Brewtown Gumshoe: September 2016

Tuesday, September 20, 2016

In the piece written by Daniel Bice (“John Doe leak offers insights”), a leaked document (email) has Baas discussing making up concerns about voter fraud in an effort to stir up the Republican base immediately after then-Supreme Court Justice David Prosser barely squeaked by challenger Joanne Kloppenburg in April 2011.

In the April 6, 2011 email Baas states: “Do we need to start messaging ‘widespread reports of election fraud’ so we are positively set up for the recount regardless of the final number? I obviously think we should.”

Scott Walker Confronts Alarming New Allegations In Wisconsin

Gov. Scott Walker and the GOP-controlled Legislature approved a measure aimed at retroactively shielding paint makers from liability after a billionaire owner of a lead producer contributed $750,000 to a political group that provided crucial support to Walker and Republicans in recall elections, according to a report released Wednesday.

Citing leaked documents gathered during a now-shuttered investigation into the governor’s campaign, the Guardian U.S., an arm of the British newspaper, reported that Harold Simmons, owner of NL Industries, a producer of the lead formerly used in paint, made three donations totaling $750,000 to the Wisconsin Club for Growth between April 2011 and January 2012.

Scott Walker Put Wisconsin Up For Sale

Among the documents are several court filings from the case, as well as hundreds of pages of email exchanges obtained by the prosecutors under subpoena. The emails involve conversations concerning Walker, his top aides, conservative lobbyists, and leading Republican figures such as Karl Rove and the chair of the Republican National Committee, Reince Priebus. Trump also appears in the files, making a donation of $15,000 following a personal visit from Walker to the Republican nominee's Fifth Avenue headquarters. In addition to Trump, many of the most powerful and wealthy rightwing figures in the nation crop up in the files: from Home Depot co-founder Ken Langone, hedge-fund manager Paul Singer and Las Vegas casino giant Sheldon Adelson, to magnate Carl Icahn. "I got $1m from John Menard today," Walker says in one email, referring to the billionaire owner of the home improvement chain Menards.

Walker Wants To Start New Projects, Delay Others

In a series of four events that began alongside I-39/90 south of Madison, Walker plunged ahead with his no-new-gas-tax pledge, betting his next budget on his belief that voters prefer delays on some major projects to pennies more at the pump per gallon.

GOP Operatives Discussed Ginning Up 'Voter Fraud' Reports

The mining firm Gogebic Taconite secretly donated more than $1.2 million to two conservative political groups in 2011 and 2012.

The Journal Sentinel had previously reported that Gogebic Taconite had given $700,000 to Wisconsin Club for Growth, a pro-Walker group then headed by one of his campaign advisers. After that contribution, the GOP-controlled Legislature and Walker approved legislation aimed at streamlining regulations for an iron ore mine in northern Wisconsin.

But the figure actually turns out to be higher. According to one of the John Doe records, the mining firm gave at least $930,000 to Wisconsin Club for Growth and another $300,000 to the Wisconsin Manufacturers & Commerce -Issues Mobilization Inc. — another conservative dark money group — during 2011-'12.

Republican Wisconsin senator disputes 'pay-to-play' allegation regarding lead paint vote

In a statement, Shilling said that both Olsen and Harsdorf used their positions on the committee "to push through controversial changes in 2013 that shielded lead paint manufacturers after receiving secret financial help in their 2011 campaigns."

"We knew Gov. Walker was at the center of this ‘criminal scheme’ to coordinate efforts with dark money special interest groups," Shilling said in a statement. "What we didn’t know was how closely Senate Republicans worked with these special interests and how favors were doled out to lead paint manufacturers that bankrolled these secret campaign efforts. These new documents clearly highlight a disturbing pay-to-play scheme between out-of-state lead paint manufacturers and Senate Republicans."

Because Scott Walker Asked

Scott Walker was under pressure. It was September 2011, and earlier that year the first-term governor had turned himself into the poster boy of hardline Republican politics by passing the notorious anti-union measure Act 10, stripping public sector unions of collective bargaining rights.

Now he was under attack himself, pursued by progressive groups who planned revenge by forcing him into a recall election. His job was on the line.

He asked his main fundraiser, Kate Doner, to write him a briefing note on how they could raise enough money to win the election. At 6.39am on a Wednesday, she fired off an email to Walker and his top advisers flagged “red”.

“Gentlemen,” she began. “Here are my quick thoughts on raising money for Walker’s possible recall efforts.”

Her advice was bold and to the point. “Corporations,” she said. “Go heavy after them to give.” She continued: “Take Koch’s money. Get on a plane to Vegas and sit down with Sheldon Adelson. Ask for $1m now.”

Her advice must have hit a sweet spot, because money was soon pouring in from big corporations and mega-wealthy individuals from across the nation. A few months after the memo, Adelson, a Las Vegas casino magnate who Forbes estimates has a personal fortune of $26bn, was to wire a donation of $200,000 for the cause.

Friday, September 16, 2016

Americans Got Raise Last Year For First Time Since 2007

Americans Got Raise Last Year for First Time Since 2007

In a long-awaited sign that middle-class Americans are finally seeing real economic gains, U.S. households got a raise last year after seven years of stagnant incomes. Rising pay also lifted the poorest households, cutting poverty by the sharpest amount in nearly a half-century.

Higher minimum wages in many states and tougher competition among businesses to fill jobs pushed up pay, while low inflation made those paychecks stretch further. The figures show that the growing economy is finally benefiting a greater share of American households...

Still, median incomes remain 1.6 below the $57,423 reached in 2007. The median is the point where half of households fall below and half are above...

Even so, it follows years of tepid pay gains that contributed to widespread political turmoil, driving insurgent presidential candidacies from GOP nominee Donald Trump and Sen. Bernie Sanders. Median household income remains 2.4 percent below the peak it reached in 1999.

Good news, but no need for policy-makers to get carried away. The Fed doesn't need to raise interest rates just yet. And, with income inequality still near record highs, there's plenty of room for much more wage-growth below the top 1 percent.

Saturday, September 10, 2016

Pay More

Dr. Ed Yardeni, President and Chief Investment Strategist of Yardeni Research, Inc., provided a summation of the latest U.S. employment findings:

Plenty of jobs available. In August’s consumer confidence survey, the Conference Board found that the percentage of respondents who said that jobs are plentiful rose to 26.0%, the highest since August 2007. The percentage saying that jobs are hard to get was 23.4%, near recent cyclical lows, and consistent with the cyclical low in the unemployment rate.

Record job openings. It’s actually somewhat surprising that nearly a quarter of respondents still say that jobs are hard to get given that job openings are at a record high. Perhaps many workers simply lack the skills required by the available jobs.

Unfilled positions hard to fill. NFIB’s August survey also reported the following litany of complaints by small business owners about the labor market: “Fifty-three percent reported hiring or trying to hire (down 3 points), but 46 percent reported few or no qualified applicants for the positions they were trying to fill. Fourteen percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem. This issue ranks third out of nine major issues listed. Twenty-six percent of all owners reported job openings they could not fill in the current period, down 3 points from, the highest reading in this recovery.”

Business owners, especially in our hyper-politicized environment, have been claiming there aren't any skilled workers to be found.

One caveat from Yardeni's findings:

Why aren’t wages rising more rapidly? There are a few explanations for the slow pace of wage gains. One possibility is that high-wage Baby Boomers are retiring and more jobs are going to low-wage Millennials. Workers may be afraid to push for big raises, fearing that that would provide an even greater incentive to employers to replace them with automation, robotics, and artificial intelligence. Since the Trauma of 2008, corporate managements have been obsessed with keeping a lid on their costs and maintaining high profit margins.

Although Yardeni mentions the lack of wage growth, he really doesn't give that factor its proper due. Which is sad because its the crucial point in this discussion. If demand is high and supply is low, wages should rise. That's basic economics.

Owners can't have it both ways - claiming they have all these positions to fill, yet they can't find anyone, while also being unwilling to increase wages to attract workers. If they are such astute businessmen, they should understand basic economics.

As Barry Ritholtz wrote, Having Trouble Hiring? Try Paying More.

None of this means there is never some frictional or structural unemployment, where skilled workers for a certain industry are in short supply. But, again, this is solved by increasing wages.

For Further Reading:
Shortage of Skills or Abundance of Excuses?
Skills Shortage Sham
Training, Skills, & Other Fairy Tales
The Zombie Skills Gap Meme That Won't Die
Low Wages, Not Skills Mismatch

Why Wages Are Not Returning as Job Growth Increases

Wage 'growth' continues to go nowhere
Wage Growth Is Weak. Inflation-Adjusted Wage Growth Is Much Healthier

Weekend Reading

Why Financial Advisers Hate Elizabeth Warren
Ask Colorado Whether Infrastructure Spending Works
Excess Management Is Costing The U.S. $3 Trillion Per Year
Taking Stock: Income Inequality and the Stock Market
The States With The Biggest Obamacare Woes Spent Years Undermining The Law
Why Companies Are Moving Back Downtown
Affluent and Black, and Still Trapped By Segregation
One Big Reason For Stagnant Wages and Rising Inequality
Workplace Wellness Programs Are A Sham

Wisconsin Ranks 33rd In Job Creation

Wisconsin ranks 33rd in job creation

Wisconsin gained 37,166 private-sector jobs in the 12 months from March 2015 through March 2016, a 1.58% increase that ranks the state 33rd among the 50 states in the pace of job creation during that period.

Wisconsin continued to trail the national rate of job creation, as it has since July 2011. The United States created private-sector jobs at a rate of 2.1% in the latest 12-month period, according to the data from the U.S. Bureau of Labor Statistics. Wisconsin ranked fourth among its Midwest peers, ahead of Minnesota, Illinois and Iowa, but behind Michigan, Indiana and Ohio.

Economists consider Wednesday’s job creation figures, known as the Quarterly Census of Employment and Wages, to be the most credible and comprehensive available. The census report breaks out data for the nation as a whole as well as each of the 50 states. It tracks the economy in rolling 12-month increments, measured every three months.

The quarterly data are based on a census of 96% of the nation’s employers in the public and private sectors. That makes the figures far more reliable than monthly jobs data, which are based on a sample of only about 3% of employers, leaving monthly estimates prone to large margins of error.

Sunday, September 4, 2016

Decline of Unions Has Hurt All Workers

Decline of unions has hurt all workers

The steep decline in union membership in recent decades has had an outsize effect on the American workforce, tamping down wage increases for nonunion workers, a new study says.

Average weekly earnings for nonunion private-sector male workers would have been 5%, or $52, higher in 2013 if the share of union workers had remained at 1979 levels, according to the study out Tuesday from the liberal-leaning Economic Policy Institute ahead of Labor Day. That’s tantamount to a loss of $2,704 annually for the average nonunion worker.

The paper was authored by Washington University sociologists Jake Rosenfeld and Patrick Denice, and Jennifer Laird, a research scientist at Columbia University’s Center on Poverty and Social Policy.

The earnings loss is smaller for women because they were not as unionized as men in 1979. Weekly wages would be about 2% to 3% higher for women if union membership had stayed at 1979 levels, the report says.

About 10% of male private-sector workers were union members in 2013, down from 34% in 1979. In that period, the share of women who belong to unions fell to 6% from 16%.

The report argues the dwindling influence of unions is a significant but often ignored reason for wage stagnation, along with globalization, technological change and the slowdown in educational achievement gains.

The prevalence of unions affects the pay of nonunion workers in various ways, the study says. Nonunion employers often raise their workers’ pay to foster loyalty and head off an organizing drive. Kodak deployed that strategy in highly organized New York State, the study says.

The fatter paychecks of union workers also creates a more competitive labor market that forces nonunion companies to lift wages to prevent employees from jumping ship. And unions often establish labor-friendly policies that generally promote fairness in pay, benefits and worker treatment, according to the report.

The gains of yesteryear were not limited to nonunion workers at risk of joining unions, the study says. When those workers received raises, their higher-level supervisors who couldn't join unions also saw sharper pay increases to maintain salary hierarchies, the paper says.

But the losses engendered by shrinking union participation are most pronounced for nonunion private-sector male workers who lack a Bachelor's degree. Wages for that group would be 8% higher in 2013 if union membership had stayed at 1979 levels, translating into an annual wage loss of $3,016.