employment

BBC analysis of labour market statistics misses the point

Published by Anonymous (not verified) on Wed, 12/12/2018 - 4:15am in

BBC analysis of labour market statistics misses the point

PEF Economist Michael Davies writes.

There are no big surprises in this month’s round of labour market statistics from the ONS. Very little has changed since August, when I wrote about the UK’s dismal wage and productivity growth – ultimately a result of labour market power imbalances and underinvestment.

Today, I just want to say a brief word about the uncritical interpretation of these statistics in the media, using the BBC’s article on the new figures as an example. The headline is “wages accelerate to fastest pace since 2008”, and the introduction reads:

Wages are continuing to rise at their highest level for nearly a decade, the latest official Office for National Statistics figures show.

Compared with a year earlier, wages excluding bonuses, were up by 3.3% for the three months to October, the biggest rise since November 2008. Average weekly wages are £495 – the highest since 2011, when adjusted for inflation.

The number of people in work rose by 79,000 to 32.48 million, a record high. That is the highest figure since records began in 1971.

Unemployment increased by 20,000 to 1.38 million, although the margin of error is 70,000 and the total is still lower than a year ago. The number of unemployed men increased by 27,000, while the number of unemployed women fell by 8,000.

The reason both employment and unemployment have increased is a result of the UK’s rising population and more people joining the labour force, such as students and older people.”

First, it is nominal wages that are growing at their fastest rate for nearly a decade. But real wages – wages after inflation – are what really matter, as they tell us far more about workers’ living standards.[1] Here, the picture is much more dismal. Real wages grew by just over 1% in the past year – slower than in most of 2015/16, and well below 1945-2007 average of 2.5%.[2]

Indeed, this meek growth has not been enough to compensate for the falls in real wages during and following the recession, conferring onto the UK the dubious honour of being one of the only OECD countries (along with Greece) to have experienced negative wage growth since the Global Financial Crisis (GFC). So yes, weekly wages are at their “highest” since 2011, but this is not cause for celebration. If wage growth had kept up with the WW2-GFC trend, wages would be approximately ~28% higher than their current levels.

Instead of explaining this broader context in their introduction to the piece, the BBC decided to note that the number of people in work is at its highest since records began in 1971: unsurprising, given that the population of the UK has steadily risen by 11m people over this time period. Choosing to devote space to such a facile observation is questionable at the very least.

Though the BBC did add critical commentary from Margaret Greenwood, Frances O’Grady and others over the course of the day (though without timestamping these contributions/noting that the article had been edited ex post, I might add), the fact that the earliest, and likely the most-read version of the BBC article contained no such counterpoint is serious cause for concern.

The overarching issue is that wage and productivity performance has been so dismal over the past decade that it allows the Government to pass off news that would be considered miserable by any reasonable standards as fantastic. Employment Minister Alok Sharma, for example, cited “wages outpacing inflation for the ninth month in a row” as a sign of “the enduring strength of our jobs market”.

The fact that avoiding real wage falls for a grand total of nine months – outside of recession time, no less – is touted as a mark of enduring strength highlights that something is seriously wrong with the UK labour market. This is why continuing to draw attention to the wider context is so important.

[1] One commentator pointed out that higher nominal wage growth does benefit indebted households; this is true, but it is stagnant real wage growth that is driving the increase in consumer debt in the first place.

[2] Using the ‘real consumption earnings’ time series from the Bank of England’s A Millennium of Macroeconomic Data.

Photo credit from previous page: Flickr / Ali Craigmile

The post BBC analysis of labour market statistics misses the point appeared first on The Progressive Economy Forum.

Etiquette & Strategy for Switching Jobs and Outside Offers

Published by Anonymous (not verified) on Wed, 21/11/2018 - 2:25am in

A philosophy professor writes in with questions about when to let one’s current institution know one may be pursuing employment elsewhere, being recruited by other schools, and fielding offers.

He writes:

For a tenured faculty member who is either applying to other jobs, or being recruited by another university, at what point should one let
others at one’s current department know? It seems there are early stages at which it might not be appropriate to mention because there
is as yet nothing concrete. It seems that there might be somewhat different answers depending on the reason one is considering a move,
and whether one is more inclined towards taking the offer or looking for a retention package. Are there norms when it’s too late to talk to
the chair or dean?

Readers, please share your experiences with and thoughts on this. Thanks.


Kerri Harding, “Murmuration”

The post Etiquette & Strategy for Switching Jobs and Outside Offers appeared first on Daily Nous.

To Secure a Future, Britain Needs a Green New Deal

Published by Anonymous (not verified) on Tue, 20/11/2018 - 9:57am in

This is an extract from a chapter in Economics For the Many (Verso, 2018) edited by Rt. Hon. John McDonnell MP.  The chapter was written in August, 2017. 

If we are to secure a sustainable, stable and liveable future for the people of Britain, then implementation of the Green New Deal will be vital. Not just for the sake of the ecosystem, but also for the sake of rebuilding a stable, sustainable economy.

The era of procrastination, of half measures, of soothing and baffling expedients, 

of delays, is coming to its close. 

In its place, we are entering a period of consequences.

 Winston Churchill, 12 November 1936 

Introduction: the flawed economic theory and language of endless ‘growth’. 

Within nature, plants, animals and humans are seeded, or born. They mature. And then they die. Not so for an economic concept that grips the economic profession: ‘growth’. Behind the concept lies an implicit assumption: that the expansion of economic activity can be and is, limitless; that it will move relentlessly in an upward trajectory. It is a concept that drives capitalism’s globalisation ambitions: the need to continually expand and disrupt new markets, lower labour costs and make capital gains - for the few - from rent-seeking and speculation. 

The concept of “growth” was adopted relatively recently by the economics profession. Its adoption served in part to dismantle the Bretton Woods economic order (a system that had led to a ‘golden age’ in economics) in 1971; and to facilitate the globalisation and financialisation of economies.

In an essay: The National Accounts, GDP and the ‘Growthmen’ [1]Geoff Tily, the TUC’s chief economist, explains that the concept evolved as recently as 1961. OECD technocrats were encouraged by economists like Financial Times columnist, Samuel Brittan to promote policies that would turbo-charge the economy. At the time, Britain was in the happy position of providing full employment to her people. Macmillan’s 1957 comment that Britons ‘had never had it so good’ still rang true. The ‘growthmen’ as they called themselves were nevertheless discouraged by these high, sustainable levels of employment and economic activity. It is my view that they were frustrated because profits made in the ‘real’ economy were not as high as the capital gains that could be made through financial speculation. The question was: how to turbo-charge profits? The answer: accelerate ‘growth’. 

Samuel Brittan’s The Treasury under the Tories, 1951-1964 reads like a manifesto for the ‘growthmen’ (his label, p. 141). He records that the OEEC became the OECD on 30 September 1961; on 17 November, the OECD agreed a fifty per cent growth target for 1960-70 - a rate of change of a continuous function. This target was to be applied to Britain. 

At about the same time, on 12 September 1961 the Council of the OECD adopted their ‘Code for Liberalisation of Capital Movements’, presumably intended to fuel the ambition of rapid and relentless ‘growth’, regardless of the extent of capacity in the labour market. The result? High rates of inflation, often blamed on trades unions. But also, and in the broadest sense, intensified exploitation of the earth’s finite assets in order to achieve ‘growth’ targets. The consequence was ‘globalisation’ – the financialisation of the global economy. This in turn led to rises in global production and consumption – and in toxic greenhouse gas emissions,    

 The good news 

 Big business is waking up to the threat posed by climate change to future economic security. Clean energy investment (excluding nuclear and hydro) rose from about $60 billion per annum in 2004 to hit a record of $349 billion in 2015. At the same time, clean energy prices plummeted around the world. And although investment in clean energy fell in 2016, the number of renewable energy installations rose by 9%. 

 China is now leading the world and the Asian region by expanding investment in clean energy. Thanks largely to Chinese production, solar PV modules costs have fallen - by 99% since 1976. Wind energy costs are down by 50% since 2009. Nuclear energy now costs about $140 per kilowatt hour as opposed to wind energy costs of just $34 per kilowatt hour, according to Bloomberg’s Michael Liebreich. And the costs of maintaining clean energy installations are much lower than those of dirty fuels. [2]  The efficiency of cars has improved substantially over the last eight years, and will improve further as electric cars gain a foothold in the market. A car is no longer the status symbol it once was. If more is done by way of city planning to facilitate walking, biking, carpooling, trains and buses, then reliance on cars will diminish further. The growth of energy efficiency in lighting too has been dramatic. LED lighting uses 90% less energy than traditional incandescents and has the potential to transform lighting systems around the world. 

As a result of these developments, the global energy sector is at a tipping point – potentially an “accelerating non-linear transition”.[3]This is occurring as public opinion moves towards a greater understanding of the climate change threat. Despite much disinformation, including from President Trump, a Gallup poll shows that 68% of the American public now believe that climate change is down to human activity.[4]  In Britain 64% believe that climate change is mainly the result of human activities.[5]China’s leaders have declared a “war against pollution” in big cities, because pollution poses a grave threat to social and political stability. Two thirds of China’s new energy capacity in 2015 was in renewable energy. In India the cost of solar power is now cheaper than coal. In an extraordinary campaign to rid the country of nuclear power, Germans have saturated rooftops with solar power, while expanding thermal power.[6]

But while Britain will benefit from the move towards alternative and more efficient energy sources, there is one area in which progress has not been made: in space heating.  One of the biggest challenges a Labour government will face stems from the poor thermal performance of Britain’s old housing stock. 

There are about 27 million households in the UK with a wide range of properties, most dating back to the Victorian era. This has led to a legacy of some of the least thermally efficient housing in Europe. The UK ranked 11thout of fifteen European countries in terms of housing energy performance; and the UK had the highest proportion of households in fuel poverty of all the fifteen countries assessed. And fuel poverty levels are rising, partly because of pressures on household incomes, but also because of rising energy prices.[7]The level of fuel poverty is highest in the private rented sector (21.3 per cent of households) compared to those in owner occupied properties (7.4 per cent). [8]     

Mobilising a ‘Carbon Army’

However, while the state of the housing stock will make it a challenge to meet carbon reduction targets -  it is also a great opportunity.To address this challenge will require the devolution of energy, as argued in Labour’s manifesto: Protecting Our Planet. [9]We argue that Labour should go further, and ensure that every oneof Britain’s 27 million households becomes a power station, so that energy efficiency is maximised. 

To achieve this goal will not only require sound scientific advances and data, but also appropriate materials and equipment – much of which is available or can be constructed in Britain. Above all, retrofitting and making Britain’s housing stock energy secure will require the recruitment and training of a ‘Carbon Army.’  An army of highly qualified, skilled and unskilled workers to undertake a vast environmental reconstruction programme: because a Just Transition[10]to a decarbonised economy will be a labour-intensive transition. 

The training and recruitment of a high-skilled, well-paid ‘Carbon Army’ must be part of a wider shift from an economy narrowly focussed on financial services, and on low-productivity, low-paid insecure jobs to one that expands productive activity, and is an engine of environmental transformation. 

Furthermore, the establishment of such a ‘Carbon Army’ via both public and private investment would in effect, pay for itself,as I argue below. A report by Cambridge Econometrics and Verco concludes that the economic case for making the energy efficiency of the UK housing stock a national infrastructure priority is strong.[11]In addition to making all low-income households highly energy efficient, and reducing the level of fuel poverty, their modelling has established that this energy efficiency programme would deliver: 

· £3.20 returned through increased GDP per £1 invested by government 

· 0.6% relative GDP improvement by 2030, increasing annual GDP in that year by £13.9bn 

· £1.27 in tax revenues per £1 of government investment, through increased economic activity, such that the scheme has paid for itself by 2024, and generates net revenue for government thereafter 

· 2.27 : 1 cost benefit ratio (Value for Money), which would classify this as a “High” Value for Money infrastructure programme 

· Increased employment by up to 108,000 net jobs per annum over the period 2020-2030, mostly in the service and construction sectors. These jobs would be spread across every region and constituency of the UK. 

That is the strong economic case for mobilising a ‘Carbon Army’ to achieve both climate security and poverty reduction.

How can Labour finance the transformation of the economy? 

To kick-start investment in the Green New Deal will require the next Labour government, in cooperation with the monetary authorities, the Bank of England, the Treasury and the Debt Management Office (DMO) - to sell valuable assets in the government’s possession. Thanks to the founding of the Bank of England in 1694, and ever since then, British governments have not had to resort to taxation to finance investment and spending. Instead finance has been raised by the sale of public assets backed by Britain’s 31 million taxpayers. These are known as government gilts or bonds. These government assets are in great demand because governments like Britain with sound tax collection systems and strong institutions are regarded as the safest destination for investors.  Both individual investors, but also big institutional investors like those that manage pension funds and insurance companies. 

The sale of gilts has served as the time-honoured way in which governments have financed wars, infrastructure, spending and recently, private bank bailouts. Given the security threat that climate change threatens, financing the Green New Deal should be undertaken in the same way, and with the same urgency as the financing of a war to defend the nation’s security. 

If the finance so raised is used to invest in productive activity that leads to skilled, well-paid employment in both infrastructure and services, then the ‘multiplier’ will kick in. Employees will pay taxes – for all the years of employment. Years of tax-paying employment will mean that returns to the Treasury (via HMRC) will ensure the investment will pay for itself. Once employed, and by spending on housing, food and clothing, employees will increase government tax revenues (e.g. VAT) from firms and other sources. Profitable firms will pay higher corporation tax, and so on. In other words, the investment in full employment will not only generate tax revenues from the employed, but will also ‘multiply’ tax revenues from other sources. These higher tax revenues can then be used to pay down the public debt associated with the gilts or bonds issued to finance the Green New Deal. 

Indeed, only full employment can balance the government’s budget. “Look after employment” the great John Maynard Keynes once said “and the budget will look after itself.” [12]

What will the Green New Deal cost? 

We estimate that to implement the Green New Deal could cost at the minimum, about £40 billion a year, for many years. This level of investment would help finance the transformation to sustainable energy sources and transport; to retrofit the housing stock and for flood protection. In 2016/17 public investment was approximately £73bn gross (about 4% GDP).  If this was raised by £40bn – to £115bn a year gross (or about 6.0% GDP) this would be comparable to the mid-Thatcher years, 1984-5 when gross investment was 6% of GDP.   Raising public investment to this level would place Britain in line with Germany and the US where current levels of public investment are at 6% of GDP. 

In other words, governments have invested at this rate before, and can do so again. 

Is there no money? 

“But….but” says the reader: “I’m afraid there’s no money.” So wrote Liam Byrne MP, in a note for his successor on leaving the Treasury, 6 April 2010. Byrne was doing no more than echoing Mrs Thatcher, who in a speech to Conservative Party Conference in October, 1983 said: 

The state has no source of money, other than the money people earn themselves. If the state wishes to spend more it can only do so by borrowing your savings, or by taxing you more. And it’s no good thinking that someone else will pay. That someone else is you."

“There is no such thing as public money. 

There is only taxpayers’ money.” 

 Her flawed understanding of the public finances was subsequently echoed by David Cameron on the campaign trail, 6 April, 2015. “We know that there is no such thing as public money – there is only taxpayers’ money”. 

It is this flawed economic theory – that all spending is financed from taxation, that the government has no other source of financing, and that like a household, it has, under all circumstances, to ‘balance its books’ between expenditure and tax income. But governments are not like households, and have other sources of finance. The Treasury working closely with the monetary authorities could finance the Green New Deal without having recourse to tax revenues. In fact, tax revenues (from, for example, increased employment) would be a consequence, not a source of government investment. 

Mrs Thatcher’s flawed economic ideas are tacitly supported by professional and academic economists, including those at the Treasury, the OBR and the Institute of Fiscal Studies.. It is a flawed theory that has had disastrous consequences, as witnessed by ‘austerity’ in Britain and Europe. It is economic theory that has delivered a severely weakened British economy, while at the same time it has led to a rise in public and private debts. 

That has not been the approach since 2010. As a result Britain has high, and still rising levels of public and private debt. And because of‘austerity’ the government’s ‘books’ are not balanced. The country is excessively reliant on one leg of the economy, consumption. Britain’s trade terms are dangerously out of balance with the rest of the world. The UK has one of the lowest levels of private and public investment in the OECD, and has suffered the slowest ongoing economic recovery in history. High levels of low-paid, insecure employment in low productivity work is further weakening the economy. 

As a result of these imbalances and of economic weakness, Britain suffered social and political unrest. This was most clearly manifest in the referendum vote for Brexit. 

Labour needs a Green New Deal to build a sustainable, stable economy

 If we are to secure a sustainable, stable and liveable future for the people of Britain, then implementation of the Green New Deal will be vital. Not just for the sake of the ecosystem, but also for the sake of rebuilding a stable, sustainable economy. A sustainable economy will be one dominated by a “Carbon Army’ of skilled, well-paid workers. Workers that will help substitute labour for carbon, and that through employment will generate income. Income needed by households to be used, for example, to pay down debts and afford homes. Income needed by e.g. wind farmers or other environmentally innovative firms, both for profits, but also for investment. And tax income needed by government and local governments, to reduce public debt and finance public services.  

Only implementation of the Green New Deal can ensure a more stable, more sustainable economy. One that will generate the finance and income needed to transform the economy away from fossil fuels. 

What we can do, as Keynes once argued - within the limits of our imagination, intelligence, muscle, and within the limits of both the economy and the ecosystem – we can afford. 

 End.

[1] Geoff Tily, January, 2015: The National Accounts, GDP and the ‘Growthmen’

www.primeeconomics.org

[2] Michael Liebreich, 25 April, 2017, Bloomberg New Energy Finance Summit. https://data.bloomberglp.com/bnef/sites/14/2017/04/2017-04-25-Michael-Li...

[3] Michael Liebreich, as above. 

[4] As above. 

[5]  February, 2017: Survey of British adults on behalf of ECIU on climate change. http://www.comresglobal.com/polls/energy-and-climate-intelligence-unit-c...

[6] As above. 

[7] Verco, Oct 2014: Warm homes, not warm words.  Report for WWF-UK on how the UK can move to a low carbon heat system. http://assets.wwf.org.uk/downloads/wwf_heat_report_web_pdf.pdf?_ga=1.238...

[8] DECC, March 2013: The Future of Heating. Meeting the Challenge.https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...

[9]  Jeremy Corbyn: Protecting our Planet. https://d3n8a8pro7vhmx.cloudfront.net/jeremyforlabour/pages/119/attachme...

[10] TUC Economic Report Series, 2015: Green Collar Nation: a Just Transtion to a low-carbon economy. https://www.tuc.org.uk/sites/default/files/GreenCollarNation.pdf

[11] Verco, Cambridge Econometrics, October, 2014: Building the Future: The economic and fiscal impacts of making homes energy efficient. http://www.energybillrevolution.org/wp-content/uploads/2014/10/Building-...

[12] See Chick, Tily and Pettifor, 2010, revised 2016: The Economic Consequences of Mr Osborne

Just Released: New York State’s Community Colleges are Successfully Partnering with Employers

Published by Anonymous (not verified) on Thu, 15/11/2018 - 4:00am in

Jaison R. Abel, Tony Davis, Richard Deitz, and Edison Reyes

LSE_2018_New York State’s Community Colleges are Successfully Partnering with Employers

Community colleges frequently work with local employers to help shape the training of students and incumbent workers. This type of engagement has become an increasingly important strategy for community colleges to help students acquire the right skills for available jobs, and also helps local employers find and retain workers with the training they need. The Federal Reserve Bank of New York conducted a survey of community colleges in New York State with the goal of documenting the amount and types of these kinds of activities taking place. Our report, Employer Engagement by Community Colleges in New York State, summarizes the findings of our survey.

Employer engagement is a two way street. Employers have firsthand knowledge about the job skills that are in demand, both with respect to their own particular needs and in the labor market more generally. With input from local employers, community colleges can train students to develop the skills needed to fill available jobs, and help upskill employers’ incumbent workers to help them adapt to change.

Employer engagement covers a wide array of activities, ranging from employers serving on advisory boards or helping to design instructional programs, to entering into formal partnerships and contracts to train workers in specific skills for their businesses’ own current needs.

Below are some highlights from the report:

  • Employer engagement by community colleges in New York State has become the norm. The typical community college engages with more than 100 employers, spanning every major industry sector, including healthcare, manufacturing, utilities, and tourism.
  • Nearly all community colleges surveyed have employers who serve on curriculum advisory committees, come to campus for guest lectures, offer workplace visits and tours of their facilities, provide work experience and job opportunities to students, or help students prepare for the job market by participating in career fairs or mentoring. Many also work to promote the college or its programs to the local community. Although less common, it is not unusual for employers to provide financial aid to students or resources to help set up classrooms, labs, and special equipment needed for training purposes.
  • Community colleges in New York State form and build relationships with local employers in many different ways. Community colleges regularly engage with employers at networking events or target local employers by contacting them directly about potential opportunities to work together. It is also quite common for local employers to initiate contact with community colleges when their businesses have specific training needs. In addition, community colleges rely on their students, alumni, and faculty to find local employers to engage with.
  • In terms of impediments to engaging with employers, nearly all community colleges reported that they do not have enough financial resources and staff to find employers to work with. Community colleges serving the rural areas of the state commonly face the challenges of not having the information necessary to determine local labor market needs or not having enough jobs available from local employers. Furthermore, while close to 90 percent of New York’s community colleges have staff to foster employer engagement; those that do not have such staff are disproportionately located in rural areas.
  • Despite financial and staffing constraints, most community colleges in New York State plan to increase the amount of employer engagement they do over the next few years. Colleges expect to do so by both enhancing existing relationships with local employers and finding new employers to work with.

Employer engagement is widespread at New York’s community colleges. Cooperative endeavors such as the Apprenticeship Accelerator Career Training program at Onondaga Community College, the Maritime Technology program at Kingsboro Community College, the Agriculture Business Degree program at the Finger Lakes Community College, and the Medical Training Billing program at LaGuardia Community College, are instrumental in helping employers, community colleges, students, and incumbent workers all achieve their potential.

Disclaimer

The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Abel_jaisonJaison R. Abel is an assistant vice president in the Federal Reserve Bank of New York’s Research and Statistics Group.

Davis_tonyTony Davis is an officer in the Bank’s Outreach and Education Group.

Deitz_richardRichard Deitz is an assistant vice president in the Bank’s Research and Statistics Group.

Reyes_edisonEdison Reyes is an Associate in the Bank’s Outreach and Education Group.

How to cite this blog post:

Jaison R. Abel, Tony Davis, Richard Deitz, and Edison Reyes, “Just Released: New York State’s Community Colleges are Successfully Partnering with Employers,” Federal Reserve Bank of New York Liberty Street Economics (blog), November 14, 2018, https://libertystreeteconomics.newyorkfed.org/2018/11/just-released-new-....

Contracting employment services to outcomes: is this the promised land?

Published by Anonymous (not verified) on Tue, 13/11/2018 - 5:00pm in

Tags 

employment

Presentation at Melbourne Institute Public Economics Forum

Canberra, Tuesday 6 September 2016

Peter Davidson

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Learning to swim at the deep end

Published by Anonymous (not verified) on Tue, 13/11/2018 - 4:23pm in

Tags 

employment

Presentation to Jobs Australia conference, Hobart, November 2017, Peter Davidson

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Teen mothers and the success of their kids

Published by Anonymous (not verified) on Tue, 16/10/2018 - 5:51pm in

Grandparents, Moms, or Dads? Why Children of Teen Mothers Do Worse in Life
by Anna Aizer, Paul J. Devereux, Kjell G. Salvanes – #25165 (CH ED HE LS)

Abstract:

Women who give birth as teens have worse subsequent educational and labor market outcomes than women who have first births at older ages. However, previous research has attributed much of these effects to selection rather than a causal effect of teen childbearing. Despite this, there are still reasons to believe that children of teen mothers may do worse as their mothers may be less mature, have fewer financial resources when the child is young, and may partner with fathers of lower quality. Using Norwegian register data, we compare outcomes of children of sisters who have first births at different ages. Our evidence suggests that the causal effect of being a child of a teen mother is much smaller than that implied by the cross-sectional differences but that there are still significant long-term, adverse consequences, especially for children born to the youngest teen mothers. Unlike previous research, we have information on fathers and find that negative selection of fathers of children born to teen mothers plays an important role in producing inferior child outcomes. These effects are particularly large for mothers from higher socio-economic groups.

Faculty Job Security & Academic Freedom

Published by Anonymous (not verified) on Tue, 16/10/2018 - 12:48am in

Tags 

employment, Jobs

Seventy-three percent of faculty at institutions of higher education in the United States are neither tenured nor on the tenure-track, according to a new report from the American Association of University Professors (AAUP).

Table from “Data Snapshot: Contingent Faculty in US Higher Ed” from AAUPAs you can see in the table, above (from their report), even at R1 universities, roughly 70% of the faculty are non-tenured or non-tenure-track (approximately 27% full-time non-tenure-track. 15% part-time, and 28% graduate student employees).

The report also notes that, of the full-time non-tenure track faculty, 38 percent are on annual contracts, 20 percent are on multi-year contracts, 38 percent are on  indefinite/at-will contracts (38 percent), and 4 percent work on contracts of less than a year.

The authors of the report remind us that “tenure protects academic freedom by insulating faculty from the whims and biases of administrators, legislators, and donors, and provides the security that enables faculty to speak truth to power and contribute to the common good through teaching, research, and service activities.”

(via Inside Higher Ed)

The post Faculty Job Security & Academic Freedom appeared first on Daily Nous.

Just Released: Are Employer-to-Employer Transitions Yielding Wage Growth? It Depends on the Worker’s Level of Education

Published by Anonymous (not verified) on Sat, 29/09/2018 - 1:00am in

Gizem Kosar and Kyle Smith

 Are Employer-to-Employer Transitions Yielding Wage Growth? It Depends on the Worker’s Level of Education

The rate of employer-to-employer transitions and the average wage of full-time offers rose compared with a year ago, according to the Federal Reserve Bank of New York’s July 2018 SCE Labor Market Survey. Workers’ satisfaction with their promotion opportunities improved since July 2017, while their satisfaction with wage compensation retreated slightly. Regarding expectations, the average expected wage offer (conditional on receiving one) and the reservation wage—the lowest wage at which respondents would be willing to accept a new job—both increased. The expected likelihood of moving into unemployment over the next four months showed a small uptick, which was most pronounced for female respondents.

The SCE Labor Market Survey, which has been fielded every four months since March 2014 as part of the broader Survey of Consumer Expectations (SCE), provides information on consumers’ experiences and expectations regarding the labor market. The data, together with a companion set of interactive charts showing a subset of the data that we collect, are published every four months by the New York Fed’s Center for Microeconomic Data. As with other components of the SCE, we report statistics not only for the overall sample, but also by various demographic categories, namely age, gender, education, and household income. The underlying micro (individual-level) data for the full survey are made available with an 18-month lag.

The remainder of this post provides more detail on one major finding from the latest survey data collected from July 2017 to July 2018. Additional results are available in the press release.

Job Transitions

Labor market transition rates (such as job-to-job or employed-to-unemployed transition rates) are some of the most important metrics that summarize the dynamics of the labor market. The chart below reports the current labor market status of those who were employed four months ago. We see that the proportion of those who are still employed has increased from 93.6 percent in July 2017 to 96.8 percent in July 2018. In addition, the rate of transitioning to a different employer rose from 3.8 percent in July 2017 to 4.7 percent in July 2018. Although respondents who were employed four months ago show a higher rate of transitioning to a new employer compared to a year ago, we observe some interesting differences across education groups.

 Are Employer-to-Employer Transitions Yielding Wage Growth? It Depends on the Worker’s Level of Education

The chart below illustrates how the rate of transitioning to a new employer, among respondents who were employed four months ago, has been diverging since July 2017 between those with and without a college degree. The rate of transitioning to a new employer for respondents who do not have a college degree reached 7 percent in July 2018. In fact, this is the highest level this series has recorded since its start in July 2014. On the contrary, the rate of transitioning to a new employer has been on a downward trend for college graduates since July 2015, and it reached a series low of 1.6 percent in July 2018.

 Are Employer-to-Employer Transitions Yielding Wage Growth? It Depends on the Worker’s Level of Education

Earnings

Economists care about job-to-job transitions primarily because such changes are key to understanding the evolution of wage growth. Job switching, or employer-to-employer reallocations, is shown to be a sufficient statistic for average wages; positively correlated with real and nominal wage growth; and a good predictor for both wage growth and wage inflation. In the overall sample, we observe that the average salary of full-time workers essentially remained constant in July 2018, compared to a year ago. The chart below shows the average salary of full-time workers with and without a college degree, separately. We observe that even though the job-to-job transitions of the respondents without a college degree have been on the rise since July 2017; the average full-time salary for this group declined slightly from July 2017 to July 2018, by approximately $4,700.

On the other hand, the average full-time salary of the workers with a college degree increased by $5,800 from July 2017 to July 2018. The results indicate that the positive relationship between job-to-job transitions and average wages does not hold for the period after July 2017. We observe a negative relation between job-to-job transitions and average wages in this period, for the respondents without a college degree.

 Are Employer-to-Employer Transitions Yielding Wage Growth? It Depends on the Worker’s Level of Education

Reconciling the Trends in Transitions and Earnings

The fact that college graduates are experiencing a rise in average full-time salary in tandem with a declining rate of transitioning to a new employer may be reconciled with employers’ retention policies. In other words, the trends we see are suggestive evidence of more aggressive wage responses by employers in order to retain their employees. In fact, we observe an increase in the percentage of respondents with a college degree who are satisfied with their wage compensation, a rise of 6 percentage points, from July 2017 to July 2018. We also see a slight uptick in this group’s satisfaction with nonwage benefits during the same time period.

Workers typically switch jobs for offers with higher wages, better nonwage amenities, or better wage prospects in the long term due to the new employer having a higher productivity (or a combination of these). Since we don’t observe an increase in the average full-time salary of the respondents without a college degree, we next examine whether they have access to better nonwage amenities. When we look at these respondents’ satisfaction with nonwage benefits, we see that the percentage who are satisfied with their nonwage benefits remained constant in July 2018, compared to July 2017. On the other hand, we observe a significant 11.5 percentage point rise in the proportion of respondents without a college degree who are satisfied with the career progression opportunities at their current jobs. This result is suggestive of the "option-value effect," or in other words, that workers might be willing to take a wage cut to move from low to high productivity firms that will be able to offer larger wage increases in the long term.

Conclusion

Results of the July 2018 SCE Labor Market Survey point out a rise in employer-to-employer transitions and essentially no change in the average annual salary for full-time workers, compared with a year ago. However, in this post we show that these results and the interpretation of these findings differ considerably based on the education level of the respondents. For more details, visit the SCE Labor Market Survey home page.

Disclaimer

The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Kosar_GizemGizem Kosar is an economist in the Federal Reserve Bank of New York’s Research and Statistics Group.

Smith_kyleKyle Smith is a senior research analyst in the Bank’s Research and Statistics Group

How to cite this blog post:

Gizem Kosar and Kyle Smith, “Just Released: Are Employer-to-Employer Transitions Yielding Wage Growth? It Depends on the Worker’s Level of Education,” Federal Reserve Bank of New York Liberty Street Economics (blog), September 28, 2018, http://libertystreeteconomics.newyorkfed.org/2018/09/just-released-are-e....

Measuring the casualisation of your workforce

Published by Anonymous (not verified) on Thu, 06/09/2018 - 2:53pm in

The ‘gig economy’ is the most recent incarnation of a decades-long trend toward under-employment and the ‘casualisation’ of our workforce. But how do you tell if this trend is playing out in your area?

When you think of under-employment, what do you think of?

Uni students working weekend hours at the local shopping centre? Retirees working part-time or casual jobs, just to ‘keep their hand in’?

What about people picking up a few hours in the gig economy, driving an Uber, helping someone on Airtasker move their fridge, or weaving their bike through peak-hour traffic with your bowl of steaming-hot Pho strapped to their back?

These people are all employed, but they’re probably not working 38-hour-weeks.

Therein lies the importance of measuring Full-Time-Equivalent (FTE) employment data, rather than simply ’employment’ data.

We recently sat down with Peter Brain, the founder and chief economist of National Institue for Economic and Industry Research (NIEIR) to discuss how councils can better understand the casualisation of their local workforce.

(NIEIR produce the economic data used in our economic profiles, economy.id; they’re also well known in the local government sector for their annual State of the Regions report)

It’s not actually ‘casualisation’

The term “casualisation” is actually a bit of a misnomer because the shift to more part-time work doesn’t necessarily mean more casual employees. In fact, the percentage of workers in Australia described as “casual” (i.e. workers without paid holiday or sick leave) hasn’t really changed since the 1990’s.

What has changed is the percentage of workers who are working part-time – from less than 10% in the late 1960’s to over 30% today.

The following charts are from the RBA Bulletin report The Rising Share of Part-Time Employment, 2017


Source: Reserve Bank of Australia https://www.rba.gov.au/publications/bulletin/2017/sep/3.html

Why the shift?

The shift to part-time work has occurred for a number of reasons.

The increase in Australia’s population, combined with a growing older age cohort (65+) has given rise to an increase in service industries employment. Many of these service industries (industries which exist essentially to “service” the population, such as retail, accommodation and food services and health care) are more likely to employ part-time workers.

But also, a large part of the change has occurred because it’s what many of the workers want.

A recent HILDA survey (Household, Income and Labour Dynamics in Australia) conducted by the University of Melbourne, suggests that the main reasons for part-time work are for students to study while working part-time, and also for parents to work whilst caring for children.

In the older populations, as older workers transition to retirement, the most common reason for working part-time is simply a preference for that type of work.

Employment vs Full-Time-Equivalent (FTE) employment

The significant change in Australia’s employment landscape means care should be taken when making decisions or plans based purely on employment, or unemployment statistics, because they may not tell the full story – a person can be described as “employed” even if they only one hour per week.

So, to reflect the real trends of employment growth (or decline) in industries within Council areas, it’s more effective to look at Full-time equivalent (FTE) employment.

FTE, calculated simply from hours worked per industry, can reveal if employment growth in an industry is aligned to an increase in overall hours worked – or simply more workers, each working fewer hours.

Compare employment and FTE data for your area

To complete this section you will need access to our community profile and economic profile tools in your area. If your council subscribes to these resources, you can access them via our demographic resource centre here.

The graph below shows a decline in full-time employment and growth in part-time employment – a trend you will see in many community profiles.

 

Find this data: Open your community profile > What do we do? > Employment status

Chart the trend in part-time employment

The Time series industry sector analysis page in your economic profile lets you easily compare employment (total) and employment (FTE) on a chart, showing how the two have changed over time.

Below is a textbook example, showing a steady increase in employment that belies the underlying drop in full-time-equivalent employment.

Find this data: Open your economic profile > Industry focus > Time series industry sector analysis

Scroll down to see the time series chart above, and use the Measure menu to toggle between Total and FTE employment.

How employment data is calculated in our economic profiles

The employment data used in our economic profiles (economy.id) is developed by the National Institute of Economic and Industry Research (NIEIR). We recently spoke with Peter Brain, the principal of NIEIR, about why they prefer using FTE as a true measure of local employment for Local Government economic analysis.

Have you seen this trend in your area?

If you’ve noticed the impact of an increasingly part-time local workforce, we’d love to hear from you.

If you’re responsible for economic development, how are you measuring and addressing under-employment in your area? Let us know in the comments!

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