By Christopher Briem, on December 23rd, 2011
Let me make some introductions. Data meet news, news meet data.
I just caught this headline.. but the Patriot News had article over the weekend: Marcellus Shale industry brings ‘tsunami of jobs’ to Pa.. which really was more of an anecdotal story focused on a woman getting a job in the drilling industry here in Pennsylvania.
Yet below is what the state’s own data days about women working in Pennsylvania in these industries. I’ve seen virtually no news that really looks into just how one sided this looks. Given the coverage like above, you might think it was a tsunami of jobs for women. Maybe someone wants to go the next step and work out similar gender breakdowns for new hiring in the same industries in say Texas and Oklahoma and see how Pennsylvania compares.
New Hires by Gender in Mining, Quarrying, Oil and Gas Extraction Industries
Pennsylvania, 1st Half of 2010
Source: LEHD, which is a collaboration of state labor agencies and BLS.
By Christopher Briem, on December 19th, 2011
Well, in Ohio there is certainly more debate over the economic impact of shale gas development. No, that isn’t right, there is debate here, but I can’t say I’ve seen a headline this blunt in Pennsylvania.
See the Cleveland Plain Dealer over the weekend: Shale gas will not create 200,000 Ohio jobs by 2015, Ohio State University says of industry. Not only that, but here is what it says about the jobs created in Pennsylvania:
“We estimate that Pennsylvania gained about 20,000 direct, indirect and induced jobs in the natural gas industry between 2004-2010, which is a far cry fewer than the over 100,000 jobs reported in industry-funded studies (and the 200,000 expected in Ohio by 2015),”
Hmm… I guess if I had to start to judge which numbers are closer to reality, I would first look at what backgrounds the various authors have in regional economics and employment research.
By Simon Grey, on September 28th, 2011
I’d like to revisit and expound upon a thought I had in yesterday’s post on forgiving student loans: Can we get rid of this whole nonsensical stimulus thinking? All money circulates. Ceteris parabis, the money will be spent at some point.
I wanted to explain this more thoroughly yesterday, but I was pressed for time so I couldn’t explain, to the degree necessary, what I meant by this. Fortunately, Dom Armentano has already done this for me: Can government spending create jobs? Governments can certainly create jobs in the public sector; they do it all the time and Obama’s bill will do more of it. Governments can hire school teachers, social workers, and millions of other bureaucrats to administer its thousands of programs and regulations. Importantly, however, the funds for these jobs must be provided by either taxation or by borrowing from the private sector. Thus as almost all economists recognize, public sector employment comes (in some real sense) at the expense of opportunities for private sector employment.
To see why this is so, assume that $1million dollars is raised by taxation to, say, fund new staffing at the Environmental Protection Agency. No debate; public sector jobs get created. But note that the very same $1million cannot be spent by taxpayers on new washing machines or trips to Las Vegas or newspaper subscriptions. Thus for every job created by government spending there must be a tradeoff of jobs NOT created (or maintained) in the private sector of the economy. In economics, there is no free lunch.
Private sector jobs, on the other hand, are created in an entirely different manner; if they are sustainable, they are self-financing. Private employees are hired with the expectation that their wages will be paid by the additional revenue or value that they generate for the employer. Individuals that work for washing machine retailers or for a travel agency or for a newspaper must generate a stream of benefits for the company that compensates for the wages they are paid (or they will be fired). In short, private firms can hire workers – that is create jobs – if and only if it is profitable for them to do so.
In essence, the unspoken assumption of all arguments for government-provided stimulus is that money can only circulate if it goes through the government, and that money will fail to circulate if it does not go through the government. Ultimately, the problem is that too many economists ignore Bastiat’s warning and focus on that which is seen while ignoring that which is unseen.
By Simon Grey, on September 23rd, 2011
“Of jobs created in Texas since 2007, 81 percent were taken by newly arrived immigrant workers (legal and illegal),” says the report from the Center for Immigration Studies, a group that advocates reduced levels of both legal and illegal immigration. The report estimates that about 40 percent of the new jobs were taken by illegal immigrants, while 40 percent were taken by legal immigrants. The vast majority of both groups, legal and illegal, were not American citizens. (Hat tip: Vox Day.)
Native-born Americans filled just 20 percent of the new jobs in Texas, the report says, even though “the native born accounted for 69 percent of the growth in Texas’ working-age population.” “Thus, even though natives made up most of the growth in potential workers, most of the job growth went to immigrants,” the report concludes.
If you want to fix the unemployment mess America currently faces, do four things:
One, round up all illegal immigrants and guest workers and deport them. I am unable to comprehend how a government that claims to represent the interests of its people even tolerates any foreign workers when the unemployment rate is hovering around 16%. Why is this allowed when citizens are jobless and looking for work? Citizens should be given preference when it comes to domestic policy, and labor is no exception.
Two, deregulate labor. Get rid of the minimum wage, the minimum age, and mandatory overtime pay laws. Price floors always, without fail, create a surplus. Again, labor is no exception.
Three, get rid of government-sponsored welfare, unemployment compensation, and all other forms of paying people to not work. This will give the currently unemployed a very powerful incentive to find and/or create a job. Note, however, that one should not end the dole without first having eliminated minimum wage.
Four, get rid of payroll taxes. Milton Friedman’s monstrously stupid idea to have taxes withheld from one’s paycheck places compliance costs on businesses that they do not face when hiring illegal workers.This, in turn, makes it more difficult for legal workers to compete with illegal workers. As such, ending payroll taxes will reduce the costs of employment, and make it easier for citizens to compete for jobs.
By Christopher Briem, on July 18th, 2011
So experiment is not quite the right word. Let’s call this a public exercise.
A little while ago a kerfuffle erupted over some economic stats related to the job creation of Marcellus Shale related industries in Pennsylvania. The state came out with a report that mentioned there were 72 thousand ’new hires’ related to Marcellus activity.
Folks at the Keystone Research Center came out with a report that said wait a minute, the numbers don’t quite add up that way .. ‘new hires’ is not the metric anyone uses for measuring job creation or economic impact. At the very least you need to add in the routine job destruction to come up with the commonly used metric of net job creation. Otherwise you are just measuring the scale of churn in the labor market.
Then the Marcellus Shale Coalition responded with a press release that I guess has something to do with the topic at hand, though it’s a bit hard to connect the dots.
So what is the real answer? This may not deal with the technical dispute over measurement of job creation, but still people need to think a lot harder than they have been about what the scale of economic impact has been of all this drilling going on across the state and causality more broadly.
So below is a graphic of annual ‘new hires’ in Pennsylvania, so state-wide data, in the industries sectors that should capture the direct impact of Marcellus Shale activity. Yes, Marcellus like most other industries has indirect and induced effects as well… but it all starts with these direct jobs.
It is not a mistake; it is a bit Rawlsian and I have intentionally left off the labels for the years on the horizontal axis. Look at this picture and ponder 1) was there a qualitative change in trend, 2) if so, when does this chart suggest the new ‘jolt’ (as the state described it in the first link above) started up and 3) how big a change happened? Was it big? Really big? Biggest thing ever? or maybe just some random noise? and 4) is any change in trend accelerating, decelerating or something else?
I’m going to leave that there for the moment. I’m going to let that percolate for a few days and then come back with a slightly different graphic with some labels. I’d be curious if anyone has any comments before then. I’ll back to it next week.
By Christopher Briem, on April 22nd, 2011
Can I nominate the most underappreciated economic story from last weekend. In the Valley News Dispatch is this detailed piece: Pittsburgh Mills may be attracting shoppers, but may take years to reap ‘full potential’
Which would have a host of great essay questions for students of economic development. In there is a line about how local officials say the mall has “more than 4,300 jobs”. Anyone want to comment on the veracity of a claim that any retail mall has created jobs on net?
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By Eldon Mast, on December 9th, 2010
Businesses and government advertised nearly 3.4 million jobs at the end of October, up about 12 percent from the previous month, the Labor Department said Tuesday in its Job Openings and Labor Turnover survey.
That reverses two months of declines and is the highest total since August 2008, just before the financial crisis intensified.
Overall, the number of advertised jobs has increased by about 1 million, or 44 percent, since the low point of July 2009, a month after the recession ended.
And the new job postings continue at a rapid rate. According to Job Search on CNN Money.com, 151,950 new jobs were added to the site on Wednesday alone.
And there are more positive signs for jobs… according to the Manpower Employment Outlook Survey for Q1 2011:
When seasonal variations are removed from the data, the Outlook is +9%, the most promising hiring expectations reported since Quarter 4 2008… U.S. employers have now expressed
a positive Outlook for five straight quarters.
Source (Manpower.com)
By Eldon Mast, on December 8th, 2010
A deal appears near with President Barack Obama and congressional leaders. The pending bill will essentially give U.S. taxpayers a pay raise which will in turn pump money into the recovering economy almost immediately. The deal will also boost the creation of hundreds of thousands of jobs over the next two years.
The big surprise in the legislation: a one-year 2% tax cut in Social Security withholding. That cut alone will result in significant take-home upside for most wage earners.
Other income-tax cuts, that were set to expire at the end of 2010, will now remain for at least another year. Those cuts will continue to encourage small businesses to continue to hire as they have been in recent months.
The president and congressional leaders also agreed to extend benefits for the long-term unemployed for 13 more months. That aid had expired Nov. 30 and up to 2 million unemployed people would have run out of benefits by the end of the year.
One year examples for the extent of the cut in Social Security taxes:
For worker earning $40,000 a year the Social Security tax cut will result in an additional $800 in take home pay next year. A employee earning $100,000 will take home $2,000 more.
And on the jobs front, the Center for American Progress predicts that extending the unemployment benefits through next year will generate an additional 520,000 jobs — further under-girding an labor market that is steadfastly improving.
By Eldon Mast, on December 9th, 2009
President Barack Obama pressed forward with his job-creation proposals on Tuesday. Specifics included a hiring tax credit to businesses and other stimulus components. Further, those stimulus programs that he believes have worked best thus far, he would like to extend or amplify.
Thus far the existing stimulus efforts have taken an abysmal rate of 700,000 jobs lost a month earlier in the year and reduced that to a loss rate of almost zero. Obama asserts that in the months to come additional proposals can begin accelerate that improving net rate.
President Obama, at the Brookings Institution in DC on Tuesday.
Source: Associated Press
Specifically Obama would like to put an additional $50 billion toward infrastructure spending, ramp up Treasury Department lending to small businesses, extend tax credits for business investment, and offer state/local governments additional funding to help meet strained budgetary obligations.
A new infrastructure boost would further enhance programs that fund roads, bridges, airports, and water system improvements. The implication (as we’ve stated here many times) is that federal stimulus spending could stretch well into (and beyond) 2010. The White House continues to underscored that much of the $700B of the initial catalyst has not yet been spent and that by enhancing the most effective programs, jobs growth will accelerate in 2010.
Obama’s focus on jobs is politically timed well. At a loss rate of 700,000 jobs per month (that were a projected loss for April 2009 and beyond), the economy would have lost over 5M jobs since the time that the initial $700B stimulus measure was passed. Instead the net losses were trimmed to just over 2M in the same time period. (See Job Loss Chart for monthly details)
In addition to Obama’s initiatives, lawmakers are also working to continue relief to those effected by those losses. Democrats on the hill are looking to extend unemployment insurance, temporary food-stamp payment increases and subsidies for health-care purchases by the unemployed.
Following Obama’s job summit last week, the President has now invited congressional delegates to the White House on Wednesday to discuss the specifics of what he’d like to see produced by those legislative leaders.
Obama is likely to assert to his guests that lower-than-expected losses from the TARP should give room to spend more on job creation programs. Republicans of course are demanding that all $200 billion in TARP savings be immediately devoted to reducing the deficit.
With the shift to net jobs growth in coming months, the political climate to accelerate jobs growth will no doubt become more accommodating.
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By Richard Daughty, on September 25th, 2009
I really got a laugh out of the report from Bloomberg that the Democratic Party of Japan (known in the parlance as DP) won an historic victory in the recent elections, coming to power for the first time in decades with “a pledge to support households battered by two decades of economic stagnation”, whatever that is supposed to mean, but which is, upon even casual inspection, Standard Political Crapola (SPC).
The interesting part is that the new prime minister, a guy named Hatoyama, said “he’ll avoid more bond sales, so new spending will depend on his success in shrinking the bureaucracy and public works programs”, which is so laughably, ludicrously impossible, especially in such a corrupt, lopsided economy that it makes me, a stupid American who really doesn’t know what in the hell he is talking about, who lives thousands of miles away, in another country and hemisphere, turn up his nose at the sheer stink coming from that idea! Phew!
Of course, this valuable piece of Righteous Mogambo Scorn (RMS) is because it is obviously, obviously too, too late for that.
It is too late, just like it is too late here in the USA, and just like it is too late almost everywhere else, too, where years and years of increasing government spending and control means that government IS the economy, and shrinking the size of government obviously shrinks the economy! Hahahaha! Oops!
So, to the Japanese, I say, “Hahaha! Too late for that, you dumb Japanese chumps! Now you are going to pay a huge penalty for being such morons with your fiat money, and then especially involving the idiot Americans and their fiat money!”
Anyway, crude and rude xenophobic insults and senseless bigotry aside, an example of this is that, here in America, the birthplace of sheer stupidity in central banking (by which I mean the disastrous Federal Reserve), our economic performance as a result of the same kind of constant stimulus is that non-farm payrolls have been falling and are now about back to where they were in 2000, meaning absolutely zero (non-farm payroll) growth for 9 years!
A lot more people seeking the same number of jobs is pretty bad, especially when the number of people is still rising while the number of jobs is actually still falling! Yikes!
Meanwhile, however, the government has spent its time growing bigger and bigger, like a huge, cancerous, oozing lump that is growing on your neck and already people are being repulsed by both the sight and the smell of it, and now there are 6% more people on “government payrolls” than there were in 2001, which is only the tip of the iceberg.
And, as if to add insult to injury, they all make more money than you! Hahaha! For the first time in history, the average pay of a government employee is higher than the average wage of non-government employees! And when you add in their generous benefit packages, they make a lot more, and they are not going to take it kindly that you want them to suffer losses in pay and employment like us average morons out here.
So that is One More Big Reason (OMBR) why the government will keep borrowing more and more and spending more and more, which is why the Federal Reserve must create more and more money and credit, which expands the money supply more and more, which makes prices go up more and more, sometimes in bubbles, which must, and always do, bust back to their intrinsic value.
And such government and banking insanity as we are seeing today is the One Big Reason (OBR) – perhaps THE One Big Reason (TOBR) – why you must buy gold, silver and oil, apart from it being, you know, so easy that you squeal with girlish delight, “Whee! This investing stuff is easy!”
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