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The pre-debate joke was about what the keyword(s) should be for a Hi Bob style drinking game.


"Jobs" had to be #1. Better be drinking Miller 64 or not maker it through.


The data manipulation brouhaha aside, a couple of things are clear about jobs. First is that largest loss/failure to recover since 2009 has been in public sector jobs. And, the private sector has consistently added jobs but the net addition has been in lower wage, part time and most of all, non-benefit jobs.


On public sector, not much to say. Federal aid to states and localities not likely to happen, if it should, and states and localities aren't likely to increase taxes to hire more. Plus, the 20 year disaster of defined benefit plans has come to pass putting a drag on budgets as has medical costs. 


On the private side, I notice that Darden Restaurants (Red Lobster, Olive Garden) is experimenting with juggling hours and job titles in order to avoid paying minimum wage (tip sharing), part time status and, heaven forbid, Obamacare.  Which, putting aside how much the executues make, etc., is exactly how a rational actor would behave until such time as their bottom line begins to suffer becasue they either can't hire people or service is so bad that it hurts business (which I'm guessing they'd be very slow to recognize.) And, there is enough slack in the labor market that it isn't going to happen anytime soon- some of their best might go elsewhere (until the cuts catch up with them there) but for the most part the company will probably mostly rise and fall with the macro economy and the long term trend for their market position.


Someone getting minimum wage equivalent for working 31 hours a week as a dishwasher, with a family, could qualify for full foodstamp benefits (for now). If they could juggle a second 31 hour gig they'd still get stamps. They'd also cost somebody some money when they went, uninsured, to the emergency room, then defaulted on their mortgage, or got evisted from their rental unit as they can't pay it, etc.


If oil, gas and coal go full bore (already running about 80%) you will get a few hundred thousand good paying jobs (and lose some amount that green energy developments would have provided.)  This question is moot as it, and defense and government contractors ARE the GOP and if a republican majority emerges, it shall come to pass. The only question is how the GOP will misdirect the narrative as it becomes apparent that this in and of itself did little to move the needle.


Gotta run but PS- I think we could get a pretty sharp, temprary drop in oil sometime soon. There is some slack in the market and it is due much more to falling demand,- waek economies- particularly europe- and the long term adjustments to the 300% repricing of oil- than it does with supply.  


However, unconventional oil has managed to keep production pretty steady as conventional oil otput has fallen.


Somebody will get to take credit for that which will be mostly baloney but it will help a bit as the rest of the problems of global slowdown begin to bite.

15 Replies

Re: jobs

Of course the ideal situation for the manager of an individual business is that the wage he pays be 0. That would be the ultimate optimization of micro economies for that single entity.


Of course if everyone could achieve that then owners and managers would also be out of work because the aggregation of their demand for goods and services is wholly insufficent to keep businesses afloat by themselves. Even if they are, say, luxury yatch builders, there is a second or third order effect- they might make a lot of money at first but then the collapse of other businesses, banks etc. would catch up with them as well.


One of the well observed ecominc phenomena is that wages are notoriously sticky- actually in both directions. So in the business owner's dream situation- where correction for a business downturn is immediately adjusted for by the downward adjustment of the wages he pays (and coincidently he bears none of the cost because he is an essential job creator) the same thing occurs. In the macro degree, recovery is slow, if at all, becasue there is no mechanism by which wages are immediately adjusted back up.


And of course the stickiness of wages is one reason why the system of unemployment insurance was devised in the old indistrial economy. Temporry layoffs are preferable and more realistic than wage adjustments and a degree of safety net kept cyclical downturns from compounding themselves.


I'd agree that in the currenet circumstance of chronic structural unemployment that the old UE system is a relic. But would also say that the possibility of any proactive actions to replace it with something better ain't going to happen- it is either hold to the old flawed system of get another point plus lopped out of GDP.

Re: jobs

In the ideal manager's world where the worker shows up and works hard for 0 the worker does that becasue of his strong work ehtic and good attitude.


And, I suppose becasue he believes that it gets him somewhere eventually.


Hey, what I described was the badly abused intern system- yes it is real world!


in the example that I used where the business owner bears none of the cost of the economic downturn and the costs are immediately shifted to the employees-


the other side of that is that the owner obviously expects to keep more than a proportionate share of the profits should they reappear.


Sort of a matter of socializing costs but keeping the profits. Which of course he can and should do becasue he is wonderful and special.


Very much the message that emanates from the GOP, C of C, Enterprise Institute on a daily basis.

Honored Advisor

Re: jobs

See, basically Obamacare is a job killer..."you can lead a horse to water...".   This public vs private sector jobs deal is on the pulic side you hire firemen at $90K a pop to put out none existent fires or teachers to get the teacher pupil ratio down to 1 to 1 isn`t creating wealth in a country.  True wealth comes out of the mines, farms and factories.  With our backward thinking we shipped factories overseas, we sent scrap iron to China and they send us finished crap that we buy at Wally-World.  We send chickens to China and they cut `em up in pieces and send them back, this stuff is all too ridiculous.  But make no mistake it was done on purpose to bring us down to the 3rd world.

Re: jobs

I am game for going ahead and eradicating original sin- end the Fed, undergo extreme austerity and do a general Mellonite purge of the rot. Everyone can make their own bets as to where to put their fiat dollars in hopes of being one of the few who has something to start over with (in true contrarian fashion I'm inclined to lean TOWARD fiat dollars).


However that isn't going to happen- it is human nature is for anyone with advantage to risk losing everyhting and blowing up the system before they would surrender anything. Best case for "conservatives" is a keynesian warfare/security state that keeps the wheels on for the people with control of the trough to gorge.


But good news is that regardless of party, guns are safe, the lobbyist just need to pretend that they're not or they'd be out of a job (and people would stop at 10,000 rounds).


Re: jobs

Wages are sticky but in the global labor market an individuals wage goes from the sticky point to zero very quickly.  Only as long as it takes to move production from Muncie, to Taipei, to Beijing to Hanoi.  I think UE compensation probably enhances stickiness on a localized level, is that a good thing?  Cause the job at that sticky wage level is not coming back.

Re: jobs

I agree, said that the old system is antiquated.


But without transfer payments- primarily food stamps and UIns we'd be running a GDP at -2% or so, at which point the "job creators" who by and large have it pretty good now, would have some real problems to contend with.

Re: jobs

I suppose the real issue in the election os whether that marginal $half triilion or so goes to those lazy 47%ers or to the defense and other government contractors who deserve it more.


Re: jobs

Marked to market?  "letting the tail go with the hide".


We all know who would scream first and the loudest.  From bunkers and behind moats, of course.  Only to find that the lackeys that they installed in policy positions are tied up with their ordinary constituents.  And I doubt that the owners have a room and provisions set aside for all, if any, of those who they own.


Doubtful that the foot soldier segment of the services and reserve units with families and belongings to look after could reliably be called upon to guard drawbridges and the end of  driveways to farms with mass storehouses.


New season of Walking Dead starts on Sunday.