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Old 02-25-2016, 10:06 AM   #141
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So here's a thought experiment:

What would have happened had U.S. government employment not declined relative to trend by about 2.4MM workers since 2009, keeping in mind that most of those government jobs are state and local not Federal positions?

Possible things to consider:

1) Would today's unemployment rate of 4.9% (7.8MM/158MM) be the same, decline to 3.4% (5.4MM/158MM) or be at some other level? Why?

2) In light of the answer to Question 1, would the Fed still be holding rates near zero or would rates be higher and possibly even closer to "normal" today?

3) What's the net effect of all of this on government fiscal balances keeping in mind that the cost of unemployment insurance and lost tax revenue exploded during the Great Recession.

4) To the extent these jobs were not needed, is it better to pursue pro-cyclical policies that cut jobs when unemployment is unusually high or wait until recovery when the impact on workers, the economy, and even the government burden of added unemployment insurance expenses might be lessened?

5) Is it possible it would have turned us in to France?

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Old 02-25-2016, 01:32 PM   #142
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Yes, we've already learned in this thread that "We mustn't become the French, the French, I say!" Not because anyone is actually suggesting that we do so but because simple appeals to stereotypes are always easier than thoughtful arguments.
I like France, more than any foreign country. I like its food, its drink, its music and literature, its history in science (French mathematicians ruled supreme in the 18th-19th centuries).

If one can keep the same US stock performance with the current French lifestyle, I am all in.

By the way, I recently read somewhere that there are fewer unionized workers in France than in the US, percentage wise that is. Who would have thought?
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Old 02-25-2016, 03:02 PM   #143
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By the way, I recently read somewhere that there are fewer unionized workers in France than in the US, percentage wise that is. Who would have thought?
I think that is mostly because of the definition of "workers"
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Old 02-25-2016, 04:53 PM   #144
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French (1799) and Russian (1917) Revolutions were very bloody and the reason they happened was same: rich and powerful neglected poor conditions of millions hard working people in addition to war. That is why most European countries have kind of blend between Socialism and Capitalism. So far it was working well.
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Old 02-25-2016, 05:13 PM   #145
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I think that is mostly because of the definition of "workers"
Hey, I think that that statistics defines a worker as someone drawing a paycheck, no matter how hard or even if he works. Are you OK with that?

I found that article in the Economist again.

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... less than 8% of employees in France belong to a trade union, a figure that has collapsed from a high of about 30% in the 1950s. The figure today is below that in Britain (26%), Germany (18%) and even America (11%). In the French private sector, the rate is lower still: just 5%, next to 14% among civil servants.
For more: The Economist explains: Why French trade unions are so strong | The Economist.
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Old 02-25-2016, 05:13 PM   #146
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One thing I always think about is that in Europe, labor is fluid, people take other jobs in other countries and move with ease place to place wherever a good job can be found.. here in the US, that just doesn't happen.

ie the reason why the small business person says there is absolutely no one who will take job x and there are 100 people in 2 cities over looking for job x.

I'm not sure if it requires a national database, better infrastructure to make commuting possible, a change in culture? it just seems to me that we likely have enough jobs, but not the right people in the right spots.. ie why those same business people then walk down to immigration and bring in someone from outside the country to do the job. If we had a national database of jobs (vs. the ridiculous go to 680 job sites to figure out which one any given job is posted on).. and then you would know exactly how many jobs are open in a single area, what type of jobs, you could then incentivize people to go to where the work is or say hey we have 300 workers looking for jobs that all have skillsets a,b,and d so maybe we could entice a business looking for that to set up shop here...

ie I get frustrated looking for jobs by trying to figure out where jobs may or may not be posted.. once you apply for job is it really actually open or already filled or opened just to get an H1B visa (ok I know a few tech companies that clearly do this)... and you have no idea how much they even think to pay, what level of job it really is, if re-location is even an option... etc.. ie your not getting the best candidates when no one can find the job in the first place.
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Old 02-25-2016, 05:18 PM   #147
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Hmmm.... I have always thought that American people have better mobility than any other country's citizenry. Most of us are rootless people, and people moving from coast to coast is not a big deal.

Are there any statistics or studies on this subject?
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Old 02-25-2016, 05:37 PM   #148
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To return to healthy economic growth, debt needs to expand.
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Old 02-25-2016, 05:41 PM   #149
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Ah hah, the Paradox of Thrift.

We do not want to incur debts for ourselves, but want the other guys to borrow money to spend and businesses to borrow money to expand factories.

This is so that our stocks go up, and we can sit at home lazy and happy counting money.
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Old 02-25-2016, 06:17 PM   #150
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Hmmm.... I have always thought that American people have better mobility than any other country's citizenry. Most of us are rootless people, and people moving from coast to coast is not a big deal.

Are there any statistics or studies on this subject?
I'm going to go looking as while there isn't legal restrictions.. it comes down to money being a big blocker to mobility.. and that comes down to tons of issues such as lack of affordable day care so having to stay near relatives, money to even fund a move as not all companies pay, money to afford to pay for flights if the company won't fly you out.. or even if they will.. you have to have enough money to float that.. I know people that took home 6 figures that couldn't put a flight on their own credit card because it was maxed out. From personal experience my BF was floating almost $2500 in interview trips to a single company that he didnt' get hired at.

And as I said there is also cultural.. not sure that's the right word.. I just know lots of people who haven't really traveled too far from home that would be too scared to move across country or even to another state... especially when you have no guarantee when you get there you won't be let go in the next round of layoffs.
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Old 02-25-2016, 06:41 PM   #151
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I think it is not uncommon for college-educated folks to move a little bit even though they have a preference for being near family and friends.

But less educated folks really do not just pick and move for jobs as much. They just cannot afford it for the most part.

There was that exodus in the 1980s from Michigan to Texas though.
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Old 02-25-2016, 06:57 PM   #152
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ie I get frustrated looking for jobs by trying to figure out where jobs may or may not be posted.. once you apply for job is it really actually open or already filled or opened just to get an H1B visa (ok I know a few tech companies that clearly do this)... and you have no idea how much they even think to pay, what level of job it really is, if re-location is even an option... etc.. ie your not getting the best candidates when no one can find the job in the first place.
Do people know how much incredible information exists now about employment opportunities compared to 15 years ago? The night-and-day difference compared to a generation ago? Heck, as late as the 70s, people seldom knew what jobs were available outside their local area--they'd often have to relocate to a place where they'd heard the opportunities were good and then start working the local networks.

I'm sure there are still gaps out there in the information availability, and making the search tools more efficient would help a lot of people (job seekers and companies alike). But finding a job is never going to be like buying a toaster on Amazon,
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Old 02-25-2016, 08:17 PM   #153
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One thing I always think about is that in Europe, labor is fluid, people take other jobs in other countries and move with ease place to place wherever a good job can be found.. here in the US, that just doesn't happen.
There's so many more barriers to migration in Europe than in the U.S. . . . language, culture, even xenophobia or, more politely, nationalism. Someone moving to Florida from Georgia won't face the same job discrimination that someone moving from Spain might experience in Germany.

The creation of the E.U. has removed a bunch of official barriers and improved things there. And it's also true that people in the U.S. are moving around less than they once did, but we're still by far the most mobile population.

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Old 02-26-2016, 02:21 PM   #154
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We may be no better than France, but we're still no better than where we were.


In 36 States, Unemployment Rates Still Linger Above Prerecession Levels - Real Time Economics - WSJ
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Old 02-26-2016, 02:41 PM   #155
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We may be no better than France, but we're still no better than where we were.


In 36 States, Unemployment Rates Still Linger Above Prerecession Levels - Real Time Economics - WSJ
We're actually a lot better than we were when national unemployment was 10%.

Not sure it's fare to compare the unemployment rate of a recovery that's still in process with the lowest rate achieved during the last cycle.
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Old 02-26-2016, 03:33 PM   #156
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We're actually a lot better than we were when national unemployment was 10%.

Not sure it's fare to compare the unemployment rate of a recovery that's still in process with the lowest rate achieved during the last cycle.
It is not quantities of jobs openings but quality of jobs/wages. Many middle class paid jobs were replaced with low paying service jobs. Such wage frequently requires Government assistance for a family with one and, in some cases, two incomes. I have a friend whose job in IT department (Mega-corp) is going to be outsourced this year. He was warned about it in Jan 2015. An outsourcing company has offered him about 50% of his pay with far worst benefits. He declined the offer but has a hard time to find anything for over 1 year. One of my former co-worker (HVAC - Facility Tech) who is younger than me was also outsourced and took 40% cut with almost no benefits in comparison to what he had. That is type of jobs recovery we have currently.
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Old 02-26-2016, 06:13 PM   #157
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It is not quantities of jobs openings but quality of jobs/wages. Many middle class paid jobs were replaced with low paying service jobs.
To the extent this is true, it has been true for a very long time. I'm not certain it's really a point of distinction between "this recovery" and the past several recoveries.
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Old 02-27-2016, 08:31 AM   #158
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To the extent this is true, it has been true for a very long time. I'm not certain it's really a point of distinction between "this recovery" and the past several recoveries.
I think the loss of manufacturing jobs to overseas much cheaper labor is in direct relation with lack of middle class paying jobs here. In 1992 recession a company I worked for cut 10% pay of every employee making more than $35K and I had 3 offers with much higher pay to choose from. Try to do it currently and you are going to face similar to my friend "opportunities". During my carrier I worked for 3 major manufacturing companies and 3 contractors companies. Two semiconductor companies moved large portion of the production over seas (China, Indonesia), closing plants here and a 3rd company (hard drive disks) completely closed production here moving all facilities to Malaysia. It is not just automation - robotics what reduces middle class jobs in US but relocation of manufacturing plants to countries with cheaper labor, less taxes, less regulations etc. The process was going on for at least 20 years (may be more) and no politician / President did anything to stop it.
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Old 02-27-2016, 10:18 AM   #159
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I think the loss of manufacturing jobs to overseas much cheaper labor is in direct relation with lack of middle class paying jobs here. In 1992 recession a company I worked for cut 10% pay of every employee making more than $35K and I had 3 offers with much higher pay to choose from. Try to do it currently and you are going to face similar to my friend "opportunities". During my carrier I worked for 3 major manufacturing companies and 3 contractors companies. Two semiconductor companies moved large portion of the production over seas (China, Indonesia), closing plants here and a 3rd company (hard drive disks) completely closed production here moving all facilities to Malaysia. It is not just automation - robotics what reduces middle class jobs in US but relocation of manufacturing plants to countries with cheaper labor, less taxes, less regulations etc. The process was going on for at least 20 years (may be more) and no politician / President did anything to stop it.
That all sounds right to me.

I think for a long while everyone accepted certain truths about the way the economy worked - free trade makes us richer; a rising tide lifts all boats; deregulation helps the economy grow; creative destruction creates more jobs than it destroys; etc.

Now with the benefit of hindsight, we can raise serious questions about those truths. The rising tide didn't lift as many boats as we thought it would. Free trade may be a contributing reason why and so too might increasing automation. Deregulation, particularly of banking, can cause more harm than good. Etc.

Just when we think we know how the world works, the world goes and changes on us. And so we have to rethink the conventional wisdom.

Towards that end, I saw this interesting response by Stephen Hawkings in a reddit forum this morning when he was asked whether he's worried all our jobs will be replaced by robots . . .

Quote:
If machines produce everything we need, the outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution. So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality.
His is a very old argument. One we thought was convincingly refuted. But perhaps we were too hasty in that conclusion.
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Old 02-27-2016, 10:45 AM   #160
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