Yes, that is what he told readers in his column. In a column arguing for the need for more immigrants he referred to a figure from the National Association of Home Builders, that there are 200,000 unfilled construction jobs in the United States. Brooks then tells readers:
“Employers have apparently decided raising wages won’t work.
“Adjusting for inflation, wages are roughly where they were [before the crash], at about $27 an hour on average in a place like Colorado. Instead, employers have had to cut back on output. One builder told Reuters that he could take on 10 percent more projects per year if he could find the crews.”
“Raising wages won’t work.” That’s interesting. So if builders paid construction workers the same hourly pay rate as David Brooks, it wouldn’t attract more people to the job? It’s good that we have David Brooks to tell us this, because otherwise most of us wouldn’t know it.
I’m going to take a pass on the larger issue of immigration here (except for the usual call for more immigrant doctors and other high end professionals), but this is just garbage. If builders paid higher wages they would get more people willing to work as construction workers. Can’t Brooks make a more serious argument?
Yes, that is what he told readers in his column. In a column arguing for the need for more immigrants he referred to a figure from the National Association of Home Builders, that there are 200,000 unfilled construction jobs in the United States. Brooks then tells readers:
“Employers have apparently decided raising wages won’t work.
“Adjusting for inflation, wages are roughly where they were [before the crash], at about $27 an hour on average in a place like Colorado. Instead, employers have had to cut back on output. One builder told Reuters that he could take on 10 percent more projects per year if he could find the crews.”
“Raising wages won’t work.” That’s interesting. So if builders paid construction workers the same hourly pay rate as David Brooks, it wouldn’t attract more people to the job? It’s good that we have David Brooks to tell us this, because otherwise most of us wouldn’t know it.
I’m going to take a pass on the larger issue of immigration here (except for the usual call for more immigrant doctors and other high end professionals), but this is just garbage. If builders paid higher wages they would get more people willing to work as construction workers. Can’t Brooks make a more serious argument?
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The Associated Press ran a story, picked up by the PBS Newshour, that told readers:
“…factory jobs exist, CEOs tell Trump, skills don’t.”
The piece presents complaints from a number of CEOs of manufacturing companies that they can’t find the workers with the necessary skills. The piece does note the argument that the way to get more skilled workers is to offer higher pay, but then reports:
“…some data supports the CEOs’ concerns about the shortage of qualified applicants. Government figures show there are 324,000 open factory jobs nationwide — triple the number in 2009, during the depths of the recession.”
The comparison to 2009 is not really indicative of anything, since this was a time when the economy was facing the worst downturn since the Great Depression and companies were rapidly shedding workers. A more serious comparison would be to 2007, before the recession. The job opening rate in manufacturing for the last three months has averaged 2.5 percent, roughly the same as in the first six months of 2007, which was still a period in which the sector was losing jobs.
According to the Bureau of Labor Statistics, average hourly earnings of production and non-supervisory workers in manufacturing has risen by 2.4 percent over the last year. This means that manufacturing firms are not acting in a way consistent with employers having trouble finding workers. This suggests that if there is a skills shortage it is among CEOs who don’t understand that the price of an item in short supply, in this case qualified manufacturing workers, is supposed to increase.
The Associated Press ran a story, picked up by the PBS Newshour, that told readers:
“…factory jobs exist, CEOs tell Trump, skills don’t.”
The piece presents complaints from a number of CEOs of manufacturing companies that they can’t find the workers with the necessary skills. The piece does note the argument that the way to get more skilled workers is to offer higher pay, but then reports:
“…some data supports the CEOs’ concerns about the shortage of qualified applicants. Government figures show there are 324,000 open factory jobs nationwide — triple the number in 2009, during the depths of the recession.”
The comparison to 2009 is not really indicative of anything, since this was a time when the economy was facing the worst downturn since the Great Depression and companies were rapidly shedding workers. A more serious comparison would be to 2007, before the recession. The job opening rate in manufacturing for the last three months has averaged 2.5 percent, roughly the same as in the first six months of 2007, which was still a period in which the sector was losing jobs.
According to the Bureau of Labor Statistics, average hourly earnings of production and non-supervisory workers in manufacturing has risen by 2.4 percent over the last year. This means that manufacturing firms are not acting in a way consistent with employers having trouble finding workers. This suggests that if there is a skills shortage it is among CEOs who don’t understand that the price of an item in short supply, in this case qualified manufacturing workers, is supposed to increase.
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The concept of “free trade” has acquired near religious status among policy types. All serious people are supposed to swear their allegiance to it and deride anyone who questions its universal benefits.
Unfortunately, almost none of the people who pronounce themselves devotees of free trade actually do consistently advocate free trade policies. Rather they push selective protectionist policies, that have the effect of redistributing income to people like them, and call them “free trade.”
The NYT gave us yet one more example of a selective protectionist masquerading as a free trader in a column this morning by Jochen Bittner, a political editor for Die Zeit. Bittner contrasts the free trading open immigration types, who calls Lennonists (in the spirit of John Lennon’s song, Imagine) and the Bannonists who are nationalists followers of Steve Bannon or his foreign equivalents.
The problem with this easy division is that the “free traders” wholeheartedly support very costly protectionist measures in the form of ever stronger and longer patent and copyright protections. These protections redistribute several hundred billions dollars annually (at least 3 percent of GDP in the United States) from the bulk of the population to the small group of people who are in a position to benefit from these government granted monopolies.
In the United States, the “free traders” in most cases also support the protectionist restrictions which severely limit the ability of foreign trained doctors and dentists and other high-end professionals from working in the United States. As a result of these protectionist measures doctors in the United States earn twice as much as their counterparts in other wealthy countries, costing us around $100 billion a year in higher health care costs.
The “free traders” in almost all cases supported the government bailouts of the financial industry which saved the banks from being held responsible for their own greed and incompetence. As a result of these bailouts a seriously bloated financial industry was protected from the market and was allowed to continue to siphon hundreds of billions of dollars annually out of the rest of the economy.
It is undoubtedly convenient for the self-professed free traders to ignore all the forms of protectionism that benefit them to the detriment of the rest of the society (including most of the “Bannonists”), but it is not accurate and it is not honest.
Yes, all of this is covered in my (free) book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.
The concept of “free trade” has acquired near religious status among policy types. All serious people are supposed to swear their allegiance to it and deride anyone who questions its universal benefits.
Unfortunately, almost none of the people who pronounce themselves devotees of free trade actually do consistently advocate free trade policies. Rather they push selective protectionist policies, that have the effect of redistributing income to people like them, and call them “free trade.”
The NYT gave us yet one more example of a selective protectionist masquerading as a free trader in a column this morning by Jochen Bittner, a political editor for Die Zeit. Bittner contrasts the free trading open immigration types, who calls Lennonists (in the spirit of John Lennon’s song, Imagine) and the Bannonists who are nationalists followers of Steve Bannon or his foreign equivalents.
The problem with this easy division is that the “free traders” wholeheartedly support very costly protectionist measures in the form of ever stronger and longer patent and copyright protections. These protections redistribute several hundred billions dollars annually (at least 3 percent of GDP in the United States) from the bulk of the population to the small group of people who are in a position to benefit from these government granted monopolies.
In the United States, the “free traders” in most cases also support the protectionist restrictions which severely limit the ability of foreign trained doctors and dentists and other high-end professionals from working in the United States. As a result of these protectionist measures doctors in the United States earn twice as much as their counterparts in other wealthy countries, costing us around $100 billion a year in higher health care costs.
The “free traders” in almost all cases supported the government bailouts of the financial industry which saved the banks from being held responsible for their own greed and incompetence. As a result of these bailouts a seriously bloated financial industry was protected from the market and was allowed to continue to siphon hundreds of billions of dollars annually out of the rest of the economy.
It is undoubtedly convenient for the self-professed free traders to ignore all the forms of protectionism that benefit them to the detriment of the rest of the society (including most of the “Bannonists”), but it is not accurate and it is not honest.
Yes, all of this is covered in my (free) book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.
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Yes, as Un-American as that may sound, Bill Gates is proposing a tax that would undermine Donald Trump’s efforts to speed the rate of economic growth. Gates wants to tax productivity growth (a.k.a. “automation”) slowing down the rate at which the economy becomes more efficient.
This might seem a bizarre policy proposal at a time when productivity growth has been at record lows, averaging less than 1.0 percent annually for the last decade. This compares to rates of close to 3.0 percent annually from 1947 to 1973 and again from 1995 to 2005.
It is not clear if Gates has any understanding of economic data, but since the election of Donald Trump there has been a major effort to deny the fact that the trade deficit has been responsible for the loss of manufacturing jobs and to instead blame productivity growth. This is in spite of the fact that productivity growth has slowed sharply in recent years and that the plunge in manufacturing jobs followed closely on the explosion of the trade deficit, beginning in 1997.
Manufacturing Employment
Source: Bureau of Labor Statistics.
Anyhow, as Paul Krugman pointed out in his column today, if Trump is to have any hope of achieving his growth target, he will need a sharp uptick in the rate of productivity growth from what we have been seeing. Bill Gates is apparently pushing in the opposite direction.
Yes, as Un-American as that may sound, Bill Gates is proposing a tax that would undermine Donald Trump’s efforts to speed the rate of economic growth. Gates wants to tax productivity growth (a.k.a. “automation”) slowing down the rate at which the economy becomes more efficient.
This might seem a bizarre policy proposal at a time when productivity growth has been at record lows, averaging less than 1.0 percent annually for the last decade. This compares to rates of close to 3.0 percent annually from 1947 to 1973 and again from 1995 to 2005.
It is not clear if Gates has any understanding of economic data, but since the election of Donald Trump there has been a major effort to deny the fact that the trade deficit has been responsible for the loss of manufacturing jobs and to instead blame productivity growth. This is in spite of the fact that productivity growth has slowed sharply in recent years and that the plunge in manufacturing jobs followed closely on the explosion of the trade deficit, beginning in 1997.
Manufacturing Employment
Source: Bureau of Labor Statistics.
Anyhow, as Paul Krugman pointed out in his column today, if Trump is to have any hope of achieving his growth target, he will need a sharp uptick in the rate of productivity growth from what we have been seeing. Bill Gates is apparently pushing in the opposite direction.
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He uses his column today to tell us that “this century is broken.” Much of his tale involves the old problem with men story.
“For every one American man aged 25 to 55 looking for work, there are three who have dropped out of the labor force. If Americans were working at the same rates they were when this century started, over 10 million more people would have jobs. As Eberstadt puts it, ‘The plain fact is that 21st-century America has witnessed a dreadful collapse of work.’
“That means there’s an army of Americans semi-attached to their communities, who struggle to contribute, to realize their capacities and find their dignity. According to Bureau of Labor Statistics time-use studies, these labor force dropouts spend on average 2,000 hours a year watching some screen. That’s about the number of hours that usually go to a full-time job.”
While it apparently makes folks like Brooks feel good to tell these sorts of morality tales about the failings of men today, it actually has nothing to do with reality. While fewer prime-age men (ages 25–54) men are working today than in 2000, the share of prime-age women has fallen by almost the same amount. Furthermore, the percent of prime-age women working had been rising prior to 2000 and was projected to continue to rise by most economists.
The fact that women’s employment rates have fallen as well is important because it indicates that, contrary to what Brooks tells us, the problem is not a gender specific moral failing. The problem is most likely a good old-fashioned shortfall in demand in the economy.
This matters a great deal because we actually do know how to create more demand. It’s called “spending money.” This means that if the government spent more money on things like education, health care, and infrastructure, we could get more of these prime-age men and women employed. There are other ways to create demand. For example, if we got our trade deficit down by reducing the value of the dollar it would also generate more demand and employment.
If we are troubled by the large number of prime-age workers who are not employed there are policies that we could pursue that would address the problem. In other words, we should be more worried about the moral failings of people in a position to make economic policy than the moral failings of the folks not working.
He uses his column today to tell us that “this century is broken.” Much of his tale involves the old problem with men story.
“For every one American man aged 25 to 55 looking for work, there are three who have dropped out of the labor force. If Americans were working at the same rates they were when this century started, over 10 million more people would have jobs. As Eberstadt puts it, ‘The plain fact is that 21st-century America has witnessed a dreadful collapse of work.’
“That means there’s an army of Americans semi-attached to their communities, who struggle to contribute, to realize their capacities and find their dignity. According to Bureau of Labor Statistics time-use studies, these labor force dropouts spend on average 2,000 hours a year watching some screen. That’s about the number of hours that usually go to a full-time job.”
While it apparently makes folks like Brooks feel good to tell these sorts of morality tales about the failings of men today, it actually has nothing to do with reality. While fewer prime-age men (ages 25–54) men are working today than in 2000, the share of prime-age women has fallen by almost the same amount. Furthermore, the percent of prime-age women working had been rising prior to 2000 and was projected to continue to rise by most economists.
The fact that women’s employment rates have fallen as well is important because it indicates that, contrary to what Brooks tells us, the problem is not a gender specific moral failing. The problem is most likely a good old-fashioned shortfall in demand in the economy.
This matters a great deal because we actually do know how to create more demand. It’s called “spending money.” This means that if the government spent more money on things like education, health care, and infrastructure, we could get more of these prime-age men and women employed. There are other ways to create demand. For example, if we got our trade deficit down by reducing the value of the dollar it would also generate more demand and employment.
If we are troubled by the large number of prime-age workers who are not employed there are policies that we could pursue that would address the problem. In other words, we should be more worried about the moral failings of people in a position to make economic policy than the moral failings of the folks not working.
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We all know about the need to make trade-offs in budgeting, most of us have to do it on a regular basis in our daily lives. But what about the trade-offs for the federal government? Arguably there is no need for trade-offs right now. Both interest rates and inflation are at low levels, so it is not obvious that there is any problem with larger deficits, but folks in both parties are fixated on the need to run low budget deficits or even to have balanced budgets, so these politics dictate the need for trade-offs.
In this context, it is worth making some comparisons as the Republicans seem prepared to slash a number of relatively low cost programs that have received considerable visibility. At the top of this list would be federal funding for Legal Services, a program that has provided legal assistance to low income people for decades. This program provides lawyers for people facing foreclosures or evictions, for people who need help with a divorce or will, or for many other situations that would typically require the assistance of a lawyer. The appropriation last year came to $375 million, or 0.011 percent of the federal budget.
Another item on the chopping block is the Corporation for Public Broadcasting (CPB). CPB helps fund National Public Radio as well as public television stations around the country. It got $445 million from the federal government last year or 0.013 percent of total spending.
Then there is the National Endowment of the Arts (NEA). The NEA supports a variety of education and cultural events around the country. It got just under $150 million last year or 0.004 percent of the total budget. There are a number of other small programs also on the chopping block, including AmeriCorps and the White House Office of National Drug Control Policy.
It is interesting to compare the spending of these programs that face cuts or may be eliminated altogether with spending of security for President Trump and his family. In the past, presidents have generally tried to limit their own travel and that of their families so as not to create large security bills for the country. Apparently, this is not a concern of President Trump.
Unlike past presidents, he has requested Secret Service protection for his adult children. Given their travel habits running President Trump’s business, this is likely to be a considerable expense for the government. For example, the Washington Post reported that one trip to Uruguay by Eric Trump to open a hotel there cost the government almost $100,000 in security expenses. In addition, Trump’s decision to take his weekends at his golf club in Florida, rather the White House or Camp David, costs us more than $3 million a shot. And the decision by Melania Trump to stay in New York with her son is apparently costing taxpayers close to $2 million a day.
People may want to ask where they get the most money for their tax dollars.
We all know about the need to make trade-offs in budgeting, most of us have to do it on a regular basis in our daily lives. But what about the trade-offs for the federal government? Arguably there is no need for trade-offs right now. Both interest rates and inflation are at low levels, so it is not obvious that there is any problem with larger deficits, but folks in both parties are fixated on the need to run low budget deficits or even to have balanced budgets, so these politics dictate the need for trade-offs.
In this context, it is worth making some comparisons as the Republicans seem prepared to slash a number of relatively low cost programs that have received considerable visibility. At the top of this list would be federal funding for Legal Services, a program that has provided legal assistance to low income people for decades. This program provides lawyers for people facing foreclosures or evictions, for people who need help with a divorce or will, or for many other situations that would typically require the assistance of a lawyer. The appropriation last year came to $375 million, or 0.011 percent of the federal budget.
Another item on the chopping block is the Corporation for Public Broadcasting (CPB). CPB helps fund National Public Radio as well as public television stations around the country. It got $445 million from the federal government last year or 0.013 percent of total spending.
Then there is the National Endowment of the Arts (NEA). The NEA supports a variety of education and cultural events around the country. It got just under $150 million last year or 0.004 percent of the total budget. There are a number of other small programs also on the chopping block, including AmeriCorps and the White House Office of National Drug Control Policy.
It is interesting to compare the spending of these programs that face cuts or may be eliminated altogether with spending of security for President Trump and his family. In the past, presidents have generally tried to limit their own travel and that of their families so as not to create large security bills for the country. Apparently, this is not a concern of President Trump.
Unlike past presidents, he has requested Secret Service protection for his adult children. Given their travel habits running President Trump’s business, this is likely to be a considerable expense for the government. For example, the Washington Post reported that one trip to Uruguay by Eric Trump to open a hotel there cost the government almost $100,000 in security expenses. In addition, Trump’s decision to take his weekends at his golf club in Florida, rather the White House or Camp David, costs us more than $3 million a shot. And the decision by Melania Trump to stay in New York with her son is apparently costing taxpayers close to $2 million a day.
People may want to ask where they get the most money for their tax dollars.
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