More Economic Cluelessness from Economists

So there I was this morning, after my usual morning search for something approaching a full time job in my chosen career (generally unsuccessful of course) and going on to the standard search of the various news sites just to see what is happening in the world around us, I came across this article over at CNN:

Economists' biggest worry: Federal budget deficit

Once again, when I think I have seen just how totally clueless economists are, it is articles such as this that let me know we still have such a long way to go. From the article:

NEW YORK (CNNMoney) -- Government deficits are the biggest long-term worry of top U.S. economists, according to a survey released Monday.

The survey of 47 top economists by the National Association of Business Economics predicted that the Federal deficit will jump to $1.4 trillion in the fiscal year ending in September. In the November survey, the economists had forecast a $1.1 trillion deficit.

...snip...

The previous survey was taken before Congress agreed to extend Bush-era tax cuts for all income brackets and have a one-year holiday on a portion of the payroll tax. The payroll tax holiday, which hadn't been widely expected, by itself added about $112 billion to the federal deficit.

Asked to rank the seriousness of various economic problems, with one meaning no concern and five equaling extreme concern, the federal deficit was the biggest worry, with an average score of 4.1.

Why do I think most of these 47 economists that were polled probably supported the Tax Cut extensions?

We Are Seeing the Destruction of the Middle Class

Today (Sunday February 27), I was doing my standard search for news and came across this headline from Bloomberg (via MSNBC)

A U.S. recovery built on low-paying jobs

I have to admit, I was a bit shocked to see something within TradMed actually recognizing the realities that millions of us have long known from personal experience to be the case. From the article:

Before she lost her job last November as a full-time health department caseworker in Aurora, Ill., Amy Valle was making $23 an hour. Now she's paid $10 an hour as a part-time assistant coordinator in an after-school program.

"From here on out, it will be a struggle," says Valle, 32, whose husband lost his $50,000 government job and still is out of work after a year. "I don't feel like there's any place we can go to get what we were getting paid."

While the unemployment rate dropped to 9 percent in January, from a two-decade peak of 10.1 percent in October 2009, many of the jobs people are now taking don't match the pay, the hours, or the benefits of the 8.75 million positions that vanished in the recession, according to Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

Of course, things are not likely to improve when we have President Obama's "Jobs and Competitiveness Council" comprised mainly of CEOs whose companies have outsourced millions of jobs and MOTU who were instrumental in the destruction of the global economy. We see the Federal Reserve, one of whose tasks is job creation, far more concerned about inflation, even though inflation is nowhere near the problem in today's economy that joblessness is. Today's NY Times has an opinion piece from Christina Romer, former Chair of President Obama's Council of Economic Advisers":

President Obama's Jobs Commission - Outsourcers and Masters of the Universe

President Obama has named the members of his "Council on Jobs and Competitiveness" headed by GE CEO Jeffrey Immelt. Emptywheel took a whack at Immelt and his outsourcing to China last month here. Obviously Immelt knows how to create jobs, just not so sure he knows how to create jobs in the USA that can allow the US unemployed to earn a living wage.

And really, that is my biggest complaint over all with the "Council" appointed by President Obama. There are two, count'em, two, persons representing workers on this council, Richard Trumka, president of the AFL-CIO and Joseph T. Hansen, president of the United Food and Commercial Workers Union. Besides Trumka and Hansen, the other non-CEOs on the Council are Laura D'Andrea Tyson, President Clinton's Economic Adviser and John Doerr, senior partner with Kleiner Perkins Caufield & Byers, a Silicon Valley venture capital firm. Neither Tyson nor Doerr can be said to be particularly sympathetic or empathetic to workers, much less the 25 to 30 million un and underemployed.

The rest of the members represent the CEOs of the world:

Teachers Are Not the Enemy

Let me say this once again with emphasis - TEACHERS ARE NOT THE ENEMY!.

Yet, everywhere we turn, it seems teachers are the sole source of all the evils and troubles affecting school districts all over the US. And it really makes little difference what the political leanings are of the folks blaming the teachers as it is a seeming article of faith on both sides of the political aisle.

Pardon me, however, if I take the time to point a few things out to folks.

A couple of days ago, I wrote a post "Let's Play With Some Numbers Once Again (Teachers Style)" where I used this site to draw some figures for Wisconsin teaching salaries (it looks like it is through 2008). Using the same chart and some basic arithmetic and division (which I learned thanks to some good teachers pounding it into my thick skull), the average starting salary for new teachers across the fifty states is $30,950 with a high of $39,259 for Connecticut and a low of $24,872 in North Dakota. An average of the fifty state average teacher salaries is $46,227 with a high average being California of $59,825 and a low average of $34,709 in South Dakota. You might notice that both California with their highest average salary of the fifty states is also a high cost of living state (as is Connecticut which has the highest starting salary and the second highest average overall).

Now what do the states and their citizens in the individual school systems receive for these salaries? Well, outside of Detroit, where it looks like the teachers are going to be primed to become mainly baby sitters with class sizes up to 60 students per class, teachers are supposed to guide students to prepare for all that life has to offer, even when they are constrained about some of the things life offers as "inappropriate for young minds." Teachers teach the "3 Rs of Readin,' 'ritin', and 'rithmetic" (has anyone ever wondered about the Epic Fail of that phrase?) while making sure the students are prepared for and pass all the various state level achievement tests that have been brought around by "No Child Left Behind" yet doing so with increasingly larger classes and less funding?

Let's Play With Some Numbers Once Again (Teachers style)

Back in December, I wrote a post "Let's Play With Some Numbers" based upon a mythical minimum wage worker and what that means in the line of taxes versus expenses. Today, I'd like to offer a similar "what if" based on teacher salaries.

Why you may ask?

Well, mainly because of some of the "ZOMG! Teachers get paid! And they receive benefits" gibberish I've seen the last few days concerning the "budget busting unions" and the "highly compensated teachers" of Wisconsin. As a side note, why are the anti-teachers people so adamant on tearing down the teachers and other public sector workers and their benefits? Shouldn't we be trying to raise things up so that folks in the private sector are once again getting reasonable pay and benefits rather than tearing people down to a lower level? Whatever happened to the desire to see folks from all walks celebrated for their work and paid a living wage?

My reference data is from this state-by-state starting salary for teachers, average, and 10 year percentage increase (looks to be from 2008). This site offers median salaries for various grade levels of teachers but I offer it only for further discussion and will use mainly the first link.

My mythical teacher is going to be a graduate of Wisconsin Stevens Point. This person will be a Wisconsin resident so will receive instate tuition. We'll pretend that our mythical teacher lived in a dorm for all four years (though I'd guess most juniors and seniors manage to find off campus housing with all of its attendant costs) and used the meal card. So our mythical student has costs of $6,304 per semester (rounding down), $12,608 a year and a minimum four year cost of $50,432. I'll pretend this student worked and got some help from Mom and Dad and maybe a small scholarship or two but still needed loans for say $30K. I'm sure there are students who financed the whole amount as well as students who had full parental support to students who managed full time jobs as well as full time student loads.

So here we have our mythical Wisconsin Stevens Point graduate starting a career as a teacher with $30K debt and a starting salary of $25,222. We'll assume our new teacher is getting paid twice a month for nine months so will have a pre-tax bi-weekly income of $1,401 (payday on the 15th and the end of the month). Taxes and such will probably pull that down to roughly $1K take home so we'll say $2K per month. We'll put our new teacher in a one bedroom apartment at $400 per month plus utilities which will average another $400 (gas, electric, heat and air conditioning, phone, and cable). I don't know what the loan periods are for student loans now so we'll pretend the loan period for the $30K debt is ten years and with interest our mythical teacher will pay back $45K. This works out to be $375 per month for ten years. And yes, that's for those months when our teacher is not working in the summer. At this point, our teacher has $1,175 of $2K per month for nine months committed without buying any food, clothing, car payments, insurance payments, school supplies or savings to cover the three months with no salary.

More Republican "Respect" for the Workers

On Wednesday (February 16), I wrote a post with the (admittedly rhetorical) title "Is Cutting Jobs Programs to Create Jobs Like Cutting Taxes to Increase Revenues?"

Today, I'd like to offer up a few more examples of how the new governors' of Florida, Ohio, and Wisconsin are treating workers within their states as they "create" jobs.

To begin with, we have yesterday's report of Initial Unemployment Claims for last week. After falling to a 2 1/2 year low the week before, yesterday's report showed an increase once again in the initial claims:

There were 410,000 initial jobless claims filed in the week ended Feb. 12, according to the Labor Department. That was up 25,000 from the week before, and slightly more than the 408,000 claims economists surveyed by Briefing.com had expected.

Continuing claims -- which include people filing for the second week of benefits or more -- rose by 1,000 to 3,911,000 in the week ended Feb. 5, the most recent week available.

Of course, the economists interviewed looked on the sunny side of life because the trend "is still pointing downward." I'm sure that is bringing a warm feeling to the nearly 15 million unemployed and the 25 to 30 million un and underemployed. Why at the rate things are trending downwards, we might once again reach full employment in, oh, maybe in the year 2525?

Is Cutting Jobs Programs to Create Jobs Like Cutting Taxes to Increase Revenues?

So today (February 16) the current governor of the state in which I reside (there is no ef'fing way I'm going to lay any claim of ownership to this person and call him my governor) decided that he would follow in the footsteps of his fellow first term Republican governors of Ohio, Wisconsin, and New Jersey and reject federal rail funds for Florida (via CNN):

Washington (CNN) - Republican Florida Gov. Rick Scott rejected $432 million in highly-touted funding from the Obama administration for an Orlando to Tampa high-speed rail Wednesday. Slamming government for becoming "addicted to spending," Scott listed three reasons why accepting the federal funds would amount to a "recipe for disaster."

In a statement, Scott said "I was elected to get Floridians back to work and to change the way government does business in our state."

He "was elected to get Floridians back to work..." yet cuts a program that would have created a few thousand jobs for Central Florida and a high speed rail line between Tampa and Orlando and eventually Miami. Outgoing Tampa Mayor Pam Iorio called it:

...the worst decision she's seen a governor make in her 26 years of public service.

"This is such a bad decision on so many different levels. I cannot believe that the governor made this decision," Iorio said. "This is an example when you have someone who governs from ideology instead of practicality and really looking at what's best for Floridians in the long run. This is what you get and I don't know when I've been more disappointed and concerned about a decision a governor has made for our state."

More Mixed Jobs Messages

In the last few days since the release of the official employment number for January, there have been a variety of jobs related articles I've found as I surf through various news sites and the articles have been all over the map in conclusions. Some of the articles have even recognized that things really aren't getting better for the long term un and under employed while others keep trying to provide more spin at things getting better.

Saturday's (Feb 4, 2011) NY Times had Floyd Norris attempting to reconcile the weak job creation numbers withe the drop in the official Unemployment Rate. His conclusion shows just how ef'fed up the numbers are:

Over all, from January 1979 through March 2010, the first estimate was off — either higher or lower — from the final figure by a median of 74,000 jobs. If that holds true now, there is a 50 percent chance that the final number for January will be somewhere between a loss of 38,000 and a gain of 110,000. And there is an equal chance that it will be outside that range.

None of that reduces the importance of jobs data, particularly in the months after a recession ends. But it does serve as a reminder that the first attempt at estimating employment is far from authoritative.

Of course, there's Catherine Rampell in today's (Tuesday Feb 8) Economix blog from the NY Times showing there are still nearly five applicants for each job:

January Jobs Report(s) Part II

The official Department of Labor Bureau of Labor Statistics employment numbers for January 2011 are out and guess what? Same shit, different day.

According to the report (via Reuters) the jobs increase for January 2011 is 36K. This is compared to Wednesday's report from ADP (from my post on Wednesday), that the private sector created 187K jobs in January. Since the BLS number includes public sector as well as private sector, it looks like governments at all levels shed approximately 150K jobs. The same thing as happened last month, where the number of private sector jobs was initially reported as 297K (later downgraded to 247K) while the overall number from BLS was 103K.

Of course, what will be reported heavily is that the "unemployment rate" has "dropped" to 9% from 9.4%:

There was some good news in the employment report as the jobless rate fell to 9 percent from 9.4 percent in December. The household survey from which the unemployment rate is derived showed the number of unemployed dropped by about 600,000 last month.

The unemployment rate had previously declined largely as a result of people giving up the search for work, but in January the labor force was unchanged, even after adjustments for updated population controls.

The reality appears to me to be that all the numbers are probably fudged and no one in any position to do anything or comment on it has a clue. As I said, same shit, different day.

January Jobs Report(s)

Well, the January Jobs Report that is issued by ADP each month, detailing the number of private sector jobs created the month before is out. Last month, the ADP report had this number at 297K new jobs. When the official Department of Labor Bureau of Labor Statistics report came out a couple of days later, the real number of jobs was pegged at 103K new jobs for the month. Of course, the difference is because ADP only evaluates private sector jobs while the BLS report details all jobs, including those in the public sector where a lot of state and local governments have been cutting jobs.

Today's ADP report (via Reuters):

The private sector added 187,000 jobs in January, compared with a downwardly revised 247,000 jobs in December, a report by payrolls processor ADP Employer Services showed on Wednesday.

The ADP figures come ahead of the government's more comprehensive January labor market report on Friday, which includes both public and private sector employment.

But ADP figures for December -- both initial and revised -- turned out to be much stronger than the government report showed, adding to doubts about the reliability of ADP as a predictor of payrolls.