Category Archives: Unemployment

President Barack Obama!

By Peter Galuszka

President Barack Obama’s re-election and success with Virginia in Tuesday’s contest could provide  a fresh opportunity to solidify more economic recovery than what have otherwise may have happened. It could be a real chance for bipartisan progress.

Here’s my takeaway at 2:30 a.m.:

  • Virginia has again shown that it is morphing into a different kind of state. Losing some but not all power are the Old Republicans and their new iterations. Gaining power are Democrats, many of them newcomers with diverse backgrounds.
  • Bye, bye Tea Party. The anti-government, anti-spending curmudgeons of  two years ago are quickly fading in influence. Good thing. They had been a major and negative force trumping any bipartisan progress. Although Eric Cantor got re-elected, he’ll have a harder time playing obstructionist since he’ll no longer have a parade to try to race to get in front of and lead. And maybe we can give those God-awful Patrick Henry costumes to Goodwill.
  • Obamacare will not be repealed. GOP hasn’t the votes. Alleluia. Although flawed, Obamacare means that more people will be insured and health insurers won’t be able to get away with such practices as denying coverage for “pre-existing” conditions. No goofy vouchers for Medicare recipients. Not with Democrats controlling the Senate. Let’s get on with price transparency and breaking the stranglehold of Big Insurance and Big Pharma.
  • Hello manufacturing. Goodbye “Knowledge Economy.”  Obama can now solidify gains in the reviving American economy and help us once again make real things instead of just be providers of services that only help export jobs.
  • No more lying ads. We won’t have to listen to Romney  falsehoods about how Obama has a ‘War on Coal” and how he helped kill a crappy Bill’s Barbecue chain and send Jeep jobs to China.
  • Toodles, Ayn Rand. We won’t have to listen to the importance of selfishness by such faddish True Believers as Paul Ryan who was surprisingly irrelevant in the campaign. Now we can concentrate on helping Americans, not lecturing them on their irresponsible, spend thrift ways.
  • Energy. Inevitable changes will proceed, including towards cleaner natural gas, away from dirtier coal and towards renewables. Now we might start paying serious attention to greenhouse gases and make coal mines safer.
  • George Allen’s defeat means we won’t have to turn our clocks back two decades.
  • It will be harder to wage the War on Women with social conservatives trying to dictate unwanted oversight of their personal matters. Medieval advocates of “legal rape” can crawl back in their holes. It looks like Roe V. Wade is secure.
  • All in all a great night.


I want to be an underclass lover

Lay it down like a big ole’ brother

No mind who gets stuck

With the leftover

I get my F&%#

Without too much workover

Don’t care about the deficit

Don’t give a damn about the debt

’cause when it comes to lov’in

You ain’t seen noth’ yet

Ya know, the over class

They got theirs!

Henry the Eighth

And all them squares

And their deficit

Almost as big as mine

So hang on honey

Here it comes

Just a second now, we’re headin’




Are We Going Back to Selma?

By Peter Galuszka

Imagine it is Alabama in early 1965. The Southern state, like Virginia, has for decades deployed a number of ruses such as poll taxes and literacy tests to prevent U.S. citizens and state residents from voting. These people otherwise would have been qualified voters but also happened to be African-Americans whom the ruling white elite wants to keep from exercising their constitutional right. In Selma in 1965, three civil rights workers, Jimmie Lee Jackson, James Reeb and Viola Luizzo who are advocating for voter rights, are shot and killed in their car by the Ku Klux Klan.

Travel a bit farther into south Texas and find that the Lone Star State has its share of disenfranchisement devices in use to stop Mexican-Americans from voting, even though some have been legal residents from the day Texas became a state and part of the United States. In some counties, Mexican-Americans are by far the large group, which is exactly why the white elite want them not voting in strength.

And imagine, a well-meaning, white, privileged and otherwise intelligent man from these parts supporting restrictions on voting, telling people they should “get over it.”

Welcome to the future. The events in 1965 resulted in the Voters Rights Act, a landmark piece of legislation. Yet when Gov. Robert F. McDonnell signing his own weasely version of the voter identification law supported by arch conservative Republicans in the General Assembly, the Old Dominion, most of which still under federal election supervision for its tarnished past, is putting new roadblocks in front of voters.

They used to have to show a photo ID and if they didn’t have one, they’d sign an affidavit saying they were who they claimed to be. Now, their vote will be “provisional” and they will have to show up official at a later date and show the ID. Only then will their vote be counted. To make things easier, McDonnell is ordering millions of new “voter ID” cards to be issued statewide. Odd that he doesn’t mention how much this will cost since the flavor of the moment is strictly containing budget expenses.

A few points on this rather strange set of events:

  • There have been absolutely no known major scandals involving voter fraud in Virginia. So, if there’s nothing broken, why go through all the trouble to “fix” it?
  • It is clear that restricting voting is a major ambition of the Republican Party which fears that President Barack Obama may get the boost in November’s election as he did in 2008 from the poor, the minorities and the young.
  • Regarding these groups, 25 percent of African-American voters do not have valid government-issued IDs compared with 8 percent of whites, according to a study by the Brennan Center for Justice at New York University. Some 15 percent of people earning less than $35,000 a year likewise have no such ID. According to the Project Vote, about 15,000 people voted without IDs in Virginia in 2008.

Thus, Virginia’s conservative leaders and their cheerleaders are targeting what they consider to be a threatening group of voters as part of a campaign to correct a phony “wrong.” This is just another part of a sweeping socially-conservative agenda that has women, gays, dark-skinned immigrants and African-Americans in their crosshairs.

And no, I’m not going to “get over it.” I refuse to be patronizing when it comes to basic civil rights.

Virginia: Best State to Make a Living has ranked Virginia the “Best State to Make a Living” in its annual study , beating out Washington state, Texas and Illinois to snag the top spot.

The ranking considers four factors: Average Income, which increased in Virginia over the past year; Cost of Living based on ACCRA Cost of Living Index, which slightly decreased; Unemployment Rate, which decreased; and State Income Tax, which stayed the same.

Last year, Virginia ranked No. 4.

It’s refreshing to see the Old Dominion score so well, especially after the State Integrity Investigation project, in which it scored an “F” for government transparency and accountability.


¡Viva la Revolución!

Estimado Jefe!

Usted nunca debe salir de la ciudad, señor! Ahora que usted está ausente, la revolución comienza! Amados lectores de ya no ver los artículos que glorifican a los ricos y privilegiados. Vamos a ayudar a la tierra y los pobres y redistribuir los fondos de cobertura. ¡Viva la Revolución!


Goodbye Grundy! Hello, Wal-Mart

By Peter Galuszka

Hours west of Richmond by car  lies the old coal town of Grundy, lying at a confluence of the flood-prone Levisa Fork River below steep cliffs of sedimentary rock of sandstone and shale.

Grundy has been a touchstone for my various trips to the Virginia coalfields over the years. I hadn’t been that part of the woods in a while and when I drove through on Tuesday, I went into a state of shock.

Utterly gone was the pleasant old town with its rich collection of Depression-era buildings that could have been the subject of a Walker Evans photo study. Vanished was the black statute of the coal miner looking expectantly to heaven. The little movie house was gone. Everything was gone.

In its place around the dynamited sides of mountains was a multi-level Wal-Mart. I had to rub my eyes in the misty rain. An entire town had disappeared to make room for a Big Box.

To be sure, this had been a long time coming. The Levisa Fork is flood prone, in part because ruthless strip mining practices in the Southwest Virginia coalfields have ripped out vegetation that can hold back rainwater. One of the biggest floods came on April 4, 1977.

Grundy became a cause celebre among local economic development officials and U.S. bureaucrats. U.S. Rep. Rick Boucher worked out a plan in 1997 to forever change Grundy with town leaders, the U.S. Army Corps of Engineers and the Virginia Department of Transportation. Helped by $96 million in public money, VDOT bought and ripped down the old Lynwood Theater and local hardware stores and fives and dimes. The Army spent $100 million ripping out 2.4 million cubic yards of rock, enough for 68 football fields, and helped relocate rail tracks.

In all, according to a 2007 Post story, Grundy’s makeover ended up costing $196 million or $175,000 for every man, woman and child in town. But all didn’t work out according to plan. Many of the building owners, the Post reported, did not rebuild as planners hoped. They merely pocketed their money and left.

What’s left is a Wal-Mart in perhaps the most dramatic geological setting possible. The utter madness of the scene is commemorated on YouTube with a pictoral.

Even nuttier is that government officials have spent so money on Grundy when there is still so much oppressive poverty and health care needs that have infected the coalfields from the day the first coal prospector set foot on the remote and beautiful mountains of Southwest Virginia.

IG of the Day: Employment Since the Recession

Click on graph for more legible image.

This chart, found in the Commonwealth Institute’s new report, “Unemployed, Underutilized, Undone: Employment and Labor Force,” shows why the 2007-2009 recession still feels like a recession here in Virginia, even though it technically ended two years ago. In contrast to the past two economic recoveries, this business cycle truly has been a “jobless recovery.”

Among the highlights of the CI report: Unemployment in 2010 was stuck at the highest level since the early 1980s, underemployment was at the highest level in 15 years, and the drop in employment rates for Virginians with low levels of education were roughly twice the drop experienced by their better educated peers.

Digging a little deeper into CI’s report, it is somewhat disconcerting to see that the “bright spots” in Virginia employment, showing the strongest job growth between 2007 and 2011 were: (1) the federal government, (2) education and health services (both of which are experiencing unsustainable bubbles), and (3) state government. Only one private sector occupational category, professional and business services, eked out a barely detectable job gain.

The Road to Crony Capitalism

Bechtel corporate headquarters in Frisco: Rich and powerful

by James A. Bacon

Good news, bad news on the economic front. First the good news: Engineering-construction giant Bechtel Corp. will relocate 625 employees with its global operations, government services and civil business units from Frederick, Md., to Reston Town Center.

“The company was attracted to the commonwealth due to its business environment, cost, and ability to attract the best workforce to meet future growth needs, especially [information technology] and engineering employees in the area,” said Gov. Bob McDonnell in a press release announcing the move.

Oh, that and $6.5 million in state funds — a $1.5 million grant from the Governor’s Opportunity Fund to assist Fairfax County with the project and a $5 million Virginia Economic Development Incentive Grant. Previously, Bechtel had agreed to keep another 1,250 jobs in Frederick in Maryland after extracting a $9.5 million loan from that state, reports The Washington Business Journal.

Once upon a time I would have considered that good news, and I guess I still do. Bechtel’s employees are highly skilled and highly paid. (The jobs staying in Maryland pay $125,000 each on average.) The deal means more jobs, bigger tax base, a hefty multiplier effect on the local economy and a reaffirmation of Virginia’s superior business climate. All very true. But the subsidy sticks in my craw. I’m getting increasingly cynical and disillusioned with a system that dispenses favors to the rich and powerful and nothing to the small and obscure.

Here’s the other news from yesterday: Muller Martini Manufacturing, a maker of bookbinding equipment, has announced that it will close its Newport News facility, laying off 98 workers. And Berry Plastics Corp., a manufacturer of plastic bottles, will shutter its Henrico County plant, costing about 130 workers their jobs. Here we are, two years into an economic “recovery,” and it seems like more businesses are shrinking than growing. I don’t know if state or local economic development authorities tried to intervene to save those jobs (and I’m not even persuaded that it would have been a good idea to do so), but there seems to be a rank injustice that a rich and powerful company like Bechtel is getting state assistance while obscure, no-name companies don’t. Have you ever heard of Muller Martini or Berry Plastics? No, either have I. It’s a parable for our times.

Meanwhile, a quick check with the Virginia Public Access Project shows that Bechtel Infrastructure Corp., based in McLean, has donated nearly $76,000 to Political Action Committees and politicians since VPAP started keeping track in 1999. Donations from Muller Martini: zero. Donations from Berry plastics: goose egg.

Let me go way out on a limb and predict that Bechtel will be contributing more money in the future. Don’t forget, a Bechtel-led consortium is building Phase 1 of the Rail-to-Dulles project and soon will begin angling to win the contract on Phase 2. If it looks like crony capitalism and smells like crony capitalism…

The Wonk Salon, October 18-19, 2011

Dealing with Diversity in Virginia
Center for American Progress
Think tank sponsors roundtable discussion about increasing ethnic diversity in Northern Virginia.

Government Workers Are Almost as Unprepared for Retirement as the Rest of Us
Center for Retirement Research
Thanks to generous pension benefits, state and local government workers tend to be less unprepared financially for retirement than other Americans but, on average, they still fall short.

Saving the Unemployment Insurance Funds
Tax Foundation
Thirty-four states have borrowed a total of $37 billion from the federal government to pay unemployment benefits. States must begin paying interest on their balances in 2011. Good luck with that.

The Wonk Salon, October 14, 2011

Immigrant Demographic Trends in the 2000s
Brookings Institution
The foreign-born population in the United States grew by 8.8 million in the 2000s. Immigrants are somewhat more likely to live in the suburbs, to be educated, to reside here a decade or more, and to get naturalized.

Immigrant Access to Social Services
Urban Institute
Even though immigrants are more likely than native-born Americans to be poor, they enrolls in social services programs at a lower rate. Eligibility requirements vary widely across the 50 states.

The “Growth Model” of School Accountability
Education Sector
The Obama administration is pushing a new metric for rating schools: how well they improve student achievement. Growth models appear to be an idea whose time has come.

Low-Skilled Workers Take It on the Chin

Percentage change in low-skilled employment by state, 2007 to 2010/2011.

OK, I was wrong (sort of). Now I’m fessing up. So, get over it.

While the labor market has deteriorated markedly since the onset of the Great Recession, job losses for low-skilled workers have been especially devastating. And nowhere in the country (literally, nowhere, except in Tennessee) have low-skilled workers been more likely to lose jobs than in Virginia. According to the calculations of the Urban Institute’s Josh Mitchell in “Where It Really Hurts,” Virginia lost 2.7% of its jobs between 2007 and 2010/2011. But the number of low-skilled job declined 28.3%! That compares to a national average of a 9.7% decline in low-skilled jobs.

Let me be the first to say (before anyone obnoxiously points it out to me) that this data is consistent with the claim made by the Commonwealth Institute, which I dissed a couple of days back in “Virginia’s Skewed Prosperity,” that the wage gap in Virginia has been getting worse. In “Unbalanced, Unequal and Undercut,” CI argued that highly educated workers have prospered while job losses in middle-wage industries have hurt employment opportunities for middle-class Virginians.

The Urban Institute data supports CI’s assertion that employment in low wage occupations in Virginia has been clobbered and that the gap between high- and low-wage workers continues to grow. I still maintain, as I did in my review, that the statewide wage gap is exaggerated by the growth in population and incomes in Northern Virginia, thus obscuring economic dynamics within individual metropolitan areas. But I repent for saying that the CI study created “a terribly misleading impression.” Overall, CI got it right.


Virginia: A Beacon of Job Opportunity for African Americans?

Even before the recession, many Midwestern African-American communities were in distress, writes Algernon Austin with the Economic Policy Institute in “High Black Unemployment Widespread across Nation’s Metropolitan Areas.” Black unemployment was especially high in rust belt cities like Detroit, Cleveland and Milwaukee. By contrast, he notes, blacks fared relatively well in Sun Belt metro areas such as Tampa, Miami and Las Vegas.

And in which of the 31 metro areas surveyed did blacks do the very best of all? Let’s see. The Washington metro area ranked 29th in black unemployment in 2007, with a rate of 4.8%. Richmond ranked 30th, with 4.7% black unemployment. And Hampton Roads ranked 31st, or the lowest of all, with 4.1% black unemployment. Virginia metros grabbed the three lowest slots! Say what you will about Virginia’s Scrooge-like social safety net and allegedly retrograde social attitudes, but when times were good, blacks enjoyed greater employment opportunities than in the supposedly progressive states of the Midwest and Northeast.

What happened when the recession hit and unemployment soared? African-Americans were harder hit than other Americans; arguably, they were the most vulnerable because they were the least equipped with skills and education. Even so, they still were better off in Virginia than they were elsewhere in the country.

Of the 31 metro areas surveyed, Richmond ranked 28th in black unemployment, with a rate of 10.6%. Then came Washington in the 29th spot with 9.6% black unemployment. New Orleans snuck into the 30th spot. But Hampton Roads still stood out as the metro area with the lowest rate of black unemployment: 8.5%.

To some degree, low black unemployment rates in Virginia metros reflect the fact that unemployment generally is and has been lower in Virginia than elsewhere in the country. Delving a little deeper, Austin compiled one other measure of interest: the black-to-white unemployment ratio. By that measure, Virginia doesn’t score as well.

With a black-to-white unemployment ratio of 2.0 — meaning that blacks were two times more likely to be unemployed than whites — the Washington metro region ranked 13th in the country in 2010 (tied with four other regions). Richmond ranked 20th with a ratio of 1.8. But Hampton Roads was still looking good, tied with Kansas City and New Orleans with a ratio of 1.3 for the lowest black-to-white unemployment ratio in the country.

All things considered — overall economic health and a low black-to-white employment ratio — Hampton Roads would seem to be a beacon of employment opportunity for African Americans. Basket cases like Detroit and Milwaukee garner a lot of attention for African American economic hardship. Maybe someone should look at Hampton Roads as a case study in African American opportunity.


Where Are the Jobs Going to Come From?

By Peter Galuszka

The conservative dogma machine continues to whine on in full gear. There’s Texas  Gov. Rick Perry talking about it and Mitt Romney, sort of. Our own esteemed James A. Bacon Jr. is on Norm Leahy’s right-wing radio citing it chapter and verse.

What is it? The government should not be in the business of creating jobs.

OK, fine. Then who should be creating new jobs? In case you haven’t noticed, Virginia’s unemployment rate has increased from 6.1 percent to  6.3 percent in August despite the efforts of Lt. Gov Bill “The Jobs Guy” Bolling.

The answer is the private sector should be hiring. But they are not, according to a revealing story in Saturday’s Wall Street Journal. Instead of hiring, companies are collecting ever more cash to horde. It is up from $1 trillion to $2 trillion — the most in a half a century. Horded cash is up $88 billion since March, according to the Federal Reserve.

To be fair, one reason that the companies are stashing cash away is that banks aren’t lending, but the point is so very obvious. If you don’t have a recovery, banks won’t lend. And if banks don’t lend, you don’t get more jobs (at least not in the U.S.).

For those of you old enough to remember, this is a basic lesson from economics professor Paul Samuelson’s classic basic textbook. The phenomenon is called “the paradox of thrift.” It’s when people and businesses save for a downturn but since everyone does it, it makes a downturn a certainty.

Funny how you never hear about this from Bacon and his Baconauts or the GOP presidential wannabees. Our predicament, of course, is entirely Barack Obama’s fault and no, he should not create temporary jobs with another stimulus. Uh- uh. Too Keynesian.

But the Baconauts don’t exactly say how we are going to start getting jobs if the private sector they love and honor SOOO much is stashing away cash and not hiring. They can’t blame budget overspending or their other favorite themes.

This could be why a stimulus to create jobs — that’s right gang, do exactly what the Baconauts say we should not do — might finally break through this gridlock. People working even for government money on infrastructure might start spending, giving the financial sector some confidence. They start lending. Corporate America stops acting like Scrooge and spends and hires. Revenues start flowing. Sure we need to be frugal with long term public spending, but now is not the time to make it our priority.

And by the way. Three cheers for the Warren Buffet tax on the millionaires. If Obama goes and gets approval from Congress, only 0.3 percent of the country’s taxpayers would see a tax  hike. In fact, Obama should have done this months ago instead of bowing to conservative pressure and keeping on George W. Bush’s tax cuts for the rich.

As far as the millionaires, they can be sure I am crying for them. As for Obama, let’s hope he stands up to the Boehners, the Cantors and the Tea Party nuts and tells them to kiss his ^$%.

The Wonk Salon, September 12, 2011

How Hospitals Cross-Subsidize Medical Services
National Bureau of Economic Research
When hospitals face competition in their profitable medical services, surprise, surprise, profits erode and they respond by curtailing subsidizes of less profitable medical service lines.

Why Emergency Rooms Are Closing
Rand Corporation
Between 1990 and 2009, the number of emergency rooms in the United States declined by 27 percent (from 2,446 to 1,779). Why? This fact sheet doesn’t make it clear but it apparently has something to do with… losing too much money!

Inadequate Education Hurting Employment in U.S. Metro Areas
Brookings Institution
One factor holding back the recovery of employment in some metropolitan regions is a mismatch between the supply of, and demand for, educated labor. Brookings’ solution: More investment, guided by wise liberal elites, into sectors like manufacturing and the “green” economy.

IG of the Day: Virginia’s “Other” Debt

(Click on Information Graphic for more legible image.)

Every politically sentient Virginian knows that the state Constitution prohibits the state from borrowing money to cover operating expenses of government. Everyone knows that the General Assembly snuck around that restriction by under-funding payments to the Virginia Retirement System, effectively borrowing from the state employees’ pension. Less widely known is that the state, or, more exactly, the state’s unemployment fund, has borrowed $568 million from the federal government to keep up with unemployment payments.

The state has about a year and a half to pay that money back. According to the Washington Times, it may have to borrow $251 million to make those payments.

If it’s any consolation, many other states are deeply in hock as well. California is $8.5 billion in debt, Michigan $3.1 billion and New York $2.8 billion, according to the Pew Center for the States. On the other hand four states — Hawaii, Massachusetts, New Hampshire and Texas — have paid off their federal loans.

How’s that AAA bond rating looking?

— James A. Bacon