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Commentary on The Capital Markets- Category [Employment]
2017-07-25 09:44 by Karl Denninger
in Employment , 322 references
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When you can't come up with a legitimate explanation, make sure you invent one.

YOUNGSTOWN, Ohio — Just a few miles from where President Trump will address his blue-collar base here Tuesday night, exactly the kind of middle-class factory jobs he has vowed to bring back from overseas are going begging.

It’s not that local workers lack the skills for these positions, many of which do not even require a high school diploma but pay $15 to $25 an hour and offer full benefits. Rather, the problem is that too many applicants — nearly half, in some cases — fail a drug test.

Ok, that's a real problem.  Or is it?

Remember, drug tests don't test for intoxication.  They test for metabolites -- that is, the metabolic product of consumption of said substance.

As noted:

 Because tests for marijuana pick up the drug for up to a month after exposure, many local manufacturers are anxious about Ohio’s plan to permit medical marijuana use in the near future.

“I don’t know if you smoked it this weekend or this morning,” Ms. Mitchell said. “I can’t take that chance.”

But if I got hammered this weekend at the bar, that's fine -- right?

See, there is a solution to this problem and it already exists.  There are available impairment testing devices that check for actual impairment.  They're substance-agnostic -- in fact, they have nothing to do with substances at all.  If you're impaired then you are -- whether from lack of sleep, booze, narcotics or anything else.  They look sort of like a small hand-held video game and check reaction time and coordination; a test takes seconds to complete.

We don't use them on the roads in the cop cars (instead of breathalyzers) because they'd flag the old people who can't safely drive stone cold sober.  Yet said person is just as dangerous as a 25-year old ****-hammered drunk behind the wheel.  One goes to jail, the other won't but both will kill you just as dead when they run you over.

If the goal is to improve workplace safety, as claimed, that's the answer because it doesn't matter why you're impaired -- just that you are.  Set the policy that everyone takes said test (which takes under a minute) before starting your shift; you must pass to clock in.  Fail more than "X" times in "Y" period of time (e.g. twice in a month) and you're out -- and it doesn't matter why.

The devices themselves require minimal maintenance and are reasonably inexpensive since they have no consumables associated with them.  I'm willing to bet integrating one into the time clock would be pretty trivial -- and inexpensive.

At the same time, address this:

It has long been a point of pride for Ms. Mitchell that her company covers the cost of health insurance for its 150 workers and their families. But over the last three years, the company has paid for five dependents of employees to go through drug treatment, costing a quarter of a million dollars.

Last year, when a member of an employee’s family gave birth to a baby found to be addicted to opiates, the company paid $300,000 for three months of treatment in a neonatal intensive-care unit.


Since when is that part of a "reasonable" benefit package?  That's nuts folks, and the problem lies there. Stop being stupid!

Look, people will choose to use various drugs.  Booze is a hell of a drug and there's a massive opioid problem, nearly all of it spawned from the medical industry that gets people good and hooked.

But let's cut the crap, shall we?  I'd much rather someone smoke weed than drink for equal "buzz".


Because I've never seen anyone stoned on weed decide to get loud and belligerent in a bar, ending in a fight that trashes the place and possibly leads to assault charges or worse.  That happens all the time when people drink and yet there are dozens of establishments selling alcohol for consumption "on premise" within a few miles of my home.  And while smoking anything is bad for you there is zero medical evidence that THC itself, the active ingredient in marijuana, produces long-term damage to the body.  It's also very possible and in fact not hard at all to consume marijuana without smoking it; you can vape it, you can cook with and eat it and similar.

But you certainly can't say that for alcohol, which directly harms the liver, pancreas and other organs.

The Medical Monster must be de-fanged.  If we're going to talk about opiods as an illegal substance then those who push them with a medical license and get people hooked need to do the same sort of 20+ years of hard time that a street heroin distributor gets when caught and that extends to the pharmaceutical industry executives as well.

Our attitude must change, in short.

We can solve the very real issue of labor liability problems on factory floors.  Everyone is checked for impairment before starting their shift.  If you pass, you pass.  If you fail irrespective of reason you're sent home and it's a voluntarily-missed shift.  Miss more than "X" in a given amount of time and you're fired because you're incapable of performing the job.

It's pretty simple folks, but it puts a stop to the demon games, and that makes it politically unacceptable.

You see, the press and the political class always need to find a way to blame someone instead of searching for and implementing solutions.  The filtering of that paradigm down into employers is a large part of why America has become less-competitive, and if we're going to resolve that problem we need to start right here.

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2017-07-19 07:00 by Karl Denninger
in Employment , 218 references
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Make no mistake folks.  It's coming.

You have people who call it the "Amazon effect."  They liken it to when Ford started with cars, and suddenly buggies didn't make much sense, nor did horses.  Farriers went from common to near-extinct.  Oh sure, there were a few left, because some people owned horses for racing, or recreation.  But transportation?  That ended fast and so did a lot of jobs.

But when those jobs ended Henry Ford was there with an open factory door and hired all of them -- and then General Motors showed up and hired even more people.  Oh, and the cost of a car was less than the fully-loaded cost of a horse over time, never mind being faster and eliminating the literal tons of horse**** and******that the horses deposited daily all over city streets.

This is different.

I call it the monopoly effect, because it is.

Oh, and it's supposed to be illegal -- all of it.

But when you refuse to enforce anti-monopoly laws against health care providers, why would you enforce them against a big fat retailer?

You wouldn't of course and thus you don't.

This all sounds good, right?  Who doesn't like "lower prices"?

Well, among other things, all the people who get fired and now have nothing to buy with, lower prices or not.

Second, what makes you think actually lower prices result from this sort of behavior?  There's already plenty of evidence that you actually don't pay less in many cases and in fact you're likely to pay more, because your options decrease.  Simple economics tell us that with fewer choices you have less competitive pressure and prices go up, not down.

But back to the employment facts

There are nearly 16 million people employed in retail trade today -- and that's only the direct employment.  Then you have the people who keep the malls and buildings maintained, cleaned and otherwise open, along with the transportation that feeds all those locations both for the goods and for you to get there to shop.  Of course not all of this goes away when 10 stores close and Spamazon gets the business since they have warehouses and transport needs too, but their needs are far more concentrated and employ far fewer people -- like 1/5th or less than the retailers did both directly and indirectly.

Further, these are jobs that, while not particularly well-paying, do provide a means of subsistence -- and not just to those without college degrees either.  How many people working in those stores have a degree but can't find a job in-field?  Plenty.

Then there are the professional services.  Payroll, accounting, legal, architectural and other design, waste hauling, administrative.

What are we talking about here -- maybe 20% of the workforce finding itself out of work within the next handful of years if Spamazon and its friends are allowed to continue on their present path?

What do you intend to do with those people?

I have no idea, but this I do know: Monopolies don't lower prices overall, although they all argue they will through "economies of scale."  They put people out of work and screw those who remain, because they can -- on both the supply side and the demand side.  In other words prices go up instead of down, choice goes down instead of up, people lose jobs instead of gaining them and the suppliers to said business get screwed as well which radically increases the economic damage net-net across the economy.

Over 100 years ago Congress passed laws to make this sort of crap illegal for that very reason.  Those are good laws, not bad ones.  Yet today we simply don't care any more -- not in health care and not with Spamazon either.

Maybe the market is wrong on the "forward expectations" for Spamazon.  In fact, I bet it is, at least with regards to Whole Paycheck for reasons I've pointed out before.  Not only is food -- especially fresh food -- not like any sort of other packaged goods, but in addition the cultural differences between the workforces at both firms are so stark that you have to believe Bezos either thinks he can steamroller the people who work there or he had such a raging hard-on for the deal that he didn't even take a cursory look at the depth of the problems he will face trying to mold Whole Foods' employees into Spamazon's model of what a "good employee" is.  For starters there's the fact that Spamazon drug tests everyone who wants to work there while Whole Foods doesn't.  Care to take a wager on what percentage of their employees in, say, Colorado are burning a doobie on a regular basis?

Given how Wall Street has treated Beelzebub, er, Bezos over the last decade and more I suspect it's the second -- but whichever it is, he's in for a hell of a surprise on both the supply and employment sides of the ledger with this one.

You can take that to the bank -- if you still have a job.

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2017-07-07 08:50 by Karl Denninger
in Employment , 183 references
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Total nonfarm payroll employment increased by 222,000 in June, and the unemployment rate was little changed at 4.4 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in health care, social assistance, financial activities, and mining.

So says the establishment survey.

What does the household say, less all so-called "adjustments"?

It says +679,000which is wildly above the "establishment."  But -- last month it was +145, previous +634, and then back to back numbers over 1 million.

I do remind you this is the month called June.  Usually heavy seasonal summer hiring happens in May. This time it appears to have happened in June.  You can get that in one or the other depending on the survey week, which is a calendar thing.

What's much more impressive is that people came back into the workforce in spades -- 1.167 million of them, to be exact.  This pushed the employment:population ratio to 60.4%, which sure looks like a breakout to me -- although unconfirmed.

Thus ends the good news, but don't kid yourself -- it's significant.

The internals of the household data tell the tale; among age groups teen unemployment dropped a full percentage point, which is the usual for the summer seasonal hiring.  Adult men saw unemployment go up by two tenths, while adult women were flat.

In other words on balance all of this gain was among kids; it was all seasonal on a net-net basis.

Oh, and if you want to see why nobody will take the health care scam on?  It's "employing people", even though it's all a ripoff and bankrupting the country.

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