Immigrants Make U.S. Workers Richer – The San Francisco Fed is wading into the contentious debate over whether immigrants help or hurt employment for American citizens, in a paper that asserts new entrants to the nation help make almost everybody wealthier. The report counters those who believe immigrants to the U.S. take away the jobs of citizens and depress wages.“There is no evidence that immigrants crowd out U.S.-born workers in either the short or long run,” Peri writes. Instead, the evidence suggests “the economy absorbs immigrants by expanding job opportunities rather than by displacing workers born in the United States.”
Youth Unemployment Hit A Record High This Summer – In July, 51.1 percent of Americans between the ages of 16 and 24 years old were unemployed, according to new data from the U.S. Bureau of Labor Statistics (BLS). This marks the first time since 1948, when the government first started collecting this data, that less than half of all U.S. youth were employed in July. Each year from April to July, the youth labor force grows sharply as high school and college students — and recent graduates — search for summer jobs. This summer, the youth labor force grew by 2.4 million to a total of 22.9 million in July, which is typically the summertime peak for youth employment, while the number of youths employed grew 1.8 million to 18.6 million, according to the BLS. Though the increase in youth employment was slightly larger than last year’s increase of 1.6 million, the percentage of the total youth population that was employed in July dropped 2.5 percentage points to 48.9 percent. This percentage has dropped by about 20 percentage points since its peak in July 1989. And, as the Wall Street Journal notes, rampant youth unemployment is not just an American problem.
Malkin Unhappy, Obamacare Rattling Insurers. It’s All Good – When Assurant Health, a Milwaukee-based health insurance company, announced this month it was laying off 130 employees in Milwaukee and Minneapolis, it blamed the health care overhaul for its struggles — and at least one prominent critic of reform quickly chimed in. "There are more and more Obamacare job-killing stories piling up like this one," conservative columnist Michelle Malkin wrote in an item with the headline, "The White House War on Jobs." I know a lot of smart, thoughtful health reform critics. Malkin is not one of them. But we will likely read more news stories like these in the coming months. And, given public ambivalence about health reform and anger over the economy, we’ll likely hear more naysayers making these arguments.
Who’s Making Business Nervous Now? – Remember when Republicans were complaining about "uncertainty"? As the argument went, businesses weren’t expanding and hiring new workers because they feared struggling with new regulations and taxes. Businesses, the Republicans said, needed certainty and financial relief. Apparently Republican thinking has evolved, as Steve Benen at Washington Monthly and Pat Garofalo at Wonk Room explain today. In late July, the Democrats were poised to pass a small-business assistance bill, full of tax breaks and other incentives designed to reward small businesses that hire new workers. But, as always, the Democrats were one vote short in the Senate. And not one Republican agreed to sign on. So where does that leave small business? Via USA Today: Small businesses have put hiring, supply buying and real estate expansion on hold as they wait out the vote on a small-business-aid bill that stalled in the Senate earlier this summer.
Ezra Klein – The case against reforming Social Security – In my previous post, I wrote that "if you’re worried about [Social Security]’s finances, you can really only do one of two things: Lower the amount of money the program sends out or increase the amount of money it brings in."That’s pretty much true. But there’s no real reason to be worried about "Social Security’s finances." What we’re worried about, rather, is the federal government’s finances. If Social Security is proving a drag on the federal budget, then one option is make changes to Social Security, but another option is to make offsetting changes elsewhere in the federal budget.And increasingly, that’s my preference. It’s a testament to Social Security’s efficiency that every option for balancing its books is a bad option. Raising the retirement age hurts real people. Raising taxes also hurts real people. Cutting benefits hurts — well, you get the point. Social Security is adding value. Any change you make will either increase how much we’re spending for that value or decrease the total value we’re getting from the program.
GOP Warming to Elizabeth Warren? – Yes, you read that right. Apparently some GOPers are rethinking their vehement opposition to Harvard law professor and bailout watchdog Elizabeth Warren running the new Bureau of Consumer Financial Protection. A short item in the Wall Street Journal‘s gossipy "Heard on the Street" column today says there are whispers that "some Republicans are warming to Ms. Warren as the first consumer financial-affairs regulator over another candidate, Treasury Department Assistant Secretary Michael Barr. The thinking: Ms. Warren isn’t shy about speaking her mind, so banks would know what was coming." Whereas Barr, the Journal says, might be more likely to spring big regulatory surprises on the banks, something no banker—or Republican, presumably—wants.
Coup d’Etat: Standard & Poor’s Is Now Giving Orders to Congress … and the American People – There’s been a lot of talk recently about the enormous power that’s been given to the Deficit Commission, which is co-chaired by Alan "Social Security recipients are milking it" Simpson and dominated by people who have advocated cuts to Social Security and Medicare. But here’s an aspect of the story that’s gone unremarked: Standard & Poor’s, the credit rating agency whose reputation should rightfully have been shattered by the economic crisis, is now dictating policy to the United States government. S&P just put our elected officials on notice: Submit to the proclamations of the Deficit Commission or we’ll downgrade our rating of government debt. That’s blackmail, plain and simple. This threat comes from a privately-owned company whose rating process is riddled with conflicts, and which has gotten virtually every critical assessment of recent years spectacularly wrong. Enron? Lehman? Subprime mortgages? They were zero for three. Yet rather than reining back their penchant for reckless proclamations, the chairman of S&P’s "sovereign rating committee"
Robert Samuelson Gets the Saving Story Wrong – Robert Samuelson seems to think that the problem with the recovery is that people are still saving. The current saving rate is approximately 6 percent of disposable income. While Samuelson implies this is high, it is actually very low by historic standards. The saving rate averaged more than 8 percent through most of the post-war era until the wealth effect of the stock and housing bubbles drove it toward zero in the last 15 years. Samuelson seems to think that after a couple of years of a 6 percent saving rate, saving will again fall to its bubble levels of near zero. There is no reason to expect this. As the housing bubble deflates further, households will see a further decline in wealth. They will likely increase their saving rate to the 8 percent pre-bubble range. In fact, demographics suggest that the saving rate could rise even higher. The huge baby boom cohort is at the edge of retirement, with most having almost nothing other than their Social Security to depend upon. This provides a strong incentive to save, especially in an environment where much of the political leadership is pushing for cuts to Social Security..
One Lump Or Two? – Barack Obama personifies this failure these days, a politician proclaiming "change" who not only managed to change nothing, but promoted a continuation of the national self-swindling with legislation so dazzlingly prolix and complicated that no one can claim to have read either the Health Care Reform Act or the Financial Regulation bill, the two hallmarks of his tenure so far, neither of which will change anything about how we do these things. Why Mr. Obama has turned out to be such a weenie remains a mystery. Even the former communists at Russia Today laugh at the idea that he is a "communist" or a "socialist" and so do I. He certainly appears to be hostage of the more malign forces in society these days — the medical insurance racket, the too-big-to-fail banks, the multi-national corporations. But I don’t believe it’s because he wants to suck up to them, or join their country clubs when his current job ends. My own guess is that he’s been informed that the system is so fragile that if he dares to disturb even one teensy-weensy part of it — for instance, by throwing some executives from Goldman Sachs, Merrill Lynch, et cetera, into federal prison — that said system will fly to pieces in a fortnight. So Obama’s main task for a year and a half has been to desperately apply baling wire and duct tape to the banking system while telling fibs to the public about a wished-for recovery to a prior state. Unfortunately that prior state is the ecstasy of a self-swindle in the moments before it unravels… the sublime feeling of having gotten something wonderful for nothing. We’re beyond that now and nothing on the age-old shelf of nostrums, spells, prayers, and miracle-cures will avail to bring that moment back, though the public does not know this.