COULD UN-SKILLED LABOR GO THE WAY THE HORSES WENT?

In July employers added 255,000 jobs, keeping the jobless rate steady at 4.9%. Whenever the Labor Department's Bureau of Labor Statistics publishes these numbers, politicians of all stripes grab onto them to either exploit positive trends or to question their veracity. While most of us may not focus on more than that calculation, arrived at by dividing the number of people out of work and actively seeking employment by all individuals currently in the labor force, this simplistic expression of a national trend is insufficient to help craft policy responses. When we search for ways to combat unemployment it is essential that we understand why people are out of work. Economists basically identify three types of unemployment: frictional, cyclical and structural, while some also add seasonal as a distinct category. "Frictional unemployment" occurs because of normal turnover in the labor market, and the time it takes for workers to find new jobs. "Cyclical unemployment" refers to the ups and downs experienced by the economy, and is essentially the relative result of a bad economy. It increases during periods of slow economic growth. "Seasonal" identifies employment fluctuations that occur when jobs are only available during certain times of the year - like in agriculture and construction. The most complicated, and most difficult to fix, type of unemployment is "structural." This results when there are mismatches between the skills employers want and the skills that workers have.

Between 2008 and 2010 the economy lost roughly 8.7 million jobs, unemployment rates exceeded 10%. While the economy is recovering, and while overall unemployment is down, many workers have left the labor force, and are no longer included in that computation. For them the  recession is not over. Between 2000 and 2010 structural unemployment in the manufacturing sector alone shed 5.67 million lower-income, blue-collar workers. Significantly, much of this happened before the onset of the recession in December 2007. Populist candidates on the left and the right have been quick to collar this receptive segment of a potential, angry and discouraged voter segment. Nobody disagrees that this is a legitimate target. However, their approach of largely blaming globalization and international trade agreements has been well off-base. In reality only 13% of overall job losses resulted from trade. (Douglas Irwin, The Truth About Trade, Foreign Affairs, July/August 2016). The main culprit is technology. "Automation and other technologies have enabled vast productivity and efficiency improvements, but they have also made many blue-collar jobs obsolete." Research at Ball State University found that improvement in productivity accounted for more than 85% of job losses between 2000 and 2010.

The International Monetary Fund estimates that 25% of current unemployment is structural. This equates to more than 3 million jobs. Structural unemployment is caused by fundamental shifts in the economy, exacerbated by factors such as technology, competition and government policy. A prime example of technology affecting the job market was what happened after the introduction of the internal combustion engine. For many decades, horse labor appeared impervious to technological change. Between 1840 and 1900 the equine population in this country increased to 21 million horses and mules. After the introduction of the automobile the trend quickly reversed. By 1960, the United States counted just 3 million horses, a decline of 88% in half a century. Many occupations linked to horse labor became obsolete.

While it took half a century to transition from an equine-based labor force, technological change today occurs much more rapidly, making it difficult for re-training programs to keep pace. Financial difficulties prompted many high schools to deemphasize vocational training, and community colleges are not always well connected to local job markets. Ultimately, however, we need to come to grips with the reality that simplistic cures based on attacking international trade agreements by political candidates affected by some form of Tourette's syndrome are unproductive. Structural unemployment can't easily be remedied by simple demand-side stimulus. Education is the key. Unemployment for college-educated workers is 2.4%. It is more than 7.4% for those without a high school diploma. This may be easier said than done. Our government may need to incent corporations to develop re-training programs for workers in endangered positions. But, as some have pointed out, it is unclear what kind of training will transform a 55 year old assembly-line worker into a computer programmers or a web designer. Another initiative, designed to bring blue-collar workers back into the labor force, is a massive campaign to rebuild our infrastructure. However, the proposals that are currently circulating appear grossly under-capitalized. The American Society of Civil Engineers estimates that it would take $3.6 trillion to adequately upgrade the country's infrastructure by 2020. To make this idea a reality we would need to change the political will in Washington. After all, much of this comes back to politics. Regrettably, politicians shun complicated solutions - they are more difficult to sell. Our de-activated workforce deserves better. 

DECISION 2016 - WILL OUR BIASES DEFINE US?

Many of us will go into the voting booth this November to register our selection for President and various members of Congress. While this exercise should be the culmination of a rational decision making process, a significant number of voters will use shortcuts and vote a straight party ticket. Until the 1960s and 1970s this remained a common occurrence. However, this method used to decide preferences has been in decline as the number of voters registering as "Independent" significantly increased. Nevertheless, Alabama, Indiana, Iowa, Kentucky, Oklahoma, Pennsylvania, South Carolina, Texas and Utah still accommodate strong partisans by providing a ballot option allowing them to select "vote straight-ticket Democrat" and "vote straight-ticket Republican" to eliminate the need to vote for each race separately. When asked, many of us won't admit that party preference dominates the process we use to select our preferred candidates. We may proclaim that we, without articulating the details, use an intuitive or a rational process to reach our decisions. The intuitive method involves the belief that we have a grasp on the issues, and that we are therefore able to choose without the necessity to reason. The rational process requires greater intellectual involvement. It means systematically selecting among possible choices based on reason and facts. Even though many of us like to think that we listen to all sides of an issue, we don't often recognize the biases and emotions that influence our decisions. The study of ways in which emotional influences help voters make decisions is the subject of inquiry of an interdisciplinary academic field called "Political Psychology."

Some of the emotions recognized in academic studies publicized by researchers in this field include anger, fear and anxiety, emotions observers also idenitify as being prevalent in this year's election cycle. "Anger" is said to increase the use of generalized knowledge and reliance on stereotypes. Voters displaying this emotion tend to be less likely to research a candidate's policy positions. Studies in psychology have shown that voters experiencing "fear," on the other hand, rely more on detailed processing when arriving at choices. "Anxiety" emotes increases in political attentiveness, while decreasing reliance on party affiliation. These voters are more likely to vote for candidates whose policies they prefer, and they are twice as likely to defect and vote for the opposition candidate. In addition, during every election cycle some writers will report that irrelevant events, like football games or the weather, have some influence on voters' choices in the voting booth. While this influence might be minimal, empirical studies have concluded that a win by a local football team during the final ten days of an election cycle on average causes the incumbent party to benefit by an additional 1.6% of the vote. Feeling good benefits the status quo.

Aside from emotions and their basing effect on voting outcomes, other biases producing an inclination toward a particular belief or perspective, often ill-supported by reason of evidence, include conditions we often are not even aware of. The most prevalent one of these is what we refer to as the "confirmation bias." People displaying this bias, and many of us do, have a tendency to search for, interpret, favor, and recall information in a way that confirms their beliefs or hypotheses, while giving disproportionately less consideration to alternative possibilities. An example would be a reporter writing  an article on an important issue, but only interviewing experts that support her or his views on the subject, or several people on opposite sides of an issue can listen to the exact same story, and walk away with a vastly different interpretation. This bias prevents us from looking at candidates and ideas objectively. We search for information that put our candidates in a positive light, while only reading opinions about the opposing candidate that cast him or her in a negative light. We only listen to and hear what we want to hear.

Among other general biases psychologists identify, a few are also applicable to the voting process. Some voters have a "bias blind spot" - a tendency to think they are less biased than others - the thought that you somehow are above them, smarter, etc. The "halo effect" is another one, and one campaign managers frequently take advantage of. The idea here is that some  people believe that if someone is good at one particular trait, they are also trustworthy in something else that is totally unrelated. This often describes what happens when celebrities become part of a campaign. And then there is the "more exposure effect" - a tendency to like things merely because we are familliar with them, or the belief that since everyone you know believes the way you do, most everybody else does.

Finally, it is a fact that 70% of Americans believe that there is a great deal, or at least a fair amount, of media bias in news coverage. Most of what citizens know about politics comes from what they learn via the media. However, this perception tends to fit comfortably into the "confirmation bias." It is not so much the news media we follow we have a problem with, it is what the "other" media project. We select what channels we tune into. Right-wing voters may tune into FOX NEWS, while left-wing voters turn to MSNBC. Studies tend to show that the left-right bias balances each other out.

So, whether you tend to stick with party preference, as many of us tend to do, or whether you let your emotions determine the outcome of your selection process, be aware of what to be aware of. As long as you plan to vote with your head, follow the steps involved in making this election meaningful.

ELECTION 2016 - LET'S GET READY TO RUMBLE!

With the long-awaited political conventions finally behind us, and the competing slates of presidential and vice presidential candidates in place, the political world is shifting its focus to the final 100 or so days of a contest that sometimes seemed to have no end.The race to the finish on November 8 is on. Early polling has the candidates of the dominant parties running neck-and-neck, separating them by about 4% - well within the margin of error. While this may be of some consequence and comfort to both, these polls, reflecting the national popular sentiment of voters, are ultimately irrelevant. In 1824 John Quincy Adams was elected President (by the House of Representatives) even though he amassed no majority of either electoral or popular votes; Rutherford B. Hayes won the 1876 election

By one electoral vote, but lost the popular vote by 90,000; and George W. Bush surpassed Al Gore's electoral tally 271-266, but missed the popular vote by a whopping 540,000 votes. Popular vote tallies may provide bragging rights, they don't count in the outcome of the contest.

When we vote for a President, we are actually voting for presidential electors, known collectively as the Electoral College. These electors elect our chief executive. The Constitution assigns each state a number of electors equal to the combined total of the state's Senate and House of Representative delegation. The number of electors by state ranges from 3 to 54, for a total of 538. The magic number for the winner is 270. The vote results are counted and certified by a joint session of Congress on Januray 6 of the year following the election. If no candidate receives a majority, the President is elected by the House of Representatives, and the Vice President by the Senate. This happened when President John Quincy Adams was elected. The method of electing a President was established during the Constitutional Convention of 1787. The convention considered a number of different methods, including selection by Congress, by state legislatures and by direct popular election. The current system, which was adopted with the intent to reconcile differing state and federal interests. It also was thought to provide a degree of popular participation in the process, to give the less populous states some additional leverage by providing "senatorial" electors, and to preserve the presidency as independent from Congress. Today all presidential electors are chosen by popular vote.During the early republic more than half the states chose their electors in their legislatures, eliminating direct involvement by the voting public.

The upshot of all of this is that political junkies intent on keeping an eye on their favorite candidate's progress need to tune into polling in so-called battleground states. Traditionally, Democrats are counting West Coast and East Coast states like California, Oregon, Washington, New York and others as "safe." Republicans  "control" a large segment of the center and south of the country, including states like Utah, Idaho, Arizona, all the way to Georgia and South Carolina. The most intense battles will be fought in 8 to 10 states that have swung one way or another in previous elections. Perennial swing states include Florida, Iowa, Ohio, Colorado, Nevada, North Carolina and Virginia, while minority voters, and the perceived relative qualities and characters of the dominant candidates, more states than usual may be up for grabs. Most nonpartisan political analysts currently see the electoral map tilting in the Democrats' favor. Merging the ratings from four major handicappers reveal a lopsided outlook if the election was held today, with 216 electoral votes considered safe for likely leaning Democrat. (Wall Street Journal, Jul;y 22). However, a lot can happen during the next 100 days.

Potential influences on the outcome in November include a series of debates, scheduled for September 26, and October 9 and 19. The VP debate will take place October 4. Aside from these debates, the relative strength of Gary Johnson, presidential nominee of the Libertarian Party, could have an out-sized impact on the performance of the dominant candidates. Mr. Johnson is already polling at 13%. He only needs to bump this up to 15% to be included in the debates, which would give him more exposure, and could potentially affect the outcome of the election. Finally, let's not forget the crucial "down-ballot" races that help determine which party controls Congress next year. The Republicans are defending 7 states which President Obama won twice. Republicans currently have a 54-44 advantage in the Senate. "Down ballot" races are frequently decided by who wins the White House. This year might be different. Either way, Democrats smell an opportunity.

All in all, there is a lot at stake during this election. Next January our Electoral College will, in a very real sense, cast ballots that could determine the direction of the country for some time to come. Our option is not to sit this one out. Become familliar with the important issues, listen to the debates, make educated decisions, and plan to vote with your head, not your heart. These races are too important.