These big corps and their buddies need to be shut down. This tax the middle class and exploit the poor is too much! We need campain finance reform in a big way. Stop the gifts and the end the party. Put the jerks away!
So unfortunately we can't get another not so subtle big picture analogy. Been a long time but I think I read most of Vonnegut in my younger years. What a fantastic trip with good lessons.
Vonnegut was wrong. Engineers, despite the amount of education, training it takes, are being treated like disposable diapers the same as blue collar. Age discrimination is beyond brazen in these occupations.
I agree with commongood. The real problem here is globalization. The U.S. plain needs to protect it's jobs and create policies in a host of areas, trade, labor, unemployment, taxes, immigration to protect U.S. jobs.
Sorry but the idea that somehow the U.S. is the only "nation" that can be creative and innovative is absurd. Creativity and innovation come about because a society supports it. Education, study is most of it, formal or informal.
Sure technological advances will wipe out some jobs and frankly there should be laws, policy that put on the company dime, retraining in many of these cases.
But we already had the "jobs of tomorrow", those being Science, Technology, Engineering, be massively offshore outsourced. Now people will not go into those fields because it's a lot of time, hard work with no pay out.
While one can revamp higher education so the U.S. gets more college graduates and so on, but if one offshore outsources the jobs....what is the point?
I would imagine one issue is that blue collar needs more tech skills, as manufacturing technology advances, but that said we need job creators and no robot, as an example, can run conduit for high power lines.
If they want to create the "jobs of tomorrow" they must make it pay out. No one wants to study for a PhD only to end up bankrupt and homeless, there is no incentive.
But reading about the current global transition keeps me going back to a book I read long ago, Kurt Vonnegut's PLAYER PIANO. In this 1952 novel, automation had resulted in a society divided into a wealthy upper class of managers and engineers who keep the mechanized factories running, and a large lower class. This leads to conflict because the lower class has no purpose in life but to consume and survive.
The elites of Vonnegut's book are highly educated (think Ph.D.s and Harvard MBAs) so there is little social mobility.
Fast forward to the present. We live in a society where social mobility has been commonplace, but concentration of wealth, increasing joblessness, and the rising cost of higher education has restricted social opportunity. One thing the USA has going for it is the American imagination. So you can still start a business in your garage or on the internet, but on the more traditional route to mobility the bar has been raised. Washington has been corrupted by the role of money in politics and a massive revolving door, and is now a wholly owned subsidiary of Goldman Sachs and a few other well-placed corporations. I know so many jobless people, it's downright depressing. The American standard of living has declined, and -- hopefully with it -- our taste for the junk and junky values the elites want to sell us. I don't know whether Vonnegut would prefer to return and write another biting satire, or possibly he would be happy to remain out of it.
Frank T.
story here. Below is the quote from the SIGTARP report which is a dig at GS.
Recall GS was in the meeting with government officials, the only private sector company, on the plan to save AIG.
...in light of the illiquid state of the market in November 2008 (an illiquidity that likely would have been exacerbated by AIG's failure), it is far from certain that the underlying CDOs could have easily been liquidated, even at the discounted price of $4.3 billion. Second, had AIG collapsed, the systemic implications on other market participants might have made it difficult for Goldman Sachs to collect on the credit protection it had purchased against an AIG default, although Goldman Sachs stated that it had received collateral from its counterparties in those transactions. Finally, if AIG had defaulted, Goldman Sachs would have been forced to bear the risk of further declines in the market value of the approximately $4.3 billion in CDOs that it transferred to the Maiden Lane III portfolio as well as approximately $5.5 billion for its credit default swaps that were not part of the Maiden Lane III portfolio; Maiden Lane III removed any risk for the $4.3 billion within that portfolio, and continued Government backing of AIG provided Goldman Sachs with ongoing protection against an AIG default on the remaining $5.5 billion.
You're no Luddite Tom. IMO, you're a realist. We live at a historic time.....peak oil, peak uranium, peak credit, peak resource depletion, and way past peak population carrying capacity of the planet. Check out Jim Kunstler's book "The Long Emergency" for a well reasoned look at our circumstance. Or visit The Club of Rome, who have been researching the limits to growth for 40 years now.
So, once you accept that there is no return to economic growth as we have known it, the idea of "future jobs" is pretty easy. Everyone's job will be to survive the turmoil, as best they can, while civilization finds a new equilibrium within the physical limitations established in nature. And you and Mr. Ford are right, there will be dramatic changes to our standards of living, and pretty nasty ones at that.
Of course, this is a contrarian view which is very upsetting to the status quo. TPTB won't be discussing any of this in public anytime soon.
Over at the “Angry Bear” blog, there is a very thought provoking article by Martin Ford: “The Mythology of the Future Job Market.”
Mr. Ford’s thesis, as I understand it, challenges the historic assumption embraced by virtually all economist, historians and everyone else for that matter. Namely, that the past is cyclical and therefore a guide to the future. Specifically, because new technologies and economic systems replace old jobs with new; therefore, the current period of technology replacing unskilled jobs such as factory assembly lines and the new ‘global economic’ system replacing the national system is nothing to worry about. To challenge these assumptions is akin to being a Luddite.
However, Mr. Ford, if not actually challenging the assumption, acts the role of Socrates and ‘wonders aloud’ if the old unskilled middle class supporting jobs will be replaced with new unskilled middle class supporting jobs.
The new media/blog meme is ‘Job Jobs Jobs’. Well no kidding Dick Tracy! But, I see no meme about ‘What kind of Job Jobs Jobs?’ The so-called ‘shovel ready’ jobs are touted; but, how many people can handle of shovel. If ‘shovel’ is a metaphor for construction the unemployed lady next door is not strong enough. Also, don’t look now but the technological innovations in construction have significantly reduced the person-hours put unit of output (i.e. more structures for less workers). I watch the steel installation of a large duel arch six lane inner state highway bridge and on any given day I did not see more that 50 workers. But, I did see dozens of cranes and lifts.
In short, call me a Luddite if you will, but I have not seen a description of the US labor market for the year 2015 and beyond. What advice does a high school vocational counselor give to the students in his charge?
I think we need less talk about ‘jobs programs’ and ‘jobs stimulus’ bills and some actual description of the jobs that these programs and stimulus bills will create and most importantly what standard of living these jobs will support. The notion that small businesses are going to crate jobs supporting the traditional post war middle class (suburban) life style is pure fantasy. Small business jobs are minimum wage jobs - think McDonalds and CVS.
Talk about jobs is not enough. We need to talk about the standard of living the jobs will support. That’s what the kids in high school want to know.
Well enough of what I think. Really read Mr. Ford. He’s ‘spot-on’ to my mind.
Although I've read reports elsewhere but this game of using acquired countrywide is new.
We've had comments, most anonymous from people just pulling their hair out, telling similar stories on EP. You might not have seen them and I've never gone through and collected them into a blog post.
Very similar that the entire mortgage modification, "programs" ...it's more profitable with similar games like the above to foreclose.
Right now we have some pointing to the positive manufacturing numbers and this great news....but they fail to note that esp. since the China PNTR (trade agreement) went into effect in 2000, we have the incredibly shrinking U.S. manufacturing base. So now, it's plain too small (about 12.2% of overall GDP contribution) to generate the needed jobs.
Glad to see another site take note of global labor arbitrage...
Gee, it's only over 25% of all jobs are offshorable and offshore outsource them....they are!
This is ignoring the probably much larger statistic that jobs are being created overseas, by U.S. MNCs....instead of in the United States.
It is beyond absurd that companies are doing credit checks on people wanting a job. Of course they are in financial trouble, why else would they be applying for work?
We've written about that here, but this site is an economics blog, so beyond giving voice to people, we can't actually do much. That's why we are here though, raising hell on economics and policy.
The best thing you can do probably at this point is to write a personal letter to your Congress representatives, Senators, your State Senators and Representatives and your governor on the abuses of credit scores.
This has come up and the lobbyists beat back attempts to disallow these sorts of abuses of credit scores to date.
But considering it's 1 in 6 Americans needing work, of course the cannot pay their bills and of course their credit score is getting hurt. Duh. To improve their credit score they need a damn job.
It's a beyond belief catch-22 and the government should stop these abuses.
I have been unemployed since Jan 1 2009 I have been applying and at first no one was hiring, 2ndly I am a little physically diabled, now that some companies are hiring for the type of cust serv I do they are doing credit checks. I currently have bad credit and cannot pay anything but my bare nesessities, my cc are in default, cell, home everything and it looks glum for me. is there any hope of laws especially in CO changing regarding this credit chk crap. I am very scared and dont want to loose everything.
Seriously. That's some serious bullshit. If it was posted here, it would have been deleted for being Economic Fiction.
I mean it's pure spin! Notice no facts involved!
They ignore the China currency peg in addition to the very unfair tariff schedule China has against the U.S. They ignore the massive agenda by India to capture entire service sectors through their BPO agenda. Many of these outsourcing contracts are more expensive than hiring U.S. workers and doing the work here, but that doesn't stop the propaganda.
They ignore the manipulation of global tax rates, the tax deferments which incentive the offshore outsourcing of jobs.
They seriously ignore the mythical lure many MNCs have of China's and India's mythical middle class emerging consumer economies, which they froth at the mouth to get in.
Then, they also ignore the flooding of the U.S. labor market with cheaper labor
I mean this is just an absurd commentary. To be "competitive" workers must live in cardboard boxes and we can't have a middle class.
Although that is the goal of many a MNC, to put the U.S. middle class into 3rd world poverty status....ignoring the middle class is the economy, as we see today in various economic indicators. The unemployment rate is so high, it's threatening a double dip recession.
It's clearly some lobbyists' propaganda and it's disgusting the New York Times would publish it.
I can pull up over 100 of such spins, put out by corporate lobbyists. It snows bullshit claims and usually you will not see any economic statistics, facts or details involved.
Yves Smith has found some gems and blasts SIGTARP for not calling it out harsher.
Gez, I was nice too in my post.
She points out they had no efforts to negotiate lower counterparty payout, and amplifies the outrageous joke of claims that CEOs where threatening the Federal Reserve...
One note, Yves implies a bankruptcy would have been a disaster, but I cannot help but wonder if a pre-packaged, pre-arranged bankruptcy would not have been.
I don't think you'll get 20% frankly. There is location costs, there are equipment costs, uniforms, tools, sick days, health care, etc.
But as I see it currently the key is to avoid those bloated administrative costs, such as schools, universities have.
FICA alone, for the employer is 9.1%. We haven't even added health care or any benefits at all.
Then there is unemployment insurance tax, state and fed. That can be anywhere from 0.8% to 5.4%
You haven't hit training or anything yet. Training, travel, possible meals, depending,
We haven't even gotten to project and administration costs of running such a large project. One has to do payroll, manage personnel, set up a management team, do project management, scheduling...reporting, meetings, team leaders and then the project managers....
Somewhere in here is workman's comp. too.
Then there is insurance, liability insurance and so on. That's standard for any construction or infrastructure project. There are probably permits and fees and other things.
I'm not in infrastructure and construction but I'm sure there are additional costs beyond the ones that are coming to mind.
it's like setting up an entire company. Even if the exact infrastructure is already in place, one still has to set it up for a new project and that has major overhead.
I don't think 20% is realistic at all and we haven't even hit health care.
Looking at the BLS's data (http://www.bls.gov/news.release/ecec.nr0.htm), non-wage compensation only worked out to 30% - and that's including things like private retirement and life insurance plans that wouldn't be necessary in temporary jobs.
Most of the overhead is stuff that you wouldn't have to pay for - as you point out, "existing administration, infrastructure" and the like could be saved through using existing bureaucracy. Furthermore, ou can also cut down on costs by doing what the WPA did - use labor power instead of machinery, and get local sponsors to contribute labor and materials.
I guess where I come back to is that the WPA was able to do it with wages + 20%. I don't understand why, after adding on FICA, FUTA, and SUTA and an additional 10% non-labor costs, we couldn't replicate that feat.
I got 2.5x from a typical ratio of private total employee costs vs. W2 (wages). I think you're missing FICA and some other taxes which should already eat past 20% in today's world. That 2.5x is what the total employee costs are vs. the wage. i.e. health insurance, FICA taxes, training, uniforms and so on. But this is very rough, it's a thumb in the air that is used inside corporations.
That would be a very great project, I'll keep a look out. Something like Public works pay! It has to be true to some degree. Take the Hoover Dam just as one, that assuredly has paid out 100x for it's costs by now. GG bridge, probably just in tourist fees alone to cross it has to have paid out 10x, never mind the increased commerce and so on.
These big corps and their buddies need to be shut down. This tax the middle class and exploit the poor is too much! We need campain finance reform in a big way. Stop the gifts and the end the party. Put the jerks away!
So unfortunately we can't get another not so subtle big picture analogy. Been a long time but I think I read most of Vonnegut in my younger years. What a fantastic trip with good lessons.
Vonnegut was wrong. Engineers, despite the amount of education, training it takes, are being treated like disposable diapers the same as blue collar. Age discrimination is beyond brazen in these occupations.
I agree with commongood. The real problem here is globalization. The U.S. plain needs to protect it's jobs and create policies in a host of areas, trade, labor, unemployment, taxes, immigration to protect U.S. jobs.
Sorry but the idea that somehow the U.S. is the only "nation" that can be creative and innovative is absurd. Creativity and innovation come about because a society supports it. Education, study is most of it, formal or informal.
Sure technological advances will wipe out some jobs and frankly there should be laws, policy that put on the company dime, retraining in many of these cases.
But we already had the "jobs of tomorrow", those being Science, Technology, Engineering, be massively offshore outsourced. Now people will not go into those fields because it's a lot of time, hard work with no pay out.
While one can revamp higher education so the U.S. gets more college graduates and so on, but if one offshore outsources the jobs....what is the point?
I would imagine one issue is that blue collar needs more tech skills, as manufacturing technology advances, but that said we need job creators and no robot, as an example, can run conduit for high power lines.
If they want to create the "jobs of tomorrow" they must make it pay out. No one wants to study for a PhD only to end up bankrupt and homeless, there is no incentive.
But reading about the current global transition keeps me going back to a book I read long ago, Kurt Vonnegut's PLAYER PIANO. In this 1952 novel, automation had resulted in a society divided into a wealthy upper class of managers and engineers who keep the mechanized factories running, and a large lower class. This leads to conflict because the lower class has no purpose in life but to consume and survive.
The elites of Vonnegut's book are highly educated (think Ph.D.s and Harvard MBAs) so there is little social mobility.
Fast forward to the present. We live in a society where social mobility has been commonplace, but concentration of wealth, increasing joblessness, and the rising cost of higher education has restricted social opportunity. One thing the USA has going for it is the American imagination. So you can still start a business in your garage or on the internet, but on the more traditional route to mobility the bar has been raised. Washington has been corrupted by the role of money in politics and a massive revolving door, and is now a wholly owned subsidiary of Goldman Sachs and a few other well-placed corporations. I know so many jobless people, it's downright depressing. The American standard of living has declined, and -- hopefully with it -- our taste for the junk and junky values the elites want to sell us. I don't know whether Vonnegut would prefer to return and write another biting satire, or possibly he would be happy to remain out of it.
Frank T.
HuffPo did a second dig at the SIGTARP report.
story here. Below is the quote from the SIGTARP report which is a dig at GS.
Recall GS was in the meeting with government officials, the only private sector company, on the plan to save AIG.
You're no Luddite Tom. IMO, you're a realist. We live at a historic time.....peak oil, peak uranium, peak credit, peak resource depletion, and way past peak population carrying capacity of the planet. Check out Jim Kunstler's book "The Long Emergency" for a well reasoned look at our circumstance. Or visit The Club of Rome, who have been researching the limits to growth for 40 years now.
So, once you accept that there is no return to economic growth as we have known it, the idea of "future jobs" is pretty easy. Everyone's job will be to survive the turmoil, as best they can, while civilization finds a new equilibrium within the physical limitations established in nature. And you and Mr. Ford are right, there will be dramatic changes to our standards of living, and pretty nasty ones at that.
Of course, this is a contrarian view which is very upsetting to the status quo. TPTB won't be discussing any of this in public anytime soon.
Over at the “Angry Bear” blog, there is a very thought provoking article by Martin Ford: “The Mythology of the Future Job Market.”
Mr. Ford’s thesis, as I understand it, challenges the historic assumption embraced by virtually all economist, historians and everyone else for that matter. Namely, that the past is cyclical and therefore a guide to the future. Specifically, because new technologies and economic systems replace old jobs with new; therefore, the current period of technology replacing unskilled jobs such as factory assembly lines and the new ‘global economic’ system replacing the national system is nothing to worry about. To challenge these assumptions is akin to being a Luddite.
However, Mr. Ford, if not actually challenging the assumption, acts the role of Socrates and ‘wonders aloud’ if the old unskilled middle class supporting jobs will be replaced with new unskilled middle class supporting jobs.
The new media/blog meme is ‘Job Jobs Jobs’. Well no kidding Dick Tracy! But, I see no meme about ‘What kind of Job Jobs Jobs?’ The so-called ‘shovel ready’ jobs are touted; but, how many people can handle of shovel. If ‘shovel’ is a metaphor for construction the unemployed lady next door is not strong enough. Also, don’t look now but the technological innovations in construction have significantly reduced the person-hours put unit of output (i.e. more structures for less workers). I watch the steel installation of a large duel arch six lane inner state highway bridge and on any given day I did not see more that 50 workers. But, I did see dozens of cranes and lifts.
In short, call me a Luddite if you will, but I have not seen a description of the US labor market for the year 2015 and beyond. What advice does a high school vocational counselor give to the students in his charge?
I think we need less talk about ‘jobs programs’ and ‘jobs stimulus’ bills and some actual description of the jobs that these programs and stimulus bills will create and most importantly what standard of living these jobs will support. The notion that small businesses are going to crate jobs supporting the traditional post war middle class (suburban) life style is pure fantasy. Small business jobs are minimum wage jobs - think McDonalds and CVS.
Talk about jobs is not enough. We need to talk about the standard of living the jobs will support. That’s what the kids in high school want to know.
Well enough of what I think. Really read Mr. Ford. He’s ‘spot-on’ to my mind.
try the rich text editor to help or just learn how to format two things.
Also, if people get really stuck on formatting and also understanding the blog rules, EP has an email system and I'm around to help.
Although I've read reports elsewhere but this game of using acquired countrywide is new.
We've had comments, most anonymous from people just pulling their hair out, telling similar stories on EP. You might not have seen them and I've never gone through and collected them into a blog post.
Very similar that the entire mortgage modification, "programs" ...it's more profitable with similar games like the above to foreclose.
Did you notice that Bernanke's remarks has about an 8 hour effect on the commodities markets?
They went blasting back up today.
Oil man, the hidden future economic growth killer. I think a nice post on oil is due. We haven't had a long solid analysis in a while.
(yes I bought GLD earlier & am holding).
Right now we have some pointing to the positive manufacturing numbers and this great news....but they fail to note that esp. since the China PNTR (trade agreement) went into effect in 2000, we have the incredibly shrinking U.S. manufacturing base. So now, it's plain too small (about 12.2% of overall GDP contribution) to generate the needed jobs.
Glad to see another site take note of global labor arbitrage...
Gee, it's only over 25% of all jobs are offshorable and offshore outsource them....they are!
This is ignoring the probably much larger statistic that jobs are being created overseas, by U.S. MNCs....instead of in the United States.
It is beyond absurd that companies are doing credit checks on people wanting a job. Of course they are in financial trouble, why else would they be applying for work?
We've written about that here, but this site is an economics blog, so beyond giving voice to people, we can't actually do much. That's why we are here though, raising hell on economics and policy.
The best thing you can do probably at this point is to write a personal letter to your Congress representatives, Senators, your State Senators and Representatives and your governor on the abuses of credit scores.
This has come up and the lobbyists beat back attempts to disallow these sorts of abuses of credit scores to date.
But considering it's 1 in 6 Americans needing work, of course the cannot pay their bills and of course their credit score is getting hurt. Duh. To improve their credit score they need a damn job.
It's a beyond belief catch-22 and the government should stop these abuses.
I have been unemployed since Jan 1 2009 I have been applying and at first no one was hiring, 2ndly I am a little physically diabled, now that some companies are hiring for the type of cust serv I do they are doing credit checks. I currently have bad credit and cannot pay anything but my bare nesessities, my cc are in default, cell, home everything and it looks glum for me. is there any hope of laws especially in CO changing regarding this credit chk crap. I am very scared and dont want to loose everything.
Seriously. That's some serious bullshit. If it was posted here, it would have been deleted for being Economic Fiction.
I mean it's pure spin! Notice no facts involved!
They ignore the China currency peg in addition to the very unfair tariff schedule China has against the U.S. They ignore the massive agenda by India to capture entire service sectors through their BPO agenda. Many of these outsourcing contracts are more expensive than hiring U.S. workers and doing the work here, but that doesn't stop the propaganda.
They ignore the manipulation of global tax rates, the tax deferments which incentive the offshore outsourcing of jobs.
They seriously ignore the mythical lure many MNCs have of China's and India's mythical middle class emerging consumer economies, which they froth at the mouth to get in.
Then, they also ignore the flooding of the U.S. labor market with cheaper labor
I mean this is just an absurd commentary. To be "competitive" workers must live in cardboard boxes and we can't have a middle class.
Although that is the goal of many a MNC, to put the U.S. middle class into 3rd world poverty status....ignoring the middle class is the economy, as we see today in various economic indicators. The unemployment rate is so high, it's threatening a double dip recession.
It's clearly some lobbyists' propaganda and it's disgusting the New York Times would publish it.
I can pull up over 100 of such spins, put out by corporate lobbyists. It snows bullshit claims and usually you will not see any economic statistics, facts or details involved.
.
Yves Smith has found some gems and blasts SIGTARP for not calling it out harsher.
Gez, I was nice too in my post.
She points out they had no efforts to negotiate lower counterparty payout, and amplifies the outrageous joke of claims that CEOs where threatening the Federal Reserve...
One note, Yves implies a bankruptcy would have been a disaster, but I cannot help but wonder if a pre-packaged, pre-arranged bankruptcy would not have been.
Which is attached here and linked to. While it's covering highly complex topics, I think it's more than readable.
The protector of the financial oligarchy and a protege of Robert Rubin gets more power. Amazing. Only in America.
RebelCapitalist.com - Financial Information for the Rest of Us.
I don't think you'll get 20% frankly. There is location costs, there are equipment costs, uniforms, tools, sick days, health care, etc.
But as I see it currently the key is to avoid those bloated administrative costs, such as schools, universities have.
FICA alone, for the employer is 9.1%. We haven't even added health care or any benefits at all.
Then there is unemployment insurance tax, state and fed. That can be anywhere from 0.8% to 5.4%
You haven't hit training or anything yet. Training, travel, possible meals, depending,
We haven't even gotten to project and administration costs of running such a large project. One has to do payroll, manage personnel, set up a management team, do project management, scheduling...reporting, meetings, team leaders and then the project managers....
Somewhere in here is workman's comp. too.
Then there is insurance, liability insurance and so on. That's standard for any construction or infrastructure project. There are probably permits and fees and other things.
I'm not in infrastructure and construction but I'm sure there are additional costs beyond the ones that are coming to mind.
it's like setting up an entire company. Even if the exact infrastructure is already in place, one still has to set it up for a new project and that has major overhead.
I don't think 20% is realistic at all and we haven't even hit health care.
Looking at the BLS's data (http://www.bls.gov/news.release/ecec.nr0.htm), non-wage compensation only worked out to 30% - and that's including things like private retirement and life insurance plans that wouldn't be necessary in temporary jobs.
Most of the overhead is stuff that you wouldn't have to pay for - as you point out, "existing administration, infrastructure" and the like could be saved through using existing bureaucracy. Furthermore, ou can also cut down on costs by doing what the WPA did - use labor power instead of machinery, and get local sponsors to contribute labor and materials.
I guess where I come back to is that the WPA was able to do it with wages + 20%. I don't understand why, after adding on FICA, FUTA, and SUTA and an additional 10% non-labor costs, we couldn't replicate that feat.
I got 2.5x from a typical ratio of private total employee costs vs. W2 (wages). I think you're missing FICA and some other taxes which should already eat past 20% in today's world. That 2.5x is what the total employee costs are vs. the wage. i.e. health insurance, FICA taxes, training, uniforms and so on. But this is very rough, it's a thumb in the air that is used inside corporations.
That would be a very great project, I'll keep a look out. Something like Public works pay! It has to be true to some degree. Take the Hoover Dam just as one, that assuredly has paid out 100x for it's costs by now. GG bridge, probably just in tourist fees alone to cross it has to have paid out 10x, never mind the increased commerce and so on.
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