Redirect


This site has moved to http://economistsview.typepad.com/
The posts below are backup copies from the new site.

November 25, 2014

Latest Posts from Economist's View

Latest Posts from Economist's View


Links for 11-25-14

Posted: 25 Nov 2014 12:06 AM PST

'And the Winner Is...Full-Time Jobs!

Posted: 24 Nov 2014 11:50 AM PST

This is from "Julie Hotchkiss, a research economist and senior policy adviser at the Atlanta Fed":

And the Winner Is...Full-Time Jobs!: Each month, the U.S. Bureau of Labor Statistics (BLS) surveys about 60,000 households and asks people over the age of 16 whether they are employed and, if so, if they are working full-time or part-time. The BLS defines full-time employment as working at least 35 hours per week. This survey, referred to as both the Current Population Survey and the Household Survey, is what produces the monthly unemployment rate, labor force participation rate, and other statistics related to activities and characteristics of the U.S. population.
For many months after the official end of the Great Recession in June 2009, the Household Survey produced less-than-happy news about the labor market. The unemployment rate didn't start to decline until October 2009, and nonfarm payroll job growth didn't emerge confidently from negative territory until October 2010. Now that the unemployment rate has fallen to 5.8 percent—much faster than most would have expected even a year ago—the attention has turned to the quality, rather than quantity, of jobs. This scrutiny is driven by a stubbornly high rate of people employed part-time "for economic reasons" (PTER). These are folks who are working part-time but would like a full-time job. Several of my colleagues here at the Atlanta Fed have looked at this phenomenon from many angles (here, here, here, here, and here).
The elevated share of PTER has left some to conclude that, yes, the economy is creating a significant number of jobs (an average of more than 228,000 nonfarm payroll jobs each month in 2014), but these are low-quality, part-time jobs. Several headlines have popped up over the past year or so claiming that "...most new jobs have been part-time since Obamacare became law," "Most 2013 job growth is in part-time work," "75 Percent Of Jobs Created This Year [2013] Were Part-Time," "Part-time jobs account for 97% of 2013 job growth," and as recently as July of this year, "...Jobs Report Is Great for Part-time Workers, Not So Much for Full-Time."
However, a more careful look at the postrecession data illustrates that since October 2010, with the exception of four months (November 2010 and May–July 2011), the growth in the number of people employed full-time has dominated growth in the number of people employed part-time. Of the additional 8.2 million people employed since October 2010, 7.8 million (95 percent) are employed full-time (see the charts). ...
During the Great Recession (until about October 2010), the growth in part-time employment clearly exceeded growth in full-time employment, which was deep in negative territory. The current high level of PTER employment is likely to reflect this extended period of time in which growth in part-time employment exceeded that of full-time employment. But in every month since August 2011, the increase in the number of full-time employed from the year before has far exceeded the increase in the number of part-time employed. This phenomenon includes all of the months of 2013, in spite of what some of the headlines above would have you believe.
So, in the post-Great Recession era, the growth in full-employment is, without a doubt, way out ahead.

Companies on Trial: Are They ‘Too Big to Jail’?

Posted: 24 Nov 2014 11:05 AM PST

Lawrence Summers:

Companies on trial: are they 'too big to jail'?: Disillusionment with government and large institutions is a salient feature of contemporary American life. An important cause is the widespread sense that big companies and those who run them are not held accountable for their crimes – that they are ... Too Big To Jail. The fact that no one has been imprisoned for the misdeeds that led to the financial crisis is seen as outrageous by many on Main Street. At the same time, the multibillion-dollar fines and enforcement actions against financial institutions that now seem to be a monthly event are a new phenomenon...
The current trend towards large fines ... seems to promote a somewhat unattractive combination of individual incentives. Managers do not find it personally costly to part with even billions of dollars of their shareholders' money, especially when fines represent only a small fraction of total market value. Paying with shareholders' money as the price of protecting themselves is a very attractive trade-off. Enforcement authorities like to either collect large fines or be seen as delivering compensation for those who have been victimized by corporate wrongdoing. So they are all too happy to go along.
In the process, punishment of individuals who do wrong or who fail in their managerial duty to monitor the behavior of their subordinates is short-changed. And deterrence is undermined. There is a broader cultural phenomenon here as well. Relative to other countries such as the UK or Japan, the principle that leaders should resign to take responsibility for failure on their watch even when they did not directly do wrong is less established in the US. This is probably an area where we have something to learn. ...

No comments: