Pam Brown's Blog l emission - control. net

The Fiction of Unemployment Numbers

Immediately after the jobs report came out yesterday saying that unemployment had dipped to 9.7% from 10%, the administration took the opportunity to state, albeit cautiously, that employment, and the economy in general, are improving.  But if you look at the numbers carefully, you find out that there are multiple flaws with this analysis.  First, the change was due to an adjustment to the total number of jobs - so there was no actual change – just a change to the figures.  In other words, things were .3% less bad than initially thought.  So, the same number of people were unemployed, the numbers just better reflect that group.

But, an even bigger flaw in these numbers is how irrelevant they are now that there is a middle category between employed and unemployed:  namely the self-employed.  Because many turn to self-employment when their actual employment options have run out, and because self-employed people are lumped in with the employed, these numbers quickly become a mish-mosh.  Those counted as employed range from the traditional full time worker with benefits to self-employed workers selling products and services from home, but not making a sustainable living off of their “businesses.” 

Finally, last night on The Ed Show, an economist admitted this fact.  Peter Morici, an economics Professor at The University of Maryland, pointed out that employment statistics change more based on the number of people looking for work than based on the actual quantity of people working.  So, if you worked one hour last month, you’re counted as employed.  Anyone can state that they are self-employed, and after unemployment benefits have run out, there’s no reason to continue to categorize yourself as unemployed.

And there’s another problem.  Many people, who were categorized as self-employed before the crisis, were commission only salespeople.  The entire economy slid, and obviously if larger businesses have been struggling to sell products and services, the little guy is even worse off.  It’s safe to say that many self-employed people, for example real estate agents, have become unemployed in the sense that they can no longer make a living within their industries, yet they may continue to trudge along because they cannot collect unemployment benefits anyway.  Therefore, they are completely ignored in labor statistics.

Employment has changed radically over recent years due to the growing population of freelancers and so-called self-employed workers.  This growing category of workers receives no access to benefits, such as health insurance and retirement savings plans.  They are completely ignored by politicians, because they are not counted.  While it was exciting to hear an economist speaking frankly about this reality on national television, until the self-employed are accounted for in labor statistics, the numbers will remain a convenient fiction.

I’ve begun exploring how self-employed workers fit into the new economy in my essay, Self-Employment in the Age of Knowledge – it’s a work-in-progress, but you’re free to take a look.

Download Self-Employment in the Age of Knowledge.pdf

Links:

• Labor Market Shows Signs of Reawakening in New Data

• Unemployment drops to 9.7% despite more job losses

• Unemployment Rate Drop Is Good News But It's Likely To Rise Again

• Labor Market Shows Signs of Rebirth in New Data

• After Escaping Jobless Rolls, Trauma May Linger 

• Groundhog's Day Budgeting: Again, Obama Underfunds Job Growth

Fighting to Restore American Democracy

The potential for an American form of fascism to develop due to corporate infiltration of our political process via the Congress is growing day-by-day.  The Supreme ruling in Citizens United v. FEC, allowing unlimited corporate spending on political campaigns, dealt a serious blow to the principles campaign finance reform supporters have been pushing for years.  Have we crossed the line?  Is there anyway to return democracy to the hands of the People? 

 

Lawrence Lessig, the renown media and legal scholar, has written an article for this week's The Nation entitled How to Get Our Democracy Back, and with it has launched a movement toward the one option the People are left with:  a constitutional convention.  In his thinking Congress is too corrupt to pass an amendment neutralizing the Supreme court ruling.  But, if two-thirds of states apply for a constitutional convention, democracy would at least have some hope of dodging the bullet of corporate control.

I encourage you to read the article, then sign the petition.

How to Get Our Democracy Back

Change Congress Petition

fixcongressfirst.org

Senator Franken Rips Into Comcast CEO Brian Roberts

Josh Silver of Free Press:  "Not everyone is swallowing the snake oil Comcast is peddling to grease its takeover of NBC. None shone brighter yesterday than Sen. Al Franken (D-Minn.), who aggressively interrogated Comcast CEO Brian Roberts and NBC Universal President Jeff Zucker -- all but accusing them of lying to his face."

Senator Franken Rips Into Comcast CEO Brian Roberts

I would also add to Senator Franken's comments that not only did they falsely assert that FCC rules prevent a conflict of interest between content and carriage, but also that Comcast is in the process of appealing previous net neutrality rulings against them by asserting that the FCC has no jurisdiction.  So, they are simultaneously saying that the FCC rules prevent a conflict, while claiming that the FCC has no jurisdiction.

Let’s Not Pivot to Jobs

There’s been a lot of talk over the past couple of weeks - the weeks after the loss of the Democratic “super majority” and with it the likelihood of any meaningful health insurance reform - that Obama’s best political move now is to “pivot” to jobs.  Why so-called progressives would encourage him to do this is beyond me.  In fact, to me it sounds like a Republican wet dream - first, the failure of health insurance reform, and then the failure to bring back jobs, a recipe for a disastrous presidency for sure. 

Liberal economists (especially Paul Krugman) have felt that the stimulus package wasn’t big enough to promote job growth, even if it was big enough to slow job loss.  But perhaps, even a bigger stimulus really couldn’t have promoted job growth in the same way that strategy may have worked in past economies.  In this meltdown whole industries collapsed, leaving millions of workers not just unemployed, but without an employable skill set.  Many disenfranchised workers are mid career, stuck with years of specific industry experience that’s now leaves them both overqualified and under-qualified at the same time.  Many others are entry level, living at home, working in internships and McJobs, unable to obtain career-building work in the first place. 

Economists tend to focus on data, and sometimes fail to fully appreciate the real world, day-to-day, lived experience beyond the numbers.  What jobs would have been created by a bigger stimulus?  I have a friend who worked in the publishing industry; I don’t think her job would have been saved.  The whole industry is disappearing before our very eyes.  She considers herself having “taken early retirement.”  I have many friends who are self-employed.  At what point is there so little business that you go from self-employed to unemployed?  And what’s the lived difference between the two categories, if you have no other skills to trade on anyway?  And eventually almost everyone who can’t find an actual job, gets tired of saying that they’re unemployed, and becomes self-employed.  That’s exactly what my friend who works in publishing did.  This middle ground between unemployed and employed skews the numbers, rendering them an inaccurate measure of what’s happening on the ground.  So much of the job loss has been due to industry transformation that I suspect that middle class jobs would not have been very impacted by more stimulus, even if the numbers camouflage that lived experience.  And this is what Obama promised he was going to turn around - we work harder, we get paid less, we’re tired, fatigued, exhausted and broke.

The Growing Underclass: Jobs Gone Forever

In The Growing Underclass:  Jobs Gone Forever, nytimes.com Economics Editor, Catherine Rampell, points out that a major obstacle for job growth is that jobs in certain industries have completely disappeared.  In addition, because of the housing market decline, many job seekers will find it impossible to move for better work.  While I agree that those factors are significant, it concerns me that technological change is rarely mentioned as a critical factor in labor market analysis.  Further many of the reader comments pointed the finger at illegal immigration.  Several readers even commented that the problem is foreign competition - more "efficient" factories abroad.  Perhaps they're not aware of many of the things Naomi Klein discusses in No Logo - the corporate tax holidays and cruelly exploitative conditions of the workers.  Another comment was from a reader in Berlin, who thought it was crazy that the American government wouldn't take on the retraining of its citizens.  All in all, my feeling is that until we really begin to incorporate the issues related to changing technology and resultant changes to our political economy into our dialogue, we will not be able to find solutions that address the true underlying problems.  In other words, we'll just be chasing our tails.

I posted the following comment to the Economix Blog:

"This is likely to be an extremely unpopular comment, but I feel it needs to be said.  Either we turn our backs on the unfortunate who have permanently lost their livelihoods and develop something in the neighborhood of 40% poverty rates (like many of the countries that have instituted similar neoliberal economic policies - see Naomi Klein's The Shock Doctrine) or we will have no choice but to develop social programs that may need to include "basic income" or similar ideas (to increase consumption). The global trend is toward reduction of work opportunities, as productivity has increased exponentially due to changing technology. From an historical perspective, each time human beings have undergone a major technological revolution, a new political economy has formed. (Consider the printing press and capitalism...) It concerns me that technological change as a critical factor in labor markets is not being discussed in the media. It seems to me that many of the ideas as to how to impact unemployment rest on incorrect assumptions that weigh past performance too heavily in a fundamentally changed economy."