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EPI News: Today’s labor market – Mixed signals
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.”
Income, Health, and Payday Deaths
Posted on March 1, 2012
It’s hardly news that poorer people have worse health on average – but teasing apart the link of income and health is harder. The income-health gradient could be because people lose income when they have health problems, or it could be due to common causes (e.g. education) rather than income itself. In fact, the relationship is more complex than you might guess; and having recently stumbled over three wonderful studies that help unpick this, I thought I’d share them with you and see what you thought.
Short-run effects: payday deaths
Probably my favourite of these studies is a lovely paper in press by Evans and Moore, using US data. Their reasoning is that if we want to know the SHORT-RUN impact of income and health, we can look at the first day of the month when most people get paid or receive welfare payments, and see if people are more or less likely to die on payday. The results are staggering.
In the chart below, you can see how murder rates vary across the month. The relate daily mortality risk is about 10% higher on payday than it is for the rest of the month, and a little bit higher for 4 days after payday.
What’s particularly striking is that this is only found for causes of death that are related to drink in the short-term. So for example, if we look at leukemia deaths in the chart below, we see absolutely no change over the month at all.
In other words, people drink more on payday, and this raises the chances of them dying. Otherwise there’s no short-run impact of payday on health.
Long-run effects: lottery winnings
Does this mean that higher incomes are actually bad for health? Well, not so fast. The deaths-by-payday charts are good for showing the very short-run impacts of income on health, but they don’t show what happens to a change in permanent income, nor do they show the longer-run impacts. The best way of getting at the causal impact of income here is to look at lottery winnings, which (unlike most sources of income) are completely random within any particular lottery.
In the UK, a paper by Apouey & Clark 2009 looks at the impact of lottery winnings on health. Like Evans and Moore, they find that this source of extra income leads to more smoking and drinking (perhaps unsurprisingly, if you think about how you personally would spend a lottery winning (or me anyway), and also the fact that people who play the lottery are going to have a different attitude to risk than other people).
Yet we also see noticeable improvements in mental health among people who win on the lottery – suggesting that financial problems genuinely cause mental health problems.
The net effect of these two patterns in Apouey & Clark is that there’s no effect of lottery winnings on self-reported general health – but while self-reported health can be useful, it also has lots of problems as a measure. A more objective measure of general health is mortality, and for this we have to turn to some Swedish data analysed by Lindahl 2005 (free version here). Lindahl finds that about £1,000 worth of lottery winnings reduce the probability of dying by 2-3% over the next five years. With this design, it’s pretty unarguable that this shows a genuine causal impact of income.
Back full circle
So this takes us right back to where we started – poor people have worse health, and this is (at least partly) because lower incomes genuinely cause worse health. But through these three very nicely-designed studies, we get a glimpse into the complexity of this pattern across different aspects of health over different time periods – and it’s this that I thought made them particularly worth sharing.
States with highest foreclosure rates shift
Posted 02/17/2012
December, 2011 unemployment: 9.9% (6th highest)
Home price change (2006Q3-2011Q3): -49% (3rd largest decline)
Processing period: 135 days
2. New Jersey—
2011 foreclosure rate: 6.4%
December, 2011 unemployment: 9% (13th highest)
Home price change (2006Q3-2011Q3): -22.6% (14th largest decline)
Processing period: 270 days
3. Illinois—
2011 foreclosure rate: 5.4%
December, 2011 unemployment: 9.8% (7th highest)
Home price change (2006Q3-2011Q3): -29% (7th largest decline)
Processing period: 300 days
4. Nevada—
2011 foreclosure rate: 5.3%
December, 2011 unemployment: 12.6% (the highest)
Home price change (2006Q3-2011Q3): -59.3% (the largest decline)
Processing period: 116 days
5. New York—
2011 foreclosure rate: 4.6%
December, 2011 unemployment: 8% (23rd highest)
Home price change (2006Q3-2011Q3): -13.6% (23rd largest decline)
Processing period: 445 days
Related articles
- Foreclosure activity edges higher in January (usatoday.com)
- Foreclosures and a Small Sign of Housing Recovery (247wallst.com)
- Foreclosures climbed in January (money.cnn.com)
- Chicago Foreclosure Activity in 2011 Indicates Hot Foreclosure Market in 2012 (prweb.com)
CoreScore: A New Credit Report Opens Door For More Profiting Off The Poor
Thanks to a new kind of credit score, more borrowed money may end up in the hands of the increasing number of Americans who are sliding down the economic ladder.
The new CoreScore looks at financial records such as credit card borrowing, bank transactions and mortgage information, much like a traditional FICO credit score. The new rating also examines the kinds of transactions likely to occur at the lower end of the income scale. These include car and rental payments and payday loans. The CoreScore even examines the record for missed child support payments. If something can be financed, it seems, it can be linked to this new credit score.
CoreLogic, a financial data collector, made theCoreScore credit report available to lenders last week. The company said the new score creates an opportunity for borrowers and lenders alike, making credit available to those who have traditionally been shut out. However, consumer advocates are concerned that using a wider range of nontraditional information opens the door to justify even higher rates for down-and-out borrowers.
By including additional information like payday lending, which is notorious for high fees and interest rates, the financial picture of a potential borrower or job applicant is worsened, not improved, say consumer advocates. That could potentially lead to higher rates on everything from car insurance to borrowing.
“The companies don’t care if it’s accurate, or up to date, or what the consequences are,” said Marc Rotenberg, executive director at the Electronic Privacy Information Center, a public interest research center.
CoreLogic collects data from nearly 700 million residential property transactions and 50 million courthouse records. “We have resources in courthouses everyday,” said Debra Rothrock, vice president and product line management for CoreLogic. “Once a doc has been recorded at courthouse, it’s 23 days on average before data is updated in our system.”
From all this information, the company plans to boil down a consumer’s financial life into one number that can be used to supplement a traditional credit score. Rothrock said that the new score will also include the existing FICO score so lenders can see which direction a credit score is trending.
CoreScore supplements traditional credit reports from the three major credit reporting companies, the company said. Lenders of all stripes, including for mortgages, cars and credit cards can buy the new reports, which are scheduled to debut publicly in March. Currently one mortgage lender, which CoreLogic would not name, is using the CoreScore for its credit evaluations and several top lenders, including major banks, are planning to test the score soon, Rothrock said.
At least 100 million Americans will have a new CoreScore report, says CoreLogic, and that includes both people who have traditional credit scores, as well as those who have no prior credit history with TransUnion, Equifax or Experian. At least 200 million people have traditional reports, used to create a FICO score that lenders consult when deciding to approve a loan application or new financial account. Employers even use credit scores to evaluate job applicants.
For Americans who essentially live off the credit grid, either using cash or borrowing through informal channels, the new CoreScore could be a rude awakening. Rothrock did not identify how many of the 100 million people would be newly reported, but for those who have never had a report, the CoreScore may not be any help.
“Putting you in the system is not necessarily a benefit if you’re not going to get affordable credit,” said Chi Chi Wu, an attorney at the National Consumer Law Center, a public interest law group.
These new developments in credit reporting show lenders’ hunger to tap a deeper well of customers, who are outside of the traditional FICO box. “[The Core-Score] increases a lender’s understanding of a borrower’s financial obligations, assets, and history to identify previously hidden lending opportunities,” the company said in an email.
Falling wages, a dismal housing market and high unemployment have sent more Americans to the margins of borrowing in recent years. The problems is especially acute in American suburbs, where poverty is spreading. Meanwhile, alternative consumer financial tools have seen tremendous growth. For example, online payday lenders — high-interest short-term loans accessible only through the Internet — experienced 35 percent growth in revenue in 2010, according to a market report from Core Innovation Capital and Center for Financial Services Innovation, a think tank focused on financial service innovation for consumers who use banks minimally or not at all.
Rothrock said customers can request one free report each year through the company’s toll free number (877-532-8778); they also can dispute inaccuracies. But that raised additional concern from consumer attorney Wu, who said credit report disputes are hard to remedy.
“Your credit report has become your permanent financial record. A bad one is like a scarlet A for your economic life.”
Related articles
Pittsburgh’s October Employment: Best October Ever?
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.
Another Small Business Success Story
CIN ALERT
October 27, 2011
For many of us, the idea of starting a small business is a lifetime goal. In fact, the chance to be your own boss by providing a product or service ranks right up there with homeownership as one of the true American dreams. Despite tough economic times, the environment for starting a small business in many parts of the country is better than you might think, particularly in view of the various assistance programs made available for small business owners.
An enterprising business owner can be very successful, but it takes a lot of work. (And usually a lot more time and money than the business plan calls for.) Christy is an individual who knows the score. A Registered Yoga Teacher, she has been helping people achieve healthier lifestyles through massage therapy, group exercise, yoga, and Pilates for over 17 years. However, success had rendered a problem for her: the small storefront she used for years in a downtown Midwest city is just too small for her growing clientele. She faced a daunting task: Find a new location that would be a lot larger — yet also fit into her operating and personal budgets.
Driving to work one day through town, she noticed that ‘for sale’ signs had just been posted in front of a small one-story home nearby. All along Christy had been thinking about finding a larger storefront or office. Suddenly, the idea of conducting her instruction classes in a small home made sense. The next several weeks were consumed with meetings and communications with the local town officials, realtors and the chamber of commerce, to be sure that the zoning was correct and that she could have access to some small business assistance programs.
That was three months ago, and the bottom line today is: Christy has much more room in brand new surroundings, her customer base is growing by the week and it all fits into her budget very nicely. Things are looking up now for her.
All told, there are an estimated 15 to 17 million small businesses operating in America today. Small businesses are still the backbone of our communities – our Main Streets! — and are seen by many as the embodiment of the spirit of entrepreneurship.
Entrepreneurs are credited with creating the vast majority of new jobs and employing the majority of the nation’s workers. Granted, big businesses have emerged in fields where new technologies permitted economies of scale in the production and/or distribution of goods. Still, small businesses have remained vital to the nation’s economic development, and even more important as a component of American culture.
Even as our new 21st Century embraced what many Americans could view as superior efficiency and productivity (for both small and big businesses), Americans continued to revere small business owners like Christy for their self-reliance and independence and can-do spirit.
Small businesses have also been the primary way immigrant families coming to America have climbed the economic ladder and achieved the American dream. Many minority populations today — in urban, rural and suburban communities — have seized the small business pathway as a road to economic independence and building personal wealth.
CIN editors have always recognized the vital role played by small businesses, and we devote a large section of the CIN to them. This resource tool provides basic information – including the pros and the cons of small business ownership – basic start up information – government assistance programs on the Federal and State levels – grassroots programs provided by NCRC members – private sector assistance programs – franchising basics – banking connections assistance – available small business resources and the latest small business news and information. Here are some recent excerpts:
Keeping Your Small Business Ahead of the Curve
(Source: Small Business Trends) Ten key ways to keep a small business profitable and ahead of the competition are provided by Small Business Trends.
Small Business Owners Think Controlling Employee Expenses Will Lead To Cost Savings
(Source: Gaebler) A recent Citizens Financial Group/Mastercard study found 55 percent of small business owners believe better management of employee expenses would reduce costs and benefit their business, while 40 percent said more control over employee spending would give them a better peace of mind.
Wells Fargo Lends More Dollars to America’s Small Businesses Than Any Other Lender
(Source: Market Watch) 2011 US Small Business Administration data shows Wells Fargo & Company is the top lender in dollar volume, approving $1.2 billion in SBA loans to America’s small businesses for the 2011 federal fiscal year.
How Small Business Owners Were Hurt by the Fall in Home Prices
(Source: Forbes) Personal borrowing plays a key role in how many small business people finance their companies. When the housing crisis hit, small business owners that relied on home equity to finance their companies’ operations faced a credit squeeze. Thus, small businesses have access to about $25 billion less in credit than they would have had if the trend in home equity loans had continued in the direction it had been going in the first half of the 2000s.
Coffee Fix: Starbucks Pushes Small Business Loans
(Source: Business Week) New York Times columnist Joe Nocera lauds Starbucks for supporting community development financial institutions, the nonprofit lenders serving small businesses and affordable housing in low-income communities. The coffee chain is donating $5 million and encouraging customers to pitch in at the checkout line as well.
Geithner Defends Performance of Small Business Lending Fund
(Source: Business Week) Treasury Secretary Timothy F. Geithner says that the Small Business Lending Fund had been successful even if it was smaller than envisioned. The program closed Sept. 27, having distributed $4 billion of its $30 billion to 332 community banks nationwide.
Related articles
- PR Tips for Small Business (wordsforhirellc.com)
- Small Business Concepts That Work in Today’s Economy (cash-bandit.com)
HHS Data: Nonprofit Jobs Picture Mixed, Faster Job Growth than in For-Profit Sector, Small Nonprofits Hit Hard by Recession
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.
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.
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- 2009 Salary Survey of Nonprofits Reveals Promising Results (prweb.com)
- The American Jobs Act and Nonprofits (whitehouse.gov)
- Opportunity Knocks Releases 2009 Most Demanded Nonprofit Positions Listing (prweb.com)
- US economy adds 103,000 new jobs (bbc.co.uk)
- WOW: The Jobs Report Just Smashed Expectations In Canada (businessinsider.com)
- Though U.S. Unemployment Remains at 9.1 Percent, Idealist.org Says Nonprofits are Hiring (altlawyerjobs.com)
- Giving the US nonprofit sector a seat at the federal table (Rep. Betty McCollum) (thehill.com)
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The Zero Economy
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.
Related articles
- Net total jobs added in August: Zero (cbsnews.com)
- Jobs. Jobs. Jobs? (economistsview.typepad.com)
- US Bureau of Labor Statistics Report: Unemployment Rate unchanged – Sept 2 2011 (craigkamman.wordpress.com)
- Jobs Report Preview (economix.blogs.nytimes.com)
- Zero jobs growth but not necessarily recession (msnbc.msn.com)
- Economy Fails to Add Jobs (online.wsj.com)
- Bob Burnett: Labor Day: Dreaming of Joe Hill (huffingtonpost.com)
- Job Growth Dead in the Water (themoderatevoice.com)
- Jobs report is flat: No jobs added, unemployment steady at 9.1%, U6 at 16.2% (dailykos.com)
Building Community, One Household at a Time 