The Big Picture |
- Are We Becoming a Part-Time Economy?
- Subprime Rising
- Swiss Leaks
- Financial Journalists Need to Understand Numbers Better If They Want to Avoid Getting Played
- 10 Thursday AM Reads
| Are We Becoming a Part-Time Economy? Posted: 20 Feb 2015 02:00 AM PST Are We Becoming a Part-Time Economy?
Compared with 2007, the U.S. labor market now has about 2.5 million more people working part-time and about 2.2 million fewer people working full-time. In this sense, U.S. businesses are more reliant on part-time workers now than in the past. But that doesn’t necessarily imply we are moving toward a permanently higher share of the workforce engaged in part-time employment. As our colleague Julie Hotchkiss pointed out, almost all jobs created on net from 2010 to 2014 have been full-time. As a result, from 2009 to 2014, the part-time share of employment has declined from 21 percent to 19 percent and is about halfway back to its prerecession level. But the decline in part-time utilization is not uniform across industries and occupations. In particular, the decline is much slower for occupations that tend to have an above-average share of people working part-time. This portion of the workforce includes general-service jobs such as food preparation, office and administrative support, janitorial services, personal care services, and sales. The following chart compares the share of part-time employment for these general-service occupations with the share for production-type occupations (such as machine operators, fabricators, construction workers, and truck drivers). The above chart suggests that if you talk to retailers or restaurateurs, they will say that they always relied pretty heavily on part-time workers. Their utilization increased during the recession, and it really hasn’t changed much since then. But manufacturers or construction firms are more likely to say that part-time work is not that common, and although they did increase their utilization of part-time workers during the recession by quite a lot, things have been gradually returning to normal. Why is the part-time share of employment declining more slowly in general-service occupations? The economy has been generating full-time general-service jobs at a much slower pace than in the past. Of the approximately 7.6 million full-time jobs created between 2010 and 2014, only about 17 percent have been in general-service occupations, versus about 32 percent of the 7.8 million full-time jobs created between 2003 and 2007. At the current rate of full-time job creation in general-service occupations, it would take more than 10 years for the part-time share of employment in general-service occupations to return to its prerecession average. From the workers’ perspective, a relevant question is whether these part-time utilization rates are desirable. Some people work part-time and do not currently want or are not available for full-time work (so-called part-time for noneconomic reasons, PTNER). Others are available and want full-time work but are working part-time because of slack business conditions or the unavailability of full-time jobs (so-called part-time for economic reasons, PTER). The following chart shows the share of employment in the general-service and production occupation groupings that is PTER and PTNER. The chart indicates that most of the movement in the part-time share of employment is coming from people who want full-time work. In both cases, the share of involuntary part-time employment rose during the recession, but for general-service occupations it has been more persistent than for production jobs. Why has the demand for full-time workers in general-service occupations been more subdued than for other jobs? As the following chart shows, wage growth for these occupations has been quite weak in the past few years, suggesting that employers have not been experiencing much tightness in the supply of workers to fill vacancies for these occupations. Presumably, then, the firms generally find it acceptable to have a greater share of part-time workers than in the past. The overall share of the workforce employed in part-time jobs is declining and is likely to continue to decline. But the decline is not uniform across industries and occupations. Working part-time has become much more likely in general-service occupations than in the past—and a greater share of those workers are not happy about it. ~~~
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| Posted: 19 Feb 2015 01:00 PM PST
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| Posted: 19 Feb 2015 10:30 AM PST
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| Financial Journalists Need to Understand Numbers Better If They Want to Avoid Getting Played Posted: 19 Feb 2015 05:30 AM PST Another one from the archives I was saving for while I am otherwise occupied. Enjoy. ~~~ Having a fluency in the writing arts is one of the prerequisites for a career in journalism. The ability to sum up an event in an understandable manner is crucial. But people with highly developed language skills often lack a similar set of skills in mathematics. They can be literate, yet innumerate. This is highly problematic for those who cover financial news. On an all too regular basis, the media finds itself doing the bidding of clever and sophisticated spin doctors who work for corporations, trade groups, and others with a specific agenda to pursue. Look no further than the annual holiday shopping forecasts as it gets unthinkingly parroted by the usual suspects in the MSM. They ought to know better. The most recent journalistic error involved a young, dumb kid making outrageous claims about his trading prowess to New York Magazine. The first mention of this should have immediately raised red flags for everyone involved:
We eventually found out that these guys hadn't made any thing, much less $72 million dollars, and they were mere "paper trading" and basically, fabricated his returns. The NY Observer headline had I right: New York Mag's Boy Genius Investor Made It All Up. New York magazine eventually changed the headline, but the damage was done. Even writers who lack a facility with numbers should be skeptical to begin with. To paraphrase Carl Sagan, outrageous claims demand outrageous, beyond any doubt, proof. We have not seen that in the two examples above. Any journalist covering a story with specific and hard to believe claims must be capable of asking very specific questions about those claims. Consider our whiz kid trader:
Next, a pet peeve: The uncritical acceptance of what paid public relation flaks or investor relations persons have to say about, well anything. It is their jobs to obscure unpleasant facts from the public’s eyes.That should make reporters even more aggressive and skeptical. Let's get a bit more specific, and to be blunt, personal. Recall my column last As expected, the PR folks at Pimco denied the reported data, and they did so in a very disingenuous way. Hey, bullshitting people is their job. I understand that, But it's a reporters' job to understand the issues and ask appropriate follow ups. That did not happen in several articles. A little background: My source was thoroughly vetted by the editorial team at Bloomberg View. My colleague at Bloomberg News, Mary Childs, had two other sources. Having three separate and independent sources confirm the numbers – my source, plus two additional sources from Childs, made the bonus number for Pimco, Bill Gross, and the rest of the managing directors rock solid. But the PR people claimed the numbers were wrong. That these enormous (and in some people's view) outrageous numbers were so large the PR flaks needed to downplay them. Which is what they did, saying "While Pimco does not comment on compensation, the figures provided to Bloomberg are not correct." Here is where proficiency with statistics and data comes in handy: The dictionary definition of "correct" is "free from error; in accordance with fact or truth." Following that definition, Pimco's PR flak's were only in the most technical sense correct when they said the $290 million dollar bonus was "not free from error." However, that was done on purpose. To protect out source, we "rounded" all of the numbers to remove any precision. That changed the potential number of people who had access to the numbers, from a handful to many more. Providing the exact numbers to the penny would have pointed to a small number of potential sources, and we did not want to get our source in trouble. This allowed Pimco to claim that a hypothetical bonus of $99.96 that was reported as $100 to be “incorrect.” They can honestly make a claim that the round, non-decimal number is not precisely correct. And while they might be right that the number is imprecise, it is – and this is the most important aspect of this discussion – "in accordance with fact or truth." In other words, it is imprecise but accurate. The folks at Pimco were trying to thread the needle, challenging the numbers precision while silently ignoring its accuracy. That's a clever way to deny something they know to be true, yet not actually tell a lie in response to the question. A few journalists (see e.g., this or this) seemed to have misunderstood this. All they needed to do was follow up the denial with an obvious questions:
Had those question been asked, PIMCO would most likely have lapsed back to their "no comment" posture – a nondenial denial. Wink wink, nod nod, the bonus numbers were truthful and very close to the actual dollar amount, even if they were (purposefully) not the precise number to the penny. Since then, we have obtained even more confirmation about the accuracy of these numbers. In Mary Childs most recent article, she noted she had "interviews with 25 current and former Pimco employees, who asked for anonymity to discuss internal matters." No one denied the numbers previously discussed, as Childs reported:
I took that as a damning indictment of those who merely parroted the usual PR denials. Look, the reality is that Journalists HAVE TO deal with PR people all the time. The job of the flak is to present their employer in the best possible light. However, the role of the journalist is not to act as mere stenographers, blindly accepting what is told to them by the PR staff as gospel. It is incumbent on those in the media that to probe and push and question the spin doctors to get closer to the truth. And to be blunt, quite a few failed to do just that. Bringing the truth to light is the job of the Press. Journalists need to learn to ask the smart follow ups to the PR folk, including more probing questions of those people whose jobs are to obscure the truth from view. Reporters need to be smarter when it comes to numbers. Don't get played.  |
| Posted: 19 Feb 2015 04:30 AM PST Happy Chinese New Year — the year of the goat. But there are no goats in our morning train reads:
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Commercial property has been delivering excellent returns
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By 
Ellie Terry, an economic policy analysis specialist, both of the Atlanta Fed’s research department
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