South By North Strategies, Ltd.

February Job Openings

The latest version of the  Job Openings and Labor Turnover Survey conducted by the U.S. Bureau of Labor Statistics found that job openings remained scarce in February, the most recent month for which data are available.

There were 2.7 million job openings on the last business day of February 2010, the U.S. Bureau of Labor Statistics reported today. The job openings rate was little changed over the month at 2.1 percent. The hires rate (3.1 percent) and the separations rate (3.1 percent) were also little changed in February.
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Over the 12 months ending in February, hires totaled 48.3 million and separations totaled 51.5 million, yielding a net employment loss of 3.2 million.

A Broken Jobs Machine

Writing in The Washington Monthly, Barry Lynn and Phillip Longman of the New America Foundation explore the role that monopolization has played in limiting job growth.

But while the mystery of what killed the great American jobs machine has yielded no shortage of debatable answers, one of the more compelling potential explanations has been conspicuously absent from the national conversation: monopolization. The word itself feels anachronistic, a relic from the age of the Rockefellers and Carnegies. But the fact that the term has faded from our daily discourse doesn’t mean the thing itself has vanished—in fact, the opposite is true. In nearly every sector of our economy, far fewer firms control far greater shares of their markets than they did a generation ago.
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It is now widely accepted among scholars that small businesses are responsible for most of the net job creation in the United States. It is also widely agreed that small businesses tend to be more inventive, producing more patents per employee, for example, than do larger firms. Less well established is what role concentration plays in suppressing new business formation and the expansion of existing businesses, along with the jobs and innovation that go with such growth. Evidence is growing, however, that the radical, wide-ranging consolidation of recent years has reduced job creation at both big and small firms simultaneously. At one extreme, ever more dominant Goliaths increasingly lack any real incentive to create new jobs; after all, many can increase their earnings merely by using their power to charge customers more or pay suppliers less. At the other extreme, the people who run our small enterprises enjoy fewer opportunities than in the past to grow their businesses. The Goliaths of today are so big and so adept at protecting their turf that they leave few niches open to exploit.

Around the Dial – April 5

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

• The New York Times documents corporate abuses of unemployment insurance.
• The News & Observer discusses the bursting of the real estate bubble.
• Naked Capitalism asks if “extend and pretend” has worked.
• The New Republic looks at the ties between China’s internal politics and economic policies.

North Carolina Economic News

Two weekend news stories about North Carolina’s economy featured the research of South by North Strategies, Ltd.

From a story in The Winston-Salem Journal about President Obama’s recent visit to North Carolina …

Although the job market has stabilized in recent months, unemployment has settled at an extremely high level,” said John Quinterno, a principal at South by North Strategies Ltd., a research company focused on economic and social policy. “Such high levels of unemployment and long-term unemployment are limiting the speed and strength of the recovery,” Quinterno said.

From a story in The Charlotte Observer about falling wages in Mecklenburg County …

“A lot of folks are essentially losing ground,” said John Quinterno of South by North Strategies Ltd., a Chapel Hill economic research firm. “We’re in a situation now where we have such high levels of unemployment. That really tends to put a brake on wages.”

A Controversial Figure

From a profile of U.S. Treasury Sec. Timothy Geithner in the current issue of The Atlantic Monthly …

Geithner doesn’t breed nuance of opinion. You’re either for him or against him, and popular sentiment leans strongly toward the latter. But it’s possible to view him as someone who was indispensable in halting the crisis (his understanding of Wall Street’s psychology was particularly valuable) while still doubting whether someone so steeped in the institutional cultures of Washington and Wall Street has the necessary distance to direct their reform.
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The angry uprising that stopped the Obama agenda in its tracks is part of the steep political cost of following the Geithner Plan—a cost that seems to keep rising, even as the fiscal cost continues to fall. Even the most prominent indicator of recovery, the robust stock market, has come to seem a curse, by reinforcing in the public mind how quickly Wall Street has recovered while everyone else is left to endure. And Obama can’t really tout all that he’s done without also drawing attention to his gentle treatment of Wall Street.
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Depending on your point of view, this is either a cruel or a fitting irony. By placing his chips on Geithner a year ago, Obama was betting that a strategy of growth under any circumstances was the right move, and that devising new rules was best left to insiders.