Re: Job loss

[dmschanoes]

Compared to what? It's hard to argue with its capacity to 
grow,innovate, and produce cheaper commodities over the centuries - at 
ahigh social and ecological cost, for sure, but I don't think you canwin 
the "efficiency" argument from the left. It has to be on othergrounds.

 
Sympathetic we may be to Joanna's critique, but 
Henwood has hit on something important. But I think he's swung a little 
late.  
 
It's not so much that capital is efficient, more 
efficient, or most efficient, or less efficient-- it is simply that efficiency 
and non-efficiency, i.e. waste, are products and by-products, of profit.  
So the drive to reduce costs of production drives capital to the 
apparent bottom line of efficiency, but the need to realize the 
expropriated surplus value drives it to highest levels of waste and 
inefficiency.
 
So the critique isn't contained in some 
imagined measure of higher efficiency but in the terms of capitalist production 
itself-- in terms of profit and the realization thereof, in terms of the 
organization of labor to develop productive forces, and the ability of the 
property relations to sustain that development.
 
Carroll Cox may not agree, but those are 
indeed the categories of Marx's critique 
 
dms

Re: Job loss and the race to the bottom.....

[Devine, James]

interesting. But I think it's a mistake to blame "free trade." Though "globalization" 
as currently practiced does involve a race -- or rather a creep -- to the bottom, 
lowering wages relative to productivity, the high exchange rate of the dollar quickens 
this process in the US. 


Jim Devine [EMAIL PROTECTED] &  http://bellarmine.lmu.edu/~jdevine




> -Original Message-
> From: Mike Ballard [mailto:[EMAIL PROTECTED]
> Sent: Monday, October 27, 2003 9:37 PM
> To: [EMAIL PROTECTED]
> Subject: [PEN-L] Job loss and the race to the bottom.
> 
> 
> http://www.aflcio.org/aboutaflcio/magazine/0903_amjobs.cfm
> 
> Manufacturing job loss starts the downward spiral
> 
> The loss of good manufacturing jobs has ripped apart
> communities and permanently lowered living standards
> for families throughout the United States, including
> in Rockford, Ill., 70 miles from Chicago. The northern
> Illinois city is historically second only to Cleveland
> as a center for machine tooling, the making of tools
> used in machine manufacturing.
> 
> Machine tooling, which traditionally employs the most
> highly skilled manufacturing workers including members
> of the Machinists and UAW, is the bedrock of America's
> manufacturing industry.
> 
> But the bedrock is crumbling. The Rockford area lost
> more than 20 percent of its manufacturing jobs-about
> 10,000-between May 2000 and 2003, according to MBG
> Information Services President and Economist Charles
> McMillion's analysis of Department of Labor data

Job loss and the race to the bottom.....

[Mike Ballard]

http://www.aflcio.org/aboutaflcio/magazine/0903_amjobs.cfm

Manufacturing job loss starts the downward spiral

The loss of good manufacturing jobs has ripped apart
communities and permanently lowered living standards
for families throughout the United States, including
in Rockford, Ill., 70 miles from Chicago. The northern
Illinois city is historically second only to Cleveland
as a center for machine tooling, the making of tools
used in machine manufacturing.

Machine tooling, which traditionally employs the most
highly skilled manufacturing workers including members
of the Machinists and UAW, is the bedrock of America’s
manufacturing industry.

But the bedrock is crumbling. The Rockford area lost
more than 20 percent of its manufacturing jobs—about
10,000—between May 2000 and 2003, according to MBG
Information Services President and Economist Charles
McMillion’s analysis of Department of Labor data.
General manufacturing jobs have been among those lost
in Rockford, including jobs held by Steelworkers Local
745 members at the Goodyear tire plant. USWA members
at Goodyear now number 750, down from 1,650 in 1999,
before the corporation shipped the jobs to Asia and
South America.

But most manufacturing jobs lost in Rockford have been
in machine tooling. At Greenlee/Textron, which makes
drill bits and tools for electrical contractors, about
180 Machinists now represented by IAM Local 1553 are
employed today, down from about 900 in the late 1980s.
The 112-year-old crown jewel of Rockford machine
tooling—Ingersoll International—declared bankruptcy
this spring and laid off 300 employees in Rockford and
70 in Michigan, leaving only skeleton crews of
managers and a few contract workers.

“The lesson of Rockford,” says Faux, “is it disproves
the free traders’ argument that America could afford
to lose manufacturing jobs in areas like textiles and
steel because we would ultimately triumph in global
competition by making the things hardest to make. In
fact, those things are machine tools—and we’re losing
them.”

A loss of manufacturing jobs reverberates throughout
the community—and ultimately the nation. When
manufacturing factories aren’t being built, maintained
or expanded, jobs disappear in areas such as
construction.

“Our union has about 30 percent unemployment,” says
Mark Bramble, business agent for Electrical Workers
Local 364 in Rockford. “Guys burn through their
unemployment, lose all their benefits, get divorced
and then go where the grass looks greener or settle
for working as a greeter at Wal-Mart.”




=
*
"A man's maturity consists in finding once again the seriousness he had
as a child at play."

Heraclitus, Greek philosopher (500 B.C.)

http://profiles.yahoo.com/swillsqueal

__
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the cost of job loss

[Eubulides]

18% of Workers in Study Lost Jobs
The university survey of 1,015 working-age adults covers 2000-03. Many who
were laid off didn't get any jobless benefits.
>From Associated Press

July 28, 2003

TRENTON, N.J. - Two-thirds of workers laid off in the last three years
received no severance package or other compensation from their employer,
according to a new study by researchers at Rutgers University and the
University of Connecticut.

The study of 1,015 randomly selected working-age adults, titled "The
Disposable Worker: Living in a Job-Loss Economy," also found that one in
five of those interviewed, or 18%, had been laid off during the 2000-03
period.

Of those who lost their jobs, only 49% of the ones who had earned at least
$40,000 annually said they received unemployment insurance benefits. For
those who made less than $40,000 a year, the number with unemployment
insurance benefits shrank to 35%.

"There's neither private sector nor government support that's going to
most people," said Carl Van Horn, director of the John J. Heldrich Center
for Workforce Development at Rutgers, which conducted the study.

Serge Kher had never been unemployed until his job as general manager of a
car dealership in Virginia Beach, Va., was eliminated in March.

After sending out 107 resumes, trolling Internet job sites and looking
into different fields, the 48-year-old father of four had just one
interview.

"I'm starting to go crazy," he said. "There are days when I feel that I'm
worthless."

Kher, now a stay-at-home dad, got one month's severance pay and is
collecting $300 a week in unemployment benefits. His family went without
health benefits for two months until his wife found a job offering the
insurance.

Still, he's received more aid than most Americans laid off since 2000,
according to the study.

Barely one-fourth of those surveyed said their employer extended their
health benefits after they were laid off, and less than one-fifth said
they received help finding a job, career counseling or skills training.

Despite the National Bureau of Economic Research's July 17 proclamation
that the recession ended in November 2001 - because gross domestic product
began rising then - Van Horn says he and plenty of other economists
disagree that there has been a turnaround.

"There are still a lot of people unemployed," he said. "If you're a
typical person and not an economist, you don't really care about the GDP."

Businesses continue to announce thousands of layoffs. The national
unemployment rate hit a nine-year high of 6.4% in June, and many
economists think it could hit 6.6% this year before starting to decline.

In addition, workers are remaining unemployed longer than in previous
recessions, wrote Van Horn and the study's co-author, Kenneth Dautrich,
director of Connecticut's Center for Survey Research and Analysis.

Thirty percent of those surveyed received only one to two weeks' notice
their jobs were being cut, and 34% had no warning.

The survey also found that 40% of those who lost their jobs worry it will
happen again in the next three to five years.

Since James Malloy, 58, was laid off as a truck driver in September 2000,
he's washed cars and mowed lawns, then worked part-time for the Durham,
N.C., transit company with no benefits to keep up with his mortgage and
car loan.

"I was just scratching for pennies. It was tough times," said Malloy,
whose brother also hasn't had steady work for about three years.

Married with two grown children, Malloy finally got a full-time
supervisory job working nights with the transit system on July 1.

But a new company just took over the transit system and quickly cut four
of its 130 jobs.

Does he feel secure? "Not very," Malloy said.

[PEN-L:8003] Fwd: Re: Fwd: Re: cost of job loss

[MScoleman]

Doug, thanks for the info and a HAPPY NEW YEAR!!\

maggie coleman [EMAIL PROTECTED]

In a message dated 96-12-30 15:24:20 EST, [EMAIL PROTECTED] (Doug Henwood)
writes:

>Subj:  [PEN-L:7987] Re: Fwd: Re: cost of job loss
>Date:  96-12-30 15:24:20 EST
>From:  [EMAIL PROTECTED] (Doug Henwood)
>Sender:[EMAIL PROTECTED]
>Reply-to:  [EMAIL PROTECTED]
>To:[EMAIL PROTECTED] (Multiple recipients of list)
>
>At 11:44 AM 12/30/96, [EMAIL PROTECTED] wrote:
>
>>What is the definition of 'core' inflation and what is the difference
>between
>>'core' inflation and inflation as measured by the cpi?  Are the two types
of
>>inflation defined in relation to each other or are they seperate?
>
>"Core" inflation is the CPI excluding food and energy prices. The BLS
>publishes several special indexes like this, but this is the most popular
>one. The logic is that food & energy display great short-term volatility
>that may distort the underlying trend. This is of special interest to Wall
>Street, which is more concerned with month-to-month and quarter-to-quarter
>figures than are most civilians, who look at year-to-year numbers.
>
>Similar things are done with other major series, like durable goods, where
>aircraft orders are sometimes stripped away because they're so volatile,
>and retail sales, which are often looked at ex-auto, because the car market
>has a life of its own separate from more proasic consumer goods.
>
>Besides, Wall Streeters are usually looking for a "story" to tell - one
>consistent with either their own prejudices or the sales effort - so
>looking at subindexes is sometimes a way to avoid embarrassing facts.
>Another favorite ploy is to look at seasonally unadjusted numbers, if the
>tale they tell is friendlier to what you want to hear. People with bond
>inventories or portfolios under management will go to great lengths to
>uncover evidence of economic weakness lying under the headline numbers.
>
>Doug
>
>--
>
>Doug Henwood
>Left Business Observer
>250 W 85 St
>New York NY 10024-3217
>USA
>+1-212-874-4020 voice
>+1-212-874-3137 fax
>email: <[EMAIL PROTECTED]>
>web: <http://www.panix.com/~dhenwood/LBO_home.html>
>
>
>
>
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>To: Multiple recipients of list <[EMAIL PROTECTED]>
>Subject: [PEN-L:7987] Re: Fwd: Re: cost of job loss
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-
Forwarded message:
From:   [EMAIL PROTECTED] (Doug Henwood)
Sender: [EMAIL PROTECTED]
Reply-to:   [EMAIL PROTECTED]
To: [EMAIL PROTECTED] (Multiple recipients of list)
Date: 96-12-30 15:24:20 EST

At 11:44 AM 12/30/96, [EMAIL PROTECTED] wrote:

>What is the definition of 'core' inflation and what is the difference
between
>'core' inflation and inflation as measured by the cpi?  Are the two types of
>inflation defined in relation to each other or are they seperate?

"Core" inflation is the CPI excluding food and energy prices. The BLS
publishes several special indexes like this, but this is the most popular
one. The logic is that food & energy display great short-term volatility
that may distort the underlying trend. This is of special interest to Wall
Street, which is more concerned with month-to-month and quarter-to-quarter
figures than are most civilians, who look at year-to-year numbers.

Similar things are done with other major series, like durable goods, where
aircraft orders are sometimes stripped away because they're so volatile,
and retail sales, which are often looked at ex-auto, because the car market
has a life of its own separate from more proasic consumer goods.

Besides, Wall Streeters are usually looking for a "story" to tell - one
consistent with either their own prejudices or the sales effort - so
looking at subindexes is sometimes a way to avoid em

[PEN-L:7995] Re: cost of job loss

[Doug Henwood]

At 7:07 PM 12/30/96, Robert Cherry wrote:

> Doug Henwood wrote:
>
>> Hmm, but the 1989 price deflator was 1.7 points above the 1986 one - not as
>> sharp a rise as the CPI, but still a 65% spike in the inflation rate. Not
>> that that's alarming to me, but it is/was to creditors.
>
>  This is hogwash.  The price of crude oil fell from $440 in 1985 to $223 in
>1986. Agricultural prices also fell.  This is why the inflation rate for 1986
>was so low.  (Not also the movement upwards of real oil prices from 1988 to
>1990).  Every serious analyst, especially Greenspan, knew this and that
>is why they all knew that  there was no trend whatsoever for the period
>1983-90.  For this reason, I stand by my previous conclusion:
>
>>   Thus, the FED responded in 1989 and 1990 to financial interests which
>>are tied to the CPI and not to any clear underlying evidence that there was
>>an accelerating inflation rate.

Here's how two CPI subindexes with minimal attachment to oil fared. Numbers
are year-to-year changes in the indexes.

CPI ex-food & energy
  bottomed 3.7% Feb 87
  peaked 5.7% Feb 91

CPI services
  bottomed at 3.9% in Jun 87
  peaked at 6.2% in Feb 91

Meanwhile, capacity utilization had been rising from the recession low of
76% in 1983 to almost 84% in 1989 (i.e. above the 82% inflation-danger
level), and unemployment had fallen from almost 10% to just over 5% over
the same period. For good Kaleckian reasons, even industrialists would have
to view the tighter labor market with some alarm. This is real
class-struggle stuff, not the figments of bond traders' and central
bankers' imaginations.


Doug

--

Doug Henwood
Left Business Observer
250 W 85 St
New York NY 10024-3217
USA
+1-212-874-4020 voice
+1-212-874-3137 fax
email: <[EMAIL PROTECTED]>
web: 

[PEN-L:7992] Re: cost of job loss

[Robert Cherry]

  Core inflation does not simply exclude energy and agricultural products 
because of their volatility but also because any movement of these prices has 
nothing to do with movements of GDP.  Since weather conditions and world 
political dynamics determine movements of agricultural and energy prices, 
respectively, it would be wrong to include their influences on the general 
price level when determining macroeconomic policies.  

In my previous post, I noted the inflation rates.  Let me now include a 
real oil prices (in constant 1987 dollars) where the unit of measure is price 
per million BTUs:

 1983   1984  1985  1986  1987   1988   1989  1990
 CPI  3.24.3   3.6   1.9   3.64.14.8   5.4
 Price Deflator   4.14.4   3.7   2.6   3.23.94.3   4.2
 Real Oil Price   ------   440   223   265210252   305 

 Doug Henwood wrote:

> Hmm, but the 1989 price deflator was 1.7 points above the 1986 one - not as
> sharp a rise as the CPI, but still a 65% spike in the inflation rate. Not
> that that's alarming to me, but it is/was to creditors.


  This is hogwash.  The price of crude oil fell from $440 in 1985 to $223 in 
1986. Agricultural prices also fell.  This is why the inflation rate for 1986 
was so low.  (Not also the movement upwards of real oil prices from 1988 to 
1990).  Every serious analyst, especially Greenspan, knew this and that 
is why they all knew that  there was no trend whatsoever for the period 
1983-90.  For this reason, I stand by my previous conclusion:

>   Thus, the FED responded in 1989 and 1990 to financial interests which
>are tied to the CPI and not to any clear underlying evidence that there was
>an accelerating inflation rate.

Happy New Year,

Robert Cherry

  

[PEN-L:7987] Re: Fwd: Re: cost of job loss

[Doug Henwood]

At 11:44 AM 12/30/96, [EMAIL PROTECTED] wrote:

>What is the definition of 'core' inflation and what is the difference between
>'core' inflation and inflation as measured by the cpi?  Are the two types of
>inflation defined in relation to each other or are they seperate?

"Core" inflation is the CPI excluding food and energy prices. The BLS
publishes several special indexes like this, but this is the most popular
one. The logic is that food & energy display great short-term volatility
that may distort the underlying trend. This is of special interest to Wall
Street, which is more concerned with month-to-month and quarter-to-quarter
figures than are most civilians, who look at year-to-year numbers.

Similar things are done with other major series, like durable goods, where
aircraft orders are sometimes stripped away because they're so volatile,
and retail sales, which are often looked at ex-auto, because the car market
has a life of its own separate from more proasic consumer goods.

Besides, Wall Streeters are usually looking for a "story" to tell - one
consistent with either their own prejudices or the sales effort - so
looking at subindexes is sometimes a way to avoid embarrassing facts.
Another favorite ploy is to look at seasonally unadjusted numbers, if the
tale they tell is friendlier to what you want to hear. People with bond
inventories or portfolios under management will go to great lengths to
uncover evidence of economic weakness lying under the headline numbers.

Doug

--

Doug Henwood
Left Business Observer
250 W 85 St
New York NY 10024-3217
USA
+1-212-874-4020 voice
+1-212-874-3137 fax
email: <[EMAIL PROTECTED]>
web: 

[PEN-L:7985] Fwd: Re: cost of job loss

[MScoleman]

What is the definition of 'core' inflation and what is the difference between
'core' inflation and inflation as measured by the cpi?  Are the two types of
inflation defined in relation to each other or are they seperate?
maggie coleman [EMAIL PROTECTED]

In a message dated 96-12-30 14:09:07 EST, [EMAIL PROTECTED] (Doug Henwood)
writes:

>
>"Core" inflation is analytically useful, of course, but if we're talking
>about the buying power of money, you can't strip away the elements that
>tell you what you don't want to hear. Thatcher did that with the RPI for
>entirely reprehensible reasons, no?
>
>Doug
>
>--


-
Forwarded message:
From:   [EMAIL PROTECTED] (Doug Henwood)
Sender: [EMAIL PROTECTED]
Reply-to:   [EMAIL PROTECTED]
To: [EMAIL PROTECTED] (Multiple recipients of list)
Date: 96-12-30 14:09:07 EST

At 5:28 PM 12/27/96, Robert Cherry wrote:

>  In Jim Devine's communication on the COJL, he recopies a summary from the
>BLS Report:
>
>" [T]he last time the jobless rate sank as low as it is
> today -- in the late 1980s -- wage increases and inflation
> accelerated, forcing the Fed to raise interest rates in 1988
> and early 1989 to cool off the economy."
>
>
>  Inflation accelerated ONLY if the CPI is used.  When inflation is measured
>for the entire economy -- either using the implicit price deflator or core
>inflation (which eliminates energy and raw food price changes) -- there is
>virtually no change between 1988 and 1989 and no rise for 1990."
>
> 1983   1984  1985  1986  1987   1988   1989  1990
> CPI  3.24.3   3.6   1.9   3.64.14.8   5.4
> Price Deflator   4.14.4   3.7   2.6   3.23.94.3   4.2
>
>   Thus, the FED responded in 1989 and 1990 to financial interests which
>are tied to the CPI and not to any clear underlying evidence that there was
>an accelerating inflation rate.

Hmm, but the 1989 price deflator was 1.7 points above the 1986 one - not as
sharp a rise as the CPI, but still a 65% spike in the inflation rate. Not
that that's alarming to me, but it is/was to creditors.

"Core" inflation is analytically useful, of course, but if we're talking
about the buying power of money, you can't strip away the elements that
tell you what you don't want to hear. Thatcher did that with the RPI for
entirely reprehensible reasons, no?

Doug

--

Doug Henwood
Left Business Observer
250 W 85 St
New York NY 10024-3217
USA
+1-212-874-4020 voice
+1-212-874-3137 fax
email: <[EMAIL PROTECTED]>
web: 

[PEN-L:7984] Re: cost of job loss

[Doug Henwood]

At 5:28 PM 12/27/96, Robert Cherry wrote:

>  In Jim Devine's communication on the COJL, he recopies a summary from the
>BLS Report:
>
>" [T]he last time the jobless rate sank as low as it is
> today -- in the late 1980s -- wage increases and inflation
> accelerated, forcing the Fed to raise interest rates in 1988
> and early 1989 to cool off the economy."
>
>
>  Inflation accelerated ONLY if the CPI is used.  When inflation is measured
>for the entire economy -- either using the implicit price deflator or core
>inflation (which eliminates energy and raw food price changes) -- there is
>virtually no change between 1988 and 1989 and no rise for 1990."
>
> 1983   1984  1985  1986  1987   1988   1989  1990
> CPI  3.24.3   3.6   1.9   3.64.14.8   5.4
> Price Deflator   4.14.4   3.7   2.6   3.23.94.3   4.2
>
>   Thus, the FED responded in 1989 and 1990 to financial interests which
>are tied to the CPI and not to any clear underlying evidence that there was
>an accelerating inflation rate.

Hmm, but the 1989 price deflator was 1.7 points above the 1986 one - not as
sharp a rise as the CPI, but still a 65% spike in the inflation rate. Not
that that's alarming to me, but it is/was to creditors.

"Core" inflation is analytically useful, of course, but if we're talking
about the buying power of money, you can't strip away the elements that
tell you what you don't want to hear. Thatcher did that with the RPI for
entirely reprehensible reasons, no?

Doug

--

Doug Henwood
Left Business Observer
250 W 85 St
New York NY 10024-3217
USA
+1-212-874-4020 voice
+1-212-874-3137 fax
email: <[EMAIL PROTECTED]>
web: 

[PEN-L:7976] Re: cost of job loss

[Robert Cherry]

  In Jim Devine's communication on the COJL, he recopies a summary from the 
BLS Report:

" [T]he last time the jobless rate sank as low as it is 
 today -- in the late 1980s -- wage increases and inflation 
 accelerated, forcing the Fed to raise interest rates in 1988 
 and early 1989 to cool off the economy."


  Inflation accelerated ONLY if the CPI is used.  When inflation is measured 
for the entire economy -- either using the implicit price deflator or core 
inflation (which eliminates energy and raw food price changes) -- there is 
virtually no change between 1988 and 1989 and no rise for 1990."

 1983   1984  1985  1986  1987   1988   1989  1990
 CPI  3.24.3   3.6   1.9   3.64.14.8   5.4
 Price Deflator   4.14.4   3.7   2.6   3.23.94.3   4.2

   Thus, the FED responded in 1989 and 1990 to financial interests which 
are tied to the CPI and not to any clear underlying evidence that there was 
an accelerating inflation rate.

Robert Cherry
Brooklyn College

   

[PEN-L:7975] cost of job loss redux

[JDevine]

 from the BLS daily report that Dave so thoughtfully and 
 helpfully posts: >>John M. Berry, writing in The Washington 
 Post "Trendlines" column (page C6), discusses how fears 
 about job security may hold down inflation. He points out 
 that the last time the jobless rate sank as low as it is 
 today -- in the late 1980s -- wage increases and inflation 
 accelerated, forcing the Fed to raise interest rates in 1988 
 and early 1989 to cool off the economy. But today, firms 
 have become more likely to fire workers when hard times hit. 
 Employees' sense of job security has suffered as the share 
 of job-losers among the unemployed goes up and down with the 
 economy's health.<<

 COMMENT: awhile back, I played with some econometrics to see 
 if the cost-of-job-loss was rising relative to the official 
 unemployment rates, wondering if such a rise might explain 
 the seemingly increased ability of (official) unemployment to 
 deter inflation. It turned out, to my amazement, that my 
 rudimentary 'metrics indicated that, if anything, the COJL 
 has fallen relative to U (the long-term trend was down, 
 swamping the upward trend since 1979). 

 The above helps explain what's going on. The rise in job 
 insecurity isn't measured in the COJL, is it? (Eric?) The 
 rise in insecurity might explain the increased power of the 
 U rate to deter inflation. Of course, both the COJL and 
 insecurity would play a role in a complete analysis.

 Insecurity is clearly important. The Powers that Be, the 
 Pundicrats, and the Economic Establishment all want to 
 impose incrased "flexibility" -- a.k.a. worker insecurity -- 
 on labor markets in W. Europe and elsewhere. The S. Korean 
 governing party recently did this in a secret meeting of the 
 Parliament. It's class war. 

 In S. Korea, the workers responded by a massive strike, 
 according to today's L.A. TIMES. There's also been a lot of 
 resistance in W. Europe. Keep it up!

in pen-l solidarity,

Jim Devine   [EMAIL PROTECTED]
[EMAIL PROTECTED]
Econ. Dept., Loyola Marymount Univ.
7900 Loyola Blvd., Los Angeles, CA 90045-8410 USA
310/338-2948 (daytime, during workweek); FAX: 310/338-1950
"Segui il tuo corso, e lascia dir le genti." (Go your own way
and let people talk.) -- K. Marx, paraphrasing Dante A.

[PEN-L:7786] Re: Cost of Job Loss

[Eric Nilsson]

Doug H asks,
> How did you measure the social wage, Eric?

Answer: very poorly, but better than others have done it.

Key: the social wage is generally presented as the contribution
government programs make to the standard of living of employed
workers.

Determining the size of the social wage requires determining
what government programs benefit the "average worker" and, 
then, determining the contribution these programs make to
the worker's standard of living. Neither of these tasks
is easy (or, maybe, even possible). 

Those who have previously calculated the size of the social
wage have assumed that all programs that can generally
be identified as "social welfare" programs benefit employed
workers. (For instance, that ALL spending on the social
security program that goes to retired workers benefits
employed workers!) They have also assumed that current 
government spending on each of these programs is the best way to
value the contribution these programs make to a worker's
standard of living. (For instance, the 3-fold increase in
per student educational spending over 1950-1990 means that 
students now get 3 times the educational services they
did 40 years ago.)

I try to be more careful when I identify which programs benefit
employed workers and also when I estimate the contribution
government programs make to workers' standard of living.
Not surprisingly, my estimates of the social wage is smaller than 
those made by others.

I'll send you a draft paper that explains some of the details.

Eric
.. 
Eric Nilsson
Department of Economics
California State University
San Bernardino, CA 92407
[EMAIL PROTECTED]

[PEN-L:7772] Re: Cost of Job Loss

[Doug Henwood]

At 3:17 PM 12/5/96, [EMAIL PROTECTED] wrote:

>This suggests that the cost of job loss has (1) not surprisingly
>moved with the unemployment rate; but (2) fallen over the long
>haul, perhaps due to the rise of the welfare state; with (3) a
>reversal of that trend since 1979, perhaps due to monetarism.

This would suggest that the COJL is now pretty close to the lowest it's
been since the Volcker ascendancy, even given the changes in the welfare
state.

How did you measure the social wage, Eric?

Doug

--

Doug Henwood
Left Business Observer
250 W 85 St
New York NY 10024-3217
USA
+1-212-874-4020 voice
+1-212-874-3137 fax
email: <[EMAIL PROTECTED]>
web: <http://www.panix.com/~dhenwood/LBO_home.html>

[PEN-L:7752] Re: Cost of Job Loss

[Tavis Barr]

On Thu, 5 Dec 1996 [EMAIL PROTECTED] wrote:

> Stop me before I regress again! I'll leave further work to those 
> with more sophisticated 'metrics. (bill?)


Just two comments (I'd do this myself but I erased the data):

(1) You should let the data tell you where the structural break 
is.  Assume linearity of the trend on both ends and normality of the 
error structure (of course you could do it semi-parametrically but there 
aren't enough observations to get anything meaningful) and then do one 
regression taking the break in each year.  Choose the year with the 
highest likelihood value.

(2) You should really do this in first differences (or else calculate a 
cointegrating vector) since both of these are likely to be I(1) processes.


Geekishly yours,
Tavis

[PEN-L:7751] Cost of Job Loss

[JDevine]

Thanks, Eric, for the data.  I hope to see your final research on 
this.

For what it's worth, I did some quick regressions using 
QuattroPro. For 1954-91, I regressed the cojl vs. the US 
unemployment rate, a time trend, and a time trend starting in 
1979 (the onset of monetarism).

The R2 was 0.77

more meaningful are the coefficients and t-stats [in brackets]:

U rate .  0.01738 [9.808]
trend  . -0.00232 [5.831]
trend after 1979  0.000957 [3.42]

This suggests that the cost of job loss has (1) not surprisingly 
moved with the unemployment rate; but (2) fallen over the long 
haul, perhaps due to the rise of the welfare state; with (3) a 
reversal of that trend since 1979, perhaps due to monetarism. 

After eye-balling the data, I started the second trend in 1969. 
The results were much less clear. 

I also did the above regression using the log of the C-O-J-L as 
the dependent variable, giving similar results:

R2 = .7668

U rate .  0.065868 [9.593]
trend  . -0.00885 [5.732]
trend after 1979  0.003749 [3.46]

Stop me before I regress again! I'll leave further work to those 
with more sophisticated 'metrics. (bill?)

PS: I am not related to Divine. He or she was also not related 
to Father Divine, who of course was not really related to me. 

in pen-l solidarity,

Jim Devine   [EMAIL PROTECTED]
<[EMAIL PROTECTED]>
Econ. Dept., Loyola Marymount Univ.
7900 Loyola Blvd., Los Angeles, CA 90045-8410 USA
310/338-2948 (daytime, during workweek); FAX: 310/338-1950
"Segui il tuo corso, e lascia dir le genti." (Go your own way
and let people talk.) -- K. Marx, paraphrasing Dante A.

[PEN-L:7749] RE: Cost of Job Loss query

[DICKENS, EDWIN (201)-408-3024]

Eric Nilsson writes:

>I've wondered if Fed policy could be shown to respond to changes
>in CJL.  Is this what your're thinking about?

You've got it.  (Sorry, Bill Mitchell, some of us do care about
Fed policy.  When's the next non-US day?)  I'm sure the "crude
estimates" you would make of the CJL would be no more heroic
than the ones underlying the other variables in such a reaction
function.

Edwin Dickens

[PEN-L:7748] RE: Cost of Job Loss query

[Eric Nilsson]

Edwin Dickens writes,
> Can you calculate the cost of job loss series on a quarterly
> basis?
Crude estimates could be generated but most of the underlying
data is based on annual observations. The key variable that
would change on a quarterly basis (that could be measured) is
expected average unemployment duration for a job loser.

If you're really interesting in using quarterly numbers, I
could generate such a series, but it might be many months
before I find the time.

I've wondered if Fed policy could be shown to respond to
changes in CJL. Is this what you're thinking about? 

Eric
..
Eric Nilsson
Department of Economics
California State University
San Bernardino, CA 92407
[EMAIL PROTECTED]

[PEN-L:7745] RE: Cost of Job Loss query

[DICKENS, EDWIN (201)-408-3024]

Eric,

Can you calculate the cost of job loss series on a quarterly
basis?

Edwin Dickens

[PEN-L:7744] Cost of Job Loss query

[Eric Nilsson]

Jim Devine writes:
> Does anyone have (or know of) a recently-calculated time series 
> of data on the cost of job loss (C-O-J-L) for the US? 

Below are my most recent estimates of cost of job loss for
US workers (1952-1991). The number below is the proportion
of a worker's standard of living that is lost due to job loss. That
is: CJL = (absolute dollar loss due to unemployment)/ (expected
earnings + social wage). The first data point is for 1952 and it
is an annual series. (Plus, the standard of living is that for a
two year period to take account of the fact that some workers
have unemployment spells exceeding 1 year in length.)

My series has a different pattern than the Schor-Bowles series
because I estimate the social wage in a different way. 

The numbers below are still preliminary and will be revised
in the not-too-distant future. (I've been engaged in other projects
for a long time). Use them at your own risk.

Eric

CJL for US on annual basis. First year below = 1952

0.210
0.204
0.274
0.274
0.246
0.255
0.318
0.293
0.274
0.312
0.288
0.284
0.276
0.256
0.223
0.221
0.214
0.209
0.222
0.257
0.255
0.231
0.227
0.286
0.287
0.265
0.251
0.242
0.259
0.269
0.295
0.330
0.291
0.268
0.272
0.269
0.260
0.242
0.252
0.282

last data point should be for 1991.


 
Eric Nilsson
Department of Economics
California State University
San Bernardino, CA 92407
[EMAIL PROTECTED]

[PEN-L:3462] Re: Cost of Job Loss

[DICKENS]

Concerning the recalculation of the cost of job loss, I 
look forward to reading Eric's RRPE piece next month.  IN
the meantime, there appears to be no trend in his series.
Gordon et al's efforts to attribute the major postwar
macroeconmic events in the U.S. to a shifting balance of
power between capital and labor, as measured by the cjl,
thus seem to be in jeopardy.  Most disturbing iis Eric's
report of a exceptionally high cjl in 1983--27 percent--
when the economy was stagnating.  Then 22 percent on average,
1952-59, and 24 percent on average, 1960-64:  The Golden Age.
If the rate of capital accumulation is a positive function of
  the rate of exploitation, and cjl measures the ability of capital
to exploit labor, then these numbers appear to be a problem.

Edwin Dickens

[PEN-L:3448] Re: Cost of Job Loss

[Jeffrey J Smith]

My first entry into this discussion. Is there any interest in an 
income apart from labor and its derivate, capital, leaving only 
land? That is, collect and disburse rent? Collect via a tax or 
fee and disburse via a dividend or voucher? With an extra and 
secure income, job loss would be less costly, and with less com-
petition for marginal jobs, jobs should be more plentiful and 
higher paying. And looking ahead to a political effort, a citi-
zens dividend should have broader appeal, figures Jeff Smith.
Ciao.

[PEN-L:3445] Re: Robert Lane (was Cost of Job Loss)

[Thad Williamson]

Lane's book I would highly recommend: it is a virtual encyclopedia of 
social science research on issues related to work, the market, and 
character development over the past 40 years. A little dry at times but 
informative in every paragraph.

Lane's own position is a little odd, not really a leftist but 
nonetheless searching for some form of democratic socialist 
alternative. He stresses things he thinks are good about the 
market--for instance, that it gives people a sense of accomplishment 
and self-worth-- while at the same time maintaining a highly critical 
stance towards the institution as a whole (i.e. he thinks rising levels 
of reported depression in the U.S. has to do with a systemic tendency 
for commodities and the pursuit of commodities to block out friendship 
and human companionship.)

His excellent (though I don't agree with it) dissection of the concept 
of the alienation of labor would no doubt spark a rousing discussion on 
this list. 

Thad Williamson
National Center for Economic and Security Alternatives

[PEN-L:3437] Robert Lane (was Cost of Job Loss)

[C.N.Gomersall]

Here are a few sentences from Mike M.'s recent post:

>For the neo-classicals, the "supply of labor" is for the most part a result
>of the need to "bribe" workers to "substitute" work (ugh!) for leisure
>(hooray!).  I had an interesting experience in my class:  I asked them if
>they thought that leisure was always valuable --- I asked them to imagine
>NEVER HAVING TO WORK and whether that would be a much better situation than
>having to work and taking leisure as a break from work.  Most of them argued
>that if there wasn't work, leisure --- doing "nothing" --- could get pretty
>boring.  That "leisure" is only valuable in the context of a life involving
>work.  Amazing that the neo-classical textbook writers never thought of that
>.. or did I miss something?

I have Robert Lane's book "The Market Experience" on my shelves, but have
yet to find time to read it... The blurb suggests that it deals with the
issues Mike has identified... Any comments, from those on the list, about
this (or other) work of Lane's? Thanks.

C.N.Gomersall
Luther College

[EMAIL PROTECTED]
http://econ-www.newcastle.edu.au/economics/nick/nick.html

[PEN-L:3431] Re: Cost of Job Loss

[Mike Meeropol]

Thanks to Eric for detailing some of the keys to the differences between his
CJL series and the use David, Sam and Tom used the S-B original series to
develop their general explanation for the macroeconomic failures of the US
economy post 1970.

Another aspect of this that I think is particularly significant is that in
_After the Wasteland_, David, Sam and Tom argued that the rise in the CJL as
a result of the monetarist/Reagan "revolutionary" assault on the working
class was only the result of the high levels of unemployment caused by the
high real interest rates imposed by the FED as opposed to being the result
of ACTUAL high rates of exploitation that would have existed at higher
levels of capacity utlization.  In other words, though the phenomenon
appeared similar, the CAUSE of the high cost of job lost was entirely
different --- and not very positive for the long run profitability of the
capitalists.  They try to track this by deriving an index of underlying
power of capital in the capital/labor struggle.  I have always been
interested in whether that index continued to be low between 1988 and 1990
(when the recession began).  Does anyone know if David was keeping THAT
index up to date?

One other point, which I'm sure Eric will agree with, else why would he
bother to derive a CJL:  The very CONCEPT of the Cost of Job Loss is a major
challenge to the neo-classical conception of the labor market incentives. 
For the neo-classicals, the "supply of labor" is for the most part a result
of the need to "bribe" workers to "substitute" work (ugh!) for leisure
(hooray!).  I had an interesting experience in my class:  I asked them if
they thought that leisure was always valuable --- I asked them to imagine
NEVER HAVING TO WORK and whether that would be a much better situation than
having to work and taking leisure as a break from work.  Most of them argued
that if there wasn't work, leisure --- doing "nothing" --- could get pretty
boring.  That "leisure" is only valuable in the context of a life involving
work.  Amazing that the neo-classical textbook writers never thought of that
... or did I miss something?
-- 
Mike Meeropol
Economics Department
Cultures Past and Present Program
Western New England College
Springfield, Massachusetts
"Don't blame us, we voted for George McGovern!"
Unrepentent Leftist!!
[EMAIL PROTECTED]
[if at bitnet node:  in%"[EMAIL PROTECTED]" but that's fading fast!]

[PEN-L:3424] Re: Cost of Job Loss

[Eric Nilsson]

Re Edwin's questions about my findings on CJL.

The one who makes the strongest claims about CJL
is Julie Schor who wrote in her chapter in The Imperiled 
Economy (1987) that, ". . . the Golden Age of United States
capitalism was based on a high cost of job loss and high
profits. . . . [W]orkers' economic security and the macroeconomic
performance of the economy appear to be inversely related."

However, if you read Gordon et al closely, you will find that
they don't make such a strong claim. They do claim that
during the first part of the "productivity slowdown" that
a fall in CJL was very important. However, they indicate
that their econometric evidence (using the S-B CJL series)
suggests that CJL was only ONE of many factors leading to
poor macroeconomic performance after the early 1970s. Yet,
they do underline throughout their work CJL without making
strong claims but, instead, suggesting it had a role that can't 
be ignored.

I don't have their articles/books in front of me (they are buried
somewhere in my office but I don't know where) so I can't give
precise references.

As far as my most recent estimates of CJL go, I get for various
periods:
 average CJL as proportion of 
period  workers' standard of living
--   
1952-590.22
1960-640.24
1965-690.19
1970-790.21
1980-910.23

Further, in my estimates the highest CJL occured in 1983 when it 
reached 0.27. That is, CJL does not plunge permanently after
the late 1960s (as it does in the S-B CJL series). Rather, after 
falling in the last 1960s (due mostly to low unemployment 
rates not due to policy changes), CJL quickly rises back up again by 
the early 1970s.

I've not formally reproduced Gordon et al's empirical work
that led them to claim that a fall in CJL was the key factor
behind the productivity decline in the late 1960s. Although
my series looks very different from the S-B series after, say,
1970, it still might be the case that _in the last 1960s_ a fall in CJL
was as important as they claim. (This is simply because both
the S-B series and my series reach their lowest levels in the
last 1960s). In fact, this is exactly what David said to me -- redoing
some of their empirical work with my data might actually lead
to a larger impact for CJL during the late 1970s. My intuition tells
me that David was absolutely correct on this.

Yet, while Gordon and his co-authors really never _explicitly_
made the claim that a decline in CJL was key to explaining post
1970s US macroeconomic performance, they certainly made 
statements that left this impression. My series, however, is
not consistent with such suggestions.

(An alternative empirical approach to weighing the importance
of CJL and other factors for post 1970 institutional change
appears in an article I have coming out this month in RRPE).

In any case, the importance of the Schor, Gordon, Bowles,
and Weisskopf's research project is not any particular findings.
Instead, the importance of their project is in developing
certain influential ideas, empirically testing key theoretical 
claims, and stimulating a large body of literature that has provided
us with important insights into the operation of capitalism in
the US and elsewhere.

In particular, even if one decides the S-B's CJL series was
quite imperfect, this takes away nothing from the importance
of the work that David has done. I look forward to reading
his most recent book which, I'm sure, will provide to us
with a much better understanding of current economic
developments than anyother book published this year.

Eric

> Eric,
> 
> Thank you for the reflections on your research, and David's
> comments on it.  My primary concern is whether your work
> is calling into question the theses Gordon/Bowles/Weisskopf/
> Schor,etc. use the cost of job loss to substantiate.  As I
> understand them, the argument is that a Golden Age of U.S.
> capitalism was possible from 1948 to 1966 because the cost
> of job loss averaged 31 percent. But then a profit squeeze
> developed, which is reflected in the fact that the cjl began
> a steady fall in 1962, reaching a low of 19 percent in 1969.
> The stagflation of the 1970s and the tight monetary policy of
> the early 1980s are also explained in terms of the cost of
> job loss.  Is your research calling into question the validity
> of these theses?  Or are the turning points more or less the
> same?  David was a mentor and friend.  The greatest tribute we
> can pay him is thorough, critical scrutiny of his work.
> 
> Edwin Dickens
> 
> 
> 
Eric Nilsson
Department of Economics
California State University
San Bernardino, CA 92407
[EMAIL PROTECTED]

[PEN-L:3423] Re: Cost of Job Loss

[DICKENS]

Eric,

Thank you for the reflections on your research, and David's
comments on it.  My primary concern is whether your work
is calling into question the theses Gordon/Bowles/Weisskopf/
Schor,etc. use the cost of job loss to substantiate.  As I
understand them, the argument is that a Golden Age of U.S.
capitalism was possible from 1948 to 1966 because the cost
of job loss averaged 31 percent. But then a profit squeeze
developed, which is reflected in the fact that the cjl began
a steady fall in 1962, reaching a low of 19 percent in 1969.
The stagflation of the 1970s and the tight monetary policy of
the early 1980s are also explained in terms of the cost of
job loss.  Is your research calling into question the validity
of these theses?  Or are the turning points more or less the
same?  David was a mentor and friend.  The greatest tribute we
can pay him is thorough, critical scrutiny of his work.

Edwin Dickens

[PEN-L:3418] Cost of Job Loss

[Eric Nilsson]

Re
> Eric,
> Was it with your efforts to re-calculate the cost of job loss
> that David took issue with?  If so, perhaps you would share
> his criticisms with the list.

Yes it was. 

A preliminary note: David was the "keeper of the series" 
for the Gordon, Bowles, Weisskopf team. He provided 
updates of the series as new data was available.

However, David did not develop the initial methodology (Julie
Schor and, to a lesser extent, Sam Bowles did). David updated the 
CJL series using the already established methodology. Further, 
the data for the initial CJL estimates were gathered by research 
assistants as was, I suppose, the data behind later updates to 
this series.

I say all this to distinguish any criticism of the CJL series from
criticism of David's work. My criticisms with the CJL series are
about the initial methodology, not in anything David did after this
methodology was developed.

David's main criticism (based on the S-B methodology) of my 
re-estimation of the CJL series was directed at my handling 
of social security spending, which  differed from how Schor-Bowles 
introduced SS spending into their CJL methodology. 

The S-B methodology says that all CURRENT SS spending 
should be considered as contributing to the standard of living 
of CURRENTLY employed workers. That is, if $100 billion 
is given to retired folks, this $100 billion  should be considered 
as benefitting current (non-retired) workers.

In the paper I delivered at the New School, I argued that 
that current spending on SS benefits did not help those who
didn't receive these SS benefits (currently employed workers) 
although it did help (greatly) retired people. In this version
of the paper, I completely omitted SS spending as a component
of workers current standard of living. That is, rather than include
$100 billion as a component of workers' standard of living, I
included zero dollars. This was the major reason my alternative
CJL series differed from the CJL calculated using the S-B 
methodology.

David's arguments made me reconsider my extreme revision to
the S-B methodology. In short, SS spending on retired people 
reduces the amount of income support that children (and other
relatives) would otherwise have had to make to support
the elderly. (It turns out there is a literature that addresses, 
kinda-sorta, the reduction of contributions of relatives to
support the elderly caused by the SS program).

In a version of my CJL paper delivered at the ASSA in 
January, I presented CJL estimates based on an estimation of how
much the SS program reduced support relatives would
have OTHERWISE have provided to the elderly. That is,
if relatives would have provided $75 billion to the elderly
in the ABSENCE of the SS program and provided $25 billion 
in the PRESENCE of the SS program, then the contribution made 
to workers' standard of living by the SS program was $50 billion 
(and not $100 billion actually spent by the SS program). It is 
acknowledged that spending on the SS program far exceeds the 
support relatives would have provided the elderly in the absence 
of the SS program.

(How in the world do I estimate such $75 and $25 billion 
numbers above? Obviously, this is not a simple task
but it has to be performed to estimate CJL.)

It turns out that by taking explicit account of this secondary 
SS impact, my alterative CJL series is still very close to a CJL series
that ignores this secondary SS impact. And--this is key--both series 
move in very trends than a CJL series calculated according
to the S-B methodology.

David criticized other parts of my alternative methodology, but
the impact of how the SS program is accounted for is the dominant
force behind trends in CJL calculations. These other criticisms had
to do with how I estimated the value to food stamps recieved by
unemployed females, my methodology for estimating the expected
length of time unemployed for newly laidoff workers, my way of
accounting for the cut off of unemployment benefits for workers
who were unemployed longer than current law provided for UI 
compensation, how I dealt with OASDI tax deductions, how
I estimated the real value of the flow of services provided by government 
transportation programs and public education, and still more. As is 
obvious, calculating CJL is not something one does in a weekend.

David's comments were very helpful and he was quite interested
in knowing the logic of my alternative methodology. While he
disagreed with many aspects of my methodology, he clearly was
willing to rethink the logic of the S-B methodology (although he
did not indicate then that he thought the S-B methodology should
be revised). While David did not say that he thought the S-B 
methodology should be changed, he did say he was going to look 
at the S-B methodology more carefully when he had the chance. 

That is, as was typical of David, he was not rigidly defending
some position but he was w

[PEN-L:5036] Re: Cost of Job Loss Series and unemployment

[jtreacy]

Treacy: The cost of job lose might also force job losers to seek other
alternatives that might lead to better situations than the one 
they lost.  Only under the assumption that the job losers were 
maximizing their opportunities and had been actively monitoring
new ones would preclude some from this kind of gain. 
[EMAIL PROTECTED] COPYRIGHTED 
On Wed, 10 May 1995, Eric Nilsson wrote:

> Mike Meeropol wrote 
> 
> > Has the Sam Bowles/Julie Schor time series of the "cost of losing 
> >your job" been updated through the present.  That's a useful index, 
> >IMHO, for what Jim seems to be concluding... 
> 
> I am currently generating a new (hopefully improved) series for the 
> cost of job loss for the average worker in the US economy for 
> 1948-1992. There are a number of questionable assumptions made 
> by Schor, Bowles, and Gordon in generating their CJL series that
> play a large part in giving their series the pattern that it has. I 
> am correcting for these questionable assumptions. 
> 
> I should have the new CJL series generated in a few weeks 
> (calculating the CJL is quite a major project it turns out.) I might 
> post these new numbers and the comparison Schor, Bowles, 
> Gordon numbers on this list if people are interested. I also will
> soon have a paper written that explains my new CJL series
> and how it differs from the Schor, Bowles, and Gordon series.
> 
> And, RE the apparent improvement of the unemployment situation
> in the US in recent years. My estimates (based on BLS data) of 
> the average completed spell of time a newly fired JOB LOSER 
> searches for a job (and either finds one or quits searching) 
> by decade are:
>   1950s   =  13.0 weeks
>   1960s  =   13.3
>   1970s  =   14.0
>   1980s  =   15.4
>   1990s  =   16.7
> 
> It appears that although the unemployment rate might have improved
> kind-of-sort-of in recent years, the situation for JOB LOSERS
> (relevant to the cost of job loss) has continued to worsen in recent
> years.
> 
> Eric Nilsson
> 
> 
> Eric Nilsson
> Department of Economics
> California State University
> San Bernardino, CA 92407
> [EMAIL PROTECTED]
> 

[PEN-L:5029] Re: Cost of Job Loss Series and unemployment

[Eric Nilsson]

Mike Meeropol wrote 

> Has the Sam Bowles/Julie Schor time series of the "cost of losing 
>your job" been updated through the present.  That's a useful index, 
>IMHO, for what Jim seems to be concluding... 

I am currently generating a new (hopefully improved) series for the 
cost of job loss for the average worker in the US economy for 
1948-1992. There are a number of questionable assumptions made 
by Schor, Bowles, and Gordon in generating their CJL series that
play a large part in giving their series the pattern that it has. I 
am correcting for these questionable assumptions. 

I should have the new CJL series generated in a few weeks 
(calculating the CJL is quite a major project it turns out.) I might 
post these new numbers and the comparison Schor, Bowles, 
Gordon numbers on this list if people are interested. I also will
soon have a paper written that explains my new CJL series
and how it differs from the Schor, Bowles, and Gordon series.

And, RE the apparent improvement of the unemployment situation
in the US in recent years. My estimates (based on BLS data) of 
the average completed spell of time a newly fired JOB LOSER 
searches for a job (and either finds one or quits searching) 
by decade are:
  1950s   =  13.0 weeks
  1960s  =   13.3
  1970s  =   14.0
  1980s  =   15.4
  1990s  =   16.7

It appears that although the unemployment rate might have improved
kind-of-sort-of in recent years, the situation for JOB LOSERS
(relevant to the cost of job loss) has continued to worsen in recent
years.

Eric Nilsson


Eric Nilsson
Department of Economics
California State University
San Bernardino, CA 92407
[EMAIL PROTECTED]