Archive for the ‘employment’ category
May 9, 2013
First, let me start by noting that this is not a post about the merits of the Affordable Care Act (ACA), depending on your political leanings either pejoratively or admiringly labeled “Obamacare,” it is a post about policy analysis. I love public policy analysis and I tell almost everyone who asks me (there aren’t many) that to understand the full impacts of any proposal it is far more important to understand the incentives inherent in a policy proposal than it is to understand the goals, objectives or intentions of the proposal. Businesses, just like individuals, will respond to changes in public policies according to their self-interests. In the case of the ACA, businesses wishing to avoid providing health insurance coverage to some or all employees have an incentive to keep employment levels below the employment threshold at which the ACA applies to a business (50 employees) or reduce the number of full-time employees in order to fall below the threshold.
In a prior post I noted that there was some early evidence of the effects of these incentives on retail employment (an industry with a higher percentage of workers without health insurance coverage) but that I thought more evidence was needed to evaluate any impacts from the ACA. At that time I suggested that the expiration of the payroll tax cut might be more responsible for declines in retail employment than any impacts from the ACA. I promised to follow the issue so here is some additional evidence and unfortunately it points to some negative employment impacts from the ACA. Whether this will continue and if it is does whether the negative impacts outweigh any positive impacts from the ACA is fodder for future posts. For now, the chart below shows how the average hours worked in the leisure and hospitality industry has been declining. This is an industry with the highest percentage of workers without health care coverage and also with a high percentage of employers near the threshold at which the ACA mandates apply. It is also an industry that employs large numbers of part-time workers, making it relatively easy for employers to reduce the hours worked by employees in order to have them fall below the criterion that would have them classified as full-time employees for purposes of ACA mandates. As the chart shows, the average weekly hours worked in the industry (compared to the same month of the prior year) has declined significantly since the end of 2012.
It is still to0 early to make claims about negative employment impacts from the ACA but the evidence is beginning to point to some troubling impacts. As we move toward the implementation date for the ACA any employment impacts will become clearer as employers looking to avoid mandates get closer to finalizing the employment level averages that will be used to determine their inclusion or exemption from ACA mandates. Empirically it may be too early to make a definitive call on the ACA’s employment impacts, but based on what I see as the incentives inherent in the ACA, it is just a matter of time before the call gets made.
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Categories: employment, Health Care
Tags: affordable care act, employment, impacts, Obamacare, part-time
Comments: 1 Comment
March 8, 2013
I am frequently in error but rarely in doubt, so when I am right I have to make sure someone notices. Good news was reported today on job growth nationally, as an estimated 236,000 jobs were added across the country in February. I hate to sound jaded but in each of the prior two years job growth looked to be accelerating early in the year only to experience a significant mid-year slump. For now, however, it is a positive sign. I have been especially and uncharacteristically gloomy in my characterization of NH’s economy but there was some little reported good news on that front released last week. The annual benchmark employment revisions showed that NH has 9,600 more jobs than originally estimated. I won’t get into why the revisions are necessary and can result in some significant changes in the numbers but in my very first post in this blog back in October I highlighted the disconnect between the volume of help-wanted advertising in NH and estimates of job growth in the state.
“In the first ever Trend Lines blog post I begin by asking a basic question: Could the most recent job growth picture in NH be distorted by numbers that will later be revised?”
I also suggested that growth trends in reported wages and salaries in the state were also inconsistent with estimated job growth trends. In that post and in subsequent posts (here and here) and others as well, I talked about a potential “skills gap” as a contributor to the disconnect between help-wanted ads and NH’s reported job growth. I think a “skills gap” is a contributing factor but as I argued in my first and subsequent posts - my money is on job growth being revised upward. It is nice to be right but it really doesn’t change the overall theme of NH’s economy- that it continues to under perform relative to states it typically outperforms. That was also predictable:
“…that the jobs data is wrong and will be revised upward early next year, is real, but that doesn’t mean the revisions will show NH is again outperforming its neighbors or the nation. It just means we will look less bad over the past year or so than we do right now.”
Five months later I think that still sums-up my feelings about the revisions, its good to know we have more jobs but we are still in a growth mode that is too slow. With the revised job numbers for NH the relationship between help-wanted advertising and reported job growth looks more appropriate.
The revised job numbers also are more consistent with PolEcon’s NH Leading Index which had been signalling stronger employment growth in NH than was first reported. The revised job numbers are more consistent with the signals provided by the Leading Index. That may not mean much to anyone but to me it means I won’t have to spend a lot of time re-calibrating the Index and that means a more enjoyable weekend. Enjoy yours.
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Categories: employment, Help Wanted, job growth, Leading Index, NH
Tags: employment, help-wanted, job growth, NH
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February 7, 2013
Back in October I posted about the Federal Reserve Bank of Philadelphia’s leading index for each of the 50 states. The Fed’s leading index for each state contains the same, six, state and national variables so I think they miss some of key indicators that can affect individual states but they are a great way to quickly compare the trends across states. It is also good to get a dispassionate, “outsider’s” view of the direction of every state’s (including your own) economy. Below is the latest summary of what each state’s leading index is saying about the growth prospects over the next six months.
Unfortunately, NH is again showing up in the group of states that is expected to lag in economic growth over the short-term. PolEcon’s NH Leading index contains more NH specific economic indicators than does the Philly Fed’s NH Leading Index but the two indices generally agree on the short-term direction of the NH economy. Not this time. PolEcon’s NH leading Index is signalling an uptick in the rate of NH’s employment growth. As I noted back in October, statistical tests show a stronger relationship between PolEcon’s Leading Index and the rate of NH’s employment growth than the relationship between the Philly Fed NH Index and NH’s employment growth. I wish I could say I was confident my index was going to be more accurate this time but I can’t. I do take some comfort in knowing that whenever I have had the most doubts about the predictive ability of the NH Leading Index it always seems to do the most to confirm its value.
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Categories: employment, Leading Index, NH Economy
Tags: Economy, Leading Index, NH, state
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January 16, 2013
I’ve written a couple of times (here and here) about gender equity issues in employment and unemployment. I have an interest in almost all labor market issues but on this one I have three terrific and personal reasons for my interest. One of them is a scientist in training and in a few years will be confronting the labor market issues I examine here.
My initial hypothesis was that larger businesses in NH would likely have more extensive policies and recruiting efforts that would result in a higher percentage of women being employed in larger businesses in professional, scientific and technical industries in the state. These industries include things like legal, architectural, engineering, laboratory, computer programming, accounting and scientific firms as well as veterinary services but not human medical services). As the chart below shows, that is not the case, as the smallest firms have a higher percentage of their employees who are women. These industries also have the highest percentages of employees (male or female) with at least a BA degree. Again, as the chart shows, smaller firms had the highest percentage of women among the employees with the highest levels of educational attainment.
My new hypothesis is this – I don’t think (or at least I hope) that larger firms have any preference for hiring men over women. Rather, it is that a higher percentage of the smaller firms in these industries are likely to be women owned and newer businesses started, owned, or managed by women. I think the fact that the percentage of all women employees at larger firms, who have at least a BA degree or higher is greater than it is at smaller firms suggests that larger firms don’t just hire females predominately for lower-skilled occupations. Women still represent a smaller percentage of graduates from many professional, scientific and technical programs (although that is changing) and thus present a smaller percentage of the potential workforce for many industries. For smaller prof./scientific and tech. firms that are started, owned or operated by women, female employment with the highest levels of educational attainment could, however, be expected to be higher than at larger firms.
Anyway, that’s my story and until I get more evidence, I’m sticking to it. More than just my interest as a parent, I think the issue has larger implications for policies to support gender equity and to increase the supply of highly skilled workers. It may be that promoting entrepreneurship among women is among the best approaches to both.
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Categories: Educational Attainment, employment, Entrepreneur, Gender
Tags: business size, employment, entrepreneurship, gender equity, NH
Comments: 1 Comment
January 8, 2013
Two contradictory trends are occurring in NH’s labor market and as Ricky Ricardo would say “somebody’s got some splaining to do”. I see no other hands up in the room so I will take a brief stab at it. The chart below shows that help wanted ads in NH rose modestly this year but the rate of employment growth in the state has been declining.
It is easy to rest things on, and to take things off, the top of a flat head so here are a few off the top of mine that could be influencing these trends: 1) It could be that more jobs are being advertised in NH but are for companies with multiple locations – including NH and nearby states (I think this is not likely to be having much affect), 2) advertised jobs are not being filled because there are not enough applicants companies want to hire – “the skills gap” again (I think this is significant based on conversations I’ve had with companies), 3) the job growth numbers in NH could be revised upward with the upcoming benchmark revisions (I think this is likely but it may not be as significant as I thought a few months ago).
Regular readers know I write too often about the skills gap. I like the issue because it gets at so many issues of fundamental importance to the future of NH’s and the nation’s economy – education and training, k-12 and post-secondary education, young people and their guidance and direction etc. The skills gap is most often associated with very skilled scientific and technical occupations but in NH at least, any skills gap may be more pronounced in production and skilled “blue collar” occupations. Based on the volume of help wanted advertising in the state since the recession, the demand for those occupations has increased significantly compared to management, financial, business, technical and scientific occupations.
Despite the large percentage increase in help wanted ads in production and skilled blue collar occupations, employment in industries that employ those occupations has grown little. It may be that there is a lot of ‘churning” in those industries (some businesses hiring and some contracting) resulting in little net employment gain but the anecdotal evidence (I am reluctant to rely on such evidence but it is the best we have at the moment) is that many businesses who would hire production and skilled, blue collar workers are unable to find individuals to fill their positions.
It has been a relatively recent (over the last several decades) transition for NH to a more technology intensive economy that relies less on production and skilled, blue collar labor. Once the core of the NH economy it has been a long while since NH was seen a a land of opportunity for those who worked with machines and tools (other than just computers) and once you have moved on it can be very hard to go back – even when there is a reward for doing so.
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Categories: employment, Help Wanted, job growth, Labor, NH, Skills Gap
Tags: employment growth, help-wanted, NH. economy, occupational demand, Skills gap
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January 3, 2013
I have been uncharacteristically and uncomfortably gloomy in my assessment of the NH economy lately, but I still hold out hope that New Hampshire’s job growth numbers for 2012 will be revised upward early in 2013 based on the volume of help-wanted advertising in the state and reported growth in aggregate wage and salary income in the state. Even if that doesn’t happen there are encouraging signs that job growth will accelerate. PolEcon’s NH Leading Index increased this month to a value of 13.0, down slightly from 16.7 the prior month, but it has registered its highest three-month reading since early in 2010. At least some uncertainty around the “fiscal cliff” that caused many firms to postpone hiring has been removed. The U.S. Treasury debt ceiling still needs to be raised this month and a repeat of the last debt ceiling antics could produce another big drop in business and financial market confidence, but overall, the national and NH economies appear poised to see accelerating job growth as 2013 progresses.
PolEcon’s NH Index of Leading Indicators is a diffusion index consisting of nine state and national indicators of economic activity designed to predict changes in the rate of employment growth in NH. When index scores are above zero, more of the leading indicators are moving in a positive direction and the NH economy is expanding. The Index has a strong statistical relationship with changes in NH employment, Index scores lead changes in the rate of NH employment growth by 3-6 months. Using statistical techniques, Index scores can also be converted into a probability that NH will be in a recession sometime within the subsequent six months.
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Categories: employment, job growth, Leading Index, New Hampshire, NH Economy
Tags: employment, job growth, Leading Index, NH
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January 2, 2013
It is hard to fix a problem that you don’t know you have. That seems to be the case in NH where I still hear “NH has fared better than most states since the recession.” I disagree and the U.S. Bureau of Labor Statistics is on my side. Just before Christmas the Bureau of Labor Statistics issued its monthly report on November employment and unemployment in the 50 states. Once again the news was not good for New Hampshire. Most media reports chose to report that NH’s unemployment rate dropped slightly during the month without noting that the number of jobs located in the state declined in November (John Nolan of the Foster’s Daily Democrat and Rochester Times was a notable exception).
Compared to employment in November 0f 2011, November 2012 employment in NH was lower by1,700 on a seasonally adjusted basis and lower by 2,500 on a not seasonally adjusted basis. Only five states have fewer jobs located in their state in November of 2012 than they had in November of 2011. As I have suggested before, NH’s job growth goes a long way toward explaining why the state’s housing market isn’t seeing the same recovery in prices that appears to be occurring in many other states.
I am hoping that in 2013 policymakers focus much of their debates (ideological or otherwise) on policies that strengthen the NH economy. I hope that most of those debates encourage the introduction of solid empirical evidence in support or opposition to any proposals (I tried last year but could not find any data or methodology to determine the impact that allowing pistol duels in the statehouse would have on job growth) and are absent the vitriol and ad hominems that characterized so many debates last year. Policies that can influence job growth can easily accommodate the needs of the two-party system to make the sort of ideological arguments and distinctions that they feel are needed to influence elections.
Whether job growth is slower now than in the past because employers are not willing to add additional workers (supply side arguments) or because they are not able to find enough or enough qualified workers (the human capital and “skills gap” argument) is among the most important issues to understand in setting both national and state-level economic policies. If employers are unwilling to add employees that are readily available, then the efforts to spur job growth focus more on factors affecting businesses (tax rates, regulations, costs etc.). If job growth is constrained because employers are unable to find enough or enough qualified workers to fill open positions, then the focus of efforts to spur job growth will be more effective if they look to influence demographic trends, increase the skills of the labor force, and/or better match the skills of workers to the needs of employers. In reality this is not an either or question because inadequate attention to the needs of either employers or the workforce will produce sub-optimal economic growth. I’ve tried in this blog to introduce some evidence related to the human capital argument for job growth trends and I will bring some supply side evidence in the future as well.
Ideological or not, respectful and civil or not, recent trends in NH’s job growth and the implications for future growth have to be the first and most important policy debate of 2013.
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Categories: employment, job growth, NH, NH Economy, Policy, Politics, Skills Gap
Tags: ideology, job growth, NH, policy, politics
Comments: 3 Comments
December 10, 2012
I know its a tough labor market for young people and recent college grads, but they still represented a larger portion of new hires in NH in 2011 than would be expected based on the percentage of employment by age in the state. The chart below shows the age distribution of employment in NH in 2011 along with the percentage of new hires in the state by age group. Although job growth has been slow this recovery, the chart still shows that among those who have been hired for a new job (that is the hiring that is not a “call back” of a previously laid-off worker), younger workers make up a disproportionate number of the new hires.
This could be more evidence of, as well as a subset of, the “skills gap” debate. Many employers complain that the skills that young workers and recent grads posses don’t match their needs, and this is true for many occupations, but what this data also seems to suggest is that the mismatch between the demands of employers and those seeking work among the existing workforce is even greater than that for younger workers and new entrants to the labor force. It suggests a bigger problem than just getting kids into the right majors and training programs (although that is a big part of it). It points to a larger problem of a fundamental change in the types of occupations in demand (or the skills required of the same occupations) as well as a “twist” in the labor market that results in differences in the occupational make-up of industries. It is a much more difficult , slower, and likely painful process to have the existing workforce adapt to these changes in order to increase their employment prospects than it is to begin with the next generation of workers, although both will challenge future employment and economic growth for some time.
Of course it is possible that employers just prefer younger and perhaps less expensive workers and that is what accounts for their outsized share of recent new hires. Or it could be a function of the type of industries that were hiring in 2011 (I will be examining this hypothesis). It may be more comforting to view labor market trends from those perspectives but it won’t get us any closer to taking the personal and policy actions necessary to create greater alignment between the skills of our workforce and the skills needed for a more prosperous economy.
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Categories: employment, job growth, Labor, NH Economy, Skills Gap
Tags: age, employment, job growth, NH, Skills gap
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December 5, 2012
A lot of analysts, me included, have been looking for reasons why employment growth has been slower much of this recovery. That prompts questions about whether the slow recovery from recession is the result of cyclical factors (related to swings in the business cycle) or structural factors that fundamentally and longer-term alter the ability of NH and the nation to create jobs. While some wait for cyclical factors to improve job growth, in NH there is a lot of talk about demographics, migration, and too often (by me at least) the skills gap or mismatch between job openings and the skills of job seekers. Much of the demographic story, especially concerns about NH’s ability to attract people from other states, is relevant – except perhaps for the overblown concerns about NH’s “aging” (more about that in future posts). I believe demographics and things like the skills gap play an important role in the slow recovery and more general downward trend in job growth, both before and following the recession. But today, I offer another, simpler thesis, but one that may be no less troubling. If you look at job growth trends in NH by industry, you see that since the recession, employment weakness has really been most concentrated in three sectors of the economy; construction, government, and financial services. The chart below shows job growth trends over the past several years for total non-agricultural employment in NH, as well as total employment minus construction, government, and financial services. Absent the three hardest hit sectors of the economy, job growth following the recession (until recently that is) didn’t look that much different than the recovery from the briefer, milder recession of the early part of the last decade.
I know construction, government, and financial services are important but they still represent just over 20 percent of employment in the state, so the weakness in employment isn’t as broad-based as pessimists (including me at times) suggest. But what is more troubling is that the weakness in these sectors are more structural than cyclical and thus we may be waiting for a rebound that may never occur. I don’t think that is true for construction, where at least some rebound will occur as the housing market improves, as business investment strengthens, and whenever the fiscal health of governments improve enough for infrastructure spending to pick up. But weakness in government and financial services employment is likely more structural. New financial services regulations are likely to be an impediment to job growth in that industry for some time and there is no end in site for the budgetary impediments that will likely continue to weigh on job growth in the government sector. I, and others, will continue to look at the implications of such things as demographics and skills gaps on recent and prospective job growth, but we can’t fail to recognize that sometimes answers are less complex than the questions.
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Categories: employment, job growth, NH Economy
Tags: construction, economic recovery, Financial services, government, job growth, NH, recession
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November 5, 2012
The cost of the recent recession in terms of jobs lost was great, but the longer-term cost could be far greater because of the impact the recession had on NH’s entrepreneurial economy. While small businesses are cited as being responsible for the majority of new job creation, the fact always left out of that truism is that most of the job creation by small businesses come from new businesses, and more specifically, a small number of new businesses that become “gazelles,” new businesses with the potential to grow much larger. Most small business will always be small. They start, they fail, and with a lot of churning they are the businesses with whom we most interact on a daily basis. New Hampshire and New England increasingly have relied on our economy’s ability to generate new and innovative businesses to maintain a dynamic economy, a decline in entrepreneurial activity would have significant implications for our ability to continue to do so.
Looking at data on employment by age of businesses in NH from the past decade, it is clear that while NH may have suffered less than most states during the recent recession, it is not so clear that our entrepreneurial economy did as well. The chart below shows that the recession had an especially large impact on NH’s entrepreneurs, as the the number of people employed at firms operating for three years or less declined by 34% between its peak in 2006, and 2011.
As a percentage of private employment, workers at firms three years old or has fallen from over nine percent of private employment to just over six percent. This data does not mean that 16,000 workers in firms three years old or younger actually lost their jobs. Remember, this is time series data so the firms in 2006 that were three years old or younger are not the same firms in the three year old and under category in 2011. Certainly there were substantial job losses among young firms during the recession (as well as some gains) but the data more likely suggests that the next wave of new businesses (some of whom could be expected to become “gazelles”) simply did not start or were not able to survive and grow. For how long those effects lasts should be a question for anyone wondering what to do about the slow pace of job creation in the state. It would be nice to have a control group of data from Massachusetts to examine for comparison purposes but they do not participate in the program from which these data are drawn. Recessions always take a toll on smaller and newer businesses because those businesses are often in more precarious financial positions. The data for NH do not go back earlier than 2003 so it is difficult to say whether this recession was different in its impacts on entrepreneurial activity in NH but we really should be concerned about whether the impact of the recession on entrepreneurial activity will have longer-term impacts on the NH economy.
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Categories: employment, Entrepreneur, Recession
Tags: entrepreneur, entrepreneurial, job growth, NH, recession
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