Texas Worker

Texas — the second largest state — is mentioned three times by the Bureau of Labor Statistics in an April 23 press release on mass layoffs (of 50 workers or more):

• Texas is the state with the third highest number of unemployment claims resulting from layoffs in March (14,284), after California (38,130) and Illinois (18,096), but ahead of Ohio (13,067).
• Texas is the third highest of 42 states reporting growth of layoff claimants year over year (+9,179), behind California (+16,318) and Illinois (+11,402).
• Texas is among 26 states reporting the worst month ever for March layoffs since the statistic has been tracked.

In a supporting table, the BLS shows that Texas reported 112 mass layoff events in March 2009 compared to 36 in March 2008.

But in keeping with some other “derivative” trends in the US economy, which may indicate that the rate of decline is slowing, the number of layoff events was one fewer than the 113 reported in February and 24 fewer than the 136 reported in January.

While the number of March jobless claims filed by Texas workers on the basis of mass layoffs was also fewer than January 2009 (16,893), it was nevertheless a large increase over February (9,769).

In the first quarter of 2009 at least 50,000 Texas jobs have been lost to mass layoffs.

The civilian labor force in Texas has grown by 243,000 over the past year (March to March) but the number of jobs has shrunk by 40,000 (TWC).

Great article today on CounterPunch. You are right, it’s time for a democratic surge and a rebuilding of health care, etc. You mentioned Larry Kudlow? His show should be required viewing for all leftists. He is the epitome of the Capitalist televangelist, spreading the gospel of personal accumulation with such zeal that it’s, well, beyond words, I guess. anyway, thanks for a great read.
— Mike Whitney

By Greg Moses

TheRagBlog / CounterPunch / DissidentVoice

It wasn’t the housing bubble exactly. It was more the way the bubble was blown.

In the official language of the International Monetary Fund report for April 2009, “the crisis was largely caused by weak risk management in large institutions at the core of the global financial system combined with failures in financial regulation and supervision.”

After “the crisis” was caused, the weak risk managers along with their failed regulators and supervisors came back to loot the national debt.

In essence, the mortgage of the American Worker has been preyed upon to inflate the wealth and power of financiers. Twice.

From the IMF point of view, more debt looting or “fiscal adjustment” will be necessary to keep the world economy from worse channels of trouble. And so long as the money makes genuine entry into the credit system at lenient rates (if not terms), then it seems like sensible advice. I believe the IMF when it claims that worse trouble is possible.

Says the IMF: “Key transmission routes [of worse trouble] include deep corrections in national housing markets, especially but not exclusively in advanced economies; corporate stress, especially but not exclusively in emerging economies; deflation risks, mainly in advanced economies; and increasing vulnerabilities in public sector balance sheets, especially but not only in emerging economies.”

Sure as sewage runs downhill, downside risks remain.

And yet, behaving like crash victims who climb from wrecks and run around for awhile, whole classes of boosters may be seen doing double flips of joy because they think they feel the world bouncing off its bottom.

There are many gloomy charts in the IMF report on the global economy, but the one that chills me most shows how each economic region of the globe is expected to contribute to the world recovery that (we hope) will begin later this year.

When it comes to the crucial turning point for that recovery, the US is the only portion of the global economy that completely disappears from the bar graph. The US will make zero contribution to global growth in the 4th quarter of 2009, then a bit of a negative contribution in the 1st quarter of 2010, before slacking to zero again in the 2nd quarter of 2010.

As for “other advanced countries,” you will find them colored in dark blue below the line of recovery, indicating that they will be worse than no help. Above the line of positive Purchasing Power Parity, all the heaving lifting at the beginning of the second decade of the 21st Century will be upon the shoulders of China and the “rest of the world.”

This, my friends, is how you win a cold war without knowing the least reason why.

Along with my favorite storm watcher these days, Larry Kudlow, I also have faith that democracy and capital will figure out how to keep each other alive through this deluge, but I disagree with his forecast model.

For the past several decades capital has taken advantage of weakened democracy in the US. It is now time for democracy to return the favor. As US capital returns from subzero on the IMF recovery scale, democracy has to insist on new parameters.

If the Chinese can lead global growth in 2010, what happens to the claim that big governments must be incapable?

Therefore, health care coverage for all people, cap and trade for all creatures, a path to citizenship for every neighbor in the neighborhood, and a genuine national youth program, all of these things will elevate the US to a place we should have been 30 years ago

When we voted for change last November we weren’t talking about pennies on the dollar. Bankers of the world, untie!

By Greg Moses

CounterPunch / The Rag Blog

Ah, the common folk. How we do pile up. Come May Day 2009 there will be about 14 million unemployed, twice the seven million who were unemployed in June of 2007.

Speaking about this on the stock market channel—which I have been watching lately the way I used to watch the weather channel back in the 90s–they call unemployment a lagging indicator. On the stock market channel they have their eyes always on the stock prices, which crash before the people do, and which consequently qualifies unemployment as not only post hoc to stock prices but propter.

So what we need as an immediate federal jobs program is a labor channel called Countrywide Unemployment (CU) where unemployed people can get paid for some honest reporting on what a lagging indicator looks like when you keep your eye on it.

The incentive to the employer community would be that a voice on the unemployment channel would agree to leave the air when presented with a competitive labor contract for a term of 18 months or a length of time equal to the average recession, whichever is longer.

The only advertisements allowed at the CU network would be for employment, education, or the kinds of cultural events that could be considered unemployment friendly, certainly not the Super Bowl. Any other crap you want to sell goes to Google ads at the network website.

But in no event will credit card companies be allowed to advertise unless they agree on pain of nationalization to lend at prime plus nada for the life of the cardholder.

There should be regional bureaus set up in RVs and parked outside important places like the White House, Congress, State Capitols, Regional Federal Reserve Banks, and rotating on a regular basis to various network places and research parks where venture capitalists may be found.

Now in recognition of the fact that youth get systematically screwed when it comes to the unemployment rate, one desk at the unemployment network would be dedicated to coverage of the Unemployed Peoples Youth Resource Service (UPYRS).

The UPYRS program would accept proposals on a weekly basis from youth who have shovel-ready ideas for community improvement. They would pinpoint something that they are tired of seeing neglected and their proposals would be put up for vote at the network’s website and hooked into Twitter and so forth.

A camera crew in each city would be assigned to follow the winning team of the week as members of the team receive full salaries and funding, purchase equipment and supplies, and get the work done in an entertaining and uplifting youthful manner, improving the community, the economy and their own prospects for saving memories of happy and productive lives.

Upon completion of the project each team member would receive a compensation bonus bond in the form of a T-Bill denominated for effective participation in the patriotic agenda known as “quantitative easing.”

This whole operation could be geared up in about an afternoon as soon as the Fox Network is nationalized and placed under an advisory council of cable access producers from across the country.

The founding annual budget should be a modest $5 billion funded directly by the Federal Reserve Board under discretionary powers delegated to the US Central Bank. The fund will be called Talented Access Living Live (TALL). The Philly Fed should have the TALL cash Fed-Exed to Fox Headquarters by noon, although stipulation could be made for a boxcar of gold bullion in case the Philly Fed is temporarily out of paper.

If there is any trouble getting this whole network up and running by midnight, then fourteen million unemployed should go milling around the Wall Street sector of Manhattan until the last of their lagging indications gets reabsorbed into a business plan.

Let’s not be embarrassed for Mr. Rodney Delfantiez of Seguin, who is listed by FirstUSA as the ninth largest employer in Texas. Rather let’s celebrate the luck of the entrepreneur who gets a wind of good luck some days and winds up more famous than he expected.

To be sure, Alloy Wheel Repair Specialists (AWRS) is a global franchise with a location in Seguin, right next to the driveway where Mr. Delfantiez keeps his Mobile Reconditioning Facility (MRF) in which he stores tools “to straighten bent wheels and replicate CNC lathe lines when repairing machined alloy wheels.” These tools were developed by entrepreneur Tom Morris, founder of the global AWRS franchise.

So it’s not Mr. Delfantiez’s fault that he has been thrust into the light by FirstUSA as an employer of five thousand or more wheel repair specialists. Perhaps, like Joe the Plumber, he will be able to make something of it. He reminds us that job creation and recovery will either have grassroots or no chance at all.

By Greg Moses

CounterPunch / DissidentVoice / TheRagBlog

As legend has it, the economic history of the USA was changed on the day that economist Art Laffer drew his famous “Laffer Curve” upon a napkin in order to convince Dick Cheney and Don Rumsfeld that President Gerald Ford’s tax hikes would be a mistake. What the curve intends to teach us is that taxes can be too high.

Laffer’s rationaliztions for low taxes became very popular as banners for the Reagan counter-revolution. And the results of the Laffer idea can be seen quite clearly in a chart of the national debt posted at usgovernmentspending.com. Whenever the Laffer idea takes hold, as it did in 1980 and 2001, taxes are generally cut to a level below their ability to keep up with actual costs of government. The result is a combination of easy money and a mountain of public debt.

Now that the Laffer idea has been run out of town by the current federal administration, you can’t say he didn’t see it coming. In a series of policy studies, some of them done for Texas clients, Laffer has been sandbagging his case for low taxes and small government.

In the latest installment of the Laffer attack, the Texas Public Policy Foundation (TPPF) paid the Laffer associates to produce a rationalization for the state of Texas to send back federal money that was to be funnelled through state agencies. The pdf is posted at the TPPF website, texaspolicy.com, which, if you have the Netcraft toolbar, you can see is hosted on a server in Canada.

Now the most charming thing about Laffer is that he gets along well with Larry Kudlow the financial evangelist who can be seen preaching the gospel of wealth most days at CNBC. It’s difficult not to like Kudlow, even when he’s shouting over his liberal guests. But you’d have to get up very early in the morning to find cable news shows these days where the host does not shout over the guest, so in this context the shouting doesn’t seem to harm Kudlow’s charm (that is, until he starts trying to shout over the host of the show that comes after his).

There is a kernel of truth to the gospel of wealth. If there is such a thing as an American spirit then the gospel of wealth was there at its birth, if only to insist on a quick c-section to get the thing done.

But what happens when the gospel of wealth meets the Laffer Curve is that you get something like the Laffer Cathedral Arch. Instead of placing the curve into a complex field of economic and social analysis, you get led to a place where you have to face private wealth and bow down every time.

On Monday night the Texas Governor appeared as a guest on the Kudlow show. True to form for a member of the Laffer posse, the Governor denounced federal stimulus money as counterproductive to state’s rights and private property. The Governor has been speaking in Lafferese most earnestly since he found out that he will have a real fight for re-election against incumbent US Senator Kay Bailey Hutchison. He is pulling what is known in Texas as the Gramm maneuver, which positions each and every opponent as a big-spending liberal.

So these days the Texas Governor is all about the kind of state’s rights that come heavily backed by private wealth. And yes, this is the same Governor who loyally hosted Operation Close the Border or whatever it was called when National Guard troops on Pentagon orders came marching from up North, out West, and back East on down to the Rio Grande. Press two for English if you want to know how that operation worked out.

According to the Governor’s lingo, the stimulus money can only serve to keep more people unemployed longer. And you can see his point insofar as the federal money will not be delivered to some payroll office where it could get right to work making a fortune. What the Governor prefers to brag about is the money he gives directly to entrepreneurs for capital that “creates jobs.” Of course he has to tax somebody to raise that capital. Then the person he gives the money to taxes a bunch of workers, calls it profit, and you have real freedom in the making, not some dreary social oatmeal.

The annoying thing about the Laffer posse is not that they are completely wrong, but that they are so single minded. You give them a chart with a curve on it and they turn it into your one and only train of thought.
In the hands of charming Kudlow, who cannot hide his kitty-cat heart, the Laffer curve can be a healthy counterpoint to big spending liberalism. There is a line we all need to watch. But when the only line that can never be moved is the tax that needs to be paid to do the people’s business, then what we’ll get is more Reaganesque-Bush2 growth that does not, in the words of Mary McLeod Bethune, “Lift as we climb.”

Jobs at the FirstUSA-rated eighth-largest employer in Texas got hit by a hurricane in 2008. Before Hurricane Ike hit on Sept. 13 the University of Texas Medical Branch at Galveston had 12,588 employees. As of Feb. 28, 2009 UTMB had restored 10,778 of those jobs.

At Thanksgiving 2008, UTMB announced 3,000 layoffs. By mid-March 2009 UTMB told modernhealthcare.com that “it has re-hired 415 employees after the system laid off about 2,450 of its workers a few months ago.”

The challenge in the post-Ike period has been to restore education for “2,338 medical, nursing, health professions and graduate students, including 2,094 Texans from 122 counties throughout the state (fall 2008)” while keeping up the hefty research commitments that come with “$154 million in federal research funding, including $106 million from National Institutes of Health (37th in NIH ranking).”

Of 10,050 full time jobs reported by UTMB to the Texas State Auditor for the 2009 second quarter, 4,967 were funded from state appropriations while 5,083 were funded from other sources. Of the 1,189 part time jobs, 588 were funded by state appropriations, 601 were funded from other sources. And of the 390 contractors, 126 were funded by state appropriations, with 264 funded from other sources.

When it comes to job funding at UTMB, state appropriations are the junior partner. But we’ll take caution in our thinking until we get a clearer idea of the relationship between state appropriations and “E&G funding” from educational and general funds, because UTMB tells the auditor that “E&G” funds have been drawn upon to help fund the Ike recovery.

It seems a cold thing that a hurricane should knock so many people out of jobs, but the Houston Business Journal reported that many of the laid off employees were highly skilled and were highly recruited into replacement jobs. In the health professions and education, there is still some resilience in these hard times, which helps to make the bad times look temporary.

The seventh largest employer in Texas, as rated by InfoUSA is another legendary name in American business, Electronic Data Systems (EDS). The company’s 10-K of Feb. 2008, filed with the Securities and Exchange Commission (SEC), states that the Plano, Texas company, “EDS and its subsidiaries employed approximately 139,500 persons in the United States and 65 other countries around the world.”

Founded by Texas activist H. Ross Perot in 1962, EDS was swallowed up by General Motors between 1984 and 1996. Then after a dozen years of independent operation, the company was acquired by Hewlett Packard (HPQ) in 2008. Today the official way to say it is: “EDS, an HP Company.”

According to the EDS website, the company has 50,000 employees in the USA, spread across 49 states. A recent news item (of April 6, 2009) announces participation in the hefty Alliant program with the US General Services Administration that involves government-wide IT contracts with the juicy-sounding “10 year Multiple Award/Indefinite-Delivery, Indefinite-Quantity” feature with a “$50 billiion contract ceiling.” Big stuff.

The company’s global workforce strategy revolves around the key words “Best Shores,” which does not seem to encompass the Texas Gulf Coast. Here’s the way it is described in the 2008 10-K:

Our workforce alignment investments are focused on increasing our capabilities in lower-cost, Best Shore geographies, including India, Latin America, Hungary and China. We increased the number of employees in Best Shore locations from approximately 32,000 persons at the end of 2006 to approximately 41,000 at the end of 2007, including approximately 27,000 in India. Our India workforce includes employees of our majority-owned MphasiS Limited subsidiary, which in 2007 was integrated with our former EDS India operations. Our 2007 initiatives to increase capabilities in Best Shore locations included the transfer of certain internal administrative functions, which was a principal component of our efforts to reduce our selling, general and administrative (“SG&A”) expenses as a percentage of revenue. Our investments in workforce alignment represented approximately $0.13 per share of expenses in 2007 (excluding expenses related to the U.S. early retirement offer described below) compared to $0.34 per share of expenses in 2006.

We expect to significantly increase our overall investment in workforce alignment in 2008 compared to 2007. We expect our 2008 investment in workforce alignment, comprised principally of severance expense and training costs for employees in Best Shore locations, to be approximately $200 million-$250 million in 2008, or approximately $0.25-0.31 per share. This represents an incremental increase of approximately $100 million-$150 million, or $0.12-0.18 per share, compared to 2007. We expect to incur a majority of the incremental workforce alignment expense during the first half of 2008.

During the third quarter of 2007, we announced an early retirement offer (“ERO”) for approximately 12,000 U.S. employees. Approximately 2,400 employees accepted the ERO. Employees accepting the offer will receive enhanced retirement benefits payable through normal payment options under the EDS Retirement Plan. In connection with the ERO, we incurred expenses of approximately $154 million, or $0.18 per share, in the fourth quarter of 2007, substantially all of which is attributable to the enhanced retirement benefits. Because substantially all of the ERO cash expenditures will be funded by the EDS Retirement Plan, we do not expect the ERO to result in any material cash expenditures in the future based on the current funded status of that plan.

On the pension front, EDS states: “We offer pension and other postretirement benefits to our employees through multiple global pension plans.” The word “union” does not appear in the EDS 10-K of 2008.

Lockheed Martin (LMT) takes sixth place as Texas’ largest employer according to InfoUSA (after fourth and fifth place MD Anderson).

The stock of LMT jumped from $67 to $73 in early April when Secretary of Defense Robert Gates said he would, “recommend increasing the buy of the F-35 Joint Strike Fighter from the 14 aircraft bought in FY09 to 30 in FY10, with corresponding funding increases from $6.8 billion to $11.2 billion. We would plan to buy 513 F-35s over the five-year defense plan, and, ultimately, plan to buy 2,443.”

In case you didn’t notice, that would mean Lockheed Martin is dropping its price for the F-35 from a little under half of a billion dollars to a little over one third. Times 24 hundred. It’s not for nothing that they call the F-35 “the most complicated inside airplane that’s ever been built.”

According to Lockheed Martin’s 10-K Annual Report filed on Feb. 26 with the Securities and Exchange Commission (SEC), the company “had approximately 146,000 employees, over 90% of whom were located in the U.S.” Here is one employer who is likely to have unmet demands going forward:

“The demand for workers with security clearances who have specialized engineering, information technology and technical skills within the aerospace, defense, and information technology industries is likely to remain high for the foreseeable future, while growth of the pool of trained individuals with those skills has not matched demand. As a result, we are competing with other companies with similar needs in hiring skilled employees.”

Lockheed Martin is 15 percent unionized. “Approximately 15% of our employees are covered by any one of approximately seventy separate collective bargaining agreements with various unions.”

Yet, despite what Lockheed Martin calls good labor relations, and despite about a trillion dollars in guaranteed government contracts for one airplane alone, the company confesses to risky business as its products and services tend to be controversial and tend to be wanted in dangerous places.

As for the role of the Texas Worker in all this, the company website assures us that Fort Worth is “Officially designated as Air Force Plant 4, Fort Worth is the headquarters of Lockheed Martin Aeronautics Company and home of the F-16 Fighting Falcon and the F-35 Lightning II. Manufacturing activities include F-16 Fighting Falcon and F-35 Lightning II final assembly and F-22 Raptor mid-fuselage assembly. Portions of the Japan F-2 fighter are also produced here.”

But what will the Texas Worker experience as part of this enterprise? Thanks to the stock market crash, Lockheed Martin reports a debt to capital ratio of 58 percent. This makes it unlikely that the company will be able to afford reversing a declining benefit ratio for non-union employees. The benefits structure for non-union employees changed effective Jan. 1, 2006 when they were placed into “defined” pension plans instead of “qualified defined” and when they were invited to join the retired medical plan entirely at their own expense.

When benefits such as these deteriorate among non-union workers at places such as Lockheed Martin, the issue of secure pensions and health care achieves a gravitational equation where national security is precisely equal to social security. And this is what the Commander-in-Chief might have in mind when he insists that the policy network of social security in the USA cannot be told to wait at the end of some arbitrary line. But pardon us, allow us to ask, what does the price of these war machines have to do with the long term welfare of the non-union employees who will help to turn them out?

InfoUSA rates the M.D. Anderson Cancer Center in Houston as Texas top employers number four and five (counted twice under slightly different names). It is one of the great institutional cities of the Texas landscape, as any Google street view of 1515 Holcombe Ave. will confirm. It is big enough to count twice.

It is difficult to speak of M.D. Anderson without some pride of place. According to the official website, the cancer treatment city is treating 79,000 patients per year, teaching 4,000 students, hosting 1,000 clinical residents and 1,300 research fellows. All told, M.D. Anderson employs “more than 17,000 people, including nearly 1,400 faculty numbers.”

Here is the sort of enterprise where federal spending can easily translate into wealth with excellence. Yet MD Anderson President John Mendelsohn, MD, reports that “the National Cancer Institute budget has been in decline for the past four years” to the point where serious researchers have to wait until they are forty-years-old to get serious funding.

When pundits and talking heads toss around the word “infrastructure” we would encourage them to pair the word “research.” If we talk about government funding for “infrastructure and research” we could emphasize that material foundations of social progress are better built from models of advancing knowledge.

UPDATE: A query of the Full-Time Equivalent (FTE) database at the Texas State Auditor’s website furnishes the following results for MD Anderson, second quarter, 2009: 16,504 full time employees; 12,372 paid from state appropriations; 4,132 paid from other sources. 1,452 part time employees; 912 paid from state appropriations; 540 paid from other sources. 300 contractors; 166 paid from state appropriations; 134 paid from other sources (100 more than Q1).

To begin reviewing the situation of the Texas Worker, we looked for the top employers in the state. The most authoritative source that we found was the federally sponsored website careeronestop. Following the listing of top employers that is backed up by research from infoUSA, we looked at Alcon (ACL), Dell (DELL), and Aegon (AEG).

After searching the details of employment via filings at the Securities and Exchange Commission (SEC) and at corporate websites, we’re not very confident about the basis of the “Largest Employer” listings at the federally sponsored website. So the first concern we have is with the quality of “outsourced” labor research when it comes to vital labor market information. As the administration of President Barak Obama considers where to cut government and where to grow it, we would encourage “infrastructure” spending in the basic resource of authoritative labor data.

The second thing we notice, regardless of how the companies actually rank in order of jobs provided, is the international complexity of employers. With two of the companies, we have economic centers reaching outward from Europe. Alcon is under 52 percent control of the Switzerland legend Nestle, but stock option calls may soon shift that power to another Swiss powerhouse Novartis (NVS). Likewise with Aegon, a financial services giant anchored out of the Netherlands. In the case of Dell we have a genuinely home-grown force that is growing as rapidly as possible outside the USA. When it comes to large private employers in the 21st Century, the Texas Worker will be competing for payroll checks denominated in currency baskets.

Finally, the third thing we notice in this first round of inspection is how immature the Texas Worker finds her labor organizations when compared to especially the European peers. In Aegon’s dispute with Rotterdam harbor workers we get a glimpse of what effective pension politics can look like. But in order to get to that point, professional institutions need time to establish a legacy of rights and responsibilities. Where does the average Texas Worker even begin to conceive of a politics that involves her voice in the construction and preservation of well-deserved old age security?