Saturday, January 6, 2018


December US jobs report reveals weaker than expected growth

By Trévon Austin

6 January 2018
As the Dow Jones Industrial Average stock index continues to soar, the latest report on job growth and unemployment from the Department of Labor for December makes clear that workers continue to see little of the “recovery” from the 2008-2009 financial crisis.
According to the report, 148,000 jobs were added to the market in December, below an expected growth of 190,000 jobs, making a three-month average of 204,000 new jobs. The December total was depressed by the retail sector, which continued to hemorrhage jobs through the holiday sales period, cutting more than 20,000 jobs.
The additional jobs were enough to hold the unemployment rate steady at 4.1 percent, the same as in November, the lowest official figure since 2000. Finally, average hourly wages rose by nine cents to $26.63, a 2.5 percent increase from 2016.
Despite the weaker than expected jobs report, stock prices shot up, with the Dow Jones ending the day up more than 220 points, the S&P 500 up by nearly 20 points and the Nasdaq up more than 58 points.
The New York Times suggested that the latest jobs report indicates “a year of increasing opportunities for American workers.” Construction jobs increased by 210,000 last year, and manufacturing added 196,000 jobs. This trend is being used to herald a potential “blue-collar boom.”

However, the decline in the official unemployment rate and the number of jobs added over the last year do not reflect improved conditions for the working class. The reality for millions of workers is austerity, underemployment, and wages that are not keeping up with the rising cost of living.

The slight rise in the average wage is essentially meaningless, as the median wage in the United States has remained virtually unchanged since the 1970s, only rising by 0.2 percent per year when adjusted for inflation.
According to a report released by the Department of Labor last month, when accounting for inflation and other factors, the real average hourly wage was just $10.72. This figure accounts for employees in industries that include approximately four-fifths of total employment, such as manufacturing, construction and service industries.
Furthermore, the underemployment rate, which encompasses unemployed workers looking for work and part-time workers looking for full-time jobs, rose to 8.1 percent in December. Approximately 4.9 million American workers remain stuck in part time positions despite their desire for better work.
A study by economists Lawrence Katz of Harvard University and Alan Krueger at Princeton University revealed that the proportion of American workers engaged in “alternative work” increased from 10.7 percent to 15.9 percent from 2005 to 2015. Alternative work is described as temporary or unsteady employment, such as contract work. A staggering 94 percent of job growth during that period was in alternative work.
In other words, nearly all of the 10 million jobs created in the 10-year period were temporary, and the trend likely continues today. The same policies used to promote economic/job growth in the Obama era, pumping surreal amounts of money into Wall Street, are being continued under Trump with trillions in tax cuts for corporations and the rich.
With the ever-increasing cost of living and stagnant wages, those stuck in part-time work must often work multiple jobs to make ends meet. Such jobs are typically low-wage, and offer no benefits such as health care or a retirement plan. Having to work more than one job is mentally and physically exhausting for these workers and leaves little time for family, leisure, education, or the ability to look for a better job.
The real conditions facing millions of workers is further reflected by the continuing wave of retail store closures and a decline in auto sales.
Economists predict that thousands of retail stores will close in 2018, continuing the trend from last year when a host of retail chains closed 8,000 stores nationwide. Sears Holding announced on Thursday that it would be closing 64 Kmart locations and 39 Sears stores following weaker than expected in-store holiday sales. The wave of closures is mostly due to the rise of e-commerce, particularly giants such as Amazon, which heavily exploits its workforce.
According to Business Insider, large department stores, known as “anchor stores,” are particularly at risk. Macy’s announced that it will be closing 11 stores, bringing the total closed in recent years to 81 out of an announced planned total of 100.
Shopping malls rely on anchor stores such as Macy’s to attract the majority of their customers, and attract commerce to smaller businesses nearby. The report indicates 310 out of 1,300 malls are at risk of losing an anchor tenant. The loss in traffic to smaller businesses also spells more job losses in retail.
In another indication of the dismal state of the real economy, US car sales fell in 2017 for the first time since 2009. Annual sales fell 1.8 percent to 17.2 million vehicles according to figures from Autodata. The decline is attributable to the rise in average car prices and the stagnation of wages. The average amount paid for a car was $35,082, up 2.5 percent from last year.
In 2009, annual auto sales declined by 21 percent to 10.3 million cars amid the financial crisis, marking a 27-year low. The fall in sales drove automakers GM and Chrysler into bankruptcy, and they received a massive bailout from the Obama administration on the condition they slash auto workers’ wages and increase the number of part-time and temporary workers.

"Congress must prioritize four repairs for the immigration system before contemplating any DACA-style amnesty negotiation, said Brat: 1. Ending chain migration and the visa lottery; 2. Mandating employer use of E-Verify; 3. Construction of a southern border wall; and 4. Interior enforcement of immigration law." REP. DAVE BRAT

No decline in Michigan poverty since the Great Recession

By Debra Watson
28 December 2017
Despite a drastic fall in the official unemployment rate for the state the same percentage of Michigan households are living below the poverty line today as did after the onset of the Great Recession in December of 2007.
According to new income and poverty statistics from the US Census Bureau released in early December, Michigan’s poverty rate was 16.3 percent at the end of 2016, the same annual rate calculated as an average for the five-years from January 2008 through December 2012. The current rate is not much lower than the peak annual poverty rate of 16.9 percent reported for the five-year period of 2010-14.
Unemployment has been below five percent in the state since the end of 2015, down from a post-recession peak of 14.5 percent in 2009. However, this month Michigan unemployment ticked up slightly, to 4.5 percent.
The proliferation of low-paying temporary and part-time jobs in the auto industry, a process enshrined in the sellout contract imposed by the UAW in 2015, has been a key factor in the general decline in living standards in Michigan. According to data recently reported by the Michigan Department of Technology, Management and Budget wages in manufacturing jobs in the state are down by $2.00 an hour, from a high of $22.73 before the crash.
Behind the apparent contradiction between declining unemployment rates and the ongoing high official poverty level is the massive and increasing income and wealth inequality in the US. As Karl Marx established over a century ago, poverty at one pole of society is complemented by obscene levels of wealth at the other. The three top American plutocrats, Amazon’s Jeff Bezos, investor Warren Buffet and the co-founder of Microsoft, Bill Gates, now own more wealth than the bottom half of the US population, 160 million people.
Like Trump’s glorification of the ever-rising bubble in the stock market, Obama pointed to job growth when characterizing his administration as “the best time to be alive.” Michigan’s Republican Governor Rick Snyder and the Democratic Mayor of Detroit Mike Duggan have incessantly boasted of the declining unemployment and job creation as signals of a recovering economy.
Unsurprisingly, the Wall Street Journal recently touted that Michigan had “increased sharply” its “capital investment and hiring.” The paper praised policies that repealed personal-property taxes for manufacturers and right-to-work legislation, policies taken from the Republican playbook and implemented in the state.
The latest Census figures demonstrate that poverty remains a chronic condition in Michigan despite this supposed resurgence in the state’s economy. Even so, the official poverty rate grossly underestimates the depth of economic want.
In the US the official poverty level is not measured as a percentage of median income, as it is in many other developed countries, but on a far narrower measure related to food costs. Poverty for a family of three is pegged at a derisory $20,000 a year, far below sixty percent of Michigan’s current median household income of about $52,400 and drastically below the amount needed to support a family.
Sustained high rates of poverty over nearly a decade have had devastating personal implications. A family’s meagre resources can dwindle as successive years’ income deficits are never offset with rising income. They have had an equally devastating societal impact.
The five-year Census Bureau American Community Series (ACS) rolling averages from the December report supplement annual poverty and income statistics released by the Census’ Current Population Series in September. The greater sample sizes in the five-year averages allow for more accuracy and sufficient data to communities with smaller populations.
There are smaller communities in the state where there are indications poverty has increased dramatically. The large increases in poverty in these small communities indicate how a relatively small economic disruption can have a huge effect on living standards for a village or town.
For example, some villages in the Upper Peninsula with populations in the hundreds saw double digit increases. In Baldwin, which is located toward the middle of the state’s lower peninsula, poverty increased from a third of its one thousand plus residents in poverty in 2008-2012 to well over half now.
The December ACS release shows that in the five-year look-back from the end of 2016, there was an increase in poverty in half of Michigan’s communities of all sizes over the average recorded in the five years that followed the onset of the recession. Communities located throughout the state saw such increases.
Flint and other cities such as Jackson, Lansing, Detroit, Muskegon, Bay City and Ann Arbor showed small increases in their poverty rate. Other cities with comparable population sizes had poverty rates that declined, albeit slightly, including Grand Rapids, Kalamazoo and Saginaw.
Detroit, Michigan’s largest city, recorded a shockingly high official poverty rate of a 39.4 percent using the five-year ACS average. The city’s poverty rate was one percentage point higher than the 38.1 percent average for the years 2008 through 2012.
Whole cities with substantially sized populations like Detroit and Flint have average poverty rates that are more than twice the state poverty rate. The high rates in some cities reach the level of poverty concentration that is utilized by social scientists to identify neighborhoods endemic to urban areas where pervasive poverty seriously debilitates families and social structure.
Inequality is driving communities to be divided by income like never before in recent history. The growth in concentrated poverty nationwide was noted in a Brookings Institution report last year. According to the report, between 2005-09 and 2010-14 the number of such high poverty neighborhoods in the US, where more than forty percent of households are below the official poverty line, grew by more than 4,300.
By the end of 2016 Detroit, along with Cleveland, had a poverty rate a full ten percentage points higher than the city with the third highest poverty rate in the country, Philadelphia. Detroit Democratic Mayor Mike Duggan’s recent re-election campaign relied on the narrative of an ongoing “Detroit comeback” based on highly concentrated downtown real estate investment.
Detroit’s poverty statistics present a window into the effect of exploding growth in temporary and part-time jobs and parallel wage stagnation and how it has affected workers struggling in the lowest-paying jobs.
Thirty-six percent of Detroit residents now work for less than $15,000 a year. Twenty-five percent of residents do not have access to a car. Industrial jobs have hemorrhaged out of the city over the nine years since the recession. Suburban jobs require serious time and expense to reach as the mass transit system in the area is barely functional.
Two of the cities in Michigan where poverty rates were even higher than Detroit’s are actually enclaves of Detroit and would cause a higher rate and higher increase in the poverty rate for the Detroit inner-city area if their data was included. Hamtramck, a small enclave of Detroit has a poverty rate of 49.7 percent, up from 44.6 percent in the years immediately after the recession started. The other municipal enclave, Highland Park, has a poverty rate of 51.1 percent, up from 46.7 percent in the earlier years.

A Tale of Two Op-Eds

By Jason Richwine

The Corner at National Review Online, December 21, 2017

How about restricting low-skill immigration to encourage 

recruitment of Americans? No, Furman says, because — well, 

actually, he does not mention immigration at all, not even to 

dismiss its importance. Omitting the i-word in discussions of labor-

force dropout is an unfortunate habit on both the left and the right. 

Amy Wax and I wrote our Inquirer op-ed (based on a much longer 

essay in American Affairs) to show that employers turned to 

immigrants as the native work ethic declined. As evidence, we 

point both to the much higher labor-force participation of low-skill 

immigrants compared to low-skill natives, as well as to the near-

universal preference expressed by employers for immigrant labor. 

Restricting the flow of foreign workers would generate a major 

incentive for business owners, politicians, and opinion leaders to 

reintegrate American men into the labor force. It is, in our opinion, 

Study Shows E-Verify's Effectiveness... 


By Preston Huennekens

CIS Immigration Blog, December 8, 2017

Their study indicates that E-Verify is one of the most important enforcement tools available to states that wish to reduce their illegal alien populations. Research shows that most illegal migration is for economic reasons, and that the adoption of E-Verify and other worksite enforcement measures effectively blocks illegal aliens from procuring employment, thereby preventing many from settling down in the United States. Faced with mandatory E-Verify, the study shows that many aliens either returned to their home countries or traveled to other states that did not have employment verification regulations.
. . .

Whom Does Congress Work For?

By John Miano

CIS Immigration Blog, December 12, 2017

When Disney replaced 350 Americans with foreign workers, 

forcing them to train their replacements, did we see any Florida 

members of Congress threaten to shut down the government unless 

it was stopped?

When Southern California Edison and the University of California 

replaced Americans with foreign workers, did any California 

members of Congress threaten to shut down the government unless 

it was stopped?

When Toys "R" Us replaced Americans with foreign workers, did 

any New Jersey members of Congress threaten to shut down the 

government unless it was stopped?

When Cargill and Best Buy replaced Americans with foreign 

workers, did any Minnesota members of Congress threaten to shut 

down the government unless it was stopped?


Yet when illegal aliens working under the DACA program are 

threatened with losing their jobs, members of Congress spring into 

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