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Contents Bulletin Scripting in shell and Perl Network troubleshooting History Humor

Over 50 and unemployed

News Neoliberalism war on  labor Recommended Links Neoliberalism as a Cause of Structural Unemployment in the USA Underemployment Perma Temps Secular Stagnation The myth of human capital
Scapegoating and victimization of poor and unemployed Surviving a Bad Performance Review Signs that you might be dismissed soon Neoliberal rationality Neoliberalism and Christianity The Rise of the New Global Elite The Iron Law of Oligarchy The Pareto Law
IT Outsourcing/Offshoring Skeptic: Fighting Outsourcing Myths Commodization of IT: "IT does not matter" fallacy and what in Nicholas Carr views matter Bootlickocracy: "Kiss up, kick down" style in corporate IT Cargo cult programming Stoicism IT Slang The role of automation and AI in decimation of workforce  
Office Slaves: the rise of bullshit jobs Tactful communication Diplomatic Communication  Negative Politeness Dealing With Negative Criticism Six ways to say No and mean it Rules of Verbal Self Defense   Avoiding Anger Trap 
Programmers and sysadmins health issues Marriage and unemployment Coping with prolonged joblessness Adverse Selection Bosos or Empty Suits (Aggressive Incompetent Managers) The Fiefdom Syndrome Female Sociopaths The Hare Psychopathy Checklist
Signs that you might be dismissed soon Bureaucracies Bureaucratic avoidance of responsibility Bureaucratic alienation IT Outsourcing/Offshoring Skeptic Social Problems in Enterprise Unix Administration The psychopath in the corner office The IT workplace
Slightly Skeptical View on Enterprise Unix Administration Insufficient Retirement Funds as Immanent Problem of Neoliberal Regime Corporate bullshit Information Overload Fundamental Absurdity of IT Management Slackerism Cloud Computing Related Humor Etc

Introduction

"Don't tell people you're unemployed. Tell them you're semiretired.
It changed my self-identity. I still look for jobs, but I feel better about myself."
 

Many IT professionals, who are over 50, recently found  themselves excluded and marginalized: "without work, without possibilities, without any means of escape." (Pope Francis on danger of neoliberalism). Typical feelings experienced after loss of employment included emptiness, inadequacy, humiliation, rage, shame, envy, and worthlessness. Additional aspects include  grief over the additional losses that followed the job loss, such as loss of social connectedness, and professional status. For some people, unresolved conflicts vis-a-vis former employers produce strong revengeful feelings.  For others, self-loathing, contempt, self-criticism, and insecurity or fear of trying new things are more prominent. That might affect common activities such as attending children's graduations or weddings, getting through major holidays,  sustaining interest in former leisure activities or hobbies. As the period of unemployment exceeds one year most usually experienced increased and sometimes overwhelming sadness and grief at what had been lost. Paradoxically, reentering workforce now led to comparisons of "there and then" with "here and now". Reactions including rage and feelings of unfairness  were not uncommon. Shame and anger are especially notable.

The key question here is how to survive this prolonged slump, which is very similar to the situations that often happened in Arctic expeditions at the beginning of XX century: the ship squeezed by ice goes down and survivors face life in tents in Arctic weather.  With limited supplies and a long time before the rescuers can reach them. Often forced to survive in those tents Arctic winter. Dr. Sidney Blair, the Navy psychiatrist who coordinated personnel selection for the Operation Deep Freeze voiced the following opinion (BOLD ENDEAVORS. p. 260):

When I am asked, "If you want to be 100% sure that a person will adjust [ to Antarctic duty], what do you look for?"

My usual answer is that I look for somebody who loves their work. This is probably the most important thing on the list of positive factors, they have to love their work. It is almost all right if they love their work to the exclusion of everyone else.

Another important factor is ability to survive isolation and confinement inherent in long unemployment. Neoliberalism tried to atomizes employees, destroy social bonds between them, propagating " under the disguise of competition old "Man Is Wolf to Man " mentality( from Latin ' Homo homini Iupus est" . Which, in essence, is an old style "divide and conquer" strategy. Moreover there was never a trade union of IT administrators of programmers so they are by definition pretty isolated specialty, without much inter-employee solidarity. But as Mark Twain aptly said "No man is a failure who has friends". 

As in Arctic, in the situation of unemployment an isolated person is a doomed person. You need to rely of support of other people and you better start cultivating them (as well a funds) before the blow strikes. Again this is a very similar to situations that occur in Arctic expeditions, in older types of submarines crews, etc. IT specialists over 50 who succeed after long unemployment belong to the same type people who would survive in case of crash of the ship in Arctic expedition. This is a real life experiment on what we do in moments of great challenge. Do we rise to the occasion or fail? Are we heroes or cowards? Are we loyal to the people we love most or do we betray them? Are the most close people remain loyal to you in such a challenging circumstances or they are ready to betray? What is the right thing to do in such difficult circumstances? Like Arctic explorers in the past you need to face the danger and difficult decisions. It is easy to say that one had to be brave and strong and keep moving forward despite hardships. It is quite difficult to do. It's about ordinary people drawn into circumstances beyond their control and the choices they must make to take back some of that control... impulsive choices, dangerous choices, heart wrenching and even catastrophic choices that can't be undone. It's more complex that just bravery and cowardice.

People who are rated as low in impatience and irritability and low in the characteristics associated with creation interpersonal conflicts (e.g. egotistic, boastful, hostile, arrogant) have better chances in this situation. People who are more concerted with well-being of other paradoxically typically fared better in situation of Arctic expedition crisis. Other-directiveness helps to survive is such harsh environment. Traits like social compatibility or likability, emotional control, patience, tolerance to others, self-confidence without egotism, ability to subordinate your own interests to the interests of the team, a sense of humor, and  are extremely valuable and are now checked for potential members of long duration expeditions that involve severe hardships.  To those scientifically established traits for selection of people into Arctic expeditions one can add

  1. The level of self-control. There are powerful "animal" mechanisms that are still active within us and due to them we tend to display some behaviors typical for "cornered animal" in the situation of long unemployment and unsuccessful search for a job.  Emotionally the hit of losing job is comparable with the hit of losing close relative. The ability to take those behaviors under control are critical. See also Avoiding Anger Trap. The ability to take job loss "cool" without excessive negative emotions (as in "sh*t happens" attitude)  is very important. Otherwise Job loss can cause heart issues, and the stress and bad habits that frequently come with unemployment can build up over time. There is even danger to your mental health with long unemployment as depression is more common among long term unemployed:.
    Michael McKee, a psychologist and stress expert at the Center for Integrative Medicine at the Cleveland Clinic in Ohio, agreed that attention needs to paid to the body blow that job loss can inflict on any individual’s sense of identity and self-respect.

    “If you keep trying to find a job and don’t,” he noted, “or if you find a job and then lose it, and that pattern repeats and repeats, you not only lose identity, you lose income, the structure to your day, your sense of achievement, your friends from work, your other friends because you are embarrassed to be around them, your self-confidence, your self-respect. Then you start to lose hope and meaning and purpose, [and] feel alienated and hopeless and helpless.”

    So, McKee added, “Well-meaning programs, public and private, which help people find jobs, need to add caution to eagerness. Caution that they not set people up for repeated failure, for long times between jobs, which is likely to accelerate the ride to depression. Always finding another job quickly lets you keep your hope up, but struggling [can] often lead to increased fear and anxiety.”

    Related to that is the ability to use physical exercise to control your emotional state. Consider it as an effective medication for excessive aggressiveness and anger. See also Avoiding Anger TrapThe ability to maintain your physical and emotional  tonus, which now is especially important. Stretch exercises are known to help is such situation for many people.  So called 4 x 4 running/walking (fast running for 4 minute then walking 4 minutes; and so one 4 times -- 32 min total ) also is very helpful exercise to reduce the level of aggressiveness and anger. Swimming is another highly recommended exercise.  Generally spending some time near the water tend to help many people.
     

  2. Tactfulness in interpersonal relations (see Tactful communication, Diplomatic Communication, Negative Politeness). This trait can't be overestimated. For married couples, tact can avoid one of the main problem in long unemployment - stress and possible dissolution of the marriage. No matter how hard your try to compensate this is a huge hit for your self-esteem and the truth is such a hit encourages some maladjusted compensation mechanisms and first of all excessive aggression toward family members. You need to resist this tendency. The single best prediction of marital longevity is that both partners are kind and emotionally generous to each other. But this is easier said that done is such situation as long unemployment. Those who feel appreciated and valued by thier spouse may feel more committed to their marriage and have more positive outlook on overcoming existing difficulties. 
     
  3. Effective conflict resolution skills, especially in marriage, as marriage comes under stress during period of long unemployment. See Conflict Couple A Dialectical Behavior Therapy Guide to Finding Peace.  It is better to assume part of household hours to help the other partner. Nothing destructs a person so much and so quickly as prolong period of idleness and even routine tasks related to home that you can take from your spouse are beneficial in adaptation. Consider it to be a new part time job.  Expect and prepare to problems in your marital life (Marriage and unemployment). In fact, unemployment stimulates transition of a pre-existing marital conflict into the state when spouses are separated emotionally but not physically, or  became “upstairs/downstairs” couples who are estranged, but share the same house. This is a real danger during long unemployment.
     
  4. Stoicism, ability to withstand hardships with honor, without betrayal of yourself and those who are close to you. The key idea if stoicism is that  "virtue is sufficient for happiness". Such an attitude stresses the value an inner freedom in the face of the external, often hostile world. Stoicism teaches the development of self-control and fortitude as a means of overcoming destructive emotions such lust and greed; the philosophy holds that becoming a clear and unbiased thinker allows one to better understand yourself and thus overcome hardships without betrayal of yourself and those who are close to you. As Seneca said "The point is, not how long you live, but how nobly you live." Admiral James Stockdale, who was shot down over North Vietnam, held as a prisoner and repeatedly tortured was deeply influenced by Epictetus after being introduced to his works while at Stanford University. As he parachuted down from his plane, he reportedly said to himself "I'm leaving the world of technology and entering the world of Epictetus!" The same word can be repeated by IT specialist who are over 50 and became unemployed.  Practicing  Stoicism is an active process of preparation to overcome negative influence of hardships with honor  (and viewing hardships as a test that God send to evaluate a person) and acquiring deeper self-knowledge in the process (see below)
     
  5. The sense of humor.  The sense of humor is really important for survival in such circumstances. Sense of humor  serves as an important safety valve, preventing depression.  The future can be scary, but people with the sense of humor adapt easer to harsh conditions.  We often cannot predict how we will be feeling – our level of emotional stability.  Again, I would like to stress, that the sense of humor serves as a safety valve in this cases, and  really help to prevent depression caused by such circumstances.
     
  6. The ability to be easily entertained and  fight the sense of boredom.   This is an interesting observation: the easier one can fight the sense of boredom, the better are chances he/she has to survive long unemployment without emotional scars.  As Nansen frequently wrote in his journal, to survive isolation and confinement, one must learn to be idle without feeling guilty (BOLD ENDEAVORS, p.261)  See below You will survive: Fight the sense of isolation and related higher level of aggression I remember the story of one prisoner whom only entertainment in solitary confinement to observe a female rat in his cell. He observed how she behaved, gave birth, etc and noted that he probably would not survived without this strange companion of his confinement.  And this situation with excessive boredom is not limited to people with the long term unemployment problem.  It is pretty common for example for actors too.  Linda Fiorentino  who played the famous female sociopath character in  The Last Seduction once observed "As actors, the thing we have to fight, more than even the business part of making movies, is boredom."   Temporary work, or even volunteering are important for the same reason. You can't wait for your best chance forever. This is also very similar to the situation actors find themselves. As Linda Fiorentino noted  "Sometimes I have to work because I need the money. You weigh the issues and ask yourself, "Can I wake up every morning and do this?"
     
  7. Ability to regulate and maintain healthy sleep.  Sleep is one thing that people over 50 can't take for grunted. Problems with sleep due to "toxic worry" further aggravate the level of aggressiveness, especially in men and are pretty common in such situations. Switching wake up hours to suit you natural internal clock might help. Now you have such a possibility.   Valerian root tablets (over the counter) can help. Not working on the computer for three hours before going to bed might help.
     
  8. Interest in keeping a regular log of events. That can be done either on computer on or by writing it in the form of lab journal (writing a regular journal make it easier to keep it private; in case of computer you need to use encrypted USB drive which is unlocked, for example, using fingerprint or code combination). That helps to view that situation as pretty cruel experiment that neoliberal society staged upon you, and gives you an ability see a bigger picture. The picture on the level above your personal problems. See Start a log book
     
  9. Maintaining proper (or may be even slight upscale) attire and useful work habits.  Well dressed people have higher self-esteem. As simple as that. That's an important fact that dictates that you need to be dressed up. For the same reason regular visits to the library revive your work routines. That also forces you to dress properly and helps with self-confidence  Public library can serve as a substitute for working place just for few hours a day and along with positive influence on self-confidence helps to fight the sense of isolation. The same role can play a course in your local community college (if you enroll in one course in it it is tax deductable; highly recommended). People are social animals in many respects (see Your Body Language Shapes Who You Are Amy Cuddy TED Talks - YouTube :-)  See also The importance of keeping yourself occupied

Like Arctic explorers with ship squeezed by ice which went down, you need to became an expect in survival in hostile environment and keeping the friendship of a few people you can rely upon. Isolated people die in Arctic really quick. The value of the ability to manage conflicts and to communicate tactfully in your current relationships increase tenfold in such situations:

It takes more skill, effort and commitment--and, at least in the short run, more stress--to face the challenge together with the other person involved in the dispute. Certainly it seems as if it would be easier to fight, withdraw, or give in. Yet in the long run, working through difficulties together will help us live a less stressful and more fulfilling life.

The value of stoicism in fighting consequences of a job loss


The secret of happiness, you see, is not found in seeking more, but in developing the capacity to enjoy less. – Socrates

Be content with what you have; rejoice in the way things are. When you realise there is nothing lacking, the whole world belongs to you. – Lao Tzu

It is not the man who has too little, but the man who craves more, that is poor. – Seneca

God, give me grace to accept with serenity
the things that cannot be changed,
Courage to change the things
which should be changed,
and the Wisdom to distinguish
the one from the other.
Living one day at a time,
Enjoying one moment at a time,
Accepting hardship as a pathway to peace,
Serenity Prayer - Wikipedia

Admiral James Stockdale, who was shot down over North Vietnam, held as a prisoner and repeatedly tortured was deeply influenced by Epictetus after being introduced to his works while at Stanford University. As he parachuted down from his plane, he reportedly said to himself "I'm leaving the world of technology and entering the world of Epictetus!" The same words can be repeated by  IT specialist who are over 50 and became unemployed: it is the ability to fight adversity that distinguishes real men from fakes.

Stoics teach us that not everything is under our control, not it should be. There are some things we have control over (our judgments, our own mental state) but for a  lot of things we do not exercise much control -- this is what the concept of destiny is about (external processes and objects, transformations of the society, like the USA conversion to neoliberalism in 1980th with banks running amok for quick profits, resulting from this social cataclysms like Great Recession or, worse,  civil war in some countries (all wars are bankers wars)). Part of our unhappiness can be traced to confusing these two categories: thinking we have control over something that ultimately we do not.

The wisdom can can be viewed as the ability to distinguish things that we can control and those that we can not. This stoic attitude was aptly captured by American theologian Reinhold Niebuhr[ (1892–1971) in his famous Serenity Prayer:

God, give me grace to accept with serenity
the things that cannot be changed,
Courage to change the things
which should be changed,
and the Wisdom to distinguish
the one from the other.
Living one day at a time,
Enjoying one moment at a time,
Accepting hardship as a pathway to peace,

Loss of job is a severe hit for a person no matter young or old. A hit comparable in its effects with the dissolution of the marriage or a death or a jail term of a close relative. In other words it is a traumatic event with negative long term consequences.  Among them:

But you have the ability to minimize them. Stoicism is a philosophy of life that might help, at least for some people,  is those circumstances. It tried to address the problem of loss of self-esteem but reformulating it from the the "dimension" of possession to the dimension of personal courage.  After all if everything if gone a man can quit the life voluntarily. That means that he should be able to fight to last breath against even uneven adds.  The key idea of stoicism is that  "personal virtue and courage in adversity, courage in fight against uneven odds is sufficient for maintaining high self-esteem". 

In other words stoicism reasserts  human dignity as the ability to fight the external, often hostile world. Stoicism teaches the development of self-control and fortitude as a means of overcoming destructive emotions such desperation, lust and greed; the philosophy holds that the ability to see clearly your circumstances and fight them to the extent you can  is an achievement in itself, toward which we all should strive.  No matter what is the outcome of this fight. The Stoics taught that we fail far more often than we succeed, that to be human is to be fearful, selfish, and angry far more often than we’d like. But they also taught a realistic way to be less fearful, less selfish, and less angry.  It also teaches to prepare for adversity and do not expect that your life with be smooth sailing to the very end.

In addition to this "glorification of human courage in fighting adversity" stoics also strive  "to be free from anger, envy, and jealousy" (The Stoic ideal of dispassion is accepted to this day as the perfect moral state by the Eastern Orthodox Church). AS value of a person is in his inner properties , stoics teach to accept everybody as "equals, because all men alike are products of nature." In ancient world this was an innovative, rebelous postulates. Related to social status of unemployment is remains to be so even now. In their view the external differences which are considered of such primary importance in Western civilization, such as rank and wealth should not be primary criteria of judging others, not they should the primary goals in your life, or of primary importance in social relationships

After all it is the idea of capitalism to deprive part of the population from meaning full employment to increase obedience of theirs. Neoliberalism requires that employees sell their labor as a condition of survival. Nothing more, nothing less. The "entrepreneur" can exert power by denying access to work, hence income, hence survival. Watch "Office space" which provides a pretty realistic picture how fear of loss of employment paralyzes even young, rebellious people, making the easy prey to any corporate sociopath. The state has the ability to enforce this social order by "brute force”  and in modern times, when social safety nets are weak routinely destroys efforts of the remnants of organized labor to defend employees rights. And neoliberalism  is certainly remains the preferred order among Western elites. All in all "it is not your fault". Seriously.

In the words of Epictetus (note that the word happiness here has slightly different meaning then in regular English language), you can be  "sick and yet happy, in peril and yet happy, dying and yet happy, in exile and happy, in disgrace and happy..." If we assume that "happiness" means here the ability to maintain high self-esteem this quote might be more understandable. Stoic ethics stressed the rule: "Follow where reason leads." One must therefore strive to be free of the distortions caused by "passions", bearing in mind that the ancient meaning of "passion" was more close to contemporary words "emotions",  "anguish" or "suffering", that is, "passive reaction to external events, which is different from the modern use of the word. In other words you need the ability to dispassionately and persistently "stay the course" after you had chosen it with all the wisdom you are capable of; it is about "who controls whom.": either you control your your emotions, or your emotions control you. 

The four cardinal virtues of the Stoic philosophy are: wisdom (Sophia), courage (Andreia), justice (Dikaiosyne), and temperance (Sophrosyne).  The ability to fight in adversarial conditions considered to be a virtue.  This stoical sentiment with more stress on desire to fight the adversity to the bitter end despite uneven odds was expressed in old Russian song Varyag (the cruiser  that became  became famous for her crew's stoicism at the Battle of Chemulpo Bay when she alone tried to break the blockade of the port by the whole Japanese fleet)

All to the upper deck and man your battle posts,
The last battle for our ship is coming
Our proud "Varyag" will not surrender to the enemy,
And none of us want their mercy.

But this situation needs a different type of courage, then military courage required to face overwhelming enemy force and fight to the bitter end despite low or even non-existent odds of the victory and survival. Unlike military battles, unemployment can last for years. So endurance comes to the front. This is more like prolonged war, then a single battle.

Unemployment also press people to get into compromises they would never get otherwise. Stoics teach that a person should strive to be just and moral in an unjust and immoral world (see also Reinhold Niebuhr's book Moral Man and Immoral Society) despite all odds:

"Moral Man and Immoral Society", by Reinhold Neibhur, was published during the years of the Great Depression. In this work, Reinhold asserts the requirement of politics in the fight for social justice because of the depravity of human nature, that is, the arrogance of human beings. Neibur sees the flaws of the mind when it comes to solving social injustice by moral and wise means, "since reason is always the servant of interest in a social situation". This is his judgment of liberal Christian doctrine, which fully believes in the intellectual ability of humans to make themselves be good, and he admits this vulnerability as our existence. In other words, Neibhur accurately saw the evil of systems in society and its empty endeavors to better individuals and their insufficiencies.

Neibhur warns us about adopting "herd mentalities." According to him, individuals are morally able to think of the interests of others above themselves. That is, human beings can be kind. Societies, however, find it essentially impossible to manage intelligently the competing interests of subgroups. Societies, he contends, effectively gather up only individuals' selfish impulses, not their abilities for charitable thoughtfulness toward others.

According to Niebuhr, this group egocentricity of individuals-in-groups is immensely powerful. "In every human group there is less reason to guide and to check impulse, less capacity for self-transcendence, less ability to comprehend the needs of others, therefore more unrestrained egoism than the individuals, who compose the group, reveal in their personal relationships".

Avoidance of fight for justice is viewed by stoics a rejection of one's social duty. Stoic philosophical and spiritual practices included  contemplation of hardship, training to value the life as it is (similar to some forms of Eastern meditation), and daily reflection on everyday problems and possible solutions (by keeping a diary). Practicing  Stoicism is an active process of preparation to overcome  hardships that your destiny could send upon you with honor and courage  (and viewing hardships as a test that God send to evaluate a person). As well as acquiring deeper self-knowledge and the knowledge of the society in the process.

In his Meditations (which were not written for print, but as a  personal diary) Marcus Aurelius defines several such practices. For example, in Book II.I:

Say to yourself in the early morning: I shall meet today ungrateful, violent, treacherous, envious, uncharitable men. All of the ignorance of real good and ill... I can neither be harmed by any of them, for no man will involve me in wrong, nor can I be angry with my kinsman, or hate him; for we have come into the world to work together...

It was stoicism that gave mankind the idea if equality of all men. In this situation it applies to those who suffer from the long term unemployment. Below are some quotations from major Stoic philosophers, selected to illustrate common Stoic beliefs:

Epictetus:

Marcus Aurelius:

Seneca the Younger:

A good introduction to Stoicism can be found in A Guide to the Good Life by William B. Irvine. Here are some Amazon reviews of the book:

...Readers learn how to minimize worry, how to let go of the past and focus our efforts on the things we can control, and how to deal with insults, grief, old age, and the distracting temptations of fame and fortune.

We learn from Marcus Aurelius the importance of prizing only things of true value, and from Epictetus we learn how to be more content with what we have.

Finally, A Guide to the Good Life shows readers how to become thoughtful observers of their own life. If we watch ourselves as we go about our daily business and later reflect on what we saw, we can better identify the sources of distress and eventually avoid that pain in our life...

David B Richman (Mesilla Park, NM USA)
The Best Introduction to an Ancient Philosophy, December 23, 2008 See all my reviews

A Guide to the Good Life: The Ancient Art of Stoic Joy (Hardcover)

I first read Marcus Aurelius' "Meditations" while flying to the eastern United States for a scientific meeting. It was during a rather difficult period in my life and I had picked up on "Meditations" because of a mention of this work by Edwin Way Teale in "Near Horizons" as a book he turned to in times of trouble.

I was not disappointed by these insightful notes written for his own use nearly 2000 years ago by the Roman Emperor and Stoic philosopher. It was thus that I was primed to read William B. Irvine's "A Guide to the Good Life: The Ancient Art of Stoic Joy." This is one of those books that can be really life changing, if the reader is ready for it.

Irvine briefly discusses the history of Stoic philosophy and its relationship to other philosophies in ancient Greece and Rome. He concentrates most of the book, however, on the Stoics of the Roman Empire, namely Seneca, Gaius Musonius Rufus, Epictetus and, of course, Marcus Aurelius. After his historical review Irvine spends some time on the practical aspects of Stoicism, including

  • negative visualization (visualizing how your life could be worse),
  • dichotomy of control (what we can and cannot control),
  • fatalism (about the past and present, not the future),
  • self-denial (putting off pleasure so as to appreciate it more when you have it),
  • duty (what we owe to others),
  • social relations (how we relate to others),
  • insults (how to react to them),
  • grief (how to deal with loss),
  • anger (how to turn it to humor),
  • personal values (how to deal with fame and fortune, or the lack thereof),
  • old age (how to deal with the aging process),
  • and dying (how to prepare for this certainty).

The last part of the book is devoted to the practice of Stoicism in the modern world, with both its pluses and minuses.

Although I would have to practice a modified Stoicism (I doubt that most of us would like to sleep even occasionally on a board or give up sex except for procreation), there is much of Stoicism that we can use in the modern world.

Unlike the Cynics who slept on boards all the time and generally followed ascetic practices, Stoics wanted to enjoy life and followed something akin to the Middle Way of Buddhism.

This attitude could certainly be of use to counter the worst of this "me first" society of rampant consumerism. In truth you really cannot take it with you when you die and to act like you can is the height of folly.

This book is a fascinating exposition of Stoic philosophy and its possible uses in the present day. The current economic collapse and other disasters of modern living could be a fertile ground for a revival of Stoic ideas. I also recommend it as a refreshing antidote for the hectic modern world in general. Take what is useful, and leave the rest, but read it if you would live deliberately and thus be free!

Secular stagnation of the economy

The world  entered a period of economic stagnation. American middle class families now earn less and have a lower net worth than before the Great Recession.  For individuals, this translates into less savings at the age of 50. Both in 401K and in accounts outside 401K, such as Roth or regular investment account, such as Vanguard. That means that "downsizing" in case of chronic unemployment need to go deeper and be more painful. To raise funds you not only need to change your house for apartment (a good move when you children are grown up in any case) bu take other measures, like getting rid off of extra car, boat, etc. 

Rising unemployment level of IT professional over 50 is just a tip of the iceberg of multiple problems caused by secular stagnation.  Here is a short description:

Secular Stagnation is a term proposed by Keynesian economist Alvin Hansen back in the 1930s to explain America’s dismal economic performance — in which sluggish growth and output, and employment levels well below potential, coincide with a problematically low (even negative) real interest rates even in the face of extraordinarily easy monetary policy. This is stagnation that lasts longer period then the business cycle (also called Japanification of economy). It looks like a suppression of economic performance for long (aka secular) period of time.

The global stagnation we are experiencing is the logical result of dominance of neoliberalism and a sign of its crisis an a ideology, somewhat similar to the crisis of Bolshevik's ideology in the USSR in 60th when everybody realized that the existing society cannot fulfill the key promise of higher living standards and that over centralization of economic life naturally lead to stagnation.  Analogy does not ends here, but this point is the most important.

Neoliberalism replaced over-centralization (with iron fist one party rule) with over-financialization (with iron fist rule of financial oligarchy), with generally the same result as for the economy ( In other words neoliberalism like bolshevism is equal to economic stagnation; extremes meet).  End of cheap oil did not help either. In a sense neoliberalism might be viewed as the elite reaction to the end of cheap oil, when it became clear that there are no enough cookies for everyone.

This growth in the financial sector's profits has not been an accident; it is the result of  engineered shift in the elite thinking, which changed government policies. The central question of politics is, in my view, "Who has a right to live and who does not".  In the answer to this question, neoliberal subscribes to Social Darwinism: citizens should be given much less rather than more social protection. Such  policies would have been impossible in 50th and 60th (A Short History of Neo-liberalism)

In 1945 or 1950, if you had seriously proposed any of the ideas and policies in today's standard neo-liberal toolkit, you would have been laughed off the stage at or sent off to the insane asylum. At least in the Western countries, at that time, everyone was a Keynesian, a social democrat or a social-Christian democrat or some shade of Marxist.

The idea that the market should be allowed to make major social and political decisions; the idea that the State should voluntarily reduce its role in the economy, or that corporations should be given total freedom, that trade unions should be curbed and citizens given much less rather than more social protection--such ideas were utterly foreign to the spirit of the time. Even if someone actually agreed with these ideas, he or she would have hesitated to take such a position in public and would have had a hard time finding an audience.

And this change in government polices was achieved in classic Bolsheviks coup d'état way via forming first the Party of "professional neoliberal revolutionaries" who pushed for this change. The crisis of "New Deal capitalism" helped, but without network of think tanks and rich donors, the triumph of neoliberalism in the USA would have been impossible:

...one explanation for this triumph of neo-liberalism and the economic, political, social and ecological disasters that go with it is that neo-liberals have bought and paid for their own vicious and regressive "Great Transformation". They have understood, as progressives have not, that ideas have consequences. Starting from a tiny embryo at the University of Chicago with the philosopher-economist Friedrich von Hayek and his students like Milton Friedman at its nucleus, the neo-liberals and their funders have created a huge international network of foundations, institutes, research centers, publications, scholars, writers and public relations hacks to develop, package and push their ideas and doctrine relentlessly.

Most economists are acutely aware of the increasing role in economic life of financial markets, institutions and operations and the pursuit of profits via exotic instruments such as derivatives (all this constituted  financialization). This dominant feature of neoliberalism has huge the re-distributional implications, huge effects on the US economy, international dimensions and monetary system, depth and longevity of financial crises and unapt policy responses to them.

They have built this highly efficient ideological cadre because they understand what the Italian Marxist thinker Antonio Gramsci was talking about when he developed the concept of cultural hegemony. If you can occupy peoples' heads, their hearts and their hands will follow.

I do not have time to give you details here, but believe me, the ideological and promotional work of the right has been absolutely brilliant. They have spent hundreds of millions of dollars, but the result has been worth every penny to them because they have made neo-liberalism seem as if it were the natural and normal condition of humankind. No matter how many disasters of all kinds the neo-liberal system has visibly created, no matter what financial crises it may engender, no matter how many losers and outcasts it may create, it is still made to seem inevitable, like an act of God, the only possible economic and social order available to us.  

Neoliberalism naturally leads to secular stagnation due to redistribution of wealth up. which undermines purchasing power of the 99%, or more correctly 99.9 of the population. In the USA this topic became hotly debated theme in establishment circles after Summers speech in 2013.  Unfortunately it was suppressed in Presidential campaign of 2016. Please note that Sanders speaks about Wall Street shenanigans, but not about ideology of neoliberalism.  No candidates tried to address this problem of "self-colonization" of the USA, which is probably crucial to "making America great again" instead of continued slide into what is called "banana republic" coined by American writer O. Henry (William Sydney Porter 1862–1910). Here is how Wikipedia described the term:

Banana republic or banana state is a pejorative political science term for politically unstable countries in Latin America whose economies are largely dependent on exporting a limited-resource product, e.g. bananas. It typically has stratified social classes, including a large, impoverished working class and a ruling plutocracy of business, political, and military elites.[1] This politico-economic oligarchy controls the primary-sector productions to exploit the country's economy.[2]

... ... ...

In economics, a banana republic is a country operated as a commercial enterprise for private profit, effected by a collusion between the State and favoured monopolies, in which the profit derived from the private exploitation of public lands is private property, while the debts incurred thereby are a public responsibility.

This topic is of great importance to the US elite because the USA is the citadel of  Neoliberalism. It also suggest that the natural way neoliberal economic system based on increasing of the level of inequality (redistribution of wealth up) should behave: after the initial economic boom (like in case of steroids use) caused by  financialization of economy (as well as dissolution of the USSR), helped by off-shoring of manufacturing, the destructive effects of this temporary boost come into foreground. Redistribution of wealth up increases inequality which after a certain delay starts to undercuts domestic demand. It also tilts the demand more toward conspicuous consumption (note the boom of luxury cars sales in the USA).  

But after  inequality reaches certain critical threshold  the economy faces extended period of low growth reflecting persistently weak private demand (purchasing power of lower 90% of population).  People who mostly have low level service economy jobs (aka MC-jobs) can't buy that much.  Earlier giants of American capitalism like Ford understood that, but Wall Street sharks do not and does not want.  They operate under principle "Après nous le déluge" ("After us, the deluge").

An economic cycle enters recession when total spending falls below expected by producers and they realize that production level is too high relative to demand. What we have under Neoliberalism is Marx's crisis of overproduction on a new level. At this level it is intrinsically connected with the parasitic nature of complete financialization of the economy. The focus on monetary policy and the failure to enact fiscal policy options is the key structural defect of Neoliberalism ideology and can't be changed unless neoliberal ideology is abandoned. Which probably will not happen unless another huge crisis hits the USA. That might not happen soon.  Bolshevism lasted more then 70 years. If we assume that the "age of Neoliberalism" started at 1973 with Pinochet coup d'état in Chile, Neoliberalism as a social system is just 43 years old (as of 2016). It still has some "time to live"(TTL) in zombies state due to the principle first formulated by Margaret Thatcher as TINA ("There Is No Alternative") -- the main competitor, bolshevism, was discredited by the collapse of the USSR and China leadership adoption of neoliberalism. While Soviet leadership simply abandoned the sinking ship and became Nouveau riche in a neoliberal society that followed, Chinese elite managed to preserved at least outer framework of the Marxist state and the political control of the Communist party (not clear for how long). But there was a neoliberal transformation of Chinese economy, initiated, paradoxically, by the Chinese Communist Party.

Currently, no other ideology, including old "New Deal" ideology can  compete with neoliberal ideology, although things started to change with Sanders campaign in the USA on  the left and Trump campaign on the right. Most of what we see as a negative reaction to neoliberalism in Europe generally falls into the domain of cultural nationalism.    

The 2008 financial crisis, while discrediting Neoliberalism as an ideology (in the same way as WWII discredited Bolshevism), was clearly not enough for the abandonment of this ideology. Actually Neoliberalism proved to be remarkably resilient after this crisis. Some researchers claim that it entered "zombie state" and became more bloodthirsty and ruthless.

There is also religious overtones of Neoliberalism which increase its longevity (similar to Trotskyism, and neoliberalism can be called "Trotskyism for rich"). So, from a small, unpopular sect with virtually no influence, neo-liberalism has become the major world religion with its dogmatic doctrine, its priesthood, its law-giving institutions and perhaps most important of all, its hell for heathen and sinners who dare to contest the revealed truth.  Like in most cults adherents became more fanatical believers after the prophecy did not materialized. The USA elite tried partially alleviate this problem by resorting to military Keynesianism as a supplementary strategy. But while military budget was raised to unprecedented levels, it can't reverse the tendency. Persistent high output gap is now a feature of the US economy, not a transitory state.

But there is another factor in play here: combination of peak (aka "plato" ;-) oil and established correlation of  the speed of economic growth and prices on fossil fuels and first of all on oil. Oil provides more than a third of the energy we use on the planet every day, more than any other energy source (How High Oil Prices Will Permanently Cap Economic Growth - Bloomberg). It is dominant fuel for transport and in this role it is very difficult to replace. 

That means that a substantial increase of price of oil acts as a fundamental limiting factor for economic growth. And "end of cheap oil" simply means that any increase of supply of oil to support growing population on the planet and economic growth now requires higher prices. Which naturally undermine economic growth, unless massive injection of currency are instituted. that probably was the factor that prevented slide of the US economy into the recession in 2009-2012.  Such a Catch-22.

Growth dampening potential of over $100-a-barrel oil is now a well established factor. Unfortunately, the reverse is not true. Drop of oil price to below $50 as happened in late 2014 and first half of 2015 did not increase growth rate of the USA economy. It might simply prevented it from sliding it into another phase of Great Recession. Moreover when  economies activity drops, less oil is needed.  Enter permanent stagnation.

Also there is not much oil left that can be profitably extracted at prices below $80. So the current oil price slump is a temporary phenomenon, whether it was engineered, or is a mixture of factors including temporary overcapacity . Sooner or later oil prices should return to level "above $80", as only at this level of oil price capital expenditures in new production make sense. That des not mean that oil prices can't be suppressed for another year or even two, but as Herbert Stein aptly noted   "If something cannot go on forever, it will stop,"

Move to the cloud, lumpenization of IT and degeneration of IT brass

Currently the "conversion to the cloud" in the latest IT fashion. and under this sauce a lot of salaried jobs in IT are eliminated.  Technically speaking this just a new flavor of outsourcing.  While such a move have some technical merits:

But for everything else this is not "one size fit all" type of solution. As soon as the service requires considerable bandwidth (such as backup) it became really brittle after move into the cloud.  Also large provider which enjoy economy of scale (such a Google with Gmail or Amazon cloud, Microsoft or Web hosting companies) typically often experience periodic catastrophic outages just became of their huge scale: at such scale even minor mistake can has unpredictable consequences.  And there is nothing, absolutely nothing that you can change in such a situation, if your services are outsourced.  You is just one of many customers and as such there is no special loyanty toward you from the cloud provider staff. Unless you regular employees they do not care much about your company.  See "Everything in the Cloud" Utopia

But it does not matter for IT brass. In reality this conversion is used as an opening salvo in an attack of "traditional", salaried  IT workforce. Which are first transferred to the "cloud provider" and them partially eliminated when datacenter change hands due to "move to the cloud". Many of the older folds choose to retire (and that doubles the value of sound handling of your 401K -- think about it not so much as retirement fund, but more as a private unemployment insurance).  Combining some income stream from 401K and a low paying job helps to survive this adversity

The trend  under Neoliberalism is unmistakable: temps and contractors gradually displace permanent (salaried) employees, top brass gets richer and richer.  Less qualified and lower paid personnel with less benefits gradually is replacing old workforce, whenever such change is even marginally possible. Management gets outsized bonuses.  That's why large companies now are hunting for the opportunity to "convert datacenter to the cloud". 

In reality the conversion to the cloud is used as an opening salvo in an attack of "traditional", salaried IT workforce. Which are first transferred to the "cloud outsourcer" and them partially eliminated  when datacenter change hands. Many older folds choose to retire (and that double the value of sound handling of your 401K -- think about it not so much as retirement fund, but more as a private unemployment insurance).  Combining some income stream from 401K and a low paying job helps to survive this adversity.

The trend toward less qualification in IT (aka "lumpenization of IT") as also connected with the fact that as university graduates get into mature stage of development of major technologies and did not experience the emerging of all those technologies as old-timers did, unless they were amateur enthusiasts who tried to build their own computers and experimented with such OSes as MS DOS and Linux in school. That often means that they have less unique,  "in-depth" knowledge of technologies and processes that old-timers, which they acquired  by being the first hand witnesses of the  evolution of IT to the present level. As such they are more predisposed to use "packaged" solutions.

But of course there are old-timers and old-timers. Large swat of IT old-times are accidental people which moved to the field during boom years of IT (say, 1990-1998). Many of them  have neither native talent which drove "real" old-timers into IT from other specialties (often physics, or electrical engineering), nor computer science university degree which allow to see a bigger picture. Such people are just barely competent despite all the advantages cited above that their entrance at the field at the early stage of development of many important technologies (and first of all web-based technologies) provides. 

At the same time the concerns about reliability and downtime are not as simple as having old seasoned workforce on the payroll. A new generation of IT workers (mostly part-time and lower paid guys from outsourcers) is not greatly affecting network or server reliability in a negative way. May be something does happen on the margins. But major business disruptions coused by the ground floor incompetence looks completely remote to me. More often such cases are caused by gross incompetence of the top brass.

Paradoxically with the current level of hardware and software technology this new temp workers and contractors might be adequate to maintaining status quo. Its completely other game with the development of something new, but just maintaining existing services much like maining electrical network does not requires much talent and dedication. Business can survive with completely outsourced IT, if all they need are basic services. And many businesses unfortunately belongs to this type.  Of cause, everything became slow like running in the dense mud, but services somehow function and the enterprise does not collapse. Also both hardware and software architecture itself became more resilient for reasons external to the datacenter technologies used. For example, if company mail and phone network are down, people still can communicate using their cell phones SMS messages and web based personal accounts (which is bad but those are extraordinary circumstances which require extraordinary measures are better then nothing)

Another trend is that due to commodization of the technology the IT support on the level of the firm now matters less. Actually much less: any complex issues are delegated and solved by vendor support, or professional consultants. Enterprise software also became more or less standardized. Of course this is not applicable to research labs and such, but regular corporate office now runs predictable mixture of standard software suits and components including Microsoft Office, some database (Oracle or Microsoft SQL of both), backup software and storage area network, helpdesk software, datacenter monitoring software, videoconferencing software, and so on. Operating systems re also pretty much standardized: only a half dozen of operating systems such as VMware, Windows, RHEL, and SLES (with some remands of Solaris, HP-UX, AIX and remnants of mainframes OSes). Mail, DNS, proxy, firewall, NFS servers now are often implemented as appliances. 

Where  huge, damaging to the company, blunders are now made is at senior level, where the IT brass became completely detached from technology (and often from reality). In large companies, now there are way too many technically illiterate bean counters who were promoted to senior IT positions. What is important to understand is that they rely mainly on fashion (and vendor hype as well as good old bribing) in adopting new technologies for the firm. Recently misguided security efforts became a major threat to stability of the enterprise IT. In somw cases causing almost paralyses. And security for some reason attract the most incompetent careerists and "good-for-nothing" type of specialists. One typical "corporate excess" is preoccupation with firewalls. 

But contrary to the speculation about the demise of IT from the IT brass incompetence, the net result of that looks stupid and highly questionable from the ground floor are just modest cost overruns almost unnoticeable for the firm.  Nothing to be exited about. Something that should probably cost  $100K is bought for $200K or, in rare cases (if you buy from IBM ;-)  $300K. Plus additional 10-20% in annual maintenance fees. That's about it. So the level of inefficiency is not that great. Nothing in comparison with DoD. 

Please remember the cost of IT is generally around 1% of the total cost of the operation of a large company. Most often slightly less then 1%. So at the scale of the firm all those cost overruns is just a rounding error.

You should not consider your situation as your personal fault


You only have power over people so long as you don't take everything away from them. But when you've robbed a man of everything, he's no longer in your power - he's free again.

-- Aleksandr Solzhenitsyn

Man goes to doctor. Says he's depressed. Says life seems harsh and cruel. Says he feels all alone in a threatening world where what lies ahead is vague and uncertain. Doctor says, "Treatment is simple. Great clown Pagliacci is in town tonight. Go and see him. That should pick you up." Man bursts into tears. Says, "But doctor...I am Pagliacci."

You should view your situation is as a fight against unjust and cruel neoliberal society  which put you into neoliberal Gulag. In which human beings are considered consumer goods to be used and then discarded. And the guards is no less cruel and much better equipped then under Stalinism. Like prisoners in Gulag "masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape." (Pope Francis on danger of neoliberalism)

The social forces working toward shrinking of middle class have been building up for a while with the growth of neoliberalism. Among the the first and foremost factor here was the complete financialization of the economy (casino capitalism) and the steady rise in health costs and cost of university education. Due to this neoliberal transformation which meant redistribution of profits in favor of for the top 1% (much like in Gilded Age), not on the larger society,  outsourcing pressures are now huge. All those factors have hastened the demise of the safe, secure white-collar jobs, especially in IT.

Under neoliberalism the wealthy and their academic servants, see inequality as a noble outcome. They want to further enrich top 1%, shrink middle class making it less secure, and completely impoverish poor limiting payment to them to what is needed for bare survival (actually for some category of worker Wal-Mart and other retailers already pay less then that). In other words they promote under the disguise of "free market" Newspeak a type of economy which can be called a plantation economy. Or XIX century economy if you want. In this type of the economy all the resources and power are in the hands of a wealthy planter class who then gives preference for easy jobs and the easy life to their loyal toadies.

The wealthy elites like cheap labor. And it's much easier to  dictate their conditions of employment when unemployment is high. Keynesian economics values the middle class and does not value unemployment or cheap labor. Neoliberals like a system that rewards them for their loyalty to the top 1% with an easier life than they otherwise merit (look at academic economists as a good example of this trend ;-).  In a meritocracy where individuals receive public goods and services that allow them to compete on a level playing field, many neoliberal toadies would be losers who cannot compete.

Despite the neoliberal obsession with wage suppression via outsourcing, history suggests that such a policy is self-destructive, especially in high-tech industries. High wages promote both loyalty and rapid technological change that the US Information technology industry was famous for.  Now smell of "socialist enterprise" with its slogan "they pretend that they pay us, we pretend that we work" is distinctly felt in many large corporation with outsourced/offshored IT. Helpdesk tickets travel for several days, instead of resolution problems are swiped under the carpet, employees are unable to get qualified help and resort to creation of "shadow IT". And so on.

There are two major trends in job market under neoliberalism that hit especially hard older IT professionals:

One of the most important measures of the health of an economy is the following criteria: how many fulfilling, living-wage jobs are created or destroyed (most other economic factors can be distilled to this.). For example, widely used measure of economic growth, GDP is too influenced by financial masturbation and does not distinguish useful activity from harmful or irrelevant.  From this point of view we could describe the current economic system as Crapitalism, which treats ordinary people and lower level professionals as crap.

One of the most important measures of the health of an economy is the following criteria: how many fulfilling, living-wage jobs are created or destroyed (most other economic factors can be distilled to this.).

We live in a society where it's hard to maintain self-respect if you don't have a job. If you've been unemployed and are over 50 you already know this, but if you haven't, here's a news flash: Coping with prolonged joblessness is a very challenging and personally difficult task. Being unemployed is a stigma in the US neoliberal society, and being unemployed and over 50 is a double stigma. Those who are over 50 need to face subtle -- and not so subtle -- biases including hidden caveats on job ads for positions. 

Being unemployed is a stigma in the US neoliberal society, and being unemployed and over 50 is a double stigma (being young is a virtue under neoliberalism). Those who are over 50 need to face subtle -- and not so subtle -- biases including hidden caveats in job ads for relevant  positions.

And BTW the current laws don't prohibit discrimination against the jobless. As was aptly observed in Even Harvard couldn't protect me

Strikingly, no other circumstance triggers a larger decline in well-being and mental health than involuntary joblessness.

Only the death of a spouse compares.

The quest for ever higher degree of efficiency and dominance of neoliberalism as an ideology makes such a  society (and by extension the economy) extraordinarily brittle. And IT is on the forefront of this process. They essentially are destroying IT as we know it. Good, long lasting, full time jobs IT start to disappear, while percentage of IT temp jobs and low paid entry level jobs increased dramatically. Often the attitude toward older It professionals is highly negative:

"...older people are too much trouble.” When pressed on that statement, she continued, “You older folks know too much. You call us out on the BS — that every big outfit uses to keep the kids in line. Face it, you’re a threat to the system.” Evidently, overqualified also means having a social conscience today. I do pity the young folks today though. They’re growing up in a new Dickensian Age.

It does not help that white collar and professional jobs in general and IT jobs in particular are now being lost in the USA due to outsourcing. In a very deep sense many things in IT become either based on external support (and sometimes external infrastructure like in overhyped "cloud computing") or project-based with people hired at the beginning and said good by at the end. In this environment, losing a full time IT position for a person over 50 means significant hardship, as he is essentially forced by the new employment situation into temp labor pool.  As a result older IT specialist suffer a double hit -- a dramatic decline of earnings and effects of adverse selection of unemployed professionals over 50 making finding any new job a real challenge. 

A person over 50  is essentially forced by the new employment situation into temp labor pool.  As a result older IT specialist suffer a double hit -- a dramatic decline of earnings and effects of adverse selection of unemployed professionals over 50 making finding any new job a real challenge. 

The term adverse selection refers to a market process in which "bad" results occur when buyers and sellers have asymmetric information (i.e. access to different information). In this case the "inferior" products or services are more likely to be selected. As AARP noted: 

One report citing September figures noted, “Good News for Older Jobseekers Remains Elusive.” That’s one way to put it. Depressing might be another—especially if you’ve been out of work for more than a year.

“Will I ever work again?” is a common thought for unemployed people over 50, many of whom have been jobless for an average of 55 weeks. A group called Over 50 and Out of Work featuries 100 video stories on its web site to help others understand the plight of the unemployed at 50+.

Perma-temp is now a new perm for those who no longer can find full time job. You can't change the society in which you live. At least by yourself (that does not mean that you should vote for those who promote neoliberalism, which is the root case of this situation). And while you can and probably should make your voice and frustration heard via voting, on the individual day-to-day level the best philosophy to deal with this situation is Stoicism.

The fact on the ground is that IT environment as a whole seems to be thumped by "ageism" in a higher proportion than even racism or sexism. Age discrimination in the private sector IT is growing as range of candidates is vast when unemployment is high and younger employees are more malleable and controllable. Look at composition of staff of Google and, previously, at Microsoft.  It's all young people...

So situation when you are over 50 and unemployed is now pretty typical. In other word there is mass unemployment among IT professionals over 50 years old. If, despite all efforts, you got into this situation, you should try to take it easy. You are not the first and not the last who was thrown under the bus... 

Neoliberalism as a social system came as a replacement of New Deal and is about lowering standard of living of the middle class and dramatic raising the standard of living of the top 1%. This is what is happening now and It is just a part of bigger picture. You can change the society you live in. so don't take it to the heart. Other have been in this situation and survived, you will too.

This is the key point. You was thrown under the bus by neoliberal financial institutions of the country. Highly paid full time job in general and in IT  especially, are disappearing. Looks like the top 1% does not need middle class anymore and is content with Latin-American social structure of the society. So the process of Latin-americanization started we situation in It is a part of more general process of shrinking middle class.  The process which actually started decade or more ago. In other words, there is a profound, age-neutral economic transformation of the US economy: shredding large chunk of middle class jobs. For IT there are several additional powerful factors in play: commodization of IT, automation, which also affect IT jobs and, of course, outsourcing.

So people who are 50 now had the bad luck to reach their peak earning years during an economic perfect storm. Which was the recent "Great Recession" and its aftermath.

Also IT itself changes and despite the fact that most of the "cloud hype" is just hype, new technologies are gradually displacing older as hardware (especially Intel hardware) becomes more and more powerful and cheaper. Look at consolidation of OSes in Unix world into Linux as a telling example. "It's a true paradigm shift," says Karen Hochman, chair of the New York City chapter of MENG, all of whose 550 members have held top corporate jobs and half of whom are out of work.

"You've got hundreds of thousands of obsolete professionals who can't find employment in positions where they've been successful. These are people living off retirement savings 15 years before they were supposed to retire. They don't know what they're going to do."

Such understanding and mentality of a fighter for just cause can give one some additional moral strength which helps overcome the adverse situation. Mentality of a fighter for just cause, for human dignity,  greatly helps to maintain self-discipline, morale and physical condition. It gives another dimension to your physical exercises, attempt to maintain dignity and preserve a healthy lifestyle. And you should consider other is the same situation as allies that can help you, not as adversaries fighting like animals for few spots on the job market. Although you can't inflict even minor damage to neoliberals in Congress by your voting  in two party system, when both candidates competing for the job were already vetted by financial oligarchy via party "nomenclatura" (apparatchiks) mechanisms borrowed by neoliberalism from bolshevism (As George Carlin explained in his famous monologue the two party system protects interests of oligatchy extremly well  and you are f*cked no matter how you vote), it is your duty to explain to your friends and family that the situation in which you found yourself and help to navigate their choice  unless others, more radical, political actions can be taken (which sometimes is possible although such movements are either quickly "institualized" like Tea Party or suppressed like Occupy movement).  

You need to be aware that deindustrialization of the country and related job cuts often lead to long periods of unemployment, intermittent employment and/or underemployment, and the effects transcend simply the loss of pay, medical benefits and purchasing power. Financial strain creates stress, depression and family tensions, which can manifest in a variety of ways, from increased use of drugs and alcohol to suicide and domestic violence (The Social Costs of Deindustrialization):

...unemployment correlates with increased physical health problems. Reduced access to health care makes it less likely that displaced workers and their families will receive appropriate care. The mental and physical health costs of deindustrialization do not harm only pa­tients; increased demand for health care combined with decreased eco­nomic resources leads to health care workers and systems that are overburdened and ultimately unable to meet the community's needs.

Displaced workers, especially primary breadwinners, are likely to feel significant pressure and anxiety about providing for their families. But job loss causes more than just financial distress; work plays a key role in shaping individual identity and social relations. The loss of work can disrupt an individual's sense of self and his or her value and competence. As Al Gini writes, "To work is to be and not to work is not to be."42

... "anxiety, depression, and other forms of anguish may be the normal result of rational calculation of these life chances," according to Hamilton.47 Finding a new job does not entirely alleviate these fears, because the experience of being laid off can generate persistent fear about losing the next job. The security that workers once felt, especially those who worked for local companies that seemed to be dependable employers, disappears.

Neoliberalism as killing of human solidarity to enforce the rule of elite

Neoliberalism -- the ideological doctrine that market exchange is an ethic in itself, capable of acting as a guide for all human action -- has become dominant in both political thought and practice throughout much of the world since 1970 or so. It helped to crush communism in the USSR and largely displaced Marxism.

These problems are exacerbated by the loss of social networks under neoliberalism which openly process the law of jungel, the survival of the fittest for everybody execpt financial oligarchy ("masters of the universe" under neoliberalism). In other words they instill real "Homo homini lupus est" (a Latin saying  meaning "man is a wolf to [his fellow] man.")  ideology. And are pretty effective in that. 

Pope Francis recently took issue with neoliberalism and related pseudo theory called "trickle-down economics", which is designed to mask abject inequality usually created by neoliberal regimes (and resulting National Security State, where under the disguise of protecting citizens from terrorism  protects top 1% financial gains). He stressed that so-called supply side economics is a smoke screen for redistribution of wealth up by the financial oligarchy. As Eugene Patrick Devany noted in his comment to Paul Krugman's post The Case for Techno-optimism (Nov 27, 2013. NYT):

It seems that, "a persistent shortfall on the demand side" is a euphemism for the fact that half the population will remain near bankruptcy for quite sometime.

Pope Francis said two days ago

"To sustain a lifestyle which excludes others ... a globalization of indifference has developed. Almost without being aware of it, we end up being incapable of feeling compassion ..."

One may consider the Pope less qualified to "pontificate" about technology than Prof. Krugman who "tracks technology" and sees that "smart machines are getting much better at interacting with the natural environment in all its complexity ... [and concluding] that a real transformative leap is somewhere over the horizon" Pope Francis said,

"This epochal change has been set in motion by the enormous qualitative, quantitative, rapid and cumulative advances occurring in the sciences and in technology, and by their instant application in different areas of nature and of life. We are in an age of knowledge and information, which has led to new and often anonymous kinds of power."

"This epochal change" seems to be a reference to "fear and desperation, even in the so-called rich countries" and to people forced to live "with precious little dignity".

The best description of supply side or “trickle down” economics I ever heard was by JK Galbraith:

“trickle down economics is the idea that if you feed the horse enough oats eventually some will pass through to the road for the sparrows.”

Here are several more relevant Pope Francis quotes:

... Such an [neoliberal] economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.

Human beings are themselves considered consumer goods to be used and then discarded. We have created a “disposable” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the “leftovers”.

54. In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting. To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed. Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase; and in the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.

The shift toward neoliberalism occurred in the 1970s because businesses and the super-rich began a process of political self-organization in the early 1970s that enabled them to pool their wealth and influence to achieve dominant political power and to capture administration.  As David Swan noted in his review  (E. David Swan's review of A Brief History of Neoliberalism)

From its founding America's wealthy have feared democracy recognizing that the majority, being poor and middle class, could vote to redistribute wealth and reduce the control held by the elites. After World War II, the middle class in the United States grew dramatically somewhat flattening the countries power base. As a reaction to this dispersal of power the early 1970's saw the formation of groups like The Business Roundtable, an organization of CEO's who were `committed to an aggressive pursuit of political power for the corporation'. As the author writes, `neoliberalization was from the very beginning a project to achieve the restoration of class power'. T

The neoliberal plan was to dissolve all forms of social solidarity in favor of individualism, private property, personal responsibility and family values. It fell on well funded think tanks like The Heritage Foundation to sell neoliberalism to the general public using political-philosophical arguments.

Money pouring into lobbying firms, political campaigns, and ideological think tanks created the organizational muscle which mimics the Bolsheviks organizational muscle. And  a bunch of Trotskyite turncoats such as James Burnham, who knew the political technology of bolshevism from the first hands, were probably helpful in polishing this edifice.  Carter and Clinton sold Democratic Party to the same forces.

This rise of special interests politics has been at the expense of the middle class including IT professionals.  And the neoliberal plan was "to dissolve all forms of social solidarity in favor of individualism, private property, personal responsibility and family values" proved to be a huge success. The whole generation is now completely poised/brainwashed by those ideas. No longer the USA can be viewed as a Christian county by any objective observer. Neoliberalism became a new dominant enforced by the state religions which displaced Christianity. Now we have what we have.

Understand your situation as a part of civil war inflicted on the society by neoliberalism

Consider yourself in war zone now. In a sense it is true as your survival is at risk and you can lose you "living space". That means that you need to access all resources you have and try to make the best of them. In more then one way a way you view yourselves to be in  a war zone now.  This is a civil war for the destruction of New Deal capitalism (Neoliberal Capitalism destroying Society)

It is a form of terrorism because it abstracts economics from ethics and social costs, makes a mockery of democracy, works to dismantle the welfare state, thrives on militarization, undermines any public sphere not governed by market values, and transforms people into commodities. Neoliberalism’s rigid emphasis on unfettered individualism, competitiveness and flexibility displaces compassion, sharing and a concern for the welfare of others. In doing so, it dissolves crucial social bonds and undermines the profound nature of social responsibility and its ensuing concern for others. In removing individuals from broader social obligations, it not only tears up social solidarities, it also promotes a kind of individualism that is almost pathological in its disdain for public goods, community, social provisions, and public values. Given its tendency to instrumentalize knowledge, it exhibits mistrust for thoughtfulness, complexity, and critical dialogue and in doing so contributes to a culture of stupidity and cruelty in which the dominant ethic is organized around the discourse of war and a survival of the fittest mentality. Neoliberalism is the antithesis of democracy. – Henry A. Giroux

Like in any war, for civilian to survive one need to rely on resources you managed to accumulate in "peace time" and first of all your savings. Nothing is sacred in this situation: neither you401K not your house. They are just source of funds to survive. They should not be viewed via the usual prism "Keeping up with Jones" anymore. forget about it.   Move might be necessary, and not necessary to the place with more jobs -- move to place with much loser expenses also makes perfect sense

The "buck up and get over it" is useless advice. It's silly to assume most people aren't doing the best they can. For people who are over 50 it's not about trying or not trying. This is about premature switch to part part employment., Possibly for the rest of  your working life (that means before you can get Social Security which is around 67 years old now). There's just so little available IT jobs out there, that your chances of getting one are not that great. That does not mean that you should not try your best. You should do you best and continue trying despite disappointment. Never give up.  But some modest attempt to create income stream should proceed outside your specialty after your unemployment benefits expire. Even  reselling something like used books, cellphones or computers on eBay beats feeling hopeless. That actually allow you to write one room of your house as business expense. Think about it.

Analyze available funds and view them as bullets left

Most fold at 50 have some equity in the house and some sizable 401K. This is now two sources of supplementary income that can tremendously help if all you can get is a low paid job.

Create spreadsheet with your current expenses (see Insufficient Retirement Funds as Immanent Problem of Neoliberal Regime).  Cutting your current expenses to bare bones is a necessary step and the earlier you can do it, the better. It is important to not to go too far here and determine what percentage you can save without dramatically lowering your standard of living. Much depends what "emergency fund" you currently have. Please not that you can also "borrow" from 401K without penalty based of "hardship" provisions of US tax code.  It is a much better move that accumulation of credit card debt. 

You usually can sell some unused staff that you accumulated over the years on eBay. While it's not much money, there are some benefits for this as small business activity which can improve the level of your psychological comfort as you are feel engaged in some systematic activity.

Create a spreadsheet of your monthly expenses and analyze each item. Some steps that help to cut your expenses are easy.

There are several other ways to make your balance sheet more healthy depending on your situation and whether you rent or own the house or apartment.  For example, if community library is nearby, using it in can slightly cuts your air conditioning or heating costs.  Adding a thin film on your windows is another good step in the same direction. Now you have time to do this, at last. Amazon has a lot of low cost offering under such titles as  "Heat control Residential Windows Film",  "Sun control Window Firm". For example Gila LES361

For the examples table below shows monthly expenses obtained by downsizing your life style:

Item Monthly Annual
Total expenses 2470 29640
Rent 800 9600
Food 800 9600
Electricity and heating (if not in rent) 100 1200
Books and once course at community colledge 50 600
Medical Insurance (hospital only) 150 1800
Car amortization/repairs/etc (one car) 100 1200
Car insurance (one car) 100 1200
Gas/transportation 60 720
Other expenses (meals, washing cloth, dry cleaning, etc) 80 960
Drugs, Doctor visits and dental costs 100 1200
Job search expenses 50 600
Cable internet 40 480
Cell phone or tablet with cell connection plus 1GB traffic a month 40 480

The importance of keeping yourself occupied

Unemployment means boredom and it destroys the person morale and self-worth assessment. That means that it is important to keep yourself occupied. It does not really matter with what activity: Creation of personal website, carving some wood, teaching free classes in the library, helping relative and neighbors. Fred Glogower, the Navy psychologist who was responsible for screening all the US Antarctic personal in 90th, stated this point in a very clear way: "The key to successful winter-over at a station is to keep the people busy."

Experienced Antarctic managers strive to identify and assign worthwhile projects to crew members that can be completed within the period of isolation and confinement. Working towards an established goal, such as writing a new program or participating if creation of documentation for some open source project provides sense of accomplishment when the goal is achieved.

Clearly defined interim goals help to maintain the focus. Self-checks of your knowledge of Unix and scripting languages, rehearsing interview with family members, passing certification exam for RHEL or their Linux distribution, etc also can help to create that sense of mission. For this reason one need to to be aware of danger of low workloads and prepare countermeasures.

Some retraining should be considered, but without too much zeal

Among other things this new situation means that you might benefit from getting some new skills or improving an old one to be more viable on the marketplace to get back to work. But please do not bite nonsense about everyone needing to reinvent themselves.  The last think you need is $40K student debt.  In this case  taking a minimum wage position is out of the question for me since all my salary would actually go to pay my debt and I would not have money even for transportation back and forth to work.

EconomistNC,  May 5, 2015

As a former public servant teaching University Level Econometrics for nearly 15 years and possessing numerous 'Excellence' awards, this development is nothing short of shameful. I have had dozens of recruiters and HR 'specialists' debase my public service as not being 'Real World' experience despite the fact that without my commitment to 'Real World Applications' education, many of those with whom I apply for employment would not hold a college degree. Indeed, I find many of the hiring managers with whom I speak regarding positions for which I have both technical and applications experience, there is impenetrable discrimination once they meet me in person.

The point made in several articles of this nature revolve around lack of knowledge and experience with newer technologies. In an effort to address this issue, I went back to school (again) to obtain expertise in IT Networking and Security, PMP Path Project Management and ITIL. Now I am being told that my education is of no value since I do not have the requisite 'Real World' experience using these newly acquired skills.

Indeed, to meet the criteria for many positions I find open requires that I be a 'recent college graduate.' When I point out that I have been continually retraining and taking online courses to keep my IT skills current, I am once again met with the lack of 'Real World' experience requirement. For a society that purports itself to value education and hard work, for those among us that have worked very hard for substandard pay and benefits to be so casually cast aside is absolutely inexcusable.

Sill some, modern steps to adapt can and should be taken. For example, fashion rules in programming and system administration and getting a course or two for the latest fad can improve your prospects getting back to work. In community college it does not cost much money and expense is tax deductible. It is also interesting opportunity professionally as often in the corporate environment longtimers are pushed to the niche which is far from being interesting and sometimes represents a dead end for their former skills.

There are several programs which might  provide some minor financial assistance, but don't count on them too much. In any case tax deduction for one couse in the community college is yours to get.

Please understand that colleges also changed and "neoliberalized"  with money becoming primary driver of their activities. That means that many of them now are greedy money extracting machines which can capitalize of your distressed situation. Don't believe hype of magical retraining courses that charge $10K or more for a summer and teach almost nothing. This is a popular brand of  educational scams, nothing more, nothing less. And those "courses" are typically run by really ruthless education sharks. Time when in films college professor was a positive hero are long gone. Now they can well be just another variety of white color criminals. Please read the notes at Slightly Skeptical View on University Education.

In other words, if you are over 50 accumulation of education debt is gambling -- it does not really improve your chances of getting back to workforce due to age discrimination issues. Making a sizable investment in re-training with an uncertain outcome, without understanding full consequences and chances to get an entry level position in newly acquired field (and forget about any other level), might make your situation dramatically worse. See comment from hen3ry below.  You are warned...

Still there are several ways of getting positive return from educational institutions without spending much money:

I would like to mention also two related educational opportunities not directly connected to the college:

You can also try to find special federal and state programs that aid adults in returning to college. Look at website of Workforce Professionals, Employment & Training Administration (ETA) - U.S. Department of Labor. They usually provide better conditions and lower interest rate then private funding (see for example Trade Act Program TAA for Workers, Employment & Training Administration (ETA) - U.S. Department of Labor). Several community organizations and foundations provide assistance to adults going back to school. You may be eligible.  Check out associations and societies that offer scholarships and grants to older students.  If you are a female and/or a single parent there are programs and awards especially for this category.

Start a log book 

With the current complexity of the environment memory is no longer reliable store of your experience.  So create a log book and write down each evening the steps you have taken. Once a week write the review of the week and once a month write the review for the month. You will be surprised at the amount of times you step on the same rake and repeated unnecessary mistakes ;-).

Also that helps you to remember key things from one encounter from another. Logbook helps you to organize your memory and avoid repeating the same mistakes again and again.

You you use regular logbook put is somewhere were nobody else can read it. If you use computer put it on electronic USB drive with built-in encruption and iether fingerprint authentication or numeric code authentication. Log should remain private and never shared with anyone.  That extremely essential. 

Learn to get to the library each (or some) of mornings as a new working place

Use library as your new "temporary working place".  It can be a community library or nearby college library but you need to get out of house at  least for the first half of the day. This will help you in a way you don't anticipate.  First of all you can meet people, the second you preserve a resemblance of your usual schedule which positively affected your general psychological state and prevent depression which often accompany long tome unemployment. People need community just of preserving psychic health.

Just the fact you still need to get up in the morning, take a bath, have breakfast and your morning coffee, dress up and go has a strong positive influence. People are creatures of routine; don't break your current routine.  You can also save on air-conditioning going to the library at summer.

Pay attention to your attire when you are going to the library. Try to dress the way you used to dress going to work or slightly better. That keeps you in tonus as being well dressed provide strong implicit feedback to you and improve your self-confidence. Like people used to say "form liberates".

Electronic libraries as Oreily Safari is also a possibility but cost money. O'Reilly provides a short trial period that you can use as additional source of books. But nothing can substitute a real library when you are unemployed.

Enroll into one course in community college

This is a tax deductable expense. And for $400-$800 this is another opportunity to meet people and learn new skills. That also a very helpful for your psychological condition and greatly helps you stay mentally sharp.  If you worked in IT for a long time, you usually lost a lot of your knowledge due to limitations of your regular corporate job.

Now there is a chance to get some of those losses back. Programming course such as Unix shell course or C++ course while not necessary for you employment actually is a great way to relearn many useful thing and feel much better about yourself as you can compare yourself with other students.  In other words attending a college course increases your self-esteem, which is an important thing in your situation.

What is also extremely important is that your status as a student gives you access to the community college computer lab and community college library.  This is a pretty powerful learning environment in itself.

 

Create a home lab

Skilled became rusty if not used on a regular basis. You can recreate part of your former environment (and actually learn few new things is the process) by creating a home lab. Used tower computers from Dell such as Optiplex and workstations. They are very inexpensive and quite reliable. They can be bought for less then $150 each on eBay (with shipping).  4GB of RAM is more then enough to have very complex Linux setups including virtual machine setup. You can also buy used CISCO router or switch if this is part of your skills.

It is more difficult to accommodate your needs if in-addition to linux you managed Solaris o, AIX or HP-UX. But still it is possible, especially with Solaris on UltraSparc (and you can use Solaris on Intel instead).   Still even if you limit yourself to Linux it is better then nothing. 

In any case creating home linux infrastructure is no-brainer. You can have two or three linux boxes and one Solaris box. Install local DNS, DHCP, sendmail and other services. Create a "lab website". Install helpdesk or ticket tracking software. And you can enroll the help of your former colleagues for thing that you currently do not understand. 

Now you are ready to run some small development project or at least tinker with the boxes to prevent losing your skills.

You will survive: Fight the sense of isolation and related higher level of aggression

  It took all the strength I had not to fall apart
Kept trying hard to mend the peaces of my broken heart
I spent so many nights just feeling sorry for myself
I used to cry
But now I hold my head up high

Gloria Gaynor

Sense of isolation and desperation in finding a new job increase the level of aggressiveness in people. It's much like an animal which is being cornered. And this is strongly felt by family members, if any. Obeying simple guidelines might help

Humans can endure almost anything, but you need to be aware of typical pitfalls that develop in your situation. Material below is based on the book  BOLD ENDEAVORS, Chapter 18)

The primary lesson that can be learned form studying cases of long term unemployment is that humans are capable of enduring conditions far more austere financially and more challenging morally that initially planned. Your self-worse does not depend on the size of your salary. This is an important point.

People can adjust from change to living in a comfortable cabins on the ship to living in tent in Arctic. Their diaries reveal that members can remain cheerful and even had to remind themselves about their desperate situation.  Arctic expeditions prove that humans can endure unimaginable hardships when the survival is in stake. Humans also exhibited a remarkable capacity to adaptation to living on greatly reduced standard, incomparably lower that any unemployed face. Description o of the life in Nancen't hat on Frans Josef Land illustrate the extremes of human mental and physical endurance and should be a required reading.

the polar whaling industry during nineteen and early twentieth century is another example of people surviving under extremely austere and dangerous conditions,, The crews of sealing and wailing ships endure crowed and anti-sanitary conditions, bad food, harsh treatment and long period of boredom punctuated by now and then by hard work and danger.  Midshipman William Reynolds of the Wilkes Expedition described adaptability of sailors on one of his letters home in 1839 (BOLD ENDEAVORS, p 305):

As for bodily inconveniences, they are easily endured, and as long as extremes of endurance are not called for, all are disposed to make light of the present and trust to better luck in the future. Sailors are your true philosophers in these cases and never employ themselves in fancying their situation worse that it is,.

When you thing about such austere and difficult conditions as described in  BOLD ENDEAVORS,  long term unemployment does not look too bad of a situation anymore.

 

Church can be a valuable meeting place with people in the same situation

If you are a church goer, you can utilize this institution too. Church is one of the few place when your current situation does not have any stigma attached to it: religion is was created as an antipode to the Homo homini lupus est  attitude of the marketplace.

Moreover you can use it to create a group of people in similar situation which can a little bit help each other. Just communication with people in similar situation helps.

Checking your friends for job opportunities in their companies

It is a trivial advice, but important nuance is that you should not do it as the first step without talking to recruiter and understanding your situation better. You need to prepare for each such talk, as if you go to the interview, despite the fact that this is your friend.

If position in his/her company does exist, those are usually more reliable and valuable lids, that those from recruiter.  Create the list and call starting from the most promising, not in alphabet order. Those who will take your calls and at least formally try to help can be left on the list. Purge others. Inform those who responded about your the new plans and situation as you understand it now.

Often people do not do anything unless they are more informed about the roadblocks you face, your next steps and plans. This way they become more involved. Expect that some of your friends will do nothing.  Those who will try are kind of virtual team that you can use. Look for opportunities based of your LinkedIn account and you address book; some companies might be looking for consultants, if not permanent staff.  

Volunteer for some community work

Volunteering for some community work is an important source of keeping you skills in shape. Try to help some small business near you for free. Your church, your municipality, and small business around you are suitable targets if they have the infrastructure you know about and can improve.

This can greatly help to stay you sharp and even improve the skill valuable in the marketplace.

Adapt to the fact that you are now can exprience midlife crisis

Unemployment excsabates midlife crisis in individuals. For approximately 10% of individuals the condition is most common from the ages of 41 through 60 (a large study in the 1990s  found that the average age at onset of a self-described midlife crisis was 45). Mid-life crises last about 3–10 years in men and 2–5 years in women. If a  mid-life crisis coincides with losing your job it can form potentially toxic combination. Mid-life is the time from years 45 to 60 where a person is often evaluating his or her own life. Loss of employment creates an "overload" of stressors and exacerbate mdlife crisis. Especiallly in women who often experience additional multiple stressors because of their simultaneous roles as wives, mothers, and  daughters,. Personality type and a history of psychological crisis are believed to predispose some people to  a variety of negative symptoms and behaviors.  by aging itself, or aging in combination with changes, problems, or regrets over:

An American cultural stereotype of a man going through a midlife crisis may include the purchase of a luxury item such as an exotic car, or seeking affairs with a younger woman.  A woman's crisis is more related to re-evaluations of their roles. In both cases the emotions can be intense.

One of the main characteristics of a mid-life crisis  is the reavulation of self-worth. Moreover, the age period, between 50 and 60 if often the time when some chronic illness such as diabetes can come to the forefront. Individuals experiencing a mid-life crisis may feel:

If  individual lacks introspection capabilities they often exhibit a non-healthy response to such a crisis including:

Watching movies about unemployment can provide emotional support

There are several really insightful movies about unemployment. And first of all (Unemployment at the Movies 15 Films for Tough Times - Bloomberg):

The Grapes of Wrath (1940) Starring: Henry Fonda, Jane Darwell, John Carradine
Director: John Ford
U.S. Unemployment Rate, 1940: 14.6%

The epic tale of the Joad family's search for jobs in Depression America. Tom (Fonda) returns from prison just in time to see his family kicked off their farm. They strike out for California, where it's rumored there are plenty of jobs. Instead they wind up in an itinerant camp with other desperate families. Tom finds more trouble than work and delivers an immortal speech against injustice.

On the Waterfront (1954) Starring: Marlon Brando, Karl Malden, Lee J. Cobb
Director: Elia Kazan
U.S. Unemployment Rate, 1954: 5.6%

Terry Malloy (Brando) is the ex-prizefighter who has to choose between a cushy, no-show job and the hard work of doing the right thing. Terry provides muscle for Johnny Friendly's mobbed-up union thugs, but he falls for the sister of one of Johnny's victims. When he decides to testify about waterfront corruption, he is cast out of the gang. Kazan directs heavyweights who include Rod Steiger and a real-life fighter, "Two Ton" Tony Galento.

On the Waterfront (1954) Starring: Marlon Brando, Karl Malden, Lee J. Cobb
Director: Elia Kazan
U.S. Unemployment Rate, 1954: 5.6%

Terry Malloy (Brando) is the ex-prizefighter who has to choose between a cushy, no-show job and the hard work of doing the right thing. Terry provides muscle for Johnny Friendly's mobbed-up union thugs, but he falls for the sister of one of Johnny's victims. When he decides to testify about waterfront corruption, he is cast out of the gang. Kazan directs heavyweights who include Rod Steiger and a real-life fighter, "Two Ton" Tony Galento.

The Godfather Part II (1974) Starring: Al Pacino, Robert De Niro
Director: Francis Ford Coppola
U.S. Unemployment Rate, 1974: 5.6%

It all began with a layoff in turn-of-the-century New York City. In Coppola's strong sequel to The Godfather, young Vito Corleone (De Niro) steals away to America and takes a job in a grocery store. He is fired when a local mob boss forces the store owner to hire his nephew. Thwarted by nepotism, Vito takes up a life of crime with pals Peter Clemenza and Sal Tessio. And the rest is cinema history.

Gung Ho (1986) Starring: Michael Keaton, Gedde Watanabe
Director: Ron Howard
U.S. Unemployment Rate, 1986: 7.0%

Hunt Stevenson (Keaton) is foreman of a Pennsylvania car factory that's been shut down; he has to convince Japanese auto executives to reopen it. They agree, but only if they can subject the American workers to lower pay and new work rules. Conflict and cultural confusion ensue. Worth watching if only to confirm that there once was a time when Japan seemed unstoppable and unions had power. \

Glengarry Glen Ross (1992) Starring: Al Pacino, Jack Lemmon, Alec Baldwin
Director: James Foley
U.S. Unemployment Rate, 1992: 7.5%

Just imagine how cutthroat this crew would be in today's housing market. Blake (Baldwin) has been sent to light a fire under the salesmen at a tough Chicago real estate office. His pitch: a sales contest in which only the top two sellers will keep their jobs. The salesmen in this film version of David Mamet's play are matched in desperation only by their would-be clients. To quote Blake: "Only one thing counts in this life: Get them to sign on the line which is dotted." 

Everything Must Go (2010) Starring: Will Ferrell, Rebecca Hall, Christopher Jordan Wallace
Director: Dan Rush
U.S. Unemployment Rate, 2010: 9.6%

No hiding the indignity of a layoff in this one. It's all out in the open—literally—for Nick Halsey (Ferrell). Nick has hit the misery trifecta: A relapsed alcoholic, he's been fired and his wife has left him. His solution? Live in his front yard with his "stuff," or at least hold a yard sale as long as he can legally pull it off. The tale is adapted from a Raymond Carver short story published in the late 1970s, yet the theme of a man's struggle for dignity seems very much of these times.

Among more modern firms we can recommend the list by Arun Kumar  (Best Movies about Unemployment - I - CreoFire)

It is often referenced in the media that a country is progressing by leaps and bounds in the matter of economy, but at the same time there is always a sharp increase in the number of unemployed. Growing population, inflation, corruption, despotism and various other factors might play a role in spawning unemployment. But, let’s forget the causes of unemployment and how it affects society on the whole. What does unemployment does to an individual and to his immediate family? In this recession era, the psychological effects of involuntary unemployment look daunting. Our societies have buried a thought that only our job defines our worthiness. For many of us job isn’t what we do to pay our bills — it defines who we are. And when that socioeconomic identity is taken away, the emotional consequences can be severe. The movies mentioned below in the list explore the various emotional stresses a person faces due to joblessness. If I have missed out any great movie, dealing this subject, please mention it in the comments section.

Up in the Air (2009)

 Jason Reitman’s part funny, part serious work is about the corporate layoffs. Its protagonist Ryan Bingham, played charmingly by George Clooney, makes his living by ending the careers of others. His baritone voice and authoritative manner makes him to fly around US to downsize employees for companies whose HR departments are too cowardly to do the task themselves. It has got a bit touchy storyline and a script that loses some fire, but captures contemporary angst of the economic fallout with wit and humanity.

Tokyo Sonata (2008)

Famous J-horror director Kiyoshi Kurosawa’s bleakest indictment of modern Japan looks at the ripple effects caused within a family by corporate downsizing. The protagonist Ryuhei is cast out when his administrative job is outsourced to China. The humiliated breadwinner hides his unemployed state from his wife, Megumi and two sons. He suits up as usual and wanders around the city like a zombie and learns the routine of maintaining face over downsizing. The recession-era shows how out dignity is stripped away by a job and how the corporations turns our mind into vegetative state, devoid of basic human connections.

The Pursuit of Happyness (2006)

 This unsentimental Chris Gardner biopic takes an honest, intense look at the day-to-day survival that too many Americans must contend with. Every one of us could at least see some portion of the film and remember being faced with similar obstacles in their lives. Will Smith played Gardner and scored some great emotional points through his portrayal of an African-American male who turns out to be an extraordinary single-parent. The film convincingly asks us to never give up on our dreams, even when we are staying financially afloat.

Time Out (2001)

Laurent Cantet’s French psychological drama tells the story of an executive who conceals, from his family that he has been fired from his job. He later invents a phony investing scheme, calling up old friends to invest in it. The film seriously conveys absurdity behind a white-collar corporate life and showcases how words like ‘emerging markets’ can draw in even smart guys to invest huge load of money. Unlike a Hollywood protagonist, the central character here avoids over-the-top performance giving way to subtle emotions. The strain and scenarios exhibited can be understood by anyone who has held a job.
Starring: Aurélien Recoing, Karin Viard, Serge Livrozet
Director: Laurent Cantet
French Unemployment Rate, 2001: 7.8%

Vincent (Recoing) has lost his job—he's just not telling anyone. Also unclear is what he's up to now: a new consulting job with the U.N.? An investment scam? As his fantasy life ropes in a widening circle of friends and family members, the pressure builds and Vincent's calm facade begins to crumble. Vincent drives from dreary office to bland apartment complex, watching family and former colleagues through windows in the dark, having lost his identity when he was shown the door.

Office Space (1999)

 Mike Judge’s satirical comedy must be dedicated to everyone, whose life and soul is stomped out by an uncaring corporate entity. The story revolves around a frustrated corporate employee Peter Gibbons, who through an accidental session of hypnotherapy is freed from chronic anxieties and fears of unemployment. Stephen Root playing the fat, mumbling employee, Milton and three workers bashing a fax machine with a baseball bat are some of the memorable situation in the movie. Even though the movie offers enough fun, you can’t miss out the bitter truths beneath those gags.

Random Tips

The key here is to understand the your current situation is not the end of the life. You need to survive the current slump. Even if you are forced to take job at much lower salary, if this is a job that corresponds to your qualification and allow to improve them, you might be able to find something better later on.  You can also learn a few new things on a new job and such knowledge is money. You can also work less hours. Often much less hours.  Time is money after all.  Here is one relevant comment:

In worst case you will find itself in "semi-retirement" situation when the only type of jobs that are available as McJobs and entry level temporary jobs.  If you put enough efforts to adjust your cost of living with the new nasty reality you will survive even this situation.

Here are tips for getting back on your feet and into the IT job market from someone who's been there and back By Ron Nutter , Network World , 08/25/2008

Editor's note: On Feb. 20, IT manager and Network World columnist Ron Nutter was called into his boss's office and told he was being let go — that day. Once the initial shock wore off, Nutter launched an aggressive search for new employment in the Kansas City area. Over the next 76 days, Nutter applied for 85 jobs, and had 16 interviews before landing a new position. He chronicled the job search in a daily blog. Now that he has had some time to reflect on the experience, Nutter offers these 20 tips for surviving a layoff.

1. As you're getting laid off, be sure to take notes

This can be difficult to do, since losing a job can be a very emotional experience. But while everything is still fresh in your mind, write down all the details that you can remember.

For example, I was told that I would be paid for the full two-week pay period, plus my remaining vacation and sick time. When my last check arrived, there were discrepancies. Having written notes helped me when I went back and reminded my former boss and the HR folks of their commitment.

2. Take some time for yourself

Take a few days for yourself. A traumatic event has just happened to you and you need to get over the initial shock before jumping into the fray to search for a new job.

3. Review the papers from the company that laid you off

Several important things need to be attended to rather quickly. One is how to file for unemployment. Another is how long your company-paid health insurance will be in force before you have to consider paying for COBRA.

4. Update your resume

This is something that we should all do, but it doesn't always get the attention that it should. I was told a long time ago that your resume should be more than two pages with a max of three bullet points per employer. That may work in some cases but not all.

I have found that some recruiters/employers use software that does a "word count" to look for how many times a particular word, such as Cisco, or a word describing a certain type of experience is listed. I can attest that this is happening to a degree. When I was looking for a prior job, a recruiter had me just about totally rewrite my resume to specifically list all the different Cisco hardware that I had worked with. It was interesting to note how the callbacks increased after I did that.

You may find that it may be necessary to keep more than one type of resume depending on the type(s) of jobs you are looking for, so that the resume is specifically tailored to the type of job you are pursuing.

5. Get a handle on monthly bills

Even though I had a little money put back for a "rainy" day, I went through all my recurring bills to see if there was any room for saving money. One area I looked at was car and home insurance. I found that by shopping around, I was able to keep the same level of auto and homeowners coverage while reducing the amount of both bills. I had been thinking about doing it for a variety of reasons, but being unemployed helped push it to the top of the list.

6. Cut food costs

If you live by yourself, this will be easier to do. If you have a family, everyone will need to sit down and understand that they will all have to help out until you can get another job. ... ...

7. Look at health insurance options

Your company supplied health insurance will come to an end. If it was like my former employer, the health insurance ended a few days after I was separated from the company. Worse yet, I wasn't "due" to receive the COBRA information until after my company health insurance had lapsed. Because my previous employer had also been doing the claims processing for my health insurance, I wasn't comfortable with them having any further access to my medical records. Doing a little research on the Internet, I found a single health insurance policy from Blue Cross/Blue Shield for half the price and better coverage than the COBRA policy my former employer was going to offer me. 

... ... ...

10. File for unemployment compensation

This is something that I delayed a little bit. Partially because of pride and partially because I didn't anticipate the job hunting process to take more than three months. As someone pointed out to me, you earned this money and you should take advantage of it. In my case, filing was complicated by the fact that I had moved from another state in the past 18 months. The unemployment folks go back that far in figuring out where you need to file for unemployment. That potentially had me talking with three different state unemployment departments.

I spent several days on the phone with two states that would be involved in my situation. As painful as it may be to deal with this part of your unemployment process, the sooner you start, the sooner the money will start coming in to help pay the bills until you get another job.

11. Check the job boards

During my job search, I looked at CareerBuilder, Craigslist, Dice and Monster. I found no job leads from Monster in my career area. Several of the HR folks that I talked to during the process told me that they used Monster very little due in part to the higher fees that Monster charged for a job posting compared with other job boards, and the generally poorer quality of applications they received. I found some new job postings on Dice, but with a significant number of jobs cross-posted on different boards, I didn't find Dice to be a significant source of potential job leads. One source I wouldn't have thought to check for jobs was Craigslist. More than one recruiter told me that he had good results from posting new jobs on Craigslist. Set aside time each day to do this.

12. Make the job boards work for you

Dice has a feature where you can make your resume searchable by recruiters/companies looking to fill a position. I did get some calls from that. CareerBuilder recently followed suit by offering that feature as well. While Dice allows companies/recruiters to repost the same job each day so that it looks new, this makes the process of truly identifying the new jobs a little harder in some cases. Turn the tables in your favor by making periodic changes to your resume, so that when it is being searched it will show up as being new/changed and possibly get you looked at by a company or recruiter that might have passed you by the day before.

13. Prepare for the interview

One thing that I have done when preparing for an interview with a company is to do research on the company, the companies/sectors/industries that they serve. If it is a publicly listed company, do a little reading on the past quarter or two of press releases to see what changes have occurred at the company and what new directions they are heading in. From the response I have received from several companies, it seems to make a good impression that you show interest in finding out about the company when going to interview with them. It may seem like a small thing or something that you should do anyway but there seems to be quite a few people looking for a job that don't do this.

Also, have several copies of your resume printed out and with you when at an interview. This becomes even more important once you see your resume as the client/recruiter sees it, when they have downloaded it or printed it out from the job board that you applied for the position through. The formatting is pretty much gone. To make matters worse, the paragraphs or bullet points that you had in the resume will look like a series of poorly written run-on sentences that may cause distinctive or unique information about you to be overlooked.

14. Deal with recruiters

I encountered a couple of recruiters that would give used car salesmen a bad name, but as a general rule I found the recruiters pretty decent to work with. Several positions that I was approached for were not on the job boards and sometimes were only from a single recruiter. The trick I had to learn to develop was to identify the same end job when it coming from different recruiters. One situation that you want to avoid is to not have more than one recruiter pitching you to the same client. Most recruiters will usually tell you early on who the actual end client is.

15. Accept help from family

While your pride may make it hard for you to accept help, keep in mind that the unemployment situation you are dealing with is affecting them to a degree as well. Depending on the age of the family, this is something that may be new to them and that they may have never had the need to deal with. There was a time, unfortunately long gone now, when the company you first went to work for was the only company you would work for your entire career. How much help you accept from family is something that you will have to decide. Look at it this way, whatever help they do give you is that much less you will have to spend for food.

16. Keep good records

This suggestion came from a letter I received from the Department of Unemployment telling me that I would need to provide some basic information. I set up a spreadsheet in OpenOffice with three tabs. The first tab was where I kept track of the jobs I had applied for. I tracked the date, source of the job, how the job was applied for, company name (if known), job name, contact name and job number if provided. The next tab was where I kept track of the recruiters I talked to, HR folks that I had contact with for the jobs I had applied directly on, and anything else such as job fairs that I attended. This information was helpful when I got audited by the Department of Unemployment folks to make sure I was looking for another job. The last tab was where I recorded when I filed my unemployment claim each week, when I received the check, the check number, when it was deposited.

17. Get your personal records in order

When you do get an offer and accept it, one of the things that you will have to deal with is the lovely I-9 form that says you are allowed to work in this country. You will need a variety of things. If you can't find your Social Security card, now would be an excellent time to order a replacement card. This will take several weeks to get processed and get it to you. The sooner you get it, the sooner you will have it ready to produce when starting that new job. If you haven't seen a copy of the I-9 form lately, get a copy of one so you can see what documents will be needed. Another document that you want to make sure that you have a copy of, even if you don't need it for the I-9, is your birth certificate. This is one that might take a little while to get a copy of. I didn't know until recently that, depending on when and/or where you were born, there are two types of birth certificates – one that the hospital does and one done when the birth is registered with the local authorities. You will want to get one that is a copy of what is on file with the local authorities.

18. Don't wait for the phone to ring

This may be one of the harder things to do. Keep in mind that recruiters and HR types move at their own pace. That pace can be slow, very slow. When you first apply for a job, it could be several days or more before you get the first contact. Waiting for the phone to ring will have you climbing the walls in short order. Sometime you will get a call within hours of applying for a job, but expect that to be the exception. There are always things that you can do while waiting for movement on the job front and some of them may be done at little to no cost – doing that little bit of touch-up painting you have never gotten around to, do that trimming around the yard that always needs to be done. The point I am trying to make here is that you need to stay active, don't just sit around and watch the clock move forward.

19. Get out the house at least once a day

At some point you will run out of things to do around the house or just simply need to get out. There will be the occasional job fair, but that won't take a large amount of your time. While you can knock on some doors at some companies that you would like to work at, with the price of gas hovering around $4 a gallon, depending on where you live, that can be an expensive trip to make for an unknown return. Do some things that you like to do, such as going to a museum or sports game. The main thing is to get out to keep from getting cabin fever.

20. Never give up

Don't leave any stone unturned. You may just find that a company that passed you by today for another applicant may come back to you when that person leaves to move onto greener pastures. I would have never thought that could happen but I have seen it happen twice in the past year.

 


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Unemployment Bulletin, 2009 Unemployment Bulletin, 2010 Unemployment Bulletin, 2011 Unemployment Bulletin, 2012 Unemployment Bulletin, 2013 Unemployment Bulletin, 2014

[Dec 09, 2017] November Jobs Report: good month, same caveats

Notable quotes:
"... U6 underemployment rate rose +0.1% from 7.9% to 8.0% ..."
Dec 09, 2017 | bonddad.blogspot.com

So U6 is almost 10% of population. Scary...

HEADLINES :
  • +228,000 jobs added
  • U3 unemployment rate unchanged at 4.1%
  • U6 underemployment rate rose +0.1% from 7.9% to 8.0%
Here are the headlines on wages and the chronic heightened underemployment: Wages and participation rates
  • Not in Labor Force, but Want a Job Now: rose +53,000 from 5.175 million to 5.238 million
  • Part time for economic reasons: rose +48,000 from 4.753 million to 4.801 million
  • Employment/population ratio ages 25-54: rose +0.2% from 78.8% to 79.0%
  • Average Weekly Earnings for Production and Nonsupervisory Personnel: rose +$.0.5 from a downwardly revised $22.19 to $22.24, up +2.4% YoY. (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)
Holding Trump accountable on manufacturing and mining jobs

Trump specifically campaigned on bringing back manufacturing and mining jobs. Is he keeping this promise?
  • Manufacturing jobs rose by +31,000 for an average of +15,000 a month vs. the last seven years of Obama's presidency in which an average of 10,300 manufacturing jobs were added each month.
  • Coal mining jobs fell -400 for an average of -15 a month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month

September was revised upward by +20,000. October was revised downward by -17,000, for a net change of +3,000.

  1. likbez December 9, 2017 7:52 pm

    There are now large categories of jobs, both part-time and full time, that can't provide for living and are paying below or close to minimum wage (plantation economy jobs). it looks like under neoliberalism this is the fastest growing category of jobs.

    Examples are Uber and Lift jobs (which are as close to predatory scam as one can get) . Many jobs in service industry, especially retail. See for example

    https://www.huffingtonpost.com/2013/02/16/jobs-earn-less-than-minimum-wage_n_2689419.html

    They should probably be calculated separately as "distressed employment", or something like that.

    Also in view of "seasonal adjustments" the number of created jobs is probably meaningless.

[Dec 03, 2017] Nokia Shareholders Fight Back

On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few factors regardless of outsourcing or not.
Notable quotes:
"... On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few factors regardless of outsourcing or not. ..."
Slashdot

noc007 (633443)

On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few factors regardless of outsourcing or not.

The first is a golden rule of sorts on doing anything:

  • Cheap
  • Quality
  • Fast

You can only pick two; NO exceptions. I've encountered so many upper management types that foolishly think they can get away with having all three. In my experience 9/10 of the time it turns out a lack of quality bites them in the butt sometime down the road when they assumed they somehow managed to achieve all three.

The second is communication. Mostly everyone in at least the US has experienced the pain of being subjected to some company's outsourced customer service and/or tech support that can't effectively communicate with both parties on the same page of understanding one another. I really shouldn't need to explain why communication, understanding one another is so important. Sadly this is something I have to constantly explain to my current boss with events like today where my non-outsourced colleague rebooted a number of production critical servers when he was asked to reboot just one secondary server.

Third is the employee's skill in doing the job. Again, another obvious one, but I've observed that it isn't always on the hiring menu. Additionally I've seen some people that interview well, but couldn't create a "Hello World" HTML page for a web developer position as an example. There's no point in hiring or keeping a hired individual to do a job that they lack the skill to do; even if it's an entry-level position with training, that person should be willing to put for the effort to learn and take notes. I accept that everyone has their own unique skills that can aide or hinder their ability to learn and be proficient with a particular task. However, I firmly believe anyone can learn to do anything as long as they put their mind to it. I barely have any artistic ability and my drawing skills are stick figures at best (XKCD is miles ahead of me); if I were to put forth the effort to learn how to draw and paint, I could become a good artist. I taught an A+ technician certification class at a tech school a while back and I had a retired Marine that served in the Vietnam War as one of my students. One could argue his best skill was killing and blowing stuff up. He worked hard and learned to be a technician and passed CompTIA's certification test without a problem. That leads me to the next point.

Lastly is attitude of the end employee doing the actual work. It boggles my mind how so many managers loose the plot when it comes to employee morale and motivation. Productivity generally is improved when those two are improved and it usually doesn't have to involve spending a bunch of money. The employee's attitude should be getting the work done correctly in a reasonable amount of time. Demanding it is a poor approach. Poisoning an employee will result in poisoning the company in a small manner all the way up to the failure of the company. Employees should be encouraged through actual morale improvements, positive motivation, and incentives for doing more work at the same and/or better quality level.

Outsourcing or keeping things in house can be successful and possibly economical if approached correctly with the appropriate support of upper management.

Max Littlemore (1001285)

How dramatic? Isn't outsourcing done (like it or not) to reduce costs?

Outsourcing is done to reduce the projected costs that PHBs see. In reality, outsourcing can lead to increased costs and delays due to time zone differences and language/cultural barriers.

I have seen it work reasonably well, but only when the extra effort and delays caused by the increased need for rework that comes from complex software projects. If you are working with others on software, it is so much quicker to produce quality software if the person who knows the business requirements is sitting right next to the person doing design and the person cutting code and the person doing the testing, etc, etc.

If these people or groups are scattered around the world with different cultures and native languages, communication can suffer, increasing misunderstanding and reducing the quality. I have personally seen this lead to massive increase in code defects in a project that went from in house development to outsourced.

Also, time zone differences cause problems. I have noticed that the further west people live, the less likely they are to take into account how far behind they are. Working with people who fail to realise that their Monday morning is the next day for someone else, or that by the time they are halfway through Friday, others are already on their weekend is not only frustrating, it leads to slow turn around of bug fixes, etc.

Yeah, I'm told outsourcing keeps costs down, but I am yet to see conclusive evidence of that in the real world. At least in complex development. YMMV for support/call centre stuff.

-- I don't therefore I'm not.

[Dec 03, 2017] Business Has Killed IT With Overspecialization by Charlie Schluting

Highly recommended!
Notable quotes:
"... What happened to the old "sysadmin" of just a few years ago? We've split what used to be the sysadmin into application teams, server teams, storage teams, and network teams. There were often at least a few people, the holders of knowledge, who knew how everything worked, and I mean everything. ..."
"... Now look at what we've done. Knowledge is so decentralized we must invent new roles to act as liaisons between all the IT groups. Architects now hold much of the high-level "how it works" knowledge, but without knowing how any one piece actually does work. In organizations with more than a few hundred IT staff and developers, it becomes nearly impossible for one person to do and know everything. This movement toward specializing in individual areas seems almost natural. That, however, does not provide a free ticket for people to turn a blind eye. ..."
"... Does your IT department function as a unit? Even 20-person IT shops have turf wars, so the answer is very likely, "no." As teams are split into more and more distinct operating units, grouping occurs. One IT budget gets split between all these groups. Often each group will have a manager who pitches his needs to upper management in hopes they will realize how important the team is. ..."
"... The "us vs. them" mentality manifests itself at all levels, and it's reinforced by management having to define each team's worth in the form of a budget. One strategy is to illustrate a doomsday scenario. If you paint a bleak enough picture, you may get more funding. Only if you are careful enough to illustrate the failings are due to lack of capital resources, not management or people. A manager of another group may explain that they are not receiving the correct level of service, so they need to duplicate the efforts of another group and just implement something themselves. On and on, the arguments continue. ..."
Apr 07, 2010 | Enterprise Networking Planet

What happened to the old "sysadmin" of just a few years ago? We've split what used to be the sysadmin into application teams, server teams, storage teams, and network teams. There were often at least a few people, the holders of knowledge, who knew how everything worked, and I mean everything. Every application, every piece of network gear, and how every server was configured -- these people could save a business in times of disaster.

Now look at what we've done. Knowledge is so decentralized we must invent new roles to act as liaisons between all the IT groups. Architects now hold much of the high-level "how it works" knowledge, but without knowing how any one piece actually does work. In organizations with more than a few hundred IT staff and developers, it becomes nearly impossible for one person to do and know everything. This movement toward specializing in individual areas seems almost natural. That, however, does not provide a free ticket for people to turn a blind eye.

Specialization

You know the story: Company installs new application, nobody understands it yet, so an expert is hired. Often, the person with a certification in using the new application only really knows how to run that application. Perhaps they aren't interested in learning anything else, because their skill is in high demand right now. And besides, everything else in the infrastructure is run by people who specialize in those elements. Everything is taken care of.

Except, how do these teams communicate when changes need to take place? Are the storage administrators teaching the Windows administrators about storage multipathing; or worse logging in and setting it up because it's faster for the storage gurus to do it themselves? A fundamental level of knowledge is often lacking, which makes it very difficult for teams to brainstorm about new ways evolve IT services. The business environment has made it OK for IT staffers to specialize and only learn one thing.

If you hire someone certified in the application, operating system, or network vendor you use, that is precisely what you get. Certifications may be a nice filter to quickly identify who has direct knowledge in the area you're hiring for, but often they indicate specialization or compensation for lack of experience.

Resource Competition

Does your IT department function as a unit? Even 20-person IT shops have turf wars, so the answer is very likely, "no." As teams are split into more and more distinct operating units, grouping occurs. One IT budget gets split between all these groups. Often each group will have a manager who pitches his needs to upper management in hopes they will realize how important the team is.

The "us vs. them" mentality manifests itself at all levels, and it's reinforced by management having to define each team's worth in the form of a budget. One strategy is to illustrate a doomsday scenario. If you paint a bleak enough picture, you may get more funding. Only if you are careful enough to illustrate the failings are due to lack of capital resources, not management or people. A manager of another group may explain that they are not receiving the correct level of service, so they need to duplicate the efforts of another group and just implement something themselves. On and on, the arguments continue.

Most often, I've seen competition between server groups result in horribly inefficient uses of hardware. For example, what happens in your organization when one team needs more server hardware? Assume that another team has five unused servers sitting in a blade chassis. Does the answer change? No, it does not. Even in test environments, sharing doesn't often happen between IT groups.

With virtualization, some aspects of resource competition get better and some remain the same. When first implemented, most groups will be running their own type of virtualization for their platform. The next step, I've most often seen, is for test servers to get virtualized. If a new group is formed to manage the virtualization infrastructure, virtual machines can be allocated to various application and server teams from a central pool and everyone is now sharing. Or, they begin sharing and then demand their own physical hardware to be isolated from others' resource hungry utilization. This is nonetheless a step in the right direction. Auto migration and guaranteed resource policies can go a long way toward making shared infrastructure, even between competing groups, a viable option.

Blamestorming

The most damaging side effect of splitting into too many distinct IT groups is the reinforcement of an "us versus them" mentality. Aside from the notion that specialization creates a lack of knowledge, blamestorming is what this article is really about. When a project is delayed, it is all too easy to blame another group. The SAN people didn't allocate storage on time, so another team was delayed. That is the timeline of the project, so all work halted until that hiccup was restored. Having someone else to blame when things get delayed makes it all too easy to simply stop working for a while.

More related to the initial points at the beginning of this article, perhaps, is the blamestorm that happens after a system outage.

Say an ERP system becomes unresponsive a few times throughout the day. The application team says it's just slowing down, and they don't know why. The network team says everything is fine. The server team says the application is "blocking on IO," which means it's a SAN issue. The SAN team say there is nothing wrong, and other applications on the same devices are fine. You've ran through nearly every team, but without an answer still. The SAN people don't have access to the application servers to help diagnose the problem. The server team doesn't even know how the application runs.

See the problem? Specialized teams are distinct and by nature adversarial. Specialized staffers often relegate themselves into a niche knowing that as long as they continue working at large enough companies, "someone else" will take care of all the other pieces.

I unfortunately don't have an answer to this problem. Maybe rotating employees between departments will help. They gain knowledge and also get to know other people, which should lessen the propensity to view them as outsiders

[Dec 03, 2017] IT workers voices heard in the Senate, confidentially

The resentment against outsourcing was brewing for a long time.
Notable quotes:
"... Much of the frustration focused on the IT layoffs at Southern California Edison , which is cutting 500 IT workers after hiring two offshore outsourcing firms. This has become the latest example for critics of the visa program's capacity for abuse. ..."
"... Infosys whistleblower Jay Palmer, who testified, and is familiar with the displacement process, told Sessions said these workers will get sued if they speak out. "That's the fear and intimidation that these people go through - they're blindsided," said Palmer. ..."
"... Moreover, if IT workers refuse to train their foreign replacement, "they are going to be terminated with cause, which means they won't even get their unemployment insurance," said Ron Hira, an associate professor at Howard University, who also testified. Affected tech workers who speak out publicly and use their names, "will be blackballed from the industry," he said. ..."
"... Hatch, who is leading the effort to increase the H-1B cap, suggested a willingness to raise wage levels for H-1B dependent employers. They are exempt from U.S. worker protection rules if the H-1B worker is paid at least $60,000 or has a master's degree, a figure that was set in law in 1998. Hatch suggested a wage level of $95,000. ..."
"... Sen. Dick Durbin, (Dem-Ill.), who has joined with Grassley on legislation to impose some restrictions on H-1B visa use -- particularly in offshoring -- has argued for a rule that would keep large firms from having more than 50% of their workers on the visa. This so-called 50/50 rule, as Durbin has noted, has drawn much criticism from India, where most of the affected companies are located. ..."
"... "I want to put the H-1B factories out of business," said Durbin. ..."
"... Hal Salzman, a Rutgers University professor who studies STEM (Science, Technology, Engineering and Math) workforce issues, told the committee that the IT industry now fills about two-thirds of its entry-level positions with guest workers. "At the same time, IT wages have stagnated for over a decade," he said. ..."
"... H-1B supporters use demand for the visa - which will exceed the 85,000 cap -- as proof of economic demand. But Salzman argues that U.S. colleges already graduate more scientists and engineers than find employment in those fields, about 200,000 more. ..."
Mar 18, 2015 | Network World

A Senate Judiciary Committee hearing today on the H-1B visa offered up a stew of policy arguments, positioning and frustration.

Much of the frustration focused on the IT layoffs at Southern California Edison, which is cutting 500 IT workers after hiring two offshore outsourcing firms. This has become the latest example for critics of the visa program's capacity for abuse.

Sen. Charles Grassley (R-Iowa), the committee chair who has long sought H-1B reforms, said he invited Southern California Edison officials "to join us today" and testify. "I thought they would want to defend their actions and explain why U.S. workers have been left high and dry," said Grassley. "Unfortunately, they declined my invitation."

The hearing, by the people picked to testify, was weighted toward critics of the program, prompting a response by industry groups.

Compete America, the Consumer Electronics Association, FWD.us, the U.S. Chamber of Commerce and many others submitted a letter to the committee to rebut the "flawed studies" and "non-representative anecdotes used to create myths that suggest immigration harms American and American workers."

The claim that H-1B critics are using "anecdotes" to make their points (which include layoff reports at firms such as Edison) is a naked example of the pot calling the kettle black. The industry musters anecdotal stories in support of its positions readily and often. It makes available to the press and congressional committees people who came to the U.S. on an H-1B visa who started a business or took on a critical role in a start-up. These people are free to share their often compelling and admirable stories.

The voices of the displaced, who may be in fear of losing their homes, are thwarted by severance agreements.

The committee did hear from displaced workers, including some at Southern California Edison. But the communications with these workers are being kept confidential.

"I got the letters here from people, without the names," said Sen. Jeff Sessions (R-Ala.). "If they say what they know and think about this, they will lose the buy-outs."

Infosys whistleblower Jay Palmer, who testified, and is familiar with the displacement process, told Sessions said these workers will get sued if they speak out. "That's the fear and intimidation that these people go through - they're blindsided," said Palmer.

Moreover, if IT workers refuse to train their foreign replacement, "they are going to be terminated with cause, which means they won't even get their unemployment insurance," said Ron Hira, an associate professor at Howard University, who also testified. Affected tech workers who speak out publicly and use their names, "will be blackballed from the industry," he said.

While lawmakers voiced either strong support or criticism of the program, there was interest in crafting legislation that impose some restrictions on H-1B use.

"America and American companies need more high-skilled workers - this is an undeniable fact," said Sen. Orrin Hatch (R-Utah). "America's high-skilled worker shortage has become a crisis."

Hatch, who is leading the effort to increase the H-1B cap, suggested a willingness to raise wage levels for H-1B dependent employers. They are exempt from U.S. worker protection rules if the H-1B worker is paid at least $60,000 or has a master's degree, a figure that was set in law in 1998. Hatch suggested a wage level of $95,000.

Sen. Dick Durbin, (Dem-Ill.), who has joined with Grassley on legislation to impose some restrictions on H-1B visa use -- particularly in offshoring -- has argued for a rule that would keep large firms from having more than 50% of their workers on the visa. This so-called 50/50 rule, as Durbin has noted, has drawn much criticism from India, where most of the affected companies are located.

"I want to put the H-1B factories out of business," said Durbin.

Durbin got some support for the 50/50 rule from one person testifying in support of expanding the cap, Bjorn Billhardt, the founder and president of Enspire Learning, an Austin-based company. Enspire creates learning development tools; Billhardt came to the U.S. as an exchange student and went from an H-1B visa to a green card to, eventually, citizenship.

"I actually think that's a reasonable provision," said Billhardt of the 50% visa limit. He said it could help, "quite a bit." At the same time, he urged lawmakers to raise the cap to end the lottery system now used to distribute visas once that cap is reached.

Today's hearing went well beyond the impact of H-1B use by outsourcing firms to the displacement of workers overall.

Hal Salzman, a Rutgers University professor who studies STEM (Science, Technology, Engineering and Math) workforce issues, told the committee that the IT industry now fills about two-thirds of its entry-level positions with guest workers. "At the same time, IT wages have stagnated for over a decade," he said.

H-1B supporters use demand for the visa - which will exceed the 85,000 cap -- as proof of economic demand. But Salzman argues that U.S. colleges already graduate more scientists and engineers than find employment in those fields, about 200,000 more.

"Asking domestic graduates, both native-born and immigrant, to compete with guest workers on wages is not a winning strategy for strengthening U.S. science, technology and innovation," said Salzman.

See also

[Nov 28, 2017] The Stigmatization of the Unemployed

"This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills" . In the IT job markets such postings are often called purple squirrels
Notable quotes:
"... In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral" and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent of dividing by zero ..."
"... That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population. ..."
"... The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is. ..."
Mar 20, 2011 | naked capitalism

Spencer Thomas:

Very good post. Thank you.

Over the past three decades, large parts of our culture here in the US have internalized the lessons of the new Social Darwinism, with a significant body of literature to explain and justify it. Many of us have internalized, without even realizing it, the ideas of "dog eat dog", "every man for himself", "society should be structured like the animal kingdom, where the weak and sick simply die because they cannot compete, and this is healthy", and "everything that happens to you is your own fault. There is no such thing as circumstance that cannot be overcome, and certainly no birth lottery."

The levers pulled by politicians and the Fed put these things into practice, but even if we managed get different (better) politicians or Fed chairmen, ones who weren't steeped in this culture and ideology, we'd still be left with the culture in the population at large, and things like the "unemployed stigma" are likely to die very, very hard. Acceptance of the "just-world phenomenon" here in the US runs deep.

perfect stranger:

"Religion is just as vulnerable to corporate capture as is the government or the academy."

This is rather rhetorical statement, and wrong one. One need to discern spiritual aspect of religion from the religion as a tool.

Religion, as is structured, is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institutions such as Supreme – and non-supreme – Court(s). It is a form of PR of the ruling class for the governing class.

DownSouth:

perfect stranger,

Religion, just like human nature, is not that easy to put in a box.

For every example you can cite where religion "is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institution," I can point to an example of where religion engendered a liberating, emancipatory and revolutionary spirit.

Examples:

•Early Christianity •Nominalism •Early Protestantism •Gandhi •Martin Luther King

Now granted, there don't seem to be any recent examples of this of any note, unless we consider Chris Hedges a religionist, which I'm not sure we can do. Would it be appropriate to consider Hedges a religionist?

perfect stranger:

Yes, that maybe, just maybe be the case in early stages of forming new religion(s). In case of Christianity old rulers from Rome were trying to save own head/throne and the S.P.Q.R. imperia by adopting new religion.

You use examples of Gandhi and MLK which is highly questionable both were fighters for independence and the second, civil rights. In a word: not members of establishment just as I said there were (probably) seeing the religion as spiritual force not tool of enslavement.

Matt:

This link may provide some context:

http://en.wikipedia.org/wiki/Prosperity_theology

In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral" and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent of dividing by zero

DownSouth:

Rex,

I agree.

Poll after poll after poll has shown that a majority of Americans, and a rather significant majority, reject the values, attitudes, beliefs and opinions proselytized by the stealth religion we call "neoclassical economics."

That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population.

The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is.

The politicians love this, because as they carry water for their pet corporations, they can point to the Tea Partiers and say: "See what a huge upwelling of popular support I am responding to."

JTFaraday:

Well, if that's true, then the unemployed are employable but the mass mediated mentality would like them to believe they are literally and inherently unemployable so that they underestimate and under-sell themselves.

This is as much to the benefit of those who would like to pick up "damaged goods" on the cheap as those who promote the unemployment problem as one that inheres in prospective employees rather than one that is a byproduct of a bad job market lest someone be tempted to think we should address it politically.

That's where I see this blame the unemployed finger pointing really getting traction these days.

attempter:

I apologize for the fact that I only read the first few paragraphs of this before quitting in disgust.

I just can no longer abide the notion that "labor" can ever be seen by human beings as a "cost" at all. We really need to refuse to even tolerate that way of phrasing things. Workers create all wealth. Parasites have no right to exist. These are facts, and we should refuse to let argument range beyond them.

The only purpose of civilization is to provide a better way of living and for all people. This includes the right and full opportunity to work and manage for oneself and/or as a cooperative group. If civilization doesn't do that, we're better off without it.

psychohistorian:

I am one of those long term unemployed.

I suppose my biggest employment claim would be as some sort of IT techie, with numerous supply chain systems and component design, development, implementation, interfaces with other systems and ongoing support. CCNP certification and a history of techiedom going back to WEYCOS.

I have a patent (6,209,954) in my name and 12+ years of beating my head against the wall in an industry that buys compliance with the "there is no problem here, move on now" approach.

Hell, I was a junior woodchuck program administrator back in the early 70's working for the Office of the Governor of the state of Washington on CETA PSE or Public Service Employment. The office of the Governor ran the PSE program for 32 of the 39 counties in the state that were not big enough to run their own. I helped organize the project approval process in all those counties to hire folk at ( if memory serves me max of $833/mo.) to fix and expand parks and provide social and other government services as defined projects with end dates. If we didn't have the anti-public congress and other government leadership we have this could be a current component in a rational labor policy but I digress.

I have experience in the construction trades mostly as carpenter but some electrical, plumbing, HVAC, etc. also.

So, of course there is some sort of character flaw that is keeping me and all those others from employment ..right. I may have more of an excuse than others, have paid into SS for 45 years but still would work if it was available ..taking work away from other who may need it more .why set up a society where we have to compete as such for mere existence???????

One more face to this rant. We need government by the people and for the people which we do not have now. Good, public focused, not corporate focused government is bigger than any entities that exist under its jurisdiction and is kept updated by required public participation in elections and potentially other things like military, peace corps, etc. in exchange for advanced education. I say this as someone who has worked at various levels in both the public and private sectors there are ignorant and misguided folks everywhere. At least with ongoing active participation there is a chance that government would, once constructed, be able to evolve as needed within public focus .IMO.

Ishmael:

Some people would say I have been unemployed for 10 years. In 2000 after losing the last of my four CFO gigs for public companies I found it necessary to start consulting. This has lead to two of my three biggest winning years. I am usually consulting on cutting edge area of my profession and many times have large staffs reporting to me that I bring on board to get jobs done. For several years I subcontacted to a large international consulting firm to clean up projects which went wrong. Let me give some insight here.

  1. First, most good positions have gate keepers who are professional recruiters. It is near impossible to get by them and if you are unemployed they will hardly talk to you. One time talking to a recruiter at Korn Fery I was interviewing for a job I have done several times in an industry I have worked in several times. She made a statement that I had never worked at a well known company. I just about fell out of my chair laughing. At one time I was a senior level executive for the largest consulting firm in the world and lived on three continents and worked with companies on six. In addition, I had held senior positions for 2 fortune 500 firms and was the CFO for a company with $4.5 billion in revenue. I am well known at several PE firms and the founder of one of the largest mentioned in a meeting that one of his great mistakes was not investing in a very successful LBO (return of in excess of 20 multiple to investors in 18 months) I was the CFO for. In a word most recruiters are incompetent.
  2. Second, most CEO's any more are just insecure politicians. One time during an interview I had a CEO asked me to talk about some accomplishments. I was not paying to much attention as I rattled off accomplishments and the CEO went nuclear and started yelling at me that he did not know where I thought I was going with this job but the only position above the CFO job was his and he was not going anywhere. I assured him I was only interested in the CFO position and not his, but I knew the job was over. Twice feed back that I got from recruiters which they took at criticism was the "client said I seemed very assured of myself."
  3. Third, government, banking, business and the top MBA schools are based upon lying to move forward. I remember a top human resource executive telling me right before Enron, MCI and Sarbanes Oxley that I needed to learn to be more flexible. My response was that flexibility would get me an orange jump suit. Don't get me wrong, I have a wide grey zone, but it use to be in business the looked for people who could identify problems early and resolve them. Now days I see far more of a demand for people who can come up with PR spins to hide them. An attorney/treasurer consultant who partnered with me on a number of consulting jobs told me some one called me "not very charming." He said he asked what that meant, and the person who said that said, "Ish walks into a meeting and within 10 minutes he is asking about the 10,000 pound guerilla sitting in the room that no one wants to talk about." CEO do not want any challenges in their organization.
  4. Fourth, three above has lead to the hiring of very young and inexperienced people at senior levels. These people are insecure and do not want more senior and experienced people above them and than has resulted in people older than 45 not finding positions.
  5. Fifth, people are considered expendable and are fired for the lamest reasons anymore. A partner at one of the larger and more prestigious recruiting firms one time told me, "If you have a good consulting business, just stick with it. Our average placement does not last 18 months any more." Another well known recruiter in S. Cal. one time commented to me, "Your average consulting gig runs longer than our average placement."

With all of that said, I have a hard time understanding such statements as "@attempter "Workers create all wealth. Parasites have no right to exist." What does that mean? Every worker creates wealth. There is no difference in people. Sounds like communism to me. I make a good living and my net worth has grown working for myself. I have never had a consulting gig terminated by the client but I have terminated several. Usually, I am brought in to fix what several other people have failed at. I deliver basically intellectual properties to companies. Does that mean I am not a worker. I do not usually lift anything heavy or move equipment but I tell people what and where to do it so does that make me a parasite.

Those people who think everyone is equal and everyone deserves equal pay are fools or lazy. My rate is high, but what usually starts as short term projects usually run 6 months or more because companies find I can do so much more than what most of their staff can do and I am not a threat.

I would again like to have a senior challenging role at a decent size company but due to the reasons above will probably never get one. However, you can never tell. I am currently consulting for a midsize very profitable company (grew 400% last year) where I am twice the age of most people there, but everyone speaks to me with respect so you can never tell.

Lidia:

Ishmael, you're quite right. When I showed my Italian husband's resume to try and "network" in the US, my IT friends assumed he was lying about his skills and work history.

Contemporaneously, in Italy it is impossible to get a job because of incentives to hire "youth". Age discrimination is not illegal, so it's quite common to see ads that ask for a programmer under 30 with 5 years of experience in COBOL (the purple squirrel).

Hosswire

Some good points about the foolishness of recruiters, but a great deal of that foolishness is forced by the clients themselves. I used to be a recruiter myself, including at Korn Ferry in Southern California. I described the recruiting industry as "yet more proof that God hates poor people" because my job was to ignore resumes from people seeking jobs and instead "source" aka "poach" people who already had good jobs by dangling a higher salary in front of them. I didn't do it because I disparaged the unemployed, or because I could not do the basic analysis to show that a candidate had analogous or transferrable skills to the opening.

I did it because the client, as Yves said, wanted people who were literally in the same job description already. My theory is that the client wanted to have their ass covered in case the hire didn't work out, by being able to say that they looked perfect "on paper." The lesson I learned for myself and my friends looking for jobs was simple, if morally dubious. Basically, that if prospective employers are going to judge you based on a single piece of paper take full advantage of the fact that you get to write that piece of paper yourself.

Ishmael:

Hosswire - I agree with your comment. There are poor recruiters like the one I sited but in general it is the clients fault. Fear of failure. All hires have at least a 50% chance of going sideways on you. Most companies do not even have the ability to look at a resume nor to interview. I did not mean to same nasty things about recruiters, and I even do it sometimes but mine.

I look at failure in a different light than most companies. You need to be continually experimenting and changing to survive as a company and there will be some failures. The goal is to control the cost of failures while looking for the big pay off on a winner.

Mannwich:

As a former recruiter and HR "professional" (I use that term very loosely for obvious reasons), I can honestly say that you nailed it. Most big companies looking for mid to high level white collar "talent" will almost always take the perceived safest route by hiring those who look the best ON PAPER and in a suit and lack any real interviewing skills to find the real stars. What's almost comical is that companies almost always want to see the most linear resume possible because they want to see "job stability" (e.g. a CYA document in case the person fails in that job) when in many cases nobody cares about the long range view of the company anyway. My question was why should the candidate or employee care about the long range view if the employer clearly doesn't?

Ishmael:

Manwhich another on point comment. Sometimes either interviewing for a job or consulting with a CEO it starts getting to the absurd. I see all the time the requirement for stability in a persons background. Hello, where have they been the last 15 years. In addition, the higher up you go the more likely you will be terminated sometime and that is especially true if you are hired from outside the orgnanization. Companies want loyalty from an employee but offer none in return.

The average tenure for a CFO anymore is something around 18 months. I have been a first party participant (more than once) where I went through an endless recruiting process for a company (lasting more than 6 months) they final hire some one and that person is with the company for 3 months and then resigns (of course we all know it is through mutual agreement).

Ishmael:

Birch:

The real problem has become and maybe this is what you are referring to is the "Crony Capitalism." We have lost control of our financial situation. Basically, PE is not the gods of the universe that everyone thinks they are. However, every bankers secret wet dream is to become a private equity guy. Accordingly, bankers make ridiculous loans to PE because if you say no to them then you can not play in their sand box any more. Since the govt will not let the banks go bankrupt like they should then this charade continues inslaving everyone.

This country as well as many others has a large percentage of its assets tied up in over priced deals that the bankers/governments will not let collapse while the blood sucking vampires suck the life out of the assets.

On the other hand, govt is not the answer. Govt is too large and accomplishes too little.

kevin de bruxelles:

The harsh reality is that, at least in the first few rounds, companies kick to the curb their weakest links and perceived slackers. Therefore when it comes time to hire again, they are loath to go sloppy seconds on what they perceive to be some other company's rejects. They would much rather hire someone who survived the layoffs working in a similar position in a similar company. Of course the hiring company is going to have to pay for this privilege. Although not totally reliable, the fact that someone survived the layoffs provides a form social proof for their workplace abilities.

On the macro level, labor has been under attack for thirty years by off shoring and third world immigration. It is no surprise that since the working classes have been severely undermined that the middle classes would start to feel some pressure. By mass immigration and off-shoring are strongly supported by both parties. Only when the pain gets strong enough will enough people rebel and these two policies will be overturned. We still have a few years to go before this happens.

davver:

Let's say I run a factory. I produce cars and it requires very skilled work. Skilled welding, skilled machinists. Now I introduce some robotic welders and an assembly line system. The plants productivity improves and the jobs actually get easier. They require less skill, in fact I've simplified each task to something any idiot can do. Would wages go up or down? Are the workers really contributing to that increase in productivity or is it the machines and methods I created?

Lets say you think laying off or cutting the wages of my existing workers is wrong. What happens when a new entrant into the business employs a smaller workforce and lower wages, which they can do using the same technology? The new workers don't feel like they were cut down in any way, they are just happy to have a job. Before they couldn't get a job at the old plant because they lacked the skill, but now they can work in the new plant because the work is genuinely easier. Won't I go out of business?

Escariot:

I am 54 and have a ton of peers who are former white collar workers and professionals (project managers, architects, lighting designers, wholesalers and sales reps for industrial and construction materials and equipment) now out of work going on three years. Now I say out of work, I mean out of our trained and experienced fields.

We now work two or three gigs (waiting tables, mowing lawns, doing free lance, working in tourism, truck driving, moving company and fedex ups workers) and work HARD, for much much less than we did, and we are seeing the few jobs that are coming back on line going to younger workers. It is just the reality. And for most of us the descent has not been graceful, so our credit is a wreck, which also breeds a whole other level of issues as now it is common for the credit record to be a deal breaker for employment, housing, etc.

Strangely I don't sense a lot of anger or bitterness as much as humility. And gratitude for ANY work that comes our way. Health insurance? Retirement accounts? not so much.

Mickey Marzick:

Yves and I have disagreed on how extensive the postwar "pact" between management and labor was in this country. But if you drew a line from say, Trenton-Patterson, NJ to Cincinatti, OH to Minneapolis, MN, north and east of it where blue collar manufacturing in steel, rubber, auto, machinery, etc., predominated, this "pact" may have existed but ONLY because physical plant and production were concentrated there and workers could STOP production.

Outside of these heavy industrial pockets, unions were not always viewed favorably. As one moved into the rural hinterlands surrounding them there was jealously and/or outright hostility. Elsewhere, especially in the South "unions" were the exception not the rule. The differences between NE Ohio before 1975 – line from Youngstown to Toledo – and the rest of the state exemplified this pattern. Even today, the NE counties of Ohio are traditional Democratic strongholds with the rest of the state largely Republican. And I suspect this pattern existed elsewhere. But it is changing too

In any case, the demonization of the unemployed is just one notch above the vicious demonization of the poor that has always existed in this country. It's a constant reminder for those still working that you could be next – cast out into the darkness – because you "failed" or worse yet, SINNED. This internalization of the "inner cop" reinforces the dominant ideology in two ways. First, it makes any resistance by individuals still employed less likely. Second, it pits those still working against those who aren't, both of which work against the formation of any significant class consciousness amongst working people. The "oppressed" very often internalize the value system of the oppressor.

As a nation of immigrants ETHNICITY may have more explanatory power than CLASS. For increasingly, it would appear that the dominant ethnic group – suburban, white, European Americans – have thrown their lot in with corporate America. Scared of the prospect of downward social mobility and constantly reminded of URBAN America – the other America – this group is trapped with nowhere to else to go.

It's the divide and conquer strategy employed by ruling elites in this country since its founding [Federalist #10] with the Know Nothings, blaming the Irish [NINA - no Irish need apply] and playing off each successive wave of immigrants against the next. Only when the forces of production became concentrated in the urban industrial enclaves of the North was this strategy less effective. And even then internal immigration by Blacks to the North in search of employment blunted the formation of class consciousness among white ethnic industrial workers.

Wherever the postwar "pact of domination" between unions and management held sway, once physical plant was relocated elsewhere [SOUTH] and eventually offshored, unemployment began to trend upwards. First it was the "rustbelt" now it's a nationwide phenomenon. Needless to say, the "pact" between labor and management has been consigned to the dustbin of history.

White, suburban America has hitched its wagon to that of the corporate horse. Demonization of the unemployed coupled with demonization of the poor only serve to terrorize this ethnic group into acquiescence. And as the workplace becomes a multicultural matrix this ethnic group is constantly reminded of its perilous state. Until this increasingly atomized ethnic group breaks with corporate America once and for all, it's unlikely that the most debilitating scourge of all working people – UNEMPLOYMENT – will be addressed.

Make no mistake about it, involuntary UNEMPLOYMENT/UNDEREMPLYEMT is a form of terrorism and its demonization is terrorism in action. This "quiet violence" is psychological and the intimidation wrought by unemployment and/or the threat of it is intended to dehumanize individuals subjected to it. Much like spousal abuse, the emotional and psychological effects are experienced way before any physical violence. It's the inner cop that makes overt repression unnecessary. We terrorize ourselves into submission without even knowing it because we accept it or come to tolerate it. So long as we accept "unemployment" as an inevitable consequence of progress, as something unfortunate but inevitable, we will continue to travel down the road to serfdom where ARBEIT MACHT FREI!

FULL and GAINFUL EMPLOYMENT are the ultimate labor power.

Eric:

It's delicate since direct age discrimination is illegal, but when circumstances permit separating older workers they have a very tough time getting back into the workforce in an era of high health care inflation. Older folks consume more health care and if you are hiring from a huge surplus of available workers it isn't hard to steer around the more experienced. And nobody gets younger, so when you don't get job A and go for job B 2 weeks later you, you're older still!

James:

Yves said- "This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills"

In the IT job markets such postings are often called purple squirrels. The HR departments require the applicant to be expert in a dozen programming languages. This is an excuse to hire a foreigner on a temp h1-b or other visa.

Most people aren't aware that this model dominates the sciences. Politicians scream we have a shortage of scientists, yet it seems we only have a shortage of cheap easily exploitable labor. The economist recently pointed out the glut of scientists that currently exists in the USA.

http://www.economist.com/node/17723223

This understates the problem. The majority of PhD recipients wander through years of postdocs only to end up eventually changing fields. My observation is that the top ten schools in biochem/chemistry/physics/ biology produce enough scientists to satisfy the national demand.

The exemption from h1-b visa caps for academic institutions exacerbates the problem, providing academics with almost unlimited access to labor.

The pharmaceutical sector has been decimated over the last ten years with tens of thousands of scientists/ factory workers looking for re-training in a dwindling pool of jobs (most of which will deem you overqualified.)

http://pipeline.corante.com/archives/2011/03/03/a_postdocs_lament.php

Abe, NYC:

I wonder how the demonization of the unemployed can be so strong even in the face of close to 10% unemployment/20% underemployment. It's easy and tempting to demonize an abstract young buck or Cadillac-driving welfare queen, but when a family member or a close friend loses a job, or your kids are stuck at your place because they can't find one, shouldn't that alter your perceptions? Of course the tendency will be to blame it all on the government, but there has to be a limit to that in hard-hit places like Ohio, Colorado, or Arizona. And yet, the dynamics aren't changing or even getting worse. Maybe Wisconsin marks a turning point, I certainly hope it does

damien:

It's more than just stupid recruiting, this stigma. Having got out when the getting was good, years ago, I know that any corporate functionary would be insane to hire me now. Socialization wears off, the deformation process reverses, and the ritual and shibboleths become a joke. Even before I bailed I became a huge pain in the ass as economic exigency receded, every bosses nightmare. I suffered fools less gladly and did the right thing out of sheer anarchic malice.

You really can't maintain corporate culture without existential fear – not just, "Uh oh, I'm gonna get fired," fear, but a visceral feeling that you do not exist without a job. In properly indoctrinated workers that feeling is divorced from economic necessity. So anyone who's survived outside a while is bound to be suspect. That's a sign of economic security, and security of any sort undermines social control.

youniquelikeme:

You hit the proverbial nail with that reply. (Although, sorry, doing the right thing should not be done out of malice) The real fit has to be in the corporate yes-man culture (malleable ass kisser) to be suited for any executive position and beyond that it is the willingness to be manipulated and drained to be able to keep a job in lower echelon.

This is the new age of evolution in the work place. The class wars will make it more of an eventual revolution, but it is coming. The unemployment rate (the actual one, not the Government one) globalization and off shore hiring are not sustainable for much longer.

Something has to give, but it is more likely to snap then to come easily. People who are made to be repressed and down and out eventually find the courage to fight back and by then, it is usually not with words.

down and out in Slicon Valley:

This is the response I got from a recruiter:

"I'm going to be overly honest with you. My firm doesn't allow me to submit any candidate who hasn't worked in 6-12 months or more. Recruiting brokers are probably all similar in that way . You are going to have to go through a connection/relationship you have with a colleague, co-worker, past manager or friend to get your next job .that's my advice for you. Best of luck "

I'm 56 years old with MSEE. Gained 20+ years of experience at the best of the best (TRW, Nortel, Microsoft), have been issued a patent. Where do I sign up to gain skills required to find a job now?

Litton Graft :

"Best of the Best?" I know you're down now, but looking back at these Gov'mint contractors you've enjoyed the best socialism money can by.

Nortel/TRW bills/(ed) the Guvmint at 2x, 3x your salary, you can ride this for decades. At the same time the Inc is attached to the Guvmint ATM localities/counties are giving them a red carpet of total freedom from taxation. Double subsidies.

I've worked many years at the big boy bandits, and there is no delusion in my mind that almost anyone, can do what I do and get paid 100K+. I've never understood the mindset of some folks who work in the Wermacht Inc: "Well, someone has to do this work" or worse "What we do, no one else can do" The reason no one else "can do it" is that they are not allowed to. So, we steal from the poor to build fighter jets, write code or network an agency.

Hosswire:

I used to work as a recruiter and can tell you that I only parroted the things my clients told me. I wanted to get you hired, because I was lazy and didn't want to have to talk to someone else next.

So what do you do? To place you that recruiter needs to see on a piece of paper that you are currently working? Maybe get an email or phone call from someone who will vouch for your employment history. That should not be that hard to make happen.

Francois T :

The "bizarre way that companies now spec jobs" is essentially a coded way for mediocre managers to say without saying so explicitly that "we can afford to be extremely picky, and by God, we shall do so no matter what, because we can!"

Of course, when comes the time to hire back because, oh disaster! business is picking up again, (I'm barely caricaturing here; some managers become despondent when they realize that workers regain a bit of the higher ground; loss of power does that to lesser beings) the same idiots who designed those "overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills" are thrown into a tailspin of despair and misery. Instead of figuring out something as simple as "if demand is better, so will our business", they can't see anything else than the (eeeek!) cost of hiring workers. Unable to break their mental corset of penny-pincher, they fail to realize that lack of qualified workers will prevent them to execute well to begin with.

And guess what: qualified workers cost money, qualified workers urgently needed cost much more.

This managerial attitude must be another factor that explain why entrepreneurship and the formation of small businesses is on the decline in the US (contrary to the confabulations of the US officialdumb and the chattering class) while rising in Europe and India/China.

Kit:

If you are 55-60, worked as a professional (i.e., engineering say) and are now unemployed you are dead meat. Sorry to be blunt but thats the way it is in the US today. Let me repeat that : Dead Meat.

I was terminated at age 59, found absolutely NOTHING even though my qualifications were outstanding. Fortunately, my company had an old style pension plan which I was able to qualify for (at age 62 without reduced benefits). So for the next 2+ years my wife and I survived on unemployment insurance, severance, accumulated vacation pay and odd jobs. Not nice – actually, a living hell.

At age 62, I applied for my pension, early social security, sold our old house (at a good profit) just before the RE crash, moved back to our home state. Then my wife qualified for social security also. Our total income is now well above the US median.

Today, someone looking at us would think we were the typical corporate retiree. We surely don't let on any differently but the experience (to get to this point) almost killed us.

I sympathize very strongly with the millions caught in this unemployment death spiral. I wish I had an answer but I just don't. We were very lucky to survive intact.

Ming:

Thank you Yves for your excellent post, and for bringing to light this crucial issue.

Thank you to all the bloggers, who add to the richness of the this discussion.

I wonder if you could comment on this Yves, and correct me if I am wrong I believe that the power of labor was sapped by the massive available supply of global labor. The favorable economic policies enacted by China (both official and unofficial), and trade negotiations between the US government and the Chinese government were critical to creating the massive supply of labor.

Thank you. No rush of course.

Nexus:

There are some odd comments and notions here that are used to support dogma and positions of prejudice. The world can be viewed in a number of ways. Firstly from a highly individualised and personal perspective – that is what has happened to me and here are my experiences. Or alternatively the world can be viewed from a broader societal perspective.

In the context of labour there has always been an unequal confrontation between those that control capital and those that offer their labour, contrary to some of the views exposed here – Marx was a first and foremost a political economist. The political economist seeks to understand the interplay of production, supply, the state and institutions like the media. Modern day economics branched off from political economy and has little value in explaining the real world as the complexity of the world has been reduced to a simplistic rationalistic model of human behaviour underpinned by other equally simplistic notions of 'supply and demand', which are in turn represented by mathematical models, which in themselves are complex but merely represent what is a simplistic view of the way the world operates. This dogmatic thinking has avoided the need to create an underpinning epistemology. This in turn underpins the notion of free choice and individualism which in itself is an illusion as it ignores the operation of the modern state and the exercise of power and influence within society.

It was stated in one of the comments that the use of capital (machines, robotics, CAD design, etc.) de-skills. This is hardly the case as skills rise for those that remain and support highly automated/continuous production factories. This is symptomatic of the owners of capital wanting to extract the maximum value for labour and this is done via the substitution of labour for capital making the labour that remains to run factories highly productive thus eliminating low skill jobs that have been picked up via services (people move into non productive low skilled occupations warehousing and retail distribution, fast food outlets, etc). Of course the worker does not realise the additional value of his or her labour as this is expropriated for the shareholders (including management as shareholders).

The issue of the US is that since the end of WW2 it is not the industrialists that have called the shots and made investments it is the financial calculus of the investment banker (Finance Capital). Other comments have tried to ignore the existence of the elites in society – I would suggest that you read C.W.Mills – The Power Elites as an analysis of how power is exercised in the US – it is not through the will of the people.

For Finance capital investments are not made on the basis of value add, or contribution through product innovation and the exchange of goods but on basis of the lowest cost inputs. Consequently, the 'elites' that make investment decisions, as they control all forms of capital seek to gain access to the cheapest cost inputs. The reality is that the US worker (a pool of 150m) is now part of a global labour pool of a couple of billion that now includes India and China. This means that the elites, US transnational corporations for instance, can access both cheaper labour pools, relocate capital and avoid worker protection (health and safety is not a concern). The strategies of moving factories via off-shoring (over 40,000 US factories closed or relocated) and out-sourcing/in-sourcing labour is also a representations of this.

The consequence for the US is that the need for domestic labour has diminished and been substituted by cheap labour to extract the arbitrage between US labour rates and those of Chinese and Indians. Ironically, in this context capital has become too successful as the mode of consumption in the US shifted from workers that were notionally the people that created the goods, earned wages and then purchased the goods they created to a new model where the worker was substituted by the consumer underpinned by cheap debt and low cost imports – it is illustrative to note that real wages have not increased in the US since the early 1970's while at the same time debt has steadily increased to underpin the illusion of wealth – the 'borrow today and pay tomorrow' mode of capitalist operation. This model of operation is now broken. The labour force is now being demonized as there is a now surplus of labour and a need to drive down labour rates through changes in legislation and austerity programs to meet those of the emerging Chinese and Indian middle class so workers rights need to be broken. Once this is done a process of in-source may take place as US labour costs will be on par with overseas labour pools.

It is ironic that during the Regan administration a number of strategic thinkers saw the threat from emerging economies and the danger of Finance Capital and created 'Project Socrates' that would have sought to re-orientate the US economy from one that was based on the rationale of Finance Capital to one that focused in productive innovation which entailed an alignment of capital investment, research and training to product innovative goods. Of course this was ignored and the rest is history. The race to the lowest input cost is ultimately self defeating as it is clear that the economy de-industrialises through labour and capital changes and living standards collapse. The elites – bankers, US transnational corporations, media, industrial military complex and the politicians don't care as they make money either way and this way you get other people overseas to work cheap for you.

S P:

Neoliberal orthodoxy treats unemployment as well as wage supression as a necessary means to fight "inflation." If there was too much power in the hands of organized labor, inflationary pressures would spiral out of control as supply of goods cannot keep up with demand.

It also treats the printing press as a necessary means to fight "deflation."

So our present scenario: widespread unemployment along with QE to infinity, food stamps for all, is exactly what you'd expect.

The problem with this orthodoxy is that it assumes unlimited growth on a planet with finite resources, particularly oil and energy. Growth is not going to solve unemployment or wages, because we are bumping up against limits to growth.

There are only two solutions. One is tax the rich and capital gains, slow growth, and reinvest the surplus into jobs/skills programs, mostly to maintain existing infrastructure or build new energy infrastructure. Even liberals like Krugman skirt around this, because they aren't willing to accept that we have the reached the end of growth and we need radical redistribution measures.

The other solution is genuine classical liberalism / libertarianism, along the lines of Austrian thought. Return to sound money, and let the deflation naturally take care of the imbalances. Yes, it would be wrenching, but it would likely be wrenching for everybody, making it fair in a universal sense.

Neither of these options is palatable to the elite classes, the financiers of Wall Street, or the leeches and bureaucrats of D.C.

So this whole experiment called America will fail.

[Nov 22, 2017] Unemployment is Miserable and Doesn't Spawn an Upsurge in Personal Creativity

Notable quotes:
"... By Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity at the University of Newcastle, NSW, Australia. Originally published at billy blog ..."
"... The overwhelming importance of having a job for happiness is evident throughout the analysis, and holds across all of the world's regions. ..."
"... The pattern of human concerns ..."
"... The pattern of human concerns ..."
"... Journal of Happiness Studies ..."
"... The results show the differences between having a job and being unemployed are "very large indeed" on the three well-being measures (life evaluation, positive and negative affective states). ..."
"... Psychological Bulletin ..."
"... 1. "unemployment tends to make people more emotionally unstable than they were previous to unemployment". ..."
"... 2. The unemployed experience feelings of "personal threat"; "fear"; "sense of proportion is shattered"; loss of "common sense of values"; "prestige lost in own eyes and as he imagines, in the eyes of his fellow men"; "feelings of inferiority"; loss of "self-confidence" and a general loss of "morale". ..."
"... in the light of the structure of our society where the job one holds is the prime indicator of status and prestige. ..."
"... Psychological Bulletin ..."
"... Related studies found that the "unemployed become so apathetic that they rarely read anything". Other activities, such as attending movies etc were seen as being motivated by the need to "kill time" – "a minimal indication of the increased desire for such attendance". ..."
"... In spite of hopeless attempts the unemployed continually look for work, often going back again and again to their last place of work. Other writers reiterate this point. ..."
"... The non-pecuniary effects of not having a job are significant in terms of lost status, social alienation, abandonment of daily structure etc, and that has not changed much over history. ..."
"... I think what is missing from this article is the term "identity." If you meet new people, often the conversation starts with what you do for a living. Your identity, in part, is what you do. You can call yourself a plumber, a writer, a banker, a consultant, a reporter but the point is this is part of your identity. When you lose your job long term, your identity here loses one of its main anchor points. ..."
"... This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings. ..."
"... When unemployed, the stress of worry about money may suppress the creative juices. Speaking from experience. People may well 'keep looking for jobs' because they know ultimately they need a job with steady income. The great experience of some freelancers notwithstanding, not all are cut out for it. ..."
"... When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed. ..."
"... Data like that provided by Mitchell is important to demolishing the horrid "economic anxiety" frame much beloved by liberals, especially wonkish Democrats.* It's not (a) just feelings , to be solved by scented candles or training (the liberal version of rugged individualism) and (b) the effects are real and measurable. It's not surprising, when you think about it, that the working class is about work . ..."
Nov 22, 2017 | www.nakedcapitalism.com

Posted on November 21, 2017 by Yves Smith Yves here. Reader UserFriendly sent this post with the message, "I can confirm this." I can too. And before you try to attribute our reactions to being Americans, note that the study very clearly points out that its finding have been confirmed in "all of the world's regions".

By Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity at the University of Newcastle, NSW, Australia. Originally published at billy blog

Here is a summary of another interesting study I read last week (published March 30, 2017) – Happiness at Work – from academic researchers Jan‐Emmanuel De Neve and George Ward. It explores the relationship between happiness and labour force status, including whether an individual is employed or not and the types of jobs they are doing. The results reinforce a long literature, which emphatically concludes that people are devastated when they lose their jobs and do not adapt to unemployment as its duration increases. The unemployed are miserable and remain so even as they become entrenched in long-term unemployment. Further, they do not seem to sense (or exploit) a freedom to release some inner sense of creativity and purpose. The overwhelming proportion continually seek work – and relate their social status and life happiness to gaining a job, rather than living without a job on income support. The overwhelming conclusion is that "work makes up such an important part of our lives" and that result is robust across different countries and cultures. Being employed leads to much higher evaluations of the quality of life relative to being unemployed. And, nothing much has changed in this regard over the last 80 or so years. These results were well-known in the 1930s, for example. They have a strong bearing on the debate between income guarantees versus employment guarantees. The UBI proponents have produced no robust literature to refute these long-held findings.

While the 'Happiness Study' notes that "the relationship between happiness and employment is a complex and dynamic interaction that runs in both directions" the authors are unequivocal:

The overwhelming importance of having a job for happiness is evident throughout the analysis, and holds across all of the world's regions. When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed. The importance of having a job extends far beyond the salary attached to it, with non-pecuniary aspects of employment such as social status, social relations, daily structure, and goals all exerting a strong influence on people's happiness.

And, the inverse:

The importance of employment for people's subjective wellbeing shines a spotlight on the misery and unhappiness associated with being unemployed.

There is a burgeoning literature on 'happiness', which the authors aim to contribute to.

They define happiness as "subjective well-being", which is "measured along multiple dimensions":

life evaluation (by way of the Cantril "ladder of life"), positive and negative affect to measure respondents' experienced positive and negative wellbeing, as well as the more domain-specific items of job satisfaction and employee engagement. We find that these diverse measures of subjective wellbeing correlate strongly with each other

Cantril's 'Ladder of Life Scale' (or "Cantril Ladder") is used by polling organisations to assess well-being. It was developed by social researcher Hadley Cantril (1965) and documented in his book The pattern of human concerns .

You can learn more about the use of the 'Cantril Ladder' HERE .

As we read, the "Cantril Self-Anchoring Scale consists of the following":

Please imagine a ladder with steps numbered from zero at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time? (ladder-present) On which step do you think you will stand about five years from now? (ladder-future)

[Reference: Cantril, H. (1965) The pattern of human concerns , New Brunswick, Rutgers University Press.]

Christian Bjørnskov's 2010 article – How Comparable are the Gallup World Poll Life Satisfaction Data? – also describes how it works.

[Reference: Bjørnskov, C. (2010) 'How Comparable are the Gallup World Poll Life Satisfaction Data?', Journal of Happiness Studies , 11 (1), 41-60.]

The Cantril scale is usually reported as values between 0 and 10.

The authors in the happiness study use poll data from 150 nations which they say "is representative of 98% of the world's population". This survey data is available on a mostly annual basis since 2006.

The following graph (Figure 1 from the Study) shows "the self-reported wellbeing of individuals around the world according to whether or not they are employed."

The "bars measure the subjective wellbeing of individuals of working age" by employment status .

The results show the differences between having a job and being unemployed are "very large indeed" on the three well-being measures (life evaluation, positive and negative affective states).

People employed "evaluate the quality of their lives around 0.6 points higher on average as compared to the unemployed on a scale from 0 to 10."

The authors also conduct more sophisticated (and searching) statistical analysis (multivariate regression) which control for a range of characteristics (gender, age, education, marital status, composition of household) as well as to "account for the many political, economic, and cultural differences between countries as well as year-to-year variation".

The conclusion they reach is simple:

the unemployed evaluate the overall state of their lives less highly on the Cantril ladder and experience more negative emotions in their day-to-day lives as well as fewer positive ones. These are among the most widely accepted and replicated findings in the science of happiness Here, income is being held constant along with a number of other relevant covariates, showing that these unemployment effects go well beyond the income loss associated with losing one's job.

These results are not surprising. The earliest study of this sort of outcome was from the famous study published by Philip Eisenberg and Paul Lazersfeld in 1938. [Reference: Eisenberg, P. and Lazarsfeld, P. (1938) 'The psychological effects of unemployment', Psychological Bulletin , 35(6), 358-390.]

They explore four dimensions of unemployment:

I. The Effects of Unemployment on Personality.

II. Socio-Political Attitudes Affected by Unemployment.

III. Differing Attitudes Produced by Unemployment and Related Factors.

IV. The Effects of Unemployment on Children and Youth.

On the first dimension, they conclude that:

1. "unemployment tends to make people more emotionally unstable than they were previous to unemployment".

2. The unemployed experience feelings of "personal threat"; "fear"; "sense of proportion is shattered"; loss of "common sense of values"; "prestige lost in own eyes and as he imagines, in the eyes of his fellow men"; "feelings of inferiority"; loss of "self-confidence" and a general loss of "morale".

Devastation, in other words. They were not surprised because they note that:

in the light of the structure of our society where the job one holds is the prime indicator of status and prestige.

This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings. That hasn't changed since Eisenberg and Lazersfeld wrote up the findings of their study in 1938.

It might change over time but that will take a long process of re-education and cultural shift. Trying to dump a set of new cultural values that only a small minority might currently hold to onto a society that clearly still values work is only going to create major social tensions. Eisenberg and Lazarsfeld also considered an earlier 1937 study by Cantril who explored whether "the unemployed tend to evolve more imaginative schemes than the employed".

[Reference: Cantril, H. (1934) 'The Social Psychology of Everyday Life', Psychological Bulletin , 31, 297-330.]

The proposition was (is) that once unemployed, do people then explore new options that were not possible while working, which deliver them with the satisfaction that they lose when they become jobless. The specific question asked in the research was: "Have there been any changes of interests and habits among the unemployed?" Related studies found that the "unemployed become so apathetic that they rarely read anything". Other activities, such as attending movies etc were seen as being motivated by the need to "kill time" – "a minimal indication of the increased desire for such attendance".

On the third dimension, Eisenberg and Lazersfeld examine the questions – "Are there unemployed who don't want to work? Is the relief situation likely to increase this number?", which are still a central issue today – the bludger being subsidized by income support.

They concluded that:

the number is few. In spite of hopeless attempts the unemployed continually look for work, often going back again and again to their last place of work. Other writers reiterate this point.

So for decades, researchers in this area, as opposed to bloggers who wax lyrical on their own opinions, have known that the importance of work in our lives goes well beyond the income we earn. The non-pecuniary effects of not having a job are significant in terms of lost status, social alienation, abandonment of daily structure etc, and that has not changed much over history. The happiness paper did explore "how short-lived is the misery associated with being out of work" in the current cultural settings.

The proposition examined was that:

If the pain is only fleeting and people quickly get used to being unemployed, then we might see joblessness as less of a key public policy priority in terms of happiness.

They conclude that:

a number of studies have demonstrated that people do not adapt much, if at all, to being unemployed there is a large initial shock to becoming unemployed, and then as people stay unemployed over time their levels of life satisfaction remain low . several studies have shown that even once a person becomes re-employed, the prior experience of unemployment leaves a mark on his or her happiness.

So there is no sudden or even medium-term realisation that being jobless endows the individual with a new sense of freedom to become their creative selves, freed from the yoke of work. To bloom into musicians, artists, or whatever.

The reality is that there is an on-going malaise – a deeply entrenched sense of failure is overwhelming, which stifles happiness and creativity, even after the individual is able to return to work.

This negativity, borne heavily by the individual, however, also impacts on society in general.

The paper recognises that:

A further canonical finding in the literature on unemployment and subjective wellbeing is that there are so-called "spillover" effects.

High levels of unemployment "increase fear and heighten the sense of job insecurity". Who will lose their job next type questions?

The researchers found in their data that the higher is the unemployment rate the greater the anxiety among those who remain employed.

Conclusion

The overwhelming conclusion is that "work makes up such an important part of our lives" and that result is robust across different countries and cultures.

Being employed leads to much higher evaluations of the quality of life relative to being unemployed.

The unemployed are miserable and remain so even as they become entrenched in long-term unemployment. They do not seem to sense (or exploit) a freedom to release some inner sense of creativity and purpose.

The overwhelming proportion continually seek work – and relate their social status and life happiness to gaining a job, rather than living without a job on income support.

Modern Monetary Theory (MMT) allows us to understand that it is the government that chooses the unemployment rate – it is a political choice.

For currency-issuing governments it means their deficits are too low relative to the spending and saving decisions of the non-government sector.

For Eurozone-type nations, it means that in surrendering their currencies and adopting a foreign currency, they are unable to guarantee sufficient work in the face of negative shifts in non-government spending. Again, a political choice.

The Job Guarantee can be used as a vehicle to not only ensure their are sufficient jobs available at all times but also to start a process of wiping out the worst jobs in the non-government sector.

That can be done by using the JG wage to ensure low-paid private employers have to restructure their workplaces and pay higher wages and achieve higher productivity in order to attract labour from the Job Guarantee pool.

The Series So Far

This is a further part of a series I am writing as background to my next book with Joan Muysken analysing the Future of Work . More instalments will come as the research process unfolds.

The series so far:

  1. When Austrians ate dogs .
  2. Employment as a human right .
  3. The rise of the "private government .
  4. The evolution of full employment legislation in the US .
  5. Automation and full employment – back to the 1960s .
  6. Countering the march of the robots narrative .
  7. Unemployment is miserable and does not spawn an upsurge in personal creativity .

The blogs in these series should be considered working notes rather than self-contained topics. Ultimately, they will be edited into the final manuscript of my next book due in 2018. The book will likely be published by Edward Elgar (UK).

That is enough for today!

divadab , November 21, 2017 at 6:11 am

Perhaps I'm utterly depressed but I haven't had a job job for over 5 years. Plenty of work, however, more than I can handle and it requires priorisation. But I am deliberately not part of the organized herd. I stay away from big cities – it's scary how managed the herd is in large groups – and I suppose that unemployment for a herd animal is rather distressing as it is effectively being kicked out of the herd.

Anyway my advice, worth what you pay for it but let he who has ears, etc. – is to go local, very local, grow your own food, be part of a community, manage your own work, and renounce the energy feast herd dynamics. "Unemployment", like "recession", is a mechanism of control. Not very practical advice for most, I realize, trapped in the herd as they are in car payments and mortgages, but perhaps aspirational?

The Rev Kev , November 21, 2017 at 6:35 am

I think what is missing from this article is the term "identity." If you meet new people, often the conversation starts with what you do for a living. Your identity, in part, is what you do. You can call yourself a plumber, a writer, a banker, a consultant, a reporter but the point is this is part of your identity. When you lose your job long term, your identity here loses one of its main anchor points.

Worse, there is a deliberate stigma attached with being long term unemployed. In that article you have seen the word bludger being used. In parts of the US I have read of the shame of 'living off the county'. And yes, I have been there, seen that, and got the t-shirt. It's going to be interesting as mechanization and computers turn large portions of the population from workers to 'gig' workers. Expect mass demoralization.

nonclassical , November 21, 2017 at 10:24 am

yes the lives many of us have lived, no longer exist though we appear not notice, as we "can" live in many of same "ways" ..rather well known psychologist defined some 40 years ago, best to "drop through cracks"

jrs , November 21, 2017 at 12:13 pm

Well, you also lose money, maybe you become homeless etc. as you have nowhere else to turn (if there are kids involved to support it gets even scarier though there are some programs). Or maybe you become dependent on another person(s) to support you which is of course degrading as you know you must rely on them to live, whether it's a spouse or lover when you want to work and bring in money, or mom and dads basement, or the kindest friend ever who lets you sleep on their couch. I mean these are the things that really matter.

Privileged people whose main worry in unemployment would be losing identity, wow out of touch much? Who cares about some identity for parties, but the ability to have a stable decent life (gig work hardly counts) is what is needed.

sgt_doom , November 21, 2017 at 2:20 pm

I believe your comment sums up the situation the best -- and most realistically.

jgordon , November 21, 2017 at 7:08 pm

I normally wouldn't comment like this, but you have brought up some extremely important points about identity that I would like to address.

Recently I had the most intense mushroom experience of my entire life–so intense that my identity had been completely stripped and I was left in a formless state, at the level of seeing my bare, unvarnished animal neural circuitry in operation. Suddenly with a flash of inspiration I realized that the identity of everyone, all of us, is inextricably tied up in what we do and what we do for other people.

Following from that, I understood that if we passively rely on others for survival, whether it be relying on friends, family, or government, then we do not have an identity or reason for existing. And the inner self, the animal core of who we are, will realise this lack of identity (even if the concious mind denies it), and will continually generate feelings of profound depression and intense nihilism that will inevitably destroy us if the root cause is not addressed.

Before this experience I was somewhat ambivalent about my politics, but immediately after I knew that the political right was correct on everything important, from attitudes on sex to economic philosophy. People need a core of cultural stability and hard work to grow and become actualized. The alternative is rudderless dissatisfaction and envy that leads nowhere.

On the topic of giving "out of kindnes and goodwill", giving without demanding anything in return is a form of abuse, as it deprives those who receive our feel-good generosity the motivation to form a coherent identity. If the parents of a basement-dweller were truly good people, instead of supporting said dweller they'd drag her out by the ear and make her grow food in the yard or some such. Likewise, those who have supported you without also giving concrete demands and expecations in return have been unkind, and for your own good I hope that you will immediately remove yourself from their support. On the other hand, if you have been thoughtlessly giving because it warms the cockles of your heart, then stop it now. You are ruining other people this way, and if your voting habits are informed by this kind of malevolence I'd encourage you to change those as well.

Anyway the original poster is right about everything. Working and having a purpose in life is an entirely different animal from making money and being "successful" in the government-sponsored commercial economy. Society and government deliberately try to conflate the two for various reasons, primarily graft of labor and genius, but that is only a deliberate mis-framing that needlessly harms people when the mainstream economic system is in catastrophic decline, as ours is today. You should try to clear up this misconception within yourself as a way of getting better.

Well, I hope this message can give you a few different thoughts and help you find your way out of the existential angst you're caught in. Don't wallow in helplessness. Think of something useful to do, anything, whether it earns you money or not, and go out and start doing it. You'll be surprised at how much better you feel about yourself in no time.

skippy , November 22, 2017 at 12:45 am

The problem is you said – I – had an extreme experience [burning bush], the truth was reviled to – I – and I alone during this extreme chemically altered state. Which by the way just happens to conform to a heap of environmental biases I collected. This is why sound methodology demands peer review. disheveled some people think Mister Toads Wild ride at Disneyland on psychotropics is an excellent adventure too.

Jeremy Grimm , November 21, 2017 at 12:33 pm

I think your observation about the importance of work to identity is most perceptive. This post makes too little distinction between work and a job and glosses over the place of work in defining who we are to ourselves and to others. I recall the scene in the movie "About a Boy" when the hero meets someone he cares about and she asks him what he does for a living.

I believe there's another aspect of work -- related to identity -- missing in the analysis of this post. Work can offer a sense of mission -- of acting as part of an effort toward a larger goal no individual could achieve alone. However you may regard the value in putting man on the moon there is no mistaking the sense of mission deeply felt by the engineers and technicians working on the project. What jobs today can claim service to a mission someone might value?

Henry Moon Pie , November 21, 2017 at 7:00 am

Agreed on your points. Wage slavery is nothing to aspire to. Self-determination within a context of an interdependent community is a much better way to live. We do our thing in the city, however.

ambrit , November 21, 2017 at 8:29 am

Finding that "interdependent community" is the hard part. My experience has been that this endeavour is almost chance based; Serendipity if you will.
Here Down South, the churches still seem to have a stranglehold on small and mid scale social organization. One of the big effects of 'churching' is the requirement that the individual gave up personal critical thinking. Thus, the status quo is reinforced. One big happy 'Holy Circlejerk.'

UserFriendly , November 21, 2017 at 10:10 am

from the article

This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings.

That hasn't changed since Eisenberg and Lazersfeld wrote up the findings of their study in 1938. It might change over time but that will take a long process of re-education and cultural shift. Trying to dump a set of new cultural values that only a small minority might currently hold to onto a society that clearly still values work is only going to create major social tensions.

FelicityT , November 21, 2017 at 3:07 pm

I would agree about the entenched cultural norms, etc. But not the pessimism and timeline for change. An individual can communicate a complex idea to millions in seconds, things move fast these days.

For me, it seems that what we (we being UBI/radical change proponents) are lacking is a compelling easily accessible story. Not just regarding UBI (as that is but one part of the trully revolutionary transformations that must occur) but encompassing everything.

We have countless think pieces, bits of academic writing, books, etc that focus on individual pieces and changes in isolation. But we've largely abandoned the all-encompassing narrative, which at their heart is precisely what religion offers and why it can be so seductive, successful, and resilient for so long.

The status quo has this type of story, it's not all that compelling but given the fact that it is the status quo and has inertia and tradition on its side (along with the news media, political, entertainment, etc) it doesn't have to be.

We need to abandon the single narrow issue activism that has become so prominent over the years and get back to engaging with issues as unseparable and intimately interconnected.

Tinkering around the edges will do nothing, a new political religion is what is required.

Yves Smith Post author , November 21, 2017 at 4:23 pm

Sorry, I disagree vehemently. Deeply held cultural attitudes are very slow to change and the study found that work being critical to happiness examined a large number of societies.

Look at feminism. I was a half-generation after the time when women were starting to get a shot at real jobs. IIRC, the first class that accepted women at Harvard Law School was in the 1950 and at Harvard Business School, 1965. And the number of first attendees was puny. The 1965 class at HBS had 10 8 women out of a graduating class of over 800; my class in 1981 had only 11% women.

In the 1980s, you saw a shift from the belief that women could do what men could do to promotion of the idea that women could/should be feminine as well as successful. This looked like seriously mixed messages, in that IMHO the earlier tendency to de-emphasize gender roles in the workplace looked like a positive development.

Women make less than 80% of what men do in the US. Even female doctors in the same specialities make 80% of their male peers.

The Speenhamland in the UK had what amounted to an income guarantee from the 1790s to 1832. Most people didn't want to be on it and preferred to work. Two generations and being on the support of local governments was still seen as carrying a stigma.

More generally, social animals have strongly ingrained tendencies to resent situations they see as unfair. Having someone who is capable of working not work elicits resentment from many, which is why most people don't want to be in that position. You aren't going to change that.

And people need a sense of purpose. There are tons of cases of rich heirs falling into drug addiction or alcoholism and despair because they have no sense of purpose in life. Work provides that, even if it's mundane work to support a family. That is one of the great dissservices the Democrats have done to the citizenry at large: sneering at ordinary work when blue-collar men were the anchors of families and able to take pride in that.

FelicityT , November 21, 2017 at 5:11 pm

So a few points.

Regarding the large number of societies, we often like to think we're more different than we actually are focusing on a few glaringly obvious differences and generalizing from there. Even going back a few hundred years when ideas travelled slower we were still (especially the "west" though the "east" wasn't all that much more different either) quite similar. So I'm less inclined to see the large number of societies as evidence.

Generally on societal changes and movements: The issue here is that the leadership has not changed, they may soften some edges here or there (only to resharpen them again when we're looking elsewhere) but their underlying ideologies are largely unchanged. A good mass of any population will go along to survive, whether they agree or not (and we find increasing evidence that many do not agree, though certainly that they do not agree on a single alternative).

It may be impossible to implement such changes in who controls the levers of power in a democratic fashion but it also may be immoral not implement such changes. Of course this is also clearly a similar path to that walked by many a demonized (in most cases rightfully so) dictator and despot. 'Tread carefully' are wise words to keep in mind.

Today we have a situation which reflects your example re: social animals and resentment of unfairness: the elite (who falls into this category is of course debatable, some individuals moreso than others). But they have intelligently, for their benefit, redirected that resentment towards those that have little. Is there really any logical connection between not engaging in wage labor (note: NOT equivalent to not working) and unfairness? Or is it a myth crafted by those who currently benefit the most?

That resentment is also precisely why it is key that a Basic income be universal with no means testing, everyone gets the same.

I think we should not extrapolate too much from the relatively small segment of the population falling into the the inherited money category. Correlation is not causation and all that.

It also seems that so often individuals jump to the hollywood crafted image of the layabout stoner sitting on the couch giggling at cartoons (or something similarly negative) when the concept of less wage labor is brought up. A reduction of wage labor does not equate to lack of work being done, it simply means doing much of that work for different reasons and rewards and incentives.

As I said in the Links thread today, we produce too much, we consume too much, we grow too much. More wage labor overall as a requirement for survival is certainly not the solution to any real problem that we face, its a massively inefficient use of resources and a massive strain on the ecosystems.

Yves Smith Post author , November 21, 2017 at 8:34 pm

I am really gobsmacked at the sense of entitlement on display here. Why are people entitled to an income with no work? Being an adult means toil: cleaning up after yourself, cleaning up after your kids if you have them, if you are subsistence farmer, tending your crops and livestock, if you are a modern society denizen, paying your bills and your taxes on time. The idea that people are entitled to a life of leisure is bollocks. Yet you promote that.

Society means we have obligations to each other. That means work. In rejecting work you reject society.

And the touting of "creativity" is a top 10% trope that Thomas Frank called out in Listen, Liberal. It's a way of devaluing what the bottom 90% do.

WobblyTelomeres , November 21, 2017 at 8:53 pm

My argument with the article is that, to me, it smacks of Taylorism. A follow-on study would analyze how many hours a laborer must work before the acquired sense of purpose and dignity and associated happiness began to decline. Would it be 30 hours a week of backbreaking labor before dignity found itself eroded? 40? 50? 60? When does the worker break? Just how far can we push the mule before it collapses?

The author alludes to this: "The overwhelming proportion relate their social status and life happiness to gaining a job"

Work equals happiness. Got it.

But, as a former robotics instructor, and as one who watches the industry (and former students), I see an automated future as damn near inevitable. Massive job displacement is coming, life as a minimum wage burger flipper will cease, with no future employment prospects short of government intervention (WPA and CCC for all, I say). I'm not a Luddite, obviously, but there are going to be a lot of people, billions, worldwide, with no prospect of employment. Saying, "You're lazy and entitled" is a bit presumptuous, Yves. Not everyone has your ability, not everyone has my ability. When the burger flipping jobs are gone, where do they go? When roombas mop the floors, where do the floor moppers go?

flora , November 21, 2017 at 9:38 pm

"WPA and CCC for all, I say. "

+1

We could use a new Civilian Conservation Corps and and a Works Progress Administration. There's lots of work that needs doing that isn't getting done by private corporations.

nihil obstet , November 21, 2017 at 10:05 pm

The outrage at non-work wealth and income would be more convincing if it were aimed also at owners of capital. About 30% of national income is passive -- interest, rents, dividends. Why are the owners of capital "entitled to an income with no work?" It's all about the morality that underlies the returns to capital while sugaring over a devaluation of labor. As a moral issue, everyone should share the returns on capital or we should tax away the interest, rents, and dividends. If it's an economic issue, berating people for their beliefs isn't a reason.

WobblyTelomeres , November 21, 2017 at 10:14 pm

Why are the owners of capital "entitled to an income with no work?"

THIS!!!! So much, THIS!!!! But, what else is a Wobbly to say, eh?

Yves Smith Post author , November 22, 2017 at 2:27 am

The overwhelming majority do work. The top 0.1% is almost entirely private equity managers who are able to classify labor income as capital gains through the carried interest loophole. Go look at the Forbes 400.

The 1% are mainly CEOs, plus elite professionals, like partners at top law and consulting firms and specialty surgeons (heart, brain, oncology). The CEOs similarly should be seen as getting labor income but have a lot of stock incentive pay (that is how they get seriously rich) which again gets capital gains treatment.

You are mistaking clever taking advantage of the tax code for where the income actually comes from. Even the kids of rich people are under pressure to act like entrepreneurs from their families and peers. Look at Paris Hilton and Ivanka as examples. They both could have sat back and enjoyed their inheritance, but both went and launched businesses. I'm not saying the kids of the rich succeed, or would have succeed to the extent they do without parental string-pulling, but the point is very few hand their fortune over to a money manager and go sailing or play the cello.

IsotopeC14 , November 22, 2017 at 2:58 am

Isn't the brother of the infamous Koch duo doing exactly that? Actually, if all the .001%ers were like him, we'd all be better off

IsotopeC14 , November 22, 2017 at 1:34 am

What's your take on Rutger Bergman's ted talk? i think most jobs aren't real jobs at all, like marketing and ceo's. why can't we do 20 hour work weeks so we don't have huge amounts of unemployment? Note, I was "unemployed" for years since "markets" decide not to fund science in the US. Yay Germany At least I was fortunate enough to not be forced to work at Walmart or McDonalds like the majority of people with absolutely no life choices. Ah the sweet coercion of capitalism.

flora , November 21, 2017 at 9:09 pm

Your hopes for a UBI are undone by some of the real world observations I've made over many years, with regard to how a guaranteed income increase, of any measure, for a whole population of an area, affects prices. Shorter: income going up means prices are raised by merchants to capture the new income.

  • Examples: A single industry town raises wages for all employees by 2% for the new calendar year. Within the first 2 weeks of the new year, all stores and restaurants and service providers in the town raise their prices by 2%. This happens every year there is a general wage increase.
  • Example: Medicare part D passes and within 2 years, Pharma now having new captive customers whose insurance will pay for drugs, raise prices higher and higher, even on generic drugs.
  • A more recent example: ACA passes with no drug price ceilings. Again, as with the passage of Medicare part D, Pharma raises drug prices to unheard of levels, even older and cheap but life saving drugs, in the knowledge that a new, large group will have insurance that will pay for the drugs – a new source of money.

Your assumption that any UBI would not be instantly captured by raised prices is naive, at best. It's also naive to assume companies would continue to pay wages at the same level to people still employed, instead of reducing wages and letting UBI fill in the rest. Some corporations already underpay their workers, then encourage the workers to apply for food stamps and other public supports to make up for the reduced wage.

The point of the paper is the importance of paid employment to a person's sense of well being. I agree with the paper.

Andrew Dodds , November 22, 2017 at 2:48 am

For the vast majority, a UBI would be income-neutral – it would have to be, to avoid massive inflation. So people would receive a UBI, but pay more tax to compensate. The effect on prices would be zero.

The advantage of a UBI is mostly felt at the lower end, where insecure/seasonal work does now pay. At the moment, a person who went from farm labourer to Christmas work to summer resort work in the UK would certainly be working hard, but also relentlessly hounded by the DWP over universal credit. A UBI would make this sort of lifestyle possible.

jsn , November 21, 2017 at 11:28 am

Davidab, Good for you, but your perspicacity is not scalable. People are social animals and your attitude toward "the herd", at least as expressed here, is that of a predator, even if your taste doesn't run toward predation. Social solutions will necessarily be scalable or they won't be solutions for long.

Lambert Strether , November 22, 2017 at 1:44 am

> the organized herd a herd animal trapped in the herd

I don't think throwing 80% to 90% of the population into the "prey" bucket is especially perspicacious politically (except, of course, for predators or parasites). I also don't think it's especially perspicacious morally. You write:

Not very practical advice for most, I realize, trapped in the herd as they are in car payments and mortgages, but perhaps aspirational?

Let me translate that: "Trapped in the herd as many are to support spouses and children." In other words, taking the cares of the world on themselves in order to care for others.

BJ , November 21, 2017 at 6:37 am

Unemployed stay at home dad here. My children are now old enough to no longer need a stay at home dad. Things I have done: picked up two musical instruments and last year dug a natural swimming pond by hand. Further, one would need to refute all the increased happiness in retirement (NBER). Why social security but not UBI? I get being part of the precariat is painful and this is a reality for most the unemployed no matter where you live in the world. A UBI is unworkable because it will never be large enough to make people's lives unprecarious. Having said that, I am almost positive if you gave every unemployed person 24 k a year and health benefits, there would be a mass of non working happy creative folks.

divadab , November 21, 2017 at 7:41 am

UBI seems to me to encourage non-virtuous behavior – sloth, irresponsibility, fecklessness, and spendthriftness. I like the Finnish model – unemployment insurance is not limited – except if you refuse work provided by the local job center. Lots of work is not being done all over America – we could guarantee honest work to all with some imagination. Start with not spraying roundup and rather using human labor to control weeds and invasive species.

I do agree that universal health insurance is necessary and sadly Obamacare is not that.

ambrit , November 21, 2017 at 8:34 am

The crux of this problem is the definition used for "non-virtuous behaviour." A new CCC is a good place to start though. (Your Tax Dollars At Work! [For some definition of tax dollars.]) As for BJ above, I would suppose that child rearing was his "employment" for years. good so far, but his follow-up is untypical. The 'Empty Nester' mother is a well known meme.

a different chris , November 21, 2017 at 9:19 am

Spendthriftness on 24K a year? Seriously? If we are disgorging unprofessional opinions, I will add my own: sloth and irresponsibility are more signs of depression rather than freedom from having to work. In fact, I believe (and I think much of the stuff here) supports the idea that people want to be seen as useful in some way. Doesn't include me! :) .. unfortunately, I have the charmingly named "dependents" so there you have it.

BJ , November 21, 2017 at 11:18 am

I lived 6 years as a grad student on 24k a year and would say it was easy. Only thing I would have to had worried about was awful health insurance. A two household each with 24k would be even easier, especially if you could do it in a low cost area. So I am not sure what you mean by spendthrift. But again it will never happen, so we will be stuck with what we have or most likely an even more sinister system. I guess I am advocating for a JG with unlimited number of home makers per household.

roadrider , November 21, 2017 at 9:23 am

except if you refuse work provided by the local job center

And who's to say that the local "job center" has work that would be appropriate for every person's specific talents and interests? This is no better than saying that you should be willing to go work for some minimum-wage retail job with unpredictable scheduling and other forms of employer abuses after you lose a high-paying job requiring special talents. I have to call bullshit on this model. I went through a two-year stretch if unemployment in no small part because the vast majority of the available jobs for my skill set were associated with the MIC, surveillance state or the parasitic FIRE sector. I was able to do this because I had saved up enough FY money and had no debts or family to support.

I can also attest to the negative aspects of unemployment that the post describes. Its all true and I can't really say that I'e recovered even now, 2.5 years after finding another suitable job.

Jesper , November 21, 2017 at 10:55 am

The job center in the neighbouring Sweden had the same function. Had is the important word. My guess is that the last time someone lost their unemployment insurance payout due to not accepting a job was in the early 1980s. Prior to that companies might, maybe, possibly have considered hiring someone assigned to them – full employment forced companies to accept what was offered. Companies did not like the situation and the situation has since changed.

Now, when full employment is a thing of the past, the way to lose unemployment insurance payouts is by not applying to enough jobs. An easily gamed system by people not wanting to work: just apply to completely unsuitable positions and the number of applications will be high. Many companies are therefore overwhelmed by applications and are therefore often forced to hire more people in HR to filter out the unsuitable candidates.
People in HR tend not to know much about qualifications and or personalities for the job so they tend to filter out too many. We're all familiar with the skills-shortage .
Next step of this is that the companies who do want to hire have to use recruitment agencies. Basically outsourcing the HR to another company whose people are working on commission. Recruiters sometimes know how to find 'talent', often they are the same kind of people with the same skills and backgrounds as people working in HR.

To even get to the hiring manager a candidate has to go through two almost identical and often meaningless interviews. Recruiter and then HR. Good for the GDP I suppose, not sure if it is good for anything else.

But back on topic again, there is a second way of losing unemployment insurance payout: Time. Once the period covered has passed there is no more payouts of insurance. After that it it is time to live on savings, then sell all assets, and then once that is done finally go to the welfare office and prove that savings are gone and all assets are sold and maybe welfare might be paid out. People on welfare in Sweden are poor and the indignities they are being put through are many. Forget about hobbies and forget about volunteering as the money for either of those activities simply aren't available. Am I surprised by a report saying unemployed in Sweden are unhappy? Nope.

nonclassical , November 21, 2017 at 10:42 am

meanwhile NYTimes testimonials Friday, show average family of 4 healthprofit costs (tripled, due to trump demise ACA) to be $30,000. per year, with around $10,000. deductible end of any semblance of affordable access, "murKa"

https://www.nytimes.com/2017/11/16/us/politics/obamacare-premiums-middle-class.html

Jeremy Grimm , November 21, 2017 at 1:53 pm

What do you mean by virtuous behavior?

Where does a character like Bertie Wooster in "Jeeves" fit in your notions of virtuous behavior? Would you consider him more virtuous working in the management of a firm, controlling the lives and labor of others -- and humorously helped by his his brilliant valet, Jeeves, getting him out of trouble?

For contrast -- in class and social status -- take a beer-soaked trailer trash gentleman of leisure -- and for sake of argument blessed with less than average intelligence -- where would you put him to work where you'd feel pleased with his product or his service? Would you feel better about this fellow enjoying a six-pack after working 8 hours a day 5 days a week virtuously digging and then filling a hole in the ground while carefully watched and goaded by an overseer? [Actually -- how different is that from "using human labor to control weeds and invasive species"? I take it you're a fan of chain-gangs and making the poor pick up trash on the highways?]

What about some of our engineers and scientists virtuously serving the MIC? Is their behavior virtuous because they're not guilty of sloth, irresponsibility [in executing their work], fecklessness, and spendthriftness? On this last quality how do you feel about our government who pay the salaries for all these jobs building better ways to kill and maim?

Bill Smith , November 21, 2017 at 8:01 am

How big is the swimming pool and how long did it take? Where did you put the dirt?

BJ , November 21, 2017 at 11:07 am

It is a design by David Pagan Butler. It is his plunge pool design, deepend is 14 by 8 by 7 deep. I used the dirt to make swales around some trees. Win win all around.

tegnost , November 21, 2017 at 9:32 am

curious to know whether you are married to someone with a job?

BJ , November 21, 2017 at 11:25 am

The answer is yes my spouse works. So I do have a schedule of waking up to make her lunch everyday, meeting her at lunch to walk, and making dinner when she gets home, but we do all those things on her days off so .

But again we would need to explain away, why people who are retired are happier? Just because they think they payed into social security? Try explaining to someone on the SS dole how the government spends money into existence and is not paid by taxes or that the government never saved their tax money, so there are not entitled to this money.

David Kane Miller , November 21, 2017 at 6:55 am

I hated working for other people and doing what they wanted. I began to feel some happiness when I had a half acre on which I could create my own projects. Things improved even more when I could assure myself of some small guaranteed income by claiming Social Security at age 62. To arise in the morning when I feel rested, with interesting projects like gardens, fences, small buildings ahead and work at my own pace is the essence of delight for me. I've been following your arguments against UBI for years and disagree vehemently.

a different chris , November 21, 2017 at 9:23 am

I feel I would behave the same as you, if I had the chance. *But* no statements about human beings are absolute, and because UBI would work for either of us does not mean it would work for the majority. Nothing devised by man is perfect.

Mel , November 21, 2017 at 9:42 am

It's not you; it's not me. It's those deplorable people.

tegnost , November 21, 2017 at 9:37 am

first you had to buy the half acre in a suitable location, then you had to work many years to qualify for social security, the availability of which you paid for and feel you deserve. You also have to buy stuff for fences gardens and small buildings. At most that rhymes with a ubi but is significantly different in it's make up.

Lambert Strether , November 22, 2017 at 1:56 am

> when I had a half acre on which I could create my own projects

That is, when you acquired the half acre, which not everyone can do. It seems to me there's a good deal of projecting going on with this thread from people who are, in essence, statistical outliers. But Mitchell summarizes the literature:

So for decades, researchers in this area, as opposed to bloggers who wax lyrical on their own opinions, have known that the importance of work in our lives goes well beyond the income we earn.

If the solution that works for you is going to scale, that implies that millions more will have to own land. If UBI depends on that, how does that happen? (Of course, in a post-collapse scenario, the land might be taken , but that same scenario makes the existence of institutions required to convey the UBI highly unlikely. )

Carla , November 21, 2017 at 7:16 am

Very glad to hear that Bill Mitchell is working on the "Future of Work" book, and to have this post, and the links to the other segments. Thank you, Yves!

Andrew , November 21, 2017 at 7:25 am

I don't agree with this statement. Never will. I'm the complete opposite. Give me more leisure time and you'll find me painting, writing, playing instruments and doing things that I enjoy. I recall back to when I was a student, I relished in the free time I got (believe me University gave me a lot of free time) between lectures, meaning I could enjoy this time pursuing creative activities. Sure I might be different than most people but I know countless people who are the same.

My own opinion is that root problem lies in the pathology of the working mentality, that 'work' and having a 'job' is so engrained into our society and mindset that once you give most people the time to enjoy other things, they simply can't. They don't know what to do with themselves and they eventually become unhappy, watching daytime TV sat on the sofa.

I recall back to a conversation with my mother about my father, she said to me, 'I don't know how your father is going to cope once he retires and has nothing to do' and it's that very example of where work for so many people becomes so engrained in their mindset, that they are almost scared of having 'nothing to do' as they say. It's a shame, it's this systemic working mentality that has led to this mindset. I'm glad I'm the opposite of this and proud by mother brought me up to be this way. Work, and job are not in my vocabulary. I work to live, not live to work.

I_Agree , November 21, 2017 at 11:26 am

I agree with Andrew. I think this data on the negative effects says more about how being employed fundamentally breaks the human psyche and turns them into chattel, incapable of thinking for themselves and destroying their natural creativity. The more a human is molded into a "good worker" the less they become a full fledged human being. The happiest people are those that have never placed importance on work, that have always lived by the maxim "work to live, not live to work". From my own experience every assertion in this article is the opposite of reality. It is working that makes me apathethic, uncreative, and miserable. The constant knowing that you're wasting your life, day after day, engaged in an activity merely to build revenue streams for the rich, instead of doing things that help society or that please you on a personal level, is what I find misery inducing.

nycTerrierist , November 21, 2017 at 12:18 pm

I agree. If financial insecurity is removed from the equation -- free time can be used creatively for self-actualization, whatever form that may take: cultivating the arts, hobbies, community activities, worthy causes and projects. The ideology wafting from Mitchell's post smells to me like a rationale for wage slavery (market driven living, neo-liberalism, etc.)

jrs , November 21, 2017 at 12:48 pm

Besides how are people supposed to spend their time "exploring other opportunities" when unemployed anyway? To collect unemployment which isn't exactly paying that much anyway, they have to show they are applying to jobs. To go to the movies the example given costs money, which one may tend to be short on when unemployed. They probably are looking for work regardless (for the income). There may still be some free time. But they could go back to school? Uh in case one just woke up from a rock they were under for 100 years, that costs money, which one may tend to be short on when unemployed, plus there is no guarantee the new career will pan out either, no guarantee someone is just chomping at the bit to hire a newly trained 50 year old or something. I have always taken classes when unemployed, and paid for it and it's not cheap.

Yes to use one's time wisely in unemployment in the existing system requires a kind of deep psychological maturity that few have, a kind of Surrender To Fate, to the uncertainty of whether one will have an income again or not (either that or a sugar daddy or a trust fund). Because it's not easy to deal with that uncertainty. And uncertainty is the name of the game in unemployment, that and not having an income may be the pain in it's entirety.

FelicityT , November 21, 2017 at 3:18 pm

Sadly this breaking down into a "good worker" begins for most shortly after they begin school. This type of education harms society in a myriad of ways including instilling a dislike of learning, deference to authority (no matter how irrational and unjust), and a destruction of a child's natural curiosity.

Yves Smith Post author , November 21, 2017 at 5:21 pm

I don't buy your premise that people are "creative". The overwhelming majority do not have creative projects they'd be pursuing if they had leisure and income. Go look at retirees, ones that have just retired, are healthy, and have money.

Yves Smith Post author , November 21, 2017 at 4:29 pm

You are really misconstruing what the studies have found and misapplied it to your situation. Leisure time when you have a job or a role (being a student) is not at all the same as having time when you are unemployed, with or without a social safety net.

Summer , November 21, 2017 at 6:25 pm
  • Work: that can be me hiring someone to cut my yard, or another type of one-off thing filled with precariousness.
  • Job: that less temporary work, but by no means permanent. Just a step up from the precariousness of work.
  • Career: that is work in the same field over a long period of time and it is more likely that someone will develop an identity through performing the work. Still precarious, but maybe more fulfilling.
  • Sense of purpose: I was always under the impression that is something you have to give yourself. If it can be taken away by someone what was the purpose?
jrs , November 21, 2017 at 6:37 pm

one often has a role when unemployed: finding work. But it's not a very fulfilling one! But if one is trying to find work, it's not exactly the absence of a role either even if it still leaves significantly more free time than otherwise, maybe winning the lottery is the absence of a role.

But then it's also not like we give people a UBI even for a few years (at any time in adult life) to get an education. Only if they take out a student loan approaching the size of a mortgage or have parents willing to pony up are they allowed that (to pay not just for the education but to live because having a roof over one's head etc. is never free, a UBI via debt it might be called).

Lambert Strether , November 22, 2017 at 2:00 am

> Give me more leisure time and you'll find me painting, writing, playing instruments and doing things that I enjoy.
Nothing to breed resentment of "the creative class" here! Blowback from Speenhamland brought on the workhouses, so be careful what you wish for.

Jesper , November 21, 2017 at 7:47 am

Again the UBI vs JG debate .

UBI won't happen and JG has been tried (and failed).

The argument that JG would allow the public sector to hire more people is demeaning to people already employed in the public sector and demonstrably false – people are hired into the public sector without there being a JG. It is most certainly possible to be against a JG while wanting more people working in the public sector.

The way forward is to have a government acting for people instead of for corporations. Increase the amount of paid vacations, reduce the pension age and stop with the Soviet style worship of work: While some people are apparently proud of their friends and relatives who died while at work it is also possible to feel sad about that.

diptherio , November 21, 2017 at 10:00 am

JG has been tried (and failed).

When and where? The NCCC seemed to work pretty good here in the Western US.

Jesper , November 21, 2017 at 10:27 am

The JG was tried in Communist countries in Europe, Asia and Americas. The arguments then and there were the same as here and now, made by the same type of social 'scientists' (economists).

Would a JG be different here and now as the Republicans and Democrats are representing the best interests of the people? Or are they representing the same kind of interests as the Communist parties did?

Yves Smith Post author , November 21, 2017 at 4:39 pm

Data, please. The USSR fell because it was spending on its military to keep up with the US, a much larger economy. Countering your assertion we have this:

tegnost , November 21, 2017 at 10:00 am

As long as people argue that "it's not fair" to fix the inequality issue and employ things like debt jubilee or student loan forgiveness, or if we fix the ridiculous cost of health care what will all those insurance agents do then we will wind up with the real kind of class warfare, rather than the current punching from the top down, the punching will come from the bottom, because the situation is not fair now, it's just TINA according to those who profit from it. In my own life there is a balance of creativity and work, and I find work enables my creativity by putting some pressure on my time, i.e., I get up earlier, I practice at 8:30 am instead of sleeping til 10 and winding up with S.A..D., I go to bed rather than watch tv or drink to excess.. in other words i have some kind of weird schedule, I have days off sort of When I've been unemployed I feel the way s described in the article. I find the arguments in favor of ubi tend to come from people who already have assets, or jobs, or family who they take care of which is actually a job although uncommonly described as such. The only truth I see in real life is that the unemployed I am intimately familiar with first are mentally oppressed by the notion that to repair their situation will require they work every waking hour at substandard wages for the rest of their life and that is a major barrier to getting started, and that is a policy choice the gov't and elite classes purposefully made which created the precariat and will be their undoing if they are unable to see this.

tegnost , November 21, 2017 at 10:15 am

Hey look, even the msm is looking at it
https://www.seattletimes.com/seattle-news/is-uprising-the-only-way-out-of-gross-inequality-maybe-so/

j84ustin , November 21, 2017 at 10:08 am

As someone who works in the public sector I never quite thought of it like that, thanks.

hunkerdown , November 21, 2017 at 7:53 am

Disappointing that there's no analysis in this context of less employment, as in shorter work weeks and/or days, as opposed to merely all or none.

nonclassical , November 21, 2017 at 10:45 am

see – hear

(but no possibility without healthcare access, rather than healthtprofit)

Vatch , November 21, 2017 at 11:31 am

Interesting point. I read a science fiction story in which the protagonist arrives for work at his full time job at 10:00 AM, and he's finished for the day at 4:00 PM. I can't remember the name of the story or novel, unfortunately.

jrs , November 21, 2017 at 1:04 pm

Agreed. And they already have it in places like Denmark. Why don't we talk about that? It actually exists unlike utopian schemes for either total UBI or total work guarantee (government job creation is not utopian, but imagining it will employ everyone is, and I would like the UBI to be more widely tried, but in this country we are nowhere close). Funny how utopia becomes more interesting to people than actual existing arrangements, even though of course those could be improved on too.

The Danish work arrangement is less than a 40 hour week, and mothers especially often work part-time but both sexes can. It's here in this country where work is either impossibly grueling or you are not working. No other choice. In countries with more flexible work arrangements more women actually work, but it's flexible and flexible for men who choose to do the parenting as well. I'm not saying this should be for parents only of course.

Lambert Strether , November 22, 2017 at 2:02 am

Because the JG sets the baseline for employment, which private companies must meet, the JG (unlike the UBI) can do this.

Otis B Driftwood , November 21, 2017 at 7:58 am

My own situation is that I am unhappy in my well-paying job and would like nothing more than to devote myself to other interests. I'm thirty years on in a relationship with someone who grew up in bad financial circumstances and panics whenever I talk about leaving my job. I tell her that we have 2 years of living expenses in the bank but I can't guarantee making the same amount of money if I do leave my job. She has a job that she loves and is important and pays barely 1/2 of my own income. So she worries about her future with me. She worries about losing her home. I suppose that makes me the definition of a wage slave. And it makes for an increasingly unhappy marriage. I admire those who have faced similar circumstances and found a way through this. Sorry to vent, but this topic and the comments hit a nerve with me and I'm still trying to figure this out.

ambrit , November 21, 2017 at 8:38 am

Otis; We are presently going through a period where that "two year cushion" has evaporated, for various reasons. We are seeing our way through this, straight into penury and privation. Take nothing for granted in todays' economy.

jrs , November 21, 2017 at 1:11 pm

yes find the lower paying job that you like more first. If you just quit for nothing in the hopes of finding one it might not happen. Of course unemployment also happens sometimes, whether we want it or not.

bronco , November 21, 2017 at 12:47 pm

The newer generations are worse when it comes to lifestyle. Those of that are older can at least remember a time without cellphones internet streaming services leasing a new car every 2 years etc.

What about the young? My niece and her husband should be all set , his mom sunk money into a home on the condition she moved into a mother in law apartment. So far so good right? 2 years in they are imploding even with the free child care she provides. Combined their wireless bill a month is over $300. The sit on the couch side by side and stream netflix shows to dueling iphones in front of a 65 inch tv that is not even turned on. Wearing headphones in silence.

Both driving new vehicles , both have gym memberships they don't use . They buy lattes 3 or 4 times a day which is probably another 500 a month.

My uncle passed away recently and my niece asked if she was in the will. It was literally her only communication on the subject. They are going under and could easily trim a few thousand a month from the budget but simply won't. No one in the family is going to lift a finger for them at this point they burned every possible bridge already. I have seen people living in cars plenty lately but I think these will be the first I see to living in brand new cars .

Somewhere along the line they got the impression that the american dream was a leased car a starbucks in one hand and an iphone in the other .

Confront them with the concept of living within a paycheck and they react like a patient hearing he has 3 months to live.

Lambert Strether , November 22, 2017 at 2:03 am

Ah. Reagan's "welfare queens" updated. Kids these days!

JBird , November 22, 2017 at 3:00 am

Yeah being poor, never mind growing up poor, just well and truly sucks and it can really @@@@ you up. Gives people all sorts of issues. I'm rather like her, but I have had the joy of multi-hour commutes to unexciting soul crushing work. Happy, happy, joy, joy! However don't forget that with the current political economy things are likely to go bad in all sorts of ways. This whole site is devoted to that. My suggestion is to keep the job unless you have something lined up. Not being able to rent has it own stresses too. Take my word for it.

Thuto , November 21, 2017 at 8:00 am

I may be engaging in semantics but I think conflating work and jobs makes this article a bit of a mixed bag. I know plenty of people who are terribly unhappy in their jobs, but nonetheless extract a sense of wellbeing from having a stable source of INCOME to pay their bills (anecdotally speaking, acute stress from recent job losses is closely linked to uncertainty about how bills are going to be paid, that's why those with a safety net of accumulated savings report less stress than those without). Loss of status, social standing and identity and the chronic stress borne from these become evident much later I.e. when the unemployment is prolonged, accompanied of course by the still unresolved top-of-mind concern of "how to pay the bills".

As such, acute stress for the recently unemployed is driven by financial/income uncertainty (I.e. how am I going to pay the bills) whereas chronic stress from prolonged unemployment brings into play the more identity driven aspects like loss of social standing and status. For policy interventions to have any effects, policy makers would have to delineate the primary drivers of stress (or lack of wellbeing as the author calls it) during the various phases of the unemployment lifecycle. An Unemployment Insurance Fund (UIF) like we have here in South Africa appears to address the early stages of unemployment, and the accompanying acute stress, quite well by providing the income guarantee (for six months) that cushions the shock of losing a job. What's still missing of course are interventions that promote the quick return to employment for those on UIF, so maybe a middle of the road solution between UBI and a jobs guarantee scheme is how policy makers should be framing this, instead of the binary either/or we currently have.

TroyMcClure , November 21, 2017 at 9:19 am

Lots' of people think they're unhappy with their jobs. Let them sit unemployed for 9 months and ask them if they want that job back. The usual parade of anecdata is on display here in the comments. Mitchell's real data and analysis in the article above still stand.

Thuto , November 21, 2017 at 10:06 am

If you'd read through my comment, and not rushed through it with a view of dishing out a flippant response, you'd have seen that nowhere do I question the validity of his data, I merely question how the argument is presented in some areas (NC discourages unquestioning deference to the views of experts no??). By the way, anecdotes do add to richer understanding of a nuanced and layered topic (as this one is) so your dismissal of them in your haste to invalidate people's observations is hardly helpful.

jrs , November 21, 2017 at 1:15 pm

Yes people many not like their jobs but prefer the security of having them to not. Yes even if the boss sexually harasses one (as we are seeing is very common). Yes even if there is other workplace abuse. Yes even when it causes depression or PTSD (but if one stays with such a job long term it ruins the self confidence that is one prerequisite to get another job!). Yes even if one is in therapy because of job stress, sexual harassment or you name it. The job allows the having health insurance, allows the therapy, allows the complaining about the job in therapy to make it through another week.

Lambert Strether , November 22, 2017 at 2:04 am

> The usual parade of anecdata is on display here in the comments. Mitchell's real data and analysis in the article above still stand.

Ding ding ding!

Democrita , November 21, 2017 at 8:13 am

When unemployed, the stress of worry about money may suppress the creative juices. Speaking from experience. People may well 'keep looking for jobs' because they know ultimately they need a job with steady income. The great experience of some freelancers notwithstanding, not all are cut out for it.

I would love to see some more about happiness or its lack in retirement–referenced by stay-at-home dad BJ , above.

I wonder, too, about the impact of *how* one loses one's job. Getting laid off vs fired vs quitting vs involuntary retirement vs voluntary, etc feel very different. Speaking from experience on that, too. I will search on these points and post anything of interest.

jrs , November 21, 2017 at 1:40 pm

There are also other things that are degrading about the very process of being unemployed not mentioned here. What about the constant rejection that it can entail? One is unemployed and looking for work, one sends out resumes, many of them will never be answered, that's rejection. Then if one is lucky they get interviews, many will never lead to jobs, yet more rejection. Does the process of constant rejection itself have a negative effect on a human being whether it's looking for jobs or dates or whatever? Isn't it learned helplessness to if one keeps trying for something and keeps failing. Isn't that itself demoralizing entirely independent of any doubtful innate demoralizing quality of leisure.

freedeomny , November 21, 2017 at 10:23 am

I am not so sure if I agree with this article. I think it really depends on whether or not you have income to support yourself, hate or love your job, and the amount of outside interests you have, among other things. Almost everyone I know who lives in the NYC area and commutes into the city .doesn't like their job and finds the whole situation "soul-crushing".

Those that live in Manhattan proper are (feel) a bit better off. I for one stopped working somewhat voluntarily last year. I write somewhat because I began to dislike my job so much that it was interfering with my state of well being, however, if I had been allowed to work remotely I probably would have stuck it out for another couple of years.

I am close enough to 62 that I can make do before SS kicks in although I have completely changed my lifestyle – i.e. I've given up a materialistic lifestyle and live very frugally.

Additionally I saved for many years once I decided to embark on this path. I do not find myself depressed at all and the path this year has been very enriching and exciting (and scary) as I reflect on what I want for the future. I'm pretty sure I will end up moving and buying a property so that I can become as self sufficient as possible. Also, I probably will get a job down the line – but if I can't get one because I am deemed too old that will be ok as well. The biggest unknown for me is how much health insurance will cost in the future .

Yves Smith Post author , November 21, 2017 at 5:15 pm

The article made clear that the studies included "unemployed but with income" from government support. It is amazing the degree to which readers ignore that and want to make the findings about "unemployed with no income".

JBird , November 22, 2017 at 3:30 am

That's because we Americans all have work=good=worthy=blessed by God while workless=scum=worthless=accursed by God engraved into our collective soul. Our politics, our beliefs, are just overlays to that.

Even when we agree that the whole situation just crushes people into paste, and for which they have no defense regardless of how hard they work, how carefully they plan, or what they do, that underlay makes use feel that this is their/our fault. Any suggestions that at least some support can be decoupled from work, and that maybe work, and how much you earn, should not determine their value, brings the atavistic fear of being the "undeserving poor," parasites and therefore reprobated scum.

So we don't hear what you are saying without extra effort because it's bypassing our conscious thoughts.

Jamie , November 21, 2017 at 10:43 am

Add my voice to those above who feel that forced labor is the bane of existence, not the wellspring. All this study says to me is that refusing to employ someone in capitalist society does not make them happy. It makes them outcasts.

So, I say yes to a JG, because anyone who wants work should be offered work. But at the same time, a proper JG is not forced labor. And the only way to ensure that it is not forced labor, is to decouple basic needs from wage slavery.

Left in Wisconsin , November 21, 2017 at 12:02 pm

I am critical of those who distinguish between the job and the income. Of course the income is critical to the dignity of the job. For many jobs, it is the primary source of that dignity. The notion that all jobs should provide some intrinsic dignity unrelated to the income, or that people whose dignity is primarily based on the income they earn rather than the work they do are deluded, is to buy in to the propaganda of "passion" being a requirement for your work and to really be blind to what is required to make a society function. Someone has to change the diapers, and wipe the butts of old people. (yes, I've done both.) It doesn't require passion and any sense of satisfaction is gone by about the second day. But if you could make a middle class living doing it, there would be a lot fewer unhappy people in the world.

It is well known that auto factory jobs were not perceived as good jobs until the UAW was able to make them middle class jobs. The nature of the actual work itself hasn't changed all that much over the years – mostly it is still very repetitive work that requires little specialized training, even if the machine technology is much improved. Indeed, I would guess that more intrinsic satisfaction came from bashing metal than pushing buttons on a CNC machine, and so the jobs may even be less self-actualizing than they used to be.

The capitalist myth is that the private sector economy generates all the wealth and the public sector is a claim on that wealth. Yet human development proves to us that this is not true – a substantial portion of "human capital" is developed outside the paid economy, government investment in R&D generates productivity growth, etc. And MMT demonstrates that we do not require private sector savings to fund public investment.

We are still a ways from having the math to demonstrate that government investment in caring and nurturing is always socially productive – first we need productivity numbers that reflect more than just private sector "product." But I think we are moving in that direction. Rather than prioritize a minimum wage JG of make-work, we should first simply pay people good wages to raise their own children or look after their elderly and disabled relatives. The MMT JG, as I understand it, would still require people to leave their kids with others to look after them in order to perform some minimum wage task. That is just dumb.

jrs , November 21, 2017 at 1:31 pm

Maybe it's dumb, it's certainly dumb in a system like the U.S. where work is brutal and often low paid and paid childcare is not well remunerated either. But caretakers also working seems to work in countries with greater income equality, good job protections, flexible work arrangements, and a decent amount of paid parental leave – yea Denmark, they think their children should be raised by professionals, but also work-life balance is still pretty good.

Whiskey Bob , November 21, 2017 at 1:34 pm

My take is that capitalism has made the benefits and malus of having a job so ingrained into culture and so reinforced. Having a job is so closely linked to happiness because it gives you the money needed to pursue it.

A job affords you the ability to pursue whatever goals you want within a capitalist framework. "Everything" costs money and so having a job gives you the money to pay for those costs and go on to fulfill your pursuit of happiness.

Analyzing whether people are happy or not under these conditions seem apparent that it is going to lead to results heavily biased towards finding happiness through employment.

The unemployed are often living off someone else's income and feel like an undeserving parasite. Adults are generally ingrained with the culture that they have to grow up and be independent and be able to provide for a new family that they will start up. Becoming unemployed is like being emasculated and infantile, the opposite of what is expected of adults.

There's also that not having a job is increasingly being punished especially in the case of America. American wages have stayed either largely static or have worsened, making being unemployed that much more of a burden on family or friends. Unemployment has been demonized by Reaganism and has become systematically punishable for the long term unemployed. If you are unemployed for too long, you start losing government support. This compounds the frantic rush to get out of unemployment once unemployed.

There is little luxury to enjoy while unemployed. Life while unemployed is a frustrating and often disappointing hell of constant job applications and having many of them lead to nothing. The people providing support often start to become less so over time and become more convinced of laziness or some kind of lack of character or willpower or education or ability or whatever. Any sense of systemic failure is transplanted into a sense of personal failure, especially under neoliberalism.

I am not so sure about the case of Europe and otherwise. I am sure that the third world often has little or no social safety nets so having work (in exploitative conditions in many cases) is a must for survival.

Anyways, I wonder about the exact methodologies of these studies and I think they often take the current feelings about unemployment and then attempt to extrapolate talking points for UBI/JG from them. Yes, UBI wouldn't change culture overnight and it would take a very, very long time for people to let down their guard and adjust if UBI is to be implemented in a manner that would warrant trust. This article seems to understand the potential for that, but decides against it being a significant factor due to the studies emphasizing the malus of unemployment.

I wonder how different the results would be if there were studies that asked people how they would feel if they were unemployed under a UBI system versus the current system. I know a good number of young people (mostly under 30) who would love to drop out and just play video games all day. Though the significance of such a drastic demographic shift would probably lead to great political consequences. It would probably prove the anti-UBI crowd right in that under a capitalist framework, the capitalists and the employed wouldn't tolerate the unemployed and would seek to turn them into an underclass.

Personally I think a combination of UBI and JG should be pursued. JG would work better within the current capitalist framework. I don't think it is without its pitfalls due to similar possible issues (with the similar policy of full employment) either under Keynesianism (e.g. Milton Friedman sees it as inefficient) or in the USSR (e.g. bullshit jobs). There is the possibility of UBI having benefits (not having the unemployed be a burden but a subsidized contributer to the economy) so I personally don't think it should be fully disregarded until it is understood better. I would like it if there were better scientific studies to expand upon the implications of UBI and better measure if it would work or not. The upcoming studies testing an actual UBI system should help to end the debates once and for all.

redleg , November 21, 2017 at 2:28 pm

My $0.02: I have a creative pursuit (no money) and a engineering/physical science technical career (income!). I am proficient in and passionate about both. Over the last few years, the technical career became tenuous due to consolidation of regional consulting firms (endemic to this era)- wages flat to declining, higher work stress, less time off, conversation to contact employment, etc.- which has resulted in two layoffs.

During the time of tenuous employment, my art took on a darker tone. During unemployment the art stopped altogether.

I'm recently re-employed in a field that I'm not proficient. Both the peter principle and imposter syndrome apply. My art has resumed, but the topics are singular about despair and work, to the point that I feel like I'm constantly reworking the same one piece over and over again. And the quality has plummeted too.

In some fields (e.g. engineering), being a wage slave is the only realistic option due to the dominance of a small number of large firms. The big players crowd out independents and free lancers, while pressuring their own employees through just-high-enough wages and limiting time off. Engineering services is a relationship- based field, and the big boys (and they are nearly all boys) have vastly bigger networks to draw work from than a small firm unless that small firm has a big contact to feed them work (until they get gobbled up). The big firms also have more areas of expertise which limits how useful a boutique firm is to a client pool, except under very narrow circumstances. And if you are an introvert like most engineering people, there's no way to compete with big firms and their marketing staff to expand a network enough to compete.

In that way, consulting is a lot like art. To make a living at it you need either contacts or a sponsor. Or an inheritance.

ChrisPacific , November 21, 2017 at 5:30 pm

I would be interested to know what the definition of unemployment was for the purpose of this study (I couldn't find it in the supplied links). If it's simply "people who don't have a job," for example, then it would include the likes of the idle rich, retirees, wards of the state, and so on. Binary statements like this one do make it sound like the broad definition is the one in use:

When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed.

The conclusion seems at odds with results I've seen for some of those groups – for example, I thought it was fairly well accepted that retirees who are supported by a government plan that is sufficient for them to live on were generally at least as happy as they had been during their working life.

If, on the other hand, the study uses a narrow definition (e.g. people who are of working age, want a job or need one to support themselves financially, but can't find one) then the conclusion seems a lot more reasonable. But that's a heavily loaded definition in economic and cultural terms. In that case, the conclusion (people are happier if they have a job) only holds true in the current prevailing model of society. It doesn't rule out the possibility of structuring society or the economy differently in such a way that people can be non-working and happy. The existence of one such population already (retirees) strongly suggests that outcomes like this are possible. A UBI would be an example of just such a restructuring of society, and therefore I don't think that this study and its result are necessarily a valid argument against it.

nihil obstet , November 21, 2017 at 6:07 pm

Which makes a person happier -- being considered worthless by one's society or valuable? How many studies do we need to answer that question? Apparently, a lot, because studies like this one keep on going. The underlying assumption is that jobs make one valuable. So if you don't have a job you're worthless. Now, who's happier on the whole, people with jobs or the unemployed? That's surely good for a few more studies. Did you know that members of socially devalued groups (minorities, non-heteros, and the like) have higher rates of dysfunction, rather like the unemployed? Hmm, I wonder if there's maybe a similar principle at work. And my solution is not to turn all the people of color white nor to change all the women to men nor to "cure" gays. Well, maybe a few more conclusive studies of this kind will convince me that we must all be the same, toeing the line for those whom it has pleased God to dictate our values to us.

I am convinced that we shouldn't outlaw jobs, because I believe the tons of stories about happy people in their jobs However, I also believe we shouldn't force everyone into jobs, because I know tons of stories about happy people without jobs. You know, the stories that the JG people explain away: parents caring for their children (JG -- "oh, we'll make that a job!"), volunteers working on local planning issues (JG -- "oh, we'll make that a job, too. In fact, we'll make everything worth doing a job. The important thing is to be able to force people to work schedules and bosses, because otherwise, they'll all lie around doing nothing and be miserable"), the retired (JG -- "that's not really the same, but they'd be better off staying in a job"). And this is all before we get to those who can't really hold a job because of disability or geography or other responsibilities.

I support the JG over the current situation, but as to what we should be working for, the more I read the JG arguments, the more paternalistic and just plain narrow minded judgmental they seem.

Summer , November 21, 2017 at 6:52 pm

If someone else gives you a sense of purpose and takes it away what was the purpose?

Lambert Strether , November 22, 2017 at 1:24 am

Data like that provided by Mitchell is important to demolishing the horrid "economic anxiety" frame much beloved by liberals, especially wonkish Democrats.* It's not (a) just feelings , to be solved by scented candles or training (the liberal version of rugged individualism) and (b) the effects are real and measurable. It's not surprising, when you think about it, that the working class is about work .

* To put this another way, anybody who has really suffered the crawling inwardness of anxiety, in the clinical sense, knows that it affects every aspect of one's being. Anxiety is not something deplorables deploy as cover for less than creditable motives.

[Nov 04, 2017] No Dress Code AHAHAHAHAHA by Lindsay Hill

Nov 04, 2017 | lkhill.com

[Oct 31, 2017] In many companies its questionable whether the process can even be ever understood well, unless you have significant in-company knowledge, which makes outsourcing a key risk

Notable quotes:
"... Personnel turnover in Indian firms is sky high. As soon as software engineers finish taking part in a project, they jot the reference on their CV, and rush to find another project, in a different area, to extend their skill set, beef up their CV and improve their chances of a higher salary in the IT market. ..."
"... The consequence is that Indian IT firms in charge of the outsourced projects/products just cannot rely upon the implicit knowledge within the heads of their employees. In a sense, they cannot afford to have "key personnel", experienced people who know important, undocumented aspects of a piece of software and can be queried to clear up things -- all employees must be interchangeable. Hence the strict reliance on well-documented processes. ..."
"... Outsourcing your core competencies or your competitive advantage -- that's the real beauty of outsourcing! What could go wrong? ..."

Oct 30, 2017 | www.nakedcapitalism.com ,

Jesper , , October 30, 2017 at 7:40 am

I've seen a couple of BPOs, Business Process Outsourcing deals.

The key for success of BPO in the short term is to define the process -- document every step of the process of having something done and then introduce control-functions to ensure that the process is being followed. Possibly also develop some tools in supporting the process.

If the process is understood and documented well -- so well that rare/expensive skill is no longer needed to follow the process -- then it is possible to look for the lowest possible cost employee to follow the process.

As far as I can tell the most common mistake in BPO deals is that the process being outsourced isn't understood well. The documentation tends to be extensive but if the understanding is lacking then the process might be providing different results than wished for. Key Performance Indicators (KPIs) are introduced and then the gaming of the KPIs is begun .
Even if the initial process was understood well and documented well then the next problem is that due to distance (provider to client) there might be difficulties in adapting the process to changing circumstances.

And yes, there are similarities in BPOs and automation. Understanding of the process is key, without understanding of the process then the end result is usually bad. The key to learning and understanding is often humility and humility is often (in my experience) lacking in executives, senior management and project managers involved in BPO deals and/or efficiency projects.

Automation in the Too Big bank Nordea:
https://www.bloomberg.com/news/articles/2017-10-26/nordea-to-cut-at-least-6-000-jobs-in-fight-to-stay-competitive
Time will tell if it is a success for Nordea and if other big banks will follow suit and cut 13% of their workforce.

vlade , , October 30, 2017 at 8:35 am

See, you put it right on "the process is not understood well". My point is, in many companies it's questionable whether the process can even be ever understood well, unless you have significant in-company knowledge, which makes outsourcing a key risk, even in absence of anything else.

ejf , , October 30, 2017 at 9:54 am

Yup,you got it -- Business Process Outsourcing. I've seen the ill-understood processes ruined when, e.g., software development was transferred to India. I saw this starting in 2000 up til the present day. Yankee management LOVED the idea of cheap labor, but never got back the software it originally intended and designed.

It was the culture: Yankees are software cowboys -- able to change project as needed; Indians loved the process of development. The Indians sounded good but never go the job done.

visitor , , October 30, 2017 at 11:02 am

In the 1990s, I was quite impressed that the first company to reach a CMM level 5 was from India (a subsidiary from IBM, if I remember correctly) -- and thereafter seeing Indian software firms achieving ISO 9000/CMM compliance before large Western corporations.

Later, I worked in several projects that were partly outsourced/externalized to India (the usual suspects like HCL or Wipro), and I understood. Personnel turnover in Indian firms is sky high. As soon as software engineers finish taking part in a project, they jot the reference on their CV, and rush to find another project, in a different area, to extend their skill set, beef up their CV and improve their chances of a higher salary in the IT market.

Remaining in one domain area, with one set of technologies, is not considered a good thing for advancement in the Indian IT market, or when trying to get directly hired by a Western firm. They often have to support an extended family that paid for their computer science studies, so fast career moves are really important for them.

The consequence is that Indian IT firms in charge of the outsourced projects/products just cannot rely upon the implicit knowledge within the heads of their employees. In a sense, they cannot afford to have "key personnel", experienced people who know important, undocumented aspects of a piece of software and can be queried to clear up things -- all employees must be interchangeable. Hence the strict reliance on well-documented processes.

Jesper , , October 30, 2017 at 1:46 pm

all employees must be interchangeable

To expand on that I'd say that interchangeable employees have limited or no bargaining power leading to it being easier to keep salaries low. What is left for the interchangeable employee to do to increase earnings? Yep, change jobs leading to more focus on making employees interchangeable .
The game (war) between the company and its employees escalates. Power is everything and all CEOs know that you don't get paid what you're worth -- you're paid what you negotiate. Maintaining power is worth the cost of churn.

d , , October 30, 2017 at 3:12 pm

dont we have some of the all employees must be interchangeable in the US too?

Thuto , , October 30, 2017 at 8:18 am

Pity the "build or buy" decision calculus has been perverted beyond what the firm needs as inputs into its final market ready products, but is increasingly being used as a defensive move by big companies to kill off competition from smaller firms via knock off products or "acqui-hiring" of talent.

Thuto , , October 30, 2017 at 8:25 am

Aqui-hiring aka acquiring the smaller firm, pretending to integrate its product into the big company's product line, starving the product of resources to slowly kill it off, then pulling the plug citing "dissapointing sales and take up in the market" to protect big company's market share

Thuto , , October 30, 2017 at 8:41 am

Then redeploying the acqui-hired "talent" (I.e. founders of the acquired firm) to work on the next generation of big company's products (except now they do so in a bureaucratic, red tape laden maze of "corporate innovation management" processes).

Dan , , October 30, 2017 at 10:13 am

Outsourcing your core competencies or your competitive advantage -- that's the real beauty of outsourcing! What could go wrong?

WobblyTelomeres , , October 30, 2017 at 11:25 am

I thought one would outsource the core competitive disadvantages. That is, a smaller firm would outsource (buy) when they could not competitively create a subassembly/subcomponent because the sourcing firm had successfully achieved superior economies of scale (EoS) . This is why multiple automobile manufacturers purchase their subcomponents (say, coils or sparkplugs or bearings) from a supplier instead of manufacturing them in-house as the supplier achieves superior EoS by supplying the entire industry.

Even commenter Larry's above example ("offload liability risk with our larger insurance policy") is an EoS advantage/disadvantage, no?

Problems occur when one side of the dance is dominated by one or two very large players (think WalMart or Takata) or political will (defined here as $) is involved.

OTOH, I'm prolly just extremely naive.

sgt_doom , , October 30, 2017 at 2:59 pm

Naïve? No, you sound unholy ignorant, chum!

When Corporate America started offshoring R&D, scientist jobs, engineering jobs, programming jobs, medical jobs, legal jobs, etc., etc., etc. beginning in the late 1970s, but exploding under Jack Welch at GE in 1984-1985 [and I was offered a position helping in the process -- so nobody dare contradict me] it simply exacerbates those offshored manufacturing jobs, for without them in the past, too many American inventors would never have come to fruition -- this of course requires some knowledge of the history of technology.

The one absolute in human nature and human commerce: the greater the inequality, the lower the innovation -- IN EVERYTHING, IN EVERY AREA!

In other words, the greatest innovation in America (and everywhere else throughout history) took place when this nation was at its lowest in inequality indices and closest to socialism: the 1950s to 1960s and early 1970s -- and almost everything has simply been incremental since then.

As Leonardo da Vinci once remarked:

" Realize that everything connects to everything else. "

WobblyTelomeres , , October 30, 2017 at 7:44 pm

In other words, the greatest innovation in America (and everywhere else throughout history) took place when this nation was at its lowest in inequality indices and closest to socialism: the 1950s to 1960s and early 1970s

I disagree with this statement and would ask you to provide specific references for such a sweeping claim.

and almost everything has simply been incremental since then.

And would argue, with diagrams on a chalkboard if necessary, that all human knowledge is incremental. At least, that which requires more than simple immediate sensory perception.

sgt_doom , , October 30, 2017 at 2:54 pm

Thanks, Dan! Most of the comments here today are simply beneath commenting on, therefore your most sarcastic and cogent comments sums it up!

I should be flabbergasted by them, but I have frankly given up!

Recommended Reading (to the clueless, not Dan!):

Sold Out by Michelle Malkin Outsourcing America by Ron Hira Take This Job and Ship It by Byron Dorgan

[Oct 27, 2017] Freelancing Isn't Feminist -- It's Badly Negotiated Wage Labor for $5 an Hour

Notable quotes:
"... By Sophie Linden, an editorial assistant at AlterNet's office in Berkeley, CA. Originally published at Alternet ..."
"... HoneyBook's research is just one insight into wage gaps. As a largely deregulated economy with unparalleled growth, it is important to make visible the economic and social divides embedded in the independent workforce. We can start by debunking the claim that freelancing is a more equitable field to work in, and with it, the idea that any economy is without prejudice. ..."
"... I would also argue that so called 'regular' employment is trending towards a "freelance" structure. Job tenures are supposedly shrinking and often going away completely. Now, that salaryman window tribe dweller is often outside of that window, washing it on a piecework basis, with no safety line. The underlying rationale for the rise of the 'freelance' work structure is to first crapify the freelance 'experience,' with lower wages a must, and then, second, extend the 'neo-crapified' work rules into the previously "safe" 'regular' work world. ..."
"... Freelancers driving the price of their labor down to $5 per hour because they have to compete against all the other people who can't find steady work is not a feminist issue– its a class issue. And that is no less true if males make $2 more per hour because of sexual discrimination. The real enemy is the billionaire who owns the corporation, the politicians, and the enforcers that grind workers down into virtual servitude. ..."
"... When a fat pig movie director pushes you down on the "casting couch" there has always been the choice to reach for the Mace or the revolver in the purse. Submitting is prostitution, choice is rejecting greed for riches and fame and joining with others to throw the boot off your neck. ..."
"... When they turn 50, if they survive that long, they'll be replaced by younger cheaper labor. Nothing really changes, except the words we use to describe our sad condition and the lower and lower age at which we're discarded. ..."
"... Freelancing is much like entrepreneurship in that it has been way oversold to the public. Most people don't do well either as freelancers or as entrepreneurs and would likely be better off as normal employees. The emphasis on "alternative" work arrangements has taken public attention away from improving the lot of traditional employees and contributes to the devaluation of ordinary workers by suggesting that they are lazy or stupid because they didn't become freelancers or gigsters or entrepreneurs of some sort. ..."
Oct 27, 2017 | www.nakedcapitalism.com

Yves here. Holey moley. One of the good things about working for fancy firms early in my professional life was I saw how much they charged, even when the work was often pedestrian or even dubious. So I was never shy about setting a healthy price for my time. But regardless, how could anyone bid under the minimum wage?

The only time I could see that making any kind of sense would be if you were breaking into a new area and would have reason to expect the client would give you a very valuable reference, or better yet, referrals, if they liked what you did. But my experience has always been that clients who go cheap never appreciate the work done for them.

By Sophie Linden, an editorial assistant at AlterNet's office in Berkeley, CA. Originally published at Alternet

Surround yourself with positivity, exploit all marketing outlets, choose a specialized skill -- this is the repetitive wisdom passed on to every budding creative entrepreneur. Less often do we hear advice like, "increase the price of an invoice," or "make it non-negotiable," especially as it relates to the gendered wages within self-employment.

The freelance market is arguably trending across industries, with some figureheads going so far as to say " freelance is feminist ," mainly because women make up a slight majority. Unfortunately, before feminists get too heady on the issue, we need to look at whether the freelance market is any more "freeing" to the women in it, or if it is liberating any of its entrepreneurial workforce. Right now, it's just another deregulated economy in which workers are underpaid and largely invisible.

A recent study published by HoneyBook gives some visibility to the subject, showing that women in the "creative economy" are actually paid significantly less than their male counterparts, sometimes taking in an average of $5 an hour .

There are many reasons for concern about this wage discrepancy. Not only because HoneyBook found that 63% of men and women believed they were earning equal pay, but also because of the growing workforce within the world of freelance, where there are already 57.3 million freelancers in the U.S .

Industry data from UpWork and the Freelance Labor Union suggests that freelancers will be the majority by 2027, growing three times faster than the U.S. workforce overall, and contributing over $1.4 trillion to the U.S. economy annually. While scenes of cramped coffee shops may be an indicator of this burgeoning workforce, these numbers are still astounding. Without sites like UpWork and HoneyBook, they would also be hard to track.

HoneyBook is the self-employed's business management tool, hosting clients similar to those in the aforementioned study. Labeled under the guise of "creative entrepreneurs," they are working professionals navigating gigs in industries like photography, graphic design and writing. With its niche data, the site analyzed over 200,000 client invoices from October 2016-2017 to look at wage discrepancy, finding that on average women made 32% less than their male competitors . This gap is even larger than the national average, where women earn 24% less than men nationally , 76 cents to the dollar. Troubling news for the largest, opportunist workforce around: that is, women in freelance.

In 2015, women made up 53% of the freelance market . This slight dominance encouraged Sara Horowitz, founder of the Freelance Labor Union, to preemptively call freelancing "feminist." Horowitz argued that the lifestyle of a freelancer was more palatable to the roles women desired, whether that was co-careers or gendered domestic labor. She also argued that freelance work allowed women to avoid male privilege in the workplace, notably the boys club at board meetings .

While some of Horowitz's arguments hold value, we can clearly see how freelance work is still an unequal field, at least if pay is any measure of equality among genders. Women who do enter the field already consider themselves to have less bargaining power . Meanwhile, the majority of invoices in HoneyBook's study quoted a non-negotiable price, meaning women are more likely to charge less for the job. Clearly, the reasons for the gender pay gap are embedded and multi-layered. Nevertheless, the study shows that freelance is not entirely the liberated, equal rights, equal pay landscape Horowitz claims it to be.

Asked why they enter the market, freelancers often cite the flexibility of the work in a number of terms: the ability to be their own boss, as well as the ability to choose their projects and work location. In essence, men and women draw upon idealistic dreams of escaping workplace power-dynamics to find economic independence in their pajamas -- a depiction that has been repeatedly critiqued . Freelancers still enter a labor force that has few congressional protections and is arguably as successful as the social networks you were economically born into. Essentially it is prey to the same laissez-faire ideals that have manipulated structural inequity across generations of workers in the U.S. It just imagines itself differently -- now under the guise of "creative" entrepreneurship.

HoneyBook's research is just one insight into wage gaps. As a largely deregulated economy with unparalleled growth, it is important to make visible the economic and social divides embedded in the independent workforce. We can start by debunking the claim that freelancing is a more equitable field to work in, and with it, the idea that any economy is without prejudice.

ambrit , October 27, 2017 at 8:04 am

I would also argue that so called 'regular' employment is trending towards a "freelance" structure. Job tenures are supposedly shrinking and often going away completely. Now, that salaryman window tribe dweller is often outside of that window, washing it on a piecework basis, with no safety line.
The underlying rationale for the rise of the 'freelance' work structure is to first crapify the freelance 'experience,' with lower wages a must, and then, second, extend the 'neo-crapified' work rules into the previously "safe" 'regular' work world.

The only rational response to managements' claim that "we can get someone to replace you if you do not agree to our demands," is to simply walk away from the "golden opportunity." Sooner or later, all exploitative systems fall apart due to their own internal contradictions. It can be painful, but: No pain (economic micro-dislocation,) no gain (guillotines in Town Square.)

On the feminism front, and please remember that this is an older man writing, I would find any situation where the individual allows outside forces to define said individuals self definition, as the opposite of "liberating." Except in rare cases, what else is 'freelancing' but a "race to the bottom?" If one is to accept the 'freelancing' ethos as presently presented, one may as well embrace the 'contemplative life' and accept fasting and privation as a path to communion with the godhead.

Crazy Horse , October 27, 2017 at 5:22 pm

Freelancers driving the price of their labor down to $5 per hour because they have to compete against all the other people who can't find steady work is not a feminist issue– its a class issue. And that is no less true if males make $2 more per hour because of sexual discrimination. The real enemy is the billionaire who owns the corporation, the politicians, and the enforcers that grind workers down into virtual servitude.

There is always choice. There are always drugs to be transported and sold, money to be laundered, or accounting fraud to be fabricated. There is always choice even if the consequences are severe. It's long been known that the fastest (and only) way for a woman to become a movie star is on her back.

When a fat pig movie director pushes you down on the "casting couch" there has always been the choice to reach for the Mace or the revolver in the purse. Submitting is prostitution, choice is rejecting greed for riches and fame and joining with others to throw the boot off your neck.

Arizona Slim , October 27, 2017 at 8:57 am

There is no organization called the Freelance Labor Union. Horowitz's organization is called the Freelancers Union and it is little more than a buyers club. It has yet to call a strike or organize a picket line. Nor does it call out the companies that exploit freelancers.

Robert Murphy , October 27, 2017 at 9:14 am

$583,283.25 – using the annuity formula from Stewart's 4th edition precalc book (it is surely the same formula in all his books ) & taking that 5 bucks an hour TIMES 2080 hours of pay in a year (40*52) = amount to save every year, for 30 years, at 4% interest.

Now, realistically, whoever underpaid you just bought a few more trinkets for today's mansion, jet, yacht or mistress but you could have saved that money!

rmm.

agkaiser , October 27, 2017 at 9:33 am

When they turn 50, if they survive that long, they'll be replaced by younger cheaper labor. Nothing really changes, except the words we use to describe our sad condition and the lower and lower age at which we're discarded.

Arizona Slim , October 27, 2017 at 11:56 am

Which is why I summarize fifty-plus freelancing this way: Too old to get a job and too young and broke to retire.

Livius Drusus , October 27, 2017 at 9:55 am

Freelancing is much like entrepreneurship in that it has been way oversold to the public. Most people don't do well either as freelancers or as entrepreneurs and would likely be better off as normal employees. The emphasis on "alternative" work arrangements has taken public attention away from improving the lot of traditional employees and contributes to the devaluation of ordinary workers by suggesting that they are lazy or stupid because they didn't become freelancers or gigsters or entrepreneurs of some sort.

Many young people seem to have fallen into the trap of putting too much emphasis on work flexibility over a steady paycheck. These kinds of alternative work arrangements might be fun and cool when you are in your 20s but not so much after 30 and especially if you want to start a family and need a steady and reliable source of income.

DJG , October 27, 2017 at 10:38 am

I was a free lance in publishing for about twenty-five years. The tell here is the mention of pajamas: Are we still in the world of people who want to work in their pajamas? One thing I learned right away is that you have to get up each morning, dress like an adult, schedule the number of billable hours that you want to charge for, and send in invoices regularly. The successful free lances, male and female, did so. The people who started work at three in the afternoon, after cocoa with marshmallows all day, didn't succeed.

I suspect that hourly charges among free lances are falling: That is part of our friend "right to work," which keeps wages down. It is also part of the massive amount of outsourcing going on. In publishing, responsibilities that always were kept in house and should remain in house are being outsourced.

I'll also note that one of the reasons that I became a free lance, besides knowing what I could charge for my work, is that many offices are toxic environments socially and politically. There is a lot of stress on conformity. There is no concern for original thinking. Inventing the wheel is considered original.

And as someone who has worked in publishing for many years and knows many talented and powerful women in publishing, I left my last job shortly after the head of the division introduced the new editor in chief for books as a woman. That's right. The first words: M.K. is a woman.

M.K. turned out to be a nonentity who exploited the organization for personal ends. She was a great absentee manager! And I no longer had a desire to be around the endless re-runs of resentments of fellow employees.

Arizona Slim , October 27, 2017 at 12:04 pm

DJG, you're on to something.

I can remember meeting freelancers in the 1980s and 1990s. The good ones were GOOD. As in, they had waiting lists -- you had to book them a couple of months in advance. And they charged accordingly.

These days, that seldom happens. Why? Because there are too many people who can't find jobs, or they only get hired for part-time work, and they have to fill the rest of their time. Such trends do not make for increasing hourly rates.

DJG , October 27, 2017 at 12:34 pm

Arizona Slim: My dance card was always filled. But as you mention above, after age 50, I kept thinking, Am I a daring American entrepreneur and sole proprietor, or am I just terminally unemployed (and unemployable)?

Ned , October 27, 2017 at 10:42 am

OK, what's to stop women from charging higher rates? Lower self esteem? Are their lower wages for each hour worked? Or, do they work fewer hours?

"they are working professionals navigating gigs in industries like photography, graphic design and writing ." Clean, no lifting, paid to create gigs where you don't get your hands dirty, or put your body in perilous exhausting situations.

If women want to earn money, learn to be a plumber. Yes, you will get a face full of shit occasionally, will bleed, get burned and will earn $75 an hour, often in cash.

There's a shortage of linepersons to install power lines. Up on that lift bucket, 80 feet in the air, leaning out and ratcheting in 10,000 volt live wires covered with a rubber shock cloth, you can make astounding amounts of money. Why aren't more women up there? Companies go out of their way to hire women.

No mention of the free labor slave pit called "internships." How many of us have gone through that
voluntary servitude?

Arizona Slim , October 27, 2017 at 12:01 pm

I have training in the trades and have worked as a bike mechanic. On the positive side, there's a pride of workmanship that you do not get from office work or from freelancing while sitting at a computer. And there's the camaraderie. I never experienced anything like it -- except in that hot, greasy, dirty bike shop.

On the negative side, you can get too old and broken down to do the work. OTOH, you can be a sit-down freelancer until you die.

FluffytheObeseCat , October 27, 2017 at 12:27 pm

What stops women from negotiating male-equivalent wages varies. Timidity and poor negotiating skills is part of it. As Yves said above, it helps immensely to have been exposed to the billing practices of real winners in this game. And they are disproportionately men, specifically, men who operate like real machers.

The biggest factor is IMO, information deficit. Professional class people throughout many industries are idiots when it comes to freely discussing remuneration with their fellow wage slaves. Everyone acts as though their compensation package were as private and faintly dirty as .. another package.

It's idiotic. The vast majority of us would be better off if we blurted it out over lunch ever few months. And walking away a few tifmes is key. It's good for you. Likewise, if you do need to take a poorly paid gig some times, treat it as slightly less than full time. Keep lining up others. Create the bare minimum of deliverables as swiftly as you can, and get out. Those who underpay you do not deserve your maximum effort, and they're invariably shitty references, so do not anguish over doing only the job they've paid for.

Just don't stiff or cheat anyone lower down the line if you take an underpaid gig. I watched a guy do that recently on a contract job that put him into contact with me, an under-remunerated grad student. He didn't cheat me, he cheated the agency I worked for of some small use fee. Right in front of me. His consulting firm is not one I'll be looking to work for any time soon.

Also, always write a late charge fee in your contract. 120 day "billing cycles" are abusive garbage in the age of computers. After thirty days, the price goes up.

Women who let themselves get stiffed all the time are a real danger to the interests of the guys in their line of work, not just themselves. I wish more guys could see that.

DJG , October 27, 2017 at 12:39 pm

Fluffy: Yes. Know rates, and have a group of friendly free lances who will tell you what they are being offered these days. And what hourly they will turn down.

Firing clients is a necessity. I learned that from a sole proprietor who I worked for in a small typesetting / editorial / graphic design shop. The customer isn't always right. There are psychic benefits to firing a bad customer. And word sort-a gets around that there are people who / companies that you refuse to take work from.

cnchal , October 27, 2017 at 12:48 pm

. . . Why aren't more women up there?

Pajamas?

I went through an apprenticeship. It was the only time I was trapped by an employer.

D , October 27, 2017 at 1:51 pm

I suspect it's utter mythology that women do not attempt to attain far better paying manual labor jobs than they do.

Speaking of high voltage wires, I know a woman who was in the International Brotherhood of Electrical Workers Union (Brotherhood says it all!). She worked on large commercial construction, such as the NUMI Plant (now Tesla). While she endured it through to her retirement she had a horridly abusive (and life threatening on one occasion) go of it. Sexual harassment (made worse by the fact that she had an hourglass figure), an actual physical threat, knife included, while being locked in a room with someone she had already reported as having harassed her, but was forced to work with him anyway; utter resentment of women on the job; and stunning racism (the black males in that Brotherhood , did not fare much better as to the racism) in the tolerant Bay Area.

As to plumbing, the bay area has current and frequent plumbing school ads on TV which feature no women at all, and a real bro-bro atmosphere which all women who've been sexually harassed are familiar with. At one point in my life, despite having a licensed profession, I offered to apprentice to a plumber who just laughed at me (at the time, I was able to do twenty chin-ups).

And, my experience (pre putting myself through college to attain a livable wage), trying to get a job doing manual labor that actually paid a decent wage was utterly unsuccessful. I did have a nursery job, and a very brief job at a thoroughbred stable (the owner was a horrid human being so I quit). At both of those jobs, the only males were illegal immigrants from Mexico, and the wages in both jobs were under regular minimum wage ag wages.

Further, to imply that 'sit' down jobs don't have their fair share of health damage, is like saying that emotional abuse does not exist, and is not deadly when one's spirit is killed in a situation where the other wields far more economic and social power.

Many, unfortunately too many woman included, still feel that a white or non-black male will do a better job, no matter what that job is. For instance (and I don't know what it's like now) I recollect while waitressing that only males were offered high end, far better tipping, jobs in pricier restaurants. At the time, I never saw a female waitress in a high end restaurant.

[Oct 17, 2017] Use Spare Older Workers to Overcome 'Labour Shortages' naked capitalism

Notable quotes:
"... By Leith van Onselen. Originally published at MacroBusiness ..."
"... "remains low by historical standards" ..."
"... There's a myth that innovation comes from the 20 something in their basement, but that's just not the case. ..."
Oct 17, 2017 | www.nakedcapitalism.com

Yves here. On the one hand, as someone who is getting to be pretty long in tooth, I'm not sure about calling un and under-employed older workers "spare". But when the alternative is being thrown on the trash heap, maybe that isn't so unflattering.

Even though this analysis is from Australia, most of if not all of its finding would almost certainly prove out in the US. However, there is a whole 'nother set of issues here. Australia is 85% urban, with most of the population living in or near four large cities. So its labor mobility issues are less pronounced than here. Moreover, a lot of the whinging in the US about worker shortages, as even readers of the Wall Street Journal regularly point out in its comment section is:

1. Not being willing to pay enough to skilled workers, which includes not being willing to pay them to relocate

2. Not being willing to train less skilled workers, as companies once did as a matter of course

By Leith van Onselen. Originally published at MacroBusiness

A few weeks back, the Benevolent Society released a report which found that age-related discrimination is particularly rife in the workplace, with over a quarter (29%) of survey respondents stating they had been turned down for a job because of their old age, whereas 14% claimed they had been denied a promotion because of their old age.

Today, the Regional Australia Institute (RAI) has warned that Australia is facing a pension crisis unless employers stop their "discrimination" against older workers. From The ABC :

[RAI] has warned the Federal Government's pension bill would rise from $45 billion to $51 billion within three years, unless efforts were made to help more mature workers gain employment, particularly in regional communities.

Chief executive Jack Archer said continued unemployment of people older than 55 would cut economic growth and put a greater strain on public resources.

"We hear that there is a lot of people who would like to work, who would love to stay in the workforce either part-time or full-time even though they're in their late 50s, 60s and even into their 70s," he said.

"But we're not doing a very good job of giving them the training, giving them the incentives around the pension, and working with employers to stop the discrimination around employing older workers"

"It basically means you've got a lot of talent on the bench, a lot of people who could be involved and contributing who are sitting around homes and wishing they were doing something else," he said

Mr Archer said as the population aged the workforce shrank, and that risked future economic growth.

But he said that could be reversed provided employers embraced an older workforce

"[When] those people are earning [an income], their pension bills will either disappear or be much lower and the government will get a benefit from that."

For years the growth lobby and the government has told us that Australia needs to run high levels of immigration in order to alleviate so-called 'skills shortages' and to mitigate an ageing population. This has come despite the Department of Employment showing that Australia's skills shortage "remains low by historical standards" and Australia's labour underutilisation rate tracking at high levels:

Economic models are often cited as proof that a strong immigration program is 'good' for the economy because they show that real GDP per capita is moderately increased via immigration, based on several dubious assumptions.

The most dubious of these assumptions is that population ageing will necessarily result in fewer people working, which will subtract from per capita GDP (due to the ratio of workers to dependents falling).

Leaving aside the fact that the assumed benefit to GDP per capita from immigration is only transitory, since migrants also age (thereby requiring an ever-bigger immigration intake to keep the population age profile from rising), it is just as likely that age-specific workforce participation will respond to labour demand, resulting in fewer people being unemployed. This is exactly what has transpired in Japan where an ageing population has driven the unemployment rate down to only 2.8% – the lowest level since the early-1990s:

The ABS last month revealed that more Australians are working past traditional retirement age, thereby mitigating concerns that population ageing will necessarily reduce the employment-to-population ratio:

Clearly, however, there is much further scope to boost workforce participation among older workers.

Rather than relying on mass immigration to fill phantom 'labour shortages' – in turn displacing both young and older workers alike – the more sensible policy option is to moderate immigration and instead better utilise the existing workforce as well as use automation to overcome any loss of workers as the population ages – as has been utilised in Japan.

It's worth once again highlighting that economists at MIT recently found that there is absolutely no relationship between population ageing and economic decline. To the contrary, population ageing seems to have been associated with improvements in GDP per capita, thanks to increased automation:

If anything, countries experiencing more rapid aging have grown more in recent decades we show that since the early 1990s or 2000s, the periods commonly viewed as the beginning of the adverse effects of aging in much of the advanced world, there is no negative association between aging and lower GDP per capita on the contrary, the relationship is significantly positive in many specifications.

The last thing that Australia should be doing is running a mass immigration program which, as noted many times by the Productivity Commission cannot provide a long-term solution to ageing, and places increasing strains on infrastructure, housing and the natural environment.

The sustainable 'solution' to population ageing is to better utilise the existing workforce, where significant spare capacity exists.

Enquiring Mind , October 17, 2017 at 10:26 am

At what point might an impatient constituency demand greater accountability by its elected representatives? In the business world, the post-2000 accounting scandals like Enron resulted in legislation to make company execs sign off on financial statements under threat of harsh personal penalties for misrepresentation. If legislators were forced by constituents to enact similar legislation about their own actions, the transparency could be very enlightening and a type of risk reduction due to acknowledgement of material factors. Imagine seeing in print the real reasons for votes, the funding sources behind those votes and prospect of jail time for misrepresentation about what is just their damn job. Call it Truth-In-Legislating, similar to the prior Truth-In-Lending act.

Vatch , October 17, 2017 at 11:29 am

It's a nice idea, but I don't think that very many executives have been penalized under the Sarbanes Oxley Act. Jamie Dimon certainly wasn't penalized for the actions of the London Whale. I guess we'll see what happens in the near future to the executives of Wells Fargo. I suspect that a Truth-In-Legislating law would be filled with loopholes or would be hampered by enforcement failures, like current Congressional ethics rules and the Sarbanes Oxley Act.

sgt_doom , October 17, 2017 at 2:11 pm

At what point might an impatient constituency demand greater accountability by its elected representatives?

At that point when they start shooting them (as they did in Russian in the very early 1900s, or lop their heads off, as they once did in France).

Personally, I'll never work for any Ameritard corporation ever again, as real innovation is not allowed, and the vast majority are all about financialization in some form or other!

My work life the past thirty years became worse and worse and worse, in direct relation to the majority of others, and my last jobs were beyond commenting up.

My very last position, which was in no manner related to my experience, education, skill set and talents -- like too many other American workers -- ended with a most tortuous layoff: the private equity firm which was owner in a failed "pump and dump" brought a "toxic work environment specialist" whose job was to advise the sleazoid senior executives (and by that time I was probably one of only four actual employee workers there, they had hired a whole bunch of executives, though) on how to create a negative work environment to convince us to leave instead of merely laying us off (worked for two, but not the last lady there I myself).

The American workplace sucks big time as evidenced by their refusal to raise wages while forever complaining about their inability to find skilled employees -- they are all criminals today!

RUKidding , October 17, 2017 at 10:55 am

Interesting article and thanks.

I lived and worked in Australia in the late '70s and early '80s. Times were different. Back then, the government jobs came with mandatory retirement. I believe (but could be wrong) that it was at 63, but you could request staying until 65 (required approval). After that, one could continue working in the private sector, if you could find a job.

The population was much less than it is now. I believe the idea was to make room for the younger generation coming up. Back then, government workers, as well as many private sector workers, had defined benefit pension plans. So retiring younger typically worked out ok.

I had one friend who continued working until about 70 because she wanted to; liked her job; and wasn't interested in retiring. However, I knew far more people who were eager to stop at 63. But back then, it appeared to me that they had the financial means to do so without much worry.

Things have changed since then. More of my friends are putting off retirement bc they need the money now. Plus defined benefit pension plans have mostly been dispensed with and replaced by, I believe (I'm not totally clear on this), the Aussie version of a 401 (k) (someone can correct me if I'm wrong).

What the article proposes makes sense. Of course here in the USA, older workers/job seekers face a host of discriminatory practices, especially for the better paying jobs. Nowadays, though, US citizens in their golden years can sell their house, buy an RV, and become itinerant workers – sometimes at back breaking labor, such as harvesting crops or working at an Amazon gulag – for $10 an hour. Yippee kay-o kay-aaay!

So let us also talk about cutting Medicare for all of those lazy slacker Seniors out there. Woo hoo!

jrs , October 17, 2017 at 1:34 pm

There is really two issues:
1) for those whom age discrimination in employment is hitting in their 50s or even younger, before anyone much is retiring, it needs to be combatted
2) eventually (sometimes in their 60's and really should be at least by 65) people ought to be allowed to retire and with enough money to not be in poverty. This work full time until you drop garbage is just that (it's not as if 70 year olds can even say work 20 hours instead, no it's the same 50+ hours or whatever as everyone else is doing). And most people won't live that much longer, really they won't, U.S. average lifespans aren't that long and falling fast. So it really is work until you die that is being pushed if people aren't allowed to retire sometime in their 60s. Some people have good genes and good luck and so on (they may also have a healthy lifestyle but sheer luck plays a large role), and will live far beyond that, but averages

RUKIdding , October 17, 2017 at 4:44 pm

Agree with you about the 2 issues.

Working past 65 is one of those things where it just depends. I know people who are happily (and don't "really" need the money) working past 65 bc they love their jobs and they're not taking a toll on their health. They enjoy the socialization at work; are intellectually stimulated; and are quite happy. That's one issue.

But when people HAVE TO work past 65 – and I know quite a few in this category – when it starts taking a toll on their health, that is truly bad. And I can reel off several cases that I know of personally. It's just wrong.

Whether you live much longer or not is sort of up to fate, no matter what. But yes, if work is taking a toll on your heath, then you most likely won't live as long.

cocomaan , October 17, 2017 at 11:06 am

In January, economists from MIT published a paper, entitled Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation, which showed that there is absolutely no relationship between population aging and economic decline. To the contrary, population aging seems to have been associated with improvements in GDP per capita, thanks to increased automation:

From the cited article.

I don't know why it never occurred to me before, but there's no reason to ditch your most knowledgeable, most skilled workers toward the eve of their careers except if you don't want to pay labor costs. Which we know that most firms do not, in their mission for profit for shareholders or the flashy new building or trying to Innuhvate .

There's a myth that innovation comes from the 20 something in their basement, but that's just not the case. Someone who has, for instance, overseen 100 construction projects building bridges needs to be retained, not let go. Maybe they can't lift the sledge anymore, but I'd keep them on as long as possible.

Good food for thought! I enjoyed this piece.

HotFlash , October 17, 2017 at 4:19 pm

There's a myth that innovation comes from the 20 something in their basement, but that's just not the case.

Widely held by 20 somethings. Maybe it's just one of those Oedipus things.

fresno dan , October 17, 2017 at 11:08 am

1. Not being willing to pay enough to skilled workers, which includes not being willing to pay them to relocate

2. Not being willing to train less skilled workers, as companies once did as a matter of course

3. older workers have seen all the crap and evil management has done, and is usually in a much better position than young less established employees to take effective action against it

Disturbed Voter , October 17, 2017 at 1:26 pm

This. Don't expect rational actors, in management or labor. If everyone was paid the same, regardless of age or training or education or experience etc then the financial incentives for variant outcomes would decrease. Except for higher health costs for older workers. For them, we could simply ban employer provide health insurance then that takes that variable out of the equation too. So yes, the ideal is a rational Marxism or the uniformity of the hive-mind-feminism. While we would have "from each according to their ability, to each according to their need" we will have added it as an axiom that all have the same need. And a whip can encourage the hoi polloi to do their very best.

Jeremy Grimm , October 17, 2017 at 2:25 pm

Fully agee! To your list I would add a corollory to your item #3 -- older workers having seen all the crap and evil management has done are more likely to inspire other employees to feel and act with them. -- This corollory is obvious but I think it bears stating for emphasis of the point.

I believe your whole list might be viewed as symtoms resulting from the concept of workers as commodity -- fungible as cogs on a wheel. Young and old alike are dehumanized.

The boss of the branch office of the firm I last worked for before I retired constantly emphasized how each of us must remain "fungible" [he's who introduced me to this word] if we wanted to remain employed. The firm would win contracts using one set of workers in its bids and slowly replace them with new workers providing the firm a higher return per hour billed to the client. I feel very lucky I managed to remain employed -- to within a couple of years of the age when I could apply for Medicare. [Maybe it's because I was too cowed to make waves and avoided raises as best I could.]

[I started my comment considering the idea of "human capital" but ran into trouble with that concept. Shouldn't capital be assessed in terms of its replacement costs and its capacity for generating product or other gain? I had trouble working that calculus into the way firms treat their employees and decided "commodity" rather than "capital" better fit how workers were regarded and treated.]

BoycottAmazon , October 17, 2017 at 11:16 am

"skills vs. demand imbalance" not labor shortage. Capital wants to tip the scale the other way, but isn't willing to invest the money to train the people, per a comment I made last week. Plenty of unemployed or under-employed even in Japan, much less Oz.

Keeping the elderly, who already have the skills, in the work place longer is a way to put off making the investments. Getting government to tax the poor for their own training is another method. Exploiting poor nations education systems by importing skills yet another.

Some business hope to develop skills that only costs motive power (electric), minimal maintenance, and are far less capital intensive and quicker to the market than the current primary source's 18 years. Capitalism on an finite resource will eat itself, but even capitalism with finite resources will self-destruct in the end.

Jim Haygood , October 17, 2017 at 1:35 pm

Importantly, the chart labeled as Figure 2 uses GDP per capita on the y-axis.

Bearing in mind that GDP growth is composed of labor force growth times productivity, emerging economies that are growing faster than the rich world in both population and GDP look more anemic on a per capita basis, allowing us rich country denizens to feel better about our good selves. :-)

But in terms of absolute GDP growth, things ain't so bright here in the Homeland. Both population and productivity growth are slowing. Over the past two-thirds century, the trend in GDP groaf is relentlessly down, even as debt rises in an apparent attempt to maintain unsustainable living standards. Chart (viewer discretion advised):

https://gailtheactuary.files.wordpress.com/2016/02/us-annual-gdp-growth-rate-2015.png

Van Onselen doesn't address the rich world's busted pension systems. To the extent that they contain a Ponzi element premised on endless growth, immigration would modestly benefit them by adding new victims workers to support the greying masses of doddering Boomers.

Will you still need me
Will you still feed me
When I'm sixty-four?

-- The Beatles

Arthur Wilke , October 17, 2017 at 1:44 pm

There's been an increase in the employment of older people in the U.S. in the U.S. population. To provide a snapshot, below are three tables referring to the U.S. by age cohorts of 1) the total population, 2) Employment and 3) employment-population ratios (percent).based on Bureau of Labor Statistics weightings for population estimates and compiled in the Merge Outgoing Rotation Groups (MORG) dataset by the National Bureau of Economic Research (NBER) from the monthly Current Population Survey (CPS).

The portion of the population 16 to 54 has declined while those over 54 has increased.
1. Percent Population in Age Cohorts: 1986 & 2016

1986 2016 AGE
18.9 15.2 16-24
53.7 49.6 25-54
12.2 16.3 55-64
9.4 11.2 65-74
5.8 7.7 75 & OVER
100.0 100.0 ALL

The portion of the population 16 to 54 employed has declined while the portion over 54 has increased..

2 Percent Employed in Age Cohorts: 1986 & 2016

1986 2016 AGE
18.5 12.5 16-24
68.4 64.7 25-54
10.4 16.9 55-64
2.3 4.8 65-74
0.4 1.0 75 & OVER
100.0 100.0 ALL

The employment-population ratios (percents) show significant declines for those under 25 while increases for those 55 and above.

3. Age-Specific Employment Population Ratios (Percents)

1986 2016 AGE
59.5 49.4 16-24
77.3 77.9 25-54
51.8 61.8 55-64
14.8 25.9 65-74
3.8 7.9 75 & OVER
60.7 59.7 ALL

None of the above data refute claims about age and experience inequities. Rather these provide a base from which to explore such concerns. Because MORG data are representative samples with population weightings, systematic contingency analyses are challenging.

In the 30 year interval of these data there have been changes in population and employment by education status, gender, race, citizenship status along with industry and occupation, all items of which are found in the publicly available MORG dataset.

AW

Yves Smith Post author , October 17, 2017 at 4:54 pm

I think you are missing the point. Life expectancy at birth has increased by nearly five years since 1986. That renders simple comparisons of labor force participation less meaningful. The implication is that many people are not just living longer but are in better shape in their later middle age. Look at the dramatic drop in labor force participation from the 25-54 age cohort v. 55 to 64. How can so few people in that age group be working given that even retiring at 65 is something most people cannot afford? And the increase over time in the current 55=64 age cohort is significantly due to the entry of women into the workplace. Mine was the first generation where that became widespread.

The increase in the over 65 cohort reflects desperation. Anyone who can work stays working.

Arthur Wilke , October 17, 2017 at 6:27 pm

Even if life-expectancy is increasing due to improved health, the percentage of those in older cohorts who are working is increasing at an even faster rate. If a ratio is 6/8 for a category and goes up to 10/12 the category has increased (8 to 12 or 50%) and the subcategory has increased (6 to 10 i or 67% and the ratios go from 6/8 or 75/100 to 10/12 or 83.3/100)

I assume you are referencing the employment-population (E/P) ratio when noting "the dramatic drop in labor force participation from the 25-54 age cohort v. 55 to 64." However the change in the E/P ratio for 25-54 year olds was virtually unchanged (77.3/100 in 1986 to 77.9/100 in 2016) and for the 55-64 year olds the E/P ratio INCREASED significantly, from 51.8/100 in 1986 to 61.8/100 in 2016.

You query: "How can so few people in that age group be working given that even retiring at 65 is something most people cannot afford?" That's a set of concerns the data I've compiled cannot and thus cannot address. It would take more time to see if an empirical answer could be constructed, something that doesn't lend itself to making a timely, empirically based comment. The data I compiled was done after reading the original post.

You note: ". . . ;;[T] the increase over time in the current 55-64 age cohort is significantly due to the entry of women into the workplace." Again, I didn't compute the age-gender specific E/P ratios. I can do that if there's interest. The OVERALL female E/P ratio (from FRED) did not significantly increase from December 1986 ( 51.7/100) to December 2016 (53.8/100).

Your write: "The increase in the over 65 cohort reflects desperation. Anyone who can work stays working." Again, the data I was using provided me no basis for this interpretation. I suspect that the MORG data can provide some support for that interpretation. However, based on your comments about longer life expectancy, it's likely that a higher proportion of those in professional-middle class or in the upper-middle class category Richard Reeves writes about (Dream Hoarders) were able and willing to continue working. For a time in higher education some institutions offered incentives for older faculty to continue working thereby they could continue to receive a salary and upon becoming eligible for Social Security draw on that benefit. No doubt many, many vulnerable older people, including workers laid off in the wake of the Great Recession and otherwise burdened lengthened their or sought employment.

Again the MORG data can get somewhat closer to your concerns and interests, but whether this is the forum is a challenge given the reporting-comment cycle which guides this excellent site.

paul , October 17, 2017 at 1:54 pm

Institutional memory (perhaps, wisdom) is a positive threat to institutional change (for the pillage).

In my experience,those in possession of it are encouraged/discouraged/finally made to go.

The break up of British Rail is a salient,suppurating example.

The break up of National Health Service is another.

It would be easy to go on, I just see it as the long year zero the more clinical sociopaths desire.

Livius Drusus , October 17, 2017 at 3:20 pm

I don't understand how the media promotes the "society is aging, we need more immigrants to avoid a labor shortage" argument and the "there will be no jobs in the near future due to automation, there will be a jobs shortage" argument at the same time. Dean Baker has discussed this issue:

http://cepr.net/publications/op-eds-columns/badly-confused-economics-the-debate-on-automation

In any event, helping to keep older workers in the workforce can be a good thing. Some people become physically inactive after retirement and their social networks decline which can cause depression and loneliness. Work might benefit some people who would otherwise sink into inactivity and loneliness.

Of course, results might vary based on individual differences and those who engaged in hard physical labor will likely have to retire earlier due to wear and tear on their bodies.

flora , October 17, 2017 at 7:42 pm

Increase in life expectancy is greatly influenced by a decrease in childhood mortality. People are living longer because they aren't dying in large numbers in childhood anymore in the US. So many arguments that start out "we're living longer, so something" confuse a reduction in childhood mortality with how long one can expect to live to in old age, based on the actuarial charts. Pols who want to cut SS or increase the retirement age find this confusion very useful.

" Life expectancy at birth is very sensitive to reductions in the death rates of children, because each child that survives adds many years to the amount of life in the population. Thus, the dramatic declines in infant and child mortality in the twentieth century were accompanied by equally stunning increases in life expectancy. "

http://www.pbs.org/fmc/timeline/dmortality.htm

TarheelDem , October 17, 2017 at 5:24 pm

I've noticed ever since the 1990s that "labor shortage" is a signal for cost-cutting measures that trigger a recession. Which then becomes the excuse for shedding workers and really getting the recession on.

It is not just older workers who are spare. There are other forms of discrimination that could fall by the wayside if solving the "labor shortage" was the sincere objective.

JBird , October 17, 2017 at 5:57 pm

Often productively, sales, and profits decrease with those cost cuttings, which justified further cuts which decreases productivity, sales, and profits which justifies

It's a pattern I first noticed in the 1990s and looking back in the 80s too. It's like some malevolent MBAs went out and convinced the whole of American middle and senior business management that this was the Way to do it. It's like something out of the most hidebound, nonsensical ideas of Maoism and Stalinism as something that could not fail but only be failed. It is right out of the Chicago Boys' economics playbook. Thirty-five years later and the Way still hasn't succeeded, but they're still trying not to fail it.

SpringTexan , October 17, 2017 at 6:59 pm

Love your reflections. Yeah, it's like a religion that they can't pay more, can't train, must cut people till they are working to their max at ordinary times (so have no slack for crises), etc. etc., and that it doesn't work doesn't change the faith in it AT ALL.

JBird , October 17, 2017 at 5:42 pm

This is ranting, but most jobs can be done at most ages. If want someone to be a SEAL or do 12 hours at farm labor no of course not, but just about everything else so what's the problem?

All this "we have a skilled labor shortage" or "we have a labor surplus" or "the workers are all lazy/stupid" narratives" and "it's the unions' fault" and "the market solves everything" and the implicit "we are a true meritocracy and the losers are waste who deserve their pain" and my favorite of the "Job creators do make jobs" being said, and/or believed all at the same time is insanity made mainstream.

Sometimes I think whoever is running things are told they have to drink the Draught of UnWisdom before becoming the elites.

Dan , October 17, 2017 at 7:12 pm

So I'm a middle aged fella – early thirties – and have to admit that in my industry I find that most older workers are a disaster. I'm in tech and frankly find that most older workers are a detriment simply from being out of date. While I sympathize, in some cases experience can be a minus rather than a plus. The willingness to try new things and stay current with modern technologies/techniques just isn't there for the majority of tech workers that are over the hill.

flora , October 17, 2017 at 7:46 pm

Well, if you're lucky, your company won't replace you with a cheaper HiB visa holder or outsource your job to the sub-continent before you're 40.

[Oct 15, 2017] Two Cheers For Trump's Immigration Proposal Especially "Interior Enforcement" - The Unz Review

Notable quotes:
"... In the 1970s a programming shop was legacy American, with only a thin scattering of foreigners like myself. Twenty years later programming had been considerably foreignized , thanks to the H-1B visa program. Now, twenty years further on, I believe legacy-American programmers are an endangered species. ..."
"... So a well-paid and mentally rewarding corner of the middle-class job market has been handed over to foreigners -- for the sole reason, of course, that they are cheaper than Americans. The desire for cheap labor explains 95 percent of U.S. immigration policy. The other five percent is sentimentality. ..."
"... Now they are brazen in their crime: you have heard, I'm sure, those stories about American workers being laid off, with severance packages conditional on their helping train their cheaper foreign replacements. That's our legal ..."
"... A "merit-based" points system won't fix that. It will quickly and easily be gamed by employers to lay waste yet more middle-class occupational zones for Americans. If it was restricted to the higher levels of "merit," we would just be importing a professional overclass of foreigners, most East and South Asians, to direct the labors of less-meritorious legacy Americans. How would that ..."
"... Measured by the number of workers per year, the largest guestworker program in the entire immigration system is now student visas through the Optional Practical Training program (OPT). Last year over 154,000 aliens were approved to work on student visas. By comparison, 114,000 aliens entered the workforce on H-1B guestworker visas. ..."
"... A History of the 'Optional Practical Training' Guestworker Program , ..."
"... on all sorts of subjects ..."
"... for all kinds of outlets. (This ..."
"... no longer includes ..."
"... National Review, whose editors had some kind of tantrum and ..."
"... and several other ..."
"... . He has had two books published by VDARE.com com: ..."
"... ( also available in Kindle ) and ..."
"... Has it ever occurred to anyone other than me that the cost associated with foreign workers using our schools and hospitals and pubic services for free, is more than off-set by the cheap price being paid for grocery store items like boneless chicken breast, grapes, apples, peaches, lettuce etc, which would otherwise be prohibitively expensive even for the wealthy? ..."
Oct 15, 2017 | www.unz.com

Headliner of the week for immigration patriots was President Trump's immigration reform proposal , which he sent to Congress for their perusal last Sunday. The proposal is a very detailed 70-point list under three main headings:

Border Security (27 items) Interior Enforcement (39 items) Merit-Based Immigration System (four items)

Item-wise, the biggest heading there is the second one, "Interior Enforcement." That's very welcome.

Of course we need improved border security so that people don't enter our country without permission. That comes under the first heading. An equally pressing problem, though, is the millions of foreigners who are living and working here, and using our schools and hospitals and public services, who should not be here.

The President's proposals on interior enforcement cover all bases: Sanctuary cities , visa overstays , law-enforcement resources , compulsory E-Verify , more deportations , improved visa security.

This is a major, wonderful improvement in national policy, when you consider that less than a year ago the White House and Justice Department were run by committed open-borders fanatics. I thank the President and his staff for having put so much work into such a detailed proposal for restoring American sovereignty and the rights of American workers and taxpayers.

That said, here come the quibbles.

That third heading, "Merit-Based Immigration System," with just four items, needs work. Setting aside improvements on visa controls under the other headings, this is really the only part of the proposal that covers legal immigration. In my opinion, it does so imperfectly.

There's some good meat in there, mind. Three of the four items -- numbers one, three, and four -- got a fist-pump from me:

cutting down chain migration by limiting it to spouse and dependent children; eliminating the Diversity Visa Lottery ; and limiting the number of refugees admitted, assuming this means severely cutting back on the numbers, preferably all the way to zero.

Good stuff. Item two, however, is a problem. Quote:

Establish a new, points-based system for the awarding of Green Cards (lawful permanent residents) based on factors that allow individuals to successfully assimilate and support themselves financially.

sounds OK, bringing in talented, well-educated, well-socialized people, rather than what the late Lee Kuan Yew referred to as " fruit-pickers ." Forgive me if I have a rather jaundiced view of this merit-based approach.

For most of my adult life I made a living as a computer programmer. I spent four years doing this in the U.S.A. through the mid-1970s. Then I came back in the late 1980s and worked at the same trade here through the 1990s. (Pictured right–my actual H-1B visa ) That gave me two clear snapshots twenty years apart, of this particular corner of skilled middle-class employment in America.

In the 1970s a programming shop was legacy American, with only a thin scattering of foreigners like myself. Twenty years later programming had been considerably foreignized , thanks to the H-1B visa program. Now, twenty years further on, I believe legacy-American programmers are an endangered species.

So a well-paid and mentally rewarding corner of the middle-class job market has been handed over to foreigners -- for the sole reason, of course, that they are cheaper than Americans. The desire for cheap labor explains 95 percent of U.S. immigration policy. The other five percent is sentimentality.

On so-called "merit-based immigration," therefore, you can count me a cynic. I have no doubt that American firms could recruit all the computer programmers they need from among our legacy population. They used to do so, forty years ago. Then they discovered how to game the immigration system for cheaper labor.

Now they are brazen in their crime: you have heard, I'm sure, those stories about American workers being laid off, with severance packages conditional on their helping train their cheaper foreign replacements. That's our legal immigration system in a nutshell. It's a cheap-labor racket.

A "merit-based" points system won't fix that. It will quickly and easily be gamed by employers to lay waste yet more middle-class occupational zones for Americans. If it was restricted to the higher levels of "merit," we would just be importing a professional overclass of foreigners, most East and South Asians, to direct the labors of less-meritorious legacy Americans. How would that contribute to social harmony?

With coming up to a third of a billion people, the U.S.A. has all the talent, all the merit , it needs. You might make a case for a handful of certified geniuses like Einstein or worthy dissidents like Solzhenitsyn, but those cases aside, there is no reason at all to have guest-worker programs. They should all be shut down.

Some of these cheap-labor rackets don't even need congressional action to shut them down; it can be done by regulatory change via executive order. The scandalous OPT-visa scam, for example, which brings in cheap workers under the guise of student visas.

Here is John Miano writing about the OPT program last month, quote:

Measured by the number of workers per year, the largest guestworker program in the entire immigration system is now student visas through the Optional Practical Training program (OPT). Last year over 154,000 aliens were approved to work on student visas. By comparison, 114,000 aliens entered the workforce on H-1B guestworker visas.

Because there is no reporting on how long guestworkers stay in the country, we do not know the total number of workers in each category. Nonetheless, the number of approvals for work on student visas has grown by 62 percent over the past four years so their numbers will soon dwarf those on H-1B visas.

The troubling fact is that the OPT program was created entirely through regulation with no authorization from Congress whatsoever. [ A History of the 'Optional Practical Training' Guestworker Program , CIS, September 18, 2017]

End quote. (And a cheery wave of acknowledgement to John Miano here from one of the other seventeen people in the U.S.A. that knows the correct placement of the hyphen in "H-1B.")

Our legal immigration system is addled with these scams. Don't even get me started on the EB-5 investor's visa . It all needs sweeping away.

So for preference I would rewrite that third heading to include, yes, items one, three, and four -- cutting down chain migration, ending the Diversity Visa Lottery, and ending refugee settlement for anyone of less stature than Solzhenitsyn; but then, I'd replace item two with the following:

End all guest-worker programs, with exceptions only for the highest levels of talent and accomplishment, limit one hundred visas per annum .

So much for my amendments to the President's October 8th proposals. There is, though, one glaring omission from that 70-item list. The proposal has no mention at all of birthright citizenship.

have abandoned it . It leads to obstetric tourism : women well-advanced in pregnancy come to the U.S.A. to give birth, knowing that the child will be a U.S. citizen. It is deeply unpopular with Americans , once it's explained to them.

Yes, yes, I know: some constitutional authorities argue that birthright citizenship is implied in the Fourteenth Amendment , although it is certain that the framers of that Amendment did not have foreign tourists or illegal entrants in mind. Other scholars think Congress could legislate against it.

The only way to find out is to have Congress legislate. If the courts strike down the legislation as unconstitutional, let's then frame a constitutional amendment and put it to the people.

Getting rid of birthright citizenship might end up a long and difficult process. We might ultimately fail. The only way to find out is to get the process started . Failure to mention this in the President's proposal is a very glaring omission.

Setting aside that, and the aforementioned reservations about working visas, I give two cheers to the proposal. email him ] writes an incredible amount on all sorts of subjects for all kinds of outlets. (This no longer includes National Review, whose editors had some kind of tantrum and fired him. ) He is the author of We Are Doomed: Reclaiming Conservative Pessimism and several other books . He has had two books published by VDARE.com com: FROM THE DISSIDENT RIGHT ( also available in Kindle ) and FROM THE DISSIDENT RIGHT II: ESSAYS 2013 . (Republished from VDare.com by permission of author or representative)

SimpleHandle > > , October 14, 2017 at 2:56 am GMT

I agree with ending birthright citizenship. But Trump should wait until he can put at least one more strict constitutionalist in the supreme court. There will be a court challenge, and we need judges who can understand that if the 14th Amendment didn't give automatic citizenship to American Indians it doesn't give automatic citizenship to children of Mexican citizens who jumped our border.

Diversity Heretic > > , October 14, 2017 at 5:04 am GMT

@Carroll Price

Insofar as your personal situation is concerned, perhaps you would find yourself less "relatively poor" if you had a job with higher wages.

Diversity Heretic > > , October 14, 2017 at 5:16 am GMT

John's article, it seems to me, ignores the elephant in the room: the DACA colonists. Trump is offering this proposal, more or less, in return for some sort of semi-permanent regularization of their status. Bad trade, in my opinion. Ending DACA and sending those illegals back where they belong will have more real effect on illegal and legal immigration/colonization than all sorts of proposals to be implemented in the future, which can and will be changed by subsequent Administrations and Congresses.

Trump would also be able to drive a much harder bargain with Congress (like maybe a moratorium on any immigration) if he had kept his campaign promise, ended DACA the afternoon of January 20, 2017, and busloads of DACA colonists were being sent south of the Rio Grande.

The best hope for immigration patriots is that the Democrats are so wedded to Open Borders that the entire proposal dies and Trump, in disgust, reenacts Ike's Operation Wetback.

bartok > > , October 14, 2017 at 6:32 am GMT

@Carroll Price

Once all the undocumented workers who are doing all the dirty, nasty jobs Americans refuse to do are run out the country, then what?

White people couldn't possibly thrive without non-Whites! Why, without all of that ballast we'd ascend too near the sun.

Negrolphin Pool > > , October 14, 2017 at 7:53 am GMT

Well, in the real world, things just don't work that way. It's pay me now or pay me later. Once all the undocumented workers who are doing all the dirty, nasty jobs Americans refuse to do are run out the country, then what?

Right, prior to 1965, Americans didn't exist. They had all starved to death because, as everyone knows, no Americans will work to produce food and, even if they did, once Tyson chicken plants stop making 50 percent on capital they just shut down.

If there were no Somalis in Minnesota, even Warren Buffett couldn't afford grapes.

Joe Franklin > > , October 14, 2017 at 12:24 pm GMT

Illegal immigrants picking American produce is a false economy.

Illegal immigrants are subsidized by the taxpayer in terms of public health, education, housing, and welfare.

If businesses didn't have access to cheap and subsidized illegal alien labor, they would be compelled to resort to more farm automation to reduce cost.

Cheap illegal alien labor delays the inevitable use of newer farm automation technologies.

Many Americans would likely prefer a machine touch their food rather than a illegal alien with strange hygiene practices.

In addition, anti-American Democrats and neocons prefer certain kinds of illegal aliens because they bolster their diversity scheme.

Carroll Price > > , October 14, 2017 at 12:27 pm GMT

@Realist "Once all the undocumented workers who are doing all the dirty, nasty jobs Americans refuse to do are run out the country, then what?"

Eliminate welfare...then you'll have plenty of workers. Unfortunately, that train left the station long ago. With or without welfare, there's simply no way soft, spoiled, lazy, over-indulged Americans who have never hit a lick at anything their life, will ever perform manual labor for anyone, including themselves.

Jonathan Mason > > , October 14, 2017 at 2:57 pm GMT

@Randal Probably people other than you have worked out that once their wages are not being continually undercut by cheap and easy immigrant competition, the American working classes will actually be able to earn enough to pay the increased prices for grocery store items, especially as the Americans who, along with machines, will replace those immigrants doing the "jobs Americans won't do" will also be earning more and actually paying taxes on it.

The "jobs Americans/Brits/etc won't do" myth is a deliberate distortion of reality that ignores the laws of supply and demand. There are no jobs Americans etc won't do, only jobs for which the employers are not prepared to pay wages high enough to make them worthwhile for Americans etc to do.

Now of course it is more complicated than that. There are jobs that would not be economically viable if the required wages were to be paid, and there are marginal contributions to job creation by immigrant populations, but those aspects are in reality far less significant than the bosses seeking cheap labour want people to think they are.

As a broad summary, a situation in which labour is tight, jobs are easy to come by and staff hard to hold on to is infinitely better for the ordinary working people of any nation than one in which there is a huge pool of excess labour, and therefore wages are low and employees disposable.

You'd think anyone purporting to be on the "left", in the sense of supporting working class people would understand that basic reality, but far too many on the left have been indoctrinated in radical leftist anti-racist and internationalist dogmas that make them functional stooges for big business and its mass immigration program.

Probably people other than you have worked out that once their wages are not being continually undercut by cheap and easy immigrant competition, the American working classes will actually be able to earn enough to pay the increased prices for grocery store items, especially as the Americans who, along with machines, will replace those immigrants doing the "jobs Americans won't do" will also be earning more and actually paying taxes on it.

There might be some truth in this. When I was a student in England in the 60′s I spent every summer working on farms, picking hops, apples, pears, potatoes and made some money and had a lot of fun too and became an expert farm tractor operator.

No reason why US students and high school seniors should not pick up a lot of the slack. Young people like camping in the countryside and sleeping rough, plus lots of opportunity to meet others, have sex, smoke weed, drink beer, or whatever. If you get a free vacation plus a nice check at the end, that makes the relatively low wages worthwhile. It is not always a question of how much you are paid, but how much you can save.

George Weinbaum > > , October 14, 2017 at 3:35 pm GMT

We can fix the EB-5 visa scam. My suggestion: charge would-be "investors" $1 million to enter the US. This $1 is not refundable under any circumstance. It is paid when the "investor's" visa is approved. If the "investor" is convicted of a felony, he is deported. He may bring no one with him. No wife, no child, no aunt, no uncle. Unless he pays $1 million for that person.

We will get a few thousand Russian oligarchs and Saudi princes a year under this program

As to fixing the H-1B visa program, we charge employer users of the program say $25,000 per year per employee. We require the employers to inform all employees that if any is asked to train a replacement, he should inform the DOJ immediately. The DOJ investigates and if true, charges managerial employees who asked that a replacement be trained with fraud.

As to birthright citizenship: I say make it a five-year felony to have a child while in the US illegally. Make it a condition of getting a tourist visa that one not be pregnant. If the tourist visa lasts say 60 days and the woman has a child while in the US, she gets charged with fraud.

None of these suggestions requires a constitutional amendment.

Auntie Analogue > > , October 14, 2017 at 7:10 pm GMT

In the United States middle class prosperity reached its apogee in 1965 – before the disastrous (and eminently foreseeable) wage-lowering consequence of the Hart-Celler Open Immigration Act's massive admission of foreigners increased the supply of labor which began to lower middle class prosperity and to shrink and eradicate the middle class.

It was in 1965 that ordinary Americans, enjoying maximum employment because employers were forced to compete for Americans' talents and labor, wielded their peak purchasing power . Since 1970 wages have remained stagnant, and since 1965 the purchasing power of ordinary Americans has gone into steep decline.

It is long past time to halt Perpetual Mass Immigration into the United States, to end birthright citizenship, and to deport all illegal aliens – if, that is, our leaders genuinely care about and represent us ordinary Americans instead of continuing their legislative, policy, and judicial enrichment of the 1-percenter campaign donor/rentier class of transnational Globali$t Open Border$ E$tabli$hment $ellout$.

Jim Sweeney > > , October 14, 2017 at 8:26 pm GMT

Re the birthright citizenship argument, that is not settled law in that SCOTUS has never ruled on the question of whether a child born in the US is thereby a citizen if the parents are illegally present. Way back in 1897, SCOTUS did resolve the issue of whether a child born to alien parents who were legally present was thereby a citizen. That case is U.S. vs Wong Kim Ark 169 US 649. SCOTUS ruled in favor of citizenship. If that was a justiciable issue how much more so is it when the parents are illegally present?

My thinking is that the result would be the same but, at least, the question would be settled. I cannot see justices returning a toddler to Beijing or worse. They would never have invitations to cocktail parties again for the shame heaped upon them for such uncaring conduct. Today, the title of citizen is conferred simply by bureaucratic rule, not by judicial order.

JP Straley > > , October 14, 2017 at 9:42 pm GMT

Arguments Against Fourteenth Amendment Anchor Baby Interpretation
J. Paige Straley

Part One. Anchor Baby Argument, Mexican Case.
The ruling part of the US Constitution is Amendment Fourteen: "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside."

Here is the ruling part of the Mexican Constitution, Section II, Article Thirty:
Article 30
Mexican nationality is acquired by birth or by naturalization:
A. Mexicans by birth are:
I. Those born in the territory of the Republic, regardless of the nationality of
their parents:
II. Those born in a foreign country of Mexican parents; of a Mexican father and
a foreign mother; or of a Mexican mother and an unknown father;
III. Those born on Mexican vessels or airships, either war or merchant vessels. "

A baby born to Mexican nationals within the United States is automatically a Mexican citizen. Under the anchor baby reasoning, this baby acquires US citizenship at the same time and so is a dual citizen. Mexican citizenship is primary because it stems from a primary source, the parents' citizenship and the law of Mexico. The Mexican Constitution states the child of Mexican parents is automatically a Mexican citizen at birth no matter where the birth occurs. Since the child would be a Mexican citizen in any country, and becomes an American citizen only if born in America, it is clear that Mexico has the primary claim of citizenry on the child. This alone should be enough to satisfy the Fourteenth Amendment jurisdiction thereof argument. Since Mexican citizenship is primary, it has primary jurisdiction; thus by the plain words of the Fourteenth such child is not an American citizen at birth.

[MORE]
There is a second argument for primary Mexican citizenship in the case of anchor babies. Citizenship, whether Mexican or American, establishes rights and duties. Citizenship is a reciprocal relationship, thus establishing jurisdiction. This case for primary Mexican citizenship is supported by the fact that Mexico allows and encourages Mexicans resident in the US, either illegal aliens or legal residents, to vote in Mexican elections. They are counted as Mexican citizens abroad, even if dual citizens, and their government provides widespread consular services as well as voting access to Mexicans residing in the US. As far as Mexico is concerned, these persons are not Mexican in name only, but have a civil relationship strong enough to allow a political voice; in essence, full citizenship. Clearly, all this is the expression of typical reciprocal civic relationships expressed in legal citizenship, further supporting the establishment of jurisdiction.

Part Two: Wong Kim Ark (1898) case. (Birthright Citizenship)

The Wong Kim Ark (WKA) case is often cited as the essential legal reasoning and precedent for application of the fourteenth amendment as applied to aliens. There has been plenty of commentary on WKA, but the truly narrow application of the case is emphasized reviewing a concise statement of the question the case was meant to decide, written by Hon. Horace Gray, Justice for the majority in this decision.

"[W]hether a child born in the United States, of parents of Chinese descent, who, at the time of his birth, are subjects of the Emperor of China, but have a permanent domicile and residence in the United States, and are there carrying on business, and are not employed in any diplomatic or official capacity under the Emperor of China, becomes at the time of his birth a citizen of the United States by virtue of the first clause of the Fourteenth Amendment of the Constitution." (Italics added.)

For WKA to justify birthright citizenship, the parents must have " permanent domicile and residence " But how can an illegal alien have permanent residence when the threat of deportation is constantly present? There is no statute of limitation for illegal presence in the US and the passage of time does not eliminate the legal remedy of deportation. This alone would seem to invalidate WKA as a support and precedent for illegal alien birthright citizenship.

If illegal (or legal) alien parents are unemployed, unemployable, illegally employed, or if they get their living by illegal means, then they are not ". . .carrying on business. . .", and so the children of indigent or criminal aliens may not be eligible for birthright citizenship

If legal aliens meet the two tests provided in WKA, birthright citizenship applies. Clearly the WKA case addresses the specific situation of the children of legal aliens, and so is not an applicable precedent to justify birthright citizenship for the children of illegal aliens.

Part three. Birth Tourism

Occasionally foreign couples take a trip to the US during the last phase of the wife's pregnancy so she can give birth in the US, thus conferring birthright citizenship on the child. This practice is called "birth tourism." WKA provides two tests for birthright citizenship: permanent domicile and residence and doing business, and a temporary visit answers neither condition. WKA is therefore disqualified as justification for a "birth tourism" child to be granted birthright citizenship.

Realist > > , October 14, 2017 at 10:05 pm GMT

@Carroll Price Unfortunately, that train left the station long ago. With or without welfare, there's simply no way soft, spoiled, lazy, over-indulged Americans who have never hit a lick at anything their life, will ever perform manual labor for anyone, including themselves. Then let them starve to death. The Pilgrims nipped that dumb ass idea (welfare) in the bud

Alfa158 > > , October 15, 2017 at 2:10 am GMT

@Carroll Price

An equally pressing problem, though, is the millions of foreigners who are living and working here, and using our schools and hospitals and public services, who should not be here.
Has it ever occurred to anyone other than me that the cost associated with foreign workers using our schools and hospitals and pubic services for free, is more than off-set by the cheap price being paid for grocery store items like boneless chicken breast, grapes, apples, peaches, lettuce etc, which would otherwise be prohibitively expensive even for the wealthy?

Let alone relatively poor people (like myself) and those on fixed incomes? What un-thinking Americans want, is having their cake and eating it too. Well, in the real world, things just don't work that way. It's pay me now or pay me later. Once all the undocumented workers who are doing all the dirty, nasty jobs Americans refuse to do are run out the country, then what? Please look up;History; United States; pre mid-twentieth century. I'm pretty sure Americans were eating chicken, grapes, apples, peaches, lettuce, etc. prior to that period. I don't think their diet consisted of venison and tree bark.
But since I wasn't there, maybe I'm wrong and that is actually what they were eating.
I know some people born in the 1920′s; I'll check with them and let you know what they say.

[Sep 24, 2017] Inside Amazon's Warehouses: Thousands of Senior Citizens and the Occasional Robot Mishap

Sep 24, 2017 | hardware.slashdot.org

(wired.com) Posted by EditorDavid on Saturday September 23, 2017 @09:30PM from the looking-inside dept. Amazon aggressively recruited thousands of retirees living in mobile homes to migrate to Amazon's warehouses for seasonal work, according to a story shared by nightcats . Wired reports: From a hiring perspective, the RVers were a dream labor force. They showed up on demand and dispersed just before Christmas in what the company cheerfully called a "taillight parade." They asked for little in the way of benefits or protections . And though warehouse jobs were physically taxing -- not an obvious fit for older bodies -- recruiters came to see CamperForce workers' maturity as an asset. These were diligent, responsible employees. Their attendance rates were excellent. "We've had folks in their eighties who do a phenomenal job for us," noted Kelly Calmes, a CamperForce representative, in one online recruiting seminar... In a company presentation, one slide read, "Jeff Bezos has predicted that, by the year 2020, one out of every four workampers in the United States will have worked for Amazon." The article is adapted from a new book called " Nomadland ," which also describes seniors in mobile homes being recruited for sugar beet harvesting and jobs at an Iowa amusement park, as well as work as campground hsots at various national parks. Many of them "could no longer afford traditional housing," especially after the financial downturn of 2008. But at least they got to hear stories from their trainers at Amazon about the occasional "unruly" shelf-toting "Kiva" robot: They told us how one robot had tried to drag a worker's stepladder away. Occasionally, I was told, two Kivas -- each carrying a tower of merchandise -- collided like drunken European soccer fans bumping chests. And in April of that year, the Haslet fire department responded to an accident at the warehouse involving a can of "bear repellent" (basically industrial-grade pepper spray). According to fire department records, the can of repellent was run over by a Kiva and the warehouse had to be evacuated.

[Sep 16, 2017] Will Millennials Be Forced Out of Tech Jobs When They Turn 40?

Notable quotes:
"... Karen Panetta, the dean of graduate engineering education at Tufts University and the vice president of communications and public relations at the IEEE-USA, believes the outcome for tech will be Logan's Run -like, where age sets a career limit... ..."
"... It's great to get the new hot shot who just graduated from college, but it's also important to have somebody with 40 years of experience who has seen all of the changes in the industry and can offer a different perspective." ..."
Sep 16, 2017 | it.slashdot.org

(ieeeusa.org)

Posted by EditorDavid on Sunday September 03, 2017 @07:30AM

dcblogs shared an interesting article from IEEE-USA's "Insight" newsletter: Millennials, which date from the 1980s to mid-2000s, are the largest generation. But what will happen to this generation's tech workers as they settle into middle age ?

Will the median age of tech firms rise as the Millennial generation grows older...? The median age range at Google, Facebook, SpaceX, LinkedIn, Amazon, Salesforce, Apple and Adobe, is 29 to 31, according to a study last year by PayScale, which analyzes self-reported data...

Karen Panetta, the dean of graduate engineering education at Tufts University and the vice president of communications and public relations at the IEEE-USA, believes the outcome for tech will be Logan's Run -like, where age sets a career limit...

Tech firms want people with the current skills sets and those "without those skills will be pressured to leave or see minimal career progression," said Panetta... The idea that the tech industry may have an age bias is not scaring the new college grads away. "They see retirement so far off, so they are more interested in how to move up or onto new startup ventures or even business school," said Panetta.

"The reality sets in when they have families and companies downsize and it's not so easy to just pick up and go on to another company," she said. None of this may be a foregone conclusion.

Millennials may see the experience of today's older workers as a cautionary tale, and usher in cultural changes... David Kurtz, a labor relations partner at Constangy, Brooks, Smith & Prophete, suggests tech firms should be sharing age-related date about their workforce, adding "The more of a focus you place on an issue the more attention it gets and the more likely that change can happen.

It's great to get the new hot shot who just graduated from college, but it's also important to have somebody with 40 years of experience who has seen all of the changes in the industry and can offer a different perspective."

[Jun 26, 2017] How Can A Human Justify Asking To Be Paid $15 To Work Zero Hedge

Jun 26, 2017 | www.zerohedge.com
Authored by Mike Shedlock via MishTalk.com,

McDonald's announced it will replace cashiers in 2,500 stores with self-service kiosks.

The story buzzed across the internet but Business Insider reported McDonald's shoots down fears it is planning to replace cashiers with kiosks .

"McDonald's has repeatedly said that adding kiosks won't result in mass layoffs, but will instead move some cashiers to other parts of the restaurant where it's adding new jobs, such as table service. The burger chain reiterated that position again on Friday."

Is McDonald's denial believable? What would you expect the company to say?

McDonald's has to deny the story or it might have a hiring problem, a morale problem, and other problems.

"Our CEO, Steve Easterbrook, has said on many occasions that self-order kiosks in McDonald's restaurants are not a labor replacement," a spokeswoman told Business Insider. "They provide an opportunity to transition back-of-the-house positions to more customer service roles such as concierges and table service where they are able to truly engage with guests and enhance the dining experience."

Move cashiers to table service? Really?

Yeah, right.

An interesting political rule from the British sitcom "Yes, Minister" is to "never believe anything until it's officially denied".

Will Humans Be Necessary?

When someone can be replaced by a robot, how can the push for $15 be justified?

Psychology Today asks Will Humans Be Necessary?

Will automation kill as many jobs as is feared? A widely cited Oxford University study predicts that 47% of jobs could be automated in the next decade of two. Price Waterhouse pegs the U.S. risk at 38%. McKinsey estimates that 45% of what people are paid for could be automated using existing technology!

No less than Tesla's Elon Musk, Bill Gates, and Stephen Hawking fear the loss of jobs will cause world cataclysm.

Lower-level jobs at risk

Let's start with jobs likely to be eliminated, starting with the present and with those lower-level jobs.

Already, don't you prefer a ATM to a teller, self-checkout to the supermarket checker, drive-through tolls rather than stop for the toll-taker, automated airline check-in rather than waiting for a clerk, shopping on Amazon rather than fighting traffic, parking, and the check-out experience with a live clerk, assuming the store has what you want in your size? Indeed, malls are closing while online retailers led by Amazon are growing.

As minimum wage and mandated benefits rise, fast-food restaurants especially are accelerating use of, for example, order-taking kiosks, which McDonald's is rolling out in 2,500 stores, robotic burger flippers and fry cooks, even pizza, ramen and sushi makers . Even that fail-safe job, barista, is at-risk, Bosch now makes an automated barista . Mid-range restaurants such as Olive Garden, Outback, and Applebee are replacing waiters with tabletop tablets . Will you really miss having your conversation interrupted by a waiter hawking hors de oeuvres and expecting a 15+% tip? If you owned a fast-food franchise, mighn't you be looking to replace people with automated solutions? Can it really be long until there are completely automated fast-food and even mid-range restaurants?

Robots are already being used as security guards. There are humanoid robots that can move heavy boxes, walk in uneven snow, and get up, not annoyed when thrown to the ground. (And won't sue for failure to supervise or an OSHA violation.)

Instead of hiring architects for tens of thousands of dollars, many people are opting to spend just a few hundred bucks to instantly get any of thousands of often award-winning house plans which, if needed, can be inexpensively customized to suit. Far fewer architects needed.

BlackRock, the world's largest fund company has replaced seven of its 53 analysts with AI-driven stock-picking.

The remaining jobs

In such a world, how can a human justify asking to be paid to work?

Four scenarios

The range of scenarios would seem circumscribed by these. How likely do you think each of these are?

  • Continue on the current path: The world continues to slowly make progress, e.g., birth rates declining in developing nations, slowed global warming, more education and health care. Those positives would be mitigated by declining jobs, more concentration of wealth.
  • World socialism.
  • Mass population reduction, for example, by nuclear war, pandemic, or, per Clive Cussler, highly communicable biovirus simultaneously put into the water supply of a half-dozen cruise ships?
  • A world run by machines and the few people they deem worthy.
  • Here is a debate between an optimistic and a pessimist on the future of the world.

    The truth may well be something we can't even envision. After all, he who lives by the crystal ball usually eats broken glass.

    Note that Psychology Today author Marty Nemko did not ask about $15. He wonders if pay for some jobs is worth anything at all.

    saudade -> 2banana , Jun 26, 2017 5:15 AM

    How about just reinstitute slavery and be done with it.

    Erek -> AVmaster , Jun 26, 2017 6:21 AM

    When all the jobs are taken over by machines there won't be anybody with money left to buy or pay for anything at all. WTF then? A world of no work is a world of little or no income. The ones who survive are the ones who know how to provide for themselves without the use of currency (barter, trade, farming, etc ).

    crazzziecanuck -> Erek , Jun 26, 2017 6:59 AM

    Before that happens, these machines will be heavily vandalized. It's all part of the inevitable ISEP problem (It's Someone Else's Problem).

    For one firm to do this, it's understandable, but for an entire sector, they're ripping their face off and everyone else's. But those making the decisions are unwilling or unable to care about even their long-term positions. To start, they largely exist to kick the can down the road until ... you guess it! ... it's ISEP. It's a problem for the next round of overcompensated intellectual-light and morally-bankrupt executives.

    But don't think "the market" is going to fix that. Markets never do. Markets have failures all the time yet people still pretend like they have this inherent magical property. Markets would be fine ... in a human-free world ... because anything a sociopath touches will be turned to sh*t. And power, be it government or "market" will attract these people. Any ideology can work, but only until the sociopaths game the sh*t out of the system and destroy it from the inside.

    Now, the less stupid people in these positions will realize the ISEP problem but know full well the government of the future can be extorted into, effectively, bailing them out somehow. Think of the "mandate" of ObamaCare and realize "thinkers" at the Heritage Institute saw this down the road back in the early 1980s. Right now, I'm starting to wonder if this whole "livable wage" is just a proxy bailout on behalf of large actors like McDonald's (who can no longer expect growth as the incomes and costs at the bottom shrink in the former and explode in the latter). That leadership knows full well that even if they took a leadership position on living wages, they'll be expected to be the only ones. The sociopaths at the other firms will think ... you got it! ... ISEP. Those firms can continue on f**king their employees while a large firm like McDonald's is expected to shoulder the entire burden or drive them into bankruptcy. In either of those cases, the status quo remains across the industry.

    FIRE-HC-E (Financial, Insurance, Real Estate, Healthcare, Education; the major rackets of ourlives) is destroying the markets for not just McDonald's employees, but also markets for other brick-and-mortar companies like Apple or Home Depot. This is why I focus heavily on our poor leadership because the leadership of the industrial sectors as a whole just sat back and watched as the likes of Wall Street slowly eroded the bedrock of the economy.

    Everything is a racket.

    Took Red Pill -> blown income , Jun 26, 2017 7:40 AM

    The author, Mike Shedlock, links to a POS article in Psychology Today, authored by Marty Nemko Ph.D. Did anyone else read that? It says under An optimistic vision "Longer term, it's even possible that we'll be able to accomplish more of what we want by using gene therapy or a chip embedded in our brain -Research to make that happen is already being funded by the federal government." Ah, no thank you!

    Mike also asks " how can the push for $15 be justified? And links to the Psycholgy Today article which say "we may also need a guaranteed basic income paid heavily by successful corporations and wealthy individuals". Which view do you support Mike?

    Psychology Today article also states "What about journalism? Even in major media outlets, many journalism jobs have already been lost to the armies of people willing to write for free. In addition, software such as Quill can replace some human journalists" Maybe in this case, that's not a bad thing.

    NidStyles -> Took Red Pill , Jun 26, 2017 8:05 AM

    More like Shylock....

    If it's being printed commercially, it's probably bullshit.

    [Jun 26, 2017] In Towns Already Hit by Steel Mill Closings, a New Casualty: Retail Jobs

    Jun 26, 2017 | economistsview.typepad.com

    Fred C. Dobbs , June 25, 2017 at 09:03 PM

    In Towns Already Hit by Steel Mill Closings, a New Casualty: Retail Jobs

    https://nyti.ms/2u369Ph
    NYT - RACHEL ABRAMS and ROBERT GEBELOFF - JUNE 25, 2017

    Thousands of workers face unemployment as retailers
    struggle to adapt to online shopping. But even as
    e-commerce grows, it isn't absorbing these workers.

    JOHNSTOWN, Pa. - Dawn Nasewicz comes from a family of steelworkers, with jobs that once dominated the local economy. She found her niche in retail.

    She manages a store, Ooh La La, that sells prom dresses and embroidered jeans at a local mall. But just as the jobs making automobile springs and rail anchors disappeared, local retail jobs are now vanishing.

    "I need my income," said Ms. Nasewicz, who was told that her store will close as early as August. "I'm 53. I have no idea what I'm going to do."

    Ms. Nasewicz is another retail casualty, one of tens of thousands of workers facing unemployment nationwide as the industry struggles to adapt to online shopping.
    Continue reading the main story
    Photo
    A sporting goods store in a Johnstown, Pa., mall is having a going-out-of-business sale. Credit George Etheredge for The New York Times

    Small cities in the Midwest and Northeast are particularly vulnerable. When major industries left town, retail accounted for a growing share of the job market in places like Johnstown, Decatur, Ill., and Saginaw, Mich. Now, the work force is getting hit a second time, and there is little to fall back on.

    Moreover, while stores in these places are shedding jobs because of e-commerce, e-commerce isn't absorbing these workers. Growth in e-commerce jobs like marketing and engineering, while strong, is clustered around larger cities far away. Rural counties and small metropolitan areas account for about 23 percent of traditional American retail employment, but they are home to just 13 percent of e-commerce positions.

    E-commerce has also fostered a boom in other industries, including warehouses. But most of those jobs are being created in larger metropolitan areas, an analysis of Census Bureau business data shows.

    Almost all customer fulfillment centers run by the online shopping behemoth Amazon are in metropolitan areas with more than 250,000 people - close to the bulk of its customers - according to a list of locations compiled by MWPVL International, a logistics consulting firm. An Amazon spokeswoman noted, however, that the company had recently opened warehouses in two distressed cities in larger metropolitan areas, Fall River, Mass., and Joliet, Ill.

    The Johnstown metropolitan area, in western Pennsylvania, has lost 19 percent of its retail jobs since 2001, and the future is uncertain. At least a dozen of Ooh La La's neighbors at the mall have closed, and a "Going out of business" banner hangs across the front of the sporting goods store Gander Mountain.

    "Every time you lose a corner store, every time you lose a restaurant, every time you lose a small clothing store, it detracts from the quality of life, as well as the job loss," said John McGrath, a professor of management at the University of Pittsburgh Johnstown.

    This city is perhaps still best known for a flood that ravaged it nearly 130 years ago. After rebuilding, Johnstown eventually became prosperous from its steel and offered a clear path to the middle class. For generations, people could walk out of high school and into a steady factory job.

    But today, the area bears the marks of a struggling town. Its population has dwindled, and addiction treatment centers and Dollar Generals stand in place of corner grocers and department stores like Glosser Brothers, once owned by the family of Stephen Miller, President Trump's speechwriter and a policy adviser.

    When Mr. Trump spoke about "rusted-out factories scattered like tombstones across the landscape of our nation" in his Inaugural Address, people like Donald Bonk, a local economic development consultant, assumed that Mr. Miller - who grew up in California but spent summers in Johnstown - was writing about the old Bethlehem Steel buildings that still hug long stretches of the Little Conemaugh River.

    The county voted overwhelmingly for Mr. Trump, eight years after it helped to elect Barack Obama. (It also voted for Mitt Romney in 2012, but not by as wide a margin.)

    Here and in similar towns, when the factory jobs left, a greater share of the work force ended up in retail.

    Sometimes that meant big-box retailers like Walmart, which were often blamed for destroying mom-and-pop stores but at least created other jobs for residents. The damage from e-commerce plays out differently. Digital firms may attract customers from small towns, but they are unlikely to employ them.

    Some remaining retailers are straining for solutions. ...

    [Jun 25, 2017] The idea of basic income is incompatible with the neoliberalism

    Notable quotes:
    "... What's needed is not the arbitrary adoption of UBI, but a conversation about what a welfare state is for. In their incendiary book Inventing the Future, the authors Alex Williams and Nick Srnicek argue for UBI but link it to three other demands: collectively controlled automation, a reduction in the working week, and a diminution of the work ethic. Williams and Srnicek believe that without these other provisions, UBI could essentially act as an excuse to get rid of the welfare state. ..."
    "... What's needed is not the arbitrary adoption of UBI, but an entirely different conversation about what a welfare state is for. As David Lammy MP said, after the Grenfell Tower disaster: "This is about whether the welfare state is just about schools and hospitals or whether it is about a safety net." The conversation, in light of UBI, could go even further: it's possible for the welfare state not just to act as a safety net, but as a tool for all of us to do less work and spend more time with our loved ones, pursuing personal interests or engaging in our communities. ..."
    Jun 25, 2017 | economistsview.typepad.com

    Christopher H. June 25, 2017 at 07:01 AM

    https://lanekenworthy.net/2017/06/23/in-work-poverty-in-the-us/

    Lane Kenworthy's article shows how America is already great, with many more people working in poverty than in the UK, Ireland or Australia. Maybe the robots stole better paying jobs? Maybe they need more education and to skill up?

    Christopher H. , June 25, 2017 at 07:02 AM

    https://www.theguardian.com/commentisfree/2017/jun/23/universal-basic-income-ubi-welfare-state?CMP=share_btn_tw

    Love the idea of a universal basic income? Be careful what you wish for

    Ellie Mae O'Hagan

    Friday 23 June 2017 10.36 EDT

    Yes, UBI could be an important part of a radical agenda. But beware: its proponents include neoliberals hostile to the very idea of the welfare state

    For some time now, the radical left has been dipping its toes in the waters of universal basic income (or unconditional basic income, depending on who you talk to). The idea is exactly as it sounds: the government would give every citizen – working or not – a fixed sum of money every week or month, with no strings attached. As time goes on, universal basic income (UBI) has gradually been transitioning from the radical left into the mainstream: it's Green party policy, is picking up steam among SNP and Labour MPs and has been advocated by commentators including this newspaper's very own John Harris.

    Supporters of the idea got a boost this week with the news that the Finnish government has piloted the idea with 2,000 of its citizens with very positive results. Under the scheme, the first of its kind in Europe, participants receive €560 (£473) every month for two years without any requirements to fill in forms or actively seek work. If anyone who receives the payment finds work, their UBI continues. Many participants have reported "decreased stress, greater incentives to find work and more time to pursue business ideas." In March, Ontario in Canada started trialling a similar scheme.

    Given that UBI necessarily promotes universalism and is being pursued by liberal governments rather than overtly rightwing ones, it's tempting to view it as an inherently leftwing conceit. In January, MEPs voted to consider UBI as a solution to the mass unemployment that might result from robots taking over manual jobs.

    From this perspective, UBI could be rolled out as a distinctly rightwing initiative. In fact it does bear some similarity to the government's shambolic universal credit scheme, which replaces a number of benefits with a one-off, lower, monthly payment (though it goes only to people already on certain benefits, of course). In the hands of the right, UBI could easily be seen as a kind of universal credit for all, undermining the entire benefits system and providing justification for paying the poorest a poverty income.

    In fact, can you imagine what UBI would be like if it were rolled out by this government, which only yesterday promised to fight a ruling describing the benefits cap as inflicting "real misery to no good purpose"?

    Despite the fact that the families who brought a case against the government had children too young to qualify for free childcare, the Department for Work and Pensions still perversely insisted that "the benefit cap incentivises work". It's not hard to imagine UBI being administered by the likes of A4e (now sold and renamed PeoplePlus), which carried out back-to-work training for the government, and saw six of its employees receive jail sentences for defrauding the government of £300,000. UBI cannot be a progressive initiative as long as the people with the power to implement it are hostile to the welfare state as a whole.

    What's needed is not the arbitrary adoption of UBI, but a conversation about what a welfare state is for. In their incendiary book Inventing the Future, the authors Alex Williams and Nick Srnicek argue for UBI but link it to three other demands: collectively controlled automation, a reduction in the working week, and a diminution of the work ethic. Williams and Srnicek believe that without these other provisions, UBI could essentially act as an excuse to get rid of the welfare state.

    What's needed is not the arbitrary adoption of UBI, but an entirely different conversation about what a welfare state is for. As David Lammy MP said, after the Grenfell Tower disaster: "This is about whether the welfare state is just about schools and hospitals or whether it is about a safety net." The conversation, in light of UBI, could go even further: it's possible for the welfare state not just to act as a safety net, but as a tool for all of us to do less work and spend more time with our loved ones, pursuing personal interests or engaging in our communities.

    UBI has this revolutionary potential – but not if it is simply parachuted into a political economy that has been pursuing punitive welfare policies for the last 30 years.

    On everything from climate change and overpopulation to yawning inequality and mass automation, modern western economies face unprecedented challenges. These conditions are frightening but they also open up the possibility of the kind of radical policies we haven't seen since the postwar period. UBI could be the start of this debate, but it must not be the end.

    Christopher H. -> Christopher H.... , June 25, 2017 at 07:06 AM
    "In January, MEPs voted to consider UBI as a solution to the mass unemployment that might result from robots taking over manual jobs."

    MEPs stands for Members of the European Parliament.

    Julio -> Christopher H.... , June 25, 2017 at 08:41 AM
    One of the reasons I support UBI is that it refocuses political discussions to some of the fundamental issues, as this article points out.
    libezkova -> Julio ... , June 25, 2017 at 11:21 AM
    > "One of the reasons I support UBI is that it refocuses political discussions to some of the fundamental issues, as this article points out."

    I agree. UBI might probably be the most viable first step of Trump's MAGA. But he betrayed his electorate. Similarly it would be a good step in Obama's "change we can believe in" which never materialized. The level of automation that currently exists makes UBI quite a possibility.

    But...

    The problem is the key idea of neoliberalism is "socialism for rich and feudalism and/or plantation slavery for poor." So neither Republicans, nor Clinton Democrats are interested in UBI. It is anathema for neoliberals.

    [May 20, 2017] Outsourcing higher wage work is more profitable than outsourcing lower wage work

    Notable quotes:
    "... Baker correctly diagnoses the impact of boomers aging, but there is another effect - "knowledge work" and "high skill manufacturing" is more easily outsourced/offshored than work requiring a physical presence. ..."
    "... That's what happened with American IT. ..."
    May 20, 2017 | economistsview.typepad.com
    cm, May 20, 2017 at 04:51 PM
    Baker correctly diagnoses the impact of boomers aging, but there is another effect - "knowledge work" and "high skill manufacturing" is more easily outsourced/offshored than work requiring a physical presence.

    Also outsourcing "higher wage" work is more profitable than outsourcing "lower wage" work - with lower wages also labor cost as a proportion of total cost tends to be lower (not always).

    And outsourcing and geographically relocating work creates other overhead costs that are not much related to the wages of the local work replaced - and those overheads are larger in relation to lower wages than in relation to higher wages.

    libezkova -> cm... May 20, 2017 at 08:34 PM

    "Also outsourcing "higher wage" work is more profitable than outsourcing "lower wage" work"

    That's what happened with American IT.

    [May 18, 2017] Toward a Jobs Guarantee at the Center for American Progress by Lambert Strether

    Notable quotes:
    "... By Lambert Strether of Corrente ..."
    "... The Financial Times ..."
    "... customer ..."
    May 17, 2017 | www.nakedcapitalism.com
    Posted on May 17, 2017 By Lambert Strether of Corrente

    I had another topic lined up today, but this ( hat tip alert reader ChrisAtRU ) is so remarkable - and so necessary to frame contextualize immediately - I thought I should bring it your attention, dear readers. The headline is "Toward a Marshall Plan for America ," the authors are a gaggle of CAP luminaries with Neera Tanden leading and Rey Teixeira trailing, and the "Marshall Plan" indeed includes something called a "Jobs Guarantee." Of course, I trust Clinton operatives like Tanden, and Third Way types like Teixeira, about as far as I can throw a concert grand piano. Nevertheless, one sign of an idea whose time has come is that sleazy opportunists and has-beens try to get out in front of it to seize credit[1] and stay relevant. So, modified rapture.

    In this brief post, I'm going to look at the political context that drove CAP - taking Tanden, Teixeira, and the gaggle as a proxy for CAP - to consider a Jobs Guarantee (JG), briefly describe the nature and purpose of a JG, and conclude with some thoughts on how Tanden, Teixeira would screw the JG up, like the good liberals they are.

    Political Context for CAP's JG

    Let's begin with the photo of Prairie du Chien, WI at the top of CAP's JG article. Here it is:

    I went to Google Maps Street View, found Stark's Sports Shop (and Liquor Store), and took a quick look round town. Things don't look too bad, which is to say things look pretty much like they do in my own home town, in the fly-over state of Maine; many local businesses. The street lamps make my back teeth itch a little, because along with bike paths to attract professionals, they're one of those panaceas to "bring back downtown," but as it turns out Prairie du Chien has marketed itself to summer tourists quite successfully as " the oldest Euro-American settlement established on the Upper Mississippi River," so those lamps are legit! (Of course, Prairie du Chien, like so much of flyover country, is fighting an opioid problem , but that doesn't show up in Street View, or affect the tourists in any way.)

    More to the point, Crawford County WI, in which Prairie du Chien is located, was one of the counties that went for Obama, twice, and then flipped to Trump ( 50.1% Trump, 44.6% Clinton ), handing Trump the election, although the CAP authors don't mention this. AP has a good round-up of interviews with Prairie du Chien residents , from which I'll extract the salient points. On "flipping," both from Obama (since he didn't deliver) and away from Trump (if he doesn't deliver):

    In 2012, [Lydia Holt] voted for Barack Obama because he promised her change, but she feels that change hasn't reached her here. So last year she chose a presidential candidate unlike any she'd ever seen, the billionaire businessman who promised to help America, and people like her, win again. Many of her neighbors did, too .

    In this corner of middle America, in this one, small slice of the nation that sent Trump to Washington, they are watching and they are waiting, their hopes pinned on his promised economic renaissance. And if four years from now the change he pledged hasn't found them here, the people of Crawford County said they might change again to someone else.

    "[T]hings aren't going the way we want them here," she said, "so we needed to go in another direction."

    And the issues:

    [Holt] tugged 13 envelopes from a cabinet above the stove, each one labeled with a different debt: the house payment, the student loans, the vacuum cleaner she bought on credit.

    Lydia Holt and her husband tuck money into these envelopes with each paycheck to whittle away at what they owe. They both earn about $10 an hour and, with two kids, there are usually some they can't fill. She did the math; at this rate, they'll be paying these same bills for 87 years.

    Kramer said she's glad the Affordable Care Act has helped millions get insurance, but it hasn't helped her he and her husband were stunned to find premiums over $1,000 a month. Her daughter recently moved into their house with her five children, so there's no money to spare. They opted to pay the penalty of $2,000, and pray they don't get sick until Trump, she hopes, keeps his promise to replace the law with something better.

    Among them is a woman who works for $10.50 an hour in a sewing factory, who still admires Obama, bristles at Trump's bluster, but can't afford health insurance. And the dairy farmer who thinks Trump is a jerk - "somebody needs to get some Gorilla Glue and glue his lips shut" - but has watched his profits plummet and was willing to take the risk.

    And of course jobs (as seen in this video, "Inside the Minds and Homes of Voters in Prairie du Chien, WI," made by students at the University of Wisconsin-Milwaukee).

    So that's Prairie du Chien, Wisconsin. CAP frames the electoral context this way:

    While the election was decided by a small number of votes overall, there was a significant shift of votes in counties in critical Electoral College states, including Iowa, Michigan, Ohio, Pennsylvania, and Wisconsin.

    (I could have told them that. In fact, I did! ) And the reasons for the shift:

    What was going on in these heavily white working-class counties that might explain support for Trump? Without diminishing the importance of cultural and racial influences, it is clear to us that lingering [sic] economic pressures among important voting blocs helped to create a larger opening for Trump's victory.

    We do not yet know the exact reasons for the drop in turnout among young people and black voters. But with President Obama not on the ticket to drive voter enthusiasm, it is quite possible that lingering job and wage pressures in more urban areas with lots of young people, and in areas with large populations of African-Americans, yielded similar, if distinct, economic anxiety in ways that may have depressed voter turnout among base progressives. The combined effect of economic anxiety may have been to drive white noncollege voters toward Trump and to drive down voter engagement and participation among base progressives.

    Either way, issues related to lost jobs, low wages, high costs, and diminished mobility played a critical role in setting the stage for a narrow populist victory for Trump.

    (I could have told them that, too. In fact, I did! ) Note the lingering "Obama Coalition" / identity politics brain damage that casually assumes "base progressives" equate to African-Americans and youth. Nevertheless, mild kudos to CAP for fighting through to the concept that "economic pressures among important voting blocs helped to create a larger opening for Trump's victory." The CAP paper then goes on to recommend a JG as an answer to such "economic pressures."[2]

    Nature and Purpose of a JG

    Here's the how and why of a JG (though I wrote it up, I had the help of practioners):

    How would the JG work from the perspective of a working person (not an owner?) Or from the perspective of the millions of permanently disemployed? The MMT Primer :

    If you are involuntarily unemployed today (or are stuck with a part-time job when you really want to work full time) you only have three choices:

    Employ yourself (create your own business-something that usually goes up in recessions although most of these businesses fail) Convince an employer to hire you, adding to the firm's workforce Convince an employer to replace an existing worker, hiring you

    The second option requires that the firm's employment is below optimum-it must not currently have the number of workers desired to produce the amount of output the firm thinks it can sell. …

    If the firm is in equilibrium, then, producing what it believes it can sell, it will hire you only on the conditions stated in the third case-to replace an existing worker. Perhaps you promise to work harder, or better, or at a lower wage. But, obviously, that just shifts the unemployment to someone else.

    It is the "dogs and bones" problem: if you bury 9 bones and send 10 dogs out to go bone-hunting you know at least one dog will come back "empty mouthed". You can take that dog and teach her lots of new tricks in bone-finding, but if you bury only 9 bones, again, some unlucky dog comes back without a bone.

    The only solution is to provide a 10 th bone. That is what the JG does: it ensures a bone for every dog that wants to hunt.

    It expands the options to include:

      There is a "residual" employer who will always provide a job to anyone who shows up ready and willing to work.

    It expands choice. If you want to work and exhaust the first 3 alternatives listed above, there is a 4 th : the JG.

    It expands choice without reducing other choices. You can still try the first 3 alternatives. You can take advantage of all the safety net alternatives provided. Or you can choose to do nothing. It is up to you.

    If I were one of the millions of people permanently disemployed, I would welcome that additional choice. It's certainly far more humane than any policy on offer by either party. And the JG is in the great tradition of programs the New Deal sponsored, like the CCC, the WPA, Federal Writers' Project , and the Federal Art Project . So what's not to like? ( Here's a list of other JGs). Like the New Deal, but not temporary!

    Intuitively: What the JG does is set a baseline[3] for the entire package offered to workers, and employers have to offer a better package, or not get the workers they need. When I came up here to Maine I'd quit my job voluntarily and so wasn't eligible for unemployment. Then the economy crashed, and I had no work (except for blogging) for two years. There were no jobs to be had. I would have screamed with joy for a program even remotely like this, and I don't even have dependents to take care of. It may be objected that the political process won't deliver an offer as good as the Primer suggests. Well, don't mourn. Organize. It may be objected that a reform like the JG merely reinforces the power of the 0.01%. If so, I'm not sure I'm willing to throw the currently disemployed under the bus because "worse is better," regardless. Anyhow, does "democratic control over the living wage" really sound all that squillionaire-friendly to you? Aren't they doing everything in their power to fight anything that sounds like that? The JG sounds like the slogan Lincoln ran on, to me: "Vote yourself a farm!" [3]

    So, what does the JG for the economy? MMT was put together by economists; from an economists perspective, what is it good for? Why did they do that? The Primer once more:

    some supporters emphasize that a program with a uniform basic wage[4] also helps to promote economic and price stability.

    The JG/ELR program will act as an automatic stabilizer as employment in the program grows in recession and shrinks in economic expansion, counteracting private sector employment fluctuations. The federal government budget will become more counter-cyclical because its spending on the ELR program will likewise grow in recession and fall in expansion.

    Furthermore, the uniform basic wage will reduce both inflationary pressure in a boom and deflationary pressure in a bust. In a boom, private employers can recruit from the program's pool of workers, paying a mark-up over the program wage. The pool acts like a "reserve army" of the employed, dampening wage pressures as private employment grows. In recession, workers down-sized by private employers can work at the JG/ELR wage, which puts a floor to how low wages and income can fall.

    Finally, research indicates that those without work would prefer to have it :

    Research by Pavlina Tcherneva and Rania Antonopoulos indicates that when asked, most people want to work. Studying how job guarantees affect women in poor countries, they find the programs are popular largely because they recognize-and more fairly distribute and ­compensate-all the child- and elder care that is now often performed by women for free (out of love or duty), off the books, or not at all.

    Enough of this crap jobs at crap wages malarky!

    And here's the how and why of a JG, as described by CAP :

    We propose today a new jobs guarantee, and we further expect a robust[3] agenda to be developed by the commission.

    The low wages and low employment rates for those without college degrees only exist because of a failure of imagination. There is no shortage of important work that needs to be done in our country. There are not nearly enough home care workers to aid the aged and disabled. Many working families with children under the age of 5 need access to affordable child care. Schools need teachers' aides, and cities need EMTs. And there is no shortage of people who could do this work. What has been missing is policy that can mobilize people.

    To solve this problem, we propose a large-scale, permanent program of public employment and infrastructure investment-similar to the Works Progress Administration (WPA) during the Great Depression but modernized for the 21st century. It will increase employment and wages for those without a college degree while providing needed services that are currently out of reach for lower-income households and cash-strapped state and local governments. Furthermore, some individuals may be hired into paying public jobs in which their primary duty will be to complete intensive, full-time training for high-growth, in-demand occupations. These "public apprenticeships" could include rotations with public and private entities to gain on-the-ground experience and lead to guaranteed private-sector employment upon successful completion of training.

    Such an expanded public employment program could, for example, have a target of maintaining the employment rate for prime-age workers without a bachelor's degree at the 2000 level of 79 percent. Currently, this would require the creation of 4.4 million jobs. At a living wage-which we can approximate as $15 per hour plus the cost of contributions to Social Security and Medicare via payroll taxes-the direct cost of each job would be approximately $36,000 annually. Thus, a rough estimate of the costs of this employment program would be about $158 billion in the current year. This is approximately one-quarter of Trump's proposed tax cut for the wealthy on an annual basis.

    With tis background, let's look at how liberals would screw the JG up.

    How a CAP JG Would Go Wrong

    Before getting into a little policy detail, I'll examine a few cultural/framing issues. After all, CAP does want the program's intended recipients to accept it with good grace, no? Let me introduce the over-riding concern, from Joan C. Williams in The Financial Times : "They don't want compassion. They want respect" :

    Williams warns that Republican errors alone won't give Democrats back the WWC.

    Or any part of the WC; as even CAP recognizes, although WWC disproportionately voted Trump, and non-WWC disproportionately stayed home.

    While [Williams] agrees that the Democrats have mobilised their base since Trump's election, she has "one simple message" for the party: it needs to show the WWC respect, "in a tone suitable for grown-ups". Democrats must say: "We regret that we have disrespected you, we now hear you." She asks: "Is this so hard? Although the risk is that the response will be, 'Oh, those poor little white people with their opioid epidemics, let's open our hearts in compassion to them.' That's going to infuriate them. They don't want compassion, they want respect."

    To show respect, it would really behoove liberals to deep-six the phrase "economic anxiety," along with "economic frustrations," "economic concerns," "economic grievances," and "lingering economic pressures."[4] All these phrases make successful class warfare a psychological condition, no doubt to be treated by a professional (who by definition is not anxious, not frustrated, has no grievances, and certainly no economic pressures, because of their hourly rate (or possibly their government contract).

    To show respect, it would also behoove liberals to deep-six the concept that markets come first; people who sell their labor power by the hour tend to be sensitive about such things. Take, for a tiny example, the caption beneath the image of Prairie du Chein. Let me quote it:

    A customer crosses the street while leaving a shop along the main business district in Prairie du Chien, Wisconsin, January 2017.

    Really? A customer ? Does the human figure have to be a customer ? Why?

    Along the same lines, drop the "affordable" crap; ObamaCare should have ruined that branding already; what seems like it's affordable to CAP writers in the Beltway probably isn't affordable at all to somebody making $10 an hour. Anyhow, if something like childcare or for that matter #MedicareForAll ought to be a universal direct material benefit, then deliver it!

    To show respect, abandon the "Marshall Plan" framing immediately. Because it means the "winners" are going to graciously help the "losers," right? And prudentially, liberals don't really want to get the working class asking themselves who conducted a war against them, and why, right?

    To show respect, make the JG a truly universal benefit, a real guarantee, and don't turn it into an ObamaCare-like Rube Goldberg device of means-testing, worthiness detection, gatekeeping, and various complex forms of insult and degradation, like narrow networks. This passage from CAP has me concerned:

    Such an expanded public employment program could, for example, have a target of maintaining the employment rate for prime-age workers without a bachelor's degree at the 2000 level of 79 percent.

    That 'target" language sounds to me very much like the "dogs and bones" problem. Suppose currently we have 6 bones and 10 dogs. The "target" is 7 bones. Suppose we meet it? There are still 3 dogs without bones! Some guarantee! The JG should be simple: A job for everyone who wants one. None of this targeting or slicing and dicing demographics. The JG isn't supposed to be an employment guarantee for macro-economists (who basically have one anyone).

    To show respect, make the JG set the baseline for wages (and working conditions). This passage from CAP has me concerned:

    Second, because it would employ people to provide services that are currently needed but unaffordable, it would not compete with existing private-sector employment.

    This language seems a bit slippery to me. If Walmart is paying $10.00 an hour, is the JG really going to pay $9.50?

    Finally, you will notice that the CAP JG is shorn of any macro-economic implications. Note, for example, that replacing our current cruel system of regulating the economy by throwing people out of work isn't mentioned. Note also that CAP also accepts the false notion that Federal taxes pay for Federal spending. That puts CAP in the austerity box, meaning that the JG might be cut back just when it is most needed, not least by working people.

    Conclusion

    I do want to congratulate CAP, and without irony, for this passage:

    [The JG] would provide the dignity of work, the value of which is significant. When useful work is not available, there are large negative consequences, ranging from depression, to a decline in family stability, to "deaths of [sic] despair."

    It's good to see the Case-Deaton study penetrating the liberal hive mind. Took long enough. Oh, and this makes the JG a moral issue, too. The pallid language of "economic anxiety" should be reformulated to reflect this, as should the program itself.

    NOTES

    [1] The JG originally comes from the MMT community; here is a high-level summary . Oddly, or not, there's no footnote crediting MMTers. Interestingly, Stephanie Kelton, who hails from the University of Missouri at Kansas City's MMT-friendly economics department, before Sanders brought her onto the staff at the Senate Budget committee, was not able to persuade Sanders of the correctness and/or political utility of MMT generally or the JG in particular.

    [2] I guess those famous Democrat 2016 post mortems will never be published, eh? This will have to do for a poor substitute. Or maybe the Democrats just want us to read Shattered .

    [3] In my view, "robust" is a bullshit tell. Back when I was a hotshot consultant, the operational definition of "robust" was "contained in a very large three-ring binder."

    [4] Dear God. Are these people demented? Nobody who is actually under "economic pressure" would use these words. And so far as I can tell, "lingering" means permanent.

    About Lambert Strether

    Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism ("Because markets"). I don't much care about the "ism" that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don't much care, as long as the benefits are delivered. To me, the key issue - and this is why Medicare for All is always first with me - is the tens of thousands of excess "deaths from despair," as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics - even the worthy fight to help the refugees Bush, Obama, and Clinton's wars created - bright shiny objects by comparison. Hence my frustration with the news flow - currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press - a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let's call such voices "the left." Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn't allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I've been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

    ChrisAtRU , May 17, 2017 at 1:38 pm

    Thank you! Thank you! Thank you!

    Clive , May 17, 2017 at 2:37 pm

    No, thank you!

    Dead Dog , May 17, 2017 at 4:40 pm

    Yes, a great essay. And thank you commentariat.
    Of course, there is a potential conflict from those who want a basic income, but don't want to work. Such a position frames such people badly, but a basic income remains an essential part of a JG world IMO.
    The JG would provide incentive if you didn't lose the safety net and could add to it by working in a JG program.
    Most here in this place accept that a sovereign government can pay for programs which are not funded by taxes (or debt) and the JG and basic income concepts could be a way to test this in a controlled way.
    The main reason I think that politicians continue to have blinkers (LA LA, CAN'T HEAR YOU) with respect to MMT is that they are scared witless of a government with unlimited spending powers. That's why we can't have nice things.

    jrs , May 17, 2017 at 5:26 pm

    don't want to work, hmm I don't even know if I could work in a job without a decent amount of slack (A.D.D. mind may not be capable of it or something and often not for lack of trying, though I do a decent amount of unpaid work in my precious leisure time). Or at least not the full 40 hours, so if the job guarantee bosses are slave drivers, I don't know, I'd probably be fired from my job guaranteed job period.

    But what if a job was aligned with one's interest? Don't know, never experienced that.

    But all that aside and never even mind unemployment, given how horrible the job circumstances are that I see many people caught in (and I definitely don't mean having slack – that's a good thing, I mean verbal ABUSE, I mean working endless hours of unpaid overtime etc.), any alternative would seem good.

    nycTerrierist , May 17, 2017 at 6:19 pm

    +1!

    PKMKII , May 17, 2017 at 1:55 pm

    The "target" language also makes me worry that they're defining optimal employment by the inflation-obsessed standards of Chicago-school economists, thus coming up short in the name of protecting the investor class.

    Minor quibble: Does Maine constitute flyover country? Usually that term means the parts of the country that the well-to-do "fly over" from east coast cities to west coast ones, with perhaps an exception for Chicago. You wouldn't fly over Maine for any of those routes. Not to mention, Maine is a popular vacationing/summer home state for rich New Englanders, so it doesn't exactly have an "other" status for them the way rural Wisconsin would.

    Huey Long , May 17, 2017 at 4:22 pm

    I think Maine is legit flyover country as flying over Maine was once mandatory on the transatlantic route in order to Gander Airport in Newfoundland. I know, I know, it's a bit of a stretch but I'm trying here!

    As for Maine's other status, you're spot on about "down east" (coastal) Maine and some of the lakes being popular with the landed gentry, but the interior of the state is sparsely populated, poor, white, and marginalized. Many of the paper mills have gone belly-up and the economy in many places consists of picking potatoes or cutting down trees.

    Knifecatcher , May 17, 2017 at 5:06 pm

    I used to do a lot of business travel to Nova Scotia. Hard to get there from the US without flying over Maine. But I think Lambert meant flyover in the pejorative "why would you live here when you could be an artisanal pickle maker in Brooklyn" sense.

    Peham , May 17, 2017 at 2:17 pm

    Thanks much! A JG as you describe plus nationalizing all our current rentier industries ought to just about do the trick.

    Sutter Cane , May 17, 2017 at 2:24 pm

    Are you still guaranteed a job if you happen to make any negative comments about Neera Tanden? (Asking for Matt Bruenig)

    nihil obstet , May 17, 2017 at 6:50 pm

    Matt Bruenig had other issues with the article: More Job Guarantee Muddle . While he points out that the jobs suggested in the article should be permanent rather than temporary jobs, I go on with my own little sense of discomfort that they all involve putting the otherwise jobless in charge of caring for the helpless. I don't find that a good idea. I've spent enough time both working with and volunteering in human service organizations to have observed that it's not really appropriate work for a lot of people, even for many good-hearted volunteers. It really dampens my enthusiasm for a JG that I have yet to see an argument for it that doesn't invoke child and elderly care as just great jobs that the jobless can be put to doing.

    Just another quibble with this post. I first heard of a job guarantee and heard arguments for it in the U.S. civilian society from Michael Harrington in the early 1980s (guaranteed jobs have been a feature of the state capitalist societies that call themselves socialist throughout the 20th c.), so I don't find it particularly odd when the MMT community isn't mentioned as originating the idea. In fact, I tend to respond with "Hey, MMTers, learn some history."

    jrs , May 17, 2017 at 7:06 pm

    good points.

    Susan the other , May 17, 2017 at 2:47 pm

    Thanks for this article Lambert. Why should we trust CAP to handle this when they have done nothing toward this end in their entire history. In fact, in undeniable fact, if we don't do something about demand in this country we will have no economy left at all. For these guys to even approach a JG you know they are panicked. Nobody goes over this fact because it turns them all into instant hypocrites. I spent yesterday listening to some MMTers on U-Tube, Wray and some others. They all clearly and succinctly explain the systemic reasons for JG. Not nonsense. In fact, MMT approaches a JG as the opposite of nonsense on so many levels. As you have pointed out – these CAP people are a little late to reality. And their dear leader Obama is first in line for the blame, followed closely by Bill Clinton and his balance-the-budget cabal of bankster idiots. And etc. And these JG jobs could be just the jobs we need to turn global warming around. It could be the best spent money ever. It is a very straight-forward calculation.

    Sue , May 17, 2017 at 2:57 pm

    Dispel ambiguity. Call it LWUJG, Living Wage Universal Job Guarantee

    Sandler , May 17, 2017 at 3:20 pm

    I don't know how you even bother. America is so far away from this intellectually and culturally, there is no chance. Right now the "jobs guarantee" is get arrested for something bogus and be sentenced to prison to do forced labor for outsourcing corporations (yes this is real). Look where the GOP stands on basic issues which were settled long ago in Europe, they are in the Stone age. The Dems are right wing everywhere else.

    With US institutions usually run horribly how do you expect this to be well run? Is the VA a shining example? I certainly would not have hope for this at the federal level.

    Murph , May 17, 2017 at 3:43 pm

    I feel the same way often but I've got to allow myself some hope once in a while. This development is at least turn in the right direction for the moment, nothing else. There's nothing wrong with being (aprehensively) pleased about that.

    Sandler , May 17, 2017 at 5:29 pm

    I'd like to get a basic unemployment welfare scheme going first. We don't even have that! We have an "insurance" program which requires you to first have held a job which paid enough for long enough, and then get fired, not quit. And it only pays for six months. Again, this was settled in other rich countries a long time ago.

    Darius , May 17, 2017 at 6:38 pm

    Swing for the fences, ladies or gentlemen. Throw incremental change overboard, along with Hillary, Tim Kaine and Neera.

    Disturbed Voter , May 17, 2017 at 6:03 pm

    There is a job guarantee in Castro's Cuba. So wonderful, people are swimming from Miami to Havana ever day.

    Though you have it exactly right in the US the job guarantee is to be a felon on a privatized prison farm usually called a "plantation". I am looking forward to my neighbors finally being put to work. At least it is only building a Presidential Library for Obama, not a pyramid for Pharaoh.

    witters , May 17, 2017 at 6:40 pm

    "There is a job guarantee in Castro's Cuba. So wonderful, people are swimming from Miami to Havana ever day."

    That is why Cuba will never last! It will die in minutes, without any outside help!

    Mind you, here's a thought. Maybe the one's who didn't want to work, left for Florida!

    diptherio , May 17, 2017 at 3:49 pm

    My prediction: by the time this makes it through Congress, it will be a guarantee for no more than 15 hours per week at slightly below the minimum wage and you'll only be able to be in the program for nine months, total during your lifetime. Or am I being overly cynical?

    Maybe we need to update that old saw: "First they ignore you, then they laugh at you, then they co-opt your idea and strip the soul out of it, then you kinda win but not really, but hey that's progress, right?"

    Even though I'm cynical, I'm with Lambert in being for just about anything that makes us bottom-20%ers lives better, even if it is highly flawed. Heck, I'd even be for a BIG on that basis, even if Yves is right about the negative side-effects of that policy.

    Huey Long , May 17, 2017 at 4:29 pm

    they co-opt your idea and strip the soul out of it, then you kinda win but not really, but hey that's progress, right?"

    SPOT ON!!!

    This is EXACTLY what Bismark did in 1883 with his Staatssozialismus (state socialism) reforms.

    Disturbed Voter , May 17, 2017 at 6:03 pm

    In 1883, Germany still had hope it was only 12 years old!

    Jeff , May 17, 2017 at 3:50 pm

    If I understood correctly, Norway is running such a program since many years.
    Basically, when you are out of a job, you get unemployment benefits (a low but decent salary, health care and other modern facilities unheard of is the US) – which last forever .
    On the other hand, any public institution can call you in to help a hand: washing dishes at the school kitchen one day, waiting on the elderly the other day, helping out in the local library wherever hands are needed but not available.
    So it is not really a JG, but you are guaranteed to help out your local community, and you are guaranteed a minimal income. That seems close enough to me.

    Fred1 , May 17, 2017 at 4:27 pm

    This is just positioning to defend against a challenger from the left who is promoting a genuine JG.

    See we agree about a JG, I'm for it too and here is my 9 point proposal on my website.

    robnume , May 17, 2017 at 5:56 pm

    Thanks, Lambert, for a very interesting post. I combed through CAP's panel of "experts." I was not impressed.
    I'm going to start my own think tank. Gonna call it CRAP: Center for Real American Progress.

    lyle , May 17, 2017 at 7:18 pm

    Of course in the north in the winter you could go back to shoveling snow with snow shovels (no machines allowed) and ban use by public employees of riding lawnmowers in the summer in favor of powered walk behind mowers. From what I have read this is what china did on the 3 gorges dam, partly making the project a jobs project by doing things in a human intensive way. (of course you could go back to the hand push non powered reel mower but then you have to worry about folks and heart attacks. (Or use those in their 20s for this. Growing up in MI and In this is how we mowed the yard. (in the 1950s and 1960) and for snow shoveling, my dad got a snow blower when I went off to college.
    Now if you really want a low productivity way of cutting grass get one of the hand grass trimmers and set to work cutting it by that, it would employ a lot of folks and not have the exertion problem of a push mower (Again I used these in the 1960s in MI before we had the string trimmers and edgers etc. (also recall the old hand powered lawn edgers.)

    craazyboy , May 17, 2017 at 8:19 pm

    I'm partial to John Cleese Silly Walks. It would be creative and artistic. We need more art.

    Samuel Conner , May 17, 2017 at 9:46 pm

    It sounds like the CAP JG proposal is "top down" in that the "palette" of jobs to be funded is decided by the same agency (or an agency at the same level of government) as the fund disbursement authority, or is specified in the law itself.

    IIRC, the JG concept proposed in the MMT primer would devolve the decision of "how to usefully employ willing underutilized workers" to local level. Funding would still be Federal. There would be some kind of "request for proposals/peer review" process to decide which locally-wanted projects would receive JG dollars (presumably in order to be a guarantee, enough projects would be approved for every locality to employ the available under-utilized willing workforce. If a locality only proposed one project, that would be funded)

    It that right, Lambert? Is "top down" another way that centrists could screw up a JG? And might the "local devolution" aspect of the NEP/MMT Primer concept appeal to folks on the right?

    washunate , May 18, 2017 at 12:13 am

    Great write up. I obviously have a long-running disagreement on the policy prescription of JG, but I do find it interesting talking about how groups like CAP present it outside the specific confines of MMT (and, apparently, without even tipping the hat to them ?).

    One concrete bit of info I would love to know is how they estimate 4.4 million workers for take-up. First, it's a hilarious instance of false precision. Second, it's remarkably low. $15/hr is approximately the median wage. Tens of millions of workers would sign up, both from the ranks of the crap jobs and from the ranks of those out of the labor force.

    [May 07, 2017] Prime-Age Employment Rate Hits New High for Recovery

    May 07, 2017 | economistsview.typepad.com
    point , May 07, 2017 at 05:34 AM
    Perhaps this report raises the possibility that this low pressure low growth economy may actually lead to a new high in the prime working age cohort, still with little wage growth.
    libezkova -> point... , May 07, 2017 at 01:33 PM
    Boomers are retiring and that increases employment in prime age (25-54) cohort. So to take only prime age is a little bit disingenuous. This effect needs to be taken into consideration.

    Those who were born before 1950 were probably the most numerous. They all will be over 67 at the end of the year.

    [Apr 19, 2017] Paul Krugman Gets Retail Wrong: They are Not Very Good Jobs

    Apr 19, 2017 | economistsview.typepad.com
    anne , April 17, 2017 at 05:55 AM
    http://cepr.net/blogs/beat-the-press/paul-krugman-gets-retail-wrong-they-are-not-very-good-jobs

    April 17, 2017

    Paul Krugman Gets Retail Wrong: They are Not Very Good Jobs

    Paul Krugman used his column * this morning to ask why we don't pay as much attention to the loss of jobs in retail as we do to jobs lost in mining and manufacturing. His answer is that in large part the former jobs tend to be more white and male than the latter. While this is true, although African Americans have historically been over-represented in manufacturing, there is another simpler explanation: retail jobs tend to not be very good jobs.

    The basic story is that jobs in mining and manufacturing tend to offer higher pay and are far more likely to come with health care and pension benefits than retail jobs. A worker who loses a job in these sectors is unlikely to find a comparable job elsewhere. In retail, the odds are that a person who loses a job will be able to find one with similar pay and benefits.

    A quick look at average weekly wages ** can make this point. In mining the average weekly wage is $1,450, in manufacturing it is $1,070, by comparison in retail it is just $555. It is worth mentioning that much of this difference is in hours worked, not the hourly pay. There is nothing wrong with working shorter workweeks (in fact, I think it is a very good idea), but for those who need a 40 hour plus workweek to make ends meet, a 30-hour a week job will not fit the bill.

    This difference in job quality is apparent in the difference in separation rates by industry. (This is the percentage of workers who lose or leave their job every month.) It was 2.4 percent for the most recent month in manufacturing. By comparison, it was 4.7 percent in retail, almost twice as high. (It was 5.2 percent in mining and logging. My guess is that this is driven by logging, but I will leave that one for folks who know the industry better.)

    Anyhow, it shouldn't be a mystery that we tend to be more concerned about the loss of good jobs than the loss of jobs that are not very good. If we want to ask a deeper question, as to why retail jobs are not very good, then the demographics almost certainly play a big role.

    Since only a small segment of the workforce is going to be employed in manufacturing regardless of what we do on trade (even the Baker dream policy will add at most 2 million jobs), we should be focused on making retail and other service sector jobs good jobs. The full agenda for making this transformation is a long one (higher minimum wages and unions would be a big part of the picture, along with universal health care insurance and a national pension system), but there is one immediate item on the agenda.

    All right minded people should be yelling about the Federal Reserve Board's interest rate hikes. The point of these hikes is to slow the economy and reduce the rate of job creation. The Fed's concern is that the labor market is getting too tight. In a tighter labor market workers, especially those at the bottom of the pecking order, are able to get larger wage increases. The Fed is ostensibly worried that this can lead to higher inflation, which can get us to a wage price spiral like we saw in the 70s.

    As I and others have argued, *** there is little basis for thinking that we are anywhere close to a 1970s type inflation, with inflation consistently running below the Fed's 2.0 percent target, (which many of us think is too low anyhow). I'd love to see Krugman pushing the cause of full employment here. We should call out racism and sexism where we see it, but this is a case where there is a concrete policy that can do something to address it. Come on Paul, we need your voice.

    * https://www.nytimes.com/2017/04/17/opinion/why-dont-all-jobs-matter.html

    ** https://www.bls.gov/news.release/empsit.t19.htm

    *** http://cepr.net/blogs/beat-the-press/overall-and-core-cpi-fall-in-march

    -- Dean Baker

    Fred C. Dobbs -> anne... , April 17, 2017 at 06:17 AM
    PK: Consider what has happened to department stores. Even as Mr. Trump was boasting about saving a few hundred jobs in manufacturing here and there, Macy's announced plans to close 68 stores and lay off 10,000 workers. Sears, another iconic institution, has expressed "substantial doubt" about its ability to stay in business.

    Overall, department stores employ a third fewer people now than they did in 2001. That's half a million traditional jobs gone - about eighteen times as many jobs as were lost in coal mining over the same period.

    And retailing isn't the only service industry that has been hit hard by changing technology. Another prime example is newspaper publishing, where employment has declined by 270,000, almost two-thirds of the work force, since 2000. ...

    (To those that had them, they were probably
    pretty decent jobs, albeit much less 'gritty'
    than mining or manufacturing.)

    BenIsNotYoda -> anne... , April 17, 2017 at 06:42 AM
    Dean is correct. Krugman just wants to play the racism card or tell people those who wish their communities were gutted that they are stupid.
    JohnH -> BenIsNotYoda... , April 17, 2017 at 06:48 AM
    Elite experts are totally flummoxed...how can they pontificate solutions when they are clueless?

    Roger Cohen had a very long piece about France and it discontents in the Times Sunday Review yesterday. He could not make heads or tails of the problem. Not worth the read.
    https://www.nytimes.com/2017/04/14/opinion/sunday/france-in-the-end-of-days.html?rref=collection%2Fcolumn%2Froger-cohen&action=click&contentCollection=opinion&region=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=collection&_r=0

    And experts wonder why nobody listens to them any more? Priceless!!!

    BenIsNotYoda -> JohnH... , April 17, 2017 at 07:34 AM
    clueless experts/academics. well said.
    paine -> anne... , April 17, 2017 at 08:27 AM
    Exactly dean
    Tom aka Rusty -> anne... , April 17, 2017 at 07:39 AM
    Krugman is an arrogant elitist who thinks people who disagree with him tend to be ignorant yahoos.

    Sort of a Larry Summers with a little better manners.

    anne -> Tom aka Rusty... , April 17, 2017 at 08:18 AM
    Krugman is an arrogant elitist who thinks people who disagree with him tend to be ignorant yahoos.

    [ This is a harsh but fair criticism, and even the apology of Paul Krugman was conditional and showed no thought to the other workers insulted. ]

    cm -> Tom aka Rusty... , April 17, 2017 at 08:11 AM
    There is a lot of elitism to go around. People will be much more reluctant to express publicly the same as in private (or pseudonymously on the internet?). But looking down on other people and their work is pretty widespread (and in either case there is a lot of assumption about the nature of the work and the personal attributes of the people doing it - usually of a derogatory type in both cases).

    I find it plausible that Krugman was referring those widespread stereotypes about job categories that (traditionally?) have not required a college degree, or have been relatively at the low end of the esteem scale in a given industry (e.g. in "tech" and manufacturing, QA/testing related work).

    It must be possible to comment on such stereotypes, but there is of course always the risk of being thought to hold them oneself, or indeed being complicit in perpetuating them.

    As a thought experiment, I suggest reviewing what you yourself think about occupations not held by yourself, good friends, and family members and acquaintainces you like/respect (these qualifications are deliberate). For example, you seem to think not very highly of maids.

    Of course, being an RN requires significantly more training than being a maid, and not just once when you start in your career. But at some level of abstraction, anybody who does work where their autonomy is quite limited (i.e. they are not setting objectives at any level of the organization) is "just a worker". That's the very stereotype we are discussing, isn't it?

    anne -> cm... , April 17, 2017 at 08:26 AM
    Nicely explained.
    paine -> anne... , April 17, 2017 at 08:40 AM
    Yes
    anne -> Tom aka Rusty... , April 17, 2017 at 08:24 AM
    Krugman thinks nurses are the equivalent of maids...

    [ The problem is that Paul Krugman dismissed the work of nurses and maids and gardeners as "menial." I find no evidence that Krugman understands that even after conditionally apologizing to nurses. ]

    paine -> anne... , April 17, 2017 at 08:42 AM
    Even if there are millions of mcjobs
    out there
    none are filled by mcpeople

    [Apr 16, 2017] The most common characteristic of people running their own business was that theyd been fired twice

    Notable quotes:
    "... things might have worked out with better luck on timing), you need your head examined to start a small business ..."
    "... If you can tolerate the BS, it is vastly better to be on a payroll. 90% of all new businesses fail and running one is no picnic. ..."
    "... And new business formation has dived in the US, due mainly IMHO to less than robust demand in many sectors of the economy. ..."
    "... You're so right. It used to be that there were set asides for small businesses but nowadays Federal and State Governments are only interested in contracts with large businesses. The SBA classification for small business is based on NAICS code (used to be SIC code) is usually $1-2 million or up to 500 employees. I wonder how they can be small businesses! ..."
    "... To survive, small businesses need to sell their goods/services to large businesses. Most of the decision makers who purchase these items are unreachable or already have their favorites. Unless your small business has invented a better mousetrap you're SOL! ..."
    Apr 16, 2017 | www.nakedcapitalism.com
    Yves Smith, April 16, 2017 at 5:00 pm

    As someone who has started three businesses, two of them successful (I went to Australia right before the Gulf War started, which led to new business in Sydney coming to a complete halt for six months; things might have worked out with better luck on timing), you need your head examined to start a small business. The most common characteristic of people running their own business was that they'd been fired twice.

    If you can tolerate the BS, it is vastly better to be on a payroll. 90% of all new businesses fail and running one is no picnic.

    And new business formation has dived in the US, due mainly IMHO to less than robust demand in many sectors of the economy.

    steelhead , April 16, 2017 at 5:41 pm

    Unless your family fully bankrolls you until BK kicks in (snark). I would have loved to write as a career. Unfortunately, at the time, promises that had been made were broken and I had to go to work for a F500 just to survive right after my undergraduate degree was completed. Fate and Karma.

    oh , April 16, 2017 at 5:56 pm

    You're so right. It used to be that there were set asides for small businesses but nowadays Federal and State Governments are only interested in contracts with large businesses. The SBA classification for small business is based on NAICS code (used to be SIC code) is usually $1-2 million or up to 500 employees. I wonder how they can be small businesses!

    To survive, small businesses need to sell their goods/services to large businesses. Most of the decision makers who purchase these items are unreachable or already have their favorites. Unless your small business has invented a better mousetrap you're SOL!

    [Apr 12, 2017] The Despair of Learning That Experience No Longer Matters

    Apr 12, 2017 | economistsview.typepad.com
    RGC , April 12, 2017 at 06:41 AM
    The Despair of Learning That Experience No Longer Matters

    By Benjamin Wallace-Wells April 10, 2017

    .....................

    The arguments about Case and Deaton's work have been an echo of the one that consumed so much of the primary campaign, and then the general election, and which is still unresolved: whether the fury of Donald Trump's supporters came from cultural and racial grievance or from economic plight. Case and Deaton's scholarship does not settle the question. As they write, more than once, "more work is needed."

    But part of what Case and Deaton offer in their new paper is an emotional logic to an economic argument. If returns to experience are in decline, if wisdom no longer pays off, then that might help suggest why a group of mostly older people who are not, as a group, disadvantaged might become convinced that the country has taken a turn for the worse. It suggests why their grievances should so idealize the past, and why all the talk about coal miners and factories, jobs in which unions have codified returns to experience into the salary structure, might become such a fixation. Whatever comes from the deliberations over Case and Deaton's statistics, there is within their numbers an especially interesting story.

    http://www.newyorker.com/news/benjamin-wallace-wells/the-despair-of-learning-that-experience-no-longer-matters

    [Apr 12, 2017] Why losing your job leads to a very long-lasting decline in your lifetime wages

    Apr 12, 2017 | lse.ac.uk
    Gregor Jarosch (2015, Chicago, Stanford): Jarosch writes a model to explain why losing your job leads to a very long-lasting decline in your lifetime wages. His hypothesis is that this is due to people climbing a ladder of jobs that are increasingly secure, so that when one has the misfortune of losing a job, this leads to a fall down the ladder and a higher likelihood of having further spells of unemployment in the future. He uses administrative social security data to find some evidence for this hypothesis.

    [Apr 11, 2017] Legacy systems written in COBOL that depends on a shrinking pool of aging programmers to baby

    Notable quotes:
    "... Of course after legacy systems [people] were retrenched or shown the door in making government more efficient MBA style, some did hit the jack pot as consultants and made more that on the public dime . but the Gov balance sheet got a nice one time blip. ..."
    "... In the government, projects "helped" by Siemens, especially at the Home and Passport Offices, cost billions and were abandoned. At my former employer, an eagle's nest, it was Deloittes. At my current employer, which has lost its passion to perform, it's KPMG and EY helping. ..."
    "... My personal favourite is Accenture / British Gas . But then you've also got the masterclass in cockups Raytheon / U.K. Border Agency . Or for sheer breadth of failure, there's the IT Programme That Helped Kill a Whole Bank Stone Dead ( Infosys / Co-op ). ..."
    "... I am an assembler expert. I have never seen a job advertised, but a I did not look very hard. Send me your work!!! IBM mainframe assembler ..."
    "... What about Computer Associates? For quite a while they proudly maintained the worst reputation amongst all of those consultancy/outsourcing firms. ..."
    "... My old boss used to say – a good programmer can learn a new language and be productive in it in in space of weeks (and this was at the time when Object Oriented was the new huge paradigm change). A bad programmer will write bad code in any language. ..."
    "... The huge shortcoming of COBOL is that there are no equivalent of editing programs. ..."
    "... Original programmers rarely wrote handbooks ..."
    "... That is not to say that it is impossible to move off legacy platforms ..."
    "... Wherefore are ye startup godz ..."
    Apr 11, 2017 | www.nakedcapitalism.com
    After we've been writing about the problem of the ticking time bomb of bank legacy systems written in COBOL that depends on a shrinking pool of aging programmers to baby them for now nearly two years, Reuters reports on the issue. Chuck L flagged a Reuters story, Banks scramble to fix old systems as IT 'cowboys' ride into sunset, which made some of the points we've been making but frustratingly missed other key elements.

    Here's what Reuters confirmed:

    Banks and the Federal government are running mission-critical core systems on COBOL, and only a small number of older software engineers have the expertise to keep the systems running . From the article:

    In the United States, the financial sector, major corporations and parts of the federal government still largely rely on it because it underpins powerful systems that were built in the 70s or 80s and never fully replaced

    Experienced COBOL programmers can earn more than $100 an hour when they get called in to patch up glitches, rewrite coding manuals or make new systems work with old.

    For their customers such expenses pale in comparison with what it would cost to replace the old systems altogether, not to mention the risks involved.

    Here's what Reuters missed:

    Why young coders are not learning COBOL . Why, in an era when IT grads find it hard to get entry-level jobs in the US, are young programmers not learning COBOL as a guaranteed meal ticket? Basically, it's completely uncool and extremely tedious to work with by modern standards. Given how narrowminded employers are, if you get good at COBOL, I woudl bet it's assumed you are only capable of doing grunt coding and would never get into the circles to work on the fantasy of getting rich by developing a hip app.

    I'm sure expert readers will flag other issues, but the huge shortcoming of COBOL is that there are no equivalent of editing programs. Every line of code in a routine must be inspected and changed line by line.

    How banks got in this mess in the first place. The original sin of software development is failure to document the code. In fairness, the Reuters story does allude to the issue:

    But COBOL veterans say it takes more than just knowing the language itself. COBOL-based systems vary widely and original programmers rarely wrote handbooks, making trouble-shooting difficult for others.

    What this does not make quite clear is that given the lack of documentation, it will always be cheaper and lower risk to have someone who is familiar with the code baby it, best of all the guy who originally wrote it. And that means any time you bring someone in, they are going to have to sort out not just the code that might be causing fits and starts, but the considerable interdependencies that have developed over time. As the article notes:

    "It is immensely complex," said [former chief executive of Barclays PLC Anthony] Jenkins, who now heads startup 10x Future Technologies, which sells new IT infrastructure to banks. "Legacy systems from different generations are layered and often heavily intertwined."

    I had the derivatives trading firm O'Connor & Associates as a client in the early 1990s. It was widely recognized as being one of the two best IT shops in all of Wall Street at the time. O'Connor was running the biggest private sector Unix network in the world back then. And IT was seen as critical to the firm's success; half of O'Connor's expenses went to it.

    Even with it being a huge expense, and the my client, the CIO, repeatedly telling his partners that documenting the code would save 20% over the life of the software, his pleas fell on deaf ears. Even with the big commitment to building software, the trading desk heads felt it was already taking too long to get their apps into production. Speed of deployment was more important to them than cost or long-term considerations. 1 And if you saw this sort of behavior with a firm where software development was a huge expense for partners who were spending their own money, it's not hard to see how managers in a firm where the developers were much less important and management was fixated on short term earnings targets to blow off tradeoff like this entirely.

    Picking up sales patter from vendors, Reuters is over-stating banks' ability to address this issue . Here is what Reuters would have you believe:

    The industry appears to be reaching an inflection point, though. In the United States, banks are slowly shifting toward newer languages taking cue from overseas rivals who have already made the switch-over.

    Commonwealth Bank of Australia, for instance, replaced its core banking platform in 2012 with the help of Accenture and software company SAP SE. The job ultimately took five years and cost more than 1 billion Australian dollars ($749.9 million).

    Accenture is also working with software vendor Temenos Group AG to help Swedish bank Nordea make a similar transition by 2020. IBM is also setting itself up to profit from the changes, despite its defense of COBOL's relevance. It recently acquired EzSource, a company that helps programmers figure out how old COBOL programs work.

    The conundrum is the more new routines banks pile on top of legacy systems, the more difficult a transition becomes. So delay only makes matters worse. Yet the incentives of everyone outside the IT areas is to hope they can ride it out and make the legacy system time bomb their successor's problem.

    If you read carefully, Commonwealth is the only success story so far. And it's vastly less complex than that of many US players. First, it has roughly A$990 billion or $740 billion in assets now. While that makes it #46 in the world (and Nordea is of similar size at #44 as of June 30, 2016), JP Morgan and Bank of America are three times larger. Second, and perhaps more important, they are the product of more bank mergers. Commonwealth has acquired only four banks since the computer era. Third, many of the larger banks are major capital markets players, meaning their transaction volume relative to their asset base and product complexit is also vastly greater than for a Commonwealth. Finally, it is not impossible that as a government owned bank prior to 1990 that not being profit driven, Commonwealth's software jockeys might have documented some of the COBOL, making a transition less fraught.

    Add to that that the Commonwealth project was clearly a "big IT project". Anything over $500 million comfortably falls into that category. The failure rate on big IT projects is over 50%; some experts estimate it at 80% (costly failures are disguised as well as possible; some big IT projects going off the rails are terminated early).

    Mind you, that is not to say that it is impossible to move off legacy platforms. The issue is the time and cost (as well as risk). One reader, I believe Brooklyn Bridge, recounted a prototypical conversation with management in which it became clear that the cost of a migration would be three times a behemoth bank's total profit for three years. That immediately shut down the manager's interest.

    Estimates like that don't factor in the high odds of overruns. And even if it is too high for some banks by a factor of five, that's still too big for most to stomach until they are forced to. So the question then becomes: can they whack off enough increments of the problem to make it digestible from a cost and risk perspective? But the flip side is that the easier parts to isolate and migrate are likely not to be the most urgent to address.

    ____
    1 The CIO had been the head index trader and had also help build O'Connor's FX derivatives trading business, so he was well aware of the tradeoff between trading a new instrument sooner versus software life cycle costs. He was convinced his partners were being short-sighted even over the near term and had some analyses to bolster that view. So this was the not empire-building or special pleading. This was an effort at prudent management.

    Clive , April 11, 2017 at 5:51 am

    I got to the bit which said:

    Accenture is also working with software vendor Temenos Group AG to help

    and promptly splurted my coffee over my desk. "Help" is the last thing either of these two ne'redowells will be doing.

    Apart from the problems ably explained in the above piece, I'm tempted to think industry PR and management gullibility to it are the two biggest risks.

    Marina Bart , April 11, 2017 at 6:06 am

    As someone who used to do PR for that industry (worked with Accenture, among others), I concur that those are real risks.

    skippy , April 11, 2017 at 6:07 am

    Heaps of IT upgrades have gone a bit wonky over here of late, Health care payroll, ATO, Centerlink, Census, all assisted by private software vendors and consultants – after – drum roll .. PR management did a "efficiency" drive [by].

    Of course after legacy systems [people] were retrenched or shown the door in making government more efficient MBA style, some did hit the jack pot as consultants and made more that on the public dime . but the Gov balance sheet got a nice one time blip.

    disheveled . nice self licking icecream cone thingy and its still all gov fault . two'fer

    Colonel Smithers , April 11, 2017 at 7:40 am

    Thank you, Skippy.

    It's the same in the UK as Clive knows and can add.

    In the government, projects "helped" by Siemens, especially at the Home and Passport Offices, cost billions and were abandoned. At my former employer, an eagle's nest, it was Deloittes. At my current employer, which has lost its passion to perform, it's KPMG and EY helping.

    What I have read / heard is that the external consultants often cost more and will take longer to do the work than internal bidders. The banks and government(s) run an internal market and invite bids.

    Clive , April 11, 2017 at 9:33 am

    Oh, where to start!

    My personal favourite is Accenture / British Gas . But then you've also got the masterclass in cockups Raytheon / U.K. Border Agency . Or for sheer breadth of failure, there's the IT Programme That Helped Kill a Whole Bank Stone Dead ( Infosys / Co-op ).

    They keep writing books on how to avoid this sort of thing. Strangely enough, none of them ever tell CEOs or CIOs to pay people decent wages, not treat them like crap and to train up new recruits now and again. And also fail to highlight that though you might like to believe you can go into the streets in Mumbai, Manila or Shenzhen waving a dollar bill and have dozens of experienced, skilled and loyal developers run to you like a cat smelling catnip, that may only be your wishful thinking.

    Just wait 'til we get started trying to implement Brexit

    Raj , April 11, 2017 at 12:10 pm

    Oh man, if you only had a look at the kind of graduates Infosys hires en masse and the state of graduate programmers coming out of universities here in India you'd be amazed how we still haven't had massive hacks. And now the government, so confident in the Indian IT industry's ability to make big IT systems is pushing for the universal ID system(aadhar) to be made mandatory for even booking flight tickets!

    So would you recommend graduates do learn COBOL to get good jobs there in the USA?

    Clive , April 11, 2017 at 12:22 pm

    I'd pick something really obscure, like maybe MUMPS - yes, incredibly niche but that's the point, you can corner a market. You might not get oodles of work but what you do get you can charge the earth for. Getting real-world experience is tricky though.

    Another alternative, a little more mainstream is assembler. But that is hideous. You deserve every penny if you can learn that and be productive in it.

    visitor , April 11, 2017 at 1:36 pm

    Is anybody still using Pick? Or RPG?

    Regarding assembler: tricky, as the knowledge is tied to specific processors - and Intel, AMD and ARM keep churning new products.

    Synoia , April 11, 2017 at 3:40 pm

    I am an assembler expert. I have never seen a job advertised, but a I did not look very hard. Send me your work!!! IBM mainframe assembler

    visitor , April 11, 2017 at 10:02 am

    What about Computer Associates? For quite a while they proudly maintained the worst reputation amongst all of those consultancy/outsourcing firms.

    How does Temenos compare with Oracle, anyway?

    Clive , April 11, 2017 at 10:05 am

    How does Temenos compare with Oracle, anyway?

    Way worse. Yes, I didn't believe it was possible, either.

    MoiAussie , April 11, 2017 at 6:13 am

    For a bit more on why Cobol is hard to use see Why We Hate Cobol . To summarise, Cobol is barely removed from programming in assembler, i.e. at the lowest level of abstraction, with endless details needing to be taken care of. It dates pack to the punched card era.

    It is particularly hard for IT grads who have learned to code in Java or C# or any modern language to come to grips with, due to the lack of features that are usually taken for granted. Those who try to are probably on their own due to a shortage of teachers/courses. It's a language that's best mastered on the job as a junior in a company that still uses it, so it's hard to get it on your CV before landing such a job.

    There are potentially two types of career opportunities for those who invest the time to get up-to-speed on Cobol. The first is maintenance and minor extension of legacy Cobol applications. The second and potentially more lucrative one is developing an ability to understand exactly what a Cobol program does in order to craft a suitable replacement in a modern enterprise grade language.

    MartyH , April 11, 2017 at 12:53 pm

    Well, COBOL's shortcomings are part technical and part "religious". After almost fifty years in software, and with experience in many of the "modern enterprise grade languages", I would argue that the technical and business merits are poorly understood. There is an enormous pressure in the industry to be on the "latest and greatest" language/platform/framework, etc. And under such pressure to sell novelty, the strengths of older technologies are generally overlooked.

    @Yves, I would be glad to share my viewpoint (biases, warts and all) at your convenience. I live nearby.

    vlade , April 11, 2017 at 7:52 am

    "It is particularly hard for IT grads who have learned to code in Java or C# or any modern language to come to grips with"

    which tells you something about the quality of IT education these days, where "mastering" a language is more often more important than actually understanding what goes on and how.

    My old boss used to say – a good programmer can learn a new language and be productive in it in in space of weeks (and this was at the time when Object Oriented was the new huge paradigm change). A bad programmer will write bad code in any language.

    craazyboy , April 11, 2017 at 9:32 am

    IMHO, your old boss is wrong about that. Precisely because OO languages are a huge paradigm change and require a programmer to nearly abandon everything he/she knows about programming. Then get his brain around OOP patterns when designing a complex system. Not so easy.

    As proof, I put forth the 30% success rate for new large projects in the latter 90s done with OOP tech. Like they say, if it was easy, everyone would be doing it.

    More generally, on the subject of Cobol vs Java or C++/C#, in the heyday of OOPs rollout in the early 90s, corporate IT spent record amounts on developing new systems. As news of the Y2K problem spread, they very badly wanted to replace old Cobol/mainframe legacy systems. As things went along, many of those plans got rolled back due to perceived problems with viability, cost and trained personnel.

    Part of the reason was existing Cobol IT staff took a look at OOP, then at their huge pile of Cobol legacy code and their brains melted down. I was around lots of them and they had all the symptoms of Snow Crash. [Neil Stephenson] I hope they got better.

    Marco , April 11, 2017 at 12:21 pm

    It never occurred to me that the OOP-lite character of the newer "hipster" languages (Golang / Go or even plain old javascript) are a response to OOP run amok.

    Arizona Slim , April 11, 2017 at 9:35 am

    A close friend is a retired programmer. In her mind, knowing how to solve the problem comes​ first.

    MartyH , April 11, 2017 at 12:54 pm

    @Arizona_Slim: I agree with her. And COBOL lets you write business logic with a minimum of distractions.

    Mel , April 11, 2017 at 11:36 am

    In the university course I took, we were taught Algol-60. Then it turned out that the univ. had no budget for Algol compiles for us. So we wrote our programs in Algol-60 for 'publication' and grading, and rewrote them in FORTRAN IV to run in a cheap bulk FORTRAN execution system for results. Splendid way to push home Turing's point that all computing is the same. So when the job needed COBOL, "Sure, bring it on."

    rfdawn , April 11, 2017 at 1:30 pm

    My old boss used to say – a good programmer can learn a new language and be productive in it in in space of weeks (and this was at the time when Object Oriented was the new huge paradigm change). A bad programmer will write bad code in any language.

    Yes. Learning a new programming language is fairly easy but understanding existing patchwork code can be very hard indeed. It just gets harder if you want to make reliable changes.

    HR thinking, however, demands "credentials" and languages get chosen as such based on their simple labels. They are searchable on L**kedIn!

    A related limitation is the corporate aversion to spending any time or money on employee learning of either language or code. There may not be anyone out there with all the skills needed but that will not stop managers from trying to hire them or, better still, just outsourcing the whole mess.

    Either choice invites fraud.

    reslez , April 11, 2017 at 2:02 pm

    Your boss was correct in my opinion - but also atypical. Most firms look for multi-years of experience in a language. They'll toss your resume if you don't show you've used it extensively.

    Even if a new coder spent the time to learn COBOL, if he wasn't using it on the job or in pretty significant projects he would not be considered. And there aren't exactly many open source projects out there written in COBOL to prove one's competence. The limiting factor is not whether you "know" COBOL, or whether you know how to learn it. The limiting factor is the actual knowledge of the system, how it was implemented, and all the little details that never get written down no matter how good your documentation. If your system is 30+ years old it has complexity hidden in every nook and cranny.

    As for the language itself, COBOL is an ancient language from a much older paradigm than what students learn in school today. Most students skip right past C, they don't learn structural programming. They expect to have extensive libraries of pre-written routines available for reuse. And they expect to work in a modern IDE (development environment), a software package that makes it much easier to write and debug code. COBOL doesn't have tools of this level.

    When I was in the Air Force I was trained as a programmer. COBOL was one of the languages they "taught". I never used it, ever, and wouldn't dream of trying it today. It's simply too niche. I would never recommend anyone learn COBOL in the hopes of getting a job. Get the job first, and if it happens to include some COBOL get the expertise that way.

    d , April 11, 2017 at 4:04 pm

    having seen the 'high level code' in C++, not sure what makes it 'modern'.its really an out growth of C, which is basically the assembler language of Unix. which it self is no spring chicken. mostly what is called 'modern' is just the latest fad, has the highest push from vendors. and sadly what we see in IT, is that the IT trade magazines are more into what they sell, that what companies need (maybe because of advertising?)

    as to why schools tend to teach these languages than others? mainly cause its hip. its also cheaper for the schools, as they dont have much in the way of infrastructure to teach them ( kids bring their own computers). course teachers are as likely to be influenced by the latest 'shinny;' thing as any one else

    craazyboy , April 11, 2017 at 4:34 pm

    C++ shares most of the core C spec but that's it. [variables and scope, datatypes, functions sorta, math and logic operatives, logic control statements] The reason you can read high level C++ is because it uses objects that hide the internal code and are given names that describe their use which if done right makes the code somewhat readable, along with a short comment header, and self documenting.

    Then at high level most code is procedural and/or event driven, which makes it appear to function like C or any other procedural language. Without the Goto statements and subroutines, because that functionality is now encapsulated within the C++ objects. {which are a datatype that combines data structures and related functions that act on this data)

    ChrisPacific , April 11, 2017 at 5:31 pm

    Well put. I was going to make this point. Note that the today's IT grads struggle with Cobol for the same reason that modern airline pilots would struggle to build their own airplane. The industry has evolved and become much more specialized, and standard 'solved' problems have migrated into the core toolsets and become invisible to developers, who now work at a much higher level of abstraction. So for example a programmer who learned using BASIC on a Commodore 64 probably knows all about graphics coding by direct addressing of screen memory, which modern programmers would consider unnecessary at best and dangerous at worst. Not to mention it's exhausting drudgery compared to working with modern toolsets.

    The other reason more grads don't learn COBOL is because it's a sunset technology. This is true even if systems written in COBOL are mission critical and not being replaced. As more and more COBOL programmers retire or die, banks will eventually reach the point where they don't have enough skilled staff available to keep their existing systems running. If they are in a position where they have to fix things anyway, for example due to a critical failure, they will be forced to resort to cross-training other developers, at great expense and pain for all concerned, and with no guarantee of success. One or two of these experiences will be enough to convince them that migration is necessary, whatever the cost (if their business survives them, which isn't a given when it comes to critical failures involving out of date and poorly-understood technology). And while developers with COBOL skills will be able to name their own price during those events, it's not likely to be a sustainable working environment in the longer term.

    It would take a significant critical mass of younger programmers deciding to learn COBOL to change this dynamic. One person on their own isn't going to make any difference, and it's not career advice I would ever give to a young graduate looking to enter IT.

    I am an experienced developer who has worked with a lot of different languages, including some quite low level ones in my early days. I don't know COBOL, but I am confident that I could learn it well enough to perform code archaeology on it given enough time (although probably nowhere near as efficiently as someone who built a career on it). Whether I could be convinced to do so is another question. If you paid me never-need-to-work-again money, then maybe. But nobody is ever going to do that unless it's a crisis, and I'm not likely to sign up for a death march situation with my current family commitments.

    Steve , April 11, 2017 at 6:47 am

    "Experienced COBOL programmers can earn more than $100 an hour"

    Then the people hiring are getting them dirt cheap. This is a lot closer to consulting than contracting–a very specialized skill set and only a small set of people available. The rate should be $200-300/hour.

    reslez , April 11, 2017 at 2:46 pm

    I wonder if it has something to do with the IRS rules that made that guy fly a plane into an IRS office? Because of the rules, programmers aren't allowed to work as independent consultants. Since their employer/middleman takes a huge cut the pay they receive is a lot lower. Coders with a security clearance make quite a bit but that requires an "in", getting the clearance in the first place which most employers won't pay for.

    d , April 11, 2017 at 4:05 pm

    not any place i know of. maybe in an extreme crunch. cause today the most COBOL jobs have been offshored. and maybe thats why kids dont lean COBOL.

    ChrisPacific , April 11, 2017 at 5:31 pm

    I had the same thought. Around here if you want a good one, you would probably need to add another zero to that.

    shinola , April 11, 2017 at 6:52 am

    Cobol? Are they running it on refrigerator sized machines with reel-to-reel tapes?

    ejf , April 11, 2017 at 8:45 am

    you're right. I've seen it on cluckny databases in a clothing firm in NY State, a seed and grain distribution facility in Minnesota and a bank in Minneapolis. They're horrible and Yves is right – documentation is completely ABSENT

    d , April 11, 2017 at 4:06 pm

    in small business, where every penny counts, they dont see the value in documentation. not even when they get big either

    Disturbed Voter , April 11, 2017 at 7:05 am

    No different than the failure of the public sector to maintain dams, bridges and highways. Basic civil engineering but our business model never included maintenance nor replacement costs. That is because our business model is accounting fraud.

    I grew up on Fortran, and Cobol isn't too different, just limited to 2 points past the decimal to the right. I feel so sorry for these code jockies who can't handle a bit of drudgery, who can't do squat without a gigabyte routine library to invoke. Those languages as scripting languages or report writers back in the old days.

    Please hire another million Indian programmers they don't mind being poorly paid or the drudgery. Americans and Europeans are so over-rated. Business always complains they can't hire the right people some job requires 2 PhDs and we can't pay more than $30k, am I right? Business needs slaves, not employees.

    d , April 11, 2017 at 4:08 pm

    COBOL hasnt been restricted to 2 points to the right of decimal place. for decades

    clarky90 , April 11, 2017 at 7:06 am

    The 'Novopay debacle'

    This was a "new payroll" system for school teachers in NZ. It was an ongoing disaster. If something as simple (?) as paying NZ teachers could turn into such a train-wreck, imagine what updating the software of the crooked banks could entail. I bet that there are secret frauds hidden in the ancient software, like the rat mummies and cat skeletons that one finds when lifting the floor of old houses.

    https://en.wikipedia.org/wiki/Novopay

    "Novopay is a web-based payroll system for state and state integrated schools in New Zealand, processing the pay of 110,000 teaching and support staff at 2,457 schools .. From the outset, the system led to widespread problems with over 8,000 teachers receiving the wrong pay and in some cases no pay at all; within a few months, 90% of schools were affected .."

    "Many of the errors were described as 'bizarre'. One teacher was paid for 39 days, instead of 39 hours getting thousands of dollars more than he should have. Another teacher was overpaid by $39,000. She returned the money immediately, but two months later, had not been paid since. A relief teacher was paid for working at two different schools on the same day – one in Upper Hutt and the other in Auckland. Ashburton College principal, Grant McMillan, said the 'most ludicrous' problem was when "Novopay took $40,000 directly out of the school bank account to pay a number of teachers who had never worked at the college".

    Can you imagine this, times 10,000,000????

    d , April 11, 2017 at 4:12 pm

    this wasnt COBOL. or even a technology problem. more like a management one. big failures tend to be that way

    vlade , April 11, 2017 at 7:48 am

    "but the huge shortcoming of COBOL is that there are no equivalent of editing programs. Every line of code in a routine must be inspected and changed line by line"
    I'm not sure what you mean by this.

    If you mean that COBOL doesn't have the new flash IDEs that can do smart things with "syntactic sugar", then it really depends on the demand. Smart IDEs can be written for pretty much any languages (smart IDEs work by operating on ASTs, which are part and parcel of any compiler. The problem is more of what to do if you have an externalised functions etc, which is for example why it took so long for those smart IDEs to work with C++ and its linking model). The question is whether it pays – and a lot of old COBOL hands eschew anything except for vi (or equivalent) because coding should be done by REAL MEN.

    On the general IT problem. There are three problems, which are sort of related but not.

    The first problem is the interconnectedness of the systems. Especially for a large bank, it's not often clear where one system ends and the other begins, what are the side-effects of running something (or not running), who exactly produces what outputs and when etc. The complexity is more often at this level than cobol (or any other) line-by-line code.

    The second problem is the IT personell you get. If you're unlucky, you get coding monkeys, who barely understand _any_ programming language (there was time I didn't think people like that get hired. I now know better), and have no idea what analytical and algorithmic thinking is. If you're lucky, you get a bunch of IT geeks, who can discuss the latest technology till cows come home, know the intricate details of what a sequence point in C++ is and how it affects execution, but don't really care that much about the business. Then you get some possibly even brilliant code, but often also get unnecessary technological artifacts and new technologies just because they are fun – even though a much simpler solution would work just as well if not better. TBH, you can get this from the other side too, someone who understands the business but doesn't know even basic language techniques, which generally means their code works very well for the business, but is a nightmare to maintain (a typical population of this groups are front office quants).

    If you are incredibily lucky, you get someone who understands the business and happens to know how to code well too. Unfortunately, this is almost a mythical beast, especially since neitehr IT nor the business encourage people to understand each other.

    Which is what gets me to the thirds point – politics of it. And that's, TBH, is why most projects fail. Because it's easier to staff a project with 100 developers and then say all that could have been done was done, than get 10 smart people working on it, but risk that if it fails you get told you haven't spent enough resources. "We are not spending enough money" is paradoxically one of the "problems" I often see here, when the problem really is "we're not spending money smartly enough". Because in an organization budget=power. I have yet to see an IT project that would have 100+ developers that would _really_ succeed (as opposed to succeed by redefining what it was to deliver to what was actually delivered).

    Oh, and last point, on the documentation. TBH, documentation of the code is superfluous if a) it's clear what business problem is being solved b) has a good set of test cases c) the code is reasonably cleanly written (which tends to be the real problem). Documenting code by anything else but example is in my experience just a costly exercise. Mind you, this is entirely different from documenting how systems hang together and how their interfaces work.

    Yves Smith Post author , April 11, 2017 at 7:52 am

    On the last point, I have to tell you I in short succession happened to work not just with O'Connor, but about a year later, with Bankers Trust, then regarded as the other top IT shop on Wall Street. Both CIOs would disagree with you vehemently on your claim re documentation.

    vlade , April 11, 2017 at 8:25 am

    Yes, in 90s there was a great deal of emphasis on code documentation. The problem with that is that the requirements in real world change really quick. Development techniques that worked for sending the man to the moon don't really work well on short-cycle user driven developments.

    90s was mostly the good old waterfall method (which was really based on the NASA techniques), but even as early as 2000s it started to change a lot. Part of it come from the realization that the "building" metaphor that was the working approach for a lot of that didn't really work for code.

    When you're building a bridge, it's expensive, so you have to spend a lot of time with blueprints etc. When you're doing code, documenting it in "normal" human world just adds a superfluous step. It's much more efficient to make sure your code is clean and readable than writing extra documents that tell you what the code does _and_ have to be kept in sync all the time.

    Moreover, bits like pretty pictures showing the code interaction, dependencies and sometimes even more can now be generated automatically from the code, so again, it's more efficient to do that than to keep two different versions of what should be the same truth.

    Yves Smith Post author , April 11, 2017 at 8:31 am

    With all due respect, O'Connor and Bankers Trust were recognized at top IT shops then PRECISELY because they were the best, bar none, at "short cycle user driven developments." They were both cutting edge in derivatives because you had to knock out the coding to put new complex derivatives into production.

    Don't insinuate my clients didn't know what they were talking about. They were running more difficult coding environments than you've ever dealt with even now. The pace of derivative innovation was torrid then and there hasn't been anything like it since in finance. Ten O'Connor partners made $1 billion on the sale of their firm, and it was entirely based on the IT capabilities. That was an unheard of number back then, 1993, particularly given the scale of the firm (one office in Chicago, about 250 employees).

    vlade , April 11, 2017 at 9:23 am

    Yves,

    I can't talk about how good/bad your clients were except for generic statements – and the above were generic statements that in 90s MOST companies used waterfall.

    At the same time please do not talk about what programming environments I was in, because you don't know. That's assuming it's even possible to compare coding environments – because quant libraries that first and foremost concentrate on processing data (and I don't even know it's what was the majority of your clients code) is a very very different beast from extremely UI complex but computationally trivial project, or something that has both trivial UI and computation but is very database heavy etc. etc.

    I don't know what specific techniques your clients used. But the fact they WANTED to have more documentation doesn't mean that having more documentation would ACTUALLY be useful.

    With all due respect, I've spent the first half of 00s talking to some of the top IT development methodologists of the time, from the Gang Of Four people to Agile Manifesto chaps, and practicing/leading/implementing SW development methodology across a number of different industries (anything from "pure" waterfall to variants of it to XP).

    The general agreement across the industry was (and I believe still is) that documenting _THE CODE_ (outside of the code) was waste of time (actually it was ranging from any design doc to various levels of design doc, depending on who you were talking to).

    Again, I put emphasis on the code – that is not the same as say having a good whitepaper telling you how the model you're implementing works, or what the hell the users actually want – i.e. capturing the requirements.

    As an aside – implementation of new derivative payoffs can be actually done in a fairly trivial way, depending on how exactly you model them in the code. I've wrote an extensive library that did it, whose whole purpose was to deal with new products and allow them to be incubated quickly and effectively – and that most likely involved doing things that no-one at BT/O'Conner even looked at in early 1990s (because XVA wasn't even gleam in anyone's eye at that time).

    Clive , April 11, 2017 at 9:54 am

    Well at my TBTF, where incomprehensible chaos rules, the only thing - and I do mean the only thing - that keeps major disasters averted (perhaps "ameliorated" is putting it better) is where some of the key systems are documented. Most of the core back end is copiously and reasonably well documented and as such can survive a lot of mistreatment at the hands of the current outsourcer de jour.

    But some "lower priority" applications are either poorly documented or not documented at all. And a "low priority" application is only "low priority" until it happens to sit on the critical path. Even now I have half of Bangalore (it seems so, at any rate) sitting there trying to reverse engineer some sparsely documented application - although I suspect there was documentation, it just got "lost" in a succession of handovers - desperate in their attempts to figure out what the application does and how it does it. You can hear the fear in their voices, it is scary stuff, given how crappy-little-VB6-pile-of-rubbish is now the only way to manage a key business process where there are no useable comments in the code and no other application documentation, you are totally, totally screwed.

    visitor , April 11, 2017 at 3:51 pm

    Your TBTF corporation is ISO 9000-3,9001/CMM/TickIt/ITIL certified, of course?

    Skip Intro , April 11, 2017 at 11:48 am

    It seems like you guys are talking past each other to some degree. I get the sense that vlade is talking about commenting code, and dismissing the idea of code comments that don't live with the code. Yves' former colleagues are probably referring to higher level specifications that describe the functionality, requirements, inputs, and outputs of the various software modules in the system.
    If this is the case, then you're both right. Even comments in the code can tend to get out of date due to application of bug fixes, and other reasons for 'drift' in the code, unless the comments are rigorously maintained along wth the code. Were the code-level descriptions maintained somewhere else, that would be much more difficult and less useful. On the other hand the higher-level specifications are pretty essential for using, testing, and maintaining the software, and would sure be useful for someone trying to replace all or parts of the system.

    Clive , April 11, 2017 at 12:30 pm

    In my experience you need a combination of both. There is simply no substitute for a brief line in some ghastly nested if/then procedure that says "this section catches host offline exceptions if the transaction times out and calls the last incremental earmarked funds as a fallback" or what-have-you.

    That sort of thing can save weeks of analysis. It can stop an outage from escalating from a few minutes to hours or even days.

    Mathiasalexander , April 11, 2017 at 8:22 am

    They could try building the new system from scratch as a stand alone and then entering all the data manually.

    Ivy , April 11, 2017 at 10:39 am

    There is some problem-solving/catastrophe-avoiding discussion about setting up a new bank with a clean, updated (i.e., this millennium) IT approach and then merging the old bank into that and decommissioning that old one. Many questions arise about applicable software both in-house and at all those vendor shops that would need some inter-connectivity.

    Legacy systems lurk all over the economy, from banks to utilities to government and education. The O'Connor CIO advice relating to life-cycle costing was probably unheard in many places besides
    The Street.

    d , April 11, 2017 at 4:24 pm

    building them from scratch is usually the most likely to be a failure as to many in both IT and business only know parts of the needs. and if a company cant implement a vendor supplied package to do the work, what makes us think they can do it from scratch

    visitor , April 11, 2017 at 9:44 am

    I did learn COBOL when I was at the University more than three decades ago, and at that time it was already decidedly "uncool". The course, given by an old-timer, was great though. I programmed in COBOL in the beginnings of my professional life (MIS applications, not banking), so I can provide a slightly different take on some of those issues.

    As far as the language itself is concerned, disregard those comments about it being like "assembly". COBOL already showed its age in the 1980s, but though superannuated it is a high-level language geared at dealing with database records, money amounts (calculations with controlled accuracy), and reports. For that kind of job, it was not that bad.

    The huge shortcoming of COBOL is that there are no equivalent of editing programs.

    While in the old times a simple text editor was the main tool for programming in that language, modern integrated, interactive development environments for COBOL have been available for quite a while - just as there are for Java, C++ or C#.

    And that is a bit of an issue. For, already in my times, a lot, possibly most COBOL was not programmed manually, but generated automatically - typically from pseudo-COBOL annotations or functional extensions inside the code. Want to access a database (say Oracle, DB2, Ingres) from COBOL, or generate a user interface (for 3270 or VT220 terminals in those days), or perform some networking? There were extensions and code generators for that. Nowadays you will also find coding utilities to manipulate XML or interface with routines in other programming languages. All introduce deviations and extensions from the COBOL norm.

    If, tomorrow, I wanted to apply for a job at one of those financial institutions battling with legacy software, my rusty COBOL programming skills would not be the main problem, but my lack of knowledge of the entire development environment. That would mean knowing those additional code generators, development environments, extra COBOL-geared database/UI/networking/reporting modules. In an IBM mainframe environment, this would probably mean knowing things like REXX, IMS or DB2, CICS, etc (my background is DEC VMS and related software, not IBM stuff).

    So those firms are not holding dear onto just COBOL programmers - they are desperately hoarding people who know their way around in mainframe programming environments for which training (in Universities) basically stopped in the early 1990s.

    Furthermore, I suspect that some of those code generators/interfaces might themselves be decaying legacy systems whose original developers went out of business or have been slowly withdrawing from their maintenance. Correcting or adjusting manually the COBOL code generated by such tools in the absence of vendor support is lots of fun (I had to do something like that once, but it actually went smoothly).

    Original programmers rarely wrote handbooks

    My experience is that proper documentation has a good chance to be rigorously enforced when the software being developed is itself a commercial product to be delivered to outside parties. Then, handbooks, reference manuals and even code documentation become actual deliverables that are part of the product sold, and whose production is planned and budgeted for in software development programmes.

    I presume it is difficult to ensure that effort and resources be devoted to document internal software because these are purely cost centers - not profit centers (or at least, do not appear as such directly).

    That is not to say that it is impossible to move off legacy platforms

    So, we knew that banks were too big to fail, too big to jail, and are still too big to bail. Are their software problems too big to nail?

    d , April 11, 2017 at 4:27 pm

    actually suspect banks like the rest of business dont really care about their systems, till they are down, as they will find the latest offshore company to do it cheaper.

    Yves Smith Post author , April 11, 2017 at 5:58 pm

    Why then have I been told that reviewing code for Y2K had to be done line by line?

    I said documentation, not handbooks. And you are assuming banks hired third parties to do their development. Buying software packages and customizing them, as well as greater use of third party vendors, became a common practice only as of the 1990s.

    JTMcPhee , April 11, 2017 at 10:33 am

    I'm in favor of the "Samson Option" in this area.

    I know it will screw me and people I care about, and "throw the world economy into chaos," but who effing cares (hint: not me) if the code pile reaches past the limits of its angle of repose, and slumps into some chaotic non-form?

    Maybe a sentiment that gets me some abuse, but hey, is it not the gravamen of the story here that dysfunction and then collapse are very possible, maybe even likely?

    And where are the tools to re-build this Tower of Babel, symbol of arrogant pride? Maybe G_D has once again, per the Biblical story, confounded the tongues of men (and women) to collapse their edifices and reduce them to working the dirt (what's left of it after centuries of agricultural looting and the current motions toward temperature-driven uninhabitability.)

    Especially interesting that people here are seemingly proud of having taken part successfully in the construction of the whole derivatives thing. Maybe I'm misreading that. But what echoes in my mind in this context is the pride that the people of Pantex, https://en.wikipedia.org/wiki/Pantex_Plant , have in their role in keeping the world right on the ragged edge of nuclear "Game Over." On the way to Rapture, because they did G_D's work in preparing Armageddon. http://articles.chicagotribune.com/1986-09-05/features/8603060693_1_pantex-plant-nuclear-weapons-amarillo

    "What a wondrous beast this human is "

    lyman alpha blob , April 11, 2017 at 10:57 am

    So is it time to go long on duct tape and twine?

    ChrisAtRU , April 11, 2017 at 11:19 am

    #Memories

    My first job out of uni, I was trained as a MVS/COBOL programmer. After successfully completing the 11-week pass/fire course, I showed up to my 1st work assignment where my boss said to me, "Here's your UNIX terminal."

    ;-) – COBOL didn't strike me as difficult, just arcane and verbose. Converting to SAP is a costly nightmare. That caused to me to leave a job once had no desire to deal with SAP/ABAP. I'm surprised no one has come up with an acceptable next-gen thing . I remember years ago seeing an ad for Object-Oriented-COBOL in an IT magazine and I almost pissed myself laughing. On the serious side, if it's still that powerful and well represented in Banking, perhaps someone should look into an upgraded version of the language/concepts and build something easy to lift and shift COBOL++?

    Wherefore are ye startup godz

    #OnlyHalfKidding

    #MaybeNot

    Peewee , April 11, 2017 at 12:22 pm

    This sounds like an opportunity for a worker's coop, to train their workers in COBOL and to get back at these banks by REALLY exploiting them good and hard.

    MartyH , April 11, 2017 at 12:57 pm

    @Peewee couldn't agree more! @Diptherio?

    susan the other , April 11, 2017 at 1:02 pm

    so is this why no one is willing to advocate regulating derivatives in an accountable way? i almost can't believe this stuff. i can't believe that we are functioning at all, financially. 80% of IT projects fail? and if legacy platforms are replaced at great time and expense, years and trillions, what guarantee is there that the new platform will not spin out just as incomprehensibly as COBOL based software evolved, with simplistic patches of other software lost in translation? And maybe many times faster. Did Tuttle do this? I think we need new sophisticated hardware, something even Tuttle can't mess with.

    Skip Intro , April 11, 2017 at 3:40 pm

    I think it is only 80% of 'large' IT projects fail. I think it says more about the lack of scalability of large software projects, or our (in-) ability to deal with exponential complexity growth

    JimTan , April 11, 2017 at 2:34 pm

    Looks like there are more than a few current NYC jobs at Accenture, Morgan Stanley, JPMorgan Chase, and Bank of America for programmers who code in COBOL.

    https://www.indeed.com/jobs?q=mainframe+Cobol+&l=New+York%2C+NY

    [Apr 09, 2017] Time to do some fact checking on this right wing spin

    Apr 09, 2017 | economistsview.typepad.com
    DeDude , April 08, 2017 at 12:31 PM
    Now isn't that amazing. When you increase the income of the consumer class workers you grow the economy.

    http://ritholtz.com/2017/04/new-seattle-post/

    Nobody could have predicted that - at least not if they were addicted to right wing narratives.

    pgl -> DeDude... , April 08, 2017 at 12:31 PM
    Ritholtz has had a field day debunking the right wing intellectual garbage of Martin Perry but today he turns on right wing toadie Tim Worstall.

    Great link!

    pgl -> pgl... , April 08, 2017 at 12:38 PM
    Worstall:

    https://www.forbes.com/sites/timworstall/2017/04/05/seattles-2-9-unemployment-rate-tells-us-nothing-about-the-effects-of-seattles-minimum-wage-rise/#782d373068b8

    "Sure, it's lovely that unemployment in Seattle dips under 3%. But an attempt to tie that drop in the unemployment rate to the minimum wage isn't going to work. For we can as easily note that the unemployment rate has dropped everywhere in the US over this same time period and the minimum wage hasn't risen everywhere over that time period. We've not even got a consistent correlation between minimum wages and unemployment that is.mWhat we've actually got to do is try to work out some method of what would have happened in Seattle from all of the effects of everything else other than the minimum wage, then compare it to what did happen with the minimum wage. The difference between these two will be the effect of the minimum wage rise. Seattle City Council know this, which is why they asked the University of Washington to run exactly such a study."

    Worstall reaches back to this July 2016 paper:

    https://evans.uw.edu/sites/default/files/MinWageReport-July2016_Final.pdf

    Time to do some fact checking on this right wing spin.

    [Apr 06, 2017] Approximately 10 million males ages 25-54 are unemployed. Fifty-seven percent of these are on disability

    Apr 06, 2017 | economistsview.typepad.com
    New Deal democrat , April 05, 2017 at 05:56 AM
    Via Business Insider
    http://www.businessinsider.com/jamie-dimon-ceo-letter-jpmorgan-on-education-and-labor-force-participation-2017-4

    This is from Jamie Dimon's letter to stockholders:

    "If the work participation rate for this group [men ages 25-54] went back to just 93% – the current average for the other developed nations – approximately 10 million more people would be working in the United States. Some other highly disturbing facts include: Fifty-seven percent of these non-working males are on disability"

    I don't know where he got the statistic from, but if it is true it is potent evidence that the main factor behind the 60 year long decline in prime age labor force participation by men is an increase in those on disability, probably due to both the expansion of the program, and better longevity and diagnostics -- and probably also tied in to opiate addiction as well.

    pgl -> New Deal democrat... , April 05, 2017 at 08:14 AM
    So does Jamie sitting on his mountain of other people's money have some magic solution that will get this EPOP back to 93%? I guess if we all bank at JPMorganChase, all will be fine? C'mon Jamie.
    New Deal democrat -> pgl... , April 05, 2017 at 08:54 AM
    I'm only citing him for the disability stat.

    Do you happen to have any source material that would indicate whether that stat is correct or not?

    pgl -> New Deal democrat... , April 05, 2017 at 09:37 AM
    There has been a bit of a discussion on this - most of which I sort of found unconvincing. Sorry but I am not the expert on this one. And I doubt Jamie Dimon is not either.
    EMichael -> New Deal democrat... , April 05, 2017 at 08:26 AM
    Never, ever listen to Jamie Dimon about anything.

    "This is another common explanation for the drop in male participation. But again it doesn't explain more than a fraction of the phenomenon.

    There's not much doubt that Social Security Disability Insurance takes people out of the workforce, often by inelegant design. In order to qualify for disability payments, people typically have to prove that they cannot work full-time. SSDI critics say this policy sidelines many people who might otherwise be able to contribute to the economy.

    But how many people does SSDI really remove? From 1967 to 2014, the share of prime-age men getting disability insurance rose from 1 percent to 3 percent. There is little chance that this increase is entirely the result of several million fraudulent attempts to get money without working. But even if it were, SSDI would still only explain about one-quarter of the decline in the male participation rate over that time. There are many good reasons to reform disability insurance. But it's not the singular driving force behind the decline of working men."

    https://www.theatlantic.com/business/archive/2016/06/the-missing-men/488858/

    pgl -> EMichael... , April 05, 2017 at 08:28 AM
    When Dimon makes a recommendation re regulating his own sector, the best thing to do is just the opposite.

    [Apr 04, 2017] Americans Want More Than Just Money to Live On

    Apr 04, 2017 | www.bloomberg.com

    APRIL 3, 2017 9:00 AM EDT

    Donald Trump's election as president should have reminded liberals that Americans want more than money from their work. They responded to Trump's promise of jobs more than to Hillary Clinton's promise of government benefits because in addition to money, people also need dignity, a sense of self-reliance and respect within their community. For centuries, jobs have provided all of those.

    To say that work is disappearing would be an exaggeration. But despite the low unemployment rate, fewer Americans have jobs than in years past:

    [chart]

    This new class of non-workers may be able to survive on the government dole, the charity of friends and family or via black-market activities like drug sales. But they've probably lost some of the dignity and respect that used to come with working for a living. Falling employment has been linked to declining marriage rates, reduced happiness and opiate abuse. Some economists even blame disappearing jobs for the recent rise in mortality rates afflicting white Americans.

    What's more, the longer people stay out of the labor force, the more trouble they will have getting back into it. They lose work ethic, skills and connections, and employers become suspicious of the large gaps in the resumes. Economists Brad DeLong and Larry Summers have shown that this so-called labor-market hysteresis can have potentially large, long-lasting negative effects on the economy.

    When the economy is in recession, the best approach is probably a combination of fiscal and monetary stimulus. But when the labor-force dropout problem is chronic, as it is now, a different kind of policy may be needed -- a government-job guarantee.

    The U.S. has used an approach like this before. In 1935, the administration of President Franklin Roosevelt established the Works Progress Administration, which employed millions of American men, mostly in public-works projects. WPA employees received hourly wages similar to other unskilled workers in the surrounding area. Most of them built infrastructure and buildings, but a few were paid to make art and write books. The total cost of the program was high -- $1.3 billion a year, or about 1.7 percent of U.S. gross domestic product. An equivalent expenditure now would be a little more than $300 billion, or about half of federal defense spending. But the popularity of the program is hard to deny, given Roosevelt's resounding victory in his reelection bid in 1936.

    The idea of a new work program isn't a new one -- economists on all sides of the political spectrum have been kicking it around for years now. It has received support from Stephanie Kelton, an adviser to the Bernie Sanders presidential campaign, and from Kevin Hassett, who is reportedly Trump's pick to lead the Council of Economic Advisers. Jeff Spross has an excellent article in Democracy exploring the idea in depth.

    William Darity of Duke University has been a particularly avid promoter of a job guarantee. He describes it thus:

    Any American 18 years or older would be able to find work through a federally funded public service employment program -- a "National Investment Employment Corps." Each National Investment Employment Corps job would offer individuals non-poverty wages, a minimum salary of $20,000, plus benefits including federal health insurance. The types of jobs offered could address the maintenance and construction of the nation's physical and human infrastructure, from building roads, bridges, dams and schools, to staffing high quality day care.
    There is no shortage of work to be done. Even beyond the tasks Darity lists, the U.S. is full of jobs that need doing, from elder care to renovation of old decaying buildings, to cleanup of lead and other pollution, to construction and staffing of transit systems.

    Darity estimates the cost of the program at $750 billion a year, Spross at $670 billion. That's about equivalent to all of the U.S.'s current anti-poverty programs, and would be about twice the size of the old WPA. So this would be a very big deal. But the true cost to society would be considerably less, because the jobs would provide value. Better infrastructure, more child care and elder care, and a cleaner, healthier environment would make the nation a richer, better place to live -- in other words, those benefits should defray much of the program's cost. Also, the program would take people off of the welfare rolls and cut government anti-poverty spending. Finally, even when the economy isn't in a recession, more income will probably increase demand in the local economy.

    All told, the program could end up being a bargain. And if the guarantee is limited to distressed, low-employment areas, which could lower the costs down even more, and allow for pilot programs to establish the viability of the concept.

    Many people on the left and elsewhere don't like this idea. They doubt that government make-work will provide dignity. And they believe strongly in the theory that automation will soon put large numbers of people out of a job entirely. The only solution, they say, is to change U.S. culture and values to make work less important, and to rely on programs like universal basic income. On the right, some would inevitably see the plan as a first step on the road to socialism.

    Maybe the critics will prove right in the long run. But for now, forcing a dramatic change on American culture is a lot harder than simply giving people jobs. Robot-driven unemployment and new social values are still mostly in the realm of science fiction, while the American public wants jobs now. A job guarantee looks like a very good thing to try.

    Peter K. said in reply to Peter K.... Do both, the UBI and Job Guarantee.

    Why doesn't Noah Smith discuss Fed Fail in detail and about how conservatives forced unprecedented austerity on the economy.

    This is not just "natural" or the evolution of technology, demographics and innovation.

    He should be supporting an NGDP target, etc.

    At very least run the economy hot.

    Reply Tuesday, April 04, 2017 at 12:08 PM Peter K. said in reply to Peter K.... What Smith does not discuss is how the Fed is currently raising rates to kill jobs. Reply Tuesday, April 04, 2017 at 12:09 PM

    [Mar 22, 2017] Stephen Williamson New Monetarist Economics What is full employment anyway, and how would we know if we are there

    Mar 22, 2017 | newmonetarism.blogspot.com
    Sunday, March 19, 2017 What is full employment anyway, and how would we know if we are there? What are people talking about when they say "full employment?" Maybe they don't know either? Whatever it is, "full employment" is thought to be important for policy, particularly monetary policy. Indeed, it typically enters the monetary policy discussion as "maximum employment," the second leg of the Fed's dual mandate - the first leg being "price stability."

    Perhaps surprisingly, there are still people who think the US economy is not at "full employment." I hate to pick on Narayana, but he's a convenient example. He posted this on his Twitter account:

    Are we close to full emp? In steady state, emp. growth will be about 1.2M per year. It's about *twice* that in the data. (1) Employment is growing much faster than long run and inflation is still low. Conclusion: we're well below long run steady state. end
    Also in an interview on Bloomberg, Narayana gives us the policy conclusion. Basically, he thinks there is still "slack" in the economy. My understanding is that "slack" means we are below "full employment."

    So what is Narayana saying? I'm assuming he is looking at payroll employment - the employment number that comes from the establishment survey. In his judgement, in a "steady state," which for him seems to mean the "full employment" state, payroll employment would be growing at 1.2M per year, or 100,000 per month. But over the last three months, the average increase in payroll employment has exceeded 200,000 per month. So, if we accept all of Narayana's assumptions, we would say the US economy is below full employment - it has some catching up to do. According to Narayana, employment can grow for some time in excess of 100,000 jobs per month, until we catch up to full employment, and monetary policy should help that process along by refraining from interest rate hikes in the meantime.

    Again, even if we accept all of Narayana's assumptions, we could disagree about his policy recommendation. Maybe the increase in the fed funds rate target will do little to impede the trajectory to full employment. Maybe it takes monetary policy a period of time to work, and by the time interest rate hikes have their effect we are at full employment. Maybe the interest rate hikes will allow the Fed to make progress on other policy goals than employment. But let's explore this issue in depth - let's investigate what we know about "full employment" and how we would determine from current data if we are there or not.

    Where does Narayana get his 1.2M number from? Best guess is that he is looking at demographics. The working age population in the United States (age 15-64) has been growing at about 0.5% per year. But labor force participation has grown over time since World War II, and later cohorts have higher labor force participation rates. For example, the labor force participation rate of baby-boomers in prime working age was higher than the participation rate of the previous generation in prime working age. So, this would cause employment growth to be higher than population growth. That is, Narayana's assumptions imply employment growth of about 0.8% per year, which seems as good a number as any. Thus, the long-run growth path for the economy should exhibit a growth rate of about 0.8% per year - though there is considerable uncertainty about that estimate.

    But, we measure employment in more than one way. This chart shows year-over-year employment growth from the establishment survey, and from the household survey (CPS): For the last couple of years, employment growth has been falling on trend, by both measures. But currently, establishment-survey employment is growing at 1.6% per year, and household survey employment is growing at 1.0% per year. The latter number is a lot closer to 0.8%. The establishment survey is what it says - a survey of establishments. The household survey is a survey of people. The advantages of the establishment survey are that it covers a significant fraction of all establishments, and reporting errors are less likely - firms generally have a good idea how many people are on their payrolls. But, the household survey has broader coverage (includes the self-employed for example) of the population, and it's collected in a manner consistent with the unemployment and labor force participation data - that's all from the same survey. There's greater potential for measurement error in the household survey, as people can be confused by the questions they're asked. You can see that in the noise in the growth rate data in the chart.

    Here's another interesting detail: This chart looks at the ratio of household-survey employment to establishment-survey employment. Over long periods of time, these two measures don't grow at the same rate, due to changes over time in the fraction of workers who are in establishments vs. those who are not. For long-run employment growth rates, you should put more weight on the household survey number (as this is a survey of the whole working-age population), provided of course that some measurement bias isn't creeping into the household survey numbers over time. Note that, since the recession, establishment-survey employment has been growing at a significantly higher rate than household-survey employment.

    So, I think that the conclusion is that we should temper our view of employment growth. Maybe it's much closer to a steady state rate than Narayana thinks.

    But, on to some other measures of labor market performance. This chart shows the labor force participation rate (LFPR) and the employment-population ratio (EPOP). Here, focus on the last year. LFPR is little changed, increasing from 62.9% to 63.0%, and the same is true for EPOP, which increased from 59.8% to 60.0%. That looks like a labor market that has settled down, or is close to it.

    A standard measure of labor market tightness that labor economists like to look at is the ratio of job vacancies to unemployment, here measured as the ratio of the job openings rate to the unemployment rate: So, by this measure the labor market is at its tightest since 2001. Job openings are plentiful relative to would-be workers.

    People who want to argue that some slack remains in the labor market will sometimes emphasize unconventional measures of the unemployment rate: In the chart, U3 is the conventional unemployment rate, and U6 includes marginally attached workers (those not in the labor force who may be receptive to working) and those employed part-time for economic reasons. The U3 measure is not so far, at 4.7%, from its previous trough of 4.4% in March 2007, while the gap between current U6, at 9.2% and its previous trough, at 7.9% in December 2006, is larger. Two caveats here: (i) How seriously we want to take U6 as a measure of unemployment is an open question. There are problems even with conventional unemployment measures, in that we do not measure the intensity of search - one person's unemployment is different from another's - and survey participants' understanding of the questions they are asked is problematic. The first issue is no worse a problem for U6 than for U3, but the second issue is assuredly worse. For example, it's not clear what "employed part time for economic reasons" means to the survey respondent, or what it should mean to the average economist. Active search, as measured in U3, has a clearer meaning from an economic point of view, than an expressed desire for something one does not have - non-satiation is ubiquitous in economic systems, and removing it is just not feasible. (ii) What's a normal level for U6? Maybe the U6 measure in December 2006 was undesirably low, due to what was going on in housing and mortgage markets.

    Another labor market measure that might be interpreted as indicating labor market slack is long term unemployment (unemployed 27 weeks or more) - here measured as a rate relative to the labor force: This measure is still somewhat elevated relative to pre-recession times. However, if we look at short term unemployment (5 weeks or less), this is unusually low: As well, the insured unemployment rate (those receiving unemployment insurance as a percentage of the labor force) is very low: To collect UI requires having worked recently, so this reflects the fact that few people are being laid off - transitions from employment to unemployment are low.

    An interpretation of what is going on here is that the short-term and long-term unemployed are very different kinds of workers. In particular, they have different skills. Some skills are in high demand, others are not, and those who have been unemployed a long time have skills that are in low demand. A high level of long-term unemployed is consistent with elevated readings for U6 - people may be marginally attached or wanting to move from part-time to full-time work for the same reasons that people have been unemployed for a long time. What's going on may indicate a need for a policy response, but if the problem is skill mismatch, that's not a problem that has a monetary policy solution.

    So, if the case someone wants to make is that the Fed should postpone interest rate increases because we are below full employment - that there is still slack in the labor market - then I think that's a very difficult case to make. We could argue all day about what an output gap is, whether this is something we should worry about, and whether monetary policy can do much about an output gap, but by conventional measures we don't seem to have one in the US at the current time. In terms of raw economic performance (price stability aside), there's not much for the Fed to do at the current time. Productivity growth is unusually low, as is real GDP growth, but if that's a policy problem, it's in the fiscal department, not the monetary department.

    But there is more to Narayana's views than the state of the labor market. He thinks it's important that inflation is still below the Fed's target of 2%. Actually, headline PCE inflation, which is the measure specified in the Fed's longer-run goals statement, is essentially at the target, at 1.9%. I think what Narayana means is that, given his Phillips-curve view of the world, if we are close to full employment, inflation should be higher. In fact, the long-run Fisher effect tells us that, after an extended period of low nominal interest rates, the inflation rate should be low. Thus, one might actually be puzzled as to why the inflation rate is so high. We know something about this, though. Worldwide, real rates of interest on government debt have been unusually low, which implies that, given the nominal interest rate, inflation will be unusually high. But, this makes Narayana's policy conclusion close to being correct. The Fed is very close to its targets - both legs of the dual mandate - so why do anything?

    A neo-Fisherian view says that we should increase (decrease) the central bank's nominal interest rate target when inflation is too low (high) - the reverse of conventional wisdom. But maybe inflation is somewhat elevated by increases in the price of crude oil, which have since somewhat reversed themselves. So, maybe the Fed's nominal interest rate target should go up a bit more, to achieve its 2% inflation target consistently.

    Though Narayana's reasoning doesn't lead him in a crazy policy direction, it would do him good to ditch the Phillips curve reasoning - I don't think that's ever been useful for policy. If one had (I think mistakenly) taken Friedman to heart (as appears to be the case with Narayana), we might think that unemployment above the "natural rate" should lead to falling inflation, and unemployment below the natural rate should lead to rising inflation. But, that's not what we see in the data. Here, I use the CBO's measure of the natural rate of unemployment (quarterly data, 1990-2016): According to standard Friedman Phillips-curve logic, we should see a negative correlation in the chart, but the correlation is essentially zero.

    Posted by Stephen Williamson at 1 comment:

    1. Avraam J Dectis March 21, 2017 at 7:58 AM

      .
      Nice insightful column.

      One thing I wonder about is the possibility that policy implementing economists are a bit insulated from reality. It seems possible their personal experiences might reinforce a feeling that everything is all right.

      Meanwhile countervailing data may subconsciously be given short shrift. A shrinking middle class, stagnant wages, declining labor force participation of adult males all seem ignored.

      Could it be argued that full employment is characterized by a robust and growing middle class? Economics is both a hard and social science and social criteria may belong in the definition of full employment.

      Is it wise to try to throttle growth as soon as policy mandates are achieved, thus seeking to maintain a virtuous steady state equilibrium? Might it not be better to attempt more of a sine wave economic policy, deliberately overshooting targets to bring the marginal sidelined workers into the economy where they can gain experience and then, if necessary, briefly overshooting constraining measures to quickly contain possible excesses?

    [Mar 19, 2017] When inequality is driven by extremes at the tail, using median means that you dont see much change in the demographics

    Mar 19, 2017 | economistsview.typepad.com
    libezkova : March 16, 2017 at 09:51 PM , 2017 at 09:51 PM
    "the U.S. middle class - with household incomes ranging from two-thirds to double the national median"

    Median household income in the US in 2015 was less the $60K. Two-thirds is $40K. That's almost poverty not middle class.

    Sociologically the middle class is a quasi-elite of professionals and managers, who are largely immune to economic downturns and trends such as out-sourcing.

    reason -> libezkova... , March 17, 2017 at 04:24 AM
    The definition game? Define something to something else as is being talked about and then claim, claims based on a completely different definition are false?
    Lyle -> libezkova... , March 17, 2017 at 12:47 PM
    Actually with the change in ratio professionals and managers now tend to upper middle class, (29% of us is upper middle now, 32% middle).

    One of the influences is that post WWII it was possible to be middle class and work on an assembly line in a job that was described as check your brain at the door. Automation and process changes have wiped the high pay of such jobs out. Steel makers for example thru mainly process changes (electric furnaces using scrap, continuous casting and the like) mean that it takes 1/5 the hours to produce a ton of steel in did in the 1970s.

    The movement of assembly line jobs to the middle class occured because there was a period where the US was much less involved with the rest of the world economically, because their industries had all been destroyed. The change started during the Johnson admin, and showed up in the high inflation of the Nixon admin.

    cm -> libezkova... , March 17, 2017 at 10:48 PM
    Most "professionals and managers" are nowhere near being immune to downturns and outsourcing, in aggregate.

    You could likewise claim that "low skilled" or any other occupations are "immune" as somewhere around 70-80% of their members continue being employed through tough times, in aggregate.

    If you take "tech", companies laying off around 5-10% or even more of their staff in busts is a frequent enough occurrence. And that's in addition to the "regular" age discrimination and cycling of workers justified with "outdated skills". Being young and (supposedly) impressionable is a skill!

    D. C. Sessions -> libezkova... , March 18, 2017 at 10:16 AM
    "the U.S. middle class - with household incomes ranging from two-thirds to double the national median"

    That's almost tautological. By definition, there can't be a whole lot of change in the population of groups defined relative to median. Income and wealth of those groups, though, can be enlightening.

    Substitute "mean" for "median" and watch what happens. When inequality is driven by extremes at the tail, using "median" means that you don't see much change in the demographics. (Hint: if "middle class" is defined as half to twice the average income, there are damned few in that bracket.)

    [Mar 17, 2017] The best existing research suggests that modest increases in minimal wage have had little or no employment-reducing impact.

    Mar 17, 2017 | economistsview.typepad.com
    Denis Drew : March 17, 2017 at 08:29 AM , 2017 at 08:29 AM
    Re: America's employment problem - Lane Kenworthy

    "It can do so by increasing the federal minimum wage to $10 per hour and indexing it to inflation. The best existing research suggests that modest increases such as this have had little or no employment-reducing impact. And the government should also increase the Earned Income Tax Credit, a refundable tax credit for workers, for people who don't have children (a strategy Brooks endorses)."

    Here we go again. First, I thought we had left EITC behind as any kind of substantial answer to underpaid Americans: redistributing all of 1/2 of one percent of overall income when 45% of our workforce is earning less than what we think the minimum wage should be, $15 an hour.

    $15 may be the most fast food can pay. Sometimes in McDonald's there are more people behind the counter than in front (most customers come through the drive through). If fast food (33% labor costs) can pay $15, then maybe Target (10%-15%) can pay $20, and maybe super efficient WalMart (7%) can pay $25.

    Always keeping in mind that labor bought and sold sort of on margin. Doubling Walmart's pay could add only 7% to prices.

    Bottom 45% of workforce now takes 10% share of overall income -- used to be 20%. Top 1% now 20% instead of 10%. How to get that 10% back -- how to supply the economic and political muscle to TAKE IT BACK: just put some teeth in the (federal) law that already says union busting is illegal.

    States can do this without any fear of confronting federal preemption. States can make it a crime for wholesalers for instance to pressure individual retailers from combining their bargaining power -- same such law can overlap federal labor area; especially since fed left blank for 80 years. Blank or not: may overlap as with min wage.

    No need for complicated policy researches; no need to spend a dime: states just make union busting a felony and let people organize if they wish to -- and get out of their way. :-)

    Back to min wage. If you sell fewer labor hours for more dollars that works out better for labor than for potatoes -- because in the labor market the potatoes get the money to spend -- and they are more likely to spend it more on other potatoes than more upscale. Why min wage raises often followed by higher min wage employment. (Higher wage jobs lost -- everybody looking in wrong place.)

    ***************************

    My minimum wage worksheet

    (2013 dollars)
    yr..per capita...real...nominal...dbl-index...%-of

    68...15,473....10.74..(1.60)......10.74......100%
    69-70-71-72-73 *
    74...18,284.....9.43...(2.00)......12.61
    75...18,313.....9.08...(2.10)......12.61
    76...18,945.....9.40...(2.30)......13.04........72%
    77 *
    78...20,422.....9.45...(2.65)......14.11
    79...20,696.....9.29...(2.90)......14.32
    80...20,236.....8.75...(3.10)......14.00
    81...20,112.....8.57...(3.35)......13.89........62%
    82-83-84-85-86-87-88-89 *
    90...24,000.....6.76...(3.80)......16.56
    91...23,540.....7.26...(4.25)......16.24........44%
    92-93-94-95 *
    96...25,887.....7.04...(4.75)......17.85
    97...26,884.....7.46...(5.15)......19.02........39%
    98-99-00-01-02-03-04-05-06 *
    07...29,075.....6.56...(5.85)......20.09
    08...28,166.....7.07...(6.55)......19.45
    09...27,819.....7.86...(7.25)......19.42........40%
    10-11-12-13-14-15-16-17 *

    anne -> Denis Drew ... , March 17, 2017 at 08:45 AM
    https://fred.stlouisfed.org/graph/?g=d30R

    January 4, 2017

    Real Federal Minimum Hourly Wage for Nonfarm Workers, 1964-2016

    (Indexed to 2016)

    Denis Drew -> Denis Drew ... , March 17, 2017 at 09:05 AM
    Re: The Man Who Made Us See That Trade Isn't Always Free - Noah Smith

    "Instead, he and his co-authors found that trade with China in the 2000s left huge swathes of the U.S. workforce permanently without good jobs -- or, in many cases, jobs at all.

    "This sort of concentrated economic devastation sounds like it would hurt not just people's pocketbooks, but the social fabric. In a series of follow-up papers, Autor and his team link Chinese import competition to declining marriage rates and political polarization. Autor told me that these social ills make the need for new thinking about trade policy even more urgent."

    Here we go again. US manufacturing going from 16% of employment from 2000 to 12% in 2016 (half due automation) nowhere near as sucking-all-the-oxygen-out-of-life as the the bottom 45% of earners taking 10% of overall income, down from 20% over two generations -- more and more being recognized due to the loss of collective bargaining power ...

    ... for which loss the usual litany of causatives NEVER seem to include one mention of the complete lack of teeth protecting union organizing from market power in US labor law.

    Simple answer: no studies or research needed, not a dollar appropriated: simply make union busting a felony at state level -- and get out of people's way.

    States can do this without conflict with federal preemption. States can make it a crime for wholesalers for instance to pressure individual retailers from combining their bargaining power -- same such law can overlap federal labor area; especially since fed left blank for 80 years. Blank or not: may overlap as with min wage.

    Don't do this and you'll never bring back collective bargaining power -- and all the genuine populist politics that goes with it!

    anne -> Denis Drew ... , March 17, 2017 at 09:10 AM
    http://www.bls.gov/webapps/legacy/cpslutab3.htm

    January 15, 2017

    United States Union Membership Rates, 1992-2016

    Private wage and salary workers

    1992 ( 11.5)
    1993 ( 11.2) Clinton
    1994 ( 10.9)

    1995 ( 10.4)
    1996 ( 10.2)
    1997 ( 9.8)
    1998 ( 9.6)
    1999 ( 9.5)

    2000 ( 9.0)
    2001 ( 8.9) Bush
    2002 ( 8.6)
    2003 ( 8.2)
    2004 ( 7.9)

    2005 ( 7.8)
    2006 ( 7.4)
    2007 ( 7.5)
    2008 ( 7.6)
    2009 ( 7.2) Obama

    2010 ( 6.9)
    2011 ( 6.9)
    2012 ( 6.6)
    2013 ( 6.7)
    2014 ( 6.6)

    2015 ( 6.7)
    2016 ( 6.4)

    [Mar 17, 2017] Tax cuts kill jobs. Plain and simple.

    Notable quotes:
    "... Tax cuts kill jobs. Plain and simple. You can't create jobs by cutting the amount you paid workers. Taxes are prices that workers .pay You dodge taxes by underpaying workers. If taxes are cut, both paying workers is cut AND paying workers to dodge taxes is cut. ..."
    Mar 17, 2017 | economistsview.typepad.com
    mulp -> DrDick ... March 16, 2017 at 09:54 AM , 2017 at 09:54 AM
    Forecasting is done to change human behavior to invalidate the forecasts.

    Thus forecasts are by design never accurate about the future.

    This is different than designing systems using natural laws.

    A plane is designed to fly, because every forecast for it crashing has resulted in design changes to invalidate that forecast.

    Conservatives hate forecasts because they hate changing their plans. To forecast slower gdp growth and job creation, or even contraction from tax cuts and spending cuts is unacceptable. Thus they strive to change forecasts or discredit them to get their policy implemented.

    My forecast in the late 90s and early 00s was for economic disaster as a result of conservative policy eventually being implemented.

    Tax cuts kill jobs. Plain and simple. You can't create jobs by cutting the amount you paid workers. Taxes are prices that workers .pay You dodge taxes by underpaying workers. If taxes are cut, both paying workers is cut AND paying workers to dodge taxes is cut.

    That would have been the forecast in the 60s.

    Today even Krugman and Bernie support job killing tax cuts based on that creating jobs. Lots of bad forecasting is done to back tax cuts. The tax cuts fail to create jobs, so the bad forecasts are blamed so every forecast is ignored, even the good ones.

    New Deal democrat -> John Williams... , March 16, 2017 at 08:02 AM
    That ecosystem forecasting system is safe until the animals and plants learn how to read. ;-)
    Thi$ World$ Banker$ -> New Deal democrat... , March 16, 2017 at 09:03 AM

    Believe it!

    When Congressional critters learned to read, 45th POTUS was suddenly and permanently unable to drain the swamp of critters who grow fat on the pork-barrel-legislation that drains the public treasure of We the Workers and Savers.

    These parasitic critters will grow fat and strong, strong enough to gobble up the the once brave workers who feed the fat in DC.

    Thanks,
    NDD --

    [Mar 14, 2017] No wonder the unemployed increasingly kill themselves, or others. The whole economy tells them, indirectly but unmistakably, that their human value does not exist.

    Mar 14, 2017 | economistsview.typepad.com
    Noni Mausa : March 13, 2017 at 04:13 PM

    What the wealthy right wing has decided in the past 40 years is that they don't need citizens. At least, not as many citizens as are actually citizens. What they are comfortable with is a large population of free range people, like the longhorn cattle of the old west, who care for themselves as best they can, and are convenient to be used when the "ranchers" want them.

    Of course, this is their approach to foreign workers, also, but for the purpose of maintaining a domestic society within which the domestic rich can comfortably live, only native born Americans really suit.

    With the development of high productivity production, farming, and hands-off war technology the need for a large number of citizens is reduced. The wealthy can sit in their towers and arrange the world as suits them, and use the rest of the world as a "farm team" to supply skills and labour as needed.

    Proof of this is the fact that they talk about the economy's need for certain skills, training, services and so on, but never about the inherent value of citizens independent of their utility to someone else.

    No wonder the unemployed increasingly kill themselves, or others. The whole economy tells them, indirectly but unmistakably, that their human value does not exist. ken melvin : , March 13, 2017 at 04:48 PM

    Can someone get me from $300 billion tax cut for the rich to getting the markets work for health care?
    ken melvin : , March 13, 2017 at 04:54 PM
    It isn't about 'markets', never is. It is about extraction of as much profit as possible using whatever means necessary. This is what the CEOs of insurance companies get payed to do. Insurance policies they don't pay out, the ones Ryan is referring to, are as good as any for scoring.
    libezkova : , March 13, 2017 at 07:09 PM
    "It isn't about 'markets', never is. It is about extraction of as much profit as possible using whatever means necessary. This is what the CEOs of insurance companies get payed to do."

    What surprises me most in this discussion is how Obamacare suddenly changed from a dismal and expensive failure enriching private insurers to a "good deal".

    Lesseevilism in action ;-)

    ilsm : , March 13, 2017 at 01:41 PM
    When the PPACA band-aid is pulled off the US health care mess the gusher will be blamed on "the Russians running the White House".

    Cuba does better than the US despite being economically sanctioned for 55 years. Distribution of artificially scarce health care resources is utterly broken. This failed market is financed by a mix of 'for profit' insurance and medicare (which sublets a big part to 'for profit' insurance).

    Coverage!!! PPACA added taxpayers' money to finance a bigger failed market. It did nothing to address the market fail!

    Single payer would not address the market failure. Single payer would put the government financing most of the failed market.

    Democrats have put band-aids on severe bleeds since Truman made the cold war more important than Americans.

    At least we know what Trump stands for!

    jeff fisher said in reply to ilsm... , March 13, 2017 at 01:58 PM
    Cuba is the shining example of how doing the first 20% of healthcare well for everyone gets you 80% of the benefit cheap.

    The US is the shining example of how refusing to do the first 20% of healthcare well for everyone only gets you 80% of the benefit no matter how much you spend.

    jonny bakho : , March 13, 2017 at 12:09 PM
    Mark's very nice argument does nothing to address The Official Trump Counter Argument:

    [Shorter version: Obamacare is doomed, going to blow up. Any replacement is therefore better than Obamacare; Facts seldom win arguments against beliefs]

    "During a listening session on healthcare at the White House on Monday, President Donald Trump said Republicans "are putting themselves in a very bad position by repealing Obamacare."

    Trump said that his administration is "committed to repealing and replacing" Obamacare and that the House Obamacare replacement will lead to more choice at a lower cost. He further stated, "[T]he press is making Obamacare look so good all, of a sudden. I'm watching the news. It looks so good. They're showing these reports about this one gets so much, and this one gets so much. First of all, it covers very few people, and it's imploding. And '17 will be the worst year. And I said it once; I'll say it again: because Obama's gone."

    He continued, "And the Republicans, frankly, are putting themselves in a very bad position - I tell this to Tom Price all the time - by repealing Obamacare. Because people aren't gonna see the truly devastating effects of Obamacare. They're not gonna see the devastation. In '17 and '18 and '19, it'll be gone by then. It'll - whether we do it or not, it'll be imploded off the map."

    He added, "So, the press is making it look so wonderful, so that if we end it, everyone's going to say, 'Oh, remember how great Obamacare used to be? Remember how wonderful it used to be? It was so great.' It's a little bit like President Obama. When he left, people liked him. When he was here, people didn't like him so much. That's the way life goes. That's human nature."

    Trump further stated that while letting Obamacare collapse on its own was the best thing to do politically, it wasn't the right thing to do for the country.

    http://www.breitbart.com/video/2017/03/13/trump-republicans-putting-bad-position-repealing-obamacare/

    [Mar 03, 2017] The crazy works iof IT hiring

    Mar 03, 2017 | economistsview.typepad.com
    "Back in the mid/late 90's, there was a running joke that tech companies were looking for people with more years of experience with certain programing languages than the programming languages even existed (in a form to be usable for commercial work)."

    That's a very good and historically accurate point(in 90th Java was a crush ;-). And this type of parasitism continues to flourish even now. Just with the new buzzwords...

    When employee's complain that that can't fill open positions that often means that they painstakingly define the position is such a way that the person deemed suitable can hit ground running on the first day or week on the job. No retraining period is needed. Like a new brake pads in a car. Totally replaceable.

    To say nothing that in reality Google and other giants (Amazon, Microsoft, Facebook, etc) are to a large extent "cemeteries" for IT talent. What's so exciting is creating Gmail and many other Google products ? Absolutely nothing. This is a pretty disgusting reimplementation work.

    cm -> New Deal democrat... March 01, 2017 at 07:55 AM , 2017 at 07:55 AM

    One issue that you both don't mention is lags. Translating a demand for skill into available skill takes years to decades in the best of circumstances. Even for many so called "low skilled" jobs, people have to be trained commonly for several years. For "knowledge work" or "new technology paradigms", you basically have to bring up a new generation of school/college graduates.

    Expecting training to happen "just like that", or to be funded by the workers themselves, is a non-starter.

    And when the business has to pay for the training (with the risk that some of the cost cannot be recouped because trained up people may leave), then we are back at "lack of profitability".

    Back in the mid/late 90's, there was a running joke that tech companies were looking for people with more years of experience with certain programing languages than the programming languages even existed (in a form to be usable for commercial work).

    reason -> cm... , March 01, 2017 at 07:57 AM
    "Back in the mid/late 90's, there was a running joke that tech companies were looking for people with more years of experience with certain programing languages than the programming languages even existed (in a form to be usable for commercial work)."

    The trouble is, I think that was no joke, it was literally true. Which means that were deliberately recruiting liars. Maybe that explains a lot.

    cm -> reason ... , March 01, 2017 at 08:24 AM
    Yes, the joke was based on true anecdotes. Not sure about "deliberately", my most plausible assumption is that they just plugged the "skill" description into the standard job ad templates.

    Looking for about 5 years experience - enough to (presumably) be able to do stuff, but not yet too old/tainted.

    cm -> reason ... , March 01, 2017 at 08:27 AM
    Also it is not necessary to have exactly all the asked experiences, at least when your resume will be selected/reviewed by a human. Of course if the recruiting process has been made "efficient" that will filter resumes by strict criteria, then the honest/modest applicants will be disproportionately screened out.
    cm -> reason ... , March 01, 2017 at 08:30 AM
    In a lot of big corps, the early stages of recruiting (processing/screening incoming resumes) are often outsourced to HR who obviously have little idea about the subject matter of the work, and can only go by buzzwords, possibly using computer software (OCR processing of resumes).

    I have heard the story often that hiring managers are presented with unsuitable resumes/candidates, and often find better matches going through the raw data themselves. But that costs time ("inefficient").

    Anachronism -> cm... , March 01, 2017 at 09:44 AM
    I can tell you that, from a consulting standpoint, I have been on several contracts where we've interviewed someone who had great skills, and the person who showed up had zero. So now companies will Skype with people to make sure they're talking to the actual consultant.
    DrDick -> cm... , March 01, 2017 at 11:28 AM
    Sadly, that is true of far too many companies of all sorts today, who refuse to train their workers and expect them to come preprogrammed with the company's proprietary software.

    [Feb 25, 2017] Unemployment versus Underemployment: Assessing Labor Market Slack

    Feb 25, 2017 | economistsview.typepad.com
    Unemployment versus Underemployment: Assessing Labor Market Slack : The U-3 unemployment rate has returned to prerecession levels and is close to estimates of its longer-run sustainable level. Yet other indicators of slack, such as the U-6 statistic, which includes people working part-time but wanting to work full-time (often referred to as part-time for economic reasons, or PTER), has not declined as quickly or by as much as the U-3 unemployment rate.

    If unemployment and PTER reflect the same business-cycle effects, then they should move pretty much in lockstep. But as the following chart shows, such uniformity hasn't generally been the case. In the most recent recovery, unemployment started declining in 2010, but PTER started to move substantially lower beginning only in 2013. The upshot is that for each unemployed worker, there are now many more involuntary part-time workers than in the past.

    anne : , February 21, 2017 at 01:01 PM
    https://fred.stlouisfed.org/graph/?g=cNuM

    January 4, 2017

    Unemployment and Unemployment-Underemployment * rates, 1994-2017

    * Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers; age 16 and over.


    https://fred.stlouisfed.org/graph/?g=cNuZ

    January 4, 2017

    Unemployment and Unemployment-Underemployment * rates, 1994-2017

    * Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers; age 16 and over.

    (Indexed to 1994)

    New Deal democrat : , February 21, 2017 at 01:19 PM
    "during the last recession, firms reduced the hours of workers in low-skill jobs more than they cut the number of low-skill jobs"

    I believe this is the correct explanation. I used to tack growth in hours vs. growth in payrolls, and what I found was that, had the 2008 recession followed the pattern of previous recessions, the peak unemployment rate would have been considerably higher. Let me do a little digging ....

    New Deal democrat -> New Deal democrat... , February 21, 2017 at 01:29 PM
    Here we go: aggregate hours vs. aggregate payrolls (indexed to 100 in 1964):

    https://fred.stlouisfed.org/graph/?g=cNwf

    The value reached its lowest level ever in 2009. In other words, relative more hours than jobs were cut in the Great Recession, even compared to other recessions.

    anne -> New Deal democrat... , February 21, 2017 at 05:13 PM
    Nicely done.

    https://fred.stlouisfed.org/graph/?g=cNIF

    February 21, 2017

    Aggregate Weekly Hours for Production and Nonsupervisory Employees as a percent of Total Nonfarm Employees, 1980-2017

    (Indexed to 1980)

    anne -> anne... , February 21, 2017 at 03:37 PM
    http://cepr.net/blogs/beat-the-press/trump-and-trade-he-s-largely-right

    February 21, 2017

    Trump and Trade: He's Largely Right

    -- Dean Baker

    pgl -> anne... , February 21, 2017 at 03:57 PM
    Dean covers a ton of material here. One is his points is right in one sense. We are below full employment so we need some sort of aggregate demand expansion. Would trade protection do this for the US? Perhaps if we had fixed exchange rates and we did not suffer a trade war. But as Dean has noted elsewhere, we need more expansionary monetary policy. Dean repeats something that Jared Bernstein wrote:

    'If we wanted better data on bilateral trade flows, then it would be desirable to pull out the re-exports from both our exports to Canada and our imports from Germany. This adjustment would make our trade deficit with Canada appear larger and trade deficit with Germany smaller, but would leave our total trade balance unchanged.'

    So Dean and Jared thinks that a US multinational that buys a product from Mexico at $80 which ultimately sells in Canada for $100 charges the Canadian distribution affiliate only $80? Dean knows better as he in the past has written about transfer pricing. No - transfer pricing games do affect the current reporting of the trade balance. Dean needs to read Brad Setser.

    [Feb 25, 2017] Trump and Trade He's Largely Right Beat the Press Blogs Publications The Center for Economic and Policy Research

    Feb 25, 2017 | cepr.net
    According to CBO , potential GDP for the 4 th quarter of 2016 was $19,049 billion. This is 1.0 percent higher than the estimate of GDP for the quarter of $18,860.8 billion. This means that if CBO is right, if there had been more demand in the economy, for example due to imports being replaced by domestically produced goods, GDP could have been 1.0 percent higher last quarter.

    Of course CBO's estimates of potential GDP are not especially accurate. Its most recent estimates for potential GDP in 2016 are more than 10 percent below what it had projected for potential GDP in 2016 back in 2008, before the severity of the crash was recognized. It is possible it overstated potential by a huge amount in 2008, but it is also possible it is understating potential today. It also hugely understated potential GDP in the mid-1990s, with 2000 GDP coming in more than 5 percent above the estimate of potential that CBO made in 1996. In other words, it would not be absurd to think that the economy could sustain a level of output that is 2.0 percent above the current level. (The fact that the employment rate of prime age workers [ages 25-54] is still 4.0 percentage points below the 2000 peak is certainly consistent with this view.)

    Suppose that GDP were consistently 2.0 percent higher than current projections over the next decade due to a lower trade deficit. This would imply an additional $4.6 trillion in output over this period. If the government captures 30 percent of this in higher taxes and lower spending on transfer programs like unemployment insurance and food stamps, this would imply a reduction in the projected deficit of $1.38 trillion over the decade. That's not quite the $1.74 trillion projected by Navarro, but close enough to make the derision unwarranted.

    In terms of how you get a lower trade deficit, Navarro's strategy of beating up on China is probably not the best way to go. But there is in fact precedent for the United States negotiating a lower value for the dollar under President Reagan, which had the desired effect of reducing the trade deficit.

    There is no obvious reason it could not pursue a similar path today, especially since it is widely claimed in business circles that China actually wants to raise the value of its currency. The U.S. could help it.

    The second area of seemingly gratuitous Trump trade bashing comes from a Wall Street Journal news article on the Trump administration's efforts to correct for re-exports in trade measures. Before getting to the article, it is important to understand what is at issue.

    Most of what the United States exports to countries like Mexico, Japan, or elsewhere are goods and services produced in the United States. However, some portion of the goods that we export to these countries consists of items imported from other countries which are just transshipped through the United States.

    The classic example would be if we offloaded 100 BMWs on a ship in New York and then 20 were immediately sent up to Canada to be sold there. The way we currently count exports and imports, we would count the 20 BMWs as exports to Canada and also as imports from Germany. These re-exports have zero impact on our aggregate trade balance, but they do exaggerate out exports to Canada and our imports from Germany.

    If we wanted better data on bilateral trade flows, then it would be desirable to pull out the re-exports from both our exports to Canada and our imports from Germany. This adjustment would make our trade deficit with Canada appear larger and trade deficit with Germany smaller, but would leave our total trade balance unchanged.

    This better measure of trade flows would be useful information to have if we wanted to know what happened to trade with a specific country following a policy change, for example the signing of a trade deal like NAFTA. The inclusion of re-exports in our export data would distort what had happened to actual flows of domestically produced exports and imports for domestic consumption.

    The United States International Trade Commission already produces a measure of trade balances that excludes imports that are re-exported. However this measure is still not an accurate measure of bilateral trade balances since it still includes the re-exports on the import side. In the case mentioned above, it would include the BMWs imported from Germany that were immediately sent to Canada, as imports. In principle, we should be able to construct a measure that excludes these items on the import side as well. If this is what the Trump administration is trying to do, then it is asking for a perfectly reasonable adjustment to the data.

    This is where we get to the WSJ article. According to the piece, the Trump administration was asking the Commerce Department to produce measures of bilateral trade balances that took out the re-exports on the export side, but left them in on the import side. This would have the effect of artificially inflating our trade deficit with a bogus number. If this is in fact what the Trump administration is trying to do, then we should be shooting at them with all guns. (This is metaphorical folks, I'm not advocating violence.)

    However some skepticism might be warranted at this point. No one with a name actually said the Trump administration asked for this bogus measure of trade balances. The sole source listed is "one person familiar with the discussions."

    There was an official statement from the Commerce Department's Bureau of Economic Analysis (BEA), which collects and compiles the data:

    "Any internal discussions about data collection methods are no more than the continuation of a longstanding debate and are part of the bureau's normal process as we strive to provide the most precise statistics possible."

    I take very seriously efforts to mess with the data. We are fortunate to have independent statistical agencies with dedicated civil servants who take their work very seriously. However we should wait until we have a bit more solid evidence before assuming that the Trump administration is trying to interfere in their independence, as opposed to trying to make a totally legitimate adjustment to the data that the BEA staff would almost certainly agree is an improvement.

    • Abe Lincoln was protectionist • 2 hours ago Yes - Pres. Trump is MUCH MUCH better at economics than many so-called American economists.

      Also ignores transfer pricing. US corporations are good at gaming their own tax system but face tough regulations elsewhere. Their solution to pulling profits out of their foreign operations and putting them in a non-taxed US is to export phantom products to foreign countries from their American subsidiaries. The US is Ireland on a large scale - the real trade deficit with China is probably closer to $10 in imports for every $1 of export rather than the official $4 in imports to $1 in exports.

    • urban legend 5 hours ago Economists often seem to pooh-pooh the employment-to-population ratio as some kind of unrealistic never-again-to-be achieved holy grail -- as if the phenomenon of women going back into the labor force had been completely expended and there would thereafter be no change in the education level of working age adults. In fact, women entering the labor force continued to grow, and faster than men dropping out, and the education level (and employability) of working age adults has been improving, especially in Southern states that had relatively low high school or college graduation rates and, therefore, low employment-to-population ratios that pulled down the national rate.

      While looking at the employment rate of all non-institutional adults 16 and older may be complicated by baby boomers hitting senior status, the prime working age (25-54) employment rate should be even higher than it was in 2000, not just the same or lower. We saw an inkling then of what full employment might look like, and an inflation problem did not raise its ugly head.

      It's also to be noted that while in January 1994 when the "marginally attached to the labor force" and "discouraged worker" measures were first reported, only two million members of the 16+ adult population were counted as marginally attached and only 600,000 were considered to be discouraged. Yet as demand grew, almost 20 million people crawled out from outside the labor force or from being counted as potential workers by any measurement and took jobs when they became available. That's 18 million more than BLS statistics suggested would be the outermost limit to the size of the labor force.

      In other words, it seems absurd, indeed absurd enough to consider it almost to be offered in bad faith, to suggest that we are anywhere remotely close to full employment. One must ask what the agenda is for it to continue to be suggested, since slowing growth has certain consequences that may help the wealthier members of our society while hurting everyone else.

      • pieceofcake urban legend 5 hours ago 'In other words, it seems absurd, indeed absurd enough to consider it almost to be offered in bad faith, to suggest that we are anywhere remotely close to full employment.'

        If We would be anywhere remotely close to full employment - there would be NO 'gig-economy' - no companies on the Internet which help you to (still) write all these resumes - and probably NO Uber - as - do you know anybody who is willing to work as a Uber driver if he or she can have a real Job?

        And about the wealthier members of our society - Yeah they did that!

        • pieceofcake pieceofcake 5 hours ago - and since I'm back again in the homeland - I have been the guest of 63 Uber-Drivers in 16 different cities -(right now I'm in Redwood City CA) - and the overwhelming majority of the drivers agreed with me - that there might be no better measure for the real unemployment situation in the homeland and the terrible Job market - that so many Americans - who actually have learned some real Jobs - end up driving idiots like me around.

          For heavens sake - the other day I even had a History Prof. - and if I will get Mr. Baker one day as my driver - I tell'ya - I will get really worried.

    [Feb 21, 2017] People like Summers, DeLong, PGL and Krugman have been saying this for 30 years ever since NAFTA was passed. The voters no longer believe them. Theyre like the boy who cried wolf

    Feb 21, 2017 | economistsview.typepad.com
    Peter K. -> Peter K.... February 20, 2017 at 08:13 AM

    , 2017 at 08:13 AM
    https://www.ft.com/content/cd4e8576-e934-11e6-967b-c88452263daf

    Revoking trade deals will not help American middle classes

    The advent of global supply chains has changed production patterns in the US

    by Larry Summers
    FEBRUARY 5, 2017

    Trade agreements have been central to American politics for some years. The idea that renegotiating trade agreements will "make America great again" by substantially increasing job creation and economic growth swept Donald Trump into office.

    More broadly, the idea that past trade agreements have damaged the American middle class and that the prospective Trans-Pacific Partnership would do further damage is now widely accepted in both major US political parties.

    As Senator Daniel Patrick Moynihan once observed, participants in political debate are entitled to their own opinions but not their own facts. The reality is that the impact of trade and globalisation on wages is debatable and could be substantial. But the idea that the US trade agreements of the past generation have impoverished to any significant extent is absurd.

    There is a debate to be had about the impact of globalisation on middle class wages and inequality. Increased imports have displaced jobs. Companies have been able to drive harder bargains with workers, particularly in unionised sectors, because of the threat they can outsource. The advent of global supply chains has changed production patterns in the US.

    My judgment is that these effects are considerably smaller than the impacts of technological progress. This is based on a variety of economic studies, experience in hypercompetitive Germany and the observation that the proportion of American workers in manufacturing has been steadily declining for 75 years. That said I acknowledge that global trends and new studies show that the impact of trade on wages is much more pronounced than a decade ago.

    But an assessment of the impact of trade on wages is very different than an assessment of trade agreements. It is inconceivable that multilateral trade agreements, such as the North American Free Trade Agreement, have had a meaningful impact on US wages and jobs for the simple reason that the US market was almost completely open 40 years ago before entering into any of the controversial agreements.

    American tariffs on Mexican goods, for example, averaged about 4 per cent before Nafta came into force. China had what was then called "most favoured nation" trading status with the US before its accession to the World Trade Organization and received the same access as other countries. Before the Korea Free Trade Agreement, US tariffs on Korea averaged a paltry 2.8 per cent.

    The irrelevance of trade agreements to import competition becomes obvious when one listens to the main arguments against trade agreements. They rarely, if ever, take the form of saying we are inappropriately taking down US trade barriers.

    Rather the naysayers argue that different demands should be made on other countries during negotiations - on issues including intellectual property, labour standards, dispute resolution or exchange rate manipulation. I am sympathetic to the criticisms of TPP, but even if they were all correct they do not justify the conclusion that signing the deal would increase the challenges facing the American middle class.

    The reason for the rise in US imports is not reduced trade barriers. Rather it is that emerging markets are indeed emerging. They are growing in their economic potential because of successful economic reforms and greater global integration.

    These developments would have occurred with or without US trade pacts, though the agreements have usually been an impetus to reform. Indeed, since the US does very little to reduce trade barriers in our agreements, the impetus to reform is most of what foreign policymakers value in them along with political connection to the US.

    The truth too often denied by both sides in this debate is that incremental agreements like TPP have been largely irrelevant to the fate of middle class workers. The real strategic choice Americans face is whether the objective of their policies is to see the economies of the rest of the world grow and prosper. Or, does the US want to keep the rest of the world from threatening it by slowing global growth and walling off products and people?

    Framed this way the solution appears obvious. A strategy of returning to the protectionism of the past and seeking to thwart the growth of other nations is untenable and would likely lead to a downward spiral in the global economy. The right approach is to maintain openness while finding ways to help workers at home who are displaced by technical progress, trade or other challenges.

    Peter K. -> Peter K.... , February 20, 2017 at 08:16 AM
    " The right approach is to maintain openness while finding ways to help workers at home who are displaced by technical progress, trade or other challenges."

    People like Summers, DeLong, PGL and Krugman have been saying this for 30 years ever since NAFTA was passed.

    The voters no longer believe them. They're like the boy who cried wolf.

    cm -> Peter K.... , February 20, 2017 at 01:05 PM
    I would actually agree with the stance in general, if there would be an actuall intention to help the affected people/populations, but there is none. Retraining for yet another job that doesn't exist (in sufficient volume so you can realistically get it) is not help. It is just cover for victim blaming - see we forgive you for choosing an incorrect career, here is your next chance, don't blow that one too (which we know "you will" as there are not enough jobs there either).
    Peter K. -> Peter K.... , February 20, 2017 at 08:14 AM
    http://www.bradford-delong.com/2017/02/must-read-four-things-are-going-on-technology-globalization-macro-policy-trade-agreements-lawrence-summ.html

    DeLong Feb. 20, 2017

    Must-Read: Five things are going on with respect to America's blue-, pink-, and--increasingly--white lower-middle and middle-middle working classes. Three of them are real, and two of them are fake:

    Technology: It has--worldwide--greatly amplified manufacturing labor productivity, accompanied by limited demand for manufactured goods: few of us want more than one full-sized refrigerator, and very very few of us want more than two. That means that if you are hoping to be relatively high up in the wage distribution by virtue of your position as a hard-to-replace cog on a manufacturing assembly line, you are increasingly out of luck. If you are hoping for high blue-collar wages to lift your own via competition, you are increasingly out of luck.

    Legal and institutional bargaining power: The fact that bargaining power has flowed to finance and the executive suite and away from the shop- and assembly-floor is the second biggest deal here. It could have been otherwise--this is, primarily, a thing that has happened in English-speaking countries. It has happened much less elsewhere. It could have happened much less here.

    Macro policy: Yes, the consequences of the Reagan deficits were to cream midwestern manufacturing and destroy worker bargaining power in export and import-competing industries. Yes, the low-pressure economies of Volcker, late Greenspan, and Bernanke wreaked immense damage. Any more questions?

    Globalization: Globalization deepens the division of labor, and does so in a way that is not harmful to high-paying manufacturing jobs in the global north. The high-paying manufacturing jobs that require skills and expertise (as opposed to the lower-paying ones that just require being in the right place at the right time with some market power) are easier to create and hold on to if you can be part of a globalized value chain than otherwise. This is largely fake.

    Trade agreements: This is a nothingburger: completely fake.

    As somebody who strongly believes that supply curves slope up--are neither horizontal nor vertical--and that demand curves slope down--are neither horizontal nor vertical--I think that Larry Summers is misguided here when he talks about how "companies have been able to drive harder bargains with workers, particularly in unionised sectors, because of the threat they can outsource." This was certainly true since the 1950s with the move of American manufacturing to the south, and the rise of deceptively-named "right-to-work" laws. But the threat to outsource is zero-sum on a national level: the balance of payments balances. Individual sectors lose--and manufacturing workers have been big losers. But that is, I think, only because of our macro policies. If we were a normal global North manufacturing power--a Germany or a Japan--exporting capital and running a currency policy that did not privilege finance, he would not be talking a out how "companies have been able to drive harder bargains with workers, particularly in unionised sectors, because of the threat they can outsource." He would be talking about how the opportunity to participate in global value chains increases the productivity of semi-skilled and skilled manufacturing workers in the U.S.

    Thus I think Larry conceded too much here. Blame macro policy. Blame technology. Blame the conflict between the market society's requirements that only property rights matter and that everything pass a profitability test against people's strong beliefs that even if they have no property rights they have rights to stable communities, stable industries, and stable occupations. But, to channel Pascal Lamy, look not at the finger but at the moon here.

    However, Larry is right on his main point: NAFTA really ain't the problem:

    Lawrence Summers: Revoking Trade Deals Will Not Help American Middle Classes: "There is a debate to be had about the impact of globalisation on middle class wages and inequality...

    Tom aka Rusty -> Peter K.... , February 20, 2017 at 09:27 AM
    For Delong to be right on trade, thousands of rust belt politicians, journalists, and business leaders and a few hundred thousand workers would have to be delusional.

    He is right in the sense that it is too late to revoke NAFTA, the damage is done.

    [Feb 21, 2017] Debt slavery and high unemployment are two the most direct method of keeping wages low

    Feb 21, 2017 | economistsview.typepad.com
    J ohnH -> New Deal democrat... February 20, 2017 at 07:31 AM , 2017 at 07:31 AM
    I expect that if you look at the pre-bellum South, there will be plenty of examples of stagnant wages, low interest rates...

    In Mexico, wages never rose regardless of monetary policy.

    The point that I've been making for a while: despite a few progressive economists delusions for rapid economic growth to tighten wages, it won't happen for the following reasons.

    1) most employers will just say 'no,' probably encouraged centrally by the US Chamber of Commerce and other industry associations. Collusion? You bet.

    2) employers will just move jobs abroad, where there's plenty of slack. Flexible labor markets has been one of the big goals of globalization, promoted by the usual suspects including 'librul' economists like Krugman.

    3) immigration, which will be temporarily constrained as Trump deports people, but will ultimately be resumed as employers demand cheap, malleable labor.

    New Deal democrat -> JohnH... , February 20, 2017 at 07:35 AM
    If what we get is easy money, no inflation, and stagnant wages, then that is the Coolidge bubble. We know how that ends.
    Peter K. -> JohnH... , February 20, 2017 at 07:36 AM
    I disagree. It happened in late 90s. The ideas you mention are factors, including the decline of unions.

    What has happened in recent decades is that asset bubbles - like the dot.com and housing bubbles - have popped sending a high pressure economy into a low pressure one with higher unemployment.

    Neoliberal economists often talk about "flexible labor markets" as desirable but I don't think Krugman ever has. Maybe he has in a roundabout, indirect way.

    JohnH -> Peter K.... , February 20, 2017 at 07:58 AM
    Peter K still insists on propagating the myth that the 1990s was a period of easy money that led to increasing wages. Not so:
    https://fred.stlouisfed.org/series/FEDFUNDS

    Fed funds rates were consistently about double the rate of inflation.

    The fact that the economy boomed and wages increased was due to the tech boom--an unrepeatable anomaly. The Fed and Clinton administration unsuccessfully attempted to stifle it with high rates and budget balancing.

    To make sure that wages never rose again, Clinton signed China PNTR, granting China access to WTO, ushering in the great sucking sound of jobs going to China. Krugman cheered.

    Peter K. -> JohnH... , February 20, 2017 at 08:28 AM
    Again I just disagree with you.

    "Fed funds rates were consistently about double the rate of inflation."

    That doesn't matter. What matters is if they were tightening or loosening. Where they reducing access to credit or expanding it.

    The real history is that Democrats on the FOMC wanted to raise rates - as Dean Baker has discussed.

    Greenspan decided not to raise rates for various reasons and unemployment stayed low at around 4 percent with wages sharing in productivity gains until the Dot.com stock bubble popped.

    I see no reason why you should believe labor markets will never get tight again and that even if they do it won't lead to increased worker bargaining power and higher wages.

    Your reasoning and logic isn't sound.

    Peter K. -> Peter K.... , February 20, 2017 at 08:30 AM
    Some people were afraid of inflation but it never came. But wages did share in productivity gains.
    JohnH -> Peter K.... , February 20, 2017 at 03:17 PM
    There are numerous reasons why wages won't increase even if labor markets tighten...you just don't want to acknowledge the nefarious consequences of neoliberal policies: business collusion, offshoring, immigration, and the tax system's preference for returns of returns to capital over wages, which preferences technology.
    pgl -> JohnH... , February 20, 2017 at 10:36 AM
    The real interest rate was around 2.5% per your own argument which was a lot lower than real rates in the 1980's. So by any reasonable standard - we did have easy money.
    JohnH -> pgl... , February 20, 2017 at 01:35 PM
    lol!!! 2.5% real Fed funds rates as cheap money? Who are you kidding???

    If pgl is good at anything, it's producing nonsense!

    Julio -> JohnH... , February 20, 2017 at 08:35 AM
    Another round of tax and regulatory giveaways can create a short-term boom and keeping jobs at home.

    Of course, with the giveaways they're hitting the zero lower bound...

    JohnH -> Julio ... , February 20, 2017 at 03:21 PM
    "Another round of tax and regulatory giveaways can create a short-term boom," as part of the race to the bottom for wages...IOW Republicans and their Democratic allies will have succeeded when American wages are about the same as wages in China or Mexico. But, per their logic, then jobs will be plentiful because there will be no need to off-shore.
    pgl -> JohnH... , February 20, 2017 at 09:11 AM
    "the pre-bellum South"? You mean slavery. Yeah - wages were incredibly low.
    JohnH -> pgl... , February 20, 2017 at 01:37 PM
    Yep...slavery is the most direct method of keeping wages low. The policies I outlined--monopsony, offshoring, and immigration--are all a fall back, to be used when industry can't use their best policy.
    libezkova -> JohnH... , February 20, 2017 at 12:02 PM
    If the neoliberal elite can't part with at least a small part of their privileges, the political destabilization will continue and they might lose everything.

    "People of privilege will always risk their complete destruction rather than surrender any material part of their advantage." -- John Kenneth Galbraith

    ilsm -> libezkova... , February 20, 2017 at 12:53 PM
    You may know that JK Galbraith served on the US' evaluation of strategic bombings effect in WW II.

    He is one of the minority whose opinion was suppressed by the military industry complex which concluded outside the A bomb no relation to bombing and victory was proven, including both industry output and energy production in Germany.

    Allied bombing did kill a lot of civilians, which if Germans or Japan had won bomber commanders would have been hanged.

    Julio -> libezkova... , February 20, 2017 at 05:44 PM
    "...the political destabilization will continue and they might lose everything."

    Or they might find a way to end the political destabilization. You know, we're not arresting you, we just want to know, in the war on Muslim terrorists and Mexican criminals, are you with us or against us? You'd be surprised (or maybe you wouldn't!) how the question is enough to quiet everybody down.

    Julio -> Julio ... , February 20, 2017 at 05:46 PM
    Just heard an interview clip with candidate Trump defending his Muslim ban as being the same as the Japanese interment, and saying we're in a war.

    [Feb 20, 2017] Tech Jobs Took a Big Hit Last Year

    Feb 20, 2017 | tech.slashdot.org

    Barb Darrow, writing for Fortune: Tech jobs took it on the chin last year. Layoffs at computer, electronics, and telecommunications companies were up 21 percent to 96,017 jobs cut in 2016 , compared to 79,315 the prior year. Tech layoffs accounted for 18 percent of the total 526,915 U.S. job cuts announced in 2016, according to Challenger, Gray & Christmas, a global outplacement firm based in Chicago. Of the 2016 total, some 66,821 of the layoffs came from computer companies, up 7% year over year. Challenger attributed much of that increase to cuts made by Dell Technologies, the entity formed by the $63 billion convergence of Dell and EMC