Tag: employment

The Fed: ObamaCare “Leading to Layoffs”

The Hill has the story:

The Federal Reserve on Wednesday released an edition of its so-called “beige book,” that said the 2010 healthcare law is being cited as a reason for layoffs and a slowdown in hiring.

“Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff,” said the March 6 beige book, which examines economic conditions across various Federal Reserve districts across the country.

Or in other words, yes, ObamaCare will eliminate some 800,000 jobs.

Obama vs. Romney on Public School Jobs

In a high-profile presser on the economy last Friday, President Obama’s central proposal was to hire more public employees. Then, in his weekly address, he argued that hiring more public school teachers would allow the U.S. to educate its way to prosperity. His Republican presidential rival, Governor Romney, has recommended precisely the opposite: reducing the size of government to boost private sector job growth–and he, too, mentions public school teachers. So… who’s right?

First, let’s look at public school employment and student enrollment over time.

As the chart makes clear, enrollment is only up 8.5% since 1970, whereas employment is up 96.2%. In other words, the public school workforce has grown 11 times faster than enrollment over the past 40 years. What difference does that make in economic terms? If we went back to the staff-to-student ratio we had in 1970, we’d be saving… $210 billion… annually.

Wait a minute, though! Research by economist Rick Hanushek and others has found that improved student achievement boosts economic growth. So if the 2.9 million extra public school employees we’ve hired since 1970 have improved achievement substantially, we might well be coming out ahead economically. So let’s look at those numbers…

Uh oh. Despite hiring nearly 3 million more people and spending a resulting $210 billion more every year, achievement near the end of high school has stagnated in math and reading and actually declined slightly in science since 1970. This chart also shows the cost of sending a student all the way through the K-12 system–the total cost per pupil of each graduating class from 1970 to the present. As you can see, on a per pupil basis, a K-12 education has gone from about $55,000 to about $150,000 in real, inflation-adjusted terms.

The implications of these charts are tragic: the public school monopoly is warehousing 3 million people in jobs that appear to have done nothing to improve student learning. Our K-12 government school system simply does not know how to harness the skills of our education workforce, and so is preventing these people from contributing to our economy while consuming massive quantities of tax dollars. So what would hiring even more people into that system do for our economy…

Obama-Reid ‘Jobs’ Bill Soaked in Greece

A stated aim of the Obama-Reid jobs bill is to preserve the “competitive edge” that our “world-class” education system purportedly gives us. In an attempt to do that it would throw tens of billions of extra taxpayer dollars at public school employees.

A few problems with that: we’re not educationally world-class; we don’t have a competitive edge in k-12 education; and this bill would actually push the U.S. economy closer to a Greek-style economic disaster.

First, the belief that increasing public school employment helps students learn is demonstrably false. Over the past forty years, public school employment has grown 10 times faster than enrollment. If more teachers union jobs were going to boost student achievement, we’d have seen it by now. We haven’t. Achievement at the end of high school has been flat in reading and math and has declined in science over this period. I documented these facts the last time Democrats decided to stimulate their teachers union base, just one year and $10 billion ago.

So what has our public school hiring binge done for us? Since 1980, it has raised the cost of sending a child from Kindergarten through the 12th grade by $75,000 – doubling it to around $150,000, in 2009 dollars.

And what would going back to the staff-to-student ratio of 1980 do? It would save taxpayers over $140 billion annually.

But don’t those school employees need jobs? Of course they do. But we can’t afford to keep paying for millions of phony-baloney state jobs that have no impact on student learning. We need these men and women working in the productive sector of the economy – the free enterprise sector – so that they contribute to economic growth instead of being a fiscal anchor that drags us ever closer to the bottom of the Aegean. Freeing up the $140 billion currently squandered by the state schools would provide the resources to create those productive private sector jobs.

Continuing to tax the American people to sustain or even expand the current bloat, as Obama and Reid want to do, cripples our economic growth prospects by warehousing millions of potentially productive workers in unproductive jobs. The longer we do that, the slimmer our chances of economic recovery become. This Obama-Reid bill is such an incredibly bad idea, so obviously bad, that it is hard to imagine any remotely well-informed policymaker supporting it… unless, of course, they think the short term good will of public school employee unions is more important than the long-term prosperity of the American people.

Obama Jobs Plan to Push More K-12 Bloat?

In a recent interview, President Obama hints at the core of his much-anticipated jobs plan:

PRESIDENT OBAMA: what we do have, I think, is the capacity to do some things right now that would make a big difference …

TOM JOYNER: Like?

OBAMA: For example, putting people to work rebuilding our roads, our bridges, our schools all across America…

We’ve got the capacity right now to help local school districts make sure that they’re not laying off more teachers. We haven’t been as aggressive as we need to, both at the state and federal level.

So we haven’t been aggressive enough with our hiring at the K-12 level, hmm? Perhaps I’m an unusually timid sort, but the trend below looks pretty darn aggressive to me: k-12 employment has been growing 10 times faster than enrollment for forty years.

And the $300 billion question is: what impact has doubling the workforce had on the cost and performance of America’s public schools? According to federal government data, the answer is this:

We’ve nearly tripled the cost of sending a child all the way through the K-12 system, while performance near the end of high school has been stagnant (reading and math) or even declining (science). Just returning to the staff-to-student ratio of 1980 would save almost $150 billion annually—and somehow students weren’t performing noticeably differently in the ’80s than today.

And yet President Obama apparently wants more hiring and more spending. I wonder if voters will want more of President Obama if he indeed continues to flog the failed policies of the past two generations?

Cato Unbound: Are Men in Decline?

This month’s Cato Unbound looks at the intersection of education, work, and gender, and asks: Are men in decline? As women have advanced in education, the workplace, and even politics, some fear that the emerging new economy—or perhaps some other factors—are dragging men down. We’ve all heard talk of the Mancession, and it’s well known that men are in the minority now on many college campuses. How long will the trend continue?

Lead essayist Kay Hymowitz makes the case for male decline; Jessica Bennett, Amanda Hess, and Myriam Miedzian give reasons to be skeptical. Hymowitz replies to her critics. (Men, alas, were so far in decline that I couldn’t find a single one to write for this issue.)

The conversation is just getting started, so be sure to drop by again or subscribe to Cato Unbound so you’ll never miss a post.

Barack Obama, Luddite?

In the video clip above, President Obama blames America’s current unemployment problem on… automation. ATMs and airport kiosks are singled out.

These words could only be uttered by someone who knows very little about economics or the history of human progress. In fact, they could only be uttered by someone who has never reflected on this question before in his  life. Because if you reflect for one moment, you come up with this glaringly obvious counterfactual: we use a lot more  labor-saving technology today than in previous generations, and yet we also employ far more people. Therefore, increased automation does not lead to decreased national employment.

If you do more than just think for a second – if you read an economic history book, for instance – you discover that increased automation doesn’t even necessarily lead to decreased employment in the industry being automated! The classic example is the 19th century British textile industry. The so-called “Luddites” smashed automated looms fearing that they would lead to rampant unemployment in their industry. But, as the new technology proliferated, textile industry employment rose. Among other reasons, increased efficiency drastically lowered the prices of textile goods, that shot demand through the roof, and to meet the new demand new workers were required to operate and maintain the new machinery.

There are other examples, of course, and the president will save the American people a great deal of hardship, and himself further embarrassment,  if he familiarizes himself with them. Here’s a good brief introduction from the British Secretary of State… under Margaret Thatcher.

Update:

For those having trouble viewing the video, here is a transcript of the relevant Q&A:

Q: Why, at a time of record profits, have you been unable to convince businesses to hire more people Mr. President?

A: [….] the other thing that happened, though, and this goes to the point you were just making: there are some structural issues with our economy, where a lot of businesses have learned to be a lot more efficient with a lot fewer workers. You see it when you go to a bank and there’s an ATM, you don’t go to a bank teller. Or you go to the airport, and you’re using a kiosk instead of checking in at the gate.

Pages