Recovery?

Fed Chairmen (paternal or motherly)
Have made a depressing discovery:
If demand isn't great,
You can lower the rate
But you can't cut your way to recovery.

March Productivity Madness

Economists show the proclivity
Toward lamenting the lost productivity
When Americans cling,
From the first day of Spring,
To basketball bracket activity. 

At work we may go to extremes
Of collegiate basketball dreams,
And glance in our laps 
At websites and apps
With brackets and video streams. 

Consultants engaged by the boss
To reckon the March Madness cost
Deduce from the gauges
Of hours and wages
That 1.2 billion are lost.

But a national payroll statistic
As a measure is much too simplistic,
As workers are apt
In March to adapt
In a manner that's deft and holistic.

Despite how the experts may warn
That brackets are worthy of scorn,
It's easy to see
For office esprit,
They're better than downloading porn. 

Back To Work

The ranks of the long-unemployed
(A status you'd like to avoid)
Have started to thin
From the slow growth we're in;
Is it reason to be overjoyed?

The jobless in longer-term stages
Are fewer than they've been in ages,
Though many returning
To rolls of the earning
May settle for minimum wages.

There's a glimmer of good news for the long-term unemployed: your chances of finding employment are growing.  The proportion of job-seekers unemployed six months or longer was 39.1% in December, the first time this ratio has fallen under 40% in more than three years, according to the Wall Street Journal.  Although that still leaves 4.8 million long-term jobless, it's a considerable reduction from the peak of 6.5 million in 2010.  But, you say, haven't most long-term unemployment reductions come from discouraged job-seekers dropping out of the labor force?  The answer appears to be: not so much.  The number of jobless who report they've given up looking is estimated at 400,000 over the last year, while the number of Americans with jobs rose by 2.4 million over the same period.

Now for the bad news: wages of returning workers fall by 11% for every year they are out of the workforce, and unemployment benefits no longer last 99 weeks - it's now 73 weeks at most, depending on your state of residency.  Some of the long-term unemployed may have been motivated by their expiring benefits to take lower-paying jobs.  Finally, those poor souls who have gone three or more years without work had no holiday cheer in December, as their numbers have not yet reduced.

Waning Middle Class

A big social sciences trust
Researched and concluded, nonplussed:
"Our suburbanite set,
Adjusted for debt
And inflation, is actually bust."

Aaron Task and Henry Blodget of Yahoo! Finance alert us to a study conducted by the Pew Research Center. Pew looked at the data related to income and wealth inequality in the US and determined: the US economy sucks because the middle class is broke. Task and Blodget agree, in their discussion below, that US employers must hire more workers and pay them more, for the good of the economy as a whole. As Henry Ford realized a century ago, well-paid workers can afford to buy things, and their liquidity feeds a rising tide that lifts all boats. Can the private economy, which is sitting on mountains of idle cash, do this on its own without the intervention of our dysfunctional government? I ask you.

Flat As All That

"The median wage compensation,"
Said Krugman, "Has lain in stagnation."
For those who mistrusted,
His charts are adjusted
For medical plans and vacation.

Paul Krugman takes umbrage at those who doubt his assertion that US wages have stagnated since the 1970's (see chart). Yes, Dr. Krugman has thought this through, and the stagnation even takes the cost of health benefits into account, as detailed in this analysis from the Economic Policy Institute. Alarmingly, during the generation-and-a-half in which wages have barely risen, household debt has skyrocketed from 45% of GDP to nearly 100%, culminating in the mortgage meltdown. (Recovery alert: it has since moderated to about 85% of GDP.) The bottom line politically is that this plays into the Presidential choice in November. Mitt Romney has profited greatly from some of the policies and developments that led to the middle class stagnation, and defends them robustly on the campaign trail. Barack Obama, to be fair, does not represent the dramatic reversal of such policies that either he or his critics would have you believe, but he at least acknowledges the problem and proposes some ameliorative steps.

More Made in the USA

Though more work on the factory line
Is always a positive sign,
Manufacturing's rise
In the US belies
That wages are on the decline.

The headline in The Wall Street Journal reads: Flat US Wages Help Fuel Rebound in Manufacturing," but, looking a little behind the headline, it becomes apparent that the rebound is fueled by a sharp decline in starting wages. Two-tier wage agreements have become a common practice in union factories, with new hires earning $8-10 an hour less than "legacy" workers. Coupled with the strong rise in Chinese manufacturing wages, as well as increases south of the border, this development has led to the migration of factory jobs back to the US, and a 4.3% overall increase since 2010.

Wage Index Report

The data on wages disclose
That the specter of joblessness grows,
Except for the few
Making mega-bucks, who,
In their number, substantially rose.

The Social Security Administration released its Wage Statistics for 2010, and - with one glaring exception - they tell a sorry tale.   Journalist and author David Cay Johnston crunched the numbers and found that

There were fewer jobs and they paid less last year except at the very top, where the number of people making more than $1 million increased by 20 percent over 2009. The median paycheck — half made more, half less — fell again in 2010, down 1.2 percent to $26,364. That works out to $507 a week, the lowest level, after adjusting for inflation, since 1999. The number of Americans with any work fell again last year, down by more than a half million from 2009 to less than 150.4 million.

Hat tip to Barry Ritholtz, who notes the obvious statistical underpinning for the Occupy Wall Street movement.

It Isn't a SNAP

An American family who,
On a pittance, must try to make do,
Turns to fed'ral assistance
To get their subsistence,
As one out of seven do, too.

The Wall Street Journal's Real Time Economics reports that the proportion of the US population receiving food stamps has stabilized (if that's the word for it) at 14.3%. The USDA's Supplemental Nutritional Assistance Program , or SNAP, helps poor Americans - for example, a family of four with gross annual income of less than $28,700 - get basic nutrition. Almost two years after the "Great Recession" was declared over, a surprisingly large number remain in the qualifying pool.

Bankers' Remuneration

Said a pundit, "Where's the validity
That the bankers are paid so unfittingly?
Does the world so demand
The result of their hand,
Or it's just their control of liquidity?"

Employers Pay More, Workers Get Less

At the Labor Department they noted,
"Compensation expenses are bloated."
Replied Commerce to that,
"Workers' wages are flat."
...And Aetna declined to be quoted.

Thanks to Real Time Economics, for keeping it real.