this graph to show how poorly job losses are being regained versus previous recessions:

Source: Bureau of Labor Statistics. Chart by Amanda Cox/The New York Times. Horizontal axis shows months. Vertical axis shows the ratio of that month’s nonfarm payrolls to the nonfarm payrolls at the start of recession.

Eskow points out that this gives the Administration a messaging challenge that it has not solved:

Barack Obama and his fellow Democrats are in an unenviable position: If they celebrate the tepid revival of jobs growth they run the risk of being seen as out of touch with the ongoing pain of many Americans and the reduced prospects for many others. If they acknowledge the ongoing misery that has abandoned millions of Americans to long-term joblessness, and millions of others to wage stagnation, they're giving ammunition to their own opponents.

The President hasn't struck the right balance yet.

Most read Realitybase posts in February

The Citigroup Plutonomy Memos With key quotations from documents that are being disappeared. This post has been the #1 response to a Google search for "plutonomy memo."

"The American Dream died in February 1973 With graphs from multiple sources showing stagnation of inflation-adjusted middle class incomes since the 1970s after strong and steady post-WWII growth

The history of US per-capita petroleum consumption will surprise you.  A graph and other data show US per-capita consumption of petroleum is down substantially from the 1970s, has been very stable since 1983 because of CAFE standards, and has fluctuated only slightly with retail price changes.

Comparative Advantage—The Unicorn of Free Trade A collection of sources and analyses demonstrating that the assumptions of classic Ricardian theory rarely if ever align with real-world conditions.

Why We Can't Bring Manufacturing and Innovation Back to America A comprehensive piece on how changes since the 20^th Century have been so profound that innovation is rapidly following manufacturing from the US to China, and on why that trend will continue without US government intervention—even in the unlikely event that China were to comply with international law on trade and currency.

U.S. aircraft carrier and 15 other Navy ships sunk in the Strait of Hormuz in 5-10 minutes Reporting on the results of US war games when attacked by large numbers of speed boats and missiles such as Iran has in the hands of Revolutionary Guards reputed to be "cowboys," and suggesting still other ways we might get into an all out war with Iran by accident.

The Dysfunction and Corruption of Our Healthcare System, Its Damage to the National Economy and other Basic Healthcare Matters (Guest Post) Describing a system that is destroying American business global competitiveness, that violates fundamental insurance risk principles, and that has inherent conflicts of interest preventing quality national health care delivery and cost efficiency, and proposing a solution.

US job creation has been declining since April 2000 and is now in freefall. Discussion around a dramatic graph showing the US employment-to-population ratio strongly increasing until 2000 followed by a devastating loss in 10 years of all the gains made in the previous 20 years.

US healthcare efficiency did not go off the rails until about 30 years ago. US life expectancy increased in lockstep with 19 other rich countries as healthcare expenses increased, but in 1982 the US life expectancy increases shifted onto a dramatically slower rate of increase than the other 19 countries even though US healthcare spending started rising even faster. The adverse change was most striking for females. It all seems very counterintuitive, but several data sets are compelling.

What happens when you get all your information about employment and job creation from employers?  Cluelessness. In a live video chat with citizens Obama seemed stunned that it may not be true that employers have to bring in foreign high-tech workers at low wages under H-1b and L-1 visas because "there is a shortage of qualified Americans."

Adam Smith on self love and greed

Adam Smith is regarded by many as the patron saint of capitalism and the chief proponent of the prevalent notion that thoughtless greed is economically beneficial to society at large.  Gavin Kennedy, who runs the Adam Smith’s Lost Legacy blog, posted these two paragraphs from Smith’s Theory of Moral Sentiments as revised by Smith in 1789 a few months before his death.

“When the happiness or misery of others depends in any respect upon our conduct, we dare not, as self–love might suggest to us, prefer the interest of one to that of many. The man within immediately calls to us, that we value ourselves too much and other people too little, and that, by doing so, we render ourselves the proper object of the contempt and indignation of our brethren.l  Neither is this sentiment confined to men of extraordinary magnanimity and virtue. It is deeply impressed upon every tolerably good soldier, who feels that he would become the scorn of his companions, if he could be supposed capable of shrinking from danger, or of hesitating, either to expose or to throw away his life, when the good of the service required it.

One individual must never prefer himself so much even to any other individual, as to hurt or injure that other, in order to benefit himself, though the benefit to the one should be much greater than the hurt or injury to the other. The poor man must neither defraud nor steal from the rich, though the acquisition might be much more beneficial to the one than the loss could be hurtful to the other. The man within immediately calls to him, in this case too, that he is no better than his neighbour, and that by this unjust preference he renders himself the proper object of the contempt and indignation of mankind; as well as of the punishment which that contempt and indignation must naturally dispose them to inflict, for having thus violated one of those sacred rules, upon the tolerable observation of which depend the whole security and peace of human society. There is no commonly honest man who does not more dread the inward disgrace of such an action, the indelible stain which it would for ever stamp upon his own mind, than the greatest external calamity which, without any fault of his own, could possibly befal him; and who does not inwardly feel the truth of that great stoical maxim, that for one man to deprive another unjustly of any thing, or unjustly to promote his own advantage by the loss or disadvantage of another, is more contrary to nature, than death, than poverty, than pain, than all the misfortunes which can affect him, either in his body, or in his external circumstances” (TMS, Part 3, Chapter 3, paragraphs 5 and 6: 137-8).

Are you paying attention, John Galt and Gordon Gekko?

Cal Trillin on super PACs

There might be a serious message somewhere in Cal Trillin's piece in today's NYT, but the only reason I'm linking to it is that it made me laugh. Really.

INTERVIEWER Your “super PAC,” America the Super, has now spent just over $3 million on negative television ads attacking Art Schwartz, the most serious opponent of Jeff Gold in the race for the Senate, and — with all due respect, ma’am — that has raised questions about how closely America the Super is connected to the Gold campaign.

SUPER PAC CHIEF EXECUTIVE By law, a candidate’s campaign cannot coordinate or communicate with a super PAC. America the Super is for America being super. If that leads to an investigation into whether Mr. Schwartz did any inappropriate touching when he was a scoutmaster in 1978 — because a lot of those scoutmasters did, you know — so be it.

INTERVIEWER Well, you do understand the assumption some have that there might be more contact than the spirit of the law intends there to be, given your closeness with Mr. Gold.

SUPER PAC C.E.O. My closeness? What do you mean by my closeness?

INTERVIEWER Because you’re, well, his ...

SUPER PAC C.E.O. Because I’m his mother?

. . . .

Read the rest here.

What happens when you get all your information about employment and job creation from employers? Cluelessness.

US employers consistently complain that they can't fill job openings in the US because there are not enough qualified American applicants. Therefore, they say, government policy needs to focus on increasing government spending on education, especially in science, technology, engineering and math ("STEM"), and on reducing or eliminating barriers to bringing in foreign guest workers on H-1b and L-1 visas. In H-1b, the "Outsourcing Visa" I reported on two different studies that showed there is no relevant labor market test for the issuance of these visas and that employers can and do bypass American workers for cheaper guest workers. There are about 1 million workers in H-1b and L-1 visa jobs at any one time and about 1 million more have been here for training on those visas and then gone home taking the jobs with them. President Obama seems to know nothing about this, according to a McClatchy-Tribune News Service report on his live video chat with citizens last Monday.

Jennifer Wedel was one of five people selected to take part in a live video chat Monday with the president through the "hangout" feature on Google Plus, the search engine's social-networking site.

Wedel asked why U.S. companies were allowed to use a controversial program to hire high-skilled foreign workers when her husband, Darin, has similar skills and can't find full-time work. Darin Wedel lost his job at Texas Instruments about three years ago.

. . . .

"My question to you is to why does the government continue to issue and extend H-1B visas when there are tons of Americans just like my husband with no job?" she asked.

Obama offered that industry leaders have told him that there aren't enough of certain kinds of high-tech engineers in America to meet their needs. Jennifer Wedel interrupted him to explain that that answer didn't match what her husband is seeing out in the real world.

"Jennifer, can I ask what kind of engineer your husband is?"

"He's a semiconductor engineer," she told the president, who seemed genuinely surprised.

"If you send me your husband's resume, I'd be interested in finding out exactly what's happening right there," he told her. "The word we're getting is somebody in that high-tech field, that kind of engineer, should be able to find something right away. And the H-1B should be reserved only for those companies who say they cannot find somebody in that particular field."

Near the end of the online event, Obama reminded Wedel about his request.

"I mean what I said. If you send me your husband's resume, I'd be interested in finding out what's happening," Obama told her and thousands of others watching.

Hat tip BuzzFlash.  I have written about this problem on other occasions too, in Down with Globalization and in Skilled labor shortages in declining industries accelerate the decline. Shouldn't President Obama already have heard about this well-documented and important non-employer view, say from the Secretary of Labor?  He's certainly not hearing it from his Council on Jobs and Competitiveness headed by GE's CEO and other prominent outsourcers. Obama names fox to head advisory panel on hen house security.

Tea Party and Occupy acting in concert!

In Common Ground for Tea Partiers and Liberals, before the Occupy Movement emerged, I pointed out that liberal ideology and goals have much in common with Tea Party ideology and goals and speculated that there could be a political realignment based on that overlap. The first overt sign I have seen of Tea Party and Occupy working together is in this report from the OccupyLA blog: Protesters Find Common Ground: Tea Party & Occupy Movement Come Together in Worcester MA. Both groups were protesting against the NDAA threat to civil liberties. No indication that there was any commonality on economic issues. From Occupy LA:

More than 100 people who don't agree on much agreed yesterday that a Congress that passes a law permitting the indefinite detention of Americans without charge diminishes the country.

Among them were Sheila, a 68-year-old tea party member from Worcester who brought her sign "What-cha gonna do when They come for you," and Occupy Worcester's Sam Capogrossi. They and a dozen others banged on a 5-gallon plastic container, trying to persuade the drivers in rush-hour traffic on Main Street that the National Defense Authorization Act that passed in December is a threat to their civil liberties. The law permits indefinite detention for terrorism suspects, American or not.

They read in unison the Bill of Rights in the plaza in front of the federal courthouse, under the watchful eyes on three Worcester police officers and two members of Homeland Security's Federal Protective Service. There were no incidents, save for a citation written for defacing public property when an Occupy Worcester member wrote in chalk "Occupy Everywhere" on a column in Federal Plaza.

Members of each group said they admired the other group for its stand on NDAA, but except for a brief speaking portion of event, Occupy Worcester members mostly occupied the north end of the small Federal Plaza Park and tea partiers mostly the south. There was some "good discussion" among the members, but "we're not changing any minds," said Ken Mandile, head of the Worcester Tea Party.

Nevertheless, he said, it is impressive that the groups can put aside their differences to stand for such an important principle as the Bill of Rights.

Occupy Worcester's Jonathan Noble said, "Anarchists, communists, and tea partiers are standing together. Even though I feel a little uncomfortable about what they (tea party members) stand for, I think it's kind of a beautiful thing that we can stand together on this."

Carrying a sign saying "Give Me Liberty," Paxton tea partier Margaret Pennace said. "I think it's a wonderful demonstration of Americanism."

Update on Sunday, February 12, 2012 at 02:54PM by Skeptic

Occupy and Tea Party also working together in Oregon on the NDAA issue.

Trickle down economics

If image is not visible, click here.

Most read Realitybase posts in January

The Citigroup Plutonomy Memos With key quotations from documents that are being disappeared. This post has been the #1 response to a Google search for "plutonomy memo."

The Dysfunction and Corruption of Our Healthcare System, Its Damage to the National Economy and other Basic Healthcare Matters (Guest Post) Describing a system that is destroying American business global competitiveness, that violates fundamental insurance risk principles, and that has inherent conflicts of interest preventing quality national health care delivery and cost efficiency, and proposing a solution.

U.S. aircraft carrier and 15 other Navy ships sunk in the Strait of Hormuz in 5-10 minutes Reporting on the results of US war games when attacked by large numbers of speed boats and missiles such as Iran has in the hands of Revolutionary Guards reputed to be "cowboys," and suggesting still other ways we might get into an all out war with Iran by accident.

Why We Can't Bring Manufacturing and Innovation Back to America A comprehensive piece on how changes since the 20^th Century have been so profound that innovation is moving fast behind manufacturing from the US to China, and why that trend will continue without US government intervention—even in the unlikely event that China were to comply with international law on trade and currency.

The American Dream died in February 1973 This post, which makes the top 10 almost every month, has graphs from multiple sources showing stagnation of inflation-adjusted middle class incomes since the 1970s after strong and steady post-WWII growth

US job creation has been declining since April 2000 and is now in freefall. Discussion around a dramatic graph showing our employment-to-population ratio strongly increasing until 2000 followed by a devastating loss in 10 years of all the gains made in the previous 20 years.

The history of US per-capita petroleum consumption will surprise you.  A graph and other data show US per-capita consumption of petroleum is down substantially from the 1970s, has been very stable since 1983 because of CAFE standards, and has fluctuated only slightly with retail price changes.

Comparative Advantage—The Unicorn of Free Trade A collection of sources and analyses demonstrating that the assumptions of classic Ricardian theory rarely if ever align with real-world conditions.

Two hypotheses for why US CEO pay is so high Charts show that in the US CEO pay is about double that in other advanced countries, implying either that there is a shortage of talent in the US, or that the US CEO pay market is broken.

The Recession is Coming! The Recession is Coming! December 2007 post with charts showing America's middle class had already been in recession for 7 years and asking if we really care about them.