"The auto recovery, like the U.S. recovery, is built on a fragile assumption: The rich can be rich enough for the rest of us."

Derek Thompson’s latest story for the Atlantic: Overdrive

theatlantic:

Overdrive: How America’s Amazing Car Recovery Explains the U.S. Economy

There was a time, not so long ago, when cars supposedly personified the American character. Our aggression, our style, our rugged independence. In the last 30 years, the automobile has faded slightly in the American imagination, but today the car industry does, in fact, explain the American economy.
It is a surprisingly durable, fantastically productive juggernaut, whose success relies on the old, the rich, and foreign trade — and less on American workers.
To begin this story, let’s appreciate the big picture. The car economy, a small but mighty sliver of American industry, has been on a roll. Since 2009, car production has nearly doubled, accounting for between 15 and 20 percent of our whole recovery.
Read more. [Image: Reuters]


I think this is the defining paragraph: 

The amazing car comeback has not translated into equally amazing jobs. Auto manufacturing employment is up since 2009, but whereas the motor industry has accounted for 15 to 20 percent of economic growth, it’s accounted for just 2 to 3 percent of job growth. “We’re at record productivity levels,” McAlinden said. But productivity across the industry hasn’t trickled down as better pay or equally rising employment. Instead, car companies are making more with less. According to CAR figures shared with The Atlantic, total motor vehicle output has grown 75 percent faster than total industry employment.

But overall it is a great read. 

theatlantic:

Overdrive: How America’s Amazing Car Recovery Explains the U.S. Economy

There was a time, not so long ago, when cars supposedly personified the American character. Our aggression, our style, our rugged independence. In the last 30 years, the automobile has faded slightly in the American imagination, but today the car industry does, in fact, explain the American economy.

It is a surprisingly durable, fantastically productive juggernaut, whose success relies on the old, the rich, and foreign trade — and less on American workers.

To begin this story, let’s appreciate the big picture. The car economy, a small but mighty sliver of American industry, has been on a roll. Since 2009, car production has nearly doubled, accounting for between 15 and 20 percent of our whole recovery.

Read more. [Image: Reuters]

I think this is the defining paragraph: 

The amazing car comeback has not translated into equally amazing jobs. Auto manufacturing employment is up since 2009, but whereas the motor industry has accounted for 15 to 20 percent of economic growth, it’s accounted for just 2 to 3 percent of job growth. “We’re at record productivity levels,” McAlinden said. But productivity across the industry hasn’t trickled down as better pay or equally rising employment. Instead, car companies are making more with less. According to CAR figures shared with The Atlantic, total motor vehicle output has grown 75 percent faster than total industry employment.

But overall it is a great read. 

Today’s Jobs Report in tweets

Calculated Risk - Public and Private Payrolls Under Bush and Obama

A big difference between Mr. Bush’s tenure in office and Mr. Obama’s presidency has been public sector employment. The public sector grew during Mr. Bush’s term (up 1,748,000 jobs), but the public sector has declined since Obama took office (down 718,000 jobs). These job losses have mostly been at the state and local level, but they are still a significant drag on overall employment.

Another important difference: I started warning about the housing bubble in 2004, and I started this blog in January 2005 - the beginning of Mr. Bush’s 2nd term.  My focus in 2005 was on the housing bubble and coming recession.  Now - at a similar point in Mr. Obama’s tenure - I expect the economy to continue to expand, so I don’t expect a sharp decline in employment as happened at the end of Mr. Bush’s 2nd term.

Phil Izzo, WSJ:

Federal, state and local governments have shed nearly 750,000 jobs since June 2009, according to the Labor Department‘s establishment survey of employers. No other sector comes close to those job losses over the same period. Construction is in second worst place, but its 225,000 cuts are less than a third of the government reductions. To be sure, construction and other sectors performed worse during the depths of the recession, but no area has had a worse recovery.

That issue highlights how hard it will be to see the effect on the job market of the reductions in federal spending known as the sequester. It won’t be enough to look at what happens to government jobs, since many positions are indirectly financed by government spending.

Cecilia Kang of the Washington Post takes a look: 

Today’s robots can do far more than their primitive, single-task ancestors. And there is a broad debate among economists, labor experts and companies over whether the trend will add good-paying jobs to the economy by helping firms run more efficiently or simply leave human workers out in the cold.

U.S. firms have already begun deploying some of these newer robots. General Electrichas developed spiderlike robots to climb and maintain tall wind turbines. Kiva Systems, a company bought by Amazon.com, has orange ottoman-shaped robots that sweep across warehouse floors, pull products off shelves and deliver them for packaging. Some hospitals have begun employing robots that can move room to room to dispense medicines to patients or deliver the advice of a doctor who is not on site.

Many companies see such automation as the key to cutting costs and staying competitive. Sales of industrial robots rose 38 percent between 2010 and 2012 and are poised to bring in record revenue this year, according to industry analyst Dan Kara.

"Another consistent trend in January: Government employment fell by 9,000, which followed a 9,000 job loss in November and 6,000 job loss in December."

The Washington Post

(How much longer until we realize that austerity isn’t helping our fragile growth?)

Jared Bernstein notes:

Average hourly earnings were up 2.1% over past year, a bit ahead of inflation, so real wages are up a bit. …

On the other hand, the weekly earnings of middle- and lower-wage workers (blue collar in manufacturing; non-managers in services) are up only 1.2% over the past year, before accounting for inflation.  The difference in wage trends between the average and this less well-off group suggests that higher wage workers may be getting ahead more quickly than middle- and lower-wage workers.

Despite inequality’s role in the build up to the financial crash, we still haven’t addressed its structural causes. 

From the EPI blog

Rowley accepts Cohen’s conclusion that his internship was valuable but says the experience shouldn’t be limited to people like Cohen (a former media executive) and his son, who can afford to work for free. What about the kids graduating from college with $50,000 of debt, or the children of factory workers or waitresses who can’t support their grown children in New York City? Should they be denied the audition, the exposure to interesting work environments, the chance to prove themselves? 

Cohen goes on and on about how much he learned by copying litigation documents on the office copy machine. I did that job before I went to law school 35 years ago, and I learned a lot, too; but I was paid for the work, as were the other clerks. It was an audition for later employment, but first and foremost it was a job, and the law firm followed the Fair Labor Standards Act and paid us for our work.

It might be true, as Cohen predicts, that enforcing the law will mean that companies “will now be less likely to bring on interns.” Good! They will have to bring on employees and pay them to do the essential work that interns have been doing, unpaid. Everyone but the partner at the top, who will have to shell out $7.25 an hour and some employment taxes, will be better off.

Washington Post: 

At such prices, 3-D printers, once an obscure and expensive innovation, are gaining traction among businesses, with broad implications for manufacturing. Ford is putting them in the hands of every one of its engineers. NASA uses the printers to test parts that could eventually make it to space.

And pretty soon, analysts say, they will be showing up in the home office. Just a few years ago, 3-D printers were as big as industrial refrigerators and cost hundreds of thousands of dollars each. Now anyone can order one online and put it on a desk.

he online world of hackers and tech enthusiasts is buzzing about how to use such a powerful tool. Researchers and early adopters have made everything from cute figurines and jewelry to working bicycles. A lot of iPhone cases are being custom-made on 3-D printers.

Some other possibilities have been more controversial.

After the massacre at Sandy Hook Elementary School, a video proposing the use of a 3-D printer to make a copy of a gun that fires real bullets went viral on the Web. University of Texas law student Cody Wilson explained in the video that what he called the Wiki Weaponwould create the “first 3-D printable personal defense system.”

“What’s great about the Wiki Weapon is it only needs to be lethal once,” Wilson, who heads a nonprofit called Defense Distributed, says in the video. “We will have the reality of a weapons system that can be printed out from your desk. Anywhere there is a computer, there is a weapon.”