It’s Easy Being Green….

Iconic American financier T. Boone Pickens recently saturated the media with public service announcements and a series of personal appearances on many channels.   Promoting his plan for American independence from imported oil, he has garnered considerable attention, in part because nature abhors a vacuum and aggressive, comprehensive national energy plans from political leaders have been scarce as hens’ teeth.   In this environment, Pickens has commandeered Schumpeter’s characterization of capitalism as a process of creative destruction (Always better to mention Schumpeter than Marx’s assessment of changing “forces of production.”) and married it to his own vision for transforming the US energy economy.  

Without making conclusions about the viability of Pickens’ plan for using wind and natural gas, we do have some evidence that dramatic shifts in US energy production and consumption may be less disruptive and more possible than opponents presume.  The Political Economy Research Institute and the University of Massachusetts – Amherst has produced a profile of state-level occupational gains from green investments. 

Evaluating employment data in 12 states, they conclude that jobs benefiting from a green investment transformation of our infrastructure and transportation system would have a positive impact on job stabilization and growth in numerous occupations currently under threat.  They assess the impact of six green strategies: “…building retrofitting, mass transit, energy-efficient automobiles, wind power, solar power, and cellulosic biomass fuels.”    http://www.bluegreenalliance.org/atf/cf/%7B3637E5F0-D0EA-46E7-BB32-74D973EFF334%7D/NRDC_report_May28.pdf

An ironic sidebar to this optimistic vision for basic manufacturing employment may be an emerging shortage of high skill workers needed for the infrastructure and high-tech construction it assumes.  At a recent Tennessee labor-management conference, senior executives from the Tennessee Valley Authority joined an international craft union president on a panel discussing the crisis facing power generation industries.  Our new found love for “greening” the built environment and for building new nuclear power plants may find itself slowed by lack of sufficiently trained workers.  As one TVA executive summarized, “We’ll have an outage (retrofit for a power plant) and when we call for workers, nobody will come!”   Building Trades apprenticeship programs quietly inject billions of dollars into workforce development each year.  Some unions, like the United Brotherhood of Carpenters, provide state-of-art training that even mid-size contractors cannot afford or master.  Vocational schools and private for-profit technological training fall far short of advanced programs provided by America’s craft unions and their signatory employers.   Nevertheless, current Department of Labor initiatives funded through rapid growth of budget and investigations by the Office of Labor Management Standards (OLMS), are threatening to undermine and dismantle our craft union human capital investments, just when we need them most dearly.  It would appear that, once again, ideological antipathy to labor associations may run counter to strategic economic policy.  Will T. Boone Pickens build a wind farm and have no way to get his power to market?  

The AARP Public Policy Institute has issued a “fact sheet” that should interest everyone concerned about America’s near-term and long-term economic and social health.  From 2005 to 2007, according to the AARP report, “employment gains were especially strong for workers aged 55 and older­ whose labor force participation rate in 2007 reached a level not seen for decades ­with particularly large gains in the participation rate of older women. These trends bear watching as workers aged 55 and over will account for more than 90 percent of projected job growth over the next decade.”  With most job growth absorbed by older workers and more than 70% of older non-agricultural workers employed full-time, US employment policy must take into account the complicated situation facing this population as the Boomer cohorts pass the age threshold for Social Security benefits. 

In fact, the leading edge of America’s “boomers” has already hit age 62 and applied for Social Security retirement benefits; soon millions more will join them.  Older workers report an intention to continue working and, given the size of younger cohorts, that’s good news for US labor markets and employers.  Nevertheless, low private savings rates, unanticipated declines in home values and increased debt loads are leading these older workers, like Kathleen Casey-Kirschling, the official oldest boomer, to start collecting Social Security as soon as possible.  Waiting until age 70 would nearly double their cash flow, but even if they continue working, most will opt for immediate gratification. 

The AARP report notes that the overall labor force participation rate for older workers, aged 55 -64, grew from 62.9 to 63.8 between 2005 and 2007.   For the 65-69 cohorts, it increased form 28.3 to 29.7.  Over one third of retirement age males continued working and over one quarter of women did so.  While White, Asian and Hispanic males from 55-64 report over 70% are working, only 54.4% of older (55+) Black males are in the labor force.  Black, White and Asian females all fall in the mid-to-high fifty percent for labor force participation and Hispanic women just under half.   Reduced labor-force participation during these high earning years prior to retirement will lead to dramatic contrasts in well-being for Black male retirees and their families.   

Growth in elder worker and retirement age (65+) employment for boomers comes just as America’s economy is hitting the brakes, driven by collapsing home prices and financial markets and corporations in disarray.  No wonder, then, that we see a striking turn-around in EEOC Age Discrimination complaints in 2007, up 15 percent from 2005.  Watch for 2008 to continue the trend.  Why?  In the 1990s, with low unemployment and tight labor markets, employers had little incentive to discriminate. Unemployment rates in 2008, however, have risen to 5.5% in June; this figure understates actual unemployment as it neglects increasing numbers of unemployed who drop below the radar when they cease looking for work. Long-term unemployment is rising and the volatility of annual earnings is increasing as workers hit by unemployment face steep drops in household earnings.  

Six months of job losses counter a trend from 2005 to 2007, when overall employment improved; the labor force expanded and unemployment dropped.  2008 and beyond, marked by growing unemployment, should reverse employers’ loyalty to older workers.  And those over 55 workers, now at 16.8 percent of the workforce, by 2016, will contain over 20 percent of all workers.  If Age Discrimination complaints follow past patterns, the coming class struggle with have a decidedly grey tone with trial lawyers in the vanguard.   

As this is my first LERA blog contribution, I impose on your patience with a brief personal comment.  My grandmother, born in Latvia, arrived in the US in 1891, was widowed in 1929 and reared two daughters through tough times.  For my entire childhood, she shuttled between stays with our family and that of Uncle Karl and Aunt Alice.  She worked as a seamstress and laundress at local hospitals.   She taught me to make latkes; my knuckle scars were earned grating potatoes with too much enthusiasm.  And she taught me to eat smoked chubs by surgically removing the vertebrae and ribs in one grand flourish.  We cooked, we ate, and we talked.   From grandma’s vantage point, my core traits were exposed and she summed her assessment in the following and often repeated observation:  There’s a fine line between chutzpah and hubris – you cross it on the run.

After several decades of professional work in universities and private practice, this blog marks a new adventure and means to translate frequent discussions with LERA pals into something more.   Certainly LERA’s newly recruited “Commons” corps has a rich and always current set of issues to chew on.   For those of us from academic settings, the tempo and pace of regular timely essays may be unfamiliar and mildly daunting.  We usually get to process our thoughts through well established hidden college networks of friends whose insights save us from the most obvious failings of logic and fact.  In these blogs, we will work without that safety net and may well cross the line before we know it.  So be it.  It can’t be much more threatening than stepping into the reception center at Fort Polk in January, 1970 to start Basic Training.  

The Bureau of Labor Statistics has just released a report based on the National Longitudinal Survey of Youth 1979, a survey of 9,964 men and women who were ages 14 to 22 when first interviewed in 1979 and ages 41 to 50 when interviewed most recently in 2006-07.  These late boomers, born between 1957 & 1964, have been a restless lot.  Averaging 10.8 jobs between age 18 & 42, they slow down (don’t we all?), but even for those aged 38 to 42, 31 percent of jobs ended in less than a year, and 65 percent ended in fewer than 5 years.   The average late boomer was employed 77 percent of the weeks from age 18 to 42; men about 80 weeks and women about 70.  Women spent much more time out of the labor force (25 percent of weeks) than did men (10 percent of weeks).  

Despite this pattern of intermittent and capricious familiarity with work, America has sustained a health care system largely based on the employment contract.  Were we to design a health care system that recognized the actual patterns of work and labor force participation, would anyone choose the current US system?   Workers with employment based health care and chronic illness face tough decisions if they hate their job or get a chance to improve and change jobs.  Even with a good new job, they may face a long wait prior to eligibility. Small employers find themselves strapped to pay premiums and disadvantaged when competing for high quality workers.  When these boomer cohorts are unemployed, a not uncommon status, uncertainty and cost produce health care decisions that no physician would recommend.       

Yesterday I had lunch with several local union officials, one of whom worked for years with the AFL-CIO.  Looking toward his retirement, he said that at least he could rely on his pension and his continuing health care.  Then he stopped himself and observed, At least I hope I’ll have it.  For those boomers responding to the National Longitudinal Survey of Youth, with their volatile employment histories and low savings, lacking a sensible national health policy, our collective chutzpah certainly will become a very expensive and self-destructive hubris.