Wednesday, July 25, 2012

U.S. Manufacturing Jobs and a WTO-China Connection?

I saw a graphic today (Graph 1 below) being shared by a number of my Facebook friends. It seems pretty dramatic, and the timing appears more than coincidental, implying that the acceptance of China into the WTO caused a dramatic decline in U.S. manufacturing jobs. However, I am not sure it represents the best understanding of the relationships involved. Last year I wrote several essays about how the economy has been changing since WWII, namely, the switch from a manufacturing to a finance/information economy--in one post, I included a graph displaying the change in GDP from the various sectors of the economy (How has the Economy Changed since 1947?).

Graph 1

The China-WTO-US Jobs seems dubious. First, total private sector employment (Graph 2) started leveling off in 2000, the year before China joined the WTO, and China joined at the very end of 2001 (mid-November), not enough time to have such an impact on manufacturing jobs.  Moreover, the unemployment hit was all over, not just manufacturing. One could argue that the manufacturing hit is what the total job loss is showing, especially when including the supply-chain jobs subsequently lost by the manufacturing outsourcing. However, there simply is not enough time for that kind of ripple effect, plus, the total jobs rebounded, while manufacturing jobs did not. Second, as a percent of the total U.S. job market, manufacturing jobs have been declining steadily since the post-WWII period, in almost perfect tandem with manufacturing as a percent of GDP (Graph 3, scaled on the left). There is a slightly steeper decline in 2000-2002, but the change is barely significant in comparison to the 60-year pattern.

Graph 2:

Interestingly, manufacturing production has been steadily increasing (Graph 3, scaled on the right). The standard explanation for this apparently paradoxical situation is that the job loss is caused by automation and other increasing efficiencies in production. While this may be a boon to the factories who are able to lay off employees in droves and thereby scale back hiring costs, as we have seen, it has a devastating effect on the broader economy, contributing to mass unemployment. Is there a China-WTO connection to the loss in manufacturing jobs? Perhaps, but if so, the impact seems dwarfed by the larger changes in the U.S. economy.

Graph 3:

Friday, July 20, 2012

Social Spending in the U.S.: An International Comparison

For a decade, the OECD tracked patterns of “social spending” in its member countries, distinguishing between private and public social spending--the chart above shows those patterns for 2007 (explained further below). Public social spending is tax-based programs to support housing and food insecurity of fellow citizens in poverty. Private social spending is charitable giving by generous citizens for those same ends. As U.S. citizens we like to think we are generally a kind, generous people, who help the needy with our charitable giving, especially those who consider us to be a "Christian nation."

While in many cases it may be true that we in the U.S. are generous, especially when it comes to our family or community members, a fundamental shift in society has caused a breakdown in traditional ways of helping the needy and conceptualizing broader institutions of care. Take, for instance, traditional family structures—the new husband and wife moved into the parents’ household, and stayed there for life. Once the parents became infirm, the children took care of them. There were no nursing homes, and no need for Social Security or Medicare. Of course at that time we didn’t have the medical facilities to suck 17% of our GDP into treatment as we see in the U.S. today, we mostly worked on our family farms to sustain ourselves, and our average lifespan was in the 40s. Once industrialization brought us into cities, and hospitals started becoming the focus of healthcare, rather than the house-calling general practitioner who accepted chickens as payment, everything about our way of life had to change. Included in this change is how we conceptualize charity, the role of the churches in charity, and the role of non-family organizations in providing care. Homelessness was primarily centered around those with no living family members—in some cultures such unfortunates are expected to end their own lives, such as the practice of “widow suicide” where they throw themselves onto the burning pyre of their dead husband.

With the move into cities, and the “nuclear family” pattern becoming morally dominant, where the husband and wife often moved as far away from their parents as possible to raise their children, gone are the days of family-centered care for the multiple generations throughout the entire lifespan. Currently, it is often considered shameful for children to linger in their parents’ home, or for parents to move back in with their children, the opposite moral belief from previous generations. Enter new programs to deal with these changes—such as Social Security and nursing homes. Enter also a new way of thinking about the radical forms of individualism that we had institutionalized—a rejection of the extended family network in favor of my own “nuclear” family goals, and a rejection of the importance of the broader community to my own welfare. Within these new patterns, church charitable giving often refocused onto foreign missionary work, with the assumption that the poor in the U.S. have the opportunity to feed and house themselves if they could garner the moral fortitude, or more insidiously, continuation of the Victorian imperialist impulse to “civilize” and “evangelize” the moral primitives in other cultures.
So what of contemporary patterns of charitable giving and general social spending do we see today? Returning to the OECD data, 2007 was the last year data was collected in this area. Looking at 20 of the top industrialized countries, the chart shows how much those countries spend on social welfare “per capita” (PPP). Other than Luxembourg, the top spender, the other 19 countries are all within about $6,000 per capita spending of each other. The chart distinguishes between public and private spending, blue and red, respectively. In terms of total social spending, the U.S. is in the bottom third, ranked #14 out of 20. When looking at the private amount of per capita spending, i.e., charitable giving, the U.S. ranks even lower, #15 out of 20.

One of the implications of this data, integrated with many of our poor rankings in comparisons with other high-income countries in areas such as education, healthcare, poverty intensity, and social mobility, is that need to reconceptualize how we view social care in this country. One of the biggest political debates in the country today is about taxes, with the complaint from conservatives that we are paying exorbitant tax rates, much of which is going to a welfare system that only fosters dependency and inactivity. The assumption is that if there is true need, local systems of care, such as families and charitable organizations, should be taking care of them, not massive federal programs that are inefficient and bloated. In fact, even the Bush administration’s USDA study of the welfare system indicated that there is only 1% fraud, with total housing and food insecurity welfare aid representing only 3% of the U.S. federal budget, half of which goes to children—if either party is going to be motivated to find fraud within a social welfare program, it is the conservative party. I would call this neither bloated nor inefficient.

The problem with the conservative framing of care is that the traditional structures that have provided care, families, have been sundered by the very processes that conservatives have promoted economically, i.e., capitalist individualism with an emphasis on the nuclear family structure as the primary moral good. Both traditional sectors of care—the family and the churches—have moved away from caring for those left out of the opportunity structures in society. By way of example, consistent research indicates that 80% of children born into families in the bottom 20% of the socio-economic ladder will stay at the bottom, the cause of which is not laziness or moral ineptitude, but a lack of education and a lack of jobs, not to mention exploitation by lenders, and other predatory schemes/businesses, such as lotteries, liquor stores, and high-priced markets in neighborhoods with no transportation (public or private) to lower-priced stores. To compensate for shifting arenas of care (deficits created by the solidification of the nuclear family and decreased community investment by churches), large government programs took over, such as FDR’s New Deal, Johnson’s Great Society, and now Obama’s Affordable Care Act. Each were efforts to adapt regimes of care to fundamental structural changes in U.S. social and economic realities.

If conservatives assume that local, charitable giving is a better source of funding for such programs, then processes would need to be established to ensure that all local communities have generous donors to administrate and fund such programs. Other than the na├»ve assumption that such processes exist, the more fundamental problem is the pattern of social exclusion that has dominated inequality patterns in all societies. Taking the U.S. as an example, our history of racial exploitation and discrimination demonstrates the ease with which minority groups become excluded from wider structures of social support and opportunities. More profoundly, minority groups in our history have been excluded even from the political systems, by denying them the right to vote. More currently, felons fall into a group that faces extraordinary discrimination in the U.S., being excluded by law from receiving many kinds of educational grants/loans, public housing or food assistance, and voting rights, and excluded socially from most legal employment. The U.S. is the globe’s largest jailer, with 25% of the world’s prisoners, but being only 4% of the world’s population.

Either our established patterns of preparing good citizens and creating healthy communities have stopped working, or we have a series of inappropriate funding priorities—or both. While we are low on the ranking of social spending, both in terms of public spending, and especially private charitable giving, we are at the same time highest on the ranking of incarceration spending, and healthcare spending, while getting relatively little in return, in comparison to other high-income countries. We might think that we are a kind, generous people. The data seems to indicate otherwise.

Saturday, July 14, 2012

Who Votes Democrat/Republican/Third Party Today?

Two weeks ago I posted the results of a demographic analysis of Ohio voting for a recent election where there was a state-wide Socialist candidate. Here is a follow-up post about demographics of voting patterns for the major parties, as well as compared to "Other" (non-Rep, non-Dem). Both analyses utilize Census data from the 2010 American Community Survey (5-year estimates) and 2000 Census.

This analysis explores the last 3 presidential elections (2000, 2004, 2008) to look for demographic patterns. I do not take into account national factors such as incumbency, unemployment, etc. The Census has county-level demographic data for all US counties, and county-level voting data for all 3 of these elections is publicly available. I averaged the "percent" that voted for each candidate for these 3 elections and constructed a simple correlation using data mining of about 250 socio-economic variables. Below are the strongest correlations for who voted Democrat (almost identical, but opposite those who voted Republic, so I did not include them as a column), and those who voted for a third-party candidate--few of the correlations were above 0.40, and I include only those correlations greater than 0.25. These correlations are for counties high in these populations, and do not necessarily mean these groups themselves are more or less likely to vote in these patterns.

Briefly, those counties more likely to vote Democrat have higher percentages of the following: worked in professional jobs (science, education, management) and the arts; the unemployed; renters; female-headed, single-parent homes; those never married; those who have needed to use public services (food stamps, or public transportation to get to work); those with some member of the household in college or graduate school; and some race minorities (especially counties with high numbers of Blacks and Chinese).

Those counties more likely to vote Republican have higher numbers of the following: the self-employed; those in who work in "natural resources" (mining, agriculture) and construction; the married; those who own their own homes; whites; those with some college but failed to graduate; those with children in elementary school.

Interestingly, those counties whose residents have needed to rely on public services are unlikely to vote for a third party, even more-so than their reluctance to vote Republican, as are those separated from their spouse, female-headed-single-parent households, and those with some high school but who failed to graduate. Those more likely to vote third-party: those who walked to work or worked at home; those who are consistently employed; the never married; whites; those with a high school diploma or greater.

DemocratThird-Party/ IndependentDemographic
-0.35Self-employed in own not incorporated business workers
0.33Public transportation to work
0.43Walks to work
-0.38Car, truck, or van -- drove alone to work
0.36Worked at home (no commute)
0.29-0.31Requires food stamps/SNAP
0.28Professional, scientific, and management, and administrative and waste management services
0.24Arts, entertainment, and recreation, and accommodation and food services
0.25Educational services, and health care and social assistance
-0.43Agriculture, forestry, fishing and hunting, and mining
-0.43Some high school, no degree
-0.30Some college, no degree
0.41HS diploma or greater
0.48-0.36Female, Single-parent
-0.34Separated from spouse
0.520.33Never married
-0.57Currently married (not separated)
-0.30Have kids in elementary school
0.31Someone in household in college/graduate school
-0.28Owner-occupied housing

Thursday, July 5, 2012

The Great Heat Wave of 1896--how it helped shape the Theodore Roosevelt presidency

I was looking up the history of heat waves and ran across the book Hot Time in the Old Town, Kohn, by way of an NPR interview with the author

The book links Teddy Roosevelt's later identity as a "Reformer" to massive deaths in New York City due to a 10-day heat-wave. Most of the dead were the poor who could get no relief from the heat at night, and public policy banned them from sleeping in public where they might have been able to cool down. The ban, of course, was designed to limit the visibility of vagrants, and discourage the 'lifestyle of vagrancy.'

I can think about the 1,500 people that died from the heat during this one tragic week, in relation to the house that I'm trying to restore. It is a 3-story (if you count the attic) Victorian built in 1895, the same decade as these deaths. Based on a floor plan of Victorians in NYC from the 1890s that I found in a newspaper article from that time, my house looks almost exactly like these early floor plans, so my house would probably be characteristic of where these people may have been living, if the owner were renting out some rooms upstairs. My experience with my house, which does not have central air because of looting that occurred in the 10 years it sat abandoned, is that there can easily be a 50F difference between the top floor and the basement. The attic, which is unfinished, but which is easily the size of a 3rd floor, is typically 10-20F hotter than it is outside due to the black shingles on the roof and poor ventilation. The 2nd floor is approximately air temperature or hotter. The first floor stays about 10-15F cooler than outside air temperature, while the basement is easily 20-25F cooler than outside. Because of the way my house buffers changes in air temperature, temperatures peak inside around 9pm to midnight, and don't start to cool down until around 3-6am, and even then, it's not much of a cool-down, maybe a 5F-10F difference.

According to Kohn's book, city policy prevented people from going outside at night to get relief from the heat that had built up inside their residences. If they lived on the top floors of an apartment building, I can easily imagine it reaching 120F during the day, and staying above 100F at night. My second floor hasn't dipped below 95F for the last 2 weeks. Fortunately I have a window air conditioning unit in a room on the 1st floor where I can sleep safely. However, according to CNN today (July 5th), there are still almost a million people without power from recent storms, facing another 3-day predicted stretch of highs in the 100s across the Midwest. Not to mention parts of the globe where electricity or air conditioners are mere fantasy.

Another interesting thing to me about Kohn's book is how starkly we see the differences between Republicans of the early 1900s, shown here in Teddy Roosevelt, versus Republicans today, and their outlook towards the most vulnerable in our society. Teddy (I would just call him Roosevelt, but then there would be the confusion with FDR), as Republican Reformer, wanted to create public policy that would support the poorest in our society, such as the expansion of protections for children in the welfare system. He convened the first White House Conference to discuss the care of dependent children, leaving his mark on early social work, along with other Reformers of the day. One of the large-scale initiatives he is known for is the "Square Deal," designed to help working-class and poor citizens. The Square Deal emphasized several key goals--protecting consumers, limiting the influence of large corporations, and conserving national resources. We see these in specific policies, such as the broad expansion of protections for national forests, the Food and Drug Act, the Meat Inspection Act, and the Tillman Act. The last of these explicitly prohibited corporate contributions to political campaigns--sound like an appropriate conversation for today? Other anti-corporate efforts by Theodore were the development of the Department of Commerce and Labor, to regulate interstate business violations and labor relations; the Bureau of Corporations, to monitor and regulate corporations; and a series of anti-trust lawsuits designed to prevent large corporate violations--one such suit was filed against JP Morgan--again, sound like an appropriate conversation for today? While certainly Democrats have changed dramatically from the early 1900s to today, the Republican transition from Teddy Roosevelt, to Ronald Reagan, to the current batch of freshman "Tea Party" congress Republicans is quite striking--just as many of Reagan's policies would likely not get through the current Republican leadership, I imagine Teddy's 'Square Deal' policies would be decried as Socialism and environmental extremism.