Monday, September 14, 2009

Remembering the New Deal; Response to Shared Prosperity

A reminiscence of the New Deal and a response to Shared Prosperity and the Drive for Decent Work, Garth Mangum, Max McGraw Professor Emeritus of Economics and Management, University of Utah, 6 September 2009

Let me begin with some personal reminiscence. I began life on a sharecrop farm. We farmed 40 acres and kept half the output of hay and grain, delivering the other half to the landowner. We did not feel abused, given that it was his land. We fed our half of the hay to our animals, some of which were milk cows. We separated the milk, selling the cream and giving the skim to the pigs and we kids, of whom I was the oldest. That approximately $200 a year was our only cash income. Some of the grain fed chickens who delivered us eggs. The rest went to the four mill, some of which paid for the flour and cereal we got in return. We had plenty to eat but little cash.

Then came what others called the Great Depression but was a great boon to us. In 1933, from the Federal Emergency Relief Act (FERA) we got clothing, blankets, etc., and from the Civil Works Agency (CWA) Dad got employment for him and his team of horses, rebuilding public roads. There being no reclamation yet in much of the irrigated west, drought overcame us. We left the sharecrop farm in 1934, buying 2 ½ acres 125 miles away for $150, $50 down from selling farm animals (shot and burned in the barnyard with payment from the new Agricultural Adjustment Act ) and farm equipment and the rest finally paid off, after continuing annual payments, with the beginning of World War II. We built a basement home with a ground level roof with an upstairs to be added in subsequent years and went to work for surrounding farmers, $2 a day for Dad and piece rates for Mom and we kids on fruit and berry farms, and planted our own 2 ½ acres for production in future years. Then in 1935 came for Dad the Public Works Administration (PWA) followed by the Works Progress Administration (WPA), 11 days a month at $4 a day, digging sewers, building roads, painting public buildings and so forth, with the rest of the month working for surrounding farmers at a continued $2 a day. Indoor plumbing would await World War II also, but we soon had a “Roosevelt Monument,” a WPA-built permanently located and chemically-cleaned outdoor toilet costing $10 and replacing the homebuilt and frequently-moved two-holer of our own construction.

As I grew older, I obtained a bicycled17 mile paper route making $15 a month, continuing farm work during the days in season and sweeping the floors after school for, as I remember, $7 a month from the National Youth Administration (NYA). We had no one in our immediate family of age for the Civil Conservation Corps, though I would years later marry the younger sister of a CCC veteran. After Pearl Harbor, Dad left for carpenter work in Nevada and then returned for further such projects in Utah. I spent the summer of 1942 on some of the final WPA projects in our area, concreting irrigation ditches with older WPA workers shoveling the sand, gravel and cement into the concrete mixers and we young guys paid by the irrigation company pushing the wheelbarrows. My senior high school year, 1942-43, I spent half-day at a former CCC facility learning to be an airplane mechanic, half-day back at the high school learning mathematics and aeronautics, followed by a doubled-sized and double-distanced but automobiled newspaper route. That was followed by employment in 1943 as an airplane mechanic’s helper at an Army Air Force base and subsequent volunteered service in the Army Air Force for the remainder of the Second World War.

I spent a few years trucking and coal mining after the war until I wised up and at 27 became a college freshman, building houses for a living during my undergraduate years. A question at the time was “How do you get to Washington?” and the answer was “You go to Harvard and turn left.” Which I did and packed a Ph.D. in Economics off to serve in the Kennedy and Johnson administrations.

That story may explain my subsequent continuing advocacy of public service employment as recommendations from National Commission on Technology, Automation and Economic Progress (of which I was Executive Secretary) in 1965 and as an actuality within the Comprehensive Employment and Training Act of 1973 (much of which I had written some years earlier).

From all this, I suspect I am somewhat of a radical on the Jobs For All topic. For instance, I would limit unemployment compensation to those who can reasonably expect recall or re-employment with their existing skills within a few weeks. Otherwise, I would provide public service employment at a living wage or a combination of part-time employment and part-time retraining for them until they can return to or move on to jobs of their choice. I would forget the minimum wage but guarantee public service employment at a living wage which employers would have to equal or surpass to attract employees. I am a general supporter of the employability development thrust of the Temporary Assistance to Needy Families (TANF) but I would add public service employment as a replacement for public assistance for those unable to obtain other employment after training.

I advocate the universal availability of but not requirement for pre-school education followed by K-14 public education, the latter-years making maximum possible use of competency-based education, to assure that all youth are prepared for family-sustaining earnings. I would keep the school doors open at taxpayer expense for a second chance for all for employability development for family-sustaining earnings. Taxing their subsequent higher earnings will repay the public investment.

I would delay Social Security retirement immediately to age 70 and then move it forward at approximately 15 years earlier than the average age at death, using Social Security Disability for those unable to work that long for health reasons. And during those years I would encourage community service. I do not view idleness as a great accomplishment or reward.
As a labor arbitrator for many years, I would encourage unionization of employees who desire it but would expect employers to refuse what they consider to be unreasonable demands. Strikes are a reasonable pressure approach from both sides for reaching agreement.

I would exercise comparative advantage to give workers throughout the world opportunities for employment favorable to them while we work at tasks at which we have comparative advantage. I would stop being the world’s policeman but participate in and support United Nations efforts to fill that role.

I would urge government to limit budget deficits to public investments with multi-year returns and to recession-proofing with subsequent repayment within the business cycle. I am also a strong believer in progressive taxation with conviction that we of higher than average incomes (not much higher in my case) know how to get our due rewards.

In general, I agree with the provisions of Shared Prosperity and the Drive for Decent work and wish all participants the best in the 13-14 November 2009 conference.

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Wednesday, September 9, 2009

U.S. Gets Ds on Infrastructure Report Card

U.S. Gets Ds on Infrastructure Report Card - CBS Evening News - CBS News:

"(CBS) The current financial crisis in the United States is making a bad problem even worse - namely, the sorry state of highways and other core infrastructure components. CBS News correspondent Bill Whitaker reports on this problem in Los Angeles - and how it echoes around the country.

The cab of a fire engine was almost totally devoured by a 15-foot sinkhole in Los Angeles' San Fernando Valley Tuesday - the result of a broken water main. It came just three days after an even bigger break down the road washed away cars and flooded residents and businesses for blocks.

With aging infrastructure failing so spectacularly, the mayor of L.A. says the city is playing catch up when it comes to repair.

'Some of these pipes are more than 100 years old,' said Mayor Antonio Villaraigosa.

Failing infrastructure is not just an L.A. problem. Further north, workers scrambled to reopen the 73-year old Bay Bridge between San Francisco and Oakland after finding a crack in a steel beam. The bridge was severely damaged and refurbished after the 1989 earthquake.

But it's not just earthquake-prone California that's falling apart. And it's not just bridges and water mains, but also airports, dams, roadways, sewers and more.

In their annual report card, the nation's civil engineers give the whole country poor grades for infrastructure.

'It'd be nifty if we could get all our grades in the country up to a C or even up to a B,' said Mike Kincaid of the American Society of Civil Engineers. 'And I think we have a lot of work to do before we get to that point.'

Read rest of article -- see video
See ACSE Report Card

Remember the Minneapolis bridge collapse two years ago? Today, more than 150,000 bridge"

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Unemployment climbs again in August, 216,000 net jobs lost


A year earlier, the number of unemployed persons was 9.6 million, and the jobless rate was 6.2 percent. [BLS]

White 8.9%
African American 15.1%
Hispanic 13.0%
Asian** 7.5%

Men 20 years and over 10.1%
Women 20 years and over 7.6%
Teen-agers (16-19 years) 25.5%
Black teens 34.7%
Officially unemployed 14.9 million


Working part-time because can't find a full-time job:
9.1 million

People who want jobs but are not looking so are not counted in official statistics (of which about 2.3 million** searched for work during the prior 12 months and were available for work during the reference week.)
5.6 million

Total: 29.6 million (18.5% of the labor force)


*See Uncommon Sense #4 for an explanation of the unemployment measures.
**Not seasonally adjusted.

In addition, millions more were working full-time, year-round, yet earned less than the official poverty level for a family of four. In 2007, the latest year available, that number was 17.6 million, 16.2 percent of full-time workers (estimated from Current Population Survey, Bur. of the Census, 2008).

In June, 2009, the latest month available, the number of job openings was only 2.6 million, according to the BLS, Job Openings andLabor Turnover Estimates, August 12, 2009.+ Thus there are more than 11 job-wanters for each available job.[Numbers are not comparable with previous months as methods have been revised.]

Mass layoffs: "Employers initiated 2,994 mass layoff events in the second quarter of 2009 that resulted in the separation of 534,881 workers from their jobs for at least 31 days, according to preliminary figures released by the U.S. Department of Labor's Bureau of Labor Statistics. Both the numbers of extended mass layoff events and associated separations were record highs for a second quarter (with data availableback to 1995).

Read rest of article

Analysis: "The slower rate of job loss is the result of further moderation in the pace of job loss in the sectors that have been the biggest job losers. Construction lost 65,000 jobs in August, down from 119,000 per month between October and March. Most of this job loss is now coming from the non-residential sector. This is not surprising since residential construction has stabilized in the last couple of months, while a glut in the non-residential market is leading to a sharp contraction in this sector. Stimulus-related jobs will be an offsetting factor..... This report, like the prior three reports, shows a slowing pace of job loss. It is important to recognize that this rate of job loss, especially when adding in the upward revisions, would be considered disastrous at any other time. The labor market is still deteriorating, albeit less rapidly." Baker, CEPR, 9/4/09

"The good news is that the American Recovery and Reinvestment Act (ARRA) is providing a significant boost to the labor market. Over the last three months, the labor market has shed an average of 318,000 jobs per month. By comparison, in the first quarter of this year, the labor market shed an average of nearly 700,000 jobs per month. The ARRA is likely saving or creating between 200,000 and 250,000 jobs a month, for a total of around 1.2 million saved or created since its implementation. ...To keep up with population growth, the economy needs to add approximately 127,000 jobs every month, which translates into 2.5 million jobs over the 20 months of the recession. This means the labor market is currently 9.4 million jobs below where it would need to be to maintain a pre-recession unemployment rate. " Jobs Picture, Shierholz, EPI, 9/4/09

"Focusing on the long-term unemployed is urgent because the challenges of those out of work remain significant—more so than in any prior recession. Once workers lose their job, it continues to be extremely difficult to get back into the workforce. The typical worker is now spending 15.4 weeks unemployed, which means that one-half of workers are finding a job in less time, but one-half are taking longer—often much longer—to find a new job." CAP Boushey, 9/4/09

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Does the U.S. Economy Need a Job-Creation Stimulus? - TIME

Does the U.S. Economy Need a Job-Creation Stimulus? - TIME
By Kevin O'Leary / Los Angeles Tuesday, Aug. 18, 2009

"When people say there are no jobs out there, it's true. According to the Bureau of Labor Statistics, at the start of the recession in December 2007, the ratio of job seekers to job openings was 1.5 to 1. Now six unemployed workers chase every available job. It's a brutal game of musical chairs in which a great many people lose and spiral downward economically with disastrous consequences, not only for themselves and their families, but also for communities that were once productive and prosperous."

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Schools must lead healthy foods effort

Here's a smart, inspired idea to create some jobs through a National Culinary Corps to improve school meals for kids.

However, we have a friendly amendment. If the National Culinary Corps is established, workers should get real Living Wage pay, and not Americorps stipend wages. Better to cook on your feet, then beg on your knees.

We also applaud the loan forgiveness idea, as many students have been enticed to pay top dollar for culinary schools and colleges, only to be bitterly disappointed with low wages and crappy working conditions. That would not fly in a fair economy.

From the San Francisco Chronicle

Schools must lead healthy foods effort
By Ann Cooper,Beth Collins
Sunday, August 30, 2009

"The Centers for Disease Control and Prevention have stated that of the children born in the year 2000, 1 out of 3 Caucasians and 2 out of 3 African Americans and Hispanics will contract diabetes in their lifetimes. As a result, that generation will be the first in our country's history to die at a younger age than their parents. Time magazine reported recently that as a nation we are spending more than $147 billion a year on diet-related illness, much of it attributable to diabetes and much of that preventable."

"Together these facts are the health care crisis of our lifetime."

"As a nation we have in large part stopped cooking in our homes, and this is no different in our schools. Over the decades that we've been reheating as opposed to cooking, we've lost much of our culinary skills, which means that we need to teach our school food-service workers to cook again."

"Switching from chicken nuggets and Tater Tots to roast chicken and roast potatoes means that we need culinary 'boot camps' to train our cooks and perhaps a National Culinary Corps, based on AmeriCorps, where culinary students can work off their student loans by cooking in schools."

Ann Cooper and Beth Collins are partners in the Food Family Farming Foundation and creators of the Lunch Box Project. Contact them at and Contact us at

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WPA Posters

Created with Admarket's flickrSLiDR.