Off the Charts explains “five things you probably don’t know about Food Stamps,” otherwise known as the Supplemental Nutrition Assistance Program. Perhaps the most noteworthy fact is that nearly half of all participating households with children are working households. For many of these households, there jobs simply don’t pay enough to keep them above the program’s eligibility level (income below 130% of the federal poverty level).
Economic policy reports, blog postings, and media stories of interest:
CHAPEL HILL (January 24, 2012) – North Carolina’s job market ended 2011 little different than it started the year. In December, the number of payroll jobs in the slate fell slightly, as did the number of unemployed persons and the statewide unemployment rate. Over the year, North Carolina netted 19,600 jobs (+0.5 percent) and saw the number of unemployed persons rise by 9,154 (+2.1 percent). The unemployment rate ticked up 0.1 percentage points, ending the year at 9.9 percent. These findings come from new data from the Division of Employment Security.
“December’s job market performance was a disappointing end to a disappointing year,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “The total number of jobs in the state was essentially flat, rising by just 0.5 percent in 2011. Despite the net addition of 19,600 jobs, North Carolina has 295,300 fewer jobs than it did in December 2007.”
In December, North Carolina employers shed 4,400 more payroll jobs than they added. Net losses occurred exclusively in the private sector (-5,900, -0.2 percent), while the public sector netted 1,500 jobs (+0.2 percent). Within the private sector, professional and business services lost the most jobs in absolute terms (-3,900, -0.8 percent) with the losses divided almost equally between the administrative and waste management and professional, scientific, and technical services subsectors. The trade, transportation, and utilities sector cut 1,800 positions (-0.3 percent). Meanwhile, manufacturing netted 500 jobs (+0.1 percent), while leisure and hospitality services added 300 jobs (+0.1 percent). In the public sector, a loss of 1,900 jobs within state government offset a gain of 2,800 local government and 600 federal positions.
A positive revision to the November data found that the state gained 4,100 more jobs than first reported (+7,900 versus +3,800). With that data revision, North Carolina has lost, on net, 295,300 positions, or 7.1 percent of its payroll base, since December 2007. Since bottoming out in February 2010, the state has netted an average of 1,300 payroll jobs per month, resulting in a cumulative gain of 27,700 positions (+0.7 percent). Put differently, the state’s labor market has replaced just 8.6 percent of the number of jobs lost at the height of the “Great Recession.”
“Compared to December 2007, North Carolina has fewer payroll jobs in every major industry group except for educational and health services and leisure and hospitality services,” noted Quinterno. “Despite experiencing some consistent growth in the private sector in recent months, losses in the public sector have negated much of the modest private-sector gain. Since February 2010, local government employment has fallen by 2.5 percent, and state government employment has contracted by 5.4 percent. Over that span, declines in the public sector have offset 45.6 percent of the gains in the private sector.”
Between December 2010 and December 2011, North Carolina gained, on net, 19,600 jobs (+0.5 percent). Net public-sector losses (-9,800, -1.4 percent) offset 33.3 percent of the net private-sector gains (+29,400 positions, +0.9 percent). In terms of individual private industries, trade, transportation, and utilities grew the most in absolute terms (+9,200, +1.3 percent), while information lost the most jobs (-1,100, -1.6 percent). In the public sector, net losses stemmed from drops in state (-6,500, -3.4 percent) and local (-4,500, -1 percent) employment.
The household data for December also were weak. Last month, the size of the labor force rose slightly (+4,339, +0.1 percent) to 4.51 million. While the total number of employed individuals rose (+9,532, +0.2 percent) and the number of unemployed individuals fell (-5,193, -1.1 percent), unemployment remained at an elevated level of 9.9 percent.
Between December 2010 and December 2011, the size of the labor force increased by 45,822 individuals (+1 percent). Over the year, the unemployment rate rose by 0.1 percentage points, climbing to 9.9 percent from 9.8 percent. The monthly statewide unemployment rate has been at least 9.7 in every month since February 2009.
“North Carolina’s labor market ended 2011 on a flat note,” observed Quinterno. “Minimal progress in closing the job gap was made during the year, and the unemployment rate is higher now than it was a year ago. Especially alarming is the fact that the share of working-age North Carolinians with a job remains near the lowest level recorded since 1976. In December, only 55.6 percent of working-age North Carolinians had jobs, down from 62.4 percent in December 2007.”
“The December employment report suggests that North Carolina’s labor market posted almost no progress over the course of the year. Four years after the onset of the Great Recession, little suggests that the job market has made—or is about to make—significant strides in putting sizable numbers of displaced Tar Heels back to work.”
A long, front-page story in Sunday’s edition of The New York Times explored “the iPhone economy,” one in which popular products invented in the United States are manufactured not by American industrial employees but by those based overseas and employed by foreign contract manufacturers. According to the article, the basic rationale for this development is simple:
To thrive, companies argue they need to move work where it can generate enough profits to keep paying for innovation. Doing otherwise risks losing even more American jobs over time, as evidenced by the legions of once-proud domestic manufacturers — including G.M. and others — that have shrunk as nimble competitors have emerged.
While the article is wroth reading in full, it doesn’t clearly show the policy choices–choices made by governments in both the United States and abroad–that shape the location of manufacturing sites and instead gives the impression that the choices made by firms like Apple somehow are inevitable.
Dean Baker immediately pointed out one dynamic missing from the story:
Remarkably, the piece never once mentions exchange rates. This is a major determinant of relative prices. If the dollar rises by 30 percent against other currencies, as it did in the late 90s, then it becomes 30 percent more expensive to produce goods in the United States relative to other countries. This rise in the value of the dollar was the major factor behind the explosion in the trade deficit at the end of the 90s and at the beginning of the last decade.
…
The dollar is also supposed to be the mechanism through which trade is rebalanced. Large trade deficits are supposed to cause currencies to fall in value. This leads their deficits to move back toward balance. This has not happened to any significant extent with the United States in the last decade in large part because foreign governments have placed a high priority on accumulating large amounts of dollars, buying up trillions of dollars of U.S. government debt and other dollar denominated assets. If the dollar were allowed to fall to a level consistent with more balanced trade, then many manufacturing jobs would return to the United States.
Naked Capitalism, meanwhile, identified a number of other omissions, including the following:
The problem with using the microcosm to illustrate the macrocosm is you need to choose the right microcosm. The danger in using the iPhone example is that (as I have discussed at length in prior posts) there are quite a few industries in which the case for offshoring and outsourcing is not compelling, particularly if you allow for the increased risk of extended supply chains, as Apple itself learned in the wake of the Fukushima nuclear disaster. But even in those cases, it still has the effect of transferring income from middle level and factory workers to the top brass. Thus the iPhone/consumer electronics example will have the effect of giving other businesses a free pass.
In a much more supportive analysis of the piece, Free Exchange noted the aggressive policy role in supporting manufacturing played by Asian countries like China–a role that the United States government ceased playing many years ago:
It’s not necessary to talk about this as an entirely organic process. Unquestionably, Asian governments aggressively pursued manufacturing and subsidised it heavily, both directly and through advantageous exchange rates. As the story points out, Asia has capitalised on other advantages, as well. Cheap labour is one. More flexible land-use, labour, and environmental rules are another; China can erect a massive operation in no time at all, staffed with compliant labour and with little concern about the impact of the factory on watersheds, air quality, and traffic. Skill supply seems to matter as well. China is churning out engineers with basic technical competence (but less, it appears, than a bachelor’s degree) by the hundreds of thousands. It would be incorrect to point to any one of these characteristics as the driving force behind the global shift. Rather, these are self-reinforcing factors within a global economy that has multiple stable equilibria. After some level of Asian development and integration, it became more attractive for manufacturers to locate there as more manufacturers located there.
Economic policy reports, blog postings, and media stories of interest:
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