Paul Craig Roberts Warns Americans: "Oligarchic Rule Prevails Regardless Of Electoral Outcomes"

Authored by Paul Craig Roberts,

Do the Wall Street Journal’s editorial page editors read their own newspaper?

The frontpage headline story for the Labor Day weekend was “Low Wage Growth Challenges Fed.” Despite an alleged 4.4% unemployment rate, which is full employment, there is no real growth in wages. The front page story pointed out correctly that an economy alleged to be expanding at full employment, but absent any wage growth or inflation, is “a puzzle that complicates Federal Reserve policy decisions.”

On the editorial page itself, under “letters to the editor,” Professor Tony Lima of California State University points out what I have stressed for years: “The labor-force participation rate remains at historic lows. Much of the decrease is in the 18-34 age group, while participation rates have increased for those 55 and older.”

Professor Lima points out that more evidence that the American worker is not in good shape comes from the rising number of Americans who can only find part-time work, which leaves them with truncated incomes and no fringe benefits, such as health care.

Positioned right next to this factual letter is the lead editorial written by someone who read neither the front page story or the professor’s letter. The lead editorial declares: “The biggest labor story this Labor Day is the trouble that employers are having finding workers across the country.” The Journal’s editorial page editors believe the solution to the alleged labor shortage is Senator Ron Johnson’s (R.Wis.) bill to permit the states to give 500,000 work visas to foreigners.

In my day as a Wall Street Journal editor and columnist, questions would have been asked that would have nixed the editorial. For example, how is there a labor shortage when there is no upward pressure on wages? In tight labor markets wages are bid up as employers compete for workers. For example, how is the labor market tight when the labor force participation rate is at historical lows. When jobs are available, the participation rate rises as people enter the work force to take the jobs.

I have reported on a number of occasions that according to Federal Reserve studies, more Americans in the 24-34 age group live at home with parents than independently, and that it is those 55 and older who are taking the part time jobs. Why is this? The answer is that part time jobs do not pay enough to support an independent existence, and the Federal Reserve’s decade long zero interest rate policy forces retirees to enter the work force as their retirement savings produce no income. It is not only the manufacturing jobs of the middle class blue collar workers that have been given to foreigners in order to cut labor costs and thus maximize payouts to executives and shareholders, but also tradable professional skill jobs such as software engineering, design, accounting, and IT—jobs that Americans expected to get in order to pay off their student loans.

The Wall Street Journal editorial asserts that the young are not in the work force because they are on drugs, or on disability, or because of their poor education. However, all over the country there are college graduates with good educations who cannot find jobs because the jobs have been offshored. To worsen the crisis, a Republican Senator from Wisconsin wants to bring in more foreigners on work permits to drive US wages down lower so that no American can survive on the wage, and the Wall Street Journal editorial page editors endorse this travesty!

The foreigners on work visas are paid one-third less than the going US wage. They live together in groups in cramped quarters. They have no employee rights. They are exploited in order to raise executive bonuses and shareholder capital gains. I have exposed this scheme at length in my book, The Failure of Laissez Faire Capitalism (Clarity Press, 2013).

When Trump said he was going to bring the jobs home, he resonated, but, of course, he will not be permitted to bring them home, any more than he has been permitted to normalize relations with Russia.

In America Government is not in the hands of its people. Government is in the hands of a ruling oligarchy. Oligarchic rule prevails regardless of electoral outcomes. The American people are entering a world of slavery more severe than anything that previously existed. Without jobs, dependent on their masters for trickle-down benefits that are always subject to being cut, and without voice or representation, Americans, except for the One Percent, are becoming the most enslaved people in history.

Americans carry on by accumulating debt and becoming debt slaves. Many can only make the minimum payment on their credit card and thus accumulate debt. The Federal Reserve’s policy has exploded the prices of financial assets. The result is that the bulk of the population lacks discretionary income, and those with financial assets are wealthy until values adjust to reality.

As an economist I cannot identify in history any economy whose affairs have been so badly managed and prospects so severely damaged as the economy of the United States of America. In the short/intermediate run policies that damage the prospects for the American work force benefit what is called the One Percent as jobs offshoring reduces corporate costs and financialization transfers remaining discretionary income in interest and fees to the financial sector. But as consumer discretionary incomes disappear and debt burdens rise, aggregate demand falters, and there is nothing left to drive the economy.

What we are witnessing in the United States is the first country to reverse the development process and to go backward by giving up industry, manufacturing, and tradable professional skill jobs. The labor force is becoming Third World with lowly paid domestic service jobs taking the place of high-productivity, high-value added jobs.

The initial response was to put wives and mothers into the work force, but now even many two-earner families experience stagnant or falling material living standards.

New university graduates are faced with substantial debts without jobs capable of producing sufficient income to pay off the debts.

Now the US is on a course of travelling backward at a faster rate. Robots are to take over more and more jobs, displacing more people. Robots don’t buy houses, furniture, appliances, cars, clothes, food, entertainment, medical services, etc. Unless Robots pay payroll taxes, the financing for Social Security and Medicare will collapse. And it goes on down from there. Consumer spending simply dries up, so who purchases the goods and services supplied by robots?

To find such important considerations absent in public debate suggests that the United States will continue on the country’s de-industrialization, de-manufacturing trajectory.

Guaranteed Income And Living Wage Schemes Cannot Possibly Work

Authored by Mike Shedlock via MishTalk.com,

Facebook founder Mark Zuckerberg Supports Universal Basic Income.

In its basic form, universal basic income means “everyone gets a paycheck, whether they have a job or not.”

Many expect even more. They want a guaranteed “living wage”.

Useless Trials

Such schemes cannot possibly work. But that does not stop fools from trying.

For example, Finland is giving out a guaranteed monthly income of nearly $600 to 2,000 citizens.

Canada’s province of Ontario, which includes Toronto, started a pilot program in April that provides 4,000 citizens with an unconditional income of about $12,600 a year. Applicants must be between ages 18 and 64 and living on a limited income.

Those studies cannot prove anything, no matter what the results.

Free Money Proposals Do Not Scale

Sure, one can do a trial and show that 20,000 or whatever sample size is better off.

However, any benefit to the trial participants must at the expense of a bigger deficit or higher taxes on everyone else.

Imagine giving 200 million people a guaranteed living wage. Who is going to pay for it?

Next, imagine all of Europe doing this coupled with freedom of movement.

Why stop there? Imagine the same program for the entire world? Free money for everyone!

Hawaii Considers A "Universal Basic Income" As Robots Seen Stealing Jobs, There's Just One Catch...

Forget social security, medicaid and WIC, today"s progressives have moved well beyond discussing such entitlement relics of the past and nowadays dedicate their efforts to the concept of a "Universal Basic Income" for all...call it the New "New Deal".  You know, because having to work for that "car in every garage and chicken in every pot" is just considered cruel and unusual punishment by today"s standards.

Of course, it should come as little surprise that the progressive state of Hawaii, which depends on easily automatable jobs tied to the tourism industry, is among the first to pursue a Universal Basic Income for its residents.  And while the idea of passing out free money to everyone seems like a genius plan, if we understand it correctly, as CBS points out, there is just one catch...figuring out who will pay for it.

Driverless trucks. Factory robots. Delivery drones. Virtual personal assistants.

As technological innovations increasingly edge into the workplace, many people fear that robots and machines are destined to take jobs that human beings have held for decades--a trend that is already happening in stores and factories around the country. For many affected workers, retraining might be out of reach —unavailable, unaffordable or inadequate.

Over the past two decades, automation has reduced the need for workers, especially in such blue-collar sectors as manufacturing, warehousing and mining. Many of the jobs that remain demand higher education or advanced technological skills. It helps explain why just 55 percent of Americans with no more than a high school diploma are employed, down from 60 percent just before the Great Recession.

Hawaii state lawmakers have voted to explore the idea of a universal basic income in light of research suggesting that a majority of waiter, cook and building cleaning jobs — vital to Hawaii"s tourism-dependent economy — will eventually be replaced by machines. The crucial question of who would pay for the program has yet to be determined. But support for the idea has taken root.

"Our economy is changing far more rapidly than anybody"s expected," said state Rep. Chris Lee, who introduced legislation to consider a guaranteed universal income.

Lee said he felt it"s important "to be sure that everybody will benefit from the technological revolution that we"re seeing to make sure no one"s left behind."

But taking billions from hard working Americans to "spread the wealth around" has never been all that difficult before so presumably this too should prove to be a relatively minor issue.

In all seriousness, where does Representative Lee and CBS figure Hawaii will get the funding for their guaranteed income plan?  Well, as it turns out, Facebook co-founder Chris Hughes made a very generous $10mm donation to support programs just like this...the only problem, of course, is that Hawaii would need about 1,000 times that amount to fund Chris Lee"s plan for just one year.

For now, philanthropic organizations founded by technology entrepreneurs have begun putting money into pilot programs to provide basic income. The Economic Security Project, co-led by Facebook co-founder Chris Hughes and others, committed $10 million over two years to basic income projects.

Tom Yamachika, president of the Tax Foundation of Hawaii, a nonprofit dedicated to limited taxes and fairness, has estimated that if all Hawaii residents were given $10,000 annually, it would cost about $10 billion a year, which he says Hawaii can"t afford given its $20 billion in unfunded pension liabilities.

That said, it"s difficult to argue with Karl Widerquist"s argument that Hawaiians deserve a "beach dividend" for their heroic efforts in being born and continuing the difficult task of breathing day in and day out.

Karl Widerquist, co-founder of the U.S. Basic Income Guarantee Network, an informal group that promotes the idea of a basic income, suggests that Hawaii could collect a property tax from hotels, businesses and residents that could be redistributed to residents.

"If people in Alaska deserve an oil dividend, why don"t the people of Hawaii deserve a beach dividend?" he asked.

And while we have little doubt that Widerquist has fully thought through his suggestion that Hawaii just raise an incremental $10 billion every year via a tax on hotel stays...we thought we"d run the math just to make sure his plan holds water.  As it turns out, roughly 3 million families visit Hawaii for a little R&R every year which means each family would only have to pony up an extra $3,400 per hotel stay to cover Hawaii"s Universal Basic Income plan.  Seem more than reasonable, right?

Missouri's New Minimum Wage Law Will Be... Complicated

Authored by Jazz Shaw via HotAir.com,

Generally when we see news of a new minimum wage law it relates to a city or state raising it. Missouri went in the opposite direction recently, instituting a rule which forbids any local government entities from instituting a minimum wage which is higher than that state minimum. (Currently sitting at $7.70 per hour.)

That’s going to cause considerable consternation for people in St. Louis who only recently received a raise to $10.00 per hour because of a municipal law. (Associated Press)

Thousands of workers in St. Louis will likely see smaller paychecks starting Monday, when a new Missouri law takes effect barring local government from enacting minimum wages different than the state minimum.

The law is drawing protests in St. Louis and in Kansas City, where a recent vote approving a higher minimum wage is essentially nullified without ever really taking effect.

The impact is direct in St. Louis, where the minimum wage had increased to $10 after the Missouri Supreme Court sided with the city in a two-year legal battle. Days after the Supreme Court ruling, Missouri’s Republican-led Legislature passed a statewide uniform minimum wage requirement. The state minimum wage is $7.70 per hour. Republican Gov. Eric Greitens declined to veto the bill, allowing it to become law.

This new law seems to be somewhat unique in that it effectively also sets a maximum minimum wage rather than just a minimum. I was glancing through the summaries of minimum wage laws around the country and couldn’t find anyplace else which has tried this. So is it a good idea? Keep in mind that the law obviously doesn’t forbid anyone from paying a higher rate if they wish, and in fact a number of businesses (mostly smaller ones) have signed on to a pledge to stick to the new, higher rate of ten dollars.

I suppose one could approach this from the supremacy angle and say that the state has the right to determine such rules for all the counties and municipalities if they wish. After all, the federal minimum wage overrides any states which attempt to have a lower rate as the minimum, so the supremacy aspect should flow downhill from there.

But the idea seems problematic. It might be a way for a more conservative state government to stick a thumb in the eye of more liberal cities who are in line with the Fight for 15 crowd, but the net effect seems negative. One of the major hurdles to a national minimum wage hike is the fact that the cost of living can vary so wildly between large, urban areas and more rural districts. New York has had to look at such accommodations because the average rent in the Big Apple can literally be ten times higher than in some rural, upstate regions.

A city can get carried away (see Seattle for an example) and jack up their minimum wage to the point where it shuts down businesses and costs jobs, but it’s understandable if some of them want to take the average cost of living into account. Will this be challenged in court by the City of St. Louis? Can it even be challenged? Interesting questions and I’m sure the rest of the country will be watching how this one plays out because the minimum wage is a hot topic pretty much everywhere these days.

UPDATE: I almost immediately received feedback on this subject. Turns out it has been done before in at least a few states. Alabama already passed such a law and it stood up to at least one challenge.

Here's How Many Americans Are Living Paycheck To Paycheck (Hint: It's A Lot)

Is your family forced to count down the days each month until the next paycheck arrives?  If so, you"re part of a staggering, and growing, majority of households in America, the richest country on the planet, that is forced to do the same.  

According to a new poll conducted by Harris Poll on behalf of CareerBuilder, over three-quarters of American households are forced to live paycheck to paycheck to make ends meet. 

More than three-quarters of workers (78 percent) are living paycheck-to-paycheck to make ends meet — up from 75 percent last year and a trait more common in women than men — 81 vs. 75 percent, according to new CareerBuilder research. Thirty-eight percent of employees said they sometimes live paycheck-to-paycheck, 17 percent said they usually do and 23 percent said they always do.

Having a higher salary doesn"t necessarily mean money woes are behind you, with nearly one in 10 workers making $100,000 or more (9 percent) saying they usually or always live paycheck-to-paycheck and 59 percent in that income bracket in debt. Twenty-eight percent of workers making $50,000-$99,999 usually or always live paycheck to paycheck, 70 percent are in debt; and 51 percent of those making less than $50,000 usually or always live paycheck to paycheck to make ends meet, 73 percent are in debt.

Not surprisingly, the problem is even worse for minimum wage workers, 54% of whom say they have to work more than 1 job to cover their monthly expenditures. 

The majority of workers (81 percent) have worked a minimum wage job, and 71 percent of them were not able to make ends meet financially during that time — more than half (54 percent) had to work more than one job.

To alleviate some financial burden, 83 percent of employers that are hiring minimum wage workers this year (45 percent) will be raising the minimum wage at their organization.

Meanwhile, 57% of households say they can"t afford to save even $100 a month.

Less than a third of workers (32 percent) stick to a clearly defined budget and a slight majority (56 percent) save $100 or less a month:

• None: 26 percent


• Less than $50: 15 percent


• $51 to $100: 16 percent


• $101 to $250: 14 percent


• $251 to $500: 11 percent


• $501 to $750: 5 percent


• $751 to $1,000: 4 percent


• More than $1,000: 10 percent

The scariest part of the poll, as CBS points out, is that the number of people living paycheck to paycheck is actually growing despite the fact that the Fed and our politicians continue to brag about near "full employment."

The survey highlights a troubling trend in household finances: More than eight years since the end of the recession, the share of Americans who are living on the financial edge is growing, said Mike Erwin, a spokesman for CareerBuilder. While some may want to blame Americans" spendthrift ways, Erwin pointed to two trends that continue to put financial stress on households: stagnant wages and the rising cost of everything from education to many consumer goods.

"Living paycheck to paycheck is the new way of life for U.S. workers," he said. "It"s not just one salary range. It"s pretty much across the board, and it"s trending in the wrong direction."

A year ago, about 75 percent of U.S. workers said they were living from payday to payday, a number that has grown to 78 percent this year. The study, conducted by Harris Poll, surveyed nearly 2,400 hiring and human resource managers and 3,500 adult employees who worked full-time in May and June.

Meanwhile, employers seems to see straight through the "full employment" charade because wage growth continues to be completely nonexistent...an outcome that would seem inconceivable in an under-supplied market.

Weak wage growth is partly to blame for the financial stress felt by many Americans. Median household income is still stuck in low gear, with the U.S. Census reporting only one year of income gains since 2007, the year the recession officially started.

The end result: American households are still earning 2.4 percent below what they brought home at their income peaks in 1999. At the same time, expenses for food, fuel, education, housing and other costs have risen.

"Jobs have come back, but we haven"t seen salaries rebound," Erwin said. "Right now we are in a time when the cost of living is way outpacing the amount of money that people are getting through raises."

Of course, the real question is precisely how many of these households live in a McMansion that"s 2x larger than what they need for their family and drive around in brand new BMWs that get replaced with new leases every 3 years?

Growing Number Of Companies Complain About Inability To Find Workers: So Why Is Wage Growth So Low?

Authored by Mike Shedlock via MishTalk.com,

Since 2010, the highest year-over-year wage increase in any month for production and nonsupervisory employees is near 2.6%.

For a two-year stretch between summer of 2011 and summer of 2013 wage increases less than 2% were the norm.

Yet, firms complain about labor costs while simultaneously complaining about the lack of workers.
 

Bloomberg reports Firms Under Pressure as Labor Drought Grows, U.S. Survey Shows.

A growing number of companies are finding it difficult to recruit skilled workers, which threatens to curtail profits and growth, according to a quarterly survey conducted by the Washington-based National Association for Business Economics.

The results of NABE’s July Business Conditions Survey published on Monday showed that 34 percent of respondents have had trouble hiring skilled employees over the last three months, up from 27 percent in January. The Washington-based association polled 101 panelists, who are economists from companies and industry associations.

In response, companies are sponsoring foreign workers, expanding their search and hiring more independent contractors, according to the survey. They’re also boosting automation, stepping up internal training and in some cases improving pay, Jankowski said.

Perhaps at least partially as a result, more than a third of respondents cited labor costs as having the largest negative impact on their profits so far this year.

Year-Over-Year Wage Growth

Year-Over-Year Wage Growth

Is 2.6% wage growth too hefty even as corporations complain about a lack of workers?

What’s Going On?

• It’s not just salaries. Obamacare and benefits are hurting many companies.


• Cheap money from the Fed keeps zombie companies alive.


• Cheap money from the Fed induced (and still does) overexpansion fast of food restaurants and retail stores of all sorts.


• Workers really are not worth benefit costs plus an extra 3% so companies seek to automate.


• Are McDonald’s workers worth $15? Please be serious.


• Amazon and online shopping are weakening retail profits.

Finally, I suspect the survey is deeply flawed.

Does some random small to medium-sized company have the same weight as Walmart? The regional Fed manufacturing and ISM surveys seem to have that defect.

Yet for now, enough stores are still expanding which adds to job growth despite automation. Apparently, the goal is a McDonald’s or a Walmart on every corner.

We will not quite get that far. Rampant expansion will turn on a dime at some point, most likely globally.

Missouri Legislature Reverses St. Louis Minimum-Wage Hike

A week ago, we reported on a study from the University of Washington that exposed how the city of Seattle’s progressive minimum wage increases, which began in 2015, are – contrary to the hopes of misguided liberals – actually crushing the city’s poor.

Specifically, the study found that higher minimum wages caused a 9.4% reduction to total hours worked by low-skilled workers, or roughly 14 million hours per year.  Given that a full-time employee works 2,080 hours per year, that"s equivalent to just over 6,700 full-time equivalents who have lost their jobs, just in the city of Seattle.

While the higher minimum wage law remains intact in liberal Washington State - despite the research suggesting that it’s harming Seattle"s most vulnerable workers - the Missouri legislature recently acted to prevent a similar catastrophe from playing out in St. Louis by passing what’s known as a preemption law to invalidate a city-approved minimum wage hike that was slated to take effect in late August. The hike would’ve raised the city’s minimum wage to $10 an hour, from the state-approved $7.70.

Preemption laws are becoming increasingly popular in GOP-controlled states as cities – typically bastions of liberal sentiment – try to raise minimum wages above statewide minimum levels. As the Huffington Post reports, it’s impossible to say how many St. Louis employers will take the GOP up on the offer to slash pay, given the effect such a move could have on competitiveness and morale.

But if businesses agree that the wage hike was too aggressive, then at least some of them will likely revert to lower pay rates, particularly in low-wage industries like fast food.

“If St. Louis’ existing measure were to stay in effect, the city’s minimum wage would be $10 this year and would then climb to $11 in 2018. The statewide rate of $7.70 typically goes up just a few cents a year, since it’s tied to an inflation index.

St. Louis originally passed a minimum wage hike two years ago, prompting business groups to sue to stop it in court. The Missouri Supreme Court recently ruled that the St. Louis measure was lawful, but the new state preemption law renders it irrelevant.”

However, St. Louis is one of the more interesting preemption-law case studies because it undoes a hike that was already approved – even if it hadn’t yet gone into effect. But at least 17 states have preemption laws that stand in the way of local minimum wage legislation, according to a recent study by the National League of Cities.

Though Missouri is hardly alone. Just days after the Birmingham, Ala. City Council passed a wage hike in February 2016, GOP state legislators in Alabama passed a preemption law taking aim at the new $10.10 minimum wage. The Alabama chapter of the NAACP ended up filing a civil rights lawsuit against the state, claiming that the majority-white legislature was disenfranchising Birmingham residents, who are 73 percent African-American.

Fearing the political backlash associated with potentially cutting people’s pay, Missouri Gov. Eric Greitens wouldn’t affix his signature to the bill; Missouri’s constitution stipulates that bills that go unsigned by the governor automatically become law.

Elderly Americans Are Taking Their Grandkids' Summer Jobs

Compared with their peers in the European periphery, American teenagers looking for a part-time job this summer are in an enviable position: With the unemployment rate at a post-crisis low and demand for seasonal workers set to rise by more than 10 percentage points compared with last year, they shouldn’t have much trouble finding work, Bloomberg reported.

However, despite these encouraging circumstances, the teenage workforce participation rates are already at their lowest levels in more than a decade – and they’re expected to keep falling. The Bureau of Labor Statistics expects the workforce participation rate among teens to break below 27 percent in 2024, or 30 points lower than the peak seasonally adjusted rate in 1989.

Why? Because teens these days are facing stiff competition from Americans over the age of 65 – i.e. their parents and grandparents.

As Bloomberg reports: American teens are “being crowded out of the workforce by older Americans, now working past 65 at the highest rates in more than 50 years.”

Of course, senior citizen aren’t the only demographic group vying for the service-industry jobs once coveted as a rite of passage among American teens. Immigrants have also taken some of those jobs, as Bloomberg reports.

“Why aren"t teens working? Lots of theories have been offered: They"re being crowded out of the workforce by older Americans, now working past 65 at the highest rates in more than 50 years. Immigrants are competing with teens for jobs; a 2012 study found that less educated immigrants affected employment for U.S. native-born teenagers far more than for native-born adults.”

Whether you"re looking at summer jobs or at teen employment year-round, the work trends for teenagers show a clear pattern over the last three decades. When recessions hit, in the early 1990s, early 2000s, and from 2007 to 2009, teen labor participation rates plunge. As the economy recovers, though, teen labor doesn"t bounce back.

Today"s college-bound teens are finding that the ROI for focusing on their studies in the hopes of obtaining outside scholarships or merit-based aid packages is more attractive than a minimum-wage paycheck, according to a study by the BLS.

“Parents are pushing kids to volunteer and sign up for extracurricular activities instead of working, to impress college admission counselors. College-bound teens aren"t looking for work because the money doesn"t go as far as it used to. ‘Teen earnings are low and pay little toward the costs of college,’ the BLS noted this year. The federal minimum wage is $7.25 an hour. Elite private universities charge tuition of more than $50,000.”

Whereas decades ago, summer school was for remedial-track students who failed courses offered during the academic year, teens from affluent families are enrolling in enrichment courses and taking classes for college credit as high school curriculum grows increasingly more intense.

In 1982, fewer than one in 10 high school graduates had completed at least four years of English classes, three years of math, science, and social science, and two years of a foreign language. By 2009, the most recent data in the U.S. Digest of Education Statistics, the share of grads taking those classes was almost 62%.

All this studying has obvious benefits, but a single-minded focus on education has disadvantages, too; a summer job helps provide teens with real work experience that they can’t get at school or home. Working teens learn how to interact with co-workers, operate as part of a team and – most importantly – deal with bosses.

Last year, 43 percent of 16- to 19-year-olds were either working or looking for a job. That"s 10 points lower than in July 2006. In 1988 and 1989, the July labor force participation rate for teenagers nearly hit 70 percent.

In July 2016, more than two-fifths of American students aged 16-19 were enrolled in a summer course. That’s more than four times the enrollment totals from July 1965, Bloomberg reported.

Huge Miss: Only 138K Jobs Added In May; April Revised Much Lower As Wages Disappoint

As previewed last night, the jobs "whisper" risk was to the downside, and in what was a very disappointing print released moments ago by the BLS, the whisper was spot on with only 138K jobs added in May, far below the 185K estimate, and below the lowest estimate of 140K. This was the second lowest print going back all the way to last October. Additionally, April"s big beat of 211K was revised substantially lower to only 174K, suggesting that any expectation the Fed may have had of "evidence" the recent economic slowdown was transitory was just crushed.

The change in total payrolls for March was revised down from +79,000 to +50,000, and the change for April was revised down from +211,000 to +174,000. With these revisions, employment gains in March and April combined were 66,000 less than previously reported. This means that over the past 3 months, job gains have averaged 121,000 per month, a far cry from the 181,000 average jobs added over the past 12 months.

To be sure, as SouthBay Research points out, a big reason for the unexpected miss was the sharp seasonal adjustment favtor, which was the biggest going back to the financial crisis days:

Not helping the Trump agenda, manufacturing jobs declined sharply, posting the weakest growth of 2017.

Looking at the Household survey revealed an even uglier picture as the number of employed workers declined by 233K to 152,923, the lowest since March.

Even worse for wage watchers, while the average hourly earnings rose by 0.2% monthly, the annual increase also missed printing at 0.2%, with April revised from 0.3% to 0.2%, while the annual increase was 2.5%, also missing the expectations of a 2.5% print. This was the lowest annual increase in average hourly earnings since March 2016.

On an absolute basis, the rebound in average hourly earnings has now fizzled completely.

While there was a silver lining in the unemployment rate which declined again to 4.3% from 4.4%, a bigger problem emerged in the participation rate which took a big step lower from 62.9% to 62.7%.

More details from the report:

Total nonfarm payroll employment increased by 138,000 in May, compared with an average monthly gain of 181,000 over the prior 12 months. In May, job gains occurred in health care and mining. 

Employment in health care rose by 24,000 in May. Hospitals added 7,000 jobs over the month, and employment in ambulatory health care services continued to trend up (+13,000). Job growth in health care has averaged 22,000 per month thus far in 2017, compared with an average monthly gain of 32,000 in 2016.

Mining added 7,000 jobs in May. Employment in mining has risen by 47,000 since reaching a recent low point in October 2016, with most of the gain in support activities for mining.

In May, employment in professional and business services continued to trend up (+38,000). The industry has added an average of 46,000 jobs per month thus far this year, in line with the average monthly job gain in 2016. 

Employment in food services and drinking places also continued to trend up in May (+30,000) and has grown by 267,000 over the past 12 months. 

Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.  

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in May. In manufacturing, the workweek also was unchanged at 40.7 hours, while overtime edged up by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.6 hours. 

In May, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $26.22. Over the year, average hourly earnings have risen by 63 cents, or 2.5 percent. In May, average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $22.00. 

The change in total nonfarm payroll employment for March was revised down from +79,000 to +50,000, and the change for April was revised down from +211,000 to +174,000. With these revisions, employment gains in March and April combined were 66,000 less than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 121,000 per month. 

Where The May Jobs Were: It Was All About Minimum Wage Again

If May was supposed to be the "tiebreaker" month, after a disastrous March and a solid (if now downward revised) April, then the US economy is not doing well: with only 138K jobs added in the past month, while over 200K actual jobs were lost (per the Household Survey), it was no surprise that the biggest missing link of the so-called recovery, wage growth, was simply not there again.

How is it that with the labor market supposedly near full employment, and the unemployment rate sliding to a post 2001 low of 4.3%, wages simply can not rise?

The answer was once again to be found in the quality of jobs added because in addition to the previously noted plunge in full-time jobs, the biggest in three years, the granular detail from the BLS revealed that all the jobs growth was again in low or minimum-wage sectors such as education and health, which added 47,000, leisure and hospitality up 31,000 jobs of which food services and drinking places workers, aka waiters and bartenders, added another +30,300. Temp help services, by definition the lowest paying job category, added another 12,900 jobs. Combined, these three minimum-wage categories accounted for two-thirds of all April job gains.

Looking at retail workers, which have suffered steep job losses recently as a result of the widespread shuttering of bricks-and-morter outlets, the BLS revised the reported rebound in the last two months, converting it into a job loss. As a result, retail workers have dropped for 4 consecutive months, and at 15.836 million, have dropped to 11 month lows.

Another notable observation: after rising by 11,000 last month, manufacturing workers declined once again, down 1,000 jobs, the first drop in the sector since last October.

Some further observations on the job breakdown, courtesy of Southbay Research:

• Healthcare (+32K): As expected, with ACA repeal dead, Healthcare hiring returns


• Leisure/Hospitality (+31K): As expected, restaurant demand kicks in


• Professional Services ex temp (+25K): As expected, relatively mild Temp worker demand


• Construction (+11K): Mild weather pulled in payrolls, leaving little for May


• Financial (+11K): Housing boom continues to drive financial payrolls


• Transportation (+4K): Supply chain pressure and manufacturing pause slowed demand for trucking


• Manufacturing (-1K): Factories hit the pause button (Trump rhetoric not yet translating into actual activity boost)


• Wholesale (-2K): Consistent with general macro trends (lack of inflation, retail supply chain pressure, inventory pressure)


• Retail (-6K): Grocery store and brick-and-mortar store pressure

The complete breakdown of changes in key job categories in April and May is shown below.

Appeals Court Rules Against San Diego Unions: First of Many Taxpayer Victories To Come

Authored by Mike Shedlock via MishTalk.com,

In 2012, San Diego voters gave Landslide Approval to Proposition B, which eliminated defined-benefit pensions for newly hired city workers except for police.

In December of 2015, the state Public Employment Relations Board, a bastion of Union sympathizers, ordered the city to make millions of dollars of retroactive payments to workers hired since the law took effect.

The city appealed. Today we have a very welcome ruling for taxpayers: An Appeals Court overturned the PERB Ruling.

“This is a victory for the citizens of San Diego and the state of California,” said taxpayer advocate April Boling, one of three who filed court appeals. “The court agreed citizens can take matters into their own hands through the initiative process and support of elected officials does not somehow trigger the requirement for union negotiations.”

Since the provisions of the ballot measure were implemented, most new employees have been offered 401k-style plans.

The proposition was opposed by organized labor groups, which took their case to the PERB.

The city contended that private citizens don’t have to negotiate with organized labor before proceeding with a ballot measure, and that even though municipal officials like then-Mayor Jerry Sanders backed Proposition B, they did so on their own time.

A three-justice panel of the Fourth District Court of Appeal returned the case to PERB with directions to dismiss the union complaints.

The justices also called on PERB to order other “appropriate relief” consistent with the views they expressed in their opinion, and determined that each side to the litigation will bear its own costs.

First of Many Court Victories to Come

This is the first of many court rulings that will have unions reeling.

I discussed why previously on December 28, 2016, in Good News in Battle Against Public Union Greed and Corruption.

The election of Donald Trump is likely to do at least one good thing for the country (and that’s at least one more good thing than we would have seen had Hillary won).

Trump gets to make the next Supreme Court appointments and he has a great chance to clobber the public unions.

Already the SEIU is putting out warnings. An internal memo outlines plans to slash budgets by 30 percent at SEIU, the group behind the Fight for $15.

Victory Postponed

When Supreme Court Justice Antonin Scali unexpectedly died on February 13, 2016, after hunting quail, I was dismayed by the impact that might have on union rulings.

Sure enough, on March 29, the Supreme Court Handed a Major Victory to the Unions in a 4-4 tie, upholding an Appeals court ruling on union fee collection.

The Supreme Court handed organized labor a major victory on Tuesday, deadlocking 4 to 4 in a case that had threatened to cripple the ability of public-sector unions to collect fees from workers who chose not to join and did not want to pay for the unions’ collective bargaining activities.

It was the starkest illustration yet of how the sudden death of Justice Antonin Scalia last month has blocked the power of the court’s four remaining conservatives to move the law to the right.

A ruling allowing workers to refuse to pay the fees would have been the culmination of a decades-long campaign by a group of prominent conservative foundations aimed at weakening unions that represent teachers and other public employees. Tuesday’s deadlock denied them that victory, but it set no precedent and left the door open for further challenges once the Supreme Court is back at full strength.

Gorsuch Replaces Scalia

Scalia is gone but via a nuclear option, Gorsuch Heads for Supreme Court.

One is never 100% sure how justices will rule, but there is an overwhelming likelihood that Clinton would have appointed a union sympathizer who would have further wrecked taxpayer and city budgets.

Instead, there is a very strong likelihood, Gorsuch will stick it to public unions every chance he gets.

At long last, the court has a chance to make some very important rulings that put money into taxpayers’ pockets while lowering the costs of cities doing business.

However, the Supreme Court cannot fix everything that needs to be fixed by itself. Congressional help is needed.

I call on Republicans in Congress to do four things.

Four Things

1. Kill collective bargaining for public unions


2. Pass national right-to-work legislation


3. Scrap Davis-Bacon and all prevailing wage legislation


4. Pass national bankruptcy laws allowing cities and municipalities to declare bankruptcy

Victory at Hand

Point number four above will allow insolvent cities in Illinois, California, and other places escape preposterous pension obligations via bankruptcy.

Victory over public unions is possible. All Republicans have to do is the right thing.

Note to Senator Rand Paul: Please lead the victory charge.

Why Special Interests Sacrifice The Future For Short-Term Gain

The special interests that dominate politics dominates to produce a form of economic warfare. The more some can manipulate the political machinery, the more they can feather their own nests. They even use similar propaganda techniques.

In wartime, we are always defined as the good guys, ennobled by our moral cause. "They" are the bad guys, to be demeaned and dehumanized, so few will be bothered by what is done to them. Similarly, in domestic politics, representatives of each group paint themselves as particularly worthy or needy, making their advocacy morally superior, contrasted with their opponents whom they tar as selfish or unprincipled.

However, advocates for such causes do not always occupy the moral high ground they try so hard to create. They advocate coercing those who have done no harm to others to justify it. Further, the policies proposed often benefit existing members of a group, but harm those who will be members of that group in the future.

In such cases, justifying the political plunder to deliver a group’s demands because they are particularly deserving is self-contradictory. If membership in a group justifies special treatment, the same must apply to future members as well. Therefore, policies that benefit current members, while harming equally deserving future members, necessarily violate their own rationale.

The first example of how this works is the use of minimum wage laws.

Much in the news of late, these laws are promoted as helping low-skill workers. It is true that those lucky enough to keep their existing jobs, hours, working conditions, on-the-job training, promotion possibilities, etc., can gain. But other low-skill current workers, who lose jobs, hours or training, are harmed. Beyond that, though, by raising the cost of hiring low-skill workers, it leads employers to reduce the number of jobs and training opportunities available to future low-skill workers, with the consequences worst for the least-skilled. Similarly, arguments for living or prevailing wage laws, to provide “good” jobs, raises the cost of hiring workers relative to alternatives such as automation, reducing the number of future “good” jobs available.

Another good example is rent control.

A recently-introduced bill in the California legislature, AB 1506 would allow local governments to dramatically expand rent control in California, where I live.

It is true that rent control would benefit many current renters, by lowering what they pay and locking in their too-good-to-give-up gains for years. But coming at the expense of property owners, it would progressively reduce the supply of rental housing over time. And those eventual effects are very large. As Swedish economist Assar Lindbeck once commented, “next to bombing, rent control seems in many cases to be the most efficient technique so far known for destroying cities.” That reduced future rental housing, particularly for unoccupied units, harms all future renters.

A third example is taxation on capital. 

Some claim that taxing or regulating capital more heavily will benefit laborers. But, reducing the payoffs to saving and investing with increased burdens reduces the growth rate of the capital stock. With fewer tools, future workers will be less productive, reducing their earnings and well-being.

Other special-interest groups follow the same pattern. Those now old want others to pay for more of their retirement, health care, etc., because they claim to be especially needy or deserving. But the cost must then be imposed on others who are not yet old. That will leave future generations worse off when they become old. Similarly, licensing and other restrictions are proposed to benefit current suppliers, but they harm potential future suppliers by denying them entry.

Those who want government to pickpocket others for them go to great lengths to claim special worthiness. However, not only does what they want punish innocent parties, but many of those harmed are future members - often a much larger number - of the “special” groups proponents claim to care so deeply about. That unwarranted harm and the glaring inconsistency between rhetoric and future reality justifies thinking far more carefully about such policies before buying into the propaganda.

Meet SAM, Brick Laying Robot That Does The Work Of 6 Humans

In the latest installment of our "Dear Bernie" series, posts intended to inform the Vermont Senator about the unintended, negative consequences of minimum wage hikes, we present SAM (Semi-Automated Mason), a brick laying robot designed and engineered by Construction Robotics out of New York.  While SAM can do the work of 6 unionized masons each day, he never requires a break, benefits or a paycheck.

Here"s a look at SAM in action:

Each SAM can be rented at a monthly cost of ~$3,300 according to The Sun.  With an average efficiency of 3,000 bricks per day, that breaks down to about 4.5 cents per brick.  Meanwhile, using using Bernie"s preferred $15 per hour minimum wage rate, plus benefits, and a daily efficiency of about 500 bricks brings the human labor cost equivalent to roughly 32 cents per brick, or a little over 7x.

Of course, SAM can"t completely eliminate the need for masons on work sites just yet, as human assistance is still needed to load bricks and mortar into the system and to clean up excess mortar from joints after bricks have been laid.  That said, Construction Robotics estimates that overall labor costs for bricklaying projects can be reduced by at least 50%.

And while Bernie is unlikely to rent a SAM to construct his next $575,000 lake house, we hear that someone may be taking bids for an impenetrable, yet "aesthetically pleasing", 30-foot border wall that will span nearly 2,000 miles. 

Perfect Example Of Why Job Losses From Minimum-Wage-Hikes Are Being Underestimated, 'Bigly'

Over the past several months, we"ve highlighted a number of economic studies analyzing the potential negative impact, in terms of job losses, that may be expected to result from the state-mandated minimum wage hikes that are currently being implemented around the country.

One such study came from the American Action Forum (AAF) and estimated that 2.6 million jobs will be lost around the country over the next several years as states phase-in minimum wage hikes that have already been passed (see "State Minimum Wage Hikes Already Passed Into Law Expected To Cost 2.6 Million Jobs, New Study Finds").  Here were a few of the key takeaways:

• In isolation, the minimum wage increases in 2017 will cost 383,000 jobs;


• The entire minimum wage increases currently phasing-in will cost over 2.6 million jobs; and


• Each job lost only leads to an extra $6,900 in total wage earnings across all workers.

After running a lot of really complicated math using complex equations that most of us stupid people just wouldn"t understand, these studies ultimately come down to a simple economic premise: elasticity of demand (a.k.a. "the higher shit is priced the less people will buy of it" rule).  In fact, the AAF analysis even summarized their study by saying that each 10% increase in wages results in an proximate 0.3% - 0.5% decline in net job growth...a rule which they used to conclude the following:

While proposals to raise the minimum wage are well intended, it is important to consider the negative labor market consequences. Meer & West (2015) find that raising the minimum wage reduces job creation. Specifically, they find that a 10 percent increase in the real minimum wage is associated with a 0.3 to 0.5 percentage-point decline in the net job growth rate. As a result, three years later employment becomes 0.7 percent lower than it would have been absent the minimum wage increase.

While the Meer & West (2015) findings may not seem very problematic, when taking into account the magnitude of the minimum wage increases and the number of states implementing new laws, the negative labor market consequences add up. Let’s first examine the minimum wage hikes of 2017 in isolation, without considering previous or future minimum wage increases under the new state laws.

The problem is that these studies consistently underestimate the number of jobs that will be impacted by minimum wage hikes.  For the most part, the economists simply tally up the number of jobs in a given market that currently fall beneath the new minimum wage threshold and then assume that a certain percentage of them will disappear.

In reality, minimum wage hikes trigger pay increases across the pay scale, not just for the employees earning minimum wage, because most people make employment decisions based on relative wages and not absolute wages. 

Consider, for example, the folks working at a California McDonalds where the minimum wage was $10 per hour in 2016 but is set to increase to $15 over the coming years.  Lets also assume that most of the customer service staff earns the minimum pay rate while managers earn $15.  Under the methodology above, the manager would never be counted as an "at-risk" position because his job would never technically fall below the new minimum wage.  But, in reality, there"s no conceivable world where the manager will simply agree to keep his $15 per hour pay rate once all of his workers have received a 50% pay increase and now make the same as him...instead, he"ll run some basic math and conclude he needs to be making $22.50 per hour to have the same "relative" compensation he had before or he"ll just go work as an order taker with less responsibility. 

And while these are simple concepts to most of us, even if we don"t understand the complicated econometrics equations, as the Associated Press points out today they"re completely foreign concepts to our elected officials who ignorantly passed minimum wage bills across the country without understanding the real economic consequences.  As a perfect example, apparently New York Governor Andrew Cuomo was shocked to learn that home healthcare experts would rather take his new $15 per hour minimum wage job flipping burgers with no stress than to earn the same amount of money for a job that requires a ton of expensive education and stressful, long hours....who knew?

It"s a national problem advocates say could get worse in New York because of a phased-in, $15-an-hour minimum wage that will be statewide by 2021, pushing notoriously poorly paid health aides into other jobs, in retail or fast food, that don"t involve hours of training and the pressure of keeping someone else alive.

"These should not be low-wage jobs," said Bruce Darling, executive director at the Center for Disability Rights. "We"re paying someone who gives you a burger the same as the person who operates your relative"s ventilator or feeding tubes."

There are 2.2 million home health aides and personal care aides in the U.S., with another 630,000 needed by 2024 as the Baby Boomer generation ages, according to the nonprofit research and consulting group PHI. New York state employs about 326,000 home health workers but is predicted to need another 125,000 by 2024.

For now, home health aides in New York state earn an average of about $11 an hour, though wages are lower in upstate regions. Advocates say the system needs an overhaul that focuses on higher pay, worker retention and finding methods of compensation beyond what is provided through Medicaid.

Here"s an idea...how about we just let markets set wage rates?

How The Market Creates Jobs (And How Government Destroys Them)

Via Walter Block of The Mises Institute,

The Creation of Jobs

If the media tell us that "the opening of XYZ mill has created 1,000 new jobs," we give a cheer. When the ABC company closes and 500 jobs are lost, we"re sad. The politician who can provide a subsidy to save ABC is almost assured of wide spread public support for his work in preserving jobs.

But jobs in and of themselves do not guarantee well-being. Suppose that the employment is to dig huge holes and fill them up again? What if the workers manufacture goods and services that no one wants to purchase? In the Soviet Union, which boasts of giving every worker a job, many jobs are just this unproductive. Production is everything, and jobs are nothing but a means toward that end.

Imagine the Swiss Family Robinson marooned on a deserted South Sea island. Do they need jobs? No, they need food, clothing, shelter, and protection from wild animals. Every job created is a deduction from the limited, precious labor available. Work must be rationed, not created, so that the market can create the most product possible out of the limited supply of labor, capital goods, and natural resources.

The same is true for our society. The supply of labor is limited. We must not allow government to create jobs or we lose the goods and services which otherwise would have come into being. We must reserve precious labor for the important tasks still left undone.

Alternatively, imagine a world where radios, pizzas, jogging shoes, and everything else we might want continuously rained down like manna from heaven. Would we want jobs in such a utopia? No, we could devote ourselves to other tasks - studying, basking in the sun, etc. - that we would undertake for their intrinsic pleasure.

Instead of praising jobs for their own sake, we should ask why employment is so important. The answer is, because we exist amidst economic scarcity and must work to live and prosper. That"s why we should be of good cheer only when we learn that this employment will produce things people actually value, i.e., are willing to buy with their own hard,earned money. And this is something that can only be done in the free market, not by bureaucrats and politicians.

The Destruction of Jobs

But what about unemployment? What if people want to work, but can"t get a job? In almost every case, government programs are the cause of joblessness.

Minimum Wage. The minimum wage mandates that wages be set at a government-determined level. To explain why this is harmful, we can use an analogy from biology: there are certain animals that are weak compared to others. For example, the porcupine is defenseless except for its quills, the deer vulnerable except for its speed.

In economics there are also people who are relatively weak. The disabled, the young, the untrained—all are weak economic actors. But like the weak animals in biology, they have a compensating advantage: the ability to work for lower wages. When the government takes this ability away from them by forcing up pay scales, it is as if the porcupine were shorn of its quills. The result is unemployment, which creates desperate loneliness, isolation, and dependency.

Consider a young, uneducated, unskilled person, whose productivity is $2.50 an hour in the marketplace. What if the legislature passes a law requiring that he be paid $5 per hour? The employer hiring him would lose $2.50 an hour.

Consider a man and a woman each with a productivity of $10 per hour, and suppose, because of discrimination or whatever, that the man is paid $ 10 per hour and the woman is paid $8 per hour. It is as if the woman had a little sign on her forehead saying, "Hire me and earn an extra $2 an hour."

This makes her a desirable employee even for a sexist boss. But when an equal-pay law stipulates that she must be paid the same as the man, the employer can indulge his discriminatory tendencies and not hire her at all, at no cost to himself.

Comparable Worth. What if government gets the bright idea that nurses and truck drivers ought to be paid the same wage because their occupations are of "intrinsically" equal value? It orders that nurses" wages be raised to the same level, which creates unemployment for women.

Working Conditions. Laws which force employers to provide certain types of working conditions also create unemployment. For example, migrant fruit and vegetables pickers must have hot and cold running water and modern toilets in the temporary cabins provided for them. This is economically equivalent to wage laws because, from the point of view of the employer, working conditions are almost indistinguishable from money wages. And if the government forces him to pay more, he will have to hire fewer people.

Unions. When the government forces businesses to hire only union workers, it discriminates against non-union workers, causing them to be at a severe disadvantage or permanently unemployed. Unions exist primarily to keep out competition. They are a state-protected cartel like any other.

Employment Protection. Employment protection laws, which mandate that no one can be fired without due process, are supposed to protect employees. However, if the government tells the employer that he must keep the employee no matter what, he will tend not to hire him in the first place. This law, which appears to help workers, instead keeps them from employment. And so do employment taxes and payroll taxes, which increase costs to businesses and discourage them from hiring more workers.

Payroll Taxes. Payroll taxes like Social Security impose heavy monetary and administrative costs on businesses, drastically increasing the marginal cost of hiring new employees.

Unemployment Insurance. Government unemployment insurance and welfare cause unemployment by subsidizing idleness. When a certain behavior is subsidized—in this case not working—we get more of it.

Licensing. Regulations and licensing also cause unemployment. Most people know that doctors and lawyers must have licenses. But few know that ferret breeders, falconers, and strawberry growers must also have them. In fact, government regulates over 1,000 occupations in all 50 states. A woman in Florida who ran a soup kitchen for the poor out of her home was recently shut down as an unlicensed restaurant, and many poor people now go hungry as a result.

When the government passes a law saying certain jobs cannot be undertaken without a license, it erects a legal barrier to entry. Why should it be illegal for anyone to try their hand at haircutting? The market will supply all the information consumers need.

When the government bestows legal status on a profession and passes a law against competitors, it creates unemployment. For example, who lobbies for the laws which prevent just anyone from giving a haircut? The haircutting industry—not to protect the consumer from bad haircuts, but to protect themselves against competition.

Peddling. Laws against street peddlers prevent people from selling food and products to people who want them. In cities like New York and Washington, D.C., the most vociferous supporters of anti-peddling laws are established restaurants and department stores.

Child Labor. There are many jobs that require little training—such as mowing lawns—which are perfect for young people who want to earn some money. In addition to the earnings, working also teaches young people what a job is, how to handle money, and how to save and maybe even invest. But in most places, the government discriminates against teenagers and prevents them from participating in the free enterprise system. Kids can"t even have a street-corner lemonade stand.

The Federal Reserve. By bringing about the business cycle, Federal Reserve money creation causes unemployment. Inflation not only raises prices, it also misallocates labor. During the boom phase of the trade cycle, businesses hire new workers, many of whom are pulled from other lines of work by the higher wages. The Fed subsidy to these capital industries lasts only until the bust. Workers are then laid off and displaced.

The Free Market. The free market, of course, does not mean Utopia. We live in a world of differing intelligence and skills, of changing market preferences, and of imperfect information, which can lead to temporary, market-generated unemployment, which Mises called "catallactic." And some people choose unemployment by holding out for a higher paying job.

But as a society, we can insure that everyone who wants to work has a chance to do so by repealing minimum wage law, comparable worth rules, working condition laws, compulsory union membership, employment protection, employment taxes, payroll taxes, government unemployment insurance, welfare, regulations, licensing, anti-peddling laws, child-labor laws, and government money creation.

The path to jobs that matter is the free market.

Most Government Workers Could Be Replaced By Robots, New Study Finds

Submitted by Emily Zanotti via HeatSt.com,

A study by a British think tank, Reform, says that 90% of British civil service workers have jobs so pointless, they could easily be replaced by robots, saving the government around $8 billion per year.

The study, published this week, says that robots are “more efficient” at collecting data, processing paperwork, and doing the routine tasks that now fall to low-level government employees. Even nurses and doctors, who are government employees in the UK, could be relieved of some duties by mechanical assistants.

There are “few complex roles” in civil service, it seems, that require a human being to handle.

“Twenty percent of public-sector workers hold strategic, ‘cognitive’ roles,” Reform’s press release on the study says. “They will use data analytics to identify patterns—improving decision-making and allocating workers most efficiently.

“The NHS, for example, can focus on the highest risk patients, reducing unnecessary hospital admissions. UK police and other emergency services are already using data to predict areas of greatest risk from burglary and fire.”

The problem, Reform says, is that public sector employee unions have bloated the civil service ranks, forcing government agencies to keep on older employees, and mandating hiring quotas for new ones. The organizational chart looks like a circuit board—and there’s no incentive to streamline anything.

Unfortunately for civil service workers, it seems the study is just the latest in a series of research  that won’t save their jobs. Oxford University and financial services provider Deloitte, both of whom comissioned their own studies concur with Reform‘s conclusions. The Oxford University study said that more than 850,000 public sector jobs could fall to robots over the course of the next decade.

Reform suggests that government employees should probably look into opportunities presented by the “sharing economy,” like driving for Uber – at least until robots replace those, too.

State Minimum Wage Hikes Already Passed Into Law Expected To Cost 2.6 Million Jobs, New Study Finds

Even though we know that Bernie and his alt-left compatriots will never tire of their endless "Fight for $15" no matter how much data we throw at them, we thought we would go ahead and highlight yet another economic study detailing the devastating job losses that will result from minimum wages hikes that have already been passed in states all around the country.

The latest study comes for the American Action Forum (AAF) and estimates that 2.6 million jobs will be lost around the country over the next several years as states phase-in minimum wage hikes that have already been passed.  Here are the key takeaways:

• In isolation, the minimum wage increases in 2017 will cost 383,000 jobs;


• The entire minimum wage increases currently phasing-in will cost over 2.6 million jobs; and


• Each job lost only leads to an extra $6,900 in total wage earnings across all workers.

Below are the 14 states where the minimum wage is set to increase in 2017 as well as the entire increases anticipated for states where large increases have been passed but will be phased in over several years. 

First, AAF estimates that the minimum wage increases planned for 2017 alone will result in 383,000 job losses.  The analysis assumes that each 10% increase in wages results in a 0.3% - 0.5% decline in the net job growth rate. 

While proposals to raise the minimum wage are well intended, it is important to consider the negative labor market consequences. Meer & West (2015) find that raising the minimum wage reduces job creation. Specifically, they find that a 10 percent increase in the real minimum wage is associated with a 0.3 to 0.5 percentage-point decline in the net job growth rate. As a result, three years later employment becomes 0.7 percent lower than it would have been absent the minimum wage increase.

While the Meer & West (2015) findings may not seem very problematic, when taking into account the magnitude of the minimum wage increases and the number of states implementing new laws, the negative labor market consequences add up. Let’s first examine the minimum wage hikes of 2017 in isolation, without considering previous or future minimum wage increases under the new state laws.

Of course, for most states that have enacted minimum wages increases, 2017 hikes are just one component of multi-year increases.  Below is a look at how much minimum wages are expected to increase overall after they"re fully implemeneted. 

Using the same correlations between minimum wage increases and net job losses noted above, AAF estimates that 1.8 million jobs will be lost once current increases are fully implemented. 

As if that weren"t enough, several states, including California, passed their current minimum wage laws several years ago.  Therefore, adding in jobs that have already been lost from current minimum wage legislation, AAF estimates that a total of 2.6 million jobs will be lost courtesty of misinformed liberal agendas. 

So goodluck with the continued crusade, Bernie!  If you get hungry along the way, we highly recommend you try out a sandwich from this new "Big Mac ATM" which comes with McDonald"s special sauce and all the fixin"s but requires exactly 0 of your minimum wage workers to cook. 

Union Servitude Ends In Kentucky: State Kills Prevailing Wages, Passes Right-To-Work

Submitted by Mike Shedlock via MishTalk.com,

In a major setback for organized labor, Kentucky passed right-to-work legislation and repealed the state’s prevailing wage law.

Organized labor suffered its first major legislative setback due to the 2016 elections on Saturday, when Kentucky Republicans gave final approval to right-to-work legislation and repealed the state’s prevailing wage law. Both bills are expected to be signed into law by the governor, and will take effect immediately.

Labor leaders were equally troubled by the legislature’s move to gut the state’s prevailing wage law. Such laws require that employers pay certain minimum wages on work funded by public money. Backers of the laws say they help make sure companies accepting taxpayer dollars don’t drive down wages and working conditions. Opponents argue they inflate the cost of public works projects.

The repeal means prevailing wages will no longer apply to construction workers building schools and government buildings.

Charlie Essex, the financial secretary for Local 369 of the International Brotherhood of Electrical Workers in Louisville, called the measure “an attack on union people.” He estimated that the prevailing wage law applied to more than 30 percent of union construction work in Kentucky.

Backed by business lobbies, Republican lawmakers around the country have been aggressive in pushing right-to-work bills and prevailing wage repeals in recent years. When Democrats lose control of a statehouse chamber or the governor’s mansion, they are often powerless to stop them.

Long confined to the South and West, right-to-work proponents have recently made inroads elsewhere in the country, including even the industrial Midwest. Since 2012, Indiana, Michigan, Wisconsin and West Virginia have all gone right-to-work. Kentucky will be the 27th such state, making it more the norm than the exception around the country.

Crux of the Matter

Congratulations to Kentucky. The state will now be able to avoid overpaying for schools and paving roads.

Prevailing wage laws guarantee overpaying.

Unions’ Misguided Sense of “Fair”

Under U.S. labor law, a union must represent all employees in a unionized workplace, even those who may not want representation.

Unions argue it’s only fair that all workers share the costs of bargaining and maintaining the union contract.

Compelled Servitude

There is nothing fair at all about forcing someone to join an organization against their free will. In fact, it’s compelled servitude to do so.

I made the case in Paul Krugman, Stephen Colbert, Bill Maher, others, Ignore Extortion, Bribery, Coercion, and Slavery; No One Should Own You!

Even FDR Understood the Problem

Public unions get into bed with management and politicians and work out sweet deals for themselves at taxpayer expense. No one looks out for the taxpayer. Even FDR understood the problem.

Message from FDR

Inquiring minds are reading snips from a Letter from FDR Regarding Collective Bargaining of Public Unions written August 16, 1937.

All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management.

The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations.

Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees.

A strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable.

Union Extortion

Here are a couple of YouTube videos to consider, showing typical public union thug tactics.

Give up the Bucks

SEIU Spokesperson Threatening California Lawmakers with Union Retaliation

National Legislation Needed

Hopefully Trump will revise or completely toss the National Labor Relations board out the window.

National legislation is the only hope for dysfunctional states like Illinois.

GOP Plans 'Pre-Emptive' Law Crackdown On Liberal City Agendas

For years the liberal elitist politicians of large metropolitan cities around the country have overstepped their boundaries by passing city-level taxes on things like sugary drinks while also imposing new regulations like minimum wage hikes and, our personal favorite, plastic bag bans, which just went into effect for many cities across the country. 

As exhibit A, just yesterday we presented the following receipt showing the impact of Philadelphia"s new 51% "beverage tax":

And who can forget Bloomberg"s attempt to ban sugary drinks over 16 ounces from being served in restaurants, movie theaters, stadiums and arenas in New York City back in 2012.  While New York"s highest court ultimately ruled that New York City lacked the authority to implement the ban, it nonetheless became the poster child for the liberal Nanny State.

But, as The Hill points out, the consolidation of power in state capitals as a result the 2016 election has many Republican state legislatures looking to fight back against their rogue bastions of liberalism. 

Republican state legislatures are planning so-called preemption laws, which prevent cities and counties from passing new measures governing everything from taxes to environmental regulations and social issues.

Republican legislators around the country say liberal cities and counties vastly overstepped their bounds by implementing new taxes on sodas and sugary beverages, by raising local minimum wages or through strict new environmental regulations.

“What we see is circumventing the process that’s in place,” said Linda Upmeyer, the Republican speaker of the Iowa state House. “I think we will likely look at language on preemption so that the state is making decisions where it ought to, and cities and counties are making decisions where they should.”

In fact, in the last month alone both Michigan and Wisconsin passed state laws preventing individual cities from banning plastic grocery bags.  Moreover, the state of Ohio overturned Cleveland"s effort to raise its minimum wage.

In just the last month, legislatures in Michigan and Wisconsin have passed laws preempting local governments from banning plastic grocery bags. In the last few years, courts have upheld the rights of Colorado and Texas legislators to prevent municipalities from banning hydraulic fracturing, also known as fracking, within their borders. Ohio is the latest state to preempt local efforts to raise the minimum wage, after Cleveland tried to boost wages for its lowest-paid workers.

Proponents of local control worry that with the incoming Trump administration, even more power will bleed away from cities and counties. The outgoing Obama administration sided with municipal utilities in Chattanooga, Tenn., and Wilson, N.C., when the utilities wanted to expand access to broadband internet services beyond city borders. Republican-led legislatures in both states blocked those efforts, before the Federal Communications Commission stepped in.

Anticipating the number of measures likely to spring up in legislatures in the coming months, Pertschuk added: “This is going to be the worst year we’ve ever had.”

Meanwhile, rather than addressing new rules and regulations individually, other states are considering "blanket preemption" laws that would automatically cut off state funding for cities that pass legislation that runs contrary to state law.

At least some Republican-dominated states are considering what Pertschuk calls “blanket preemption” laws, similar to a measure Arizona lawmakers passed last year. That law would allow the state to cut off funding to cities that refuse to give up laws that run counter to state law.

The city of Tucson is in the midst of a legal battle over a local gun control measure that Attorney General Mark Brnovich (R) says stands in contrast to state law.

And Trump has been quite clear that he intends to pursue a similar strategy when it comes to withholding federal funding from states that refuse to enforce federal laws, like harboring illegal immigrants.

Battle over sanctuary cities - President-elect @realDonaldTrump pledges to block federal funding. #SpecialReport pic.twitter.com/AOrdY1csmI

— Fox News (@FoxNews) November 30, 2016

And while we"re not quite sure whether the masses will survive without Mayor Bloomberg dictating what size soda they should drink, we certainly look forward to giving it a shot.