Change labor data
Stop unneeded adjustments
Use the raw numbers
Stop unneeded adjustments
Use the raw numbers
Showing posts with label labor. Show all posts
Showing posts with label labor. Show all posts
Saturday, July 05, 2014
The Trustworthiness Of BLS JOLTS Data
Understanding the US economy requires access to good data. It's temping to rely on the BLS Job Openings and Labor Turnover Survey (JOLTS) products. I am not one to give in to temptation. Analysts cannot merely assume that government data sets such as JOLTS are reliable.
I looked at the JOLTS ten-year data set for the quit rate. That's the percentage of people who voluntarily leave a job in a given month. The quit rate bottomed out in 2009 and has been climbing ever since. A climbing quit rate should be a sign of a healthy economy as employed people trade up to better jobs. The hires rate and turnover rate within JOLTS also track this trend. The caveat is that BLS uses seasonal adjustment factors for this data, and the effects of later adjustments are summarized in BLS's revision tables. The effects are typically small but they will matter in some sectors where employment forecasts matter. Retailers who hire seasonally should be very interested in whether BLS seasonal adjustment factors create positive feedback loops in their own business models.
Shadow Government Statistics has reconstructed the nation's unemployment rate without the government's birth-death assumptions and other adjustments. Using raw, unaltered numbers probably yields a more accurate understanding of the job market than using adjusted numbers. Government economists should be very concerned with keeping the trust of the business community. They can do so by jettisoning artificial adjustments from their statistical methodologies.
I looked at the JOLTS ten-year data set for the quit rate. That's the percentage of people who voluntarily leave a job in a given month. The quit rate bottomed out in 2009 and has been climbing ever since. A climbing quit rate should be a sign of a healthy economy as employed people trade up to better jobs. The hires rate and turnover rate within JOLTS also track this trend. The caveat is that BLS uses seasonal adjustment factors for this data, and the effects of later adjustments are summarized in BLS's revision tables. The effects are typically small but they will matter in some sectors where employment forecasts matter. Retailers who hire seasonally should be very interested in whether BLS seasonal adjustment factors create positive feedback loops in their own business models.
Shadow Government Statistics has reconstructed the nation's unemployment rate without the government's birth-death assumptions and other adjustments. Using raw, unaltered numbers probably yields a more accurate understanding of the job market than using adjusted numbers. Government economists should be very concerned with keeping the trust of the business community. They can do so by jettisoning artificial adjustments from their statistical methodologies.
Tuesday, May 13, 2014
Thursday, May 01, 2014
Monday, March 03, 2014
Thursday, January 16, 2014
Thursday, August 29, 2013
Stupid Fast Food Workers Demand More Pay
I laugh at the latest wave of stupidity sweeping America. Fast food workers think they deserve massive pay increases. I say they deserve exactly what they're paid right now, and if they don't like it they can take a hike so some ambitious teenager can earn extra cash after school.
The minimum wage that fast food workers earn was never intended to guarantee a level of income that supports an entire four-person household. Raising a family in post-Cold War America usually requires two wage earners because our halcyon days of prosperity are long gone. Put two such wages together and you've got a $30K household income, more than enough to sustain a family in most of America.
This entire stupid idea is pushed by SEIU and other labor organizers to increase their base. Private sector union membership has been declining for years. Employers don't like union demands, work rules, production stoppages, rampant absenteeism, and other problems caused by activists who possess more attitude than intellect. Consumers don't buy union label products because they want value for their dollar. The unionized work ethic and its entitlement culture destroyed the US automobile industry. Bring that culture to fast food and your burger will take an hour to serve.
Fast food workers can always work other jobs with equivalent prerequisites if they don't like flipping burgers. They can pick vegetables, sweep floors, haul boxes, or shovel manure. I've had to work some pretty worthless jobs in my life but I outgrew them once I acquired education, advanced skills, and leadership experience. I don't expect most adult fast food workers to take the hint because I suspect they cluster at the left end of the IQ bell curve.
Saturday, August 10, 2013
Defining The American Lumpenproletariat
Every civilization is ultimately defined by the goals and cohesion of its ruling class. Their lives and deeds become the stuff of legend and their visages are fit for monuments. Let's not forget the lower orders, who get no monuments. The term "lumpenproletariat" has a bad reputation. Forget its Marxist origins. Karl Marx was wrong about collectivism replacing capitalism but his class definitions are still convenient descriptions of society. George Orwell's proles actually existed in his day. America has its own prole class.
The low-information voter is a prole. These are the folks who vote for politicians based on charm, dress, hobbies, and family image. They don't have time to read position papers or party platforms because some ball game or reality show is on TV. They don't read news commentary because they're too busy clicking "like" on some Photoshopped meme going around. Political operatives generate memes that supplant critical thinking and the best memes win elections by swaying the low-information voter.
The welfare queen is a prole. This part of the American caste system has grown by several orders of magnitude in my lifetime thanks to SNAP/EBT, SSI, and other forms of the dole. Their planning horizon extends precisely to the collection date of their next benefit, no farther. They may be goaded into performing marginally useful labor from time to time if benefit collection is conditioned on said performance. Some of their number are habitual criminals and must always be monitored. The rest are a source of amusement.
Unsophisticated country folk are proles. I won't repeat their more derogatory synonyms here. They escape the attention of the bi-coastal ruling elite because they inhabit the farms, woods, and mountains of this great country of ours. Most of them grow our food and fix our machines. The best of them have given us American roots music and other styles of entertainment.
I for one am grateful that the proles exist. Someone has to do the hard work and mindless consumption in society and it might as well be the unfortunate folks at the low IQ end of the bell curve. Automation may change that within a generation. Elites need to start thinking up something for all these proles to do to keep them occupied. Social safety nets are insurance against the proles' revolt but their lack of class consciousness is their primary inhibiting factor, as George Orwell correctly assessed.
The low-information voter is a prole. These are the folks who vote for politicians based on charm, dress, hobbies, and family image. They don't have time to read position papers or party platforms because some ball game or reality show is on TV. They don't read news commentary because they're too busy clicking "like" on some Photoshopped meme going around. Political operatives generate memes that supplant critical thinking and the best memes win elections by swaying the low-information voter.
The welfare queen is a prole. This part of the American caste system has grown by several orders of magnitude in my lifetime thanks to SNAP/EBT, SSI, and other forms of the dole. Their planning horizon extends precisely to the collection date of their next benefit, no farther. They may be goaded into performing marginally useful labor from time to time if benefit collection is conditioned on said performance. Some of their number are habitual criminals and must always be monitored. The rest are a source of amusement.
Unsophisticated country folk are proles. I won't repeat their more derogatory synonyms here. They escape the attention of the bi-coastal ruling elite because they inhabit the farms, woods, and mountains of this great country of ours. Most of them grow our food and fix our machines. The best of them have given us American roots music and other styles of entertainment.
I for one am grateful that the proles exist. Someone has to do the hard work and mindless consumption in society and it might as well be the unfortunate folks at the low IQ end of the bell curve. Automation may change that within a generation. Elites need to start thinking up something for all these proles to do to keep them occupied. Social safety nets are insurance against the proles' revolt but their lack of class consciousness is their primary inhibiting factor, as George Orwell correctly assessed.
Thursday, March 21, 2013
The Haiku of Finance for 03/21/13
Striking musicians
Greedy losers hate their jobs
Replace them all now
Greedy losers hate their jobs
Replace them all now
Wednesday, March 20, 2013
Fire All Striking San Francisco Symphony Musicians
The unionized musicians of the San Francisco Symphony have gone on strike over compensation. They claim they should be paid as much as other big-city musicians and have declared a work stoppage until they get what they demand. This shuts down many of the in-house performances scheduled for Davies Symphony Hall and jeopardizes the performances of visiting artists who expect at least partial accompaniment from the Symphony. It also forced cancellation of the Symphony's tour of the East Coast, including a performance at Carnegie Hall. I was under the impression that every true artist in the world aspired to play at Carnegie Hall. A pianist who happens to share my surname once played there as a child prodigy.
The reputation of one of the world's greatest performing arts ensembles is at risk because these union thugs in tuxedos are unsatisfied with a base salary of $141,700. That is far above the San Francisco median household income of $72,947. Consider that the median national income from that same Census source is $61,632; San Francisco's median is thus 18.36% higher. It follows that a fair comparison for symphony musicians is not to the base salaries of other symphonies held hostage by collective bargaining but to nationwide statistics for musicians. The BLS reports that the nationwide hourly mean wage for musicians and singers in performing arts companies (NAICS 711100) is $34.85. The annualized equivalent, assuming a 40-hour workweek and 52 work weeks per year would be $72,488. I will allow that employment terms offer vacation time, overtime, sick days, health benefits, and other adjustments to total compensation but a gross figure is useful in comparative analysis. Let's apply the San Francisco premium I calculated above as 18.36% to this national figure, admitting some methodological imperfection because it is from a median set of figures and I'm applying it to a mean set of figures. This premium gives us an adjusted annual income of $85,797. Check my math if you'd like and I'll correct any errors.
Making over $85K per year to do something a talented high school musician can do for free is pretty generous. Simple statistics tells us that's pretty much all a professional musician in San Francisco deserves. Anything higher is a sum the market cannot bear for long without a return to a lower equilibrium through fewer ticket sales and lower ticket prices. Music promoters and non-marquee acts figure that out pretty quickly because they operate in a free market. San Francisco Symphony's unionized extortionists are unable to figure it out because their greed blinds them to market realities. The Symphony's Board has a much better grasp on reality because it includes business professionals who must make a profit in the real world outside of collective bargaining. The Board must close a four-year old operating deficit or there will be no future at all for this Symphony. Math is a harsh mistress.
If the Symphony needs a scab player for the triangle or tambourine to help break the strike, then I volunteer to perform for free. I've had no musical education at all but those instruments don't look that difficult. I am even willing to solo "O Mio Babbino Caro" on a kazoo if Renee Fleming can't elbow her way through the union's picket line. I'm pretty sure I could pick up the tempo if someone in the Davies front office would hum a few bars.
The greed of the Symphony's professional musicians is disgusting. I would like to see the SF Symphony's Board of Governors and renowned music director immediately terminate the employment of every single one of the Symphony's striking musicians. Replace them with the numerous musicians who compete for the small number of open spots in the company when they are available Musicians who fancy themselves irreplaceable remind me of the federal air traffic controllers who were justifiably fired in 1981 when they arrogantly broke federal law. The nation thanked President Reagan and even the leadership of the Soviet Union was impressed. San Francisco is in dire need of such bold, decisive action.
The SF Symphony can do without the greed of Musicians Union Local 6 corrupting its performing artists. Performing classical works in one of the greatest cities in the world is an honor and privilege that countless musicians dream of having. The spoiled union brats on strike for exorbitant pay no longer deserve such an honor. Their selfish action denies music to fans and brings shame to The City.
Addendum 03/22/13: I shall state for the record that I am not in any way speaking on behalf of any party to this labor dispute. No one involved in this dispute induced me to make this statement. I do not stand to gain anything at all from any resolution of this dispute. I speak only for myself in my capacity as a music fan exercising my First Amendment right to freedom of speech.
The reputation of one of the world's greatest performing arts ensembles is at risk because these union thugs in tuxedos are unsatisfied with a base salary of $141,700. That is far above the San Francisco median household income of $72,947. Consider that the median national income from that same Census source is $61,632; San Francisco's median is thus 18.36% higher. It follows that a fair comparison for symphony musicians is not to the base salaries of other symphonies held hostage by collective bargaining but to nationwide statistics for musicians. The BLS reports that the nationwide hourly mean wage for musicians and singers in performing arts companies (NAICS 711100) is $34.85. The annualized equivalent, assuming a 40-hour workweek and 52 work weeks per year would be $72,488. I will allow that employment terms offer vacation time, overtime, sick days, health benefits, and other adjustments to total compensation but a gross figure is useful in comparative analysis. Let's apply the San Francisco premium I calculated above as 18.36% to this national figure, admitting some methodological imperfection because it is from a median set of figures and I'm applying it to a mean set of figures. This premium gives us an adjusted annual income of $85,797. Check my math if you'd like and I'll correct any errors.
Making over $85K per year to do something a talented high school musician can do for free is pretty generous. Simple statistics tells us that's pretty much all a professional musician in San Francisco deserves. Anything higher is a sum the market cannot bear for long without a return to a lower equilibrium through fewer ticket sales and lower ticket prices. Music promoters and non-marquee acts figure that out pretty quickly because they operate in a free market. San Francisco Symphony's unionized extortionists are unable to figure it out because their greed blinds them to market realities. The Symphony's Board has a much better grasp on reality because it includes business professionals who must make a profit in the real world outside of collective bargaining. The Board must close a four-year old operating deficit or there will be no future at all for this Symphony. Math is a harsh mistress.
If the Symphony needs a scab player for the triangle or tambourine to help break the strike, then I volunteer to perform for free. I've had no musical education at all but those instruments don't look that difficult. I am even willing to solo "O Mio Babbino Caro" on a kazoo if Renee Fleming can't elbow her way through the union's picket line. I'm pretty sure I could pick up the tempo if someone in the Davies front office would hum a few bars.
The greed of the Symphony's professional musicians is disgusting. I would like to see the SF Symphony's Board of Governors and renowned music director immediately terminate the employment of every single one of the Symphony's striking musicians. Replace them with the numerous musicians who compete for the small number of open spots in the company when they are available Musicians who fancy themselves irreplaceable remind me of the federal air traffic controllers who were justifiably fired in 1981 when they arrogantly broke federal law. The nation thanked President Reagan and even the leadership of the Soviet Union was impressed. San Francisco is in dire need of such bold, decisive action.
The SF Symphony can do without the greed of Musicians Union Local 6 corrupting its performing artists. Performing classical works in one of the greatest cities in the world is an honor and privilege that countless musicians dream of having. The spoiled union brats on strike for exorbitant pay no longer deserve such an honor. Their selfish action denies music to fans and brings shame to The City.
Addendum 03/22/13: I shall state for the record that I am not in any way speaking on behalf of any party to this labor dispute. No one involved in this dispute induced me to make this statement. I do not stand to gain anything at all from any resolution of this dispute. I speak only for myself in my capacity as a music fan exercising my First Amendment right to freedom of speech.
Tuesday, January 29, 2013
Immigration Reform and Wage Arbitrage
Immigration reform is coming in the U.S. The Administration believes it has a mandate to loosen immigration controls for visiting workers and corporate America is fully on board. The hints floated so far offer glimpses into the future of the American middle class.
The tech sector claims it needs more than the current 65,000 H-1B visas to attract STEM professionals. It's worth noting that a Congressional Research Service report from 2008 found that U.S. universities award just under 400,000 STEM degrees annually. If this domestic pipeline isn't enough to satisfy the tech sector's demand for skilled professionals, then presumably all of those American-produced graduates are gainfully employed in STEM work.
It's unfortunate that the picture for American STEM graduates isn't so rosy. Parsing a recent Microsoft report shows that many computer science jobs are held by people who never studied that subject. A broader look at STEM career trends shows that foreign-born STEM graduates can stay in the U.S. for quite some time to seek work, while many companies continue to lay off tech workers.
One very telling statistic from a National Science Foundation study of the STEM workforce reveals that the involuntarily out of field (IOF) rate for recent graduates is 11.0%. Think about it. If 44,000 of those annual 400,000 STEM graduates can't find work in their field, why is industry pushing for even more than the 65,000 green cards for foreign-born workers? The obvious answer is that the tech sector is not at all concerned about finding employment for those 44,000 lost workers. It would rather use an influx of more than 65,000 foreigners to drive down wages for remaining STEM employees.
The push for more green card STEM workers has little to do with satisfying an unmet demand for skilled labor. Tech employers can use an imported glut of qualified workers to press existing employees for wage concessions. Wage "arbitrage" is sometimes a polite way of saying wage suppression, because that's an easy way for employers to control costs. Compared to investing in automation or redesigned work flows, lobbying for lower wages via immigration reform has a big payoff.
The tech sector claims it needs more than the current 65,000 H-1B visas to attract STEM professionals. It's worth noting that a Congressional Research Service report from 2008 found that U.S. universities award just under 400,000 STEM degrees annually. If this domestic pipeline isn't enough to satisfy the tech sector's demand for skilled professionals, then presumably all of those American-produced graduates are gainfully employed in STEM work.
It's unfortunate that the picture for American STEM graduates isn't so rosy. Parsing a recent Microsoft report shows that many computer science jobs are held by people who never studied that subject. A broader look at STEM career trends shows that foreign-born STEM graduates can stay in the U.S. for quite some time to seek work, while many companies continue to lay off tech workers.
One very telling statistic from a National Science Foundation study of the STEM workforce reveals that the involuntarily out of field (IOF) rate for recent graduates is 11.0%. Think about it. If 44,000 of those annual 400,000 STEM graduates can't find work in their field, why is industry pushing for even more than the 65,000 green cards for foreign-born workers? The obvious answer is that the tech sector is not at all concerned about finding employment for those 44,000 lost workers. It would rather use an influx of more than 65,000 foreigners to drive down wages for remaining STEM employees.
The push for more green card STEM workers has little to do with satisfying an unmet demand for skilled labor. Tech employers can use an imported glut of qualified workers to press existing employees for wage concessions. Wage "arbitrage" is sometimes a polite way of saying wage suppression, because that's an easy way for employers to control costs. Compared to investing in automation or redesigned work flows, lobbying for lower wages via immigration reform has a big payoff.
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