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Progressive Politics in Minnesota, the Nation, and the World

About That Workforce Participation Rate

Category: Economy
Posted: 11/12/15 20:45

by Dave Mindeman

Labor statistics are always cited in economic discussions. These statistics can be manipulated depending on what kind of point you are trying to make. The national unemployment figure has been steadily trending downward since the great recession and as corrective measures finally took hold. The Obama administration also can point to an unprecedented 67 consecutive months of job growth. That is the longest streak we have ever had since we have kept labor records.

So when Republicans go into their "woe is us" economic arguments, they have to look for some kind of competing statistic....and they have seemed to latch onto "workforce participation".

So let's get some definitions. According to the CPS (Current Population Survey), a worker is only officially unemployed if he or she lacks a job, has actively searched for a job in the last four weeks, and is available to work.

So who would be the people not working who are not counted as unemployed?

The largest population in this group would be retirees. It is not surprising that workforce participation is trending down because the baby boomers are beginning to peak as retirees.

But another trend is that younger people 18-24 are also a growing statistical number that do not work, yet are not counted as unemployed. Why is that? Because they are spending more years in school...higher education. It is hard to see this as a bad sign for the economy...after all, we are in dire need of a higher skilled workforce.

Prior to the economic downtown in 2007, workforce participation was at 62.7% Our economic situation brought that number down to a bottom figure of 58.2% in 2010. The unemployment numbers were also high and our economy was in trouble. But over the next four years, workforce participation has been climbing - in June it was back to 59.3%

For a comparison, our peak figure is 64.7% in April of 2000, still basking in the 1990's economic boom. So, although things have improved, we are still a full 5 percentage points below the high. Not as bad as Republicans would have you think, but still not where we would like to be.

But there is another trend that is affecting that workforce participation that the GOP would rather not publicize too much.

If you do a gender comparison of workforce participation, you would see that participation by men has been on a very slow but steady decline since 1948. That trend shows no signs of abating.

If you look at female participation, you see the opposite. The number is on a steady increase from 1948 until it seems to peak in 1998. After that the women's participation shows about the same kind of decline as men.

(These statistics are taken from testimony by Elisabeth Jacobs, Senior Director for Policy and Academic Programs, Washington Center for Equitable Growth, testifying before the United States Joint Economic Committee on "What Lower Labor Force Participation Rates Tell Us about Work Opportunities and Incentives" - posted in June, 2015.)

Here is a logical explanation of why women have been leaving the workforce in the last decade...

In 1990, the United States had the sixth-highest female labor force participation rate amongst 22 high-income OECD countries. By 2010, its rank had fallen to 17th. Why have other high-income countries continued their climb while the United States has stalled? Research by economists Francine Blau and Lawrence Kahn suggests that the absence of family-friendly policies such as paid parental leave in the United States is responsible for nearly a third of the U.S. decline relative to other OECD economies. As other developed countries have enacted and expanded family-friendly policies, the United States remains the lone developed nation with no paid parental leave.

Do you think a Republican official is going to mention this explanation when talking about workforce participation? I seriously doubt it.

But the absence of family and parental leave coupled with gender pay inequities do not seem like the incentive women need to come back to the labor force.

So when you hear politicians talk about the undercurrent of pain in the economy not reflected by the official unemployment rate, maybe they need to examine some of the other labor policies that have not been enacted which might improve that situation.

As often happens, it is what they don't say that matters.
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Commissioner Pay Raises & Republican Hypocrisy

Category: Economy
Posted: 07/02/15 11:17

by Dave Mindeman

It would seem that the MN Republicans are going to have an election discussion about Gov. Dayton's push for increases in Commissioner salaries. But if they insist on doing that, then let's make sure we have all the facts.

1. If the GOP was so concerned about this, why did they allow a window (July 1st) for the governor to do it? In fact, they legislated it that way (the House GOP voted for it). Why didn't they just slam the door entirely early in the session - they had that option. Heck, they even had Bakk's support.

2. From a StarTribune article: Before the increases, Minnesota commissioners were making less than their counterparts in most states, according to an analysis by Minnesota Management and Budget from data compiled by the Council of State Governments. Fourteen of 15 commissioners were paid at or below the 50th percentile; eight were below the 25th percentile. The raises push Minnesota salaries above the median.

The comparison with other states shows that Minnesota has been lagging far behind other states in paying people for "executive" type positions. It took these large raises to catch up - and now that the legislature has taken back control of these salaries, there won't be any further raises for the foreseeable future.

3. Direct comparisons with our neighbors were not favorable either.

North Dakota had at least 10 cabinet-level positions that paid more than Minnesota commissioners before the raises and six jobs that will still be paid more than in Minnesota. Most Wisconsin commissioners were paid slightly more than Minnesota's before the Dayton raises but now would be paid less.

4. The Republican strategy is clear. Even though Dayton is not on the ballot and it was his decision to raise the salaries, Daudt attempts to blame the DFL legislators for this government "failure" - even though the vote on the parameters by which Dayton acted was completely bipartisan.

Frankly, I think Dayton showed tremendous courage to go ahead with these planned increases. We will attract highly competent people to do this important work and solidify the salaries for the future. Future governors (Republican or Democrat) will thank him for it.

The most important takeaway from this is that the MN GOP compares these raises to the "hard working" Minnesota families who don't have the opportunity for such raises....the same MN GOP that fought and continues to fight increases in the minimum wage....and promotes tax relief for the wealthy which the middle class has to pay for.

The Republican hypocrisy in all this is the true election issue.
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Medical Marijuana: Doctor Timidity & Red Tape Need To Go

Category: Economy
Posted: 07/01/15 23:33

by Dave Mindeman

Today the Medical Marijuana law took effect and patients could now get their medication. However, very few people are eligible because doctors are reluctant to get involved and the law is so very restrictive.

As to the restrictions, I feel that Minnesota's legislature was much too timid in regards to the writing of this law. They kept watering down the availability until we have come to the point that the medicine is not going to get to the people who need it fast enough.

But I am particularly disappointed with Minnesota's physicians. I understand that there is ambiguity in regards to State and Federal law - and there might be a certain risk to get into the middle of this-- I think it is minimal but it is still there.

But what I find particularly disturbing is the complaints from doctors about loss of control. As I understand it, the doctors evaluate their patients for eligibility in the program and then hand their patients over to the program for actual treatment. Yes, the doctors do not have much control about the patient treatment once the patient is in the program, but if they are not happy with the outcome they can encourage their patient to drop out and return to the doctor's course of treatment.

You have to wonder how different the doctors would be assessing the marijuana program if it had a Big Pharma company promoting these medications.

Viagra type advertising....doctors given lunches and paid seminars to consider the treatment...sales pitches from hard sell representatives. You know, the kind of thing they are used to dealing with.

You have to wonder how different the program's fortunes would be under that type of promotion.

This program deserves to move forward. It's not like we have a drug that has never been tested in humans. We know the side effects...we know what it will do. A multitude of opinions have been posted about it.

What is needed now is a chance for this program to succeed or fail on its own merits. We do not need to get hung up on speculation or innuendo. We have patients who desperately want to give this a chance. They want the opportunity to try this treatment. They want to take the risks. They want to see the outcomes directly.

The red tape and the doctors need to get out of the way and let the treatment begin.

The patients, the ones that are directly affected, are clear about this.
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