Rutgers Labor Economist William (Bill) Rodgers' Blog

The Neglected Costs of Republican Budget Cuts

2011-09-14T20:19:00.000-07:00

Republican policymakers that seek to implement austerity programs to address the Nation’s fiscal problems rationalize the bitter medicine by asserting that failing to reduce the Nation’s debt will place an undue burden on future generations.

However, these policymakers fail to include the long-term costs associated with implementing austerity programs too early in the Nation’s recovery, and policies that remove oversight of the private sector and weaken workers' voice.

If these policies are pursued, future generations may not face a serious debt burden, but the following will happen:

• Long-term unemployment will remain elevated,
• Minority, youth, and older worker joblessness will remain elevated, and
• Part-time employment will remain elevated.

As a result, future generations will have to pay for the costs of:

• Elevated worker idleness and higher crime rates,
• Larger class sizes and fewer teacher resources,
• Elevated levels of clinical depression,
• Elevated levels of poverty and food insecurity, and
• Elevated numbers of families that can’t achieve a “living wage”.

When these and other costs are included, immediately cutting government spending and returning to the policies of the 1980s at a time when the recovery has stalled, becomes an unattractive and dangerous policy path.

Violating Conventional Wisdom: Cutting Education, Training and Financial Stability Programs is Wrong

2011-03-08T19:24:00.000-08:00

The February Bureau of Labor Statistics employment report contained some very good news. Over 200,000 private sector jobs were added and over the last 12 months, 1.5 million private sector jobs were created.

But, we must temper our positive reaction. The 1.5 million translates into a monthly average of 127,000, still below the 150,000 that’s needed to increase high school graduate, youth, and minority employment.

The report showed the consequences of the sustained, but modest growth. The college graduate unemployment rate fell because they obtained jobs. The high school graduate jobless rate fell too, but due to labor force exit. Further, earnings barely kept pace with inflation.

With these bifurcated outcomes, now is not the time to cut funds for education and training programs. Now is not the time to cut funds for Volunteer Income Tax Assistance Programs (VITA). VITA programs:

• Ensure financial stability. They maximize the use of tax code benefits and incentives, such as the Earned Income Tax Credit and Child Tax Credit.

• Help people create bank accounts and save a portion of their refund to pay for necessities.

• Provide an alternative to predatory tax preparers. Clients receive 100% of their tax refunds.

Yes, the federal budget needs trimming, but cutting education, training, and VITA programs violates a basic rule of thumb. You don’t cut funding that helps Americans achieve financial stability, especially so soon after the “Great Recession”, and when uncertainty remains that the economy can sustain itself without stimulus.

Economics Literacy for Adults, especially Young Adults

2011-02-16T08:46:00.000-08:00

Emma Taylor of Acredited Online Colleges shared with me one of their recent blog postings: Money 101: 40 Financial Lectures to Prepare You for the Real World.

http://www.accreditedonlinecolleges.com/blog/2011/money-101-40-financial-lectures-to-prepare-you-for-the-real-world/

The site pulls together a wealth of on-line lectures by scholars and practitioners on an array of topics such as financial happiness, negotiation, investment and philanthropy, and credit, loans and retirement.

Enjoy!!!

New Piece on Kids and Economics

2011-02-12T21:59:00.000-08:00

The folks at Nightly Business Report invited me to give a second 60 second commentary. I spoke about kids and economics, highlighting the Rutgers' Econkids.rutgers.edu site. Here is the link to the Monday, February 7th show: http://www.pbs.org/nbr/info/video.htm.

Review of Last Week's Labor Market Commentary

2011-01-09T22:40:00.000-08:00

Friends:

From my posts over the past year, you all now know that I spend 3-4 days prior to the first Friday of each month pouring over statistics in preparation for the release of the Bureau of Labor Statistics' unemployment rate and payroll employment growth.

The monthly report also contains information on the length and type of unemployment. For example, in December, 44% of the unemployed have been out of work for at least 27 weeks. We have almost 9 million Americans that are working part-time, but want a full-time job. Counting them as unemployed raises the jobless rate from 9.4% to 16.7%. Many call this the "real" unemployment rate.

My commentary on the labor market started with an early Wednesday morning interview on NPR's "The Takeaway". Ryan Wineland, a Block Buster Video manager and I reacted to a new study that found that 84% of those surveyed said they planned on switching jobs this year, up from 60% last year.
(http://www.thetakeaway.org/2011/jan/06/does-worker-dissatisfaction-signal-positive-job-growth-ahead/)

Thursday (Jan. 6th) was a first. I did a short commentary for the Nightly Business Report. The piece expressed my concerns about a new surge in income inequality in 2011 and beyond. The commentary presents a broad framework for us to consider. (http://www.pbs.org/nbr/info/video.html)

On Friday, I spent the morning and early afternoon at CNN. University of Maryland economist Peter Morici and I commented on the falling of the December unemployment rate form 9.8 to 9.4% for Your $$$$. (http://transcripts.cnn.com/TRANSCRIPTS/1101/08/cnnitm.01.html)

I also served as a resource for Mary Snow's Situation Room piece "On the Front Lines of a Job Search." http://edition.cnn.com/video/#/video/business/2011/01/07/tsr.snow.searching.for.a.job.cnn?iref=allsearch. She highlighted the job search experiences of not only the unemployed, but also the 9 million Americans that want to work full-time, but only have part-time hours.

My last bit of input was to help CNN staff writer Aaron Smith shine a greater light on the disparate impacts that the recession and now the weak jobs recovery are having across age, race and gender. http://money.cnn.com/2011/01/07/news/economy/unemployment_racial_gap/index.htm

If there is a common thread to my commentary, it is to remind us of the recovery's various contours of experience.

The Economy and Labor Market in 2011

2010-12-27T06:55:00.000-08:00

Friends:

Here is a link to a story that NPR's Tamara Keith did for last Sunday's Weekend Addition.
http://www.npr.org/2010/12/26/132328098/experts-see-economy-turning-corner-in-new-year

I am cautiously optimistic about the economy's recovery. The new stimulus will help the recovery accelerate, but its impact may not be as large as predicted. We have several drags on the economy:

-State and local governments are doing "anti-stimulus". Due to balanced-budget requirements, they are raising taxes and/or cutting expenditures.
-Many home owners remain underwater or have lost a serious amount of equity in their homes. As a result, they will continue to be cautious about spending money. Further, many can't move to areas where job are available.
-Along with the 15 million Americans that are searching for a job, we have an unprecedented 9 million Americans who are working part-time, but want full-time work. Creating a large number of jobs without stoking inflationary fears will take time.

Let's end the year on a positive note. In 2010, the labor market turned the corner:

-Private sector job creation occurred in every month.
-Growth in temp employment, a precursor to full-time job creation occurred in every month except one.
-Increases in hours worked, also a precursor to full-time job creation occurred.
-Retail sales during the Holiday season are up from the previous year!

In 2011, with the second stimulus' help, the labor market will accelerate out of the turn.
Happy New Year!!!!
Bill

African Americans and the "Great Recession"

2010-10-21T19:37:00.000-07:00

Friends:

Here is the link to an opinion piece that I just did for CNNMoney on the disproportionate impacts that the "Great Recession" had on African Americans:
http://www.cnn.com/2010/OPINION/10/20/inam.money.great.recession/index.html

If you look at reader reactions, I clearly struck a nerve. I look forward to your comments and suggestions on follow up.

Bill

Kids and Economics

2010-10-21T19:28:00.000-07:00

Friends:
You can see the segment that Christine Romans did on financial and economic literacy at:
http://www.cnn.com/video/#/video/living/2010/10/04/am.dnt.romans.sitnr.kids.cnn?iref=videosearch.

Enjoy!!!!
Bill

Economic and Financial Literacy Finally Get Their Due

2010-10-02T18:30:00.000-07:00

This weekend (CNN's Your $$$$$) and on Monday (CNN's American Morning), Christine Romans will shine a light on economic and financial literacy. It is an answer to the following question.

Want to help stimulate the economy, spend time with your child, and reduce the chances that the financial crisis occurs in the future?

Until Christine's report and forthcoming book (Smart is the New Rich: If You Can't Afford It- Put it Down), a long-term strategy not receiving enough attention is strengthening the economic literacy of our youth. One way to prevent a financial crisis from happening again is to better educate today's youth on economic principles, such as consumption, saving, and investment. Almost all states have economic content standards that begin in Kindergarten, but as parents, we must play a bigger role.

Prior to the financial crisis, parents and teachers had few well-known resources for identifying children's books that teach kids about the importance of saving and the importance of not living beyond one's means. For several years a little known "free" resource has existed at http://econkids.rutgers.edu/.

The concept behind the youth-oriented and user-friendly website is simple. Rutgers economics Professor Yana Rodgers and Williamsburg, VA K-5 reading specialist Shelby Hawthorne have developed a "living" catalog of children's literature that teaches a wide range of economic concepts that are linked to state curriculum standards. The site provides quick lesson ideas that are based on current research in economics and education.

Based on objective research criteria, you can click on an economics concept and obtain a list of the site's "Top Five" choices for acclaimed children's books that use enjoyable stories to teach economics.

The site encourages return visits. It profiles a new book each month, reviews new children's books and identifies their economic content. I am a labor economist , so one of my favorites is "Click Clack Moo," a wonderful story about some cows who go on strike because they want blankets and a duck, who serves as the arbitrator.

For sure, using http://econkids.rutgers.edu will not solve the credit card problems that many young adults have gotten themselves into. Nor will it solve the sub-prime lending mess that played a big role in dragging the economy into the worst recession since WWII. However, the site provides some neat stocking stuffer ideas for the holidays that will help your children become savvier and smarter consumers.

In short, you will be investing in your child's future and the nation's return to prosperity. If these economic rationales are not clear, then maybe you, too, will benefit as you read to your child.

Enjoy the Site and enjoy the time with your child!!!!

July 2010 Jobs Report

2010-08-06T17:26:00.000-07:00

Friends, today's Bureau of Labor Statistics July jobs report revealed that the private sector added 71,000 jobs. The good news is that this marks 7 consecutive months of job growth and the July increase may signal that the June lull or pause (+31,000) could be over. We will know next month.

Should we worry about the weakness of these numbers? On one hand no. This pattern happened after the 2001 and 1991-92 recessions. At the start of these recoveries, we got several strong months of job creation, followed by a lull, and then a return to stronger growth. Assuming we don't get bumped by breaking news, you can hear me talk in more detail about this issue on this weekend's Your $$$$ on CNN.

Further, because of the weak job creation and declining prices (yes, declining), many fear we are headed to a period of deflation. For what this means and should we be concerned, listen to my interview on NPR's The Takeaway:
http://www.thetakeaway.org/2010/aug/06/start-conversation-your-personal-jobs-report/#commentlist

On the other hand, yes. These job creation numbers are not strong enough to reduce unemployment and part-time employment. The impact of the $787 billion stimulus has started to wane and the economy clearly needs help standing on its own two feet.

Several months ago, I participated in a small discussion with the Speaker of the House and her committee chairs. We talked about ways to create jobs. I offered the idea of a tax credit and/or wage subsidy to nonprofits like the United Way who hire unemployed and/or part-time workers. These Americans would work for 3 to 6 months on specific projects (e.g., resource development), helping to rebuild their lost capacity.

Do you have any ideas on how to provide incentives to create jobs? If so, please share them with me and if promising I will pass them on to the Speaker and friends in the White House. Yes, I will give you credit. I look forward to hearing from you.

New Study: Is the stimulus landing in the Neediest Communities?

2010-01-09T06:32:00.000-08:00

Happy New Year!!!

Here is a quick alert to a new study on the stimulus' job impacts.

The study shows that the contracts, loans, and grants in the American Recovery and Reinvestment Act of 2009 (ARRA) have reduced or reversed job losses in key states. During October and November 2009, employment levels were higher than expected in 33 states.
Overall, the stimulus money is landing in states with the weakest labor markets. Unfortunately, the stimulus in 16 high-unemployment states -- such as Michigan, Florida, Rhode Island, Oregon, and North Carolina -- may still be in the pipeline or too small."

Even with the national loss of 84,000 jobs during December (November was revised for an increase of 4,000), since October the stimulus has added an additional 2.0 million jobs. Almost 1.8m were in the private sector.

Here are the major industry breakouts: Construction (+190,000), Durable Manufacturing (+408,000), Professional Business Services (+794,000), Trade (+62,000), Transportation (+79,000), Utilities (+6,000) Information (+75,000), Financial Activities (+164,000), Education and Health Services (+47,000), Leisure and Hospitality (-131,000) and Other Services (-42,000). These patterns are consistent with the type of projects that have been funded.

Want to read more? Go to www.heldrich.rutgers.edu for the full report and state estimates.

2009-12-11T14:15:00.000-08:00

Paul Davidson of USA Today did a nice piece that summarizes the pros and cons of the major items that are being discussed to stimulate job creation.

Here is the link:
http://www.usatoday.com/money/economy/employment/2009-12-09-jobsproposals09_ST_N.htm?csp=34&loc=interstitialskip

Holiday Gift Ideas

2009-11-25T07:17:00.000-08:00

In a few days, the holiday shopping season starts. Although the worst of the recession appears to be behind us, economists are worried that consumer spending will still be down.

Want to help stimulate the economy, spend time with your child, and reduce the chances that the financial crisis occurs in the future?

A long-term strategy receiving little attention is strengthening the economic literacy of our youth. One way to prevent a financial crisis from happening again is to better educate today's youth on economic principles, such as consumption, saving, and investment. Almost all states have economic content standards that begin in Kindergarten, but as parents, we must play a bigger role.

Prior to the financial crisis, parents and teachers had few well-known resources for identifying children's books that teach kids about the importance of saving and the importance of not living beyond one's means. For several years a little known "free" resource has existed at http://econkids.rutgers.edu/.

The concept behind the youth-oriented and user-friendly website is simple. Rutgers economics Professor Yana Rodgers and Williamsburg, VA K-5 reading specialist Shelby Hawthorne have developed a "living" catalog of children's literature that teaches a wide range of economic concepts that are linked to state curriculum standards. The site provides quick lesson ideas that are based on current research in economics and education.

Based on objective research criteria, you can click on an economics concept and obtain a list of the site's "Top Five" choices for acclaimed children's books that use enjoyable stories to teach economics.

The site encourages return visits. It profiles a new book each month, reviews new children's books and identifies their economic content. I am a labor economist , so one of my favorites is "Click Clack Moo," a wonderful story about some cows who go on strike because they want blankets and a duck, who serves as the arbitrator.

For sure, using http://econkids.rutgers.edu will not solve the credit card problems that many young adults have gotten themselves into. Nor will it solve the sub-prime lending mess that played a big role in dragging the economy into the worst recession since WWII. However, the site provides some neat stocking stuffer ideas for the holidays that will help your children become savvier and smarter consumers.

In short, you will be investing in your child's future and the nation's return to prosperity. If these economic rationales are not clear, then maybe you, too, will benefit as you read to your child.

New Study on the Impact of 9-11 on the Employment and Earnings of U.S. Muslims

2009-07-29T10:30:00.000-07:00

Former graduate student Faisal Rabby and I have completed a study that examines the impact that the 9-11 attacks had on the employment and earnings of U.S. Muslims.

Here is a summary:

Using a difference-in-differences framework and micro data from the Current Population Survey-Merged Outgoing Rotation Group Files (1999 to 2004), we estimate the impact that the 9-11 terrorists attacks had on the U.S. labor market outcomes of individuals with nativity profiles similar to the terrorists.

We find that 9-11 and the anti-terrorism measures were associated with a relative decrease in employment and hours worked of immigrants from Muslim-majority countries. The largest decreases were among the youngest immigrant men (ages 16 to 25) from the Middle East (excluding Israel), Iran and Afghanistan, whose demographic profiles are the closest to the terrorists. Most significant is the finding that even for the youngest men, the adverse impacts appear to be short lived. Many of the estimated losses dissipate by the end of 2004. The employment-population ratios and hours worked of older Muslim men experienced little deterioration.

Contact me if you want the full study.

2009-07-28T05:00:00.000-07:00

Dear Friends:

I changed my username at Twitter. You can follow me there at https://twitter.com/wmrodgersIII.

Cheers,

Bill

Current Views on the Labor Market

2009-07-17T21:19:00.000-07:00

Although I have not written for awhile, I have been very busy commenting on the labor market: recent segments include CNBC "Squawk Box", NBC Nightly News, CNN (TV and radio), Fox Business News and NBC's Meet the Press. Below is a summary of the themes developed and expressed over the past few months.

During the months prior to the July Jobs report (Numbers for June), many were beginning to discuss economic policy for the 4th quarter of this year and early in 2010. Why? Payroll numbers were improving. Job loss was still occuring, but the contractions were getting smaller. In fact, for July, the temporary help services sector was poised to show an increase. As a result, the policy conversation shifted to whether the $787 billion stimulus was going to ignite inflation.

Alas, the three months of improvement did not last. The July numbers threw everyone for a loop. Large and widespread job losses returned. In fact, a chorus for a new stimulus package emerged.

Their rationale, which is quite compelling is as follows:
1. 30% of the unemployed have been jobless for at least 27 weeks, breaking the record set several months after the 1981-82 recession.
2. Today, 49% of the unemployed have exhausted their regular benefits, a record too.
3. By September of this year, approximately 650,000 Americans will begin to exhuast their extended Unemployment Insurance Benefits.
4. The number of Americans utilizing food stamps is at a record high.
5. These trends will only worsen as unemployment is expected to rise during the balance of this year and into next year.

Budget hawks are countering the chorus for a new stimulus package. They cite safety net expenditures of $2 trillion for 2009, up 209 billion dollars from last year. Social conservatives raise the concern that if safety nets are made more "generous" (The average weekly UI Benefit is several hundred dollars), they will foster laziness.

We should always be concerned about costs and the unintended consequences of public policy, but let's have that conversation with a full understanding of how we got here today and the benefits of these programs.

The increased expenditures have the following origins:
1. One half of the 2009 increase is due to worthy increases that occurred during the Bush Administration.
2. Only 0ne-quarter of the expenditure growth is attributed to the recession.
3. The increases can be traced to the fact that Americans entered this recession in extremely vulnerable positions: high debt levels, employment rates that were little different than in 2001, and very low savings rates.
4. Over time, safety nets became more porous.

With respect to benefits, in the absence of these expenditures, poverty would rise and the middle class would further erode, having both short and long-term consequences for American families, and the stability of the nation.

One of the many lessons from today's recession is the importance of investing in Americans and providing much strong safety nets. As the auto tech in the PHRAM oil filter commercial said, "You can pay me now, or pay me later."

Joined Twitter

2009-07-17T21:15:00.000-07:00

Dear Friends:
I just joined Twitter. You can follow me there at https://twitter.com/labpolicyprof.

Bill

Some quick commentary on NBC Nightly News: Where are the jobs?

2009-03-18T18:24:00.000-07:00

Below is a link to an NBC Nightly News segment in which I appeared. There are jobs out there in all major industries; however, in many industries, the number of openings is one-third to one-half the level at the start of the recession.

The lower number of openings means that we have to really rely on personal networks. It means potentially having to relocate, increase the length of our commutes, accept an entry level job, and most likely search longer to uncover opportunties. While doing this, you might consider volunteering at your local United Way or favorite organization. It is a way to help those that may face even greater challenges than you or your friends, but also network at the same time.

The current labor market as a "bad" game of musical chairs. During the first part of the recession, the number of people that wanted to play the game increased, but the growth in the number of chairs (job openings) failed to to keep pace with new gamers. In recent months, the number of chairs (job openings) has been pulled from the game, representing layoffs.

http://www.msnbc.msn.com/id/3032619/#29763398

Rodgers' CNBC Comments on February 2009 Employment Situation

2009-03-18T18:15:00.000-07:00

Jobs Report: Rodgers' CNBC Reaction to the U.S. Employment Situation for February.

http://www.cnbc.com/id/15840232?play=1&video=1054344450

Jobs Report: Rodgers' CNBC Preview to the U.S. Employment Situation

http://www.cnbc.com/id/15840232?play=1&video=1054328959

Jobs Report: Rodgers' Reaction to the Feb. 6th Bureau of Labor Statistics Employment Situation on CNBC's Squawk Box

2009-02-07T19:54:00.000-08:00

Here is the url for the Friday, February 6th, 8:30am segment on CNBC's Squawk Box. I give my response to the Bureau of Labor Statistics' Employment Situation for January.

http://www.cnbc.com/id/15840232?video=1023932636

Jobs Report: Rodgers' Preliminary Thoughts on the Feb. 6th Bureau of Labor Statistics Employment Situation Report

2009-02-07T19:36:00.000-08:00

Here is the url for the Friday, February 6th, 8:00am segment on CNBC's Squawk Box. I give a preview of the Bureau of Labor Statistics' Employment Situation for January.

http://www.cnbc.com/id/15840232?video=1023911939