Where is the US economy headed?

@okie,

Heh! Back when I was starting out, on new construction the plumber got to lay one joint of pipe in the morning. Then they turned on the water, and we had to stay ahead of it.

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@realjohnboy,

realjohnboy wrote:

Good evening to yall.
I spent 15 or so minutes wandering around Statistics Land on Google re the topic of "Union Membership by State." Here is some stuff I found.
Nationwide, 12.4% of workers belong to a union. That is down from 20.1% in 1983. I reckon some would argue that decline is attributable to unions making unsustainable demands on employers. It could also be due to the auto industry making some poor decisions re car design and putting out products that were perceived as being of inferior quality. Or it could be due to globalization of manufacturing. China, for example, killed our steel industry not only because of lower wages but also lower environmental standards. I reckon that deserves its own discussion.

The table below starts with:
1) Unemployment rates by state. Okie did not provide a source for his numbers. I stopped after the 7 in double digits
2) Union Membership by state as a % of the workforce;
3) Union Membership in the private sector by state. This was kind of interesting. The numbers in (2) include, as I read it, public sector employees (garbage collectors to teachers). Big numbers-much more than I anticipated.

So here we go, using (1) and (2) and (3) above:
Michigan: (1) 12% (2) 18.3% (3) 13.1%
South Carolina: (1) 11 (2) 3.9% (3) 2.4%
Oregon: (1) 10.8% (2) 16.6% (3) 9.0%
North Carolina: (1) 10.7% (2) 3.5% (3) 5.0% (I may have that wrong)
Rhode Island: (1) 10.5% (2) 16.5% (3) 8.7%
California: (1) 10.1% (2) 18.4% (3) 10.7%
Nevada: (1) 10.1% (2) 16.7% (3) 13.9%

I have my links for this data as being unionstats.com and bls.gov/news.release
But I don't know how to do links. Let me know if that doesn't work.

Okie, you know someone who knows someone who is in a unionized job and has been told to slow down. I know someone who is in a non-unionized job and has been told the same thing. So what does that prove?
Please look at the data above and make a coherent pitch for your argument that unemployment is tied to union membership. Thank you in advance.

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@hamburger,

As I think Foxfyre pointed out, some construction jobs by the government require union contracts, but that doesn't mean the firms are better, it only means, probably, that the government is paying alot more for the same work. From what I hear, the costs escalate.

And as soon as the other non-union company wins some contracts, he intends on going back there, as promised, because he likes the working conditions much better. This tells me that a union is no guarantee at all that people's jobs are going to be enhanced, or that they will like them better. It is up to the individual as to what they like, and nobody is forced to work anywhere if they don't like it.

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@realjohnboy,

realjohnboy wrote:

Okie, you know someone who knows someone who is in a unionized job and has been told to slow down. I know someone who is in a non-unionized job and has been told the same thing. So what does that prove?

Those two cases don't prove anything at all. You have to look at the whole package, and I am willing to wager that contracts, such as constuction of a government installation, such as a school or airport, whatever, the costs will be higher with a union contract. This is only common sense. You can do a search and find the data. When doing this, you have to try to screen out the bias - both ways, but common sense tells us that if a union cannot enhance wages and benefits much higher than prevailing market forces, then unions are essentially worthless. And in the long run, because of the law of unintended consequences, I think they are counterproductive, at least anymore.

The following site does provide some information about inflated costs in Michigan, to the taxpayers.

http://www.mackinac.org/article.aspx?ID=2385

Quote:

Please look at the data above and make a coherent pitch for your argument that unemployment is tied to union membership. Thank you in advance.

I admit this is tough to do, because of the many other factors that come into play. To name some of them, high numbers of illegal immigrants affect employment in some states, states that are heavily weighted to industries that happen to suffer the most impacts in a downturn, and tax policies of certain states. It is difficult therefore to isolate one factor and make a direct one to one comparison to unemployment, but I do believe Michigan suffering is one pretty good indicator or the unions over reaching, and essentially helping drive their businesses into the ground. They are not the only factor, but certainly one important one.

But simply use your head, and one can use the auto industry as an example, if labor costs are much lower in non-union states, the auto industry will build their plants in those states, and I think we have seen that. And on a world scale, industries will move out of the country, we all know this, and this is due not only to higher costs of all kinds here in the states, the whole package of costs, which unions have had a hand in driving up wage and benefit costs, especially in certain industries. Of course, there are other factors, including tax rates, etc., but this is all simply common sense. I am citing one link with the following introduction:

http://www.cargroup.org/pdfs/North-SouthPaper.PDF

"Introduction
Since the late 1980s, a number of high-profile automotive assembly facilities"and their associated jobs"have located in the southern portion of the United States"in a region which previously had a small automotive presence. Speculation is rampant that the automotive industry is moving south, lured by lower costs and large incentive packages. This has caused concern among the traditional automotive communities in the U.S. upper Midwest and southern Ontario that they do not have the necessary resources to compete for new automotive investment against the southern U.S. This paper examines
what factors are responsible for this shift south, and whether the northern region can stem the tide and attract new investment."

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@okie,

okie quoted :

Quote:

Speculation is rampant that the automotive industry is moving south, lured by lower costs and large incentive packages.

okie :
i'm sure you know who has to pay the "incentive packages" to these companies to entice them to relocate .
IT'S THE LOCAL TAX PAYERS WHO PAY FOR IT !
so the local taxpayers pay higher taxes to lure big corporations to their community - and when they find a better offer from some other community , they pack up and move when convenient .
is that the NEW KIND OF COMMON SENSE ?
hbg

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@okie,

That might have been me, okie, but they don't require union contracts. They merely require that they pay the prevailing union wage, and that means total compensation. So far as I know, though, they are not tightly bound to union work rules, which sometimes turn into major loses in productivity.

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@okie,

Most government contracts require bids; high bids will be tossed out. How does that make union shops more expensive?

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@hamburger,

hamburger wrote:

okie quoted :

Quote:
Speculation is rampant that the automotive industry is moving south, lured by lower costs and large incentive packages.

okie :
i'm sure you know who has to pay the "incentive packages" to these companies to entice them to relocate .
IT'S THE LOCAL TAX PAYERS WHO PAY FOR IT !
so the local taxpayers pay higher taxes to lure big corporations to their community - and when they find a better offer from some other community , they pack up and move when convenient .
is that the NEW KIND OF COMMON SENSE ?
hbg

hamburger, yes, that is one piece of the puzzle, and those kinds of favoritism, corporate bribes in a sense, that is one pet peeve of mine. Even Foxfyre disagrees with me on this, but I believe this is unethical at least, and should be unconsitutional to tax one entity more or less than another, or waive a tax for one business and not for another. If a governmental jurisdiction institutes a tax policy, it should apply equally to all businesses, as much as is practical, at least all businesses in the same sector. I know that companies like Walmart or Home Depot attempt, and in many cases were successful, to obtain waivers or special deals on property taxes, etc., just to agree to move into a town. Meanwhile, existing stores sit there and pay the same taxes they have always paid, and it is very unethical, crooked in my opinion.

I don't see a problem with states competing with other states, to have lower sales tax or property tax, or whatever, but it should be across the board within that state, or county, or city, on a reasonably permanent basis.

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@roger,

roger wrote:

That might have been me, okie, but they don't require union contracts. They merely require that they pay the prevailing union wage, and that means total compensation. So far as I know, though, they are not tightly bound to union work rules, which sometimes turn into major loses in productivity.

Essentially, it amounts to almost the same thing, roger. There is little doubt that Obama is in the hip pocket of unions, and he has to pay them off, that is part of his policy, and the policy of Democrats. Its all about the "working class, blah blah blah."

Personally, I have been very anti-union, ever since union thugs personally threatened the families of employees where one of my relatives worked one time. All the people working there, which was for a contractor maintaining jet aircraft for the Air Force, most of them liked it fine without the union, and the wages and benefits were good, but the union wanted to move in, and they pulled no punches, including threats. I believe many unions are mafia controlled, or at least used to be. It was and is a cash cow for them. Did they ever find Jimmy Hoffa?

http://www.factcheck.org/askfactcheck/did_obama_require_that_all_infrastructure_jobs.html

"Q: Did Obama require that all infrastructure jobs in the stimulus bill go to union workers?
I received this e-mail from a friend. Is it true that President Obama signed an Executive Order that gives the infrastructure jobs that are in the stimulus bill to union workers only?

President Obama quietly signs Pro-Union Executive Order

February 9, 2009

While everyone is talking about the pork laden stimulus that Obama and many Democrats in Congress are pushing, President Obama very quietly signed a pro union executive order on Friday. It ordered the use of union labor for federal construction projects. This is one of the most blatant payoffs I have ever seen.

Republican National Committee Chairman Michael Steele has made the following statement.

"President Obama's executive order will drive up the cost of government at a time when we should be doing everything possible to save taxpayer dollars. Federal contracts should go to the businesses that can offer taxpayers the best value - not just the unions who supported the Democrats' campaigns last year. Quietly signing executive orders to payback campaign backers undermines Obama's promise to change Washington. It is a disappointment for Americans hoping for more transparency and less politics as usual in Washington ."

I would have to agree with everything the chairman said. It is nothing less than a payoff to the unions who supported his campaign with both money and troops. And the fact that it was done with no media coverage shows that he once again is trying to slip one by Americans, which is anything but transparent.
A: Obama didn't set a requirement. He issued an executive order that "encourage[s] executive agencies to consider requiring" union labor for "large-scale" government contracts.

It's not often that we receive chain e-mails that actually check out, but this one, while exaggerated, is largely right. On Feb. 6, Obama issued Executive Order 13502 that encourages federal agencies to "consider requiring the use of project labor agreements in connection with large-scale construction projects in order to promote economy and efficiency in Federal procurement." A project labor agreement requires contractors and subcontractors to pay union wages and to recognize collective bargaining agreements. The order "does not require" project labor agreements, but it's reasonable to say that "encouragement" from the president is likely to carry considerable weight with federal agencies."

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Government Contracts Guide Part II: The Bidding Process
Nov. 25, 2008

Now that you have evaluated your company (see Guide to Getting Government Contracts, Part I), registered with the appropriate databases, familiarized yourself with various government programs, understand the rules and regulations and did some research as to what agencies and who in those agencies to target, you are ready to seek out a government contract.

There is one website that provides federal government agencies and departments information on vendors, and their products and services. It also provides information on contracts open for bid. That website is Federal Business Opportunities at:http://www.fedbizopps.gov. All Federal solicitations worth more than $25,000 are posted here.

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Looks like Obama is getting serious about trimming wasteful spending:

"Obama Seeks $100M Budget Trim From Cabinet
President will convene his first Cabinet meeting this morning and order his department chiefs to immediately cut a combined $100 million from their budgets"

http://www.foxnews.com/politics/first100days/2009/04/20/obama-seeks-m-cuts-cabinet-meeting/

100 million, wow, that is huge!!! Laughing

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@okie,

Ever see Bush do anything similar? NOOOOOOO!

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Some of the big banks posted profits for the 1st Q and the stock market responded by tripling the share prices in just a few weeks. Now, as in today, those same stocks are getting slammed as analysts probe deeper into the numbers.
Here is your chart for today showing a couple of things that have the guys with green eyeshades concerned.
(1) The year over year % increase in Non-Performing Assets (NPA). An NPA is a loan that meets a certain level of delinquency (pre-defined) such that its collection is in doubt. So if a bank had $1 in NPAs last year and $2 this year that would be a 100% increase.
(2) The year over year % increase in loan loss reserves. The idea is that the current quarter or year is matched with the period in which the loan's value or possibility of going bad took place.

(3) Loan Loss Reserve as a % of NPAs today.
(4) Loan Loss Reserve as a % of NPSs last year.

Ready for some numbers?

CITI: (1) 125% (2) 78% (3) 121% (4) 177%
BOA: (1) 255% (2) 95% (3) 121% (4) 203%
JPMorgan: (1) 188% (2) 135% (3) 241% (4) 271%
WellsFargo: (1) 100% (2) 267% (3) 255% (4) 134%

So here is what we could say in the case of CITI: The $ value of their NPAs rose by 177% (1) but their increase in their Loan Loss Reserves (2) only went up by 78% and as a result their Loan Loss Reserve stands at 121% of NPAs today (3) vs 177% last year.
You could say that a reserve of 177% or 121% looks pretty good. Bank analysts say 200% is a better target given the state of the economy. The banks' Loan Loss Reserves as banks try to get homeowners upright by, perhaps, restructuring the principle on mortgages. The credit card market is, in the minds of many, going to really deteriorate.

The numbers above for BOA, along with their reported earnings of $4.2B, are totally skewed due to its recent acquisition of Merrill Lynch and Countrywide. The former was responsible for a big chunk of that. The latter is having problems.
Wells Fargo, on paper at least, appears to have made progress.

Source: Fortune magazine with numbers for Wells Fargo based on some bank analysts' estimates. Wells Fargo has yet to report when Fortune reported.

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@realjohnboy,

The problem--which I do not presume to fully understand in all the nuances and possibilites but as it has been presented to me--is that the government is strongly discouraging any banks from repaying their loans; i.e. the government is strongly discouraging private ownership of the banks. The intent is for the government to have control of, and possibly, as has been suggested in the auto industry, to have their own hand picked people heading up the auto manufacturing companies and large financial institutions at least the foreseeable future.

The latest shot over the bow is government pressure to convert those stocks the government now controls from preferred stock to common stock putting the taxpayer at greater risk of losing their money, but strengthening the government's hand over the institutions.

Perhaps somebody who more fully understands the dirty little details of this can explain it?

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@Foxfyre,

You and I, Foxfyre, are (amicably, I hope) on opposite ends of the political spectrum. The "problem" that you pose above as "a dirty little secret" with the government nationalizing banks and sending in government suits to run them is, I have no doubt, something that is flying around the conservative media and blogs.
I try, Fox, to wear two different hats. In one I am a loyal Democrat and in the other I am a semi-pro or something on talking about interpreting economic data.
The government has invested billions in the banks using TARP money and taking in return preferred stock. One "dirty little secret" is that the banks are going to need more cash due to the deteriorating credit card and commericial
real estate markets. The 2nd largest mall owner went into bankruptcy last week. The banks claim they want to pay back the TARP money because of the strings attached, but their ability to do so is BS. They are going to need more money and what would be the security (preferred or common stock) is not, I believe, driven by any desire for control over management.

The government is frustrated that the TARP money did not translate into an increase in lending.
Preferred stockholders get no vote and get a fixed rate of return (say 5%). The money comes out of the cash earnings of the bank. If the bank makes a bunch of money and has a bunch of preferred stock, all the cash gets distributed to preferred shareholders and the bank has little left to lend, which was the original intent.
The idea of the government investing in common stock works like this. Unlike preferred, the bank can set a dividend-perhaps a dividend of a penny. But it gets to keep its cash profits and make loans and make money and get the economy moving. The stock market will then bid up the shares of the now profitable bank and in due course the bank might increase the dividend.

I apologize for two too long posts.

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@okie,

Sorry Okie, I'd missed your post here, but we're discussing this oh-so-newsworthy event over here

http://able2know.org/topic/131621-1

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Chrysler turns down more loans. It seems they are tired of government arm twisting that comes with the money.

http://www.foxnews.com/story/0,2933,517216,00.html

"Official: Chrysler Turned Down Loan Over Exec Pay Limits"

1 Reply

@okie,

Quote:

Chrysler turns down more loans. It seems they are tired of government arm twisting that comes with the money

I am sure that this behavior is an attempt by the failed Chrysler Corp leadership to feel all powerful and ****, but we all know that they are a failed corporation that will survive only if the Obama Administration allows them to live. They should be dead though. You should not read too much into this gamesmanship

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Another economic opinion in regard to Obama's stimulus and economic policies in the following. If I interpret this correctly, its another way of saying that redistributing wealth only bleeds the wealth producers and the reservoir of wealth dry, while it does nothing to stimulate or grow the wealth producers or wealth activities. It fits the analogy I posted more than once, weeks ago, that Obama's plan is nothing more than taking a bucket and dipping into the lake, then pouring it out around the shores and on the land, meanwhile the lake continues to evaporate and recede, because nothing is done to revitalize the streams or the springs that feed the lake.

Just because Obama's advisors have degrees does not mean they know anything. MBA's are bankrupting companies, daily, in this country, which proves a degree is worthless if you don't adhere to a few common sense policies, such as "don't spend more than you make." Now that would be miraculous if the government could do that!

http://commoditybullmarket.blogspot.com/2009/04/why-obamas-stimulus-package-is-doomed.html

"........

Not only does more debt add nothing to the GDP, in fact, it causes economic contraction, including greater unemployment. The country is eating the seed corn with the result that accumulated capital may be gone before you know it. Immediate action is absolutely necessary to stop the hemorrhage, or the patient will bleed to death.

.....

The head of the European Union and Czech prime minister Mirek Topolanek has publicly characterized president Obama's plan to spend nearly $2 trillion to push the U.S. economy out of recession as "road to hell". There is absolutely no reason to castigate Mr. Topolanek for this characterization. True, it would have been more polite and diplomatic if he had couched his comments in words to the effect that "the Obama plan was made in blissful ignorance of the marginal productivity of debt which was now negative and falling. In consequence more spending on stimulus packages would only stimulate deflation and economic contraction."

......"

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@okie,

Okie,

Quote:

Just because Obama's advisors have degrees does not mean they know anything. MBA's are bankrupting companies, daily, in this country, which proves a degree is worthless if you don't adhere to a few common sense policies, such as "don't spend more than you make." Now that would be miraculous if the government could do that!

Don't you constantly carp on how it is "investment" that creates jobs? Since "investment" is nothing but "borrowing" by the company, don't you think that your argument of not borrowing anything would kill this economy faster than anything?

Investment or borrowing is done all the time by business. It only requires a plan as to future earnings will eventually pay for today's borrowing. It doesn't have to be in 10 years or even 20. It can be much more long term than that. I can't think of a single fortune 1000 company that doesn't have debt, can you? Your argument is nothing but the usual **** you throw hoping some of it sticks.

I am surprised that you are completely opposed to the capitalist system okie after your years of claiming you are for it.

1 Reply

Where is the US economy headed?

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