National News

PODCAST: Jobs up; wages... well...

Marketplace - American Public Media - Fri, 2014-11-07 07:48

As part of our program's 25th anniversary, we've been tracking the odd ways prices have changed over that period. According to a cellular phone industry group, the average monthly cell phone bill has dropped from an inflation adjusted 151 dollars back in 1989 to 47 dollars now. Plus: Chris Low of FTN Financial gives us some perspective on the 214,000 jobs added to payrolls this month.

The labor force participation rate is at a low point (updated)

Marketplace - American Public Media - Fri, 2014-11-07 07:00

UPDATE: October's numbers are in from the Bureau of Labor Statistics: 214,000 jobs added, and the unemployment rate "edged down" to 5.8 percent. 

The monthly employment report from the Department of Labor will likely show the economy added approximately 240,000 jobs in October, and unemployment held steady at 5.9 percent, after falling below 6.0 percent in September for the first time since mid-2008.

Economists can point to steady improvement over the past several years in those two statistics—job creation, and the unemployment rate (which was 7.2 percent in September 2013, and 9 percent two years earlier).

Yet, this ‘official’ unemployment rate doesn’t accurately characterize many aspects of the labor market right now—in particular, how hard it still is to land a middle-income job; how easy it is for employers to find qualified candidates; and how little those employers have to compete with each other over wage and benefit offers, in order to hire the workers they want.

The ‘official’ unemployment rate—called the U-3 by the Bureau of Labor Statistics—only counts how many people are actively unemployed. They’re looking for work and actually applied for a job in the past four weeks.

But right now, the number of people who are not working, but would like to work, is unprecedentedly high. These people have given up looking—possibly because they don’t think any jobs are available for them, or perhaps to attend school and upgrade their skills, or to go into semi-retirement. They’ve pushed down the labor force participation rate to its lowest level (62.7 percent in September) since the late 1970s.

Combine these discouraged and marginally attached workers with the ‘underemployed’—people who would like to find better-paying full-time jobs but can only find part-time jobs—and total unemployment (the U-6 rate), as measured by the BLS, is averaging well over 12 percent in 2014 (it was 11.8 percent in September).

Economists have anticipated that some attrition in the labor market would occur when the Baby Boomers began retiring earlier this decade. But in fact, after the recession, older workers have stayed on the job longer than was predicted, on average. With retirement savings and home equity depleted by the recession, older Americans are holding on to jobs if they can.

“Where we’re seeing large declines in labor force participation is actually among prime-age workers,” explains University of California-Berkeley economist Jesse Rothstein, “especially among people in their early twenties. It’s hard for me to believe that there’s this enormous group of people in their early twenties who have decided that they’re never going to work.”

Rothstein and many other economists believe the economy hasn’t changed structurally so that fewer people want to work or feel the financial need to work. Rather, they think the labor market is simply too weak, and demand in the economy too anemic, to employ all the potential workers who want and need jobs. They believe if the economy strengthens significantly, many of those potential workers will come out of the woodwork and begin job-hunting again.

Absent such improvement, the labor market is likely to remain slack, even if the official unemployment rate continues to decline steadily and eventually dips below the Federal Reserve’s target of 5.5 percent. Fed policymakers, led by chair Janet Yellen, have said they are looking at other labor market indicators in addition to the unemployment rate, to make sure they don’t withdraw economic stimulus and kill the nascent recovery before it’s helped the hard-core and long-term unemployed, the underemployed, and discouraged workers.

Rising wages are now considered a key harbinger of labor-market tightening by market participants and Fed policymakers, explains economist John Canally at LPL Financial.

“I think that’s the ultimate indicator—to get wage growth back to normal, back to the 3.5-percent-to-4.5-percent gains we saw prior to the Great Recession,” said Canally. “Then I think there’ll be confidence that businesses are finding it more and more difficult to fill jobs.”

In recent years, average hourly earnings have been rising in the 2-percent-per-year range, just keeping pace with inflation.

Another indicator of a tightening labor market would be a reverse in recent declines in labor force participation, especially among prime-age workers. If more people who have dropped out of the workforce, or never entered it after high school or college,  started looking for work again, that might raise the unemployment rate temporarily. But it would be another sign the economy is truly on the mend.

How to change company boards: the Stringer solution

Marketplace - American Public Media - Fri, 2014-11-07 02:00

New York City Comptroller Scott Stringer wants to bring a kind of direct democracy to corporations.

He’s teaming up with institutional investors, including some of the country’s largest public pension funds, to lobby 75 companies to allow shareholders to nominate directors for election to their boards.

The investors will have to hold more than three percent of the company’s stock for more than three years to qualify but even so, David Nadler, a principle at Nadler Advisory Services, thinks companies will resist.

“The cost and the time and distraction of potentially dealing with contested board elections, I think, is not good for the enterprise,” he says.

Nadler consults with boards and executives on leadership and corporate governance issues and thinks, on the whole, companies have become more responsive to their shareholders in recent years. He doesn’t think these changes would be worth the hassle they’d cause.

Stringer disagrees.

“The old boys' network is still in place,” he says. “You know, 'a friend of a friend of a friend' is serving on these corporate boards, but we need certain expertise. We need more diversity. If you put more women and people of color on boards, studies show that the company does better.”

If companies don’t agree to Stringer’s changes, shareholders would have to vote to approve his proposal next year. Even then, companies wouldn’t have to adopt it. But Stringer says he and his pension fund allies will just keep coming back. 

Free trade on the agenda for Obama's Asia trip

Marketplace - American Public Media - Fri, 2014-11-07 02:00

President Barack Obama will be in Asia starting Monday with an itinerary that includes attending the APEC CEO Summit, a state visit with Chinese President Xi Jinping and the G20 summit in Brisbane, Australia.

Among the top items on the agenda is the Trans-Pacific Partnership (TPP), a 12-country free trade agreement that has proven difficult to hammer out between the U.S. and Japan before being presented to the other 10 countries, says Derek Scissors, an Asia scholar at the American Enterprise Institute.

"There are a lot of really contentious issues,” says Scissors. "Can American farm goods freely enter the Japanese market? The Japanese have resisted this for years. Can Japanese autos freely enter the American market? The United States has resisted.”

If the U.S. and Japan were to settle their differences, that would be a major success story coming out of this latest trip, says Scissors. 

For a president that may be looking at a tough road ahead on his domestic agenda, it makes sense to switch focus to foreign policy, says Russell Riley, a presidential historian at the University of Virginia.

"Towards the end of the term, when presidents are thinking about legacies, they do become focused on places abroad, where they feel like they can make a difference,” Riley says.

The timing may work out for the president, as a recovering economy offers the U.S. a renewed leadership role in global trade.

“We’re the only one doing well,” says Scissors. “So everyone is looking to the United States for wise economic policy, which we don’t always deliver…And the TTP is a good step in that agenda.” 

Silicon Tally: So many penguins

Marketplace - American Public Media - Fri, 2014-11-07 01:14

It's time for Silicon Tally! How well have you kept up with the week in tech news?

This week, we're joined by Ashkan Soltani, newly appointed Chief Technologist at the FTC.

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Donor Gives Los Angeles Museum Art Worth $500 Million

NPR News - Thu, 2014-11-06 16:19

Billionaire Jerry Perenchio will donate works by masters such as Edgar Degas, Édouard Manet, Claude Monet, René Magritte and Pablo Picasso.

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Rubik's Cube, Bubbles And Green Army Men Join Toy Hall Of Fame

NPR News - Thu, 2014-11-06 15:10

Four well-loved toys are inducted into the National Toy Hall of Fame, beating out fellow nominees such as the Operation skill game and Fisher-Price Little People.

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Drummer And Tuba Player Work To Stay Sharp For Band And College

NPR News - Thu, 2014-11-06 14:06

In May, we shared the story of a New Orleans high school marching band. Two students earned scholarships to play for Jackson State University's marching band, the Sonic Boom of the South.

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Beyond Cat Videos: YouTube Bets On Production Studio 'Playgrounds'

NPR News - Thu, 2014-11-06 14:04

The online video giant has just opened a gleaming new production studio in Manhattan. It's part of an effort to attract new viewers — and ultimately compete with companies like Netflix and Hulu.

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Gay-Marriage Bans Are Upheld In 4 States By Circuit Court

NPR News - Thu, 2014-11-06 13:57

Bans on same-sex marriage in Michigan, Ohio, Kentucky and Tennessee were confirmed by a federal court Thursday, reversing lower courts' decisions.

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Alaska Station Sets Dubious Record: Most Senate Campaign Ads

NPR News - Thu, 2014-11-06 13:51

The Center for Public Integrity calculates that KTUU in Anchorage ran more U.S. Senate ads this cycle than any station in the country.

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Jet Fuel Is Down, But Not Enough For A Thanksgiving Fare War

NPR News - Thu, 2014-11-06 13:31

Airlines say they expect an uptick in Thanksgiving travel. This November, jet fuel prices are down, but carriers are using the saved money to upgrade equipment and software rather than cut fares.

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Flu Season Brings Stronger Vaccines And Revised Advice

NPR News - Thu, 2014-11-06 13:20

Health officials estimate that every flu season, 1 in 5 Americans will get the bug. This year, changes in flu vaccines and in federal guidelines could help those most susceptible to the virus.

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Amazon Wants To Put A Listening Speaker In Your Home

NPR News - Thu, 2014-11-06 13:18

Are you ready to bring an eavesdropping device that's connected to the cloud into the privacy of your abode? Amazon thinks so, as it introduces Echo, a speaker that takes your questions and commands.

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Harvard Secretly Photographed Classrooms To Monitor Attendance

NPR News - Thu, 2014-11-06 12:31

Some students and faculty are upset about the surveillance, but lots of colleges do this kind of thing all the time.

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Brooklyn Prosecutor Could Be Nominated Attorney General In Coming Days

NPR News - Thu, 2014-11-06 12:20

Loretta Lynch, the top federal prosecutor in Brooklyn, could be nominated to lead the Justice Department in the coming days. She'd be the first African-American woman to hold the post.

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Astronomers Glimpse Distant Planetary Nursery

NPR News - Thu, 2014-11-06 12:01

Images produced by a giant radio telescope array in Chile's Atacama desert show a nascent star and what's thought to be its solar system in the process of being born.

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Catalonia's President Makes His Case For Independence From Spain

NPR News - Thu, 2014-11-06 11:57

Catalonia's President Artur Mas is seen as a savvy leader who has appealed far beyond his home borders for Catalan independence. But Spain says there's no way it will cut Catalonia free.

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New Star Wars Movie Is Called 'The Force Awakens,' Disney Says

NPR News - Thu, 2014-11-06 11:41

Before today, it was known only as Episode VII. Set decades after Return of the Jedi, the new installment will feature some of the same cast as the 1983 film.

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