Melissa Harris Perry: The case against education privatization

"The Lagging Public Sector"

Floyd Norris @ NYT's Economix:

Private sector employment in the United States is growing at about the same rate it did during the best days of the last decade.

The difference is in the government. It continues to shed workers.

Source: Bureau of Labor Statistics, via Haver Analytics  Year-over-year change in employment.

The above chart shows the annual change in employment for the private sector, and for government jobs, since the end of 2002.

Over the last 12 months, private sector employment rose 2 percent. That is down a little from the 2.5 percent rate early last year, but it is about the same as the rate of growth in the fall of 2005.

But government employment continues to fall. It is down 0.2 percent, which is the best year-over-year showing since 2009, when the government cutbacks were starting to be felt.

On a monthly basis, over the last 12 months the economy added an average of 191,000 jobs a month in the private sector, and cut public sector employment by 3,000 jobs a month.

Politicians lamenting the slow pace of recovery might, logically, look for ways to increase hiring in the sector that is lagging the most.

(A note on the data: I used figures before seasonal adjustments, which is possible since annual changes presumably take care of seasonal adjustment. And I dropped from the numbers the temporary surge in government jobs caused by hiring for the 2010 census. Without that change, there would have been a rise in government employment in 2010 and a much steeper decline in 2011.)

Bad News for Growth: Since 2009 Government has been shrinking

 Catherine Rampell at NYTs:

While Washington debates whether big government is holding back the economy, it’s worth keeping a couple of facts in mind: Government has been shrinking steadily for two years, and compared to the size of the overall economy, government is actually slightly smaller today than it has been on average in the postwar era.

Here’s a chart showing the annualized percentage change in gross domestic product (blue) and the percentage change in total government spending and investment (red):

 

Bureau of Economic Analysis, via Haver Analytics

 

The overall economy has been growing for 12 quarters. Total government spending (federal, state and local), on the other hand, has been falling for eight quarters. That decline has been driven primarily by state and local spending, which has been falling for 11 quarters. Federal spending has fallen for six of the last seven quarters.

In other words, without the drag of shrinking government, the growth rate of the overall economy (which is measured as consumer spending + investment + government spending + net exports) would be faster. That is even before you consider how public layoffs ripple through the private sector as unemployed workers curb their spending.

Indeed, the shrinking government labor force is another factor worth noting when thinking about the role of government in the economy. While President Obama has been pegged as a big-government politician, the total number of government jobs has actually fallen under his presidency. Federal payrolls have risen a little bit, but not enough to fully plug the steady leak of layoffs at the state and local level.

Public sector austerity is killing economic recovery

Heidi Shierholz and Josh Bivens at Economic Policy Institute explain that cutbacks in the public sector are the key to understanding the current stagnant "recovery" that has turned deep recession into lingering depression.  The private sector - while still not robust enough, given the deep trough created by the 2008 financial meltdown - is recovering at a pace consistent with previous recessions.  But prior recessions weren't accompanied by cutbacks in state and local employment that we are currently seeing.  As Bivens and Sheirholz demonstrate, this strangling of the public sector is the single biggest difference from previous recessions that weighs upon current potential recovery:

(T)he most glaring weakness in the current recovery relative to previous ones is the unprecedented public-sector job loss seen over the last three years. The figure belowshows that private sector job growth in the current recovery is close to that of the recovery following the early 1990s recession and is substantially stronger than the recovery following the early 2000s recession.



Yet, as the figure below shows, the public sector has seen massive job loss in the current recovery—largely due to budget cuts at the state and local level — which represents a serious drag that was not weighing on earlier recoveries.



How many more jobs would we have if the public sector hadn’t been shedding jobs for the last three years?  The simplest answer is that the public sector has shed 627,000 jobs since June 2009.  However, this raw job-loss figure understates the drag of public-sector employment relative to how the economy functions normally.

Dean Baker explains the world to a remarkably incoherent and confused David Brooks

Dean Baker at CEPR Beat The Press: "David Brooks Says That...Republicans Are Not Very Good At Arithmetic"

That probably was not his intention, but that is the only conclusion that numerate readers can take away from his column. He tells readers that:

"But many Republicans have now come to the conclusion that the welfare-state model is in its death throes."

He points to the crises in Greece, Spain, and Italy and then adds:

"In the decades after World War II, the U.S. economy grew by well over 3 percent a year, on average. But, since then, it has failed to keep pace with changing realities. The average growth was a paltry 1.7 percent annually between 2000 and 2009. It averaged 0.6 percent growth between 2009 and 2011. Wages have failed to keep up with productivity. Family net worth is back at the same level it was at 20 years ago."

There are a number of problems with this story. First Greece, Spain, and Italy have among the least developed welfare states in Europe. If someone wants to make an argument that there is some inherent problem with the welfare state model then we should look for crises in Sweden, Denmark and Germany, all states with far more generous welfare states than these Mediterranean countries. In fact, the welfare states of northern Europe are doing relatively well through the crisis, it is difficult to understand how anyone can look at the pattern of the crisis across Europe and conclude that it implies that the welfare state model has reached its end.

Brooks account of U.S. growth is just bizarre. Did he somehow miss the collapse of the housing bubble? If he excluded the period since the crisis then there is not much of a case for a weakening economy. The economy definitely did better in the three decades immediately following World War II, when the top marginal tax rate was between 70-90 percent than it did in the post-Reagan years, but there was a substantial uptick in productivity growth in the mid-90s. The second half of that decade saw the strongest sustained growth since the early 70s, with workers up and down the income latter sharing in the gains of productivity growth.

The economy did turn down with the collapse of the stock bubble in 2000-2002, but it is hard to see how Republicans tie the collapse of this bubble to the death throes of the welfare state, just as it is difficult to see how the more recent collapse of the housing bubble implies the death throes of the welfare state. In principle the Los Angeles Kings victory in the Stanley Cup could also signal the death throes of the welfare state, but it is not easy to see the connection. The more obvious take away from this story is that a corrupt financial sector can wreck the economy.

In terms of the link between wages and productivity growth, Brooks Republican friends seem to be in an inverted world. If this is the concern, then the welfare states in Europe would seem to be the answer, not the problem.

End This Depression Now! - Aid to the States Edition

Ben Polak and Peter K. Schott explain at NYT's Economix why unemployment is far greater for much longer into the "recovery" phase of the private sector in this extended recession:

Why is the recovery from this recession different from recoveries from past recessions? In the previous two recessions, it took 32 months for nonfarm employment to reattain its June 1990 peak, and 48 months for it to reattain its January 2001 peak. Assuming the economy keeps adding nonfarm employment at the current rate, it will have taken 88 months to reattain its January 2008 peak. The explanation most often heard is that “financial crises are different”: after a debt crisis, shaken consumers are reluctant to spend and shaken firms are reluctant to hire, slowing private-sector job growth even after the recession has bottomed out.

There is some truth in this, but it is not the whole story. In fact, while the latest recession was particularly deep, the recovery in private-sector employment, once it finally started, has not been particularly slow by recent historical standards. In the 27 months since the start of the current employment recovery, the private sector has added 4.3 million jobs, fewer than the 5.0 million it added in the 27 months after February 1992 but not many fewer than the 4.5 million it added in the equivalent period after August 2003.

Source: Bureau of Labor Statistics

But there is something historically different about this recession and its aftermath: in the past, local government employment has been almost recession-proof. This time it’s not.

"Learned Helplessness" in Hard Times

Economist Robin Wells @ The Guardian:

Yet another disappointing statistic today from the US labor market – only 115,000 jobs added in April, barely enough to keep the unemployment rate from rising given the growth in population, and a significant fall from the 154,000 jobs added in March. While not necessarily a sign that the economy is headed for another turn downward, April's job numbers signal a repeat of the pattern seen in 2011 – a recovery that is halting, unpredictable, and agonizingly slow...

And it's not surprising given the continued heavy drag on the economy from high levels of household debt, high oil prices, and significant budget cutbacks by state and local governments. Moreover, the longer the economy limps along, the harder it appears to be for policymakers to accept that another outcome is possible. Months with stronger numbers will be seen as confirmation that the economy is turning the corner, and months with weaker numbers will be seen as confirmation that there's little one can do in the face of the need for longterm adjustments in the economy. Learned helplessness sets in.

One could not have asked for a clearer example of learned helplessness than Ben Bernanke's recent press conference, where he labeled calls for further Fed stimulus "reckless" and appeals for a higher inflation target "irresponsible" because it would, in his view, sacrifice its commitment to a 2% inflation target. Higher inflation helps stimulate a depressed economy as consumers and businesses find it less appealing to sit on cash, and it reduces the real cost of pre-existing debt. Ironic given that a 4% inflation rate during the Reagan years was considered perfectly acceptable...

"Jobs Day By the Numbers"

From Think Progress:  "Jobs, Jobs, Jobs"

Today is Jobs Friday.

Here’s the rundown on the monthly employment report from the Department of Labor.

-647,000…the number of jobs
created
lost in state and local governments since August 2008.

-22,000…the average number of public sector jobs
created
lost each month in 2011, thanks to ongoing spending cuts at all levels of government which in turn continue to drive layoffs at the state and local level.

-14,000…the number of construction industry jobs
created
lost last month, something which could have been avoided and turned into a net positive for the economy if Republicans had not blocked the infrastructure investments in the American Jobs Act.

-6,000…the number of public sector jobs
created
lost last month, thanks to ongoing spending cuts at all levels of government which in turn continue to drive layoffs at the state and local level.

3…the number of consecutive months with more than 200,000 jobs gained.

24…the number of consecutive months of private sector job growth.

31,000…the number of manufacturing jobs created last month.

61,000…the additional jobs created during the months of December and January, according to revised figures released today.

61,000…the number of new health care jobs created last month.

227,000…the number of net new jobs created in February.

233,000…the number of private sector jobs created in February.

245,000…the average number of new jobs created over the past three months.

444,000…the number of jobs in durable goods manufacturing added since January 2010.

GOP Austerity in Action: Public Sector Job Losses Drag Down the Recovery

While Republicans are calling for tens or even hundreds of thousands more public sector workers to be axed, it’s clear that the public sector has already severely contracted even as the private sector recovers. Check out this chart (red is public sector employment, blue is private sector employment):

The impact of "starving the beast" on unemployment

Think Progress: "If government payrolls were the same today as they were back in 2009, the unemployment rate would be significantly lower, standing at 8.4 percent, instead of the current 9.1 percent."

Crisis at the state level

The Center on Budget and Policy Priorities:

States have enacted deep cuts in education, health care, and other important public services in their budgets for fiscal year 2012 (which begins July 1 in most states).

It is the fourth year in a row of budget-cutting for states, and the 2012 cuts are deeper than in past years. Of the 32 states that have enacted budgets, as least 24 are imposing significant cuts. These cuts will delay the nation’s economic recovery and undermine efforts to create jobs...

"The High Cost of Low Teacher Salaries"

Dave Eggers and Nineve Clemets Calegari, writing in the New York Times:

WHEN we don’t get the results we want in our military endeavors, we don’t blame the soldiers. We don’t say, “It’s these lazy soldiers and their bloated benefits plans! That’s why we haven’t done better in Afghanistan!” No, if the results aren’t there, we blame the planners. We blame the generals, the secretary of defense, the Joint Chiefs of Staff. No one contemplates blaming the men and women fighting every day in the trenches for little pay and scant recognition.

And yet in education we do just that. When we don’t like the way our students score on international standardized tests, we blame the teachers. When we don’t like the way particular schools perform, we blame the teachers and restrict their resources.

Compare this with our approach to our military: when results on the ground are not what we hoped, we think of ways to better support soldiers. We try to give them better tools, better weapons, better protection, better training. And when recruiting is down, we offer incentives.

We have a rare chance now, with many teachers near retirement, to prove we’re serious about education. The first step is to make the teaching profession more attractive to college graduates. This will take some doing.

At the moment, the average teacher’s pay is on par with that of a toll taker or bartender. Teachers make 14 percent less than professionals in other occupations that require similar levels of education. In real terms, teachers’ salaries have declined for 30 years. The average starting salary is $39,000; the average ending salary — after 25 years in the profession — is $67,000. This prices teachers out of home ownership in 32 metropolitan areas, and makes raising a family on one salary near impossible.

We Are One!

In memoriam, Martin Luther King. Stand up!

Via Digby.

Unionism, perceptions and gender

Natasha Vargas-Cooper has an insightful take in today's New York Times on an underlying gender issue in the ongoing protests of public employees and their supporters in the Midwest - one that is embedded in the current weakened position of the union movement.

"What did you do in the war, Mommy?"

WHEN a couple dozen brawny, uniformed and helmeted firefighters, led by a bagpipe player, marched through a crowd of pro-union protesters in Madison, Wis., last month, I knew, almost to a certainty, that Gov. Scott Walker had picked a fight with the wrong crew.

As the firemen assembled on the Statehouse steps, the swelling, boisterous crowd, which had raucously encircled and occupied the Capitol for days, pushing back against Governor Walker’s plan to strip public employee unions of their collective bargaining rights, all of a sudden slipped into silent reverence.

(pic via proud Dad, Marc Cooper)

While the plan exempts policemen and firemen, the first responders rallied under the oldest first principle of militant unionism: An Injury to One is an Injury to All. And the presence of these mostly white, husky, mustachioed firemen — many with soot still speckling their uniforms — had highlighted a major issue that generally goes undetected by the news media when covering labor conflicts 

In short, it’s what my old union called “the Husband Issue.”

Allow me to explain.

McCarthy's Ghost

The Madison Wisconsin Capital Times reports that the state GOP is going after U of Wisc. history professor William Cronon - who has been critical of Republican Gov. Walker's attacks on public employees and unions - requesting that his emails be made public in an attempt to pin some sort of violation of university policy on him.  Prof. Cronon was featured on "The Titanic" on Tuesday, for his New York times op-ed on GOP radicalism.

He details the GOP's attack on him for his public statements  at his aptly named Scholar as Citizen blog:  A Tactic I Hope Republicans Will Rethink: Using the Open Records Law to Intimidate Critics.

UPDATE: Krugman has a good piece on this in today's Times (3/28.)

The Radicalism of Today's Republicans

In today's NYT, William Cronon, a professor of history at University of Wisconsin-Madison, provides some historical perspective on the ideological extremism of today's "conservatives" and the destruction of the Republican Party as a responsible partner in our democracy, a moderating influence or even an authentic bastion of conservative principles:

Wisconsin’s Radical Break

NOW that a Wisconsin judge has temporarily blocked a state law that would strip public employee unions of most collective bargaining rights, it’s worth stepping back to place these events in larger historical context.

Republicans in Wisconsin are seeking to reverse civic traditions that for more than a century have been among the most celebrated achievements not just of their state, but of their own party as well.

So...uh...what do teachers make ?

"The Most Aggressive Defense of Teachers You'll Hear!"

Via Steve Benen  &  MoveOn @ jackleftown's Youtube Channel.

The Case of the $160,000 City Bus Driver...

...turns out to be a case of political desperation by a Wisconsin Republican facing recall in the wake of his attacks on public employees. Here & here - as explained by Greg Sargent/Plumline.

Winners (?) and Losers in Madison

Natasha Vargas Cooper, reporting from Madison, in The Atlantic:

"In Wisconsin, despite the biggest protests Madison has seen since the Vietnam War, there is no way getting around the basic fact: The public sector unions lost their toughest fight yet. They may have resisted mightily and sparked a national movement in opposition to Gov. Scott Walker's budget repair bill, which stripped them of most collective bargaining rights, but he was able to sign it into law Friday afternoon, nonetheless. The damage is done...

"Republican National Committee Chair Reince Priebus, the former leader of the Wisconsin GOP, proclaimed Walker's victory a win for the party as a whole. But what happened in Wisconsin wasn't that simple -- for Walker, the GOP or the unions."      

Read her full accounting of the current situation HERE.  It's not an optimistic gloss on the rebirth of Democratic activism, which is why it's a "must read" moving forward.

Fat Cat Teachers...

Contextual notes on the pressing demand for "Shared Sacrifice" from our economic elites:

In 1970, in New York City, a newly minted teacher at a public school earned about $2,000 less in salary than a starting lawyer at a prominent law firm. These days the lawyer takes home, including bonus, $115,000 more than the teacher ...   

Via Nicholas Kristof @ NYT.

State public employee pay and pensions are, on average, pretty modest.

In a Washington Post article documenting some outrageous abuses of the public employee pension system - the most egregious anecdote of which has been fixed and is no longer possible - a more significant fact is all but buried:  The average member in California of the largest public employee union, AFSCME,  "earns less than $45,000 a year and receives an annual pension of roughly $19,000." This reality flies in the face of the current demonization of public employees and attempts to destroy their collective bargaining rights by GOP Governors and their national party apparatchiks.