Wednesday, February 12, 2020

THE REAL ECONOMY - WHERE ARE THE JOBS?


Job Openings Fall By More Than Expected

Close up portrait of a pensive and contemplative factory female employee wearing a white protective hard hat
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2:15

The number of job openings in the U.S. fell to a two-year low in December, but whether this is a sign of a softening economy or a reflection of a tight labor market is debatable.
The number of job openings fell 364,000 to 6.4 million on the last business day of December, the U.S. Bureau of Labor Statistics reported today. That was below economists’ expectations for 6.75 million and represents the second consecutive monthly decline. Compared with a year ago, job openings are down 14 percent.
Hiring has not slowed. The U.S. added 225,000 new jobs in January, 147,000 in December, and 261,000 in November. The number of hires in December was basically unchanged from the previous month and unemployment has remained at very low levels, between 3.5 percent and 3.6 percent, for months.
So why are job openings declining? One possibility is that employers are increasing on the job training to increase worker productivity rather than opening new positions. That would make sense in a tight labor market where many employers say they are having trouble finding enough workers.

“It is possible the decline in job openings represents in part better job matching (greater willingness of employers to hire and train workers) rather than a cautionary signal .. but these data should be watched closely in upcoming months.” - RDQ Economics

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Keep an eye on this: The US had 6.4 million job openings in December 2019. That's was the lowest since Dec 2017.

It's possible businesses are taking down job listings b/c they can't find people. It's also possible they're taking down job listings b/c they're less optimistic.

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A more worrisome possibility is that employers could be becoming less optimistic about economic growth in the months ahead.
Evidence for the tight labor market explanation comes from the very low ratio of unemployed people to job openings. In January of 2018, this became fractional, meaning there were more openings than unemployed people. That’s still the case even with the declines in openings in November and December.
Openings and hires are down in manufacturing but the ratio of unemployed people to openings remains extremely low.
What’s more, layoffs remain scarce even in manufacturing, which certainly suffered a slump last year as global economic growth slowed. The quits level remains well above the level of layoffs, also a positive signal.


The plunge in job openings has been particularly steep in the goods-producing sector

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Manufacturing is one industry where the downturn in job openings has been accompanied by a decline in hires and should therefore be more concerning

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Taken together, these data points support the notion that the lower level of openings in the economy is not a sign of distress but a sign that businesses are looking outside of expanding their payrolls to grow.

US jobs report: 11,000 US auto jobs lost in January

The US economy shed 11,000 auto and auto parts jobs in the month of January, according to the Bureau of Labor Statistic’s monthly report released last week. This represented almost all of the 12,000 jobs lost in the manufacturing sector as a whole. Over the last 12 months, 24,000 jobs had been eliminated in the auto industry, according to the bureau’s report.
January’s figures show that the jobs bloodbath in the auto industry is continuing unabated after the United Auto Workers’ sabotage of the General Motors strike last fall. The union, which is embroiled in a massive bribery and corruption scandal which has implicated much of its top leadership, forced through a sellout contract after isolating the strike which ratified the closure of four GM facilities. A fifth, Detroit-Hamtramck Assembly, is slated to idle for the 18 months starting at the end of February.
The assembly line at the Ford Rouge assembly plant in Dearborn, Michigan [Credit: AP Photo/Carlos Osorio, File]
The union’s betrayal of the GM strike paved the way for similar sellout deals at Ford, which will close its Romeo Engine plant in Michigan in 2022, and at Fiat Chrysler, whose Marysville Axle plant may close next year.
While General Motors is carrying out forced overtime at many plants in order to make up for production lost to the strike, Ford and Fiat Chrysler are carrying out temporary layoffs and plant shutdowns throughout the country. Ford recently announced temporary layoffs at Chicago Stamping Plant in Chicago Heights, Illinois, and is cutting hours at its Chicago Assembly Plant on the south side of Chicago.
Fiat Chrysler (FCA) offered buyouts to 3,900 workers at its Belvidere Assembly plant at the end of January, fueling fears that the plant is preparing to close completely. The company laid off 1,371 workers last May after cutting a shift at the plant.
Both US-based and foreign automakers and suppliers are in the midst of a jobs purge in response to a slowdown in the global industry and to prepare for the introduction of electric and self-driving vehicles, which require far less labor to produce. General Motors ended production at its Oshawa plant in Ontario, Canada, in December, and Ford laid off 400 workers at its Oakville, Ontario, plant last week.
Ford announced in 2019 that it would close plants across Europe, including one factory in Blanquefort, France, three factories in Russia later that year, and its engine plant in Brigend, Wales, in the United Kingdom in 2020. This was in addition to 7,000 white collar job cuts announced last year. The company, already under strain from investors and credit rating agencies to quicken the pace of its “global fitness” program, has now been thrown into a deep crisis by its disastrous 2019 financial performance.
In Germany, Volkswagen announced plans to cut 20,000 jobs in Germany. The IG Metall has indicated its willingness to support these cuts, and is also helping Daimler, the parent company of Mercedes-Benz, to slash 10,000 jobs in Germany by the end of 2022.
While tens of thousands of autoworkers have already lost their jobs in the United States and Europe, the bulk of the layoffs last year took place in India (350,000) and in China (220,000). Chinese auto sales, which had experienced decades of uninterrupted growth to become the world’s largest auto market, suffered its first decline in a generation in 2018, due in large part to the impact of the Trump administration’s trade war measures.
The coronavirus outbreak, which has caused extended plant shutdowns in China’s “motor city” Wuhan, has wreaked havoc on global auto supply chains. The Trump administration is attempting to utilize this public health crisis to pressure companies into shifting to suppliers outside of China. “The fact is, it does give business yet another thing to consider when they go through their review of their supply chain,” Commerce Secretary Wilbur Ross told Fox News. “So, I think it will help to accelerate the return of jobs to North America.”
More broadly, the January jobs report points to a continuing economic stagnation confronting American workers. Just 225,000 new jobs were added to the US economy in January according to US Bureau of Labor Statistics (BLS) monthly Employment Situation released last Friday, compared to 304,000 added in January 2019.
The majority, a total of 144,000 jobs, were added in primarily low-wage, precarious sections of industry. Unemployment rose slightly to 3.6 percent, still slightly lower than last January, when it was 4.0 percent. However, for roughly a decade the official unemployment rate, which does not count the underemployed or those discouraged from looking for work, has grossly underestimated the actual state of unemployment. The number of long-term unemployed (without work for 27 weeks or more) and those who have given up looking for work is increasing, from 19.3 percent of the total unemployed in January 2019 to 19.9 percent of the total unemployed in January 2020.
Wages rose by a mere $0.07 per hour to an average of $28.44. However, this figure masks widening income inequality. Around 44 percent of US workers earn low wages under $16.00 per hour. Low-wage employment dominated job growth in January. Construction work rose by 44,000 jobs, leisure and hospitality by 36,000 and transportation and warehousing by 28,000.
The BLS also reported that the year 2019 saw the greatest number of major work stoppages (strikes) in the US out of any year in the past decade. There were 425,000 workers who participated in strikes, with the majority of workers who were on strike in the education sector. The longest strike with 29 lost working days was the strike of General Motors workers in September through October. The systematic destruction of higher-paid manufacturing work and its replacement with low-wage, precarious work is one of the many factors fueling the growth in opposition to capitalism among American workers.
The growing strike wave in the US is a part of the resurgence of the class struggle worldwide, throughout the Americas, Asia, Europe and Africa. The fight against corporate rule and to protect jobs requires a strategy to link all of these struggles of rank-and-file workers under an international and socialist program, in contrast to the pro-corporate nationalism of the trade unions in every country.


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Norwood Jewell begins 15-month sentence in minimum-security prison for role in UAW bribery scheme

Convicted former United Auto Workers vice president Norwood Jewell reported to the minimum-security Federal Correctional Institution at Oxford, Wisconsin on Tuesday to serve out his 15-month sentence.
US District Judge Paul Borman sentenced Jewell to prison after he pleaded guilty last April to conspiracy charges stemming from his role in a million-dollar bribery scheme at Fiat Chrysler (FCA). The federal corruption probe has since engulfed large portions of the union’s top leadership. So far, the federal investigation probe into the UAW has resulted in the conviction of 11 individuals and charges filed against 13 total. The last two presidents of the union, Gary Jones and Dennis Williams, have also been implicated, as well as current interim president and self-proclaimed “reformer” Rory Gamble.
Norwood Jewel (left) during contract negotiations [Source: AP Photo]
Fiat Chrysler funneled $1 million in bribes to UAW officials in exchange for major concessions. Union bureaucrats were issued credits cards through the joint union-FCA National Training Center in order, in the words of one company official, to keep them “fat, dumb and happy.” Jewell himself admitted to accepting tens of thousands of dollars worth of bribes.
Jewell also pleaded guilty to the misappropriation of about $100,000 worth of union funds for his own personal use, including stays at a luxury villa in Palm Springs, California, high-end liquor and extravagant meals.
Jewell’s sentence amounts to little more than a slap on the wrist. In addition to the relatively short prison sentence, he was not required to pay fines or court costs. Judge Borman had originally accepted the request of Jewell’s attorney Michael Manley that he serve his prison term in the minimum security Federal Correction Institution in Morgantown, West Virginia, nicknamed “Club Fed” because it houses many wealthy white-collar criminals, including businesspeople and politicians, in a campus described as “college-like” with amenities ranging from a movie theater to a bocce ball court.
In the end, Jewell’s prison assignment was moved from “Club Fed” to “the University,” as the Oxford facility is sarcastically known. Inmates at Oxford stay in their own private cabins, rather than overcrowded cellblocks more typical of the brutal American prison system, which are spread out over the sprawling 600-acre campus that has been described as “serene” by the Chicago Tribune.
Other amenities, including culinary classes, a walking track and recreation center, give the impression that it is more of a retreat than a prison, where upper middle class and elite inmates are sent to ride out sentences in comfort to prove that they have “done their time.” Notable past prisoners at the facility include former Illinois Governor George Ryan and US President Trump’s former campaign adviser George Papadopoulos.
“It's like a hotel in there,” one local resident told the Tribune in 2007. “It's clean and comfortable and quite quiet.”
For autoworkers, whose dues were stolen and who have suffered under the sellout contracts engineered by the UAW, Jewell’s lenient sentence adds insult to injury. The deals, which were forced through with the aid of bribes, not only led to wage cuts, layoffs and maintaining the two-tier pay system. They also paved the way for the expansion of a de-facto third tier of hyper-exploited temporary workers who perform the same work for far lower wages, and who pay union dues but have virtually no contractual rights.
On the basis of its high utilization of temps, Fiat Chrysler has the lowest all-in hourly labor costs of the Detroit-based automakers, at $55 per hour. The particularly cozy relationship between Fiat Chrysler and the UAW prompted General Motors to file suit late last year, alleging that the UAW was a “FCA-controlled enterprise.”
However, all of the automakers have been able to rely on the union to help them force through cuts. Last year, the UAW shut down the national strike at General Motors and rammed through a contract that ratified the closure of four facilities and provided the company with a blank check to hire temps, with only a fig-leaf “pathway” to regular employment that will be unattainable for most.
“Why is it [that] someone in a poor neighborhood gets harsh sentences for stealing a loaf of bread, or a mother gets 15 years [in jail] for stealing a gallon of milk for her baby, but a politician or top union official can steal $100,000 or more and lie about it?” one autoworker said. “Then the international union wasted $2 million defending him only for him to plead guilty and get 15 months in jail. And you wonder why people don’t trust our leaders.”
“Money talks loudly in the white-collar world,” said another.
During the trial, Manley attempted to paint Jewell as an honest but naive figure caught up in a culture of corruption in the union’s FCA department, after being transferred from the General Motors department, which he briefly ran. This dovetailed with the UAW’s claims at the time that the corruption was limited entirely to FCA, a claim which later exploded after another former union Vice President for GM Joe Ashton was indicted on similar charges. But even before his indictment, Jewell had earned the enmity of autoworkers, many of whom jeered at Jewel during meetings for the 2015 contract ratification votes.
Jewell not only helped to force through sellouts in his capacity during his earlier tenures as the union’s Vice President for GM and as Director of Region 1-C. Jewell, a political kingmaker in Flint, Michigan, also endorsed the privatization scheme that led directly to the Flint water crisis by switching the industrial city’s water supply to the polluted Flint River.
The revelation of widespread corruption in the UAW only confirms what autoworkers have known all along – that the UAW is on the side of the companies, not the workers. From a legal standpoint, all of the UAW contracts negotiated over the last decade should be considered null and void because they were “negotiated” by bargainers who were being paid off by the other side.
The near-immediate exposure of union “reformer” Rory Gamble, only months after assuming his post as interim president after Gary Jones was forced into retirement, demonstrates that the UAW cannot be reformed. The corruption itself is the outcome, not the cause, of the class hostility of the union as a whole to the workers which it claims to represent – a hostility that is shared by unions throughout the world, from Unifor in Canada to the CTM in Mexico and IG Metall in Germany, which have all worked with the companies to destroy jobs and force through cuts.
To organize a fightback against cuts and the union’s treachery, autoworkers must form new organizations, rank-and-file committees, to take the initiative out of the hands of the unions and establish lines of communication with their class brothers and sisters throughout the world. These committees, unlike the UAW, will not begin with what the global auto companies will allow, but the

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