August 25, 2011

AP Contends That Unemployment Claims Are ‘Stabilizing,’ Misses N.Y.-Only Element of the Verizon Influence

VerizonStrikeSmall0811.pngIn his coverage of the Department of Labor’s weekly report on unemployment claims this morning, the Associated Press’s Christopher Rugaber, after noting how initial claims filed by Communications Workers of America members who are on strike against Verizon (more on that later) inflated this week’s and last week’s results, wrote that “excluding the work stoppage, layoffs appear to be stabilizing. That should help ease fears that the economy is on the verge of a recession.”

The following chart, which excludes those workers’ claims during the past two weeks, doesn’t exactly give wholehearted support to Rugaber’s key contentions:

WeeklyUnempClaimsExlVerizonCWA082011

Unless Chris’s crystal ball is better than mine, a 10,000-claim, one-week jump is not a particularly strong indicator of “stabilizing,” let alone a justification for contending that the news should ease recession fears — and this is before the current week gets revised. In 23 out of the past 24 weeks, the initially reported claims number has been revised upward. Including the one week where there was no change, the subsequent-week revision has averaged over 4,000 claims.

Now let’s look at those CWA/Verizon initial claims. Here’s what Rugaber wrote about them:

… last week’s non-seasonally adjusted total included about 8,500 of those employees, the department said. About 12,500 striking workers filed claims two weeks ago.

About 45,000 Verizon workers went on strike Aug. 7. Unions representing the workers ended the strike earlier this week.

Typically, workers who walk off the job aren’t eligible for benefits. But states have specific rules governing labor disputes.

… Joshua Shapiro, an economist at MFR Inc., calculated that without the strike, applications would have dipped to 397,000 two weeks ago and risen to 407,000 last week. (The official all-inclusive totals are 412,000 and 417,000, respectively — Ed.)

It turns out (HT to emailer Bill Sloat) that only one state allows striking workers to collect unemployment benefits, something I would think that those among Rugaber’s readers who probably figured out on their own that less than half of those striking were collecting benefits would liked to have known (bold is mine):

Why Verizon Strikers Filed For Jobless Benefits

U.S. workers are usually denied jobless benefits when they go on strike. After all, they walked off the job.

Except in New York. The state is the only one in the U.S. that in some cases allows striking workers to receive unemployment benefits, according to a union official.

Apparently, thousands of workers at Verizon Communications (VZ) are trying to take advantage of the rare law. During a two-week strike that ended Tuesday, about 21,000 union members filed applications for unemployment compensation, according to the U.S. Labor Department.

Those workers might be eligible for the $405 maximum weekly benefit New York provides. The state labor office was unable to immediately say who is eligible and under what circumstances.

Interesting — and outrageous. Go on strike in New York, get a check. Only 16,000 of the 21,000 mentioned live in New York; the other 5,000 filed in other states, and will presumably have their claims denied. Assuming seemingly safely that the large majority of the 16,000 workers living in New York were eligible and entitled to collect the $405 maximum benefit, the weekly cost to the state before workers agreed a few days ago to come back as negotiations continue was about $6 million.

If Empire State Democratic Governor Andrew Cuomo was really serious about getting the state’s house in order, he’d put a stop to striker eligibility for unemployment benefits. I’d love to be surprised, but I’ll bet it’s not even on his radar.

Cross-posted at NewsBusters.org.

Steve Jobs: Resign in Peace

Filed under: Economy,Positivity,Taxes & Government — Tom @ 1:53 pm

I reacted to Karl Denninger’s inexplicable rips at Steve Jobs at this comment at another post this morning.

My summary there: “… to deny Jobs his rightful place in the business pantheon is crazy. Yes, he is/was an annoying jerk in many ways. No, he’s not Einstein, but he is/was one of the most imaginative, innovative, market-savvy guys we’ve ever seen, or ever will see.”

I would also add that Jobs probably got breaks he didn’t deserve from the SEC several years ago. (Update, 8 p.m.: Commenter Greg also reminded me that Jobs in his later years engaged in uncalled-for censorship at Apple’s iTunes and App stores; hopefully, the company will abandon these efforts, but I’m not optimistic. I’ve long thought that for all his brilliance, a guy like Jobs with real political power would be a very dangerous man indeed.)

People who live in Greater Cincinnati may remember a parody campaign on a local FM station many years ago. It “advertised” mythical products and services, like the Negative-Calorie Cookie; McMaisonette (a fast-food version of a local 5-star restaurant); and the “Encephalographic Printout Device,” which would print out your thoughts while you slept so as not to lose brilliant overnight insights. The tag line of the fictitious firm, Brute Force Cybernetics (BFC), meant to be a poke at capitalism in general, was that it was “the company that creates a need, and then fills it.”

At National Review, the American Enterprise Institute’s Nick Schulz understands how BFC’s sarcasm, though genuinely humorous and unfortunately descriptive of the mindset of many who incorrectly see themselves as entrepreneurs, was off the mark in regards to Jobs. In the information and services age, truly great entrepreneurs like Jobs recognize a need or want (even if the public doesn’t yet recognize it), and figure out how to meet it:

Jobs is a great entrepreneur for another reason. Lots of ninnies can give customers products they want. Jobs gave people products they didn’t know they wanted, and then made those products indispensable to their lives.

I didn’t know I needed the ability to read the Wall Street Journal and The Corner on a handsome handheld device at my breakfast table, on the Metro, on the Acela, or in any Starbucks I entered. But Steve Jobs did. I didn’t know I wanted to mix and match my music collection on a computer and take it with me wherever I went, but Steve Jobs did. I didn’t know I wanted a portable multimedia platform that would permit me and my kids to hurl angry birds out of a slingshot at thieving pigs. But Steve Jobs did.

All those successes were made possible by failure after failure after failure and the lessons learned from those failures.

Examples of failure Schulz cited include the pre-floppy disk Apple I and Apple II; the “Lisa,” the pre-Mac GUI computer which had a 3.5″ drive from which one could not manually eject an inserted disk; and Jobs’s attempt at his own company, NeXT Computer, “which was a big nothing-burger of a company.” He didn’t mention a couple of other biggies: the MessagePad and the Newton (think of very primitive PalmPilots).

Schulz also imparts an important and much larger lesson (bolds are mine):

There’s a moral here for a Washington culture that fears failure too much. In today’s Washington, large banks aren’t permitted to fail; nor are large auto firms. Next up will be too-big-to-fail hospital systems. Steve Jobs is a reminder that failure is a good and necessary thing. And that sometimes the greatest glories are born of catastrophe.

I would rephrase Schulz’s contention to read that Washington fears officially recognizing and carrying through with the consequences of what everyone else clearly sees as failure.

Robert X. Cringely, who probably correctly pegs Jobs as “the greatest CEO of our time” (Jobs indeed may have created more wealth in the form of shareholder value than any CEO in history) has a great write-up at InfoWorld. Read the whole thing, and thank your lucky stars that Jobs didn’t listen to any of Cringely “don’t do it” suggestions.

Initial Unemployment Claims: 417K SA, Up From 412K in Prior Week; NSA Down 11% from 2010; Verizon Cited as ‘Special Factor’ (Updates: Expectations Were 405K, Why Some Verizon Workers Get Benefits)

Filed under: Economy,Taxes & Government — Tom @ 9:13 am

From the Department of Labor:

Special Factor: As a result of a labor dispute between Communications Workers of America and Verizon Communications, at least 12,500 initial claims were filed in the week ending 8/13/2011 and at least 8,500 initial claims were filed in the week ending 8/20/2011.

SEASONALLY ADJUSTED DATA

In the week ending August 20, the advance figure for seasonally adjusted initial claims was 417,000, an increase of 5,000 from the previous week’s revised figure of 412,000. The 4-week moving average was 407,500, an increase of 4,000 from the previous week’s revised average of 403,500.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 341,436 in the week ending August 20, a decrease of 4,536 from the previous week. There were 384,955 initial claims in the comparable week in 2010.

Without the Verizon strikers’ claims, before the seemingly inevitable subsequent upward revision to this week, after applying the respective seasonal adjustment factors, and assuming the “at least” numbers above don’t go much higher, claims would have been about 397,000 last week and 407,000 this week. So we’re still basically stuck at 400,000, and maybe heading the wrong way. (10:40 a.m. Note: This corrects my estimates of 402,000 for both weeks as originally posted; that’ll teach me to do calcs before the coffee kicks in.)

I’m in the camp that doesn’t understand why workers on strike are allowed to file for unemployment compensation, which is meant for people who lost their jobs and can’t find work, not those who won’t work. To individual workers who argue that they don’t have control over that, my response is: A. You’re the one who won’t cross the picket line; B. You’re the one who decided to leave your ability to earn an income in the hands of someone else; and C. Did you actually vote for or against the strike, or does your union limit you to an “authorization” vote?

Anyway, here’s the updated “stuck above 400,000″ graph:

InitialUnemploymentClaimsTo082011

___________________________________________

UPDATE: Expectations were 405K (ForexPros), 405K (Bloomberg), and … 405K (Reuters).

UPDATE: From Dow Jones, we learn that apparently New York is the state where you can be on strike and get unemployment benefits (HT to Bill Sloat in an email) –

Why Verizon Strikers Filed For Jobless Benefits

U.S. workers are usually denied jobless benefits when they go on strike. After all, they walked off the job.

Except in New York. The state is the only one in the U.S. that in some cases allows striking workers to receive unemployment benefits, according to a union official.

Apparently, thousands of workers at Verizon Communications (VZ) are trying to take advantage of the rare law. During a two-week strike that ended Tuesday, about 21,000 union members filed applications for unemployment compensation, according to the U.S. Labor Department.

Positivity: Forty Days for Life to launch biggest campaign yet this fall

Filed under: Life-Based News,Positivity — Tom @ 8:01 am

From Fredericksburg, VA:

Aug 25, 2011 / 05:54 am

The pro-life advocacy group 40 Days for Life has announced the launch of its biggest campaign ever this fall, with over 300 locations worldwide participating in the event.

The growth has “been a joy to see and I think it shows that people want to respond to the crisis of abortion,” director Shawn Carney told CNA.

The Sept. 28 through Nov. 6 campaign – which includes fasting and peaceful prayer outside of local abortion facilities – will take place in 48 U.S. states, 7 Canadian provinces, Australia, England, Spain and, for the first time, Germany and Argentina.

“Forty Days for Life is nothing but an invitation – it’s built on the basics,” Carney said. “It’s prayer, it’s showing up at these places where the babies are lost and it’s fasting.”

The 300 locations where the campaign will be held include over 70 new sites, he added.

The initiative began in 2004 and consisted of Carney and his wife and friends in Bryan, Texas. It soon grew to such an extent that the group launched nationally in the fall of 2007 with 89 locations across the U.S.

Over the last four years more than 400,000 have joined to pray and fast for an end to abortion and over 13,000 church congregations have participated in 40 Days for Life campaigns. …

Go here for the rest of the story.