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Posts Tagged ‘employment’

Germany to immigrants: keep on truckin’!

Posted by Richard on May 22, 2018

A couple of years ago, Shikha Dalmia wrote an important column about why immigrants in America are by and large much more likely to assimilate than those in Europe:

Immigrants don’t need job programs. They need jobs. …

Jobs offer immigrants not just a paycheck, but also an entry into their new society, providing them with both the means and motive to learn its language and customs, all of which eliminates the need for formal programs. …

Yet many European countries have gone out of their way to deny or severely limit job opportunities for asylum seekers and refugees. Until a few years ago, most European Union countries prohibited asylum seekers from any employment until their application was processed, which could take years. Even now, Cato Institute’s Alex Nowrasteh points out, Germany legally bars them from working for the first three months, Italy six, France nine, and England an entire year. Many countries, including Germany, restrict their employment to “shortage” sectors—and some even ban self-employment.

Even after refugees obtain work permits, their upward mobility is greatly restricted in Europe, thanks to the exceedingly rigid labor market in many countries. The unemployment rates of France and Belgium are nearly twice that of the United States. This dismal job market affects immigrants much more than the native born, thanks to Europe’s tough minimum wage laws and other labor regulations that protect incumbents at the cost of newcomers.

As a result, Muslim immigrants in Europe are much more likely to be filled with resentment, anger, and hatred toward their supposed benefactors. So Germany, where “officials estimate that more than 75% of the new arrivals are unemployed, collecting benefits and are ‘unlikely to find work’ in the next ten years,” [!] should be applauded for taking even small steps to address this problem, right?

Well, maybe. But given that both ISIS and al Qaeda have encouraged the use of vehicles as weapons of terror, and many such attacks have since taken place, this may not be the best choice of jobs programs for Muslim immigrants:

… Big problems such as this call for big solutions and the Germans think they’ve come up with a winner. What better job to give to these unemployed migrants than that of… being a truck driver. (Voice of Europe)

This plan is not only bound to make some Germans, especially those in Berlin, somewhat nervous, it will surely cause many to wonder why it would take three years to train someone to drive a truck. Perhaps the curriculum runs something like this:

  • Three months of commercial truck driving training
  • Nine months of intensive language learning
  • Twenty-four months of teaching the students how and why not to mow down infidels

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Working 1 to 5

Posted by Richard on February 24, 2014

Obamacare is relentlessly turning full-time workers into part-time workers (or labor force dropouts dependent on government handouts) and pushing part-time workers below the magical 30-hour/week threshold. Even state and local governments are getting into the act. So an “Obamacare remix” of Dolly Parton’s “9 to 5” is a no-brainer. Remy Munasifi and the folks at Reason.TV were up to the task:

[YouTube link]

 HT: Steven Hayward

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Yes, minimum wage laws destroy jobs

Posted by Richard on February 22, 2014

The left’s cause du jour is income inequality, and the Obama administration wants to address it by increasing the national minimum wage by 40% to $10.10 per hour. The Congressional Budget Office predicts that would eliminate 500,000 jobs. Rick Manning noted that to the left that’s not a bug, it’s a feature (emphasis added):

Politically, the left benefits from another half million people off the employment roles as these new government dependents become welfare voters supporting the very politicians whose policies were directly responsible for their job losses.

At the same time, an estimated 16.5 million people are expected to see some increase in their wages. It can be anticipated that a majority of these people will also credit the Democrats for their largesse.

And the kicker is that by including automatic increases tied to the cost of living, these remaining workers will get a raise each year, regardless of whether their employer can afford to provide it. This process ensures additional job losses, accelerating the destruction of gateway jobs in America.

However, none of this matters. For those who benefit politically from government economic dependency, all that matters is that another half million dependency voters will be created with no political downside.

The inherent unfairness to the high school kid going from fast food restaurant to retailer vainly seeking employment doesn’t matter. For many job seekers, the soul-crushing realization that the above-the-table economy has no place for them destroys their connection to the legitimate free-market system. They will place the blame for this failure on our capitalist system rather than the bastardization of that system coming from craven political calculations of leftists in D.C.

Throwing away the hopes and dreams of half a million people is acceptable collateral damage to those who believe the end of achieving a permanent majority of government dependents is worth any means of attaining it.

The idea that mandating a higher starting wage eliminates entry-level jobs, which seems obvious to anyone who understands supply and demand, is disputed by various studies — that is, studies by left-wing academics (often union-funded) who manipulate their methodology to obtain the result they want. Of course, there are other studies with opposite findings — and in fairness, it may be that some of those, too, were manipulated.

The trouble with all such studies is that they invariably compare data either across states with different minimums or across time, before and after a minimum wage increase. Thus they’re comparing minimum wage level A to minimum wage level B. Such comparisons are confounded by factors such as cost of living differences across states or across time, changes in the economy (economic expansion or recession) across time, etc. And a minimum wage mandate has no significant effect if it’s below the market-clearing wage for unskilled, entry-level workers at the time.

Mark J. Perry thought a better comparison would be between places that do mandate a minimum wage and those that don’t. So where do you have to look to find a $0.00 minimum wage — some third-world country? Nope. Western Europe will do.

It turns out that nine Western European nations, including Germany and the Scandinavian countries, have no minimum wage. Their average (mean) and median unemployment rate is about half that of the nine that do mandate a minimum wage (emphasis in original):

Bottom Line: The nine countries in Western Europe with a minimum wage of $0.00 per hour, which most economists and even the New York Times argued in 1987 is the “right” wage, are apparently doing much better economically than the nine countries that have minimum wage laws legislation that makes it unlawful to employ workers whose hourly productivity is below some minimum level arbitrarily dictated by government officials.  (Thanks to Don Boudreaux for making that clarification.)

Those concerned about income inequality would do well to focus their attention on the failures of our educational system, as suggested by Nathan Smith in the December 2012 issue of The Freeman (emphasis added):

The State education system is centrally planned and run by committees, so choice and competition are lost from the system. Stagnation is therefore inevitable. Where market forces prevail, productivity improvement is normal. … But productive innovation is difficult and competition is the best school in which to learn it. State education plays hooky from that school, so it fails to learn.

Poor public schools are a major bottleneck holding back the entire U.S. economy. The recent increase in inequality has been driven not by capital but by labor income, as Saez and Piketty stress. This reflects sharply rising demand for certain kinds of skilled, educated workers, combined with little supply response. The public schools and universities are unable and/or unwilling to train the kinds of people the market wants. Eric Brynjolffson argues in his book Race Against the Machine that workers are unable to keep up with new technology. Brynjolffson illustrates his point with the chart shown below:


The fact that wages of high school graduates have fallen is a painful remark about how much the market values what the public schools produce.

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Bad jobs needed

Posted by Richard on July 10, 2011

Walter Russell Mead thinks the inner city today faces three key problems, and one of them is lack of jobs. But it's not more good jobs our large cities need, according to Mead, it's more not-so-good jobs:

Think of the path to successful middle class living as a ladder; the lower rungs on that ladder are not nice places to be, but if those rungs don’t exist, nobody can climb.  When politicians talk about creating jobs, they always talk about creating “good” jobs.  That is all very well, but unless there are bad jobs and lots of them, people in the inner cities will have a hard time getting on the ladder at all, much less climbing into the middle class.

Many sensitive and idealistic people in our society work very hard to keep from connecting these dots and admitting to themselves that bad jobs are something we need. Quacks abound promising us alternatives (“green jobs” is the latest fashionable delusion), but ugly problems rarely have pretty solutions.  We need entry level jobs that will get people into the workforce, and we need ways that they can learn useful skills at affordable prices that will help them climb the ladder and move on.

To get these jobs, we have to change the way our cities work.  Essentially, we have created urban environments in which the kind of enterprises that often hire the poor — low margin, poorly capitalized, noisy, smelly, dirty, informally managed without a long paper trail — can’t exist. …

Read the whole thing.

HT: Rand Simberg, who notes that, in addition to the factors Mead mentions, the minimum wage is part of the problem.

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Few jobs at a high cost

Posted by Richard on July 6, 2011

The President's Council of Economic Advisors released a jobs report on Friday, right before the holiday weekend, so you know they hoped no one would pay attention to it. And with good reason. According to Jeffrey H. Anderson, it shows that the jobs "created or saved" by the almost $900 billion in "stimulus" spending cost nearly $300,000 each (emphasis added):

The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.   

In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead. 

Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now.  In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.

That's the good news! The bad news is that the economy lost many more jobs than originally reported

From 2007 to 2010, initial reports from the Bureau of Labor Statistics (BLS) told us that the economy lost 4.201 million jobs. BLS revisions have thus far ramped up the number of jobs lost by 2.43 million. The four-year total is now 6.631 million — a stunning 58% increase. As seen above, the bureau’s revisions to the 12 months of the real recession (July 2008 through June 2009) have shot reported job losses up by almost 1.9 million, a jaw-dropping average of 158,000 per month.

They’re not done yet. Every February, BLS performs a comprehensive “benchmark revision.” The next one will affect the period from March 2010 through December 2011. Considering the results of the past four years showing average additional job losses of 415,000, the next benchmark revision seems destined to push the figures even higher.

Is this sort of depressing jobs data revision typical? Well, no, not during the Bush administration:

By contrast, from 2003 to 2006, initial BLS reports told us that the economy added 5.103 million jobs. After all revisions, the four-year total rose by 1.605 million to 6.708 million — a 31% increase. The sum of all benchmark revisions during that time was a positive 675,000.

The observant reader might conclude that if the government's statistics are off by 58% in one case and 31% (in the other direction) in another, maybe they're just not very good at this econometrics crap. And the observant reader would be correct. 

Be that as it may, there's a more fundamental problem with the administration's claims regarding jobs "created or saved." It's the "broken window fallacy" identified by Frédéric Bastiat in his 1850 essay "That Which is Seen, and That Which is Not Seen." Newsmax quoted a nice modern formulation from the Richmond Times-Dispatch (emphasis added): 

The effects of the stimulus have long been argued. Writing in the Richmond Times-Dispatch, A. Barton Hinkle reported that nobody could seriously argue that it had had no effect on the economy.

However, he likened it to a purse snatcher who took a handbag containing $500 and spent the money on a new television.

“It is categorically undeniable that the theft has created a sale for the TV store. Conservatives who pretend the stimulus has not created any jobs whatsoever stand in the position of an observer trying to deny the TV has been sold,” Hinkle wrote.

“Yet the liberal analysis lacks any recognition that the purse owner now has $500 less to spend on the laptop computer she was going to buy. The theft has generated one sale only by destroying another.

“The first effect is easily seen. The second is not,” Hinkle added. “But only the economically illiterate would conclude that just the first effect occurred, and that therefore the way to increase consumption is to encourage more purse-stealing.”

Exactly right. The Obama administration's strategy for improving the economy amounts to promoting purse-stealing. 

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“We want to go back to work”

Posted by Richard on July 23, 2010

The Obama administration doesn't want a government of laws, it wants a government of men. And there's no better illustration of that than the ongoing struggle over off-shore drilling in the Gulf. Despite the fact that the administration's own hand-picked experts opposed a moratorium on deep-water drilling and in essence said the administration lied about their recommendations, despite the fact that two separate federal courts have slapped down the administration's moratorium, the administration merely rearranged a few commas in their edict, and the moratorium continues.

And it's not just the deep-water moratorium. By refusing to approve or renew permits and throwing up other regulatory and bureaucratic roadblocks, the Obama administration has also effectively imposed a moratorium on shallow-water operations — a moratorium that no reasonable person thinks makes sense. Because it fits their ideological agenda, and because they never want to let a crisis go to waste, the Obama administration has used the Deepwater Horizon spill to effectively end all energy production in the Gulf of Mexico.

Yes, this is the same administration that dithered and delayed for weeks, refusing foreign assistance that could have ameliorated the situation. Ameliorating the situation wasn't their goal. Remaking the American energy economy was their goal. 

On Wednesday, over 11,000 people attended the Rally for Economic Survival in Lafayette, LA. Gov. Bobby Jindal was one of the speakers. Here is a portion of his remarks: 

[YouTube link]

More of Jindal's speech here. As he said, the oil rigs are already starting to leave the Gulf for places like Nigeria and Brazil. In the words of Bruce Springsteen, "these jobs are going, boys, and they ain’t coming back." President Obama isn't stupid or ignorant. These aren't unintended consequences, this is what he wants. 

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More and more bureaucrats earning more and more

Posted by Richard on February 5, 2010

Last Sunday, on ABC's This Week, in an interview with Baba Wawa, Scott Brown called for a freeze on federal hiring and federal pay raises (something he'd advocated before on the campaign trail):

WALTERS: President Obama has asked for a spending freeze on almost everything except matters like the military, Social Security, and Medicare. He says he's going line by line through the budget. Now, you have said that's not enough for you; that you want to cut spending and not just freeze it.

Time out: What a bogus question. The "almost everything except" that's supposed to be frozen amounts to just 13% of the federal budget, according to the Cato Institute. So 87% of the nearly $4 trillion dollar budget is exempted from the Obama "freeze." And as Cato's Chris Edwards noted, "a very large part of the 2009 spending spike of $699 billion will be sloshing forward into 2010 and later years," so even that 13% isn't really "frozen" — it will grow by the hundreds of billions of yet-unspent "stimulus" funds already appropriated and still "sloshing" around.

So what are the first 3 items that you would cut?

BROWN: The problem with what the president said is he's not doing it until 2011. We need to do it immediately. We need to put a freeze on federal hires and federal raises because, as you know, federal employees are making twice as much as their private counterparts.

Sen. Brown's assertion about federal pay apparently came from a Cato study from last fall based on Bureau of Economic Analysis data. It showed that total compensation (including fringe benefits, which are much more generous for federal employees than those in the private sector) averaged $119,982 for federal civilian employees versus $59, 909 for those in the private sector.

Americans for Limited Government's Carter Clews thinks Sen. Brown's proposal is a good beginning, but doesn't go far enough. He thinks we should cut the federal government's workforce of 1.9 million civilian employees (which has grown steadily for many years, in good times and bad) instead of just freezing it:

Private sector vs. government employment

Scott Brown was right – as far as he went. And he should have gone much further. We don’t simply need to put a freeze on federal hires and raises. We need to fire federal employees. The American people, themselves, are clearly prepared to do their part come November. But, it would be a chipper idea to get a head start now by firing about ten percent of the drones and dregs now feeding from the federal trough.

Everywhere else in America, workers are reporting to work each morning not knowing whether they will have a job by the end of the day. More than ten percent of American workers – if you believe Barack Obama’s Labor Department – are now unemployed. And if you add those who are working part time because they can’t find full time jobs, as well as those who have simply given up looking, the figure is nearly double that.

But, there is one place where no one worries about losing his or her job, where the very idea of a pay cut is little more than laughable, and where the next pay raise is as certain as the sun rising in the east and Barack Obama spending money. No, it’s not the Enchanted Kingdom. It is, of course, the federal “work” place.

Charles Anderson thinks firing just 10% is totally inadequate: 

It is almost impossible to fire a federal employee, but the government would work much better if at least 20% of them were fired.  That is just the one's who are not even trying to do their jobs.  If you were to fire the ones who are trying somewhat, but doing their jobs badly, that would eliminate another 30% of federal workers.  Then there are those who are doing what they are assigned to do adequately well, but what they are doing is so wrongheaded that it is hurting the country.  Fire them and you will have eliminated another 25%.  The remaining 25% might largely be federal employees who are doing things that ought to be done and doing them well enough that it is reasonable to spare them the axe.

I'm with Charles on this. I like his math. Cutting the federal payroll by about 75% sounds pretty good to me. 

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