Policy Points

08.12.2009 Policy Points Comments Off on What Does Temporary Hiring Mean?

What Does Temporary Hiring Mean?

Analysts have made much of the fact that temporary hiring has increased across the county in recent months. This trend, so the argument goes, suggests that the labor market is improving and presages permanent hiring on the art of employers.

Yet as an article in The San Francisco Chronicle asks, what if that assumption is wrong?

BLS economist Amar Mann said an analysis by the San Francisco office suggests that employers are getting more sophisticated about using temp hiring as a clutch to downshift into recessions and upshift into recoveries.

Mann said temp jobs started down a month after overall employment dropped during the 1990-91 recession. But by the 2001 downturn, employers started cutting temps about five months before they started issuing pink slips to the general workforce.

In the current recession, he said, companies began shedding temps 12 months before they started cutting permanent payrolls.

A similar pattern prevailed in the two prior recoveries, Mann said. Temp jobs came back at the same time as overall employment after the 1991 recovery. Temporary employment rebounded five months before the general job market turned positive following the 2001 dip.

If that pattern holds, it could be next summer before general payrolls start to grow.

Mann refused to speculate about the timing, but said temps are playing an increasing role in the job cycle.

“Employers are getting more savvy about using just-in-time labor on the way down and on the way up,” he said.

08.12.2009 Policy Points Comments Off on Imagining a Better South

Imagining a Better South

The Center for a Better South, a nonprofit organization in Charleston, S.C.,  recently released an agenda for policy change in the South. The agenda is an outgrowth of discussion process that involved civic leaders drawn from across the South. The agenda focused on policy goals in the following areas:

  • Nurturing economic development and education.
  • Boosting wellness.
  • Improving energy efficiency.
  • Reforming taxes.
  • Investing in infrastructure.
  • Cultivating governance.
  • Ensuring opportunities.
  • Fostering safe communities.

07.12.2009 Policy Points Comments Off on Around the Dial – Dec. 7

Around the Dial – Dec. 7

Economic policy reports, blog postings, and media stories of interest:

07.12.2009 Policy Points Comments Off on Innovation in North Carolina

Innovation in North Carolina

Innovation plays an essential role in economic growth, yet less well understood is just  how innovation works and how an innovative climate can be fostered . To bring some clarity to those issues at the state level, a group of civic leaders in North Carolina recently launched Change Papers, a blog that strives to generate a discussion about how North Carolina can become more innovative.

Recent papers have focused on what government can learn from the private sector, how open-source models can generate new ideas, and how innovation can be fostered.

07.12.2009 Policy Points Comments Off on Right to the Point

Right to the Point

An article in the current issue of The Economist offers a to-the-point assessment of the state of the American job market and the policy choices facing federal leaders:

Even though the economy is growing again, this picture is unlikely to change quickly. The hangover from the financial bust means the recovery will be muted. And much as they did after the 1990-91 and 2001 recessions, nervous employers are working remaining staff harder before hiring new ones. Labour productivity has soared, but the result could be a poisonous combination of deep recession followed by jobless recovery. The Federal Reserve’s latest forecasts suggest a jobless rate above 8% in 2011, and half a decade or so until the economy returns to full employment.

The economic scars could be deep. Evidence from Europe suggests that long spells of high joblessness leave a country’s underlying unemployment rate permanently higher, as workers lose skills, becoming detached from the labour force and increasingly hard to re-employ. For America’s young and black workers, especially, that is a big worry.

This grim trajectory suggests an economic, as well as a political, rationale for government action. But what sort? The administration’s original approach was to boost employment by underpinning demand with fiscal stimulus. And for all the criticism of the $787 billion stimulus package, there is little doubt that the jobs picture is less dire than it would have been without it. A report released on November 30th by the Congressional Budget Office suggests it created or saved somewhere between 0.6m and 1.6m jobs. Yet with voters increasingly worried by trillion-dollar budget deficits, that route is harder. The new focus is less on supporting demand than on policies that increase the job-intensity of the recovery.