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April 28th, 2020

↳ Unemployment

Yellow TV

ALLOVER SECTOR

A political history of the US Postal Service

It's been a turbulent week for the US Postal Service. With revenues plummeting as mail volume drops, the Postal Worker's Union leader recently estimated that the service is likely to literally "run out of money" by October. The crisis has once again sparked a debate on the organization of America's most popular public institution. Many have called for structural reforms, while others have advocated increased investment and a return to postal banking to raise revenues.

A 1998 book by RICHARD R. JOHN argues that between its founding in 1775 and the commercialization of the electric telegraph in 1844, the post office represented a communications revolution as influential for American public life as the telegraph, the telephone, and the computer.

From the introduction:

"By 1828, the American postal system had almost twice as many offices as the postal system in Great Britain and over five times as many offices as the postal system in France. In 1831, the postal system, with more than 8,700 postmasters, employed just over three quarters of the entire federal civilian work force. (The federal army, in contrast, consisted of a mere 6,332 men.) The postal system transmitted 13.8 million letters and 16 million newspapers at a cost of $1.9 million through a network that extended over 116,000 square miles.

Thanks to a variety of generous government subsidies, a large percentage of the total volume of the mail consisted of newspapers and public documents that described the proceedings of Congress. This steady flow of information helped to introduce a widely scattered population to two key ideas: that the boundaries of the community in which they lived extended well beyond the confines of their individual locality; and that the central government might come to shape the pattern of everyday life."

Link to the publisher's page.

  • A couple links from our 2018 newsletter on postal banking: A 2014 article by Mehrsa Baradaran argues that subsidies for postal banking are "appropriate and justifiable." Link. A USPS white paper details how the policy could expand financial services to the 68 million underbanked Americans. Link.
  • An extensive legislative history of "the concepts, policies, practices, and controversies associated with universal postal service from 1790 to 1970." Link.
  • Léonard Laborie on parcel post and globalization: "In 1880, several Universal Postal Union member states signed a convention for the exchange of parcel post, opening a new channel in the world of commerce. By the end of the 19th century, millions of packets poured into post offices and railway stations, crossed countries, and created unprecedented transnational connections." Link.
  • "Couriers, ships, caravans, and rest houses—throughout pre-modern history, such features have been central to the infrastructural matrix without which complex and enduring states, empires, and polities are not conceivable." Gagan Sood reviews Adam Silverstein's Postal Systems in the Pre-Modern Islamic World. Link. And Ying-wan Cheng on Postal Communication in China and Its Modernization, 1860–1896. Link.
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April 3rd, 2020

Crisis and Recovery

The underlying problems in the US economy

Today’s Bureau of Labor Statistics (BLS) report hardly registers the cataclysm in the US job market. The sharp 0.9 percent uptick in unemployment—itself newsworthy—only grasps the very beginnings of the shutdown of the American economy. Since the BLS surveys were conducted in the week of March 12, 10 million people have filed for jobless benefits. Only when the April numbers are released at the beginning of next month will we begin to get a fuller statistical picture of the magnitude of the Covid-19 crash. Unemployment rates are expected to rise to 20 percent or more. Given the 10-year-long, bull run of the stock market, one might imagine that the US economy was in good shape before that crash began, and that the labor market will therefore bounce back from the novel coronavirus’s punch once the public health crisis ends. However, the opposite is true: the fundamentals of the US economy were already incredibly weak. They have been for some time. After a decade of slow economic expansion, the US labor market was barely beginning to recover from the last crisis in 2008. If the past is any guide to the future, it will likely take even longer to recover from this one. We are only starting to get a sense of the true extent of this disaster from the perspective of American workers.

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February 10th, 2020

Part of Some Totality

DELIBERATE ETHOS

"Informality" and globalization

Standard theories of development have been predicated on the goal of an industrialized economy with the potential for full and regularized employment. Such a view necessitates a host of statistical categories to define and measure labor markets. In a 2000 paper, PAUL E. BANGASSER writes an institutional history of the International Labor Organization's (ILO) evolving attempts to understand and quantify the category of the "informal sector"—by now a permanent feature of the global workforce.

From the paper:

"Over the past three decades, the ILO has been both the midwife and the principal international institutional home for the concept of the informal sector. While the phrase 'informal sector' came onto the development scene in 1972, its roots reach back into the economic development efforts of the 1950s and 1960s. With the surprisingly successful rebuilding of Europe and Japan following the Second World War, there seemed no reason why a similar sort of deliberate economy-building effort could not also be applied to the newly emerging countries in the Third World. This technical ethos towards development was especially strong in UN Specialized Agencies like the ILO. It allowed them a measure of protection from Cold War political crossfire without undercutting either their raison d’être nor their universality.

Attention to the informal sector crescendoed in the early 1990s. The 1991 Director General’s Report, The dilemma of the informal sector, notes that 'Contrary to earlier beliefs, the informal sector is not going to disappear spontaneously with economic growth. It is, on the contrary, likely to grow in the years to come, and with it the problems of urban poverty and congestion will also grow.' A growing urbanization is consistent with the developmental expectations of the 1950s and 1960s. However, that this trend towards urbanization would represent a nexus of seemingly unsolvable problems of grinding urban poverty is quite different from that earlier thinking. The upward spiraling dynamics of 'modernization' which were supposed to accompany urbanization, and lead to economic 'takeoff,' didn’t kick in; there wasn’t any trickle-down of any significance, nor should any be expected, at least not within any reasonable time frame. This is an important conclusion, with fundamental implications for the conventional development paradigm."

Link to the paper.

  • Keith Hart's 1973 paper "Informal Income Opportunities and Urban Employment in Ghana" coined the phrase "informal sector." From the paper: "The distinction between formal and informal income opportunities is based essentially on that between wage-earning and self-employment. The key variable is the degree of rationalization of work—that is to say, whether or not labour is recruited on a permanent and regular basis for fixed rewards." Link.
  • A 2019 paper by Aaron Benanav (previously shared here) critically appraises the ILO's attempts at defining informality, situating the emergence of the "informal sector" as tied to the mid-century efforts to "generate a globally operational concept of unemployment for use in the 'developing world.'" Link. (For a broader, less empirical take along similar lines, see Michael Denning's 2006 article "Wageless Life." Link.)
  • A new IZA paper by Andrea Brandolini and Eliana Viviano looks at contemporary employment statistics and proposes supplemental indices that "account for people's experience in labor market states (e.g. work intensity for the employed and search intensity or unemployment duration for the unemployed)." Link.
  • "All the materials and human instruments of production are present in abundance, nay in excess. But their normal collaboration is impossible, because they cannot market the goods they could produce, so as to cover even the barest costs of the production." From 1924, The Economics of Unemployment by J. A. Hobson. Link.
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