Once again our daily barrage of economic injustice news is overwhelming. From lobbyist lies to interest rate swap rigging to killing workers by the hundreds to our best and brightest working jobs flipping burgers, here are some quick economic news shorts that you don't want to miss.
No Shortage of High Skilled Workers
We've proved many a time there is no skilled worker shortage in the United States. Now two top researchers proved it once again. Problem is, more skilled workers is a corporate cheap labor demand so does anyone thing Congress would listen to actual facts?
Our examination of the IT labor market, guestworker flows, and the STEM education pipeline finds consistent and clear trends suggesting that the United States has more than a sufficient supply of workers available to work in STEM occupations:
- The flow of U.S. students (citizens and permanent residents) into STEM fields has been strong over the past decade, and the number of U.S. graduates with STEM majors appears to be responsive to changes in employment levels and wages.
- For every two students that U.S. colleges graduate with STEM degrees, only one is hired into a STEM job.
- In computer and information science and in engineering, U.S. colleges graduate 50 percent more students than are hired into those fields each year; of the computer science graduates not entering the IT workforce, 32 percent say it is because IT jobs are unavailable, and 53 percent say they found better job opportunities outside of IT occupations. These responses suggest that the supply of graduates is substantially larger than the demand for them in industry.
Changes in GDP Measurement
Economist Dean Baker alerted us to major changes in how Gross Domestic Product is measured. There are more issues than Baker outlines. Patents are often put into SPVs and then parked in tax havens like the Caymans. If you don't like what the economic metrics are showing, change them?
The Bureau of Economic Analysis (BEA) will adopt a new methodology for measuring GDP this summer. The methodology will treat research and development and the creation of artistic works as forms of capital that depreciate through time rather than one-time expenditures. This will lead to an increase in measured GDP of close to 3.0 percent according to BEA's analysis.
There are three points worth making on this change. First, for you conspiracy buffs, this one has been in the works for close to two decades. The government didn't just come up with it to make President Obama look better. Go back to digging up the Real Story about the plunge in gold prices.
The second point is that the methodology for this will inevitably be very troubling. If Pfizer has a patent for a great new cancer drug we will now pick this up as an increase in the investment component of GDP. Suppose Merck develops a drug that does the exact same thing, except that it gets around Pfizer's patent. According to the new methodology this would further increase GDP.
Google Getting Censorship Requests
Google reported a huge spike in corporations and governments demanding they remove political content from their search results and sites. If you've done any in depth searches lately, you'll see Results display 1 item removed for DMCA complaint as well.
Government requests to remove content across Google products spiked sharply in the second half of 2012, particularly those that covered political content, the search giant revealed Thursday.
Between July and December 2012, Google received 2,285 government requests to remove 24,179 pieces of content, up from the 1,811 requests made regarding 18,070 during the first half of 2012.
"As we've gathered and released more data over time, it's become increasingly clear that the scope of government attempts to censor content on Google services has grown," Susan Infantino, Google's legal director, wrote in a blog post.
"In more places than ever, we've been asked by governments to remove political content that people post on our services," she said.
Jared Bernstein Pushes a Direct Jobs Program
Bernstein uses the disconnect between productivity increases and workers increasingly less share of the take, but fails as is so common, to mention globalization and outsourcing being part of the reason.
This relatively new gap between employment and productivity will only exacerbate the old gap between income and productivity unless we begin to think and act outside that box on ways to achieve full employment. Direct job creation is part of the answer.
Did you know No Compensation Executive Pay is a Tax Deduction?
By corporate tax deduction laws, shoveling riches to executives is no cost, yet a tax deduction. Tax free executive pay saved Fortune 500 companies $27 billion in taxes over three years.
How It Works: Companies Deduct Executive Compensation Costs They Never Actually Paid
Most big corporations give their executives (and sometimes other employees) options to buy the company’s stock at a favorable price in the future. When those options are exercised, corporations can take a tax deduction for the difference between what the employees pay for the stock and what it’s worth (while employees report this difference as taxable wages).
Big Data for Job Recruitment
The concept is to focus less than recruiters might on traditional talent markers — a degree from M.I.T., a previous job at Google, a recommendation from a friend or colleague — and more on simple notions: How well does the person perform? What can the person do? And can it be quantified?
The technology is the product of Gild, the 18-month-old start-up company of which Mr. Bonmassar is a co-founder. His is one of a handful of young businesses aiming to automate the discovery of talented programmers — a group that is in enormous demand. These efforts fall in the category of Big Data, using computers to gather and crunch all kinds of information to perform many tasks, whether recommending books, putting targeted ads onto Web sites or predicting health care outcomes or stock prices.
Meanwhile in Bangladesh....
Yet another sweat shop in globalization slave labor headquarters Bangladesh collapsed and killed over 300 workers. Surprise, the owners were arrested:
After an eight-story building collapsed in Bangladesh Wednesday, killing at least 300 workers, police have arrested the owners of two factories that operated within the building.
Germany Tries to Criminalize Financial Follies
Good job Germany. There is an attempt to criminalize negligent financial managers.
“BAD risk manager faces two years in jail.” That might be the headline if Germany’s draft law on ring-fencing financial risks ever hits the statute books in its present form. Among other things, the proposal would not only allow punishing those who endanger their financial institution by breaking legal banking limits, but risk managers whose negligence led to such breaches in the first place.
The desire to criminalize bad management is understandable, given the cost of such failures to the German taxpayer and the payoffs enjoyed by disgraced managers in the past.
Biggest Price Fixing Scandal Ever
Word has leaked out that the London-based firm ICAP, the world's largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.
Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It's about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.
It should surprise no one that among the players implicated in this scheme to fix the prices of interest-rate swaps are the same megabanks – including Barclays, UBS, Bank of America, JPMorgan Chase and the Royal Bank of Scotland – that serve on the Libor panel that sets global interest rates.
Citizens for Tax Justice reported that Facebook Inc. had used a single tax break, for executive stock options, to avoid paying even a dime of federal and state income taxes in 2012. Since then, CTJ has investigated the extent to which other large companies are using the same tax break. This short report presents data for 280 Fortune 500 corporations that, like Facebook, disclose a portion of the tax benefits they receive from this tax break.
Inflation Rises Higher than Wages
This is an economic statistic we want to make sure everyone sees. The BLS releases wage statistics and notice how wages have risen hardly at all while inflation is almost triple the wage increase for the same time period. Workers in the America are as usual, getting the income shaft.
Median weekly earnings of the nation's 102.6 million full-time wage and salary workers were $773 in the first quarter of 2013 (not seasonally adjusted), the U.S. Bureau of Labor Statistics reported today. This was 0.5 percent higher than a year earlier, compared with a gain of 1.7 percent in the Consumer Price Index for All Urban Consumers (CPI-U) over the same period.
Graduate From College to Work Minimum Wage
This game of monopoly has no winners. Go to College, go into massive debt, graduate, work a minimum wage job.
College-educated Americans are being thrust into poverty while increasingly finding that their degrees have no value in the work force. About 280,000 Americans with bachelor’s degrees and 37,000 with advanced degrees were working minimum-wage jobs in 2012, the Labor Department reports. The number of college-educated Americans working such jobs has risen 70 percent in the past 10 years. It is also double the number who worked minimum-wage jobs before the Great Recession.
In 2002, college graduates made up 13 percent of all hourly workers. In 2012, they made up 17.8 percent.
Astronomical Unemployment in Spain, France Worse on Record
Look what austerity brings, complete implosion of the nation.
In Spain, unemployment has jumped from February's 26.3% to a first-quarter rate of 27.2% (implying an even higher figure for March). In March 2012, it was "only" 24.1% (see source in table below).
In France, there are now 3.2 million unemployed, more than at any time since the country began keeping records in 1996. Complete EU unemployment data for March should be released in early May.