Labor Force Participation Lowest in Decades

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As we celebrated the achievement of American workers on this Labor Day, we shouldn’t forget those who are left out of the labor market.
The labor force participation rate, which is the percent of the civilian population 16 years and over who have a job or are looking for one, hasn’t been lower since 1978.
In July 2017, the labor force participation rate was 62.9 percent — down from a peak of 67.3 in March 2000.
The Federal Reserve Bank of Atlanta, which analyzes the changes in labor force at its Center for Human Capital Studies, concluded that the retiring population explains about half of the 3-percentage point decline in the labor force participation rate since 2008.
The Atlanta Fed also consider the reasons that people are not in the labor force, which varies by age, education, race and gender.
Not surprisingly, a higher percentage of people younger than 25 are not in the labor force because they are in school full-time, while many people (mainly women) 25 to 40 years old are taking care of the family. Disability or illness increases as a reason for not being in the labor force for the 45 to 60 age group. After age 60, retirement is the leading reason why individuals are not in the labor force.
One particular group not in the labor force includes those “hard-to-employ” people with barriers to work.
Kevin Corinth wrote an article in July when he was a research fellow at the American Enterprise Institute that digs deeper into why those individuals are not participating in the labor force and estimates the number of people not working because they face barriers.
He estimated that in 2015, 14.5 million adults between 25 and 54 had incomes below 200 percent of the poverty line and at least one of the following barriers to work:

  • Homelessness;
  • Serious mental illness;
  • Substance abuse; or
  • Arrested and booked for breaking the law.

Not all people with barriers would be willing to work if offered a job, so Corinth used information on peers with similar demographic characteristics and education but who do not face barriers to tease out the percentage with barriers who would work.
This method resulted in an estimate of 2 million people who potentially would be willing to work. If those people are successfully integrated into the labor market, they can increase the national labor force participation by 1.2 percentage points.
Corinth points to social enterprises as a solution to help this population, particularly those with recent experiences of homelessness, serious mental illness, and those with multiple barriers, which makes up 1.6 million adults where the gap between the actual and predicted work rate is largest.
These enterprises offer on-the-job training to people that are hard-to-employ with the goal of transitioning them into conventional employment.
When we look at macro-level statistics, it’s easy to lose sight of the human side of those numbers.
This Labor Day might be a good time to think differently about those who are not participating in the labor force as well as the social enterprises that help bring these individuals back into the labor force.
(This article first ran in the Richmond Times Dispatch on September 4, 2017)
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How Environmental Agenda Harms U.S. Economic Growth

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George Melloan, former Deputy Editor of the Wall Street Journal editorial page, wrote an insightful column on Thursday, Sept. 7, 2017, in the Journalcharging the Democratic party in the United States has become the Green Party.
Melloan claims “Under Green influence, Democratic lawmakers, when they controlled Congress, designated large tracts of the American West as new “wilderness areas.” They fostered the Endangered Species Act (ESA), which has been an effective barrier to industrial or agricultural development…” He claims the Democratic party and the Greens (environmental groups) “…operate under the flag of environmentalism…”
He further suggests the Democrats and the Greens distrust economic growth.
The Endangered Species Act has been a major tool in slowing or stopping growth in the United States. Melloan writes, “Working people, fed up with the diktats of the Greens who infest their farms and factories, were a major factor in the election of Mr. Trump.” He further alleges in the Journal column that “Greens want to deprive the economy of its basic energy sources, and they have little regard for the consequences…” of their action.
Oregon example: from growth to food stamps
A perfect example of this assertion is the timber industry in the West.  As we know, millions of acres of timber are burning, much of it in areas where the Greens will not allow the restoration of healthy forests. For an example of how much harm the ESA has caused, one needs to look no farther than Josephine County, Oregon. For 91 years, the Rough and Ready Sawmill was a major employer in southern Oregon. In this area, the federal government owns almost 80% of the land. The ESA helped create a flood of lawsuits blocking timber sales supplying Rough and Ready. At one time, the sawmill company had 22 mills in Josephine County. Josephine County, “…once Oregon’s fastest growing [county, has become] its poorest with 30% of its residents using food stamps.” According to one story, 1 of every 5 adults is unemployed in the county.
When a local congressman attempted to increase timber harvest in the county, Oregon’s Democrat-controlled state legislature and environmental groups opposed the restoring of timber harvests.
This is but one of many examples of productive jobs being eliminated by powerful environmental statutes such as ESA.
In May, 2017, National Geographic Magazine published an article defending the ESA. It claims the ESA to be “…one of the most powerful environmental statutes in the U.S. and one of the world’s strongest species protection laws.” The May article claims Republicans have introduced 25 proposals to “…skirt, hamper, defang, or undermine endangered species protection.”
National Geographic  headlines a section of its story and calls Republicans and others who support changes in ESA  “antiscience  ignoramouses”. The National Geographic quotes former Congressman John Dingell (MI) who claims to be the father of the endangered species act. Mr. Dingell claimed “I wrote much of the Endangered Species Act in my head while I was driving to and from work,…” Dingle went on to claim in the article “Today we have a bunch of antiscience  ignoramouses and vicious lying people in Congress.” I suspect that thousands of individuals in Josephine County, Orego,n would disagree with Congressman Dingell, who inherited his congressional seat from his father in Michigan and held it for over 50 years.
The spotted owl, an ESA protected species, is claimed to have shut down more than 2,000 sawmills in the Pacific Northwest, costing 40,000 jobs. Oregon Republican Congressman Greg Walden asserts “You have lost the economy that used to be there, therefore you have lost the revenues for the basic services. It is becoming a lawless county.”
Melloan writes, “The [Democrat] party’s environmental extremism puts it at odds with working people whose aspiration is prosperity.”
As long as Democrats and Green environmentalists want to deprive working people of jobs using statutes such as ESA, they make it clear they have no regard for those working people in the United States. It is clear the underlying philosophy is a distrust of economic growth. A Green agenda for sure.
(This column first ran in Farm Futures on Sept. 17, 2017)-
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Goodbye, Farewell … and Thanks.

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Author’s Note:  When Cameron Elementary School Principal George Towery retired in 2010, I wrote the following column about his accomplishments and his leadership.  In a world in which many seem to define themselves by their politics, it’s hard to imagine a principal combining the instructional ideas of the Heritage Foundation with the bleeding-heart compassion of Barack Obama.  
But that was George.  The things he did to improve student academics and make children’s lives better didn’t require massive new programs or funding – they simply demanded leadership, innovation and the willingness to respond to the specific needs of the students he served.
Returning from a grandson’s baptism in Alaska recently, I opened the paper to find that George Towery had passed away last month.  And in re-reading that seven-year-old column, it seemed to define his epitaph as well now as it did then … although his legacy will remain in the thousands of children for whom he made a difference.


To George Towery,
Goodbye, Farewell … and Thanks.
By Chris Braunlich
At a school gathering last week honoring George Towery, the retiring principal of Cameron Elementary School in Fairfax County, a poster invited students to answer the question: “What Will Mr. Towery Do With All His Free Time?” One girl wrote, “He should sit on the beach, where the sand meets the water, and build beautiful sand castles.”
Good advice for someone who has worked hard, but its difficult to think that George Towery could build a more beautiful castle than he did at Cameron.
For some, Cameron would be a candidate for a “challenged school.” Today, the school is 50 percent Hispanic, 20 percent black, 15 percent white and the remaining 15 percent a mix of other heritages. Nearly 63 percent of its children are on free and reduced meals; more than 70 percent speak a language other than English at home.
Yet, the school’s reading and math pass rates regularly equal or exceed the county and state passing rates.
Ninety percent of the schools’ Hispanic students passed the third grade state reading exam – five points higher than Hispanic students in the county; seven points higher than those in the rest of Virginia. Nor does it stop there: In 2009, every Hispanic student passed their state reading exams – and the gap between what Cameron accomplishes and what similar cohorts in the state and county accomplish carries through to nearly every subject.
That kind of accomplishment doesn’t come from going “by the book.” Towery and his leadership team at Cameron are anything but –

  • Cameron has its own “barnyard” – a suburban courtyard with chickens and goats.  Caring for the animals is a privilege and a reward, and has become a way to reinforce good behavior, and teach responsibility and cooperation.
  • When the growing number of immigrant parents asked if they could have school uniforms like they had in their home country, Towery realized the county at the time had no policy.  Rather than say “No” because there was no policy, Towery just started doing it. Today, 90% of the students come in the school “uniform”:  white shirt and tie (or polo) and khakis for boys, white blouse (or polo) and dark skirt for girls – a system that reduced competition for expensive clothes and recaptured focus on learning.
  • One year he bought each teacher a copy of a “No Excuses” book about successful schools in challenging urban environments as a “summer reading assignment,” telling them:  “If these schools can do it, we can.  Come back in September and let’s make it happen here.”
  • He introduced the school to “Direct Instruction” — a rigorous and scripted method of teaching that’s often unpopular with teachers who prefer “doing their own thing.”  But Towery recognized that the students now populating his school needed greater and consistent academic guidance.  “After a few months,” he would recall later, “all the teachers realized that suddenly these children were learning.  What they were doing was working.”  The school supplements that now with a program from William & Mary for gifted and talented students:  At Cameron, no student is left behind – or unable to move ahead.
  • At Thanksgiving, Towery and his Assistant Principal, Steve Hillyard (who succeeds Towery) deliver turkeys and food baskets to families that can’t afford them. He’s gone with a student to the coroner’s to identify a dead parent, and helped students whose parents had ended up in jail or have been evicted or are drug dealers  “because there was no one else to do it.”   He started camping trips so students would learn about nature, and trips to Colonial Williamsburg so they could learn the nation’s past.  And, recognizing that genuinely bad and dangerous behavior was easier to correct at age eight than at age 13, Towery created an “alternative school” for elementary children with behavior problems, and invited other nearby FCPS schools to send him those children.

Towery notes “It’s easier to beg forgiveness than to ask permission,” and much of what he started he started without asking permission. One suspects he frequently begged forgiveness.
It’s tempting to say “this isn’t your grandfather’s principal” … but in a way it is – a throwback to a time when leaders did whatever it took and focused on education, but knew their community, and who was having problems, and went out of their way to lend a hand for the children they loved.
We’ve lost an awful lot of that over the years, haven’t we?
Rumor has it that Towery is planning a book about the last 30 years.  One can only hope so.  The world needs a better blueprint for beautiful castles.
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A Better Model for Lending to the Poor

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It’s time to introduce into the public lexicon a distinction between “social justice warriors” and “social justice entrepreneurs.”
Social justice warriors (or SJWs, as they are known short-hand on some conservative blogs) seek to remedy the conditions of the poor and downtrodden through political action, typically calling upon government to wield its power and money to fix some perceived institutional wrong.
Then there are social justice entrepreneurs. Instead of seeing government as the answer, they look to private action: creating new business and not-for-profit models to help the poor. The entrepreneurs don’t agitate, they don’t wave placards, and they don’t frequent protest rallies. They go out and change peoples’ lives for the better.
Regular readers of this blog know that I have no patience with SJWs, most of whose “remedies” are counter-productive, if not outright destructive. By encouraging the poor to buy houses they can’t afford, take out higher-ed loans for degree students never complete, and shutting down lenders-of-last-resort like payday lenders, SJWs have worsened the plight of the poor — all for the most noble of motives, of course.
A better model for lending to the poor
California-based LendUp Global Inc., is an example of a social justice enterprise that has the potential to help ameliorate the lives of millions of poor people — without a single dollar of government funding. The company, which has established its first East Coast office in Chesterfield County, was recently profiled by the Richmond Times-Dispatch. I base the following account upon that article.
Sasha Orloff had worked in finance, including an internship at the Grameen Foundation, a global nonprofit co-founded by Nobel laureate Muhammad Yunus that provides micro-financing for poor people in developing countries.  His experience there inspired him and his stepbrother Jake Rosenberg, who had worked in technology at Yahoo! and an online gaming company. They conceived the idea of tapping the emerging FinTech industry to make small loans to an estimated 100 million Americans, mostly poor with low credit ratings and income volatility, who cannot get loans from traditional banks. In early 2016, LendUp raised $150 million in venture capital with the goal of becoming a better small-loan provider.
As with payday lenders, LendUp’s interest rates are extremely high on small, short-term loans. A $250 loan repayable within a month would carry a finance charge of $44, equivalent to an annualized interest rate of 214 percent. Interest payments must cover the transaction costs of making the loans, after all. They also reflect the increased risk on non-payment by low credit-score borrowers.
As Rosenberg acknowledges, “There is a subset of the population that actually needs payday loans, and for this population, banks cannot readily serve them for a wide range of reasons.”
“Yes, payday loans are expensive. The real problem is there is no other options,” he says. “The average borrower is getting ten [payday loans] a year, and they have no pathway to a better product. The key thing is, we’ve tried to create a model where we win when the customer wins. … We do that by trying to incentivize behaviors that are constructive to the consumer’s financial life. If they do those things, they get access to more, the cost goes down, and the amount of capital they can get goes up.”
LendUp offers customers a “ladder” out of the indebtedness trap. The company provides financial, advising customers on how to improve their credit rating and qualify for lower cost debt. Borrowers can win points by paying back loans on time. As they prove themselves, they can work from payday-like loans to installment loans of up to $1,000 with lower interest rates.
Earlier this year, LendUp passed the $1 billion mark in loans provided. It has made more than 3.5 million loans.
Time will tell if LendUp has a profitable business model. But if it does, it should have no trouble attracting capital and expanding. Most likely it will attract competitors, and it will push the payday lending industry to reform itself — either develop a better business model or get dismembered by new tech-savvy, FinTech enterprises.
Interestingly, although LendUp’s East Coast operation is based in Virginia, the company does not offer loans in the Old Dominion. The article does not explain why, but don’t be surprised if there are regulatory restrictions inspired by do-gooders trying to protect the poor from predatory lending.
(This article first ran in Bacons Rebellion on September 4, 2017)
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Many Autonomous Vehicle Assumptions Need to be Questioned

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As a transportation professional, I’m a bit overwhelmed by proliferating articles and technical papers dealing with autonomous vehicles. And I’m increasingly distressed by the growing disparity between what appears in the popular media and what’s in the technical literature, because the former is what seems to motivate legislators and planners. So here are five challenges to the mass-media version of our AV future.
AVs will save millions of lives. Certainly, we all hope this will prove to be the case. But it’s not as simple as many people seem to think. As Washington Post reporters Michael Laris and Ashley Halsey III explained in a long feature article (Oct. 18, 2016), how will we know how much safer AVs are? Only about half of all crashes are reported to police (as opposed to insurance companies), and some people avoid doing the latter to avoid a possible premium increase. The former head of the National Transportation Safety Board, Mark Rosekind, said that widespread use of AVs should not proceed until they were demonstrated be “much safer” than conventional vehicles, but without comprehensive data on actual accident rates, it’s difficult to make such a comparison. Also, researcher Tom Dingus of the Virginia Tech Transportation Institute points out that alert, attentive, sober drivers are very low risk. It’s drunk drivers plus very young and very old drivers that drive up the averages. In addition, the most promising form of vehicle automation relies on machine learning—but even the experts in that field have no idea what or how the machine actually learns. Matthieu Roy of the National Center for Scientific Research in France says that, “You would never put [a machine learning] algorithm into an airplane because you cannot prove [to regulators] the system is correct.”
AVs Will All Be Connected Autonomous Vehicles (CAVs). A January 3, 2017, Wall Street Journal news article called “Wiring Streets for Driverless Cars” presented this conventional wisdom, which is being promoted by the National Highway Transportation Safety Administration with its Vehicle to Infrastructure (V2I) efforts. Reporter Paul Page touted new digital signs on a freeway near Washington, DC “as a first step toward what highway planners say is a future in which self-driving cars will travel on technology-aided roads lined with fiber optics, cameras, and connected signaling devices.” But unlike lower-brow media, Page went on to note that many billions of dollars would be needed to wire more than 4 million miles of paved roads and 250,000 intersections. If AVs depend on that kind of infrastructure investment, don’t bet on an AV future. Fortunately, most AV researchers don’t think anything like that is necessary. AVs, especially those with full (Level 5) autonomy, will need to be self-sufficient even in alleys, on gravel roads, and on countryside dirt roads.
Full, Level 5 Autonomy Will Be Here within a Decade. In addition to academic researchers such as UC Berkeley’s Steven Shladover who projects Level 5 (all types of roadway, all weather conditions, no driver needed ever) as a 2075 phenomenon, a number of technology-literate commentators have begun throwing out caution flags. For example, telematics blogger Michael L. Sena headlined a recent issue of his The Dispatcher: “SAE Level 5 Driverless Cars Are Not Just Around the Corner.” He took issue with recent reports claiming that Transport as a Service (requiring Level 5) will be ubiquitous by 2030 nationwide. He also cited a thoughtful analysis by The Economist, headlined “Forget hype about autonomous vehicles being around the corner—real driverless cars will take a good deal longer to arrive.” Wired’s Aarian Marshall had a piece in February explaining “Why Self-Driving Cars *Can’t Even* with Construction Zones,” discussing very real problems with machine learning. He also noted an announcement by Nissan that its current plans don’t include Level 5; instead, they assume a human occupant who can take over control when the AI cannot cope, and the human can contact a Nissan call center for help.
Fleets Are the Future, Not Owned AVs. A recent “analysis” by Governing magazine, summarized in the August issue, sounds the alarm that cities’ budgets are seriously at risk from the impacts of the transition to AVs. For the largest 25 cities, the magazine’s team collected data on parking revenues, fines and citations, traffic camera fines, gas taxes, vehicle licensing fees, etc. Many of these cities each year generate several hundred dollars per capita from these vehicular revenues, much of which could disappear in the AV future, warns the article. Except—much of the impact stems from the assumption that shared fleets of robo-taxis replace individually owned cars, thereby eliminating most urban parking requirements (and hence parking revenue). Another built-in assumption is that most or all AVs will be electric, which is hardly a given. Robotaxis and individually owned AVs that can go elsewhere after dropping the owner off require Level 5 automation, which is hardly a near-term phenomenon. So city officials should not begin losing sleep over plummeting parking revenues.
AVs Will Reduce Congestion. As I’ve pointed out in previous issues, the majority view among AV researchers is that the transition to AVs will increase vehicle miles of travel (VMT), for a variety of reasons including bringing personal vehicle autonomy to millions who are unable to drive today, as well as reducing the time cost of commuting. But a related idea remains—that due to reduced distance between AVs on roadways, existing roads will be able to handle greater volume with less congestion. But even popular media are starting to consult experts who disagree. Business Insider recently interviewed Lew Fulton, co-director of UC Davis’ Institute of Transportation Studies. He expressed particular concern about zero-occupant (Level 5) vehicles being a new source of increased congestion. Such vehicles, programmed to run errands, deliver packages, etc. will lead to far more cars on the road. Fulton calls them “zombie cars.”
Before leaving these points, I want to recommend a more thoughtful article. Despite its misleading title, “The Road Ahead for Connected Vehicles” (when the article actually discusses AVs, not CAVs), is a sober discussion by industry experts—established auto industry people, high-tech AV pioneers, and consultants. It’s a product of Wharton’s Program on Vehicle and Mobility Innovation, which has absorbed the former MIT International Motor Vehicle Program. If you have time to read just one article to get a more balanced view of this challenging area, this one is hard to beat. (http://knowledge.wharton.upenn.edu/article/road-ahead-connected-vehicles)
(This article first ran in the August issue of Surface Transportation Innovations)
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