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Samuelson discusses the differences between the Bureau of Labor Statistics figures for June 2014 using the Payroll Survey and the Household Survey, each telling a different story. According to the Payroll Survey 288,000 jobs were added. The Payroll Survey is a monthly survey of 554,000 business locations, with firms asked to give the number of people on payrolls, pay and occupations. The Household Survey of the BLS asks households in monthly interviews with 60,000 Americans whether they have a job, is it part time or full time, are they looking for full time work, or jobless and for how long. The Household Survey showed June 2014 job increase at 407,000, using an estimate of 1,115,000 increase in part-time jobs and a loss of 708,000 full time jobs. Of the two the payroll survey is larger and considered by economists to be more representative. Other statistics show the parttime workers at about 3 million higher than 2007 before the 2008 financial crisis, suggesting the shift to part time jobs has been one negative result of the crisis....

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Kessler in the WP corrects Obama's claim that he created 800,000 jobs. He says this is clever arithmetic as it takes a low point in Feb. 2010 following the financial crisis. Kessler points out that according to the Bureau of Labor Statistics, U.S. manufacturing jobs were 12.56 million in Jan. 2009 when Obama became president. In Nov. 2016, early estimates show there were 12.26 million manufacturing jobs, a loss of 300,000. This loss does not reflect the problems in the U.S. auto industry and older industries in the midwestern states as a result of trade and globalization that speeded up with the rapid industrialization of China. And led as Greg Ip pointed out in a recent WSJ report to a rapid acceleration of job losses in a decade that did not happen in the same scale during Japan's industrialization and urbanization in the sixties. This aggravated the situation in Michigan, Ohio, Wisconsin, Indiana, and Pennsylvania, and was met with a feeble response from Democrats. Even a economist like Krugman favoring the Obama administration's efforts came to the conclusion that TPP did not add much to gains from trade as most of the gains had already been realized. More of the gains went to tech and IT in California, at the expense of the auto industry based in the midwest. A report in WP show a president too close to IT in California and failing to grasp the situation in the midwest. Voters punish whoever is in power, regardless of being Conservative or Liberal, in Canada the hollowing out of manufacturing under Harper in Ontario and Quebec led to the win by Trudeau's Liberals.  ...

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Lawrence Katz, Harvard labor economist, talks to Friedman about the jobs crisis in the U.S.. Katz identifies three jobs crises occurring at the same time today. One is the drop in the demand for goods and services that resulted from the longer term effects of the financial crisis of 2008, with rising foreclosures, weak housing markets, bad debt on the balance sheets of banks, and interest rates at close to zero reducing the scope of action by the Federal Reserve bank. The second, is the widespread long term unemployment with workers dropping out of the labor market. The third, is the nature of new factories and hiring. Work in new factories is done through increased automation, information technology and fewer workers. As a result job creation is a fraction of what it was in the past. Not mentioned here is the shrinking of the public sector under the strain of budget deficits for local, state and federal government. This leads to the question of how America will create jobs in the future. Katz believes the answer is creating more "hubs," networked urban areas like Austin, Silicon Valley, and Raleigh-Durham, by bringing together universities, high-tech manufacturers, software providers, and startup companies, to cooperate in creating new products that enhance people's lives worldwide. This has to be done by the private sector and government working together to build the infrastructure and make the investments in education, training of workers, and equipment for new job creation....

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The recent appointment of fast food executive Andrew Puzder as Labor Secretary has caused great concern among union leaders. Puzder supports a $9 minimum wage compared to $15 supported by Democrats. Unions now represent 7% of the labor force, down from a high of 20% during Reagan's time when Reagan appointed a construction company executive as Labor Secretary and cut regulations.  Globalization has thinned the ranks of workers in unions. And the failure of Democratic administrations to stem the shift of factories overseas to China, Mexico and other places, as part of global supply chains focussed on cost, has weakened Democratic support among workers since the period of Bill Clinton. It eroded to the point where Obama won 65% of support among unions and Hillary Clinton won 56% in 2016. Interestingly the Republican Romney gained 33% versus 37% for Trump, showing voters were more inclined to move away from Democrats and only a smaller number willing to support Republicans, but the shift enough to give Republicans a win in 2016 for the presidency. The figures are from a Election Day survey of trade union AFL-CIO, and a larger proportion in midwestern states showed disaffection with policies from Clinton to Obama. In fact Obama spent years promoting another free trade agreement TPP that favored tech more than auto and older industries, just as Bill Clinton had promoted NAFTA, without giving thought to what this was doing to its worker base of support. A similar situation happened with Social Democrats in Germany as a SPD administration moved to the centre and handed Christian Democrats led by Merkel a win in parliamentary elections. As Democrats such as former Labor Secretary Reich, a professor at UC Berkeley who served under Bill Clinton, describe the problems of working class people their is less reflection on the impact of the changes from globalization and how Democrats handled or mishandled it, and more on the politics between the two parties.   ...

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Galston of the Brookings Institution says globalization has hurt workers in manufacturing with job losses and declining incomes. It has produced outcomes that have favored some industries such as tech, and not others such as automobiles which in the past helped create the broad middle class by offering good paying jobs to people with less than a college education. Immigration has created an issue that political leaders outside of the main parties have appealed to in France, the U.S. and Britain. The result is a polarization in the voters that has rarely been seen to this extent before. The middle class in the period from the 1950's to the 1980's is not the middle class that we see today in Europe and the U.S. The 2008 financial crisis added to the problems with the slow and uncertain recovery for some groups such as white men, the less educated, students, and people on minimum wage. 

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David Blanchford of Dartmouth College and Adam Posen of the Peterson Institute of International Economics argue in a recent paper that the true indicator of unemployment in this economy -with a low participation rate and millions dropping out of the labor market unable to find work- is the wage growth. This is particularly true with the U.S. Labor Department report of 288,000 new jobs in 2014 and a 6.3% unemployment rate, yet wages flat for March and April 2014, and no improvement in the participation rate. Blanchford says one should look at the wage growth and consider the rest to be noise. The Yellen Fed is looking closely at the participation rate.

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Matthew Slaughter of the Tuck School, Dartmouth, says that the principle of comparitive advantage should determine what America exports and imports. Under comparitive advantage each country concentrates its energies on the particular goods and services that it does better than other countries. Free trade operates under the idea of comparitive advantage, but in practice it is quite different than its textbook economic counterpart. It is constantly changing as new countries or industries in different countries try to upset the existing pattern. Under a textbook example Airbus should not exist because Boeing was the most efficient manufacturer upto that time, and new entrants in a industry are nurtured for years with support from the governments of their countries. And in some situations the governments may exclude certain companies or industries from support such as Komatsu and construction equipment in postwar Japan, and Infosys and software outsourcing in India, and still survive and grow. Under comparitive advantage Japan should still be importing construction equipment from Caterpillar in the US, and there would be no serious competition in that industry. This would work to the detriment of the principle of competition in free trade which is just as important to free trade as the idea of comparitive advantage, with new entrants in an industry upsetting the old way of doing things and creating price/quality improvements. Slaughter simply pulls back off the shelf the old idea of comparitive advantage without seriously considering its real life aspects. Without dealing with trade distortion from currency manipulation, from the impact on jobs, without considering the continuing critical role of manufacturing in developed economies to provide the standards of living for a large middle class, and creating the kind of society that people of developed countries aspire to. He mentions GE's Immelt and the President's Council on Jobs, but makes no effort to engage Immelt 's statement in his recent op-ed article in the Washington Post, that the concept of transitioning from a export-oriented economic powerhouse to a services led consumption based economy could be done without loss of jobs, prosperity and prestige, was fundamentally wrong. He has only one line for manufacturing's role in America's economy. This line says knowledge intensive industries such as education and software are just as important as manufacturing, but fails to mention that manufacturing has received less attention in recent decades. In so doing he is discounting his own profession of concern for the high rate of joblessness in the U.S., and the need for a new focus on manufacturing in the U.S. to reverse that trend. By saying that imports are not a sign of failure but can raise standards of living, and leaving it at that, Slaughter does not acknowledge that consumer debt that US consumers have taken on in the process certainly affects future prospects for the US economy. And he makes no mention of the need for rebalancing the world economy, which is exactly how free trade should work ideally. Countries that have high imports export more to rebalance the world trading system, as currency valuations are allowed to adjust makig their exports more attractive. By not taking into account the realities of free trade, and the need for practical measures to rebalance without policy induced distortions by state run economies, Slaughter ignores the idea of free trade that works as it should and for all countries. The irony is that Immelt's own committment to jobs and competitiveness has been questioned in online blogs and most recently by an editorial in the Wall Street Journal on January 26, 2011, titled "The Misallocators." That editorial refers to the outsize role of GE Capital in GE's earnings during the past decade, and the lack of credibility of a focus on competitiveness and jobs that this creates for GE. It mentions the loss of 34,000 GE jobs in the US during the last decade. ...

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David Autor, an economist at the Massachusetts Institute of Technology, says he is quite worried about the steadily declining participation of men 16-64 in the labor force from 85% in the decade after World War II to less than 65% today. This is a blow to the men, their families , government revenues and the economy.

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Friedman reviews Acemoglu and Robinson's new book, "Why Nations Fail." Acemoglu says that nations fail when wealth and opportunities are concentrated in the hands of few people, that a condition for societies to succeed is to create opportunities for more people. For this to happen it is important to create inclusive political and economic institutions. This is an important insight, but for Western society this is an insight as old as Adam Smith when he pointed out the importance of this aspect of western societies after the feudal period in his "Wealth of Nations." For Smith it was the failure to create inclusive societies that led to the gradual unravelling of societies in the river valleys of the Yangste and the Ganges, in China and India, of increasing poverty and the gradual disappearance of what constituted the middle class in India and China. Chapter 8 titled "Of Wages and Labor" in the "Wealth of Nations" makes specific reference to this.

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Wages in U.S. manufacturing are declining as the U.S. regains competitivness with Mexico, China and other emerging market countries in manufacturing, through a combination of productivity from new machinery and lower wages. At the same time as this revives U.S. manufacturing this is lowering wages in manufacturing based economies in the midwest and other parts of the country. This can be seen in cities like Dayton, Ohio, where in the past good paying jobs could be found in manufacturing without a college diploma. Many of these jobs paying $15-$20 an hour are being replaced by lower paying jobs paying $10 an hour. With the cost of college education already spiralling beyond the reach of ordinary incomes, and college debt reaching $1 trillion and harder to payoff, the move to lower wages increases the probabilities that college will remain elusive to children in these families. The automated plants and lower number of workers needed to operate machinery in new and modernized plants means unemployment in manufacturing will see slow growth. This is likely to lead to continued high unemployment in cities that lag behind in college education for opportunties outside of manufacturing and in manufacturing jobs. This is also why more experts are calling for government, college and private sector support for vocational training to improve job and income opportunties....

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This is an interview with Columbia University economic historian Adam Tooze about the international trade and economic issues brought about by globalization. The rapid emergence of China in manufacturing and overcapacity in steel has led to action on steel tariffs by president Trump. Tooze is typical of opinion that sees action by Trump not as limited action to level the playing field  as proposed by Trade Representative for the U.S., Robert Lighthizer, but as reckless move on trade.  Lyrarc.com shows articles from the WSJ and NYT showing how opinion got to this point in the U.S., on Robert Lighthizer's views that the U.S. was not facing a level playing field, and  on how trade has hurt communities across the U.S. a long distance away from Silicon Valley. President Trump's views reflect a different perspective that says the U.S. has to balance the favorable situation obtained by China and the European Union through moves of its own to protect U.S. interests. Political commentary that the U.S. was starting a trade war is not supported by the facts showing China's response as muted and a willingness by China to negotiate a balanced trading relationship as its trade surplus with the U.S. continues to grow. The trade surplus is so large that the Trump moves do not tell the real story. They are likely to be overshadowed by the increasing value of the U.S. dollar leading to a continued favorable situation for Chinese exports and a larger trade surplus in 2018, regardless of Mr. Trump's action.  Trump's moves are more significant in other areas- limiting China's access to advanced technologies, with the European Union also taking the same action. This is now the new field of competition for the major world economies. ...

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Krugman points out the gains on three fronts evident from the Census Bureau report of 5.2% gain in median income of households in the U.S. He says the first is the growth in incomes of ordinary working class and middle class families, second the large decline in the poverty rate, and third the further rise in insurance coverage in 2015 for people without health insurance. He points to the steady efforts of the Obama administration to improve lives of ordinary families as working based on the Census report though results have taken time, and could have been better. The Stimulus, says Krugman could have been larger following the blow of the 2009 financial crisis and increased unemployment at the time. Janet Yellen at the inequality conference of the Boston Fed in 2014 pointed out the problems of 62 million households having net worth of about $10,000, and why this was running against the American idea of a better life for all Americans. In that sense the Census report is a movement in the right direction but a lot remains to be done.   ...

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Dow Chemical CEO Liveris says he sees signs of recovery in China in 2013. He says small and medium sized businesses in China have better access to financing in Dec. 2012 after a period of destocking and hard times accessing credit.

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Kristof says social ills- the lack of stable marraiges, drug use, poor day care resources- compound the problems of lack of education beyond high school in America's white underclass. The lack of good manufacturing jobs and lower wages have hit people with only a high school education the hardest. Two decades of decline in good manufacturing jobs with globalization have hit this part of the population in the U.S. hard creating increasing inequality in America. He sounds a Moynihan type call to the plight of America's poorest white communities.

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How will countries like India generate jobs when technology enables manufacturing and other activity to do work with fewer and fewer people. Even Hon Hai in China is shifting work to robots. Technological progress is leaving more people unemployed and widening income gaps with the benefits going to a few people, says the Economist in this research based essay. It will require carefully managed governance to invest in infrastructure, raise skills of less skilled workers through education, and wage subsidies for those left behind to ensure our current system works in the future.

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There are similarities in the Republican and Democratic party platforms in 2016. One area of agreement is in the reinstatement of Glass Steagall Act. That legislation made in the Depression period to separate commercial banking from investment banking was changed  when president Clinton made changes in a deal with Senators Phil Gramm and Jim Leach in 1999. The too big to fail problems of banks and the problems of investment banks during the 2008 financial crisis are attributed to the lack of Glass Steagall protections for financial stability and safety. The result is that in the post 2016 environment banks can expect a tougher regulatory environment. Another are is in trade where both parties are expected to take tougher positions to protect U.S. interests. The Republican platform calls for "better negotiated trade agreemets that put America first."