Wednesday, March 29, 2017

Dean Baker: Trade Denialism Continues: Trade Really Did Kill Manufacturing Jobs [feedly]

Baker makes a good point about the rising trade effects on manufacturing from 2000 onward. However it seems like simply an acceleration of a longstanding trend. There is trade, and then there are trade agreements. Textiles, machine tools and sundry other industries were "running away" from the US long before Nafta, Cafta, Korean, or TPP trade deals. And there is very little corelation between trade flows and trade deals, worldwide, without assuming all sorts of "lags" in effect which, in the absence of much data, are just speculation. NO doubt we will learn more when UK exits the EU -- that will be a key test of what happens to trade when a market agreement ends.

So, Is Baker talking trade, or trade agreements? Not clear. Also, his args are a bit tongue in cheek -- he does not actually say that slowing either trade or trade agreements will "bring back" manufacturing. In order to know for sure if trade, or trade deals, either or both, are the "cause", and not just  a correlated trend, with lost manufacturing jobs, we would have to stop both the trade and withdraw from the deals, and see if manufacturing returned....???? Very doubtful hypothesis.

Yes, Brad DeLong and some others are underplaying trade effects. But Baker may be in a cloud of "anti-trade" denialism himself.

Trade Denialism Continues: Trade Really Did Kill Manufacturing Jobs

Dean Baker

 -- via my feedly newsfeed

Dean Baker
Truthout, March 27, 2017

There have been a flood of opinion pieces and news stories in recent weeks wrongly telling people that it was not trade that led to the loss of manufacturing jobs in recent years, but rather automation. This means that all of those people who are worried about trade deficits costing jobs are simply being silly. The promulgators of the automation story want everyone to stop talking about trade and instead focus on education, technology or whatever other item they can throw out as a distraction.

This "automation rather than trade story" is the equivalent of global warming denialism for the well-educated. And its proponents deserve at least as much contempt as global warming deniers.

The basic story on automation, trade and jobs is fairly straightforward. "Automation" is also known as "productivity growth," and it is not new. We have been seeing gains in productivity in manufacturing ever since we started manufacturing things.

Productivity gains mean that we can produce more output with the same amount of work. Before the trade deficit exploded in the last decade, increases in productivity were largely offset by increases in output, making it so the total jobs in manufacturing did not change much.

Imagine that productivity increased by 20 percent over the course of a decade, roughly its average rate of growth. If manufacturing output also increases by 20 percent, then we have the same number of jobs at the end of the decade as at the beginning. This is pretty much what happened before the trade deficit exploded.

This is easy to see in the data. In December of 1970 the US had 17.3 million manufacturing jobs. Thirty years later, in December of 2000, it had 17.2 million manufacturing jobs. We had enormous growth in manufacturing productivity over this period, yet we had very little change in total employment.

To be clear, manufacturing did decline as a share of total employment. Total employment nearly doubled from 1970 to 2000, which means that the share of manufacturing employment in total employment fell by almost half. People were increasingly spending their money on services rather than manufactured foods.

However what we saw in the years after 2000 was qualitatively different. The number of manufacturing jobs fell by 3.4 million, more than 20 percent, between December 2000 and December of 2007. Note that this is before the collapse of the housing bubbled caused the recession. Manufacturing employment dropped by an additional 2.3 million in the recession, although it has since regained roughly half of these jobs.

The extraordinary plunge in manufacturing jobs in the years 2000 to 2007 was due to the explosion of the trade deficit, which peaked at just under 6 percent of GDP ($1.2 trillion in today's economy) in 2005 and 2006. This was first and foremost due to the growth of imports from China during these years, although we ran large trade deficits with other countries as well.

There really is very little ambiguity in this story. Does anyone believe that if we had balanced trade it wouldn't mean more manufacturing jobs? Do they think we could produce another $1.2 trillion in manufacturing output without employing any workers?

It is incredible how acceptable it is for our elites to lie about trade rather than deal with the issue candidly. The most blatant example of this dishonesty is a December, 2007 Washington Post editorial that praised NAFTA and, incidentally, criticized the Democratic presidential candidate for calling for renegotiating the trade deal.  

The editorial absurdly asserted:

"Mexico's gross domestic product, now more than $875 billion, has more than quadrupled since 1987."

For GDP to quadruple over the course of two decades, it would have to sustain a 7 percent average annual rate of growth. China has managed to do this and almost no one else, certainly not Mexico. According to the IMF, Mexico's GDP grew by 83 percent over this period.

While it is striking that the Washington Post's editorial board would have been so ill-informed as to make such a huge mistake in their original editorial, the really incredible part of the story is that they still have not corrected the online version almost a decade later. After all, a reader could stumble on the GDP quadrupling claim and think that it is actually true.

This level of dishonesty separates trade out from most other areas of public debate. There can be grounds for honest people to differ on many issues, but there is less of a basis for asserting Mexico's GDP quadrupled during this period than there is for denying global warming. It is unfortunate that the proponents of recent trade deals feel they have to be this dishonest to push their agenda.

Resistance Radio Interviews Jamaal Craig on A Philip Randolph and links between the labor and civil rights

Enlighten Radio:Are You Crazy is McGill-less, Resistance Gets UnCivil

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Blog: Enlighten Radio
Post: Are You Crazy is McGill-less, Resistance Gets UnCivil

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Tuesday, March 28, 2017

State Budget Cuts Hit Higher Education Hard [feedly]

State Budget Cuts Hit Higher Education Hard

This West Virginia Center on Budget and Policy Issue Brief, State Budget Cuts Hit Higher Education Hard, released today, details the impact of multiple years of budget cuts to the state's public higher education institutions. Read the PDF news release. Read the full brief.

Falling public support for the state's universities and colleges has led to tuition rising, making the reality of higher education much less attainable for many of West Virginia's families. Simultaneously, state and federal financial assistance programs for higher education have also decreased in value, leading to increased debt among graduates of West Virginia's higher education institutions.

Investing in higher education to keep tuition affordable and quality education at public colleges and universities would help West Virginia develop the skilled and diverse workforce it will need to grow its economy.

Key Finding

  • Average tuition at West Virginia's public colleges and universities has increased by $4,200 since 2002, a 147 percent increase, and far outpacing inflation.
  • Tuition increases, in large part, have been fueled by falling public support for higher education. Since 2008, state spending in higher education has declined by $130 million, adjusting for inflation.
  • As tuitions have increased, so has student debt. The average debt of a college graduate in West Virginia has increased by 70 percent since 2005. West Virginia also has the second highest student loan default rate in the country.
  • Tuition increases have eroded the value of the state's financial aid programs. The share of tuition covered by the PROMISE scholarship has fallen from 100 percent to 70 percent.
  • Investments in higher education provide significant economic benefits. Improving the levels of educational attainment in West Virginia's workforce will help ensure the state's economic future.

 -- via my feedly newsfeed

Paul Krugman: How to Build on Obamacare [feedly]

jcase: So, PK is ready to resurrect the "public option", but no mention of Medicare for All. Too Bernie, no doubt. Unfortunately the insurance industry views the "public option" with the same hatred as Medicare for All. Both put them out of the health insurance biz in the end. They might even do better with Medicare for All as contractors to provide or supplement administrative services in the vast public system which Medicare For All, and a "public option" will require.  The private insurance industry's BASE is their customers. Customers pay premiums and file claims. Customers with paid claims are happy and tend toward loyalty to the company that paid them. They got what they paid for. On the other hand customers with unpaid, or partially paid, claims may not be happy. 

The public option will likely be the cheapest for comparable coverage. Under any configuration, controlling costs mandates universal coverage, both healthy and sick people. Since coverage MUST be mandatory -- it would seem politically impossible for a public option coverage to be any worse than Medicare or expanded Medicaid. Coverage under both those plans beats anything currently for sale at an affordable price. Regardless its hard to see how insurance companies thrive in that environment, except insofar as they provide a necessary administrative service to 170 million people. 

Unfortunately providing 170 million health care customers with a vital service is also grounds for a potentially vast political resource to exploit. In addition Republicans are not likely to bring either, or anything, into being.

Both will require an anti-Trump,anti-austerity, anti-Stupid upheaval --- an upheaval that, if it can find coherent form, will be able to do either -- time to keep Medicare for All on the table. "Why take the long way around Kelly's barn?", as they say in Vermont. "The front gate is wide open."  Ooops...sorry PK...too Bernie, again :)


Paul Krugman: How to Build on Obamacare

"If Mr. Trump really wanted to honor his campaign promises about improving health coverage..., there's a lot he could do":

How to Build on Obamacare, by Paul Krugman, NY Times: "Nobody knew that health care could be so complicated." So declared Donald Trump three weeks before wimping out on his promise to repeal Obamacare. ...
Actually, though, health care isn't all that complicated. Basically, you need to induce people who don't currently need medical treatment to pay the bills for those who do, with the promise that the favor will be returned if necessary.
Unfortunately, Republicans have spent eight years angrily denying that simple proposition. ... But put politics aside..., what could be done to make health care work better...?
The Affordable Care Act deals with the fundamental issue of health care provision in two ways. More than half of the gains in coverage have come from expanding Medicaid... And that part of the program is working fine, except in Republican-controlled states that won't let the federal government aid their residents.
But Medicaid only covers the lowest-income families. Above that level, the A.C.A. relies on private insurance companies, using a combination of regulations and subsidies to keep policies affordable. This has worked well in some places. ...
Overall, however, too few healthy people have purchased insurance, despite the penalty for failing to sign up... As a result, some companies have pulled out of the market. And this has left some areas, especially rural counties in small states, with few or no insurers.
No, it's not a "death spiral"... But the system could and should be improved. ...
What about the problem of inadequate insurance industry competition? ... At the very least, there ought to be public plans available in areas no private insurer wants to serve. There are other more technical things we should do too...
So if Mr. Trump really wanted to honor his campaign promises about improving health coverage..., there's a lot he could do... And he would get plenty of cooperation from Democrats along the way.
Needless to say, I don't expect to see that happen. ...
And the tweeter-in-chief's initial reaction to health care humiliation was, predictably, vindictive. He blamed Democrats, whom he never consulted, for Trumpcare's political failure, predicted that "ObamaCare will explode," and that when it does Democrats will "own it." Since his own administration is responsible for administering the law, that sounds a lot like a promise to sabotage Americans' health care and blame other people for the disaster.
The point, however, is that building on Obamacare wouldn't be hard, and wouldn't even be all that complicated.

 -- via my feedly newsfeed

Low wage African American workers have increased annual work hours most since 1979 [feedly]

Low wage African American workers have increased annual work hours most since 1979

Over the last several decades, black workers have been offering more to the economy and the labor market to incredibly disappointing results in pay and unemployment. Some have argued that the disparity in wages between blacks and white is the result of white workers working longer and harder than black workers. They blame black workers for racial wage gaps, saying that they should do anything from getting more education to simply working harder. Such explanations minimize the role of racial discrimination on labor market outcomes, while perpetuating racial bias and stereotypes of black workers as unmotivated and lazy.

And the data show they are simply false: hours and weeks worked have increased for both races, with a larger increase for black workers over the last several decades. The increase in annual hours is particularly striking for workers in the bottom 40 percent of the wage distribution, where it has been driven almost entirely by women.

Table 1 provides data on annual hours worked in 1979 and 2015 for workers ages 18–64 years old who report non-zero earnings during the year (so the averages are conditioned on working. In forthcoming research, we explicitly address trends in labor force participation). Work hours include paid vacations and time off, and therefore represent paid hours. The table also presents the percent change from 1979 to 2015 in annual hours, weeks worked, and weekly hours. These data are shown by race and wage fifth, or quintile.

Read more

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Monday, March 27, 2017

Enlighten Radio Podcasts:Labor Beat hosts WV AFL-CIO Prez Josh Sword, and WV Senator John Ungar

John Case has sent you a link to a blog:

Blog: Enlighten Radio Podcasts
Post: Labor Beat hosts WV AFL-CIO Prez Josh Sword, and WV Senator John Ungar

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