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Arizona and Many Other States Begin Legislative Process to Protect Employees Against Discrimination Based on COVID-19 Vaccine Choices (US)

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Daniel B. Pasternak

Currently pending before the Arizona legislature, Senate Bill 1648 would prohibit discrimination in the workplace (and elsewhere) against individuals who have not received or who refuse to receive a COVID-19 vaccine. As proposed, the bill would prohibit any employer from requiring a person to receive or disclose whether they have received a COVID-19 vaccine as a condition of being hired or remaining employed. The bill additionally would amend not only Arizona’s state statutes devoted to employment matters, but also would prohibit nearly any business or public space from limiting access to a person on the basis of their receipt or non-receipt of a COVID-19 vaccine to any indoor or outdoor spaces or buildings, places of public accommodation (as defined by A.R.S. § 41-1491), spaces that are owned, leased, operated, occupied, or otherwise used by a public body (as defined by A.R.S. § 39-121.01), and places that are generally open to the public.  This partisan bill, sponsored by seven Republican Senators, is not yet set for a vote.

Arizona is just one of many U.S. states that have seen legislation introduced targeted at protecting employees (and persons in general) who choose not to receive a COVID-19 vaccine. However, the protections in these bills, and to whom they apply, vary significantly from state to state. For example, some proposed bills would regulate only public employers (see below). Others don’t prohibit vaccine requirements, but impose limitations on them. For example, Montana’s proposed law allows employer vaccine mandates, but requires that any accommodations provided by an employer for individuals who refuse to obtain a vaccine due to medical or religious reasons must also be offered to any employee who refuses to become vaccinated, for any reason.

The list of states with currently pending vaccine anti-discrimination legislation, and links to the pending bills, includes: Alabama (here and here), AlaskaArkansasCaliforniaColoradoConnecticutGeorgia (public employers), IllinoisIndiana, Iowa (here and here), KansasMarylandMichiganMinnesotaMissouri (public employers), Montana (accommodations to employer mandated vaccine policy), New MexicoNorth CarolinaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermont,  (public employers), Virginia (public employers), Washington, Wisconsin (here and here).  These bills are at various states in the legislative process.

For the most part, these bills would seek to override recent federal guidance from agencies such as the U.S. Equal Employment Opportunity Commission that employers may require employees to receive a COVID-19 vaccine as a condition of employment, provided that employees may be entitled to reasonable job accommodations in the event that a disability or sincerely held religious belief prevents them from being vaccinated. What a reasonable accommodation would be in such cases could vary dramatically on an employer- and employee-specific, case-by-case basis.  Further, where allowed, when seeking proof of vaccination or administering vaccinations themselves, employers must be mindful not to violate other applicable laws prohibiting disclosure of genetic information (Genetic Information Nondisclosure Act) or improper or overly broad medical inquiries (Americans with Disabilities Act). Whether these bills, if they become state laws, may be challenged on various bases, including possible preemption by any federal law, remains to be seen.

This blog originally appeared at Employment Law Worldview. Reprinted with permission.

About the Author: Dan Pasternak works with employers to solve workplace problems. Sometimes that involves helping develop, implement and enforce effective and business-sensible employment and traditional labor relations policies and practices. Other times, it involves representing employers in high-stakes litigation matters.


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Do Your Employment References Really “Have Your Back?” Better Not Assume That Your References Will Offer a Favorable or Neutral Reference

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We’ve all heard that our former employers, when contacted for a reference, will only confirm (per company policy) employment dates and title. Right?

Wrong.

There is no guarantee that all corporate employees are aware of, or will abide be, such guidelines. Consider these verbatim comments documented by Allison & Taylor in checking employment references on behalf of job seekers:

“He had issues with his co-workers and management and is not eligible for rehire.”

“Is there a rating less than inadequate?”

“She made a good effort but was simply not able to meet our expectations.”

“I’d rather not comment – you can take that any way you like.”

“She didn’t resign from our company – she was terminated.”

“I am not allowed to say anything about this person as they were fired.”

Clearly, any prospective employer receiving such feedback on a job seeker is highly unlikely to hire them. What, then, should be your course of action if you are concerned about potential commentary from your former employer?

The first step is to confirm if you do indeed have a problem with at least one of your references. Do an honest self-assessment of your references that are most likely to be called by prospective employers. Very possibly you already have a good idea of who may be making your employment search a challenging one. And while you might be able to keep some former associates off of a prospective employer’s radar, it is unlikely that a former supervisor or HR department will be overlooked. The HR department is a traditional venue for reference checks, and HR reps of your most recent employers are almost certain to get a call from potential employers. Your former supervisors will be high on an employer’s list as well, as they know you better than HR and may also be willing to offer a more revealing profile about you.

Then, consider having a reference check(s) conducted on those business associates from your past who might be problematic. Avoid the temptation to have a friend or associate call and pose as a prospective employer – this could backfire on you, also any unfavorable input obtained in this manner would be inadmissible for legal purposes. Instead, have a reputable third party (e.g., www.allisontaylor.com) conduct these reference interviews on your behalf to best ensure that any negative input obtained can be legally addressed and neutralized.

If negative input from a reference is uncovered, what steps can you take? Your options will depend on the nature of the negative input. Where your reference’s communication was inaccurate, malicious, or wrongful you may have the ability – through an attorney – to pursue legal recourse. When a reference’s negative input is not unlawful but is nonetheless restricting your ability to secure future employment, it can sometimes be addressed through a Cease-&-Desist letter which is typically issued by your attorney to the senior management of the company where the negative reference originated, alerting the management of the negative reference’s identity and actions. Typically the very act of offering a negative reference is against corporate guidelines, which normally state that only a former employee’s title/dates of employment can be confirmed. The negative reference is cautioned by management not to offer additional comments and – out of self-interest – will usually not offer negative commentary again.

How to Set and Increase Your Freelance Writing Rates

Whether through a Cease-&-Desist letter or stronger legal measures, the prospects for neutralizing further negative input from a reference are excellent. Also, the “peace of mind” a reference verification brings to an employment candidate unsure of what their references are really saying, cannot be underestimated. If concern about your references is causing you some sleepless nights, it’s never too soon to document – and address – what they are really saying about you.

For more information on reference checking, and what to do if a negative reference is impeding your chances for a new job, please visit www.AllisonTaylor.com.

“This blog originally appeared at Allison & Taylor on December 21, 2017. Reprinted with permission.” 


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What are the best and worst states to work in during the coronavirus pandemic?

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The coronavirus pandemic has dealt blow after blow to U.S. workers. The two biggest: Unemployment is sky-high, and many of the jobs that are left are suddenly unsafe. 

But as with so many things, from minimum wage to paid sick leave to enforcement of existing laws, how bad workers have it varies dramatically from state to state. Now, you can find out how your state ranks on labor protections in the era of COVID-19, thanks to a new report from Oxfam America. Oxfam ranked states by worker protections, healthcare, and unemployment, coming up with an overall ranking that puts Washington State, New Jersey, and California at the top, and Alabama, Missouri, and Georgia at the bottom.

At $275, Alabama’s maximum unemployment benefit is only a little higher than the minimum of $240 in Massachusetts—and in Puerto Rico, the maximum is just $190. But that’s not the only way Alabama is committed to hurting working families: “Alabama has no moratorium on evictions or utilities being shut off; no mandated paid sick or family leave; and no requirements for personal protective equipment for workers. In addition, the governor issued an executive order to protect businesses and health care providers from lawsuits resulting from COVID-19.”

Oxfam America is calling on states to:

  • Improve worker protections to ensure paid sick time, paid family and medical leave programs, and childcare for all workers
  • Expand Medicaid
  • Increase unemployment payments

Regardless of what state you live in, employers are going to vary in how much they’re doing to protect workers’ safety. The AFL-CIO has a new checklist to determine how safe you are at work, with information about workplace safety—including how to organize for it.

This blog originally appeared at Daily Kos on September 7, 2020. Reprinted with permission.

About the Author: Laura Clawson has been a Daily Kos contributing editor since December 2006. Full-time staff since 2011, currently assistant managing editor.


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Unemployment drops in May to 13.3 percent as states reopen

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The rate reflects parts of the economy reopening in the wake of the coronavirus pandemic.

The unemployment rate dropped to 13.3 percent in May, amid a push for a reopening economic rally, the Bureau of Labor Statistics reported Friday.

The economy gained 2.2 million jobs last month, as states started relaxing stay-at-home orders and opening for business.

President Donald Trump, who has been prodding governors to reopen state economies, took credit for the reversal.

“Really Big Jobs Report.” Trump tweeted in reaction to the numbers. “Great going President Trump (kidding but true)!” He also announced a Friday morning press conference at the White House to discuss the report.

The unexpected jump follows a historic 14.7 percent unemployment rate in April, the highest recorded since the economic downturn of the 1930s.

Economists were bracing for an unemployment rate close to 20 percent in the May report, aligning with weekly applications for unemployment insurance climbing above 40 million in recent weeks.

The payroll company ADP reported a 2.8 million drop in May of nonfarm private payrolls earlier this week.

“The biggest payroll surprise in history, by a gigantic margin, likely is due to a wave of hidden rehiring,” Ian Shepherdson, chief economist at Pantheon Macroeconomics wrote in reaction to the number.

“Businesses which let people go in large numbers in March didn’t need to post their intention to bring people back on Indeed;” he said, “they just needed to call/text/email.”

The unexpected number likely understates the extent of the economic pain felt last month. Economists warned large numbers of people have been classifying themselves as employed but absent from work in the survey, which can artificially suppress the unemployment rate.

The figure also reflects the situation in the middle of May, which is when the agency surveys Americans to get a snapshot of the workforce.

While the unemployment rate for adult women, adult men, white workers, Hispanic workers dropped from April to May, it rose slightly for black workers to 16.8 percent.

Notably, the number of workers who say they have permanently lost their job, increased by 295,000 in May to 2.3 million.

The leisure and hospitality industry, which was battered by state stay-at-home orders and shed more than 8 million jobs in April and March, added 1.2 million jobs last month.

But even as jobs gains were seen elsewhere, employment in government continued to decline, shedding 585,000 jobs in May for a total loss of 1.5 million jobs in two months.

Most of those losses were in local government — a major employer for black workers, and one factor contributing to the black unemployment rate holding steady even as the overall rate declined.

The jobless rates for teenagers (29.9 percent) and Asians (15 percent) also saw little change from April to May.

Heidi Shierholz, former chief economist at the DOL, noted that while May’s job growth is a positive sign, the U.S. jobs level “remains in absolute crisis.”

“In May, we added 2.5 million jobs,” wrote Shierholz, who is now with the Economic Policy Institute. “But in March and April, we lost 22 million, so we are still down 19.6 million jobs.”

The damage to the economy is forecast to be long lasting. The nonpartisan CBO estimates that unemployment won’t even near pre-pandemic levels — which was at 3.5 percent in February — by the end of next year.

The May jobs report lands amid a debate in Washington over whether to extend the unemployment benefit program created to help jobless Americans weather the pandemic.

With more than 40 million unemployment claims filed throughout the pandemic, Republicans argue that an additional $600 weekly unemployment payment authorized in a March assistance bill will discourage Americans from getting back to work and stymie the recovery.

But, former congressional economists from both Republican and Democratic administrations warned lawmakers earlier this week that more aid may be needed.

A failure to extend the benefits will “hinder our ability to recover,” said Douglas Elmendorf, who led CBO from 2009 to 2015. He said benefits should stay in place until the national jobless rate falls back down to 6 percent.

This blog originally appeared at Politico on June 5, 2020. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter. Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. Her work has been published by The Washington Post and the Associated Press, among other outlets.


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Economy Gains 136,000 Jobs in September; Unemployment Declines to 3.5%

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The U.S. economy gained 136,000 jobs in September, and the unemployment rate declined to 3.5%, according to figures released this morning by the U.S. Bureau of Labor Statistics.

In response to the September job numbers, AFL-CIO Chief Economist William Spriggs said: “It is surprising the rate of job creation has slowed, and the rate of labor force participation has stayed almost constant but this lower job growth is sufficient to keep the share of people with jobs rising slightly, and unemployment falling. It clearly reflects the slowing growth rate of the American workforce as the Baby Boom ages.” He also tweeted:

 

 

 

 

 

Last month’s biggest job gains were in health care (39,000), professional and business services (34,000), government (22,000), and transportation and warehousing (16,000). Employment declined in retail trade (-11,000). Employment in other major industries, including mining, construction, manufacturing, wholesale trade, information, financial activities, and leisure and hospitality, showed little change over the month.

Among the major worker groups, the unemployment rates for teenagers (12.5%), blacks (5.5%), Hispanics (3.9%), adult men (3.2%), whites (3.4%), adult women (3.1%) and Asians (2.5%) showed little or no change in September.

The number of long-term unemployed (those jobless for 27 weeks or more) rose in September and accounted for 22.7% of the unemployed.

This blog was originally published by the AFL-CIO on October 4, 2019. Reprinted with permission. 

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist. Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.


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The Future of U.S. Jobs Looks Bleak. Unions Are the Answer.

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Image result for heidi shierholzWe were just handed a wake-up call. Newly released numbers from the U.S. Bureau of Labor Statistics project that six of the ten occupations expected to have the most total job growth over the next decade pay less than $27,000 a year. Three of those six are low-paying jobs in the restaurant industry. Even more striking is the concentration of low-paid healthcare jobs at the top of the list, with personal care aides at number one and home health aides at number four. These jobs are disproportionately held by women and by people of color.

The low earnings in these fast-growing jobs provide a grim glimpse into what the future of work in the United States will look like if nothing changes. But this future is not ordained. These jobs pay poorly  because we allow it. Weak labor standards (such as a low federal minimum wage and weak overtime protections), weak enforcement of these standards, and labor law that does a poor job of protecting workers’ right to unionize, all mean employers have the power to suppress workers’ wages. This will continue to be the case unless we, as a society, make different choices—choices that empower workers and give them more power in their workplaces.

For those who might respond that these low-paid workers should just go to college to get a decent-paying job, the new BLS data has an answer for you. In 2028, only 27.2 percent of jobs will be in occupations where a college degree (or more) is typically required. In other words, even in nine years, a college degree won’t actually be required for a huge share of the jobs employers will need workers to do. If everyone gets a college degree, those non-college jobs will simply be filled by college grads. Put yet another way, college cannot solve this. Unless you’re willing to write off almost three-quarters of the labor market as undeserving of a decent job, we need another approach. We need to make sure even those 72.8 percent of jobs that don’t require a college degree are good jobs.

The good news is that we know how to do that. We must implement strong labor standards, strong enforcement of those standards, and reform labor law so that workers who want to join a union are able to do so. As we think about these different choices for our future, it’s worth noting that manufacturing jobs weren’t always good jobs—in fact, they were often terrible, and dangerous. Unionization changed that. Unionization could do that for the fast-growing jobs of the future, too.

This article was originally published at In These Times on September 5, 2019. Reprinted with permission.

About the Author: Heidi Shierholz is Senior Economist and Director of Policy at the Economic Policy Institute. From 2014 to 2017, she served the Obama administration as chief economist at the Department of Labor.

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A Better Trade Deal: The Working People Weekly List

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Here’s the latest edition of the Working People Weekly List.

Strive for a Better Trade Deal: “The North American Free Trade Agreement has been nothing short of a disaster for working people. For a quarter-century, Michiganians have watched as corporations shuttered plants, raided pensions and steadily eroded communities that had come to embody the promise of the American Dream. NAFTA is a disaster. But it was no accident. Politicians and corporate executives saw trade as a way to further tilt the economy in their favor. They sold out jobs and livelihoods here at home and sacrificed workers’ rights abroad. Nothing was off limits so long as they could sniff out fatter profit margins.”

Passaic County Central Labor Council Encourages Education with Awards for High Schoolers: “Last night I was a part of something so truly amazing I am still having a hard time putting it into words. And for those of you that know me, words are usually my thing. There is so much that I am grateful for and want to share. It was an incredible night and to me, it was more than 100 years in the making.”

Save Our VA!: What Working People Are Doing This Week: “Welcome to our regular feature, a look at what the various AFL-CIO unions and other working family organizations are doing across the country and beyond. The labor movement is big and active—here’s a look at the broad range of activities we’re engaged in this week.”

‘State of the Unions’ Podcast: Union Proud: “On the latest episode of ‘State of the Unions,’ Julie and Tim talked with Pride At Work Executive Director Jerame Davis as the AFL-CIO constituency group celebrates its 25th anniversary. They discussed the progress made by LGBTQ working people over the past quarter-century and the work still left to be done.”

Governor Murphy Signs ‘Panic Button’ Bill to Protect Hotel Workers from Assaults, Harassment: “Hundreds of hotel workers, union leaders and elected officials gathered at Harrah’s Resort in Atlantic City today to witness the signing of a bill requiring hotels to equip certain employees with ‘panic buttons’ for their protection against inappropriate conduct by guests.”

Pride Month Profiles: Irene Soloway: “For Pride Month, the AFL-CIO is spotlighting various LGBTQ Americans who have worked and continue to work at the intersection of civil and labor rights. Our first profile this year is Irene Soloway.”

Stop the War on Working People: In the States Roundup: “It’s time once again to take a look at the ways working people are making progress in the states.”

Get to Know the AFL-CIO’s Affiliates: “Throughout the year, we’ve been profiling each of our affiliates. Let’s take a look back at the profiles we’ve already published.”

Get to Know AFL-CIO’s Affiliates: Fire Fighters: “Next up in our series, which takes a deeper look at each of our affiliates, is the Fire Fighters.”

The TWU Celebrates Its 20th Organizing Victory!: “The TWU organizing machine is in full swing. Under this new leadership, the Transport Workers union has just won our 20th new worker organizing drive. We continue to grow and thrive across the entire transport sector. Since 2017, our membership has increased from 137,000 to 151,000.”

Economy Gains 75,000 Jobs in May; Unemployment Steady at 3.6%: “The U.S. economy gained 75,000 jobs in May, and the unemployment rate remained at 3.6%, according to figures released this morning by the U.S. Bureau of Labor Statistics. Wage growth of 3.1% was lower than last month’s 3.4% and, a downward revision of 75,000 for the job numbers for March and April signals that the Federal Reserve’s Open Market Committee needs to inch down interest rates.”

AFL-CIO President Hosts NAFTA Town Halls in Michigan, Ohio, Pennsylvania: “The president of the nation’s largest labor union announced Tuesday that he will hold a series of town halls about ‘union members’ struggles under NAFTA, and what working people want to see from the administration’s proposed USMCA [United States-Mexico-Canada Agreement].’ The AFL-CIO’s Richard Trumka will travel to Pennsylvania, Ohio and Michigan over the course of three days in mid-June to speak with union members as the President Trump administration pushes Congress to ratify his replacement for the much-maligned North American Free Trade Agreement.”

This blog was originally published by the AFL-CIO on June 18, 2019. Reprinted with permission. 

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist. Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.


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Renewable industry employed 11 million people in 2018

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The number of workers employed by the renewable energy industry keeps growing. In 2018, at least 11 million people around the world held jobs across the renewables sector, from manufacturing and trading to installation.

According to the sixth annual jobs report by the International Renewable Energy Agency, the majority of these jobs are concentrated in China, the European Union, Brazil, and the United States.

The figures show a steady increase over the years. In 2017, there were 10.3 million jobs. This was up from 9.8 million in 2016 and 8.1 million in 2015.

This growth comes at the same time as countries are setting clean energy generation records. The U.K. recently went at least 10 days without generating any coal power, while last month in the U.S. renewable energy generation surpassed coal generation for the first time in history.

11 million people were employed in the renewables industry in 2018. Credit: IRENA.
11 MILLION PEOPLE WERE EMPLOYED IN THE RENEWABLES INDUSTRY IN 2018. CREDIT: IRENA.

In the United States, the number of people working in renewables is just under the amount employed by the fossil fuel industry. Last year saw a slight uptick in these jobs, with just over 1.1 million people employed in petroleum fuels, natural gas, coal, and biomass across the country.

According to the IRENA report, solar power remains the top employer within the renewables industry, providing 3.6 million jobs last year, accounting for a third of the entire industry’s workflow. This is in part due to expansion in India and Southeast Asia as well as Brazil. China, however, remains the leading solar employer, representing 61% of all jobs in 2018.

Meanwhile, 2.1 million people worked in the biofuel industry, another 2.1 million jobs were in hydropower, and wind employed 1.2 million people.

A third of all renewable jobs globally, the report states, are held by women. This is compared to a 22% average in the oil and gas industry. However, previous reports have shown that at least in the solar industry in the United States, the majority of jobs still go white men.

President Donald Trump has repeatedly said that tackling climate change means losing jobs. But as this report shows, in fact the opposite is true.

The findings in IRENA’s latest report support a study released last December by the International Labour Review which found that accelerating the transition to clean energy could add 24 million jobs globally by 2030.

In a press statement Thursday, Francesco La Camera, the director-general of IRENA, said countries are investing in renewables not just because of climate concerns, but also because it makes economic sense.

“Beyond climate goals,” he said, “governments are prioritizing renewables as a driver of low-carbon economic growth in recognition of the numerous employment opportunities created by the transition to renewables.”

This article was originally published at AFL-CIO on June 13, 2019. Reprinted with permission.

About the Author: Kyla Mandel is the editor for the climate team. Her work has appeared in National Geographic, Mother Jones, and Vice. She has a master’s degree from Columbia University’s Graduate School of Journalism, specializing in science, health, and environment reporting. You can reach her at kmandel@thinkprogress.org, or on Twitter at .

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Economy Gains 75,000 Jobs in May; Unemployment Steady at 3.6%

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The U.S. economy gained 75,000 jobs in May, and the unemployment rate remained at 3.6%, according to figures released this morning by the U.S. Bureau of Labor Statistics. Wage growth of 3.1% was lower than last month’s 3.4% and, a downward revision of 75,000 for the job numbers for March and April signals that the Federal Reserve’s Open Market Committee needs to inch down interest rates.

In response to the May job numbers, AFL-CIO Chief Economist William Spriggs tweeted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

View image on Twitter

Last month’s biggest job gains were in professional and business services (33,000), health care (16,000) and construction (4,000). Employment in other major industries, including mining, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government, showed little change over the month.

Among the major worker groups, the unemployment rates fell for blacks (6.2%). The unemployment rates for teenagers (12.7%), Hispanics (4.2%), adult men (3.3%), whites (3.3%), adult women (3.2%) and Asians (2.5%) showed little or no change in May.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed in May and accounted for 22.4% of the unemployed.

This blog was originally published by the AFL-CIO on June 7, 2019. Reprinted with permission. 

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist. Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.


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Why Has the U.S. Economy Been Doing So Well?

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This question immediately invites a couple of additional questions: What does it mean to say the economy has been “doing so well”? And: Has the U.S. economy really been doing so well?

Long and Slow

The most widely used measure of how well an economy is doing is the growth of gross domestic product (GDP). On the one hand, GDP has been growing for an unusually long time. Since the economic expansion began in June of 2009, it has continued for 118 months, as of April 2019. If the expansion continues into the summer, it will surpass the longest expansion on record, which lasted for 120 months in the 1990s.

On the other hand, it has been an historically slow expansion, with GDP averaging about 2.24% per year. In the two years since Trump took office, GDP grew 2.22% in 2017 and 2.86% in 2018, the latter almost as fast as the 2.88% in 2015. This is quite slow compared to the 3.6% rate in the 1990s, and the 4.8% rate in the 106-month expansion of the 1960s. (All figures are adjusted for inflation.) It is remarkable that, in spite of this comparison with the rates of growth in other long expansions, media reports frequently refer to the economy as “roaring” or “sizzling.”

The employment situation also has its positive and negative aspects. On the one hand, the unemployment rate has fallen almost steadily since its 2009 peak at 10% during the Great Recession. And the rate has been at the historically unusual rate of less than 4% for the past year. Relatively few people who want jobs are unable to get them. On the other hand, in spite of the low unemployment rate, wages have risen quite slowly. Between mid-2009 and today, the average hourly rate for all private employees on private payrolls has gone up by only slightly over 4%; about half of that increase has come in the last two years.

Even with many more people employed than at the time of the Great Recession, the very slow increase in wages has meant a rise in income inequality. In 2007, the average income of households in the top 5% was 25 times as great as the average income of households in the bottom 20%. By 2017, the average income in the top 5% was 29 times that in the bottom 20%. (These figures are for pre-tax income. The after tax distribution was slightly less unequal, but changed in the same way. Moreover, the tax cut at the end of 2017 surely has made the after-tax distribution of income more unequal.)

Perhaps the combination of the slow increase of GDP and the rising income inequality can be summarized as: The economy is doing well, but the people aren’t.

What Keeps the GDP Growing?

In the spring of 2019 it appears that the growth of GDP is slowing. Still, even if the economy tanks soon, the current expansion will be the longest on record. A record requires some explanation. Part of the explanation, ironically, is that the expansion has been so long because it has been so slow. Because growth was slow and the unemployment rate, while falling, came down slowly, wages have risen very slowly. This limited the extent to which wage costs were cutting into firms’ profits.

Another factor, also easing cost pressures on profits, was that commodity prices fell and remained low—that is, prices of basic raw materials, everything from copper and oil to soy beans and corn. In 2017, the Bloomberg index of commodity prices was only 43% of its 2011 peak. While it has gone up and down in recent months, at the beginning of April 2019 the index was still only 46% of its 2011 high. These price changes were partly affected by the large increase of U.S. production of oil, but also by the slowdown in the growth of demand in the United States, relative stagnation in Europe, and even weakening of the Chinese economy. Still another factor keeping businesses’ costs down and the recovery growing, however slowly, was the low interest rate policy of the U.S. Federal Reserve. From the Great Recession until 2018, the real interest rate at which banks could borrow was effectively zero, or even negative. (The “real” interest rate is the nominal rate less the anticipated inflation rate.)

These factors affecting firms’ costs kept the economy growing. However, the government provided only limited stimulus to demand, so the growth has been slow. The federal government provided some stimulus in the American Recovery and Reinvestment Act of early 2009. The Act did help boost the economy out of the recession, but was neither large enough nor lasting enough to sustain strong growth in subsequent years.

Now and Going Forward

The large tax cuts put in place by the Republicans at the end of 2017 do appear to have had some stimulatory impact, as people spent the gain they received. But the tax cut greatly favored the very rich, and the rich tend not to spend at a high rate. So the growth impact was limited. Also, while the Republicans promised that the tax cut for corporations would lead to a surge of investment, the surge never materialized. Instead, major corporations used their windfalls from the tax cut to buy back large amounts of their stock, an action which enhanced the incomes of their executives and other stockholders, but has had created no lasting stimulus for the overall economy.

Then there is the developing trade war with China. All indications are that this conflict will not be resolved soon and will have a negative impact on economic growth—not only on the U.S. and China, but possibly on the global economy.

We are left, then, in early 2019, with an impending economic slowdown of an already slowly growing economy. While many things can happen in the coming months, it is unlikely that a year from now anyone will be asking, “Why has the U.S. economy been doing so well?”

 is professor emeritus at UMass Boston and a Dollars & Sense Associate.

 Arthur MacEwan and John Miller, “The U.S. Economy: What is Going On?” New Labor Forum, Vol. 27, Issue 2, Spring 2018; Census Bureau, “Income and Poverty in the United States: 2017” (census.gov); Bureau of Economic Analysis, “National Income and Product Accounts” (bea.gov); Investing.com, “Bloomberg Commodity Historical Data” (investing.com); Bureau of Labor Statistics, “Real Earnings Archived” (bls.gov).

This article originally appeared at dollarsandsense.org on May 30, 2019. Reprinted with permission.

 is professor emeritus of economics at UMass-Boston and a Dollars & Sense Associate.


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