Curbing Illegal Immigrants

On October 10, 2007 in an article entitled “Effort to Curb Illegal Worker’s Hiring Blocked” the Washington Post reported that overall, 7.2 million illegal immigrants account for at least 10 percent of low skilled U.S. workers and that 5 percent of the total U.S. workforce is unauthorized. The figures were cited from the Pew Hispanic Center.

Solving this problem of illegal immigrants is simple as Congress discussed recently with the minimum wage bill. They told us raising the minimum wage will reduce employment by raising operating costs, which forces business to economize on labor and layoff many. Economists continue to be unanimous in their forecast; a higher minimum wage will decrease the demand for labor.

Therefore, if we want to eliminate illegal foreign workers we will need to raise the minimum wage to eliminate their jobs. We can make a good estimate here because the Pew Institute named specific occupations where there are many illegal immigrants. They mentioned grounds maintenance workers. Well gee, over at the Bureau of Labor Statistics that is an official job with Standard Occupational Classification of 37-3011, Landscaping and Groundskeeping worker. The hard working folks at the Bureau of Labor Statistics report 924 thousand jobs at a median wage of $10.22 an hour. I am sure a new minimum wage of $12.50 an hour would eliminate thousands of those low paid landscaping and groundskeeping jobs and send thousands of those illegal immigrants back home from whence they came.

Or how about Construction Laborers? The Pew Institute mentioned them as well. The Bureau of Labor Statistics reports over a million Construction Laborers, Standard Occupational Classification of 47-2061, in its May 2006 occupational employment survey with a median hourly wage of $12.66 an hour. As all economists will tell you eliminating jobs requires raising the minimum wage above its market level so if we are going to be able to send those illegal construction laborers home we will need to get that minimum wage above $12.66 an hour. Economic policy is so easy. We just need to apply the basic principles.

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Service Jobs - Skills

It is important to pause at this juncture to consider occupational education and training requirements. I have referred to jobs requiring college degree training or jobs requiring professional education and training skills. It might appear these are my terms, but that is not correct. The busy folks at BLS have many people assigned to study the more than 700

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Educational Training and Skills Categories

1. First Professional Degree-Entry into a job in this skill category requires 2 to 4 years of degree study beyond a baccalaureate degree. Almost all professionals must pass state licensing exams or private board certification exams to enter practice. Physicians, veterinarians, dentists, lawyers, pharmacists are all examples. Ministers are generally included here although there is not ordinarily board or state certification.
2. Doctorate Degree-Entry into a job in this skill category requires a doctorate following completion of a baccalaureate degree as minimum education for entry. College teaching at four year colleges is an example. A doctorate is also required for many science and medical research positions. Many require licenses and board exams. Medical and biological researchers, physicists, and astronomers are other examples because employment is mostly in research and these require doctorates.
3. Master's Degree-Entry into a job in this skill category typically requires license, certification, credentials or registry in a specialized skill area that requires work beyond a BA degree, leading to a master's degree. Health care professions such as physical therapists, speech-language audiology or pathology, counseling are examples. Librarians are now also included.
4. Master's or Bachelor's degree combined with previous experience-Entry into a job in this skill category requires formal education, but these jobs are usually not accessible without experienced practice in the field at an entry job. Health Services managers usually have experience working in health care in addition to degrees and credentials. Some businesses now require work experience and an MBA before jobs are accessible for entry. Almost all of these jobs have manager in the SOC title. 5. Bachelor's Degree-Entry into a job in this skill category requires a BA or BS degree. In some cases a BA degree in any field is satisfactory to establish reading and computational skills necessary to begin a job. Other jobs need a BA in a particular major to establish skills, credentials or obtain a license.
6. Associate Degree-Entry into a job in this skill category usually requires some formal education such as an educational internship, or co-op program, but leading to an associate's degree. Some employers require graduation from an accredited two year community or junior college program in order to take required licensing exams. Health technician occupations are examples. Some skill types have professional associations with certification or accreditation to help establish skill levels for job entrants. Dental hygienists, licensed practical nursing are examples.
7. Post-secondary vocational training-Entry into a job in this skill category requires pre-employment skill training and often a license from a state agency. Barbers, hairstylists, office machine repairers, computer repair specialists and technicians are examples. Employers may provide some on-the-training but entrants must arrive with the skills and certification to do their job.
8. Work Experience in a Related Occupation-Entry into these jobs usually requires that applicants show a high level of skills. These skills can be acquired through degree training, but long term practice, and specialized talents acquired as part of a career in the field are necessary. It is a separate category because degrees and training do not assure entry into these occupations. First line supervisors, police detectives and investigators, adult education instructors are examples. 9. Long-term on the Job Training-Entry into a job in this skill category typically requires skills acquired from work experience that takes longer than one year. The additional skills needed for the job are taught on the job, through an apprenticeship or employer sponsored classroom instruction or training, and the skills required take a long time or a lot of effort to learn with training of over a year. Actors, athletes, dancers, electricians, carpenters and mechanics are examples. Entry into these jobs are not open to those leaving a degree program or skills training. Prior job relevant skills are necessary for advancement into these positions. For many of these positions a high school degree maybe sufficient but entry is not available to high school graduates. Entry skills are high school plus on the job skills and experience.
10. Moderate-term on the job Training-Entry into these jobs usually requires basic reading and language skills learned in high school or a GED program, but additional on-the-job training is usually necessary. Additional skills can be learned quickly, but 1 to 12 months can be needed to acquire additional skills. Medical assistants, dental assistants, social and human resource assistants are examples.
11. Short-term on the job Training-Entry into these jobs usually requires basic reading and language skills learned in high school or a GED program. Work that can be learned from written or verbal instructions, or carried out successfully after a demonstration are classified as high school skills. Additional skills can be learned quickly, typically a month or less of on-the-job experience or instruction. High school degree skills can also be thought of as general skills employment.
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United States occupations. They interview employers and employees to find out what someone has to know and do to qualify for employment in each occupation. They go to colleges and universities to learn about the curriculum for degree training. They study state regulations to know licensing or certification requirements. Categorizing education and skills training for occupations is on going work, but the BLS skills taxonomy reflects the current education and training associated with data reported within its occupational categories. This taxonomy appears in Table 2 above. The first six BLS categories give the minimum of formal college degree education that is required for entry and work in an occupation.

The term required has a broad use. In some occupations the degree is absolutely necessary and a candidate will not be considered without the required degree. These include occupations where licensing is required by the state or by a private association empowered by the state. Registered nurses must have at least an associate's degree from an approved nursing program to be able to take required state exams. Without this credential entry is blocked. In other occupations, a college degree is not strictly required but the skills needed before entry are such that a degree is strongly preferred by employers and candidates without a degree are much less likely to be considered, much less employed. Categories emphasize the sources and length of training preferred by employers. Training might be post-secondary vocational, college, postgraduate or professional education. The duration of training could range from a week or two to many years.

Prior experience and on the job training are part of the skills taxonomy. Category four is work experience plus a bachelor's or higher degree, an MBA degree for example. Someone with an MBA in finance will probably be expected to have employment experience before being considered for a managerial position. Categories eight and nine describe skills learned through long-term on-the-job training, or work experience in a similar or related occupation. These jobs do not require a degree beyond high school, but are generally not entry-level jobs. For example, a first line supervisor of retail sales workers, or a supervisor of construction workers will need experience in retail sales or construction to be eligible for a job as a supervisor. These jobs require long term on the job training, meaning more than 12 months of experience. Therefore, entry level skills are a high school degree plus skills learned in another job or lower level job.

Categories 10 and 11 are moderate term and short-term on-the-job training. Moderate term on the job training is classified as skills which take 1 to 12 months to learn on the job while short term on the job training is classified as skills which take up to 1 month, but might be less. Moderate term and short term on the job training skills can be classified as general workforce employment. Therefore, entry-level skills into these occupations are a high school degree. This taxonomy is the work of many at BLS and I have adopted their categories in all occupational references. Reference to skills, training and education follows the BLS system. Now you know.

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The Great Engine of Employment- Part II

Recently I was in a rural area of Michigan and stopped at a small out of the way place to buy a soda. As I paid I noticed a yellow sign about 8 ½ by 11 behind the clerk on the wall. It read “Licensed Minnow Dealer.” I asked the clerk if there was any special information he had to know to secure that license? Did he have to go to class to learn about minnow care, or pass a test to assure minnow competence, before he could get that license? He groaned a slow groan. “Noooooo. The governor is desperate for money. It’s just another tax.”
The minnow tax qualifies as a tiny tax, not because the tax yield is small, but because it applies to few people and goes unnoticed by nearly all of Michigan. Tiny taxes are easy to slip by the public unnoticed. We can hope the money collected for the minnow tax covers the wage costs of the people who collect it. Even it doesn’t, it is still a good tax for politicians. It generates jobs and politicians must be able to say jobs are rising and go easy on the details. As we will see below there are hundreds of tiny taxes generating jobs.

The relentless tide of productivity increases, the outsourcing of jobs abroad and the investment and movement of American manufacturing abroad has reduced millions of jobs in production occupations; 3.5 million since 1990. Tiny taxes along with the bigger and better known income, property and sales taxes create lots of tax collecting jobs.

The federal government collects the personal income tax, which is noted for its many forms and schedules and thick booklets of instructions. As recently as 1990 the IRS 1040 instruction book was 52 pages not counting the forms. In 2006 it swelled to 103 pages, not counting the forms and the pages of lost children. My favorite instruction for 2006 came from a list of exceptions. The exception is "Dividends attributable to periods totaling more the 366 days that you received on any share of preferred stock held for less than 91 days during the 180-period that began 90 days before the ex-dividend date." Even for someone who could understand when or how to apply this particular exception, would they know the ex-dividend date? Could they find the ex-dividend date?

It is popular around tax time for a Congressman or two to hold a press conference, waive some tax forms, and huff and puff in indignation at our complicated tax system. There are vows to do something, but they know perfectly well nothing will happen. The tax system is going to get more complicated: more forms, more worksheets, more booklets, more go here, more go there. It’s predictable because there is one powerful and consistent message that jumps out of every line of every page of tax forms and tax booklets. The message is employment. The Bureau of Labor Statistics puts employment as Tax Examiners and Tax Preparers at 138,000 in 2006. That total doesn't count employment in the cottage industries: paper, printing, software, books, accountants, lawyers, courts, the Post Office and, of course, tax advice. These are often high paying jobs for people of influence.

All that taxing work creates lots of jobs, but when the work is done there is nothing to drive, nothing to eat, nothing to wear. A large group of people writes checks to the government. Money is transferred, nothing else happens. It’s quite possible to end the income tax. Taxable income is almost identical with consumption spending because Americans save little as a society. Switch to a value added tax or sales tax and governments could still raise the necessary revenue without any income tax, and a tiny fraction of the present cost and work. Eliminating the income tax is administratively feasible, but it will not happen. It eliminates too much work.
But the federal personal income tax is just a start. The District of Columbia and 43 states have their own income tax with their own tax administration. They could declare that state residents will pay an income tax to their states as a percent of the federal tax and have the federal government collect and distribute the tax revenue. The plan would save nearly all the costs of a large state income tax administration and be more efficient, but who needs efficiency when America needs jobs.

All the states have a real property tax. The District of Columbia and 35 states levy a real property transfer tax, also known as a deed recordation tax, since tax liabilities incur at deed recordation. Although most states have local governments assess property values and set property tax rates, additional state bureaucracies and a state board of equalization oversee the process. Property taxes create jobs in that administrative time is required to determine assessed value and then more administrative time is needed to process and hear assessment appeals; all before collecting the tax. In Michigan, the courts got so bogged down with property tax fights, the legislature created a separate administrative law court, the Michigan Tax Tribunal, to settle property tax battles.

Sales taxes are well known state taxes. The District of Columbia and 45 states have a sales tax, and 8 states still tax food. More and more state legislatures allow local governments to levy an additional percent or two of local options sales tax. More and more states have started to extend their retail sales tax to services as well.

States will often add a use tax to accompany their sales tax. A use tax applies to all taxable items brought into a state or purchases from out-of-state retailers. Tax authorities want to discourage people from shopping in low price, or low tax states. Look on the North Dakota web site and the commissioner of revenue will tell you “In addition, tangible personal property not originally purchased for use in North Dakota is subject to a use tax based upon its fair market value at the time it was brought into the state.”

With more spending on services and legislatures hungry for revenue, some states have added gross receipts taxes. The Delaware commissioner of revenue tells website visitors “Delaware does not impose a state or local sales tax, but does impose a gross receipts tax … Unless otherwise specified by statute, the term "gross receipts" comprises the total receipts of a business received from goods sold and services rendered in the State.” The Commissioner seems to be kidding us that a gross receipts tax is different than a sales tax. Sales, use and gross receipts taxes compute a percentage of revenue paid in a transaction, or transactions, so the difference among them, if any, is miniscule.

Quite a few states have sales and use taxes and a selection of gross receipts taxes. Plans to raise a statewide sales tax generally draw media attention and statewide publicity. Opponents get organized. Plans to impose a 2 percent gross receipts tax on dry cleaning establishments may pass without notice. At least 9 states have a dry cleaning tax, which is sometimes a license fee, sometimes a gross receipts tax and sometimes both.

Some states do get carried away with their gross receipts taxes. New Jersey lists a fur clothing retail gross receipts tax, a cosmetic medical procedures gross receipts tax, the luxury & fuel inefficient vehicle surcharge and the litter control fee. All are gross receipts taxes. On the state’s website we read the litter tax will be $2.25 of every $10,000 of “gross receipts on retail sales of litter-generating products sold within or into New Jersey by each person engaged in business in the State as a manufacturer, wholesaler, distributor or retailer of such litter-generating products.”

Many know litter when they see it, but not in New Jersey where litter generating products means products “produced, distributed, or purchased in disposable containers, packages or wrappings; or not usually sold in packages, containers or wrappings but commonly discarded in public places; or of an unsightly or unsanitary nature commonly thrown, dropped, discarded, placed or deposited by a person on public property, or on private property not owned by him.” If there are any products exempted from the litter tax it is not obvious what they would be. Remember they had to have a lawyer job to write all the fancy prose.

Up in Illinois the state’s tax commissioner worries about fairs, festivals, flea markets, and craft shows. These are known to the commissioner as special events which are “a unique kind of business in which persons from other communities or states sell items to the public … Many times, the only fair and efficient way to collect the proper taxes is to have our collection agents personally register each vendor and collect taxes at the event.” How nice it is to know tax collectors are paid to attend craft shows and flea markets to collect taxes, but we have to hope they collect enough taxes to pay for their gas, and I suppose also their wage.

There are other close cousins of the sales, use and gross receipts tax. Severance taxes amount to gross receipts taxes in most situations in that taxes are usually a percentage of gross receipts from natural resource extraction. Public utility taxes typically end up being gross receipts taxes, but that is not universal. I can find 44 states with public utility taxes. Public utility taxes have many names: public utility gross receipts tax, utility gross receipts tax, telecommunications tax, telephony tax, mobile communications service tax, steam, gas and electric companies tax, electricity consumption tax, electric cooperatives fee and on and on.

Public utilities taxes can be gross receipts but they are often levied as an excise tax. An excise tax is similar to sales, use or gross receipts taxes in that all of them tax commercial transactions. Excise taxes tax quantity such as cents per gallon or cents per pound, and often levies fall on the manufacturing, or distribution part of the marketing chain and not just retail sales.

Since I am speaking of excise taxes do not forget tobacco, liquor, wine and beer. They are all favorites for excise taxes, although not the only ones. The federal government, the District of Columbia and all the states have a tobacco tax. Rhode Island has top honors here at $2.46 a pack for cigarettes, the median rings in at $.80. Most states tax everything sold that contains tobacco. Alabama does not want to leave anything to chance so they define taxable tobacco as cigarettes, cheroots, stogies, cigars, little cigars smoking tobacco chewing tobacco and snuff. Some states tax a percentage of the wholesale price, up to 90 percent in Massachusetts.

All the states get revenue from alcoholic beverage, but not always from taxes since 18 states maintain their own monopolies for distilled spirits. Alcoholic beverage taxes are all cents per gallon, but 42 states also apply their sales tax in addition to their excise charges. The tax rates are too varied and complex to describe, but liquor tax rates tend to be higher than wine, and wine rates higher than beer. They could simplify and tax by alcoholic content, but why have it simple when it can be complicated. At least six states have a special excise on soft drinks or soft drink syrup.

Probably you drive so it is hard to forget gasoline taxes, which are typically also an excise tax. Federal fuel taxes are 18.4 cents a gallon gasoline, 24.4 cents a gallon diesel. But the District of Columbia and all the states tax other fuels in addition.

Fuel taxes are just behind the federal income tax in complications, fighting and foolishness. Most of the trouble comes because the states cannot stand the spectacle of truckers buying low priced fuel in low tax states instead of high priced fuel in high tax states. Buying low priced gas for your car might seem like a normal choice. Low prices attract more business and the tendency is hardly a secret. If your neighborhood grocery charges $8.00 a gallon for milk you go to another grocery, but the states want to suspend shopping around and prevent truckers from doing what everyone else does everyday: buy at low prices.

If a trucker buys a tank of fuel in South Carolina where the diesel tax is 16 cents a gallon and then drives through North Carolina where the diesel tax is 30.15 cents per gallon, and they do not pay the extra North Carolina tax then authorities label them as criminals engaged in fraud. A whole bureaucracy of procedures, audits and enforcement tracks down the malefactors and threatens them with jail. Truckers are expected to keep detailed records of their fuel purchases and their mileage by state. They are expected to produce and document their records at any time. They are expected to pay high taxes on fuel in states where they did not buy fuel. Sometimes I hear that businesses are greedy and overcharge. I have not heard of any businesses that jail customers who buy at lower prices. It takes a state legislature and large bureaucracies with enforcement jobs for that.

However, the gasoline and diesel taxes are just two among a number of fuel related taxes. Try out the oil company franchise tax, motor carrier road tax, and taxes on aviation gasoline, jet fuel, gasohol, un-dyed diesel, un-dyed kerosene, compressed natural gas, propane/LPG, ethanol, methanol, liquefied natural gas, and electricity. Minnesota taxes wind power.

It is not enough to tax gasoline for cars. With cars we have car taxes and the DMV. Virginia taxes cars as personal property, but there are a variety of ways to extract revenue from automobiles. Try the vehicle rental tax, vehicle rental surcharge, rental car excise tax. A number of states tax tires such as the waste tire fee, tire user fee, tire excise tax, tire user surcharge, or charge a recycling fee for tires and batteries.

While you are out driving and traveling you may want to find some lodging, a place with room, bed and taxes. Expect to pay a lodging tax, hotel tax, room tax, transient room tax, room and cottage rentals tax, vacation rentals tax or a tourism tax. Oregon taxes tent sites. Most of the time these are gross receipts taxes but a few states make it an excise. About the same number of states also have meal taxes on meals and beverages. In all cases they work hard to get your money.

Many think business escapes taxation. This could be true, but before you make up your mind look at state taxation of business. Learn about corporate organization and qualification fees, all the states have them. Find out if your state has the corporate income tax or the corporate franchise tax, or the corporate business tax. In California its 8,84 percent of net income derived from business transacted in California, in Delaware 8.7 percent. Some states have a charge for each $1 or $1000 dollars of capital. Even if they do not collect any revenue from these corporations, they have some jobs doing it.

Insurance companies are singled out and taxed as their own category in some way or other in all the states. Insurance taxes go by several different names, but the tax takes a percentage of net premium receipts or a percentage of adjusted gross premiums where adjustments are made by carefully written procedures developed by the State’s Department of Finance and Revenue.

Did I mention Banks? All banks engaged in business in South Carolina are required to register and pay the annual bank tax. The tax is 4.5% of SC net income. Some states call their bank tax a financial institutions tax, such as Indiana. In Kentucky, they have the bank franchise tax, which is 1.1 percent of net capital assets after apportionment. It applies to every financial institution “regularly engaging in business in Kentucky if during any taxable year it obtains or solicits business with 20 or more persons within Kentucky, or if receipts attributable to sources in Kentucky equal or exceed $100,000.” Those regularly engaging in financial business fill out Form 73A801A, a form of 21 pages for the accountants, auditors and financial professionals who have to learn which assets to include or exclude from the total of capital assets after apportionment. Probably they do not mind though, they have salaried jobs to do the work.

Death brings death taxes in all the states. Only eleven states have inheritance taxes, but all the states have some kind of estate tax, although Virginia is getting serious about eliminating its estate tax. Both together are often referred to as death taxes. Estate taxes tax the value of a deceased persons assets and property after any allowable deductions. It reduces what is transferred to heirs or beneficiaries before ownership transfers. Inheritance taxes, if any, tax what heirs receive after they take ownership and possession. Many of the state’s estate taxes have a connection to the federal tax and amounts paid there. There is also the fiduciaries tax in a few states.

Having fun can be a do it yourself thing: a walk in the park or the home arts. Otherwise though, expect taxes with your fun. Click around a state tax website and find a few obscure links to the fun taxes. Quite a few states like the admissions tax, or some variation of it, like the riverboat admissions tax in Indiana and Illinois. Since riverboats are usually for gambling Indiana taxes gamblers when they get aboard and again with the riverboat wagering tax that takes 22.5 percent of adjusted gross receipts from gambling. States with legalized Casino gambling have gaming taxes, but casino gambling is not a requirement for gambling and gaming taxes. Pari-mutual wagering is almost always taxed. Some states tax charity gaming. Indiana has a charity gaming tax along with the other gaming taxes. Iowa has a social and charitable gambling tax, perhaps to prevent those avaricious folks running church raffles and bingo nights from getting too greedy and taking all the money they raise. Other states call it the bingo tax and some states charge a fee for the license they require to hold a bingo night. North Dakota has a bingo and pickle card tax. Illinois, one of America’s most innovative and entertaining tax states, has a pull tabs and jar games tax with License Fees.

Other fun and games taxes include the amusements tax in Arizona, the amusement machine tax in Arkansas and several other states, the watercraft excise tax in Washington, baseball stadium district taxes in Colorado and DC, the coin-operated device tax in Tennessee, boxing and wrestling exhibitions tax in New York. Many states insist on taxing vending machine revenue.

Not many know about the blueberry tax. The blueberry tax takes $.15 a pound out of Maine blueberry revenues. I looked for the blueberry tax in other states, but I could not find one. New Jersey is apparently America’s leading blueberry producer, but apparently without a blueberry tax.

Looking in other state websites for a blueberry tax took me to other agricultural states where I found the beef tax, which is a charge per head of cattle, and the corn tax, rice tax, wheat tax, potato tax, tobacco tax, soybean tax and my favorite tax, the catfish feed tax, which is in Arkansas at a rate of $.99 per ton.

Fish are good too, both for eating and taxing. There is the mahogany quahog tax, seed oyster tax, fishery resource landing tax, salmon enhancement tax, regional seafood development tax, enhanced food fish tax, which taxes those from Washington state in first commercial possession of fish at various rates like 5.92 cents per pound of Chinook, Coho, or Chum Salmon or 5.92 cents per gallon of Chinook, Coho, or Chum salmon eggs. Fish eggs. Don’t forget fish eggs.

With the growth of the Internet all the states and many of the local governments use websites to make it easy to get all the details of their taxation. For anyone interested in the details of taxation it is easy to Google or Yahoo a state’s website and study taxes to your hearts content. On this blog though we only need to see the bigger picture and that is why I summarize the three most important things to know in taxation and revenue. Take them one, two, three: jobs, jobs, jobs.

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Kelloggs 6 Hour Day

Kellogg's Six Hour Day, Benjamin Kline Hunnicutt (Philadelphia: Temple University Press, 1996) 261 pages

On Nov 24, 1930 Kelloggs Company President Lewis Brown announced the 6-hour day for workers. There were adjustments and controversies over the years but the policy continued to be an option for at least some workers until 1985, when it came to an abrupt end. Mr. Hunnicutt’s book presents a documented history of the 6-hour day at Kelloggs along with interviews of the Kellogg’s workforce from the shorter hours era. The history and supporting material make the case for a shorter work day, a still relevant but largely ignored policy.
There are nine chapters, which follow a rough chronology from the start in 1930 until 1985. Chapter 2 and Chapter 6 have supporting material with Chapter 2 primarily devoted to organized labors’ efforts to reduce work hours. Chapter 6 discusses human relations theories and the relation between work and human needs.

Chapter one presents the early years of success when management and labor supported the plan and largely cooperated to make it work. Data reported in the book shows Kelloggs had 1,500 workers at the start. With the 6 hour day the minimum daily wage for male workers increased to $4.00 a day. Other wages went up 12.5 percent. Kellogg’s asked for sharing of the burden with workers by sharing a modest weekly pay cut due to the 25 percent decline in hours in exchange for work rule concessions. Kelloggs hired more people and paid more in total wages as a result of 6 hour day. Hourly pay as opposed to total pay was important to the workforce. The 6-hour day was the company's effort to share the benefits of mechanization and productivity with workers and fulfill its obligation to the community. Lewis Brown felt Ford had already proved that shorter hours "was a good cost cutting move."

As part of the deal management insisted on the elimination of the night shift bonus and half hour lunch break when they went to four shifts at 6 hours each. Also the overtime bonus was phased out in favor of a production bonus based on what workers produced not how long they worked. Brown felt this was scientific management with shorter hours giving new opportunities for recreation and enjoyment.

Brown wrote of "another income of which we do not often think, and yet it is the one by which much of our lives is governed. ... Happiness is a bigger 'mental value' ... than the gain in money income ... of the job. The mental income is satisfaction - the enjoyment of the surroundings of your home, the place you work, your neighbors, the other pleasures you have - [which are] harder to translate into dollars and cents." He claimed that the 6-hour day would "revolutionize continuous industry operations" and laissez-faire capitalism because the balance of the workers lives would shift from concerns about work and economic matters to the various kinds of "mental income" life offered. ...

Lewis Brown guided company through the early 6-hour period. By April 14, 1931 Brown decided to make 6 hour day permanent concluding that shorter hours had proven a successful response to industrial mechanization. He found that workers were more efficient and worked harder on 6-hour shifts. He wrote, “workers worked with a will and a spirit in anticipation of the early quitting time; they accepted the "speed ups" and production bonuses because of the lure of leisure."

Brown admitted their jobs were boring and monotonous so that current and future work was likely to be boring and so it was important to work for shorter hours. Brown believed few workers found their work as interesting or fun as their time off. "Leisure" for Brown had matured into an open ended idea like "Freedom" which meant rest, family, life, recreation, education, music, ... cultural studies[sic] ... resulting in a more health, ambitious, alert, and aggressive working force." Since work was becoming more machine like it was better to eliminate it where possible.

In 1935, after 5 years on the 6 hour day, W.(William) K.(Keith) Kellogg Co. recommitted itself to the short schedule, finding that the "burden[or overhead] unit cost was reduced 25% ... labor unit costs reduced 10% ... accidents reduced 41% ... the severity of accidents(days lost per accident) improved 51% ... [and] 39% more people [were] working at Kellogg's than in 1929." "This isn't just a theory with us," W. K. boldly maintained. "We have proved it with five years' actual experience. We have found that, with the shorter working day, the efficiency and morale of our employees is [sic] so increased, the accident and insurance rates are so improved, and the unit cost of production is so lowered that we can afford to pay as much for six hours as we formerly paid for eight."

As we can tell Mr. Hunnicutt lets Mr. Brown and Mr. Kelloggs make the case for a shorter work week. The next chapter, Chapter 2, discusses labor movement history and reminds us that the early days of industrialization were periods of 10 and 12 hour days and 6 day work weeks at least up to the 1920’s. In these earlier periods labor fought to reduce work hours and the days in the work week, but much less for higher wages. By the end of the chapter many readers will realize modern day unions have abandoned the effort for shorter work hours.

After a chapter devoted to interviews with the workforce the book reaches 1937 when WK Kellogg retired and new management took over at Kelloggs. It was also the year the workforce elected to have a union. The two changes brought conflict where there had previously been harmony. The new management made it clear they would trade higher pay for longer hours and a smaller workforce. The remaining chapters of the book describe the nature of the conflict that finally brought an end to the 6 hour day at Kelloggs.

Work and pay negotiations and the 6 hour day were suspended during the Second World War and had to be restored by supporters. Management offered a raise if the union would agree to an 8 hour day, but the union voted 1477 for 6 hour day, only 440 in favor. However, the lopsided vote did not discourage management and they continued their pressure to undermine the 6 hour day. The company pressed to have department by department votes. Union pressed for plant wide vote. Company wanted to reduce the workforce and the union wanted to guarantee work for its older workers.

These chapters also describe management’s human relations efforts to undermine support for the 6 hour day among the union rank and file. For example, management began to call 6-hour work women's work and segregated older and partially disabled into 6 hour departments.
Pressure from the company divided the workforce until management had members of the union to lobby their views to others. The union began to speak of "job enhancement,” "satisfaction,” “more money for longer hours” and the "right attitude." Workers began to see favoritism in assignments for those who adopted the "right" attitude because many accepted the new management.

Chapter 8 describes the arguments and disagreements that developed over leisure time. Some argued the management position that leisure was good for nothing but idleness and the foolishness of women. The opposition, who called themselves mavericks by the 1950’s, countered with "the benefits of the 6 hour work day depends upon the quality of the use of time.” … While "crafts," "recreation," "hobbies," "pastimes," "games," “participatory sports’” were discredited in local discussion, many of the activities of the 6 hour day such as home cooking, gardening, sewing, music, home decorating, and conversation are now taken over with passive activities that are commercial. Now we defrost frozen dinners or buy fast food. We buy cut flowers. We do not converse we listen to the talk show.

Chapter 9 briefly recounts the 1980’s style business tactics that ended the 6 hour day at Kelloggs. Demands for tax favors, subsidies and threats to relocate were among them.
Even though the business view prevailed at Kelloggs, the book should be thought of as an important source of arguments for, and defense of, shorter hours. Shortening work hours continues to be relevant in 2007 as it was in 1930. Fewer hours for full time work spreads the work and jobs to more people and Hunnicutt’s use of available archival data and his discussion emphasize this point.

Cutting the work day has important economic effects, but the reader may get the impression, as I did, that the Kellogg position against shorter hours was partly driven by managerial determination to be in control. Longer hours pressures the rank and file to give up control of their time and helps management identify the more compliant people in their workforce.
Neither the Republicans nor the Democrats will touch the issue since business wants longer hours and the hefty increase in labor supply long hours represents. More surprising organized labor has shown little interest in shorter hours at least lately. Where union negotiations bring higher wages, business will economize on labor. Higher wages for fewer people divides the workforce since those left out are thrown into a surplus labor pool to earn lower wages or low wages. Solidarity is hard to achieve with the types of wage divisions that exist today in American labor markets. Labor would do well to think over bargaining for a shorter work week.
Kellogg’s Six Hour Day is an academic work that is logically organized, fully documented and written in a serious documentary or historical style, but not a journalistic or popular style. Nor does the book offer an operational plan to change the current wages and hours act or suggest how unions might bargain for a shorter hours policy. There are many shorter hours policies to explore, but the book avoids direct advocacy as part of the narrative. The reader can tell Mr. Hunnicutt believes America needs shorter hours, but the record from Kelloggs is allowed to speak for itself.

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Service Jobs - Social Assistance

Social Assistance

The NAICS committee decided to make Social Assistance a separate service sector in the classification of service industries. It was a reasonable choice but a significant share of Social Assistance services are also provided as a part of the health care industry, government services, and churches or non-profit organizations. Beneficiaries of these services often cannot pay for them, or at least cannot make more than small contributions, which is one reason government and churches also provide some of America’s Social Assistance. Children, the disabled and the elderly typically lack the means to pay so that budgets for social services likely need some tax money or charitable contributions.

The NAICS committee further defined separate categories within Social Assistance: 1. Individual and Family Services, 2. Emergency Relief Services, 3. Vocational Rehabilitation, and Training and a 4th category, Child Day Care. In the first three categories the emphasis is on non-residential assistance: especially assistance for children, the elderly and disabled on a continuing basis, or temporary assistance delivering food, clothing and shelter, or assistance with job counseling or training for the unemployed or disabled.

Child day services are distinct from these services in that they are weekday custodial care for infants or preschool children and more likely to be provided on a fee for service basis. Elder care jobs are in the health industry and not here.

The Social Assistance employment totaled for just the Social Assistance sub sector comes to 2.6 million jobs. Social Assistance services have employment growth rate of 3.5 percent even though there is no growth in jobs from 2000 in the national economy. However, 852 thousand of these jobs, or 32 percent of them, are in child day care, which was growing faster than the other social assistance sub sectors until 2009. After subtracting Child Day Care service jobs, only 1.77 million jobs remain. The 1.77 million undercounts employment in Social Assistance efforts, since it does not include the government’s Social Assistance, or the health care industry’s Social Assistance services as mentioned above.

Professional occupations needing college degree skills in social assistance come to 537.4 thousand jobs, which is nearly 21.7 percent of the social service jobs. Two occupational groups dominate professional employment in social assistance: Counselors and Social Workers. More and more employers want counseling and social work job candidates to have master’s degree training and virtually all of the states require licensure or certification to be a practitioner.

Counselors and social workers deliver most of the actual assistance in social assistance. There are about 1.22 million counseling and social work jobs in all establishments with about 247.5 thousand, or 23 percent of these jobs in the Social Assistance sub sector. Another 29.8 percent are in health care, and 43.5 percent in education and government with the remaining few jobs scattered around in non-profit organizations.

The work of social workers and counselors overlaps. Both are helping people solve individual and family problems, although social workers probably have more administrative duties and spend more time negotiating with others on behalf of clients.

Educational, vocational and school counselors and child, family and school social workers have the highest percentage of professional jobs in social assistance. Counseling specialties in mental health, substance abuse and behavioral disorders counseling and mental health and substance abuse social workers are the next most important specialties.

Child day care services are the fourth category among the social assistance services, although parents generally pay and these services are less likely to be subsidized by government, or private charity. Employment growth in childcare services averaged nearly 4.5 percent a year beginning in 1990; more than triple the growth in national establishment employment. Jobs in child care increased every single year from 1990, more than doubling employment.

Back in the 1950’s when the labor force participation rate for women was under 40 percent, childcare was more of a do-it-yourself occupation. It tended to be the unrecorded and untaxed work of moms. Now that the labor force participation rate for women approaches 60 percent, there are many more two income households needing childcare. Establishment employment in child day care services averaged 388 thousand in 1990, but 852 thousand in 2010. More two-income households mean more transactions, which help raise growth in GDP. More working moms mean more jobs in child day care services.

The 852 thousand in child day care undercounts actual childcare because it does not count work in private households. Around 270 thousand work in childcare in private households where childcare workers are better known as nannies.

With a 112.1 million service jobs, administrative support and social assistance employment gives us 2.6 million jobs, but that is only 2.0 percent of establishment employment. Social service employment continues to grow faster than the national rate and gained an increase in share of national employment every single year since 1990. Expect more jobs in this sector but it is too small to help meet the need forAmerica’s job requirements, we still have73.6 million service jobs left to fill.

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Michigan Jobs

In the Detroit News of September 8, 2007 the paper asked readers "Do you think Michigan's strip clubs should be allowed to go nude and serve alcohol?" There is no mention of jobs in the question, but one of the 11 respondents caught on right away. The answer below belongs to Pradeep Srivastava of Detroit who appears to know that the right regulation will help keep Michigan employed.

"If Michigan's strip clubs don't allow nude dancing and alcohol, people who are interested in that kind of stuff will simply go to Windsor or Toledo and Michigan will lose its tax revenue and jobs to those cities. We cannot legislate morality, for that comes from within."

We want to commend Pradeep Srivastava for helping to save Michigan’s nude dancer jobs. Still we want to know, Where was Pradeep Srivastava when Michigan had better jobs to save?

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Service Jobs - Health Care

Health Care Services

We are looking for 91.1 million more service jobs. How about health care? For the sick or injured what could be more important than health care services? Employment in 2010 in the health care sector is 14.8 million divided among three sectors: ambulatory care, hospital care and nursing and residential care.

The federal government’s Standard Occupational Classifications define a group of 52 health care jobs called health care practitioners, who are mostly doctor, dentist, pharmacist, nurse, therapy and technology jobs. Health care practitioners actually deliver health care to patients and the jobs tend to have college and professional degree requirements. Few can be performed without a license. Combine all the health care practitioners and the total is 5.7 million jobs, which includes 527.3 thousand physicians and surgeons, 98.8 thousand dentists, 69.7 thousand pharmacists and 2.28 million registered nurses, the biggest occupation in health care.
There are 15 additional healthcare support occupations with 3.3 million jobs, all of them with aide, assistant or attendant in their job title. Nurse’s aides, orderlies and attendants are the second leading occupation in health care after registered nurses.

While a license is unusual for healthcare support jobs many of them have certificate or other formal training as eligibility requirements; usually these are vocational training or an AA degree rather than 4 year college degree training. Just like educational certification, health care degrees and certification programs provide a double employment benefit, keeping people out of the workforce and supporting employment at medical schools and college programs in allied health.
Licensed practitioners closely supervise nurse’s aides, orderlies and attendants or occupational therapist aide, physical therapist aide, pharmacy aide. Support jobs as health care aides free up time for licensed practitioners so their work tends to be filling forms, preparation and routine duties.

Health care practitioners and health care support occupations are two of what are really three segments of employment in health care. The third segment might be called administration and overhead. If we composed a one sentence summarization of health care jobs, here is how it would go: 5.7 million health care practitioners work to deliver health care with 3.3 health care support staff along with 5.7 million other jobs as managers and non medical administrative staff.

If the American health care system had a similar history as public education it might not be as bloated with administration as it has come to be. With education people live somewhere and that somewhere is in a school district. Families with school age children send their children to the school in their district. The schools are publicly funded because they are vitally important to the social well-being. If we spend all that public money getting people educated it is not good for them to be ill and miss work, or die and not work at all, for lack of health care. Americans could have universal health care for all in districts like schools.

Instead America’s health care system is the evolution of political struggles beginning in the early part of the 20th century. By 1915 medical knowledge of antisepsis and anesthesia increased demand for health care enough to begin generating proposals for wide access to health care services. The American Medical Association was founded in 1847 so it was already well organized to oppose any plan that did not allow fee for service medicine. Even during the depression era when patients were unable to pay their bills, the AMA opposed government funded health care. They supported prepayment or private insurance plans like Blue Cross plans, but opposed proposals for health care coverage where the government would have a role.

Health care issues did not disappear with AMA opposition. The Truman administration supported a system of national health care with public funding and pushed hard for passage. The effort failed but political wrangling continued then as it continues today. In the arguments over government versus private insurance the Congress worked out various compromises that allowed a role for continued private insurance along with government funded health care programs. The political compromises in healthcare create bureaucratic employment: lots of it.

American health care has evolved into a decentralized public and private health care system with three large groups making transactions among themselves and with patients. On the medical side we have health care venders: hospitals, laboratories, clinics, HMO’s, PPO’s, independent practice offices, groups and associations. They do business among themselves and with the second major player in health care: private insurance companies. Federal, state and local government health care administrations round out the trio.

Universal coverage would consolidate administration and reduce the need for the multitude of separate bureaucracies. With universal health care it is easy to imagine standard forms and standard procedures. Since the health care industry supports 2.5 million jobs in Office and Administrative occupations, there are lots of jobs at stake. These include nearly 635,001 jobs as bill and account collectors, billing and posting clerks, file clerks and general office clerks involved with the billing shuffle. Bill processing needs computer support and there are about 92,520 jobs in computer work within the health care industry. Add over 764,380 jobs as secretaries, 393,000 jobs as receptionists and information clerks, and another 107,510 jobs in bookkeeping and accounting.

The Office and Administrative jobs and computer jobs just mentioned are all jobs within the health care industry, meaning ambulatory health care, hospitals, nursing and residential care. However, when bills and accounts are prepared for processing they have to be sent somewhere and to someone. Sending out is only half the transaction; someone else has to take them in; a someone who is part of another bureaucracy.

In a mixed public and private health care system lots of bills go to private insurance companies. There are 431,500 jobs in companies primarily engaged in underwriting health and medical insurance. For companies primarily underwriting health care insurance we have to figure most of those 431,500 jobs are health care administration since insurance companies do not deliver services to patients.

Claims adjusters are 10 to 12 percent of jobs in the health insurance industry and more than 10 percent are customer service representatives with some individual firms having over 20 percent of their staff in customer service. Customer service representatives within the health care industry total 78,900 jobs so we can see where billing troubles end up. There is more private sector health care administration because health care delivery continues to get more decentralized into independent practice associations, preferred provider organizations and HMO’s offering new forms of health care coverage. Some of these new groups are contracting their billing services to companies in the administrative support services industry.

Health care administration generates jobs in hundreds of decentralized state and federal offices administering Medicare, Medicaid, Social Security Disability, Workmen’s Compensation or the Veterans healthcare administration. When private health insurance expanded rapidly in the 1950’s the companies realized quickly that high risk individuals are unprofitable. Insurance companies do not want disabled, heart, diabetes, or arthritis patients so they tend to exclude them as having preexisting conditions. But private insurance will always leave out large numbers because many are too expensive to insure, or too poor to pay their premiums.
The unwanted groups have been big enough that political pressure brought a succession of unplanned and erratic compromises, which have at least one thing in common. They create separate programs with separate bureaucracies that create lots and lots of administrative jobs. In the public realm we have Medicaid, which is health care for the unwanted poor. Medicaid is a federal program with federal guidelines but it is administered through 50 state bureaucracies. The law includes authority for the states to customize their programs so Medicaid is different from one state to another.

Also in the public realm, we have health care for the unwanted retired and elderly, which is Medicare. Medicare is also a federal program, but it is administered state by state with separate administrative contractors processing claims. Medicare does not cover an entire bill so private insurance companies sell Medigap policies to millions so one hospital visit or one physicians service visit can generate two bills and brings action at two bureaucracies.
Difficulties with the Medicare billing system brought Congressional modification in the early 1980’s. Congress decided that medical venders should be responsible for filing Medicare claims rather than patients. At that time they instituted the Assignment billing system. Under this system if medical venders accept the Medicare payment amount, meaning accept assignment, they receive rapid payment directly from Medicare. If they wanted to charge more they would file the claim but request larger payment from their patient and the smaller Medicare amount would eventually go to the patient.

Using the new system required a delicate judgment by medical venders. Will the patient have the money and the willingness to pay? If the vender does not accept assignment and then cannot get full and timely payment from their patients, collection can take lots of staff time or bills may have to go to collection agencies. For anyone who has worked to decipher an Explanation of Medicare Benefits form it is easy to understand Medicare generated job creation in collection agencies.

Workmen’s compensation, which is really health care for people injured on the job, operates under federal guidelines through 50 state bureaucracies, but the states allow private companies to write the insurance so it supports jobs in private companies and independent insurance agencies. Military veterans have a separate health system, which supports another bureaucracy. Disability coverage supports additional bureaucracy since administration is through the social security administration and several specialty programs passed by Congress as well as private companies.

National health care should lead to standardization and efficiency. But we have to be careful about efficiency. Even though there is plenty of opportunity to be more efficient with health care, a modest 10 percent improvement in the health care office productivity would eliminate at least 250,000 office and administration support jobs. That is just the health care industry jobs; private sector insurance and government jobs would decline as well. Advocates of universal health care will need to consider how they will cope with these job losses.

Jobs requiring specialized professional degrees in medicine make up only 5.1 percent of health care employment. The total includes pharmacists, optometrists, dentists, orthodontists along with the physicians mentioned above. Another 4.3 percent need graduate degrees to be qualified to do some types of medical research, counseling, or physical therapy jobs. Jobs that use BA degree skills are more likely to be in health care management, finance or computing than to delivering health care to patients, but these jobs have 7.7 percent of employment in health care.

Associates degree skills have more importance to health care than the BA degree with 23.2 percent of health care jobs that need AA degree skills. Partly that is due to nursing since AA degree candidates qualify to take state nursing exams even though many registered nurses complete BA and MA degrees. Registered nurses make up 15.5 percent of jobs in health care.

The associate’s degree in specialized health programs also assures entry level skills for 15 other health occupations as health technologists and technicians including diagnostic medical sonographers, radiological technicians and technologists, nuclear medicine technologists medical records and health information technicians and others. Their numbers continue to rise.

If we total jobs that need college degree skills in professional, graduate, BA, and AA degree programs it comes to more than 40 percent of health care employment. Vocational training of a year or less provides entry level skills for 6 or 7 additional jobs that include licensed practical nurse and medical transcriptionist, which make another 16.5 percent of health care employment. Remaining jobs need only walk on skills for a high school graduate of GED graduate.

With a 112.1 million jobs to divvy up health care employment gives us 14.8 million jobs and that is 11.4 percent of establishment employment. Health care industry employment has been growing at double the national rate since at least 1990, despite leaving millions without health care insurance. The high growth rate will help to employ some of the new entrants to the nation’s growing workforce, although it could help much more if health care coverage was available to all. Combine health care jobs with professional, scientific, technical services and education services and the total comes to 35.8 million service jobs. We have 76.2 million service jobs left to fill. Remember agriculture, mining and manufacturing jobs are in decline. We cannot expect to have more jobs in these industries. In the United States a job is a requirement and America needs to be meeting its requirements. We need service!

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