In Case You Missed It: The Labor Market Wheel of Fortune

Must Reads: The New York Times' Eduardo Porter has an interesting column on the limits of corporate ability to do good. Scientific American discusses new research that shows technology is replacing low-wage jobs, but notes that there isn't enough data for a definitive determination. The Washington Post reports on the two Twitter friends, who have gotten together to create a service so that people can pay the water bills for some of the thousands of Detroit residents facing shut-offs.

The Labor Market Wheel of Fortune

Let's start with this cartoon from Carol Simpson: 

Commenting on the spate of women being arrested for neglect because they were attempting to either work or get a job without childcare, the Nation's Bryce Covert asks if we are criminalizing poverty:

These weren’t mothers doing drugs or other dangerous activities and neglecting their children; they were both mothers trying to hold down jobs to provide for their children while stuck swirling in a Catch-22. Can’t work or interview without childcare, but can’t afford childcare without a job that pays enough to cover the ever-increasing cost. Taylor and Harrell are both holding up their end of the deal: don’t rely on public assistance, go out and get work to provide for your children. Our country has reneged on its end of that deal: we’ll help you pay for someone to watch your children if you go to work...

Fast food workers are once again protesting for higher wages, reports the Associated Press, as people continue to struggle to make ends meet:

Nancy Salgado of Chicago said she and her two children share a bedroom after being forced to move into an apartment with two other adults after her hours at McDonald's were cut from 40 a week to about 24. "I don't think $15 will make me rich. ... I just want an apartment for my family and be able to have my kids in their own room, to not have to wait for the washing machine or the bathtub, and I don't want to be behind on bills if I take time off or get sick," said Salgado, who earns minimum wage after 12 years with the company. "If we've got to stop working and shut down (restaurants) to get it, that's what we're going to do," she said.

Over at the Policyshop blog, Demos' Robert Hiltonsmith says that home healthcare workers--one of the fastest growing jobs in America-- represent a microcosm of the jobs crisis:

Median wages have actually decreased over the past decade, falling 6.5 percent from a median of $22,719 in 2002. However, just 36 percent of all aides worked full time in 2012, a share which has remained relatively constant over the past ten years. Among all home health care aides, median earnings were just $12,144 per year, down 14.5 percent from $14,199 in 2002. Why, then, does the fastest-growing occupation in the country earn so little? Typically, a rapid increase in the demand for an occupation would tend to drive up average wages as employers compete for employees. In this case, several factors combine to counteract this trend, factors which in fact shed light on why wages remain low in many of the fastest-growing occupations. Perhaps the largest reason for aides’ low wages is because care work, which makes up the majority of home health care aides’ duties, has been traditionally undervalued in our society.

In the Fiscal Times, Rob Garver reports that evidence shows the long-term unemployment rate has been "dropping sharply in recent months," and that there is strong evidence to suggest that it is because they are finding jobs rather than simply dropping out of the labor force altogether." Check out this chart:

  The Economic Policy Institute's Heidi Shierholz also looks at hires, quits and job openings, check out this chart:

In the Atlantic, Team for America volunteer April Bo Wang discusses discovering the realities of poverty in the Mississippi Delta.

Corporate Deal or No Deal

In the New York Times, Neil Irwin argues that corporations' lack of spending is holding back the economy:

Dear C.E.O.s of America:

You know all that money your companies have been making the last few years? The way profits are at a record high as a share of the economy? You know how the stock market keeps reaching new highs and long-term interest rates near record lows, so you can finance any new investments cheaply? Could you maybe think about spending a little of that money? You know, buy yourself something pretty, like a nice new industrial lathe, a fleet of trucks, new computers or even a shiny headquarters office building? The rest of us would really, really appreciate it. Thanks!

If firms increased their spending enough to close that gap, it would mean an extra $220 billion in annual economic activity and perhaps a couple of million more jobs. But there may be even more important and lasting consequences for this lack of spending by businesses.

Capital spending improves worker productivity. And worker productivity improves living standards. Less capital spending by businesses means less investment in the kinds of equipment, software and intellectual property that will make the economy more competitive over the long haul.

Companies say they can't find skilled workers amongst the many unemployed, but do not want to pay for the training, reports Lauren Weber in the Wall Street Journal:

U.S. companies have been cutting money for training programs for decades, expecting schools and workers to pick up the slack. Economists say that reluctance to develop workers in-house has made it hard for workers to launch or sustain careers, resulting in a stalemate in the labor market: Companies won't look at job candidates who lack a specific skill set, so openings go unfilled even as millions linger on the unemployment rolls... Employers' expectations for new hires have shifted since the recessions of the early 1980s, when companies laid off masses of workers and slashed training programs. Where bosses once hired for potential, viewing workers as lumps of clay to be molded to the company's needs, they now want hires to arrive with all or most of the skills needed for the job—another symptom of how the employer-employee relationship has become reduced to a transaction, said Peter Cappelli, a management professor at the University of Pennsylvania's Wharton School. If employers "want only people who can step in immediately because they are currently doing the job, [they] narrow the pool to almost no one," said Mr. Cappelli.

Over at the Center for American Progress, Sarah Ayres and Ethan Gurwitz discuss the underuse of apprenticeships:

Apprenticeship is a worker-training model that has been shown to raise workers’ wages, to increase employee productivity, and to improve employers’ bottom lines. An apprentice is a paid employee who receives formal on-the-job training and classroom-based instruction leading to a nationally recognized credential. Because apprentices are paid to learn, they need not forgo employment income in order to pursue education and training. Just as importantly, apprentices gain an education while incurring little or no debt. For their part, employers gain a pipeline of skilled workers who have been shown to increase productivity and boost the bottom line. But, for all its benefits, apprenticeship is significantly underutilized in the United States.

SIB Advocates Press Their Luck

The Nonprofit Quarterly's Richard Cohen takes another look at social impact bonds, as they get a visibility boost from two unlikely allies in Congress--Republican Ted Cruz and Democrat Al Franken:

For the two senators and most of the U.S. Congress, SIBs are real, immediate, substantive, and promising—enough to justify devoting hundreds of millions of dollars to pay-for-success programming on a range of social issues. For others, they are a public policy phantom, largely unproven but highly touted by some academics, a number of private foundations, and a bevy of consultants, and broadly endorsed by Republicans and Democrats, nonprofit service providers and for-profit entrepreneurs. As this issue of the Cohen Report explores, this potentially phantom program is getting serious consideration at the federal government level and in a variety of states. ...Will SIBs and [pay for success] initiatives supported by investors from Goldman Sachs, Bank of America, or J.B. Pritzker lead suddenly to a creative, innovative governmental sector woken from the doldrums that Smolover and her colleagues think envelop those of us who have worked for government? Will, somehow, private sector principles work where government has purportedly failed? That’s the bet that Ted Cruz, Todd Young, and New Profit are making, imagining evidence of success in SIBs and PFS that really hasn’t been achieved yet, here or overseas. It’s a public policy bet that has legislators of both parties and at the national, state, and local levels hopeful that private capital will somehow discover and fund public policy solutions that wouldn’t come to the fore without SIBs. It is a bipartisan dream built on a belief in the efficacy of the free market system that hasn’t borne much social progress fruit in recent years and rooted in a disparaging view of public servants, who have accomplished more than most free market true believers might ever guess.

Over at the Huffington Post, the Urban Institute's John Roman says SIB's are unlikely to achieve their full potential in the current framework:

Today's deals are mainly efforts to fund well-intentioned programs that are appealing to all parties to the transaction: the government, investors, and social service providers. But in order to satisfy the interests of all parties whose incentives are not aligned, rather than creating real reform, they end up funding the lowest common denominator -- something that sounds good, is low risk, but does not solve big problems. There is a better way to use these transactions to create broader and deeper systems reform, using the SIB development process as the mechanism for reform. The deals funded by social innovation financing should be the product of a real, intensive strategic planning process, rather than a one-off response to a particular opportunity.

Sustainability Bits

Fossil investmentis being passed over at an increasing rate in favor of more ethical and sustainable investments, according to the Australian Associated Press. In the New York Times, John Schwartz looks at a private equity firm's effort to make money by restoring marshland in Louisiana.

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