That might be a good question for reporters to pose to Chicago Mayor Rahm Emanuel given his strong stand against Chicago’s public school teachers. (It is appropriate to refer to this as a battle between Emanuel and the teachers. Almost 90 percent of the members of the bargaining unit voted to authorize a strike. This is clearly not a case of a union imposing its will on its members.) Emanuel has insisted that the schools need a major overhaul because they are badly failing Chicago’s students.
Emanual’s position is striking because Chicago’s schools had been run for seven and half years, from June of 2001 until January of 2009, by Arne Duncan. Duncan then went on to become education secretary for President Obama, based on his performance as head of the Chicago public school system. Apparently Emanuel does not believe that Duncan was very successful in improving Chicago’s schools since he claims that they are still in very bad shape.
There is no dispute that students in Chicago public schools are not faring well. Only a bit over 60 percent graduate high school in five years or less. However, this doesn’t mean that the reforms that Emanuel wants to impose will improve outcomes, just as Duncan’s reforms apparently did not have much impact, if Emanuel is to be believed.
Diana Ravitch, a one-time leading school “reformer” and assistant education secretary in the Bush administration, argues that charter schools on average perform no better than the public schools they replace. The main determinants of children’s performance continues to be the socioeconomic conditions of their parents. Those unwilling to take the steps necessary to address the latter (e.g. promote full employment) are the ones who do not care about our children.
That might be a good question for reporters to pose to Chicago Mayor Rahm Emanuel given his strong stand against Chicago’s public school teachers. (It is appropriate to refer to this as a battle between Emanuel and the teachers. Almost 90 percent of the members of the bargaining unit voted to authorize a strike. This is clearly not a case of a union imposing its will on its members.) Emanuel has insisted that the schools need a major overhaul because they are badly failing Chicago’s students.
Emanual’s position is striking because Chicago’s schools had been run for seven and half years, from June of 2001 until January of 2009, by Arne Duncan. Duncan then went on to become education secretary for President Obama, based on his performance as head of the Chicago public school system. Apparently Emanuel does not believe that Duncan was very successful in improving Chicago’s schools since he claims that they are still in very bad shape.
There is no dispute that students in Chicago public schools are not faring well. Only a bit over 60 percent graduate high school in five years or less. However, this doesn’t mean that the reforms that Emanuel wants to impose will improve outcomes, just as Duncan’s reforms apparently did not have much impact, if Emanuel is to be believed.
Diana Ravitch, a one-time leading school “reformer” and assistant education secretary in the Bush administration, argues that charter schools on average perform no better than the public schools they replace. The main determinants of children’s performance continues to be the socioeconomic conditions of their parents. Those unwilling to take the steps necessary to address the latter (e.g. promote full employment) are the ones who do not care about our children.
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The Romney campaign has picked up a theme pushed by Republicans ever since President Obama entered the White House, employers are reluctant to hire because they are scared by regulations and taxes. Robert Samuelson picks up this line in his column assessing whether the economy can actually create 12 million jobs over the next 4 years.
There is a simple way to prove that employers have no reluctance to hire. We can look at average weekly hours. If employers are seeing increased demand but don’t want to hire because they fear an attack from the regulation monster or higher taxes, then they would work their existing work force more hours. That one should be pretty painless even for our fearful job creators. After all, do we really think that they would turn away customers from their stores, restaurants, and factories rather than have workers put in a few extra hours each week?
Here’s what the Bureau of Labor Statistics tells us about weekly hours:
Average Weekly Hours: All Employees
Source Bureau of Labor Statistics.
In short, there is no story of reluctant employers, the problem is inadequate demand pure and simple. If employers saw more demand, they would likely hire more workers.
There is one other point worth mentioning in reference to Samuelson’s evaluation of the 12 million jobs claim. Samuelson is a skeptic, noting that the economy has rarely added 3 million jobs a year in the past. That is not terribly relevant because the labor force was smaller in the past. The question is the rate of growth.
The economy did add 12 million jobs from 1996 to 2000, at a time when the labor force was almost 20 percent smaller than it is today. The 12 million jobs number is a very reasonable target. There is of course no guarantee that the economy will add this many jobs, but if we are to get back close to full employment by 2016 (8 years after the beginning of the recession) this sort of job growth will be necessary.
Addendum: The title of the graph was corrected. Also, the story here is that hours are still somewhat below their pre-recession average. That was presumably a period in which employees were not reluctant to hire because they feared taxes, regulation or whatever else. If the Romney-Samuelson story were true then hours should be above the pre-recession average. The idea is that employers would otherwise be hiring, but because of their fears about the future, they are opting not to.
The Romney campaign has picked up a theme pushed by Republicans ever since President Obama entered the White House, employers are reluctant to hire because they are scared by regulations and taxes. Robert Samuelson picks up this line in his column assessing whether the economy can actually create 12 million jobs over the next 4 years.
There is a simple way to prove that employers have no reluctance to hire. We can look at average weekly hours. If employers are seeing increased demand but don’t want to hire because they fear an attack from the regulation monster or higher taxes, then they would work their existing work force more hours. That one should be pretty painless even for our fearful job creators. After all, do we really think that they would turn away customers from their stores, restaurants, and factories rather than have workers put in a few extra hours each week?
Here’s what the Bureau of Labor Statistics tells us about weekly hours:
Average Weekly Hours: All Employees
Source Bureau of Labor Statistics.
In short, there is no story of reluctant employers, the problem is inadequate demand pure and simple. If employers saw more demand, they would likely hire more workers.
There is one other point worth mentioning in reference to Samuelson’s evaluation of the 12 million jobs claim. Samuelson is a skeptic, noting that the economy has rarely added 3 million jobs a year in the past. That is not terribly relevant because the labor force was smaller in the past. The question is the rate of growth.
The economy did add 12 million jobs from 1996 to 2000, at a time when the labor force was almost 20 percent smaller than it is today. The 12 million jobs number is a very reasonable target. There is of course no guarantee that the economy will add this many jobs, but if we are to get back close to full employment by 2016 (8 years after the beginning of the recession) this sort of job growth will be necessary.
Addendum: The title of the graph was corrected. Also, the story here is that hours are still somewhat below their pre-recession average. That was presumably a period in which employees were not reluctant to hire because they feared taxes, regulation or whatever else. If the Romney-Samuelson story were true then hours should be above the pre-recession average. The idea is that employers would otherwise be hiring, but because of their fears about the future, they are opting not to.
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The Post had a good article reminding people that the jobs numbers are subject to large revisions. It is always important not to make too much of a single release.
I was among those surprised by the August numbers. I expected something like the July report, with 160,000 jobs. Even that is far from great (how does full employment in 2028 sound?), but at least we would be making up some lost ground. The 96,000 jobs reported for August is just treading water, keeping pace with the growth of the labor market.
Anyhow, other data would seem to support a stronger pace of job growth. Most importantly the number of weekly unemployment claims remains near its low point for the recovery. In addition, the number of job openings reported by employers is up by more than 500,000 from year ago levels, a period in which they were adding well over 100,000 a month. Car sales and chain store sales were both pretty strong in August.
My guess is that the September number will be considerably stronger. But in any case, the Post’s warning on the monthly data is well-taken.
The Post had a good article reminding people that the jobs numbers are subject to large revisions. It is always important not to make too much of a single release.
I was among those surprised by the August numbers. I expected something like the July report, with 160,000 jobs. Even that is far from great (how does full employment in 2028 sound?), but at least we would be making up some lost ground. The 96,000 jobs reported for August is just treading water, keeping pace with the growth of the labor market.
Anyhow, other data would seem to support a stronger pace of job growth. Most importantly the number of weekly unemployment claims remains near its low point for the recovery. In addition, the number of job openings reported by employers is up by more than 500,000 from year ago levels, a period in which they were adding well over 100,000 a month. Car sales and chain store sales were both pretty strong in August.
My guess is that the September number will be considerably stronger. But in any case, the Post’s warning on the monthly data is well-taken.
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The Washington Post feels no need to observe normal journalistic standards when it comes to the NAFTA. When the trade agreement was being debated in 1993 it virtually turned the paper (both the news and opinion pages) into an advocacy organization. It continues this pattern even to this day.
As a result, when NAFTA was being debated in the Democratic primaries in 2007, it had a lead editorial in which it harshly criticized the candidates and absurdly claimed that Mexico’s GDP had quadruped since 1988. In addition to being hugely wrong (the actual growth was 83 percent according to the IMF), the choice of years was bizarre since NAFTA first took effect in 1994. To this day, the Post has never corrected this editorial.
More recently the Post has repeatedly run articles about Mexico’s fast-growing middle class. Some were published earlier this summer and it treats us to another today.
Source: International Monetary Fund.
In reality Mexico had the slowest growing economy in Latin America over the last decade, but what do you expect, it’s the Washington Post.
The Washington Post feels no need to observe normal journalistic standards when it comes to the NAFTA. When the trade agreement was being debated in 1993 it virtually turned the paper (both the news and opinion pages) into an advocacy organization. It continues this pattern even to this day.
As a result, when NAFTA was being debated in the Democratic primaries in 2007, it had a lead editorial in which it harshly criticized the candidates and absurdly claimed that Mexico’s GDP had quadruped since 1988. In addition to being hugely wrong (the actual growth was 83 percent according to the IMF), the choice of years was bizarre since NAFTA first took effect in 1994. To this day, the Post has never corrected this editorial.
More recently the Post has repeatedly run articles about Mexico’s fast-growing middle class. Some were published earlier this summer and it treats us to another today.
Source: International Monetary Fund.
In reality Mexico had the slowest growing economy in Latin America over the last decade, but what do you expect, it’s the Washington Post.
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Today Fred Hiatt celebrates Rhode Island’s Treasurer Gina Raimondo, who cut public employee pensions while partially replacing them with 401(k) accounts that should mean millions of dollars in additional revenue for the financial industry. This is the sort of upward redistribution that the Post loves.
In the course of praising Raimondo, the Post throws in a few lines about the need to cut Social Security, trying to scare readers with talk of the program’s $7 trillion deficit over its 75-year planning horizon. Are you scared, are you really scared?
Serious newspapers would put this measure in a context that readers could understand. They presumably know that none of their readers have any clue what $7 trillion means over the next 75 years means. On the other hand, the Post could have said the projected shortfall was equal to 0.5 percent of GDP, but hey, that probably doesn’t sound scary enough.
Today Fred Hiatt celebrates Rhode Island’s Treasurer Gina Raimondo, who cut public employee pensions while partially replacing them with 401(k) accounts that should mean millions of dollars in additional revenue for the financial industry. This is the sort of upward redistribution that the Post loves.
In the course of praising Raimondo, the Post throws in a few lines about the need to cut Social Security, trying to scare readers with talk of the program’s $7 trillion deficit over its 75-year planning horizon. Are you scared, are you really scared?
Serious newspapers would put this measure in a context that readers could understand. They presumably know that none of their readers have any clue what $7 trillion means over the next 75 years means. On the other hand, the Post could have said the projected shortfall was equal to 0.5 percent of GDP, but hey, that probably doesn’t sound scary enough.
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Of course he was arguing the opposite. But to make his case that everyone will need more education to get decent jobs he told readers:
“Which is why if we ever get another stimulus it has to focus, in part, on getting more people more education. The unemployment rate today is 4.1 percent for people with four years of college, 6.6 percent for those with two years, 8.8 percent for high school graduates, and 12.0 percent for dropouts.”
If Friedman had the ability to use the Internet he could have gone to the Bureau of Labor Statistics website to discover that the unemployment rate for college grads is more than double its pre-recession level.
Unemployment Rate for College Grads: Age 25 and Over
Source Bureau of Labor Statistics.
The story would be much worse if we looked at the experience of recent college grads. The point here is a simple one, the economy is suffering from an enormous shortfall in demand. This means that even many highly skilled people are unable to find jobs. The 4.1 percent unemployment rate for college grads is evidence of this shortfall in demand. It is not, as Friedman apparently believes, evidence that people who get education will be able to weather the storms created by incompetent economic policy.
Of course he was arguing the opposite. But to make his case that everyone will need more education to get decent jobs he told readers:
“Which is why if we ever get another stimulus it has to focus, in part, on getting more people more education. The unemployment rate today is 4.1 percent for people with four years of college, 6.6 percent for those with two years, 8.8 percent for high school graduates, and 12.0 percent for dropouts.”
If Friedman had the ability to use the Internet he could have gone to the Bureau of Labor Statistics website to discover that the unemployment rate for college grads is more than double its pre-recession level.
Unemployment Rate for College Grads: Age 25 and Over
Source Bureau of Labor Statistics.
The story would be much worse if we looked at the experience of recent college grads. The point here is a simple one, the economy is suffering from an enormous shortfall in demand. This means that even many highly skilled people are unable to find jobs. The 4.1 percent unemployment rate for college grads is evidence of this shortfall in demand. It is not, as Friedman apparently believes, evidence that people who get education will be able to weather the storms created by incompetent economic policy.
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Douthat tells us that the birthrate has fallen below the replacement rate. I haven’t checked this one, but that sure sounds like good news to me. Has anyone noticed a shortage of people anywhere? Do you want more crowded parks and beaches, more traffic congestion, more pollution and global warming?
If people who want kids can’t afford to have them or feel too insecure in their economic situation, that is bad news. But if we are seeing our population decline rather than rise (immigration will actually keep it rising), it’s difficult to see the problem. As I say, it would be great news if this was really the biggest problem we faced.
Douthat tells us that the birthrate has fallen below the replacement rate. I haven’t checked this one, but that sure sounds like good news to me. Has anyone noticed a shortage of people anywhere? Do you want more crowded parks and beaches, more traffic congestion, more pollution and global warming?
If people who want kids can’t afford to have them or feel too insecure in their economic situation, that is bad news. But if we are seeing our population decline rather than rise (immigration will actually keep it rising), it’s difficult to see the problem. As I say, it would be great news if this was really the biggest problem we faced.
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Real reporters and newspapers don’t try to tell audiences what political figures think because they don’t know what they think. But Bob Woodward does not fit the description of the former and the Washington Post does not fit the description of the latter, hence we have a front page account of the battle over the debt ceiling that concludes with a section beginning:
“Geithner thought there was one other consideration. He did not mention it to anyone, not even the president, but he had thought about it a great deal. It was not just that Obama faced an economic choice or a political choice. He faced a moral choice.”
The piece then goes on to explain how Geithner thought it would be horribly immoral to default on the debt because of the price the country would pay for generations.
There are two points to be made here. First, Woodward and the Post do not have direct access to Timothy Geithner’s thoughts. Either Geithner conveyed his thoughts to Woodward, in which case this section should begin: “Geithner said there was one other consideration.”
Alternatively, someone close to Geithner told Woodward what Geithner said, in which case the section would begin: “according to Person X (ideally a person with a name as opposed to “someone close to Secretary Geithner”), Geithner said there was one other consideration.” Okay, but this is the Post.
Let’s get to the substance. While we don’t have any clue as to what Geithner really thought, it is worth saying a word about the likely consequences of a debt default. First, it would lead to a serious downturn and big-time financial crisis. If U.S. debt was no longer 100 percent solid, it would almost certainly lead to a financial freeze-up that made the post-Lehman crisis look like a Sunday picnic.
However, the plus side of this would be that it would almost certainly wipe out the Wall Street banks once and for all. We would eliminate this massive parasitic structure that is draining hundreds of billions of dollars a year from the productive economy and is the largest single source of inequality in the economy today.
The other point is that countries do bounce back from financial crises. The best example here is probably Argentina. It had a complete financial meltdown in December of 2001. This led to banks closing and people being unable to access their money. The economy was in free fall for three months. It stabilized in the next three months and began 7 years of robust growth in the fall of 2002. By the middle of 2003 the country had made up all the ground lost in the crisis. In the case of Argentina, the people of the country are almost certainly better off today from having to endure short-term pain for long-term gain.
While economic policy makers in the United States may not be as competent as those in Argentina, even if it took twice as long to regain the lost ground (i.e. three years), the country could still be much better off in the long-run as a result of eliminating the bloat in its financial sector. It would be appropriate for a lengthy discussion of the crisis like the Post’s piece to consider this issue, even if Geithner claims that it would be immoral to allow Wall Street to go under.
Real reporters and newspapers don’t try to tell audiences what political figures think because they don’t know what they think. But Bob Woodward does not fit the description of the former and the Washington Post does not fit the description of the latter, hence we have a front page account of the battle over the debt ceiling that concludes with a section beginning:
“Geithner thought there was one other consideration. He did not mention it to anyone, not even the president, but he had thought about it a great deal. It was not just that Obama faced an economic choice or a political choice. He faced a moral choice.”
The piece then goes on to explain how Geithner thought it would be horribly immoral to default on the debt because of the price the country would pay for generations.
There are two points to be made here. First, Woodward and the Post do not have direct access to Timothy Geithner’s thoughts. Either Geithner conveyed his thoughts to Woodward, in which case this section should begin: “Geithner said there was one other consideration.”
Alternatively, someone close to Geithner told Woodward what Geithner said, in which case the section would begin: “according to Person X (ideally a person with a name as opposed to “someone close to Secretary Geithner”), Geithner said there was one other consideration.” Okay, but this is the Post.
Let’s get to the substance. While we don’t have any clue as to what Geithner really thought, it is worth saying a word about the likely consequences of a debt default. First, it would lead to a serious downturn and big-time financial crisis. If U.S. debt was no longer 100 percent solid, it would almost certainly lead to a financial freeze-up that made the post-Lehman crisis look like a Sunday picnic.
However, the plus side of this would be that it would almost certainly wipe out the Wall Street banks once and for all. We would eliminate this massive parasitic structure that is draining hundreds of billions of dollars a year from the productive economy and is the largest single source of inequality in the economy today.
The other point is that countries do bounce back from financial crises. The best example here is probably Argentina. It had a complete financial meltdown in December of 2001. This led to banks closing and people being unable to access their money. The economy was in free fall for three months. It stabilized in the next three months and began 7 years of robust growth in the fall of 2002. By the middle of 2003 the country had made up all the ground lost in the crisis. In the case of Argentina, the people of the country are almost certainly better off today from having to endure short-term pain for long-term gain.
While economic policy makers in the United States may not be as competent as those in Argentina, even if it took twice as long to regain the lost ground (i.e. three years), the country could still be much better off in the long-run as a result of eliminating the bloat in its financial sector. It would be appropriate for a lengthy discussion of the crisis like the Post’s piece to consider this issue, even if Geithner claims that it would be immoral to allow Wall Street to go under.
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The Washington Post’s article on the August jobs report included an assertion by Bernard Bamouhl, the chief global economist at the Economic Outlook Group, that:
“companies find it hard to justify hiring more people because the economic outlook is so unclear.”
To use a technical economic term, this claim is wrong. We can see this by looking at average weekly hours. If companies would otherwise be hiring people, but are restrained by uncertainty, then they would be working their current workforce more hours.
More hours and more workers are alternative ways to fill demand for labor. The former implies no real risk to a company. If they raise average hours worked by one or two hours a week this month, and then demand conditions change, there is little problem with lowering hours back to their prior level next month.
If Bamouhl’s claim that uncertainty about the future is holding back hiring then average weekly hours would be increasing. That’s not what the Bureau of Labor Statistics tells us.
Source: Bureau of Labor Statistics.
Since average weekly hours have not risen we know that uncertainty is not preventing hiring, but rather a lack of demand.
The Washington Post’s article on the August jobs report included an assertion by Bernard Bamouhl, the chief global economist at the Economic Outlook Group, that:
“companies find it hard to justify hiring more people because the economic outlook is so unclear.”
To use a technical economic term, this claim is wrong. We can see this by looking at average weekly hours. If companies would otherwise be hiring people, but are restrained by uncertainty, then they would be working their current workforce more hours.
More hours and more workers are alternative ways to fill demand for labor. The former implies no real risk to a company. If they raise average hours worked by one or two hours a week this month, and then demand conditions change, there is little problem with lowering hours back to their prior level next month.
If Bamouhl’s claim that uncertainty about the future is holding back hiring then average weekly hours would be increasing. That’s not what the Bureau of Labor Statistics tells us.
Source: Bureau of Labor Statistics.
Since average weekly hours have not risen we know that uncertainty is not preventing hiring, but rather a lack of demand.
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