Denialism on Trade

December 29, 2016

29 Diciembre 2016

It is really amazing how the political and economic establishment types feel the need to deny that trade can actually have a negative impact on manufacturing jobs and total employment in their arguments against Donald Trump's trade policies. George Will gave us a great lesson in this silliness in his column today. Among the highlights were the claim that the loss of manufacturing jobs in the years after 2000 had little to do with the explosion of the trade deficit to almost 6 percent of GDP ($1.1 trillion in today's economy), but rather was almost all due to productivity. There are two points about this one that should immediately lead numerate types to tear up the column. First, we always have productivity growth, that was not something that just happened in the decade of the 2000s. In spite of productivity growth, manufacturing employment changed little from 1973 to 1997, when our trade deficit first began to explode following the East Asian financial crisis and the surge in the value of the dollar. While manufacturing was declining as a share of total employment, the level remained roughly even (with cyclical ups and downs) at 17.5 million. Employment then plunged to around 12 million as the trade deficit soared. Productivity growth was not the new part of the story, the trade deficit was. (Susan Houseman has done excellent research showing that manufacturing productivity growth in the 2000s was almost entirely in the information technology sector, which means it will not explain a loss of jobs in sectors like steel and furniture.) The other troubling item to numerate readers of Will's column is the implicit claim that if we had been producing an additional 6 percentage points of GDP worth of manufactured goods in the U.S. (e.g. another $1.1 trillion of manufacturing goods annually in today's economy) it wouldn't require any new workers. That sounds really cool. After all, it takes more than 12 million workers to produce the current $1.7 trillion in manufacturing output in the United States, so Will apparently thinks we can increase this output by 60 percent without hiring any new workers? That would be quite a surge in productivity growth, something our slow growing economy could badly use. Sounds like a great argument for protectionist measures if anyone really believed it.

Trump and Growth

By CEPRCEPR

December 28, 2016

28 Diciembre 2016

Neil Irwin used an Upshot column to address the issue of whether Donald Trump can acheive the 4.0 percent annual growth rate he has promised over the next decade. He argues that insofar as it is possible it is likely to involve two items that Trump voters may not like: job displacing innovations and increased immigration. While Irwin is right in identifying these two factors in promoting growth, there are few additional points to add to his discussion. In the case of job displacing innovation, Irwin points to the prospect of self-driving trucks destroying up to 1.7 million long-haul trucking jobs over the next decade. Irwin notes that these jobs pay an average of $42,500 a year to workers who generally do not have a college education. (Many truck drivers do earn considerably more than this amount, especially if they are in a union.) While the spread of self-driving trucks is likely to cost a substantial number of jobs, the savings should in principle allow other workers to be paid more. For example, the remaining workers involved in loading and offloading trucks (who might be supervising robots), should be a position to get higher pay. This was the pattern among longshoreman, as pay increased as fewer workers were needed for the job. If there are strong unions and/or a tight labor market, this can be the outcome. The tight labor market issue brings up a second point. The Federal Reserve Board has been actively working to limit the number of jobs. This was the purpose of its rate hike earlier this month. The point was to slow demand growth in the economy and thereby reduce the rate of job creation. The rationale for this move was the fear of inflation. Whether or not the Fed is right to fear inflation, there is a simple point here that everyone should understand. The Fed is deliberately acting to limit the number of jobs in the economy. It is more than a bit bizarre that we have people worried that automation will destroy large numbers of jobs who are fine with the Fed raising interest rates to destroy jobs. If we think there are too few jobs in the economy, then we should be very upset that the Fed, an arm of the government, is trying to keep people from getting jobs.

• Affordable Care Act

Can We Kill the "Young Invincibles" Once and For All?

By CEPRCEPR

December 24, 2016

24 Diciembre 2016

Don't worry, I'm not advocating mass murder; I want to put to death a silly myth about Obamacare that keeps getting spread by people who should know better. The basic story is that Obamacare is dependent on getting large numbers of young and healthy people into the system. The premiums these people pay will help to cover the costs incurred by older and less healthy people. The latest repetition of this myth appears in a NYT editorial urging Republicans not to destroy the Affordable Care Act (ACA). The piece notes the sharp increases in premiums last year and then told readers: "Still, the cost of insurance, deductibles and co-payments is too high for many people, especially middle-class families that earn too much to qualify for subsidies. But the solution is not to take away the benefits of the law but to strengthen it. Costs could be lowered if more young and healthy people were encouraged to sign up to spread costs over a larger pool of people." This comment wrongly implies that the problem of the system is that not enough young people have signed up. This is not true, the age distribution of enrollees has little impact on the cost of the program. While the distribution of premiums works slightly against the young, it is not enough to have a substantial impact on the finances of the system. The Kaiser Family Foundation showed that even an extreme age skewing of enrollees would raise costs by less than 2.0 percent. It matters much more whether there is a skewing based on health conditions. To see this point, think of the premium people pay as a tax. Under the ACA, people in the oldest age bracket (ages 55 to 64) pay premiums that are three times as large as people in the youngest age bracket (ages 18 to 34). This means that each older person pays three times as much into the system as a younger enrollee. This would mean, other things equal, we should value getting an older enrollee into the exchanges three times as much as a younger enrollee.

According to Thomas Edsall, Democrats Rely on Protectionist Voters

By CEPRCEPR

December 22, 2016

22 Diciembre 2016

That is in fact what his NYT column said, even though he writes it as though the opposite is the case. The basic argument is that the core Democratic constituency is in places like Silicon Valley and other tech clusters which Edsall claims are thriving in the global economy based on free trade. By contrast, he argues that Democratic populists like Keith Ellison and Bernie Sanders are trying to rally those left behind with a protectionist agenda. Edsall warns that this would run both counter to the interests of the key Democratic constituencies and threaten the country’s economic future.

That is great as propaganda for the status quo, but flunks as serious analysis. The prosperity of the country’s Silicon Valleys depends front and center on patent and copyright protections. These forms of protectionism have been made longer and stronger over the past four decades as a matter of conscious policy. The result has been an ever sharper divergence between the protected prices and free market prices. This is seen most dramatically in the case of prescription drugs where the ratio of the protected price to the free market price is often more than 100 to 1. This is equivalent to a tariff of more than 10,000 percent for folks who care about numbers. (Yes, we have alternatives to patent monopolies for financing research.)

We have also imposed these protections on other countries in trade deals, often at the expense of manufacturing workers. After all, getting stronger protections of drugs and software, while getting cheaper clothes and steel, is a win-win for the Silicon Valley types.

Rigging the market to make the items produced in the country’s Silicon Valleys expensive, while pushing down the price of the manufactured goods produced in the rest of the country might be good for the Silicon Valley types, it is not free trade. It is very generous for people like Thomas Edsall to provide cover for such class biased policies, but the rest of us might prefer to focus on reality.

Yes, this is the main theme of Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer (free download available here).

That is in fact what his NYT column said, even though he writes it as though the opposite is the case. The basic argument is that the core Democratic constituency is in places like Silicon Valley and other tech clusters which Edsall claims are thriving in the global economy based on free trade. By contrast, he argues that Democratic populists like Keith Ellison and Bernie Sanders are trying to rally those left behind with a protectionist agenda. Edsall warns that this would run both counter to the interests of the key Democratic constituencies and threaten the country’s economic future.

That is great as propaganda for the status quo, but flunks as serious analysis. The prosperity of the country’s Silicon Valleys depends front and center on patent and copyright protections. These forms of protectionism have been made longer and stronger over the past four decades as a matter of conscious policy. The result has been an ever sharper divergence between the protected prices and free market prices. This is seen most dramatically in the case of prescription drugs where the ratio of the protected price to the free market price is often more than 100 to 1. This is equivalent to a tariff of more than 10,000 percent for folks who care about numbers. (Yes, we have alternatives to patent monopolies for financing research.)

We have also imposed these protections on other countries in trade deals, often at the expense of manufacturing workers. After all, getting stronger protections of drugs and software, while getting cheaper clothes and steel, is a win-win for the Silicon Valley types.

Rigging the market to make the items produced in the country’s Silicon Valleys expensive, while pushing down the price of the manufactured goods produced in the rest of the country might be good for the Silicon Valley types, it is not free trade. It is very generous for people like Thomas Edsall to provide cover for such class biased policies, but the rest of us might prefer to focus on reality.

Yes, this is the main theme of Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer (free download available here).

What's Different About Stagnating Wages for Workers Without College Degrees?

By CEPRCEPR

December 21, 2016

21 Diciembre 2016

There seems to be a great effort to convince people that the displacement due to the trade deficit over the last fifteen years didn’t really happen. The NYT contributed to this effort with a piece telling readers that over the long-run job loss has been primarily due to automation not trade.

While the impact of automation over a long enough period of time certainly swamps the impact of trade, over the last 20 years there is little doubt that the impact of the exploding trade deficit has had more of an impact on employment. To make this one as simple as possible, we currently have a trade deficit of roughly $460 billion (@ 2.6 percent of GDP). Suppose we had balanced trade instead, making up this gap with increased manufacturing output.

Does the NYT want to tell us that we could increase our output of manufactured goods by $460 billion, or just under 30 percent, without employing more workers in manufacturing? That would be pretty impressive. We currently employ more than 12 million workers in manufacturing, if moving to balanced trade increase employment by just 15 percent we would be talking about 1.8 million jobs. That is not trivial.

But this is not the only part of the story that is strange. We are getting hyped up fears over automation even at a time when productivity growth (i.e. automation) has slowed to a crawl, averaging just 1.0 percent annually over the last decade. The NYT tells readers:

“Over time, automation has generally had a happy ending: As it has displaced jobs, it has created new ones. But some experts are beginning to worry that this time could be different. Even as the economy has improved, jobs and wages for a large segment of workers — particularly men without college degrees doing manual labor — have not recovered.”

Hmmm, this time could be different? How so? The average hourly wage of men with just a high school degree was 13 percent less in 2000 than in 1973. For workers with some college it was down by more than 2.0 percent. In fact, stagnating wages for men without college degrees is not something new and different, it has been going on for more than forty years. Hasn’t this news gotten to the NYT yet?

There seems to be a great effort to convince people that the displacement due to the trade deficit over the last fifteen years didn’t really happen. The NYT contributed to this effort with a piece telling readers that over the long-run job loss has been primarily due to automation not trade.

While the impact of automation over a long enough period of time certainly swamps the impact of trade, over the last 20 years there is little doubt that the impact of the exploding trade deficit has had more of an impact on employment. To make this one as simple as possible, we currently have a trade deficit of roughly $460 billion (@ 2.6 percent of GDP). Suppose we had balanced trade instead, making up this gap with increased manufacturing output.

Does the NYT want to tell us that we could increase our output of manufactured goods by $460 billion, or just under 30 percent, without employing more workers in manufacturing? That would be pretty impressive. We currently employ more than 12 million workers in manufacturing, if moving to balanced trade increase employment by just 15 percent we would be talking about 1.8 million jobs. That is not trivial.

But this is not the only part of the story that is strange. We are getting hyped up fears over automation even at a time when productivity growth (i.e. automation) has slowed to a crawl, averaging just 1.0 percent annually over the last decade. The NYT tells readers:

“Over time, automation has generally had a happy ending: As it has displaced jobs, it has created new ones. But some experts are beginning to worry that this time could be different. Even as the economy has improved, jobs and wages for a large segment of workers — particularly men without college degrees doing manual labor — have not recovered.”

Hmmm, this time could be different? How so? The average hourly wage of men with just a high school degree was 13 percent less in 2000 than in 1973. For workers with some college it was down by more than 2.0 percent. In fact, stagnating wages for men without college degrees is not something new and different, it has been going on for more than forty years. Hasn’t this news gotten to the NYT yet?

How to Get New Drugs at Generic Prices

By CEPRCEPR

December 20, 2016

20 Diciembre 2016

The NYT had an interesting piece discussing the National Institutes of Health collaboration with private companies in the development of new cancer drugs. As the piece points out, this collaboration has proven very profitable for the drug companies, but leads to drugs that are very expensive because the drug companies are allowed to have patent monopolies, with no restriction on the price they charge.

It also suggests an alternative path. It shows, contrary to conventional wisdom in right-wing circles, everything the government funds is not worthless garbage. If the tables were turned, and all the funding came from the government (rather than relying on government-imposed patent monopolies), then the new drugs could be sold at generic prices since everyone already would have been paid for their research.

In many cases, the generic price would be less than one percent of the patent protected price. New cancer drugs that might sell for $100,000 for a year’s treatment, might sell for hundreds of dollars. Policy types who don’t work for the pharmaceutical industry should be looking into more efficient alternatives for financing drug research.

The NYT had an interesting piece discussing the National Institutes of Health collaboration with private companies in the development of new cancer drugs. As the piece points out, this collaboration has proven very profitable for the drug companies, but leads to drugs that are very expensive because the drug companies are allowed to have patent monopolies, with no restriction on the price they charge.

It also suggests an alternative path. It shows, contrary to conventional wisdom in right-wing circles, everything the government funds is not worthless garbage. If the tables were turned, and all the funding came from the government (rather than relying on government-imposed patent monopolies), then the new drugs could be sold at generic prices since everyone already would have been paid for their research.

In many cases, the generic price would be less than one percent of the patent protected price. New cancer drugs that might sell for $100,000 for a year’s treatment, might sell for hundreds of dollars. Policy types who don’t work for the pharmaceutical industry should be looking into more efficient alternatives for financing drug research.

Someone Has to Tell John Williams Inflation Is Not Accelerating

By CEPRCEPR

December 20, 2016

20 Diciembre 2016

The Federal Reserve Board raised interest rates last week and seem poised to do so again in the not distant future. The rationale is that the economy is now near or at full employment and that if job growth continues at its recent pace it will lead to a harmful acceleration in the inflation rate.

We have numerous pieces raising serious questions about whether the labor market is really at full employment, noting for example the sharp drop in employment rates (for all groups) from pre-recession levels and the high rate of involuntary part-time employment. But the story of accelerating inflation is also not right.

This is particularly important, since John Williams, the president of the San Francisco Federal Reserve Bank, cited accelerating inflation as a reason to support last week’s rate hike, and possibly future rate hikes, in an interview in the New York Times this morning. Williams has been a moderate on inflation, so there are many members of the Fed’s Open Market Committee who are more anxious to raise rates than him.

A close look at the data does not provide much evidence of accelerating inflation. The core PCE deflator, the Fed’s main measure of inflation, has risen 1.7 percent over the last year, which is still under the 2.0 percent target. This target is an average, which means that the Fed should be prepared to allow the inflation rate to rise somewhat above 2.0 percent, with the idea that inflation will drop in the next recession.

Anyhow, the 1.7 percent rate is slightly higher than a low of 1.3 percent reached in the third quarter of 2015, but it is exactly the same as the rate we saw in the third quarter of 2014. In other words, there has been zero acceleration in the rate of inflation over the last two years.

Furthermore, even this modest acceleration has been entirely due to the more rapid increase in rent over the last two years. The inflation rate in the core consumer price index, stripped of its shelter component, actually has been falling slightly over the last year. It now stands at 1.1 percent over the last year.

Core CPI, Minus Shelter

CPI shelter

Source: Bureau of Labor Statistics.

It is reasonable to pull shelter out of the CPI because rents do not follow the same dynamic as most goods and services. In fact, higher interest rates, by reducing construction, are likely to increase the pace of increase in rents rather than reduce them.

This issue is hugely important, since if the Fed prevents the labor market from tightening further, it will be preventing millions of people from getting jobs. These people are disproportionately African American and Hispanic and also less-educated workers. The decision to tighten will also lessen the bargaining power of a much larger group of workers, making it more difficult for them to get pay increases.

The weak labor market of the Great Recession resulted in a large redistribution from wages to profits. The tightening of the labor market in the last two years has reversed part of this shift. If the Fed raises interest rates enough to prevent further tightening, then it will be locking in place this redistribution to profits. That would be bad news for tens of millions of workers, especially if the decision was based on a misreading of inflation data.

The Federal Reserve Board raised interest rates last week and seem poised to do so again in the not distant future. The rationale is that the economy is now near or at full employment and that if job growth continues at its recent pace it will lead to a harmful acceleration in the inflation rate.

We have numerous pieces raising serious questions about whether the labor market is really at full employment, noting for example the sharp drop in employment rates (for all groups) from pre-recession levels and the high rate of involuntary part-time employment. But the story of accelerating inflation is also not right.

This is particularly important, since John Williams, the president of the San Francisco Federal Reserve Bank, cited accelerating inflation as a reason to support last week’s rate hike, and possibly future rate hikes, in an interview in the New York Times this morning. Williams has been a moderate on inflation, so there are many members of the Fed’s Open Market Committee who are more anxious to raise rates than him.

A close look at the data does not provide much evidence of accelerating inflation. The core PCE deflator, the Fed’s main measure of inflation, has risen 1.7 percent over the last year, which is still under the 2.0 percent target. This target is an average, which means that the Fed should be prepared to allow the inflation rate to rise somewhat above 2.0 percent, with the idea that inflation will drop in the next recession.

Anyhow, the 1.7 percent rate is slightly higher than a low of 1.3 percent reached in the third quarter of 2015, but it is exactly the same as the rate we saw in the third quarter of 2014. In other words, there has been zero acceleration in the rate of inflation over the last two years.

Furthermore, even this modest acceleration has been entirely due to the more rapid increase in rent over the last two years. The inflation rate in the core consumer price index, stripped of its shelter component, actually has been falling slightly over the last year. It now stands at 1.1 percent over the last year.

Core CPI, Minus Shelter

CPI shelter

Source: Bureau of Labor Statistics.

It is reasonable to pull shelter out of the CPI because rents do not follow the same dynamic as most goods and services. In fact, higher interest rates, by reducing construction, are likely to increase the pace of increase in rents rather than reduce them.

This issue is hugely important, since if the Fed prevents the labor market from tightening further, it will be preventing millions of people from getting jobs. These people are disproportionately African American and Hispanic and also less-educated workers. The decision to tighten will also lessen the bargaining power of a much larger group of workers, making it more difficult for them to get pay increases.

The weak labor market of the Great Recession resulted in a large redistribution from wages to profits. The tightening of the labor market in the last two years has reversed part of this shift. If the Fed raises interest rates enough to prevent further tightening, then it will be locking in place this redistribution to profits. That would be bad news for tens of millions of workers, especially if the decision was based on a misreading of inflation data.

Robert Samuelson and the Second Great Depression Myth

By CEPRCEPR

December 19, 2016

19 Diciembre 2016

Robert Samuelson decided to once again push the second Great Depression, applauding the Obama administration for preventing the Great Recession from turning into a depression. This is the great myth (I'm tempted to say "fake news") that establishment types push endlessly with zero foundation. It is important for the worldview they like to promote, in which we have seen a massive upward redistribution of income over the last four decades, well you know, that's just because that is the way the world is. We may not like this rise in inequality, and after all President Obama did raise taxes on the rich and propose an increase in the minimum wage, and gave us Obamacare (all very good policies), but growing inequality is just baked into the genetics of the modern economy. The Wall Street bailout that stands at the center of the second Great Depression avoidance myth is the world's largest slap in the face of promoters of the baked-into-the-genetics story. After all, other aspects of the rigging (yes, I'm promoting my free book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer) are more subtle. We have free trade in manufactured goods but rigged protectionist measures that no one knows about that protect doctors, dentists, and other highly paid professionals. We have ever stronger and longer patent and copyright protections. These protections take hundreds of billions of dollars each year out of the pockets of the bulk of the population and give them to the people in position to benefit from them. Protection adds more than $350 billion a year to the cost of prescription drugs alone. We have a Federal Reserve Board that raises interest rates to throw people out of work, and keep workers from getting bargaining power, as a way of ensuring that an arbitrary inflation target is not breached.

Washington Post Passes Along Mistaken Information on White/Black Employment Rates

By CEPRCEPR

December 18, 2016

18 Diciembre 2016

It really is hard to kill a false story on the state of the economy. The Economic Cycle Research Institute (ECRI) produced a report which purported to show that minorities were getting all the new jobs created by the economy and that whites were actually losing jobs. This report was made the central theme in a column by Eduardo Porter in the New York Times on Wednesday.

I pointed out that this conclusion was driven by demographics. While the number of prime age (ages 25–54) people had increased for the other demographic groups included in the analysis, it had fallen sharply for whites. This meant that the decline in employment for whites did not come from worsening labor market conditions, but rather whites retiring as they reached their sixties.

ECRI then did new analysis that looked at employment-to-population ratios (EPOPs) by age and compared November 2007 to November 2016. This showed a decline of 2.0 percentage points in the EPOP for prime age whites, while showing a modest 0.3 percentage point rise for African Americans. Porter highlighted this in a new piece on Friday. Porter also noted that ECRI find a rise in African American employment rates for the 55 to 64 age group, in contrast to a modest decline for whites in this age group.

The problem with this comparison is that the black employment data is extremely erratic so comparing single months of data can give a misleading picture. This turns out to be the case here.

As I noted, if we compare the first 11 months of 2016 with the first 11 months of 2007, the EPOP for prime age African Americans fell by 1.7 percentage points, almost the same as the 2.0 percentage point drop for whites. The decline in the EPOP for African Americans between the ages of 55 and 64 was actually slightly larger than the decline for whites in this age group.

Unfortunately, the Washington Post chose to highlight the response of ECRI to the initial complaints without checking with anyone familiar with the data. This leaves the mistaken impression that whites have fared worse than other demographic groups since the collapse of the housing bubble.

The take away is that workers, and especially workers without college degrees, have fared poorly in recent years. This gives them ample grounds for complaining about the course of the economy. However, white workers have not fared notably worse than non-whites.

It really is hard to kill a false story on the state of the economy. The Economic Cycle Research Institute (ECRI) produced a report which purported to show that minorities were getting all the new jobs created by the economy and that whites were actually losing jobs. This report was made the central theme in a column by Eduardo Porter in the New York Times on Wednesday.

I pointed out that this conclusion was driven by demographics. While the number of prime age (ages 25–54) people had increased for the other demographic groups included in the analysis, it had fallen sharply for whites. This meant that the decline in employment for whites did not come from worsening labor market conditions, but rather whites retiring as they reached their sixties.

ECRI then did new analysis that looked at employment-to-population ratios (EPOPs) by age and compared November 2007 to November 2016. This showed a decline of 2.0 percentage points in the EPOP for prime age whites, while showing a modest 0.3 percentage point rise for African Americans. Porter highlighted this in a new piece on Friday. Porter also noted that ECRI find a rise in African American employment rates for the 55 to 64 age group, in contrast to a modest decline for whites in this age group.

The problem with this comparison is that the black employment data is extremely erratic so comparing single months of data can give a misleading picture. This turns out to be the case here.

As I noted, if we compare the first 11 months of 2016 with the first 11 months of 2007, the EPOP for prime age African Americans fell by 1.7 percentage points, almost the same as the 2.0 percentage point drop for whites. The decline in the EPOP for African Americans between the ages of 55 and 64 was actually slightly larger than the decline for whites in this age group.

Unfortunately, the Washington Post chose to highlight the response of ECRI to the initial complaints without checking with anyone familiar with the data. This leaves the mistaken impression that whites have fared worse than other demographic groups since the collapse of the housing bubble.

The take away is that workers, and especially workers without college degrees, have fared poorly in recent years. This gives them ample grounds for complaining about the course of the economy. However, white workers have not fared notably worse than non-whites.

Contrary to What You Read in the Post, Manufacturing Companies Do Not Have That Many Job Openings

By CEPRCEPR

December 16, 2016

16 Diciembre 2016

A Washington Post article headlined, “[w]hy so many U.S. manufacturers are putting up ‘help wanted’ signs” might have led readers to believe that this is a great time for anyone looking for a job in manufacturing. That is not the case, according the Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics.

According to the JOLTS data, the job opening rate in manufacturing has been 2.6 percent for the last three months. This is small decline from the rate earlier in the year. The same rate was reported for three months in 2012 and two months in 2007. In two other months in 2007 the rate was 2.7 percent.

The article also tells readers that manufacturers have been raising wages as part of their effort to attract workers. The Bureau of Labor Statistics reports that the average hourly wage for production and non-supervisory workers in manufacturing rose 2.7 percent over the last year. This compares to an increase of 2.4 percent in the economy as a whole.

A Washington Post article headlined, “[w]hy so many U.S. manufacturers are putting up ‘help wanted’ signs” might have led readers to believe that this is a great time for anyone looking for a job in manufacturing. That is not the case, according the Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics.

According to the JOLTS data, the job opening rate in manufacturing has been 2.6 percent for the last three months. This is small decline from the rate earlier in the year. The same rate was reported for three months in 2012 and two months in 2007. In two other months in 2007 the rate was 2.7 percent.

The article also tells readers that manufacturers have been raising wages as part of their effort to attract workers. The Bureau of Labor Statistics reports that the average hourly wage for production and non-supervisory workers in manufacturing rose 2.7 percent over the last year. This compares to an increase of 2.4 percent in the economy as a whole.