Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.
December 4, 2013 at 10:55 AM
A reader writes, under the heading: “Care to explain the reasons for the dramatic rise in the stock market indices since 1/01/13?:
Low federal minimum wage? Low minimum wage affects only a very, very small segment of all people employed in this country, and even smaller portion of the number of people casting votes for president in 2012.
Leftist’s goal is something close to equality of outcomes. Not mathematical equality, but something closer to equality of outcomes.
Are you aware of any instances where machines are being yarded-out in order to make room for more employees? Higher minimum wage advocates are complaining about symptoms, paying no attention to causes of inequality. The pickle that the (so-called) machinists are in vividly demonstrates what higher wage costs do; drive employment away. The desire for higher profits on the part of shareholders is a given, and not easily satisfied.
The pickle that the City of Detroit is in can be attributed to a few things, higher employment costs being one of them, street gangs and unbelievable violent crime rates being others. “Rent-seeking” in Detroit was and probably still is rampant. Want to be elected in Detroit? Promise a fat pension, then face no consequences when unable to deliver 30 years down the road.
The Pension Benefit Guarantee Corporation will not be required to help.
How do you like long dead liberal politicians now?
The assembly line, improved upon by Henry Ford, cut unit labor required to build an automobile by about 90%.
Cutting recruitment and training costs more than made up for increases in hourly labor rates. H. Ford was not a shining example of an altruist.
December 3, 2013 at 10:56 AM
When Heritage Financial of Olympia merged with Washington Banking, parent of Whidbey Island Bank in October, the deal was part of a much larger trend. According to an analysis of FDIC data by the Wall Street Journal, the number of banking institutions in the United States has fallen to its lowest level since at least the Great Depression.
The well-known story of the Great Recession is that the Too Big To Fail banks that did so much to cause it (and got away with it) grew larger still. Now we can see the other side of the
The number of banks peaked at more than 18,000 in the late 1980s. As of Sept. 30, there were 6,891.
According to the Journal, “The consolidation could help alleviate concerns that the abundance of U.S. banks leads to difficulties in oversight or a less-efficient financial system. Meanwhile, overall bank deposits and assets have grown, despite the drop in institutions.”
December 2, 2013 at 10:42 AM
It is too early to know how the holiday retail season turns out, but some early indicators are not good. According to the National Retail Federation, sales through the entire Black Friday weekend actually declined by 3.9 percent compared with the same period last year.
The data will be noisy until after the first of next year, but some metrics are clear.
The average American family makes less, adjusted for inflation, than it did in 1989. Although productivity has risen, wages have largely stagnated. Nearly 40 percent of workers made less than $20,000 in 2012. Older workers are increasingly left to work in the low-wage fast-food sector.
The lowest-income households have barely seen any growth in recent decades. Economic mobility, once a cornerstone of a growing middle class, has become more difficult. Even before the devastating Great Recession, the top 1 percent (and the top one-hundredth of 1 percent) had seen their share of income skyrocket.
November 29, 2013 at 10:31 AM
People who want to be citizens instead of “consumers” face a conundrum during the hyper-commercialized holiday shopping season. America consumes more than it produces, adding to greenhouse gasses through the 10,000-mile supply chain and killing jobs through the trade deficit. The temptation is to drop out.
But we want to give gifts. Not only that, but the economy is heavily dependent on consumer spending (although not, technically, 70 percent, because that includes health care expenditures).
In other words, your spending helps pay for my job and likely vice versa. Performance during the holidays can make the difference whether your favorite stores stay open or not.
Still, people can choose responsibly where their spending goes. They can shop at locally owned small businesses, or chains that pay decent wages and offer real benefits to their employees. Get on “the tubes” and do some research.
November 27, 2013 at 9:29 AM
Retailers won’t really know how the critical holiday shopping season turns out until early next year. But we can take some unscientific soundings in today’s poll:
Today’s Econ Haiku:
Has a new critic circling
A bird named Francis
November 26, 2013 at 10:16 AM
As we approach the critical holiday shopping season, retailers can bag some cautious optimism based on the following two charts:
So consumer expenditures continue to rise and after a bumpy spring and summer, consumer confidence is rising again. And, yes, those per-capita numbers include the 1 percent and you.
November 25, 2013 at 10:11 AM
Why did they do it? Many in the Puget Sound are still asking this question after the Machinists decisively rejected Boeing’s offer to build the 777X here. I’ve written about the miscalculations and misunderstandings on both sides.
But I received an email from source containing a letter that a union member sent to Boeing Commercial Airplanes chief Ray Conner in response to his open letter, which ran in newspapers, urging acceptance of the deal.
You can disagree or not, but here it is:
Dear Mr. Conner,
I am Boeing employee working under the current IAM 751 contract. I am also a third generation Boeing Employee. Growing up my (now 86 year old) grandma had a saying that has stuck with me until now. She always said, “Boeing has been good to this family.” A statement I have always believed to be true until this last contract proposal.
After World War 2, my grandfather retired from duty in the Air Force and began his career at the Boeing Company. In the 1970′s two of his sons hired on in Tooling, joining their father at Boeing until his retirement. Both sons continued on to have long careers with the company. The oldest retired a few years back and the youngest, my father, is still an active employee with 35 years at Boeing. Currently, all three of his daughters are financially supported by Boeing incomes. Along with me, my two brothers-in-law are also employed at Boeing. Two of us are IAM members and the third is an Engineer who is in fear that his job may be eliminated or moved out of state. One of my brothers-in -law has a father who is also a 30+ year IAM member. Apart from my immediate family we also have many extended family members who are current, long time Boeing employees.
November 22, 2013 at 10:33 AM
I was on the road (in the air, actually) for part of the week, so I need to play some catch up:
• My colleague Coral Garnick reported on the Pacific Marine Expo, including a new report showing that the maritime sectors have a $30 billion economic impact on Washington state. Like aerospace, software and biotech/biomedicine, this is a critical cluster.
Among its components: Passenger water transportation; boat and ship building, repair, and maintenance; maritime logistics and shipping; fishing and seafood products; and maritime support services. It is also a source of well-paying, blue-collar jobs.
It faces formidable risks. Climate change and overfishing threaten the ocean and its bounty. Members of Congress keep trying to weaken the Jones Act, which ensures some ship-building is done in America.
Closer to home, policymakers are not acting to ensure that infrastructure is maintained and built to ensure the viability of these sectors. Toxic competition between the ports of Seattle and Tacoma is not growing overall market share. Let’s not that this cluster for granted.
• Unemployment in metro Seattle and Washington ticked up last month. These reports always contain what economists call “noise,” so one month’s numbers should be approached with caution. Still, as my colleague Amy Martinez wrote, “October’s spike in joblessness, which continues a trend begun in August, suggests hiring has cooled considerably from spring and early summer.”
November 21, 2013 at 10:32 AM
By all accounts, former Washington Gov. Gary Locke was a highly effective and popular ambassador to China. As the first Chinese-American to hold the post, he received intense coverage in Chinese media.
The Chinese people loved his common touch. Photos of Locke standing in line at a Starbucks and carrying his own backpack went viral, a noticable contrast to the “princelings” that run the country and enjoy lavish lifestyles. He also cultivated a good relationship with China’s new reforming President Xi Jinping.
Locke also irritated the Communist bosses by making public Beijing’s air quality with the popular PM 2.5 air quality report and granting protection to Chongqing’s former police chief and blind activist Chen Guangcheng.
And his decision to resign and return to Seattle so he could be with his children in high school is perfectly understandable.
No ambassador can be detached from the administration whose policies he carries out. For Locke, this meant explaining to Beijing the Obama “pivot to Asia,” while also working for a healthier balance between the world’s No. 1 and No. 2 economies. With China becoming more assertive, including against U.S. allies, this can’t have been easy.
November 19, 2013 at 9:43 AM
Monday’s Washington Trade Conference drew 300 people who heard from such speakers as Scott Price, president & CEO of Walmart Asia; David Dollar, a senior fellow, and John L. Thornton of the China Center at the Brookings Institution; and William Reinsch, president of the National Foreign Trade Council.
With Washington as probably the most trade dependent state in the nation — by one measure, 40 percent of the state’s jobs rely on it — the agenda was full, including discussions of the Trans Pacific Partnership (TTP), the Transatlantic Trade and Investment Partnership (TTIP), China-U.S. relations and port competitiveness.
I am out of town and wasn’t able to attend. In an email, Eric Schinfeld, president of the Washington Council on International Trade, said:
Identifying clear, tangible steps to drive action on the trade policies that matter most to Washington employers is key to our state’s success in the global economy. By educating and energizing business, government and community leaders across the state, we can create the momentum necessary to make our state more internationally competitive and successful in the future.