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EPI News: Today’s labor market – Mixed signals

March 16, 2012 1 comment

English: Bureau of Labor Statistics logo RGB c...

The latest assortment of government data tells different stories about the strength of the economy, providing no guarantee that we are yet experiencing a self-sustaining, robust jobs recovery.

The good news: State-level data show signs of recovery

State-level data released this week by the Bureau of Labor Statistics show that most states have been experiencing the steady progress towards economic recovery seen nationally. Over the four-month period from October 2011 to January 2012, every state except New York experienced a reduction in its unemployment rate. Over the course of a year (from January 2011 to January 2012), seven states experienced job growth exceeding 2.0 percent, while North Dakota experienced growth of 5.7 percent. Notably, five states (Alaska, Mississippi, Missouri, Rhode Island, and Wisconsin) lost jobs over this period, led by Wisconsin’s loss of 12,500 jobs. (Click here for interactive state maps.)

Despite these generally positive trends, four states and the District of Columbia have unemployment rates at or above 10.0 percent (led by Nevada at 12.7 percent), while 11 states plus the District of Columbia have unemployment rates of 9.0 percent or higher.

“States looking to further spur economic growth should invest more significantly in infrastructure, such as transportation networks, schools, and broadband, while avoiding budget cuts that would impede economic recovery today and could compromise future economic prosperity,” wrote EPI’s Douglas Hall, director of the Economic Analysis and Research Network.

The not-so-good news: Low level of voluntary quits should temper recent optimism about the labor market

Through examining voluntary quits, this week’s Economic Snapshot provides further evidence that the country’s labor market is not yet out of the woods. Voluntary quits, defined as workers who voluntarily leave their jobs, are high when job opportunities are plentiful and employed workers have the flexibility to look for jobs that pay better and more closely match their skills and experience. During downturns, on the other hand, the number of voluntary quits drops as job opportunities become scarce. The Snapshot shows that the number of voluntary quits is still more than 30 percent below the pre-recession level—and has seen no improvement since last summer.

More of the same: Job-seekers ratio remains unchanged

Finally, Tuesday’s release of the latest Job Openings and Labor Turnover Survey by the Bureau of Labor Statistics showed decreases in both job openings and hires in January. However, the job-seekers ratio—the ratio of unemployed workers to job openings—was 3.7-to-1 in January, unchanged from the revised December ratio.

“The softness in January’s job openings is inconsistent with the strength of January’s employment and unemployment report,” explained EPI labor economist Heidi Shierholz. “These inconsistencies underscore that it is too soon to declare that we have entered a self-sustained period of robust job growth.”

Brad Plumer of the Washington Post cited Shierholz’s analysis for his Wonkblog piece “Why are wages still stagnant? Blame the labor market”:

“There are still 3.7 job seekers for every available employment opportunity. That’s down considerably from the brutal 6.7-to-1 ratio seen in July, 2009. But as Heidi Shierholz of the Economic Policy Institute points out, the current ratio is also higher than at any point during the 2001 downturn. Across just about every industry, competition remains intense for a limited number of jobs, which means that employers are under less pressure to offer higher pay in order to entice prospective workers.”

EPI in the news

Shierholz’s analysis of last Friday’s release of the Employment Situation Summary by the Bureau of Labor Statistics was also picked up by multiple national media outlets, including the Washington Post, NPR, McClatchy, Huffington Post, and CNBC.

  • Speaking to NPR’s Scott Neuman, Shierholz explained why the labor market still needs to gain many more jobs to return to its pre-recession health, and why it’s difficult to predict when this will occur. “We don’t have some historical perspective to compare this to and go, ‘OK, we know from experience that when the unemployment rate gets to X, or the number of jobs gets to whatever, that’s when people will start coming back,’” she said.
  • And Shierholz told the Huffington Post’s Lila Shapiro that although we are seeing job growth, “it’s still a hellish job search out there” for job seekers.

EPI President Lawrence Mishel’s latest research on young workers’ declining wages continues to inform the national economic conversation. Mishel’s findings were most recently cited by the New York Times,CBS News, Huffington Post, and Think Progress.

  • From the New York Times editorial “Better Numbers on Jobs”:
    “Years into a weak labor market, and with years to go before full recovery, the scars are becoming all too apparent. Recent data from the Economic Policy Institute shows that the inflation-adjusted hourly wage of college-educated men aged 23 to 29 dropped 5.2 percent from 2007 to 2011, and for female college graduates of the same age, 4.4 percent. Joblessness and wage declines are also pronounced for those with only a high school education. For those men aged 19 to 25, wages fell 8 percent from 2007 to 2011. For those young women, the decline was 3.1 percent.”
  • CBS News’ MoneyWatch:Recent college graduates have had a hard time landing jobs and those that have jobs, are earning less. The Economic Policy Institute found that the average inflation-adjusted hourly wage for male college graduates aged 23 to 29 dropped 11 percent over the past decade. For female college graduates of the same age, the average wage is down 7.6 percent.”
  • Huffington Post: “A new analysis from the Economic Policy Institute shows what a lot of younger Americans have probably noticed for themselves: even if you’re lucky enough to have a job, it’s still tough to get ahead. Over the last decade, wages for younger male college grads have plummeted by 11 percent, while women college grads saw their paychecks drop by 7.6 percent.”
  • And Think Progress: “Not only has the Great Recession been bad for workers entering the workforce, but as the Economic Policy Institute noted, the entire last decade has essentially been lost in terms of entry-level wages.”
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Pittsburgh’s October Employment: Best October Ever?

December 6, 2011 Leave a comment

Jim Futrell;
Imagine Pittsburgh Online
December 5, 2011

While there are certainly several resources for job growth, according to the U.S. Bureau of Labor Statistics Current Employment Statistics, the Pittsburgh metropolitan statistical area recorded its best October employment on record at 1,161,300. Employment grew 1.2 percent from September 2011 and 1.9 percent from October 2010. (You can read more about it on the website of Pittsburgh TODAY which compares the Pittsburgh region to similar, benchmark cities that include Philadelphia, Cleveland, Denver and Charlotte.)

So what was driving this job growth? One would suspect this to be part of seasonal trends, and while it is true that employment almost always gets a September to October bump around 5,000, this year’s jump was well over 13,000. Trade, transportation, and utilities, and government are two industries that are more significantly impacted by seasonal gains and losses.

Traditional strong-growing industries such as financial activities and professional and business services experienced minimal ups and downs over the past few quarters. Education and health services is a key industry, which has been gradually increasing over the past several months to its current peak of 251,000 employees, a record high.

Often the most interesting data can be found deeper within certain industries. Management of companies and enterprises (a sub-sector of professional and business services) saw its employment rise to 35,900 in October. This is not just the best October for this sub-sector, but the highest employment ever recorded in this industry. This again reinforces several previous analyses by the Pittsburgh Regional Alliance on the importance of Pittsburgh as headquarters hub.

Colleges, universities, and professional schools, a sub-sector of the education and health care industry, saw its employment rise to 45,400, a record high. While some of this can be attributed to increased hiring for the school year, it’s still 10 percent higher than October 2010, and 21 percent higher than this time just five years ago. Pittsburgh’s college and universities are key contributors to this record-breaking October.

Before readers get too excited, remember, the labor force also increased in October, so this will not necessarily translate directly to a major reduction in the regional unemployment rate. According to the Pennsylvania Center for Workforce Information and Analysis, October’s unemployment rate did drop to 7.0 percent, well below the state rate (8.1 percent) and national rate (9.0 percent). The region is moving in the right direction, fueled by a wide range of industries.

HHS Data: Nonprofit Jobs Picture Mixed, Faster Job Growth than in For-Profit Sector, Small Nonprofits Hit Hard by Recession

October 7, 2011 1 comment

October 05, 2011
Rick Cohen
The Non-Profit Quarterly

Based on an analysis of four years of federal government data on tens of thousands of nonprofit, for-profit, and government employers, there are some important and startling findings about employment trends in the nonprofit sector that should interest most nonprofit agency leaders and staff:

  • Overall, the nonprofit sector is generating jobs at a faster rate than the private sector. The resilience of the nonprofit sector—and of charitable donors—during a recession is noteworthy, especially as nonprofits perform critical functions in providing a safety net for the poor and disadvantaged during a recession.
  • Nonprofit-sector job creation, however, has been largely concentrated in large nonprofit employers with 1,000 employees or more. We would guess that these nonprofits are likely to be hospitals and universities.
  • There is a reasonably logical correlation of the growth in nonprofit sector employment with the arrival of federal stimulus dollars starting in 2009 and extending through 2010. We know that a significant portion of the stimulus funds were directed to programs run by nonprofit organizations. It is possible, however, that with the end of stimulus spending, the employment gains of the nonprofit sector in recent years could be reversed.
  • Despite the increase in overall nonprofit employment and an increase in the number of establishments associated with large nonprofit employers, there appears to have been a contraction in the number of small nonprofit employers. Perhaps small nonprofits have adjusted to the recession by shifting from paid personnel to volunteer staffing. If the recession ends up double-dipping, more small nonprofits are likely to disappear or be taken over by larger organizations.

Is this data from the Census Bureau? The Bureau of Labor Statistics? The Internal Revenue Service? No, these potential findings are drawn from annual studies conducted by the Agency for Healthcare Research and Quality (AHRQ), a little-known agency associated with the Department of Health and Human Services (HHS).

No one collects undeniably accurate and reliable data on nonprofit employment, no one. Counts of employment by the Bureau of Labor Statistics, for example, are really estimates based on samples, often stratified samples of employers or employees to make sure that information is collected for specific types and classes of employers and for specific geographic regions.

So it is a boon to researchers of the nonprofit sector that a unit of the Department of Health and Human Services also conducts an annual survey of employers—like others, based on a stratified sample—in order to collect health-insurance-related information. Every year since 1996 (with the exception of 2007), AHRQ has surveyed employers to identify and assess the “number and types of private health insurance plans offered, benefits associated with these plans, premiums, contributions by employers and employees, eligibility requirements, and employer characteristics.”

This data series, known as the Medicare Expenditure Panel Study (MEPS), includes an “Insurance/Employer Component” that gathers health expenditure and benefit information from a national sample of tens of thousands of public- and private-sector employers—including nonprofit employers. For researchers interested in the nonprofit sector, there is a side benefit: the data include estimated counts of nonprofit employers and employees by size of employer and by full-time or part-time status of the employees. When examined over a period of years, these data reveal lots of hidden nuggets of insight into changes in nonprofit employment and nonprofit employers.

AHRQ researchers interview a large number of employers via a detailed telephone and written survey, typically sampling some 38,000 to 40,000 private sector establishments drawn from the Census Bureau’s most recent business register. The MEPS response rate for the 2006, 2008, 2009, and 2010 interview periods has typically hovered between 78 and 86 percent. That high response rate is due to several rounds of outreach, including an initial survey mailing, a second mailing if there is no response to the first, and a telephone follow-up if neither mailing secures a response.

Multiple years of data from these carefully constructed national samples reveal often-surprising trends concerning rates of nonprofit job creation, changes in full-time versus part-time employment, and the number and types of nonprofit firms and establishments.

Job Creation

Like many other data sources, the AHRQ surveys suggest that the nonprofit sector is outpacing the private sector in job creation:

Table I: Nonprofit Employment by Firm Size

YEAR Total nonprofit employment Less than 10 employees 10-24 employees 25-99 employees 100-999 employees 1000 or more employees
2006 15,218,123 953,578 853,258 2,256,273 4,380,927 6,774,086
2008 15,365,566 1,015,502 890,012 2,092,262 4,617,822 6,749,967
2009 14,429,714 968,522 782,180 1,888,633 4,334,549 6,455,830
2010 15,703,701 931,685 810,196 2,010,090 4,417,686 7,534,044

The MEPS statistics suggest that nonprofit employment plummeted in 2009 as the national recession ravaged the sector but then increased dramatically in 2010. Why? The obvious answer is the American Recovery and Reinvestment Act of 2009—a.k.a. ARRA or “the stimulus”—which funneled money to nonprofits such as Community Action agencies, Head Start groups, health clinics, and hospitals, allowing them to retain and hire staff. Who knows how many people’s livelihoods during the darkest days of 2009 and 2010 were maintained by ARRA dollars (funding that has more or less come to an end now)?

In 2010, ARRA-funded weatherization employment increased from 10,666 full-time jobs in the first quarter to 15,415 in the fourth as weatherization programs ramped up their activity. ARRA-funded employment in the Health Center Integrated Services Development Initiative increased from 7,068 to 8,267 over the same period, ARRA-funded Community Services Block Grant jobs grew from 7,966 in Q1 to 18,431 in Q3 (the Q4 statistic for this particular program is missing), jobs in the homelessness prevention and rehousing program grew from 3,481 to 4,252, and so on. In addition to these ARRA jobs, accelerated medical reimbursements from Medicaid and Medicare created even more nonprofit employment.

Overall, total nonprofit-sector employment grew by 8.8 percent from 2009 to 2010 according to the MEPS survey. Breaking down the data in terms of nonprofit size reveals a lot of variation, however. Employment among nonprofit employers with 10 to 24 employees was up 3.6 percent. For organizations with 25 to 99 employees it was up 6.4 percent. Between 100 and 999 employees: up 1.9 percent. More than 1,000 employees: up an astounding 16.7 percent. But at nonprofits with fewer than 10 employees employment actually dropped 3.8 percent.

Part-time vs. Full-time

Another revealing way to break down the data is to look at full-time versus part-time jobs. Part-time employment in the nonprofit sector increased 5.3 percent between 2009 and 2010, as compared with a 2.2-percent increase for all private sector employers. Part-time employment in nonprofit organizations with 1,000 or more employees increased a whopping 31.1 percent.

Table II: Part-time Nonprofit Employment by Firm Size

YEAR Total (part-time nonprofit) Less than 10 employees 10-24 employees 25-99 employees 100-999 employees 1000 or more employees
2006 3,820,580
(100%)
447,854 (11.7%) 322,816 (8.4%) 648,327 (17.0%) 967,568 (25.3%) 1,434,014 (37.5%)
2008 3,886,570
(100%)
486,015 (12.5%) 327,332 (8.4%) 559,350 (14.4%) 1,185,903 (30.5%) 1,327,970 (34.2%)
2009 3,694,472
(100%)
467,533  (12.7%) 298,540  (8.1%) 512,362 (13.9%) 1,316,193 (29.8%) 1,099,844 (35.6%)
2010 3,890,001
(100%)
474,726 (12.2%) 354,298  (9.1%) 631,212 (16.2%) 986,818 (25.4%) 1,442,947 (37.1%)

Nearly one out of four nonprofit employees were part-time workers in 2010, compared to slightly more than one out of five private-sector employees overall. (This kind of data is important to the AHRQ because part-time workers are less likely to qualify for employer-provided or employer-subsidized health insurance.)

Nonprofit Firms and Establishments

Although the data is presented by “firm” size, the survey is actually administered among “establishments.” An establishment is defined as “a specific workplace or business location,” while a “firm” is a “business entity consisting of one or more business establishments under common ownership or control.” Consequently, one firm could have several different establishments. Given that the survey sample is specifically constructed to make national estimates, the changes in the number of establishments in the survey do reveal something about the structure of both nonprofit and for-profit business entities in this recession.

Table III: Nonprofit Establishments by Firm Size

YEAR Total number of nonprofit establishments Less than 10 employees 10-24 employees 25-99 employees 100-999 employees 1000 or more employees
2006 488,663
(100%)
251,174 (51.4%) 63,429(13.0%) 61,720 (12.6%) 85,498 (17.5%) 26,843 (5.5%)
2008 534,554
(100%)
277,902 (52.0%) 70,378 (13.2%) 66,779 (12.5%) 87,262 (16.3%) 32,233 (6.0%)
2009 510,850
(100%)
257,460 (50.4%) 64,592 (12.6%) 62,590 (12.3%) 90,200 (17.7%) 36,007 (7.0%)
2010 517,245
(100%)
255,727 (49.4%) 64,102 (12.4%) 69,577 (13.5%) 89,398 (17.3%) 38,441 (7.4%)

Again, it appears that the stimulus was one factor leading to an increase in the number of nonprofit establishments between 2009 and 2010, but the number of nonprofit establishments is still down 3.2 percent as compared with 2008 (a much sharper decline than the 1-percent drop among all private-sector establishments). Particularly noteworthy is the shrinkage in the number of establishments controlled by nonprofit firms of fewer than 10 employees, as compared to the increasingly large share of establishments tied to nonprofit employers with 1,000 employees or more.

The Nonprofit Economic Engine

Everyone can argue methodology and whether the AHRQ’s MEPS studies are a better or worse indicator of changes in the nonprofit sector than other data series. For one thing, the MEPS studies focus on employers, not entities. As a result, among nonprofits—especially nonprofit corporations that are combined with other tax-exempt entities such as religious institutions—the MEPS analysis is missing the larger number of nonprofits that exist without any staff.  As a result, a contraction in the number of nonprofit establishments or firms in the MEPS studies does not necessarily mean that there was a corresponding reduction in the overall number of nonprofits for those years.

But the AHRQ’s MEPS studies should help nonprofits and policy-makers recognize the economic importance of the nonprofit sector writ large. It’s more than what the sector absorbs and spends in the form of charitable giving and governmental grants and contracts—which is a significant though not huge portion of the nation’s Gross Domestic Product. It’s also that the nonprofit sector provides employment to millions of people. When debates occur within the Washington beltway over whether employers can afford to provide health insurance or the best methods of generating jobs in the American economy, policy-makers might benefit from looking at the AHRQ data to better appreciate the nonprofit sector as a significant and resilient provider of jobs and incomes.

Clean Energy and Conservation the Silver Bullet the American Economy Needs

September 4, 2011 12 comments

Maggie Comstock
Associate, Policy
U.S. Green Building Council
Friday, September 2, 2011

One day the history books could say that the Obama Administration’s stimulus package of 2009 saved the nation from deep and irreparable financial collapse. But one thing we know right now is that the historic $90 billion investment in clean energy was a significant policy decision for unleashing critical market forces and helping ignite a nascent clean energy economy—a decision that continues to pay clear dividends.

Clean energy technology was identified by the Center for American Progress (CAP) as “one of the fastest-growing sectors of the global economy…projected to grow to $2.3 trillion by 2020.” For example, it is estimated that 827,000 clean energy jobs will have been saved or created nationwide by the fourth quarter of 2012 through the progressive provisions of the American Recovery and Reinvestment Act. Bracken Hendricks, author and senior fellow at CAP, called the green stimulus dollars the “the most important energy bill in American history.” And if we want to spur more new jobs that cannot be outsourced, we need even more innovative policy decisions that spur better clean energy market choices.

That is why clean energy and a more intelligent and resilient infrastructure to deliver that energy are also key components of CAP’s three step approach to further boost job creation: 1) Invest in national infrastructure through existing channels and the creation of an investment bank; 2) Stabilize the housing market through restructuring loans and automatic foreclosure mediation; and 3) Promote residential and commercial energy efficient retrofits.

Today, the Bureau of Labor Statistics reported that unemployment in the United States has remained unchanged at 9.1%, and that no new jobs have been added to the U.S. economy. Retrofitting our buildings may be the most obvious step forward when buildings consume 70% of all electricity and contribute to 40% of our national greenhouse gas emissions. McKinsey & Co showed that we could create nearly a million jobs by working to bring building energy retrofits to scale. With 25% unemployment in the construction sector, energy efficiency retrofits make our investment dollars go further by creating jobs, saving homeowners and building occupiers utility expenses and reducing our nation’s impact on the environment—called a triple win by some lawmakers.

In a few days the President will address the nation on the current state of unemployment and the economy. We anticipate and hope that his speech will include provisions for ramping up investments in clean energy and conservation. The clean energy economy could be the silver bullet needed to ensure America’s sustainable future—not exclusively in the environmental sense, but as a self-perpetuating and long-term economic solution.

The Zero Economy

September 3, 2011 2 comments
Robert Reich
Chancellor’s Professor of Public Policy at the University of California at Berkeley.
Posted Friday Aug 2, 2011

The Bureau of Labor Statistics reports today no jobs were created in August. Zero. Nada.

Well, not quite. The strike at Verizon reduced the labor force by 45,000. Minnesota government employees returned to work, adding 22,000. So in reality, America added 23,000 jobs. Almost zero.

In reality, worse than zero. We need 125,000 a month merely to keep up with population growth. So the hole continues to deepen.

Since this Depression began at the end of 2007, America’s potential labor force – working-age people who want jobs – has grown by over 7 million. But since then the number of Americans with jobs has shrunk by more than 300,000.

If this doesn’t prompt President Obama to unveil a bold jobs plan next Thursday, I don’t know what will.

The problem is on the demand side. Consumers (whose spending is 70 percent of the economy) can’t boost the economy on their own. They’re still too burdened by debt, especially on homes that are worth less than their mortgages. Their jobs are disappearinig, their pay is dropping, their medical bills are soaring.

And businesses won’t hire without more sales.

So we’re in a vicous cycle.

Republicans continue to claim businesses aren’t hiring because they’re uncertain about regulatory costs. Or they can’t find the skilled workers they need.

Baloney. If these were the reasons businesses weren’t hiring – and demand were growing – you’d expect companies to make more use of their current employees. The length of the average workweek would be increasing.

But the length of the average workweek has been dropping. In August it declined for the third month in a row, to 34.2 hours. That’s back to where it was at the start of the year – barely longer than what it was at its shortest point two years ago (33.7 hours in June 2009).

It’s demand, stupid.

So what does a sane nation do when the consumers and businesses can’t boost the economy on their own?

Government becomes the purchaser of last resort. It hires directly (a new WPA and Civilian Conservation Corps, for example). It helps states and locales, so they don’t have to continue to slash payrolls and public services. (The help could be structured as a loan, to be repaid when unemployment drops to, say, 6 percent.)

And it hires indirectly — contracting with companies to rebuild our crumbling infrastructure, including school buildings, to take another example.

Not only does this create jobs but also puts money in the hands of all the people who get the jobs, so they can turn around and buy the goods and services they need – generating more jobs.

Get it? Not exactly rocket science.

So why don’t Republicans get it? Either they’re knaves – they want the economy to stay awful through next Election Day so Obama gets the boot. Or they’re fools – they’ve bought the lie that reducing the deficit now creates more jobs.

Every time you hear anyone say we’re “broke” or “can’t afford to spend more,” tell them we’ll be in worse shape if we don’t. If the economy remains dead in the water, the ratio of public debt to GDP balloons.

And remind them that the federal government can now borrow at fire-sale rates. Interest on the ten-year Treasury bill is 2 percent.

Do you hear me, Mr. President? Please — be bold next week. And if, as expected, Republicans refuse to go along, take it to the people. Mobilize the public. Use the bully pulpit. That’s what you have it for.

One more thing, Mr. President. You also have to tackle inequality. When so much income and wealth continues to flow to the very top, America’s vast middle class still won’t have enough purchasing power to boost the economy. Priming the pump is necessary but won’t be sufficient without enough water in the well.

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