Saturday, January 12, 2019

57 Million Americans Are Worse Off Than Furloughed Feds

Unemployed men in 1931 dressed better than almost anyone does today 

As direct-hire employees of the U.S. federal government, you and I have a rare good deal. Don't doubt it. Many of my fellow feds have never experienced the private sector, but over in the world of 'at will' employment there is no job security at all, and paychecks do not always arrive on time when liquidity crises occur. Almost no one in the private sector has defined benefits plans anymore, and pensions went away along with the industrial economy. The economic uncertainty some feds are now experiencing is the norm for quite a few of our fellow citizens.

I get it that people have sad tales to tell, but the plight of some federally-employed people simply does not have the political utility some think it has. Americans who live in the gig economy all the time are not likely to be moved.

Today 36 percent of all workers in the U.S. are in the gig economy, where there is no expectation of the kind of pay and benefits that federal employees can take for granted. And we can take it for granted, even if it is temporarily delayed.
"Gallup estimates that 29% of all workers in the U.S. have an alternative work arrangement as their primary job. This includes a quarter of all full-time workers (24%) and half of all part-time workers (49%). Including multiple job holders, 36% have a gig work arrangement in some capacity."

This works out to about 57 million Americans.

Gallup has a broad definition of gig work. Again from their report:

...the gig economy includes multiple types of alternative work arrangements such as independent contractors, online platform workers, contract firm workers, on-call workers and temporary workers.

About those defined benefit plans, they are very scare Outside the Beltway:
The percentage of workers in the private sector whose only retirement account is a defined benefit pension plan is now 4%, down from 60% in the early 1980s. About 14% of companies offer a combination of both types.

Meanwhile, the few employers that still offer traditional pensions - typically industries with a strong union presence, such as the airline and auto sectors – have been working overtime to cut deals to either reduce or eliminate their plans.

If you work for the government?

That's a different story. Traditional pensions are still offered by about 84% of state and local governments.

So count your blessings, and get a second job, just like so many others have to do all the time. Hey, they always need substitute teachers:
Fairfax County Public Schools has added a second hiring event for furloughed federal employees interested in substitute teaching positions. The event is scheduled for Tuesday, January 15, from 2 to 4:30 p.m. at the FCPS Administration Center, 8115 Gatehouse Road, Falls Church, VA 22042. The initial event, scheduled for Friday, January 11, is at capacity.

Don't turn up your nose at sub jobs. They're scheduled day-by-day, so are good for people who may be called back to work at any time, and any type of second job beats applying for unemployment insurance. The money you make is yours, whereas that unemployment benefit will have to be paid back after the shutdown is over, and to qualify for it in the first place you have to be seeking a new job – usually proven by going on three job interviews a week – whereas you furloughed feds aren’t, really, seeking another job.

And don't forget, there are three federal government paydays in January, so everyone had already gotten one check before the lapse in appropriations hit for some yesterday. That will help.

No one can tell how much longer the shutdown will last. Since Trump is passing on the Davos conference this year, that might suggest he expects it to go on past the conference dates of January 22-25. The State of the Union address is scheduled for January 29, and that seems like it would be a good time to wrap things up. Who knows? But I would not expect it to end before the SOTU.

Most Head Shakeningly Bad Thing of the Week

Flight delayed after passenger apparently tries to throw coins into engine - Shanghaiist

Twice before, elderly Chinese travelers have been caught throwing coins in a plane’s engine in a bid to earn some good luck towards having a safe flight.

TSA Sickouts Continue, Same as Before

As the Partial Government Shutdown of 2018-2019 extends past the first missed payday, there is lots of press attention being paid to TSA airport screeners calling in sick to protest (TSA Sickouts Worsen Daily), and some speculation that the screeners might quit en masse.

To which I say, what's new about that? Not much. It's the same old situation as before anyone missed a paycheck:
The Transportation Security Administration is a revolving door for more than 8,000 screeners at 10 of the busiest airports in the U.S., data obtained by Bloomberg Law suggest.

The TSA hired nearly as many agents at some sites as left their jobs between 2012 to 2016, according to information provided by the agency in response to a Freedom of Information Act request. The TSA doesn’t separate the data by why an employee left, so the numbers include those who quit, were fired, or retired.

-- snip --

The TSA employs a total of about 11,700 screeners at the 10 airports. The turnover rate across those sites ranged from 30 percent to more than 80 percent over the five years analyzed. Turnover among federal employees overall has hovered around 15 percent during the past three years, Hausknecht said.

Being an airport screener is just a terrible job, and high turnover is inevitable.

Will the churn of TSA personnel get even greater now that they have missed a paycheck - or, more accurately, have had their pay delayed until the shutdown is over? Maybe. And if so, will that make airport screening even slower and more erratic than it is already? Yes, probably. And finally, is there anything that can be done to resolve the Partial Government Shutdown of 2018-2019 anytime soon? No, not really.

One can only feel sympathy for those unpaid screeners. But I wonder if any of that sympathy will continue after the shutdown is over.

Friday, January 4, 2019

The Partial Government Shutdown of 2018-2019 Gets Real Next Week

No furloughed fed has missed a paycheck yet. That will start to happen on January eleventh, the first payday of 2019 (see this handy federal payroll calendar). Until then, all the huffing and puffing between Trump and the House leadership is just so much stage-setting for the deal they will eventually make.

Yet, people are worried. While browsing an article with advice for furloughed federal employees I came across a terrific 2015 study from the National Bureau of Economic Research about how furloughed employees coped with a loss of cash income during the last government shutdown, the one in 2013. Some of the figures on liquidity of the average employee astonished me.

From the paper's abstract:
Using comprehensive account records, this paper examines how individuals respond to a temporary drop in income following the 2013 U.S. Federal Government shutdown. Affected employees saw their income decline by 40% on average, which was recovered within two weeks. Despite having no effect on lifetime earnings, spending dropped sharply, implying a naïve estimate of the marginal propensity to spend of 0.57. This estimate overstates how consumption responded. To smooth consumption, individuals adjusted by delaying recurring payments such as mortgages and credit card balances. Those with the least liquidity struggled most to smooth spending and were left holding more debt months after the shutdown.

Here are the figures I found astonishing:
Prior to the shutdown, the median worker in the data held an average liquid assets balance sufficient to cover just eight days of average spending.

Moreover, liquid assets exhibit systematic changes over the pay-cycle. Just before payday, the median level of liquid assets is only five days of average spending. Indeed, a substantial fraction of this population barely lives paycheck-to-paycheck. On the day before their paycheck arrives, the bottom third of the liquid assets distribution has, on average, a combined checking and savings account balance of zero.

Think of that, the median worker in the data held an average liquid assets balance sufficient to cover just eight days of average spending. Do that many federal employees live paycheck to paycheck?

And the bottom line best advice for feds critically short of income:
This paper provides direct evidence on the importance of deferring debt payments, especially mortgages, as an instrument for consumption smoothing. Mortgages function for many as a primary line of credit. By deferring a mortgage payment, they can continue to consume housing, while waiting for an income loss to be recovered. For changing the timing of mortgage payments within the month due, there is no cost. As discussed above, that is the pattern for the bulk of deferred mortgage payments. Moreover, the cost of paying one month late can also be low. Many mortgages allow a grace period after the official due date, in which not even late charges are incurred, or charge a fee that is 4-6 percent of the late payment. Being late by a month adds only modestly to the total mortgage when interest rates are low, and mortgage service companies cannot report a late payment to credit agencies until it is at least 30 days overdue. Even if there are penalties or costs, late payment of a mortgage is a source of credit that is available without the burden of applying for credit.

The shutdown might be resolved before it comes to the point of deferring mortgage payments. Should the House agree to pass the El Chapo Act, for instance, that might let both sides call it a win. Or Trump might even bypass Congress and sell bonds, which is a current practice of the federal government to raise money for other purposes, or tax the billions of dollars in cash transfers to Mexico and Central America, something that could be done using regulatory authority.

So it might not come to that. But if it does, the home you own is your best store of value.

Friday, December 21, 2018

FBI Agent Who Negligently Shot Bar Patron Dances Away From the Law

The moment Special Agent Twinkle Toes negligently fired his dropped Glock 

That FBI agent who dropped his pistol by doing a backflip on the dance floor of a bar in Denver has been sentenced, and to say the judge let him dance away would be an understatement.

The Denver Post has the details:
The FBI agent charged with accidentally shooting a man after doing a backflip on the dance floor at a Denver bar last summer will avoid jail time after pleading guilty Friday to third-degree assault.

Under his deal with prosecutors, Chase Bishop, 30, immediately was sentenced to two years probation. He was also fined $1,200 and ordered to pay restitution to the victim. Denver District Judge Karen Brody cited Bishop’s lack of criminal history in her decision to accept the plea agreement.

Bishop had pleaded not guilty last month to a second-degree assault charge in connection with the June 2 incident.

“My whole goal in life is to care, protect and serve people,” Bishop told the judge on Friday. “I never expected the result of my actions to lead to something like this.”

That is a strangely garbled sentence. The wounding of the bystander was not something which the results of the agent's actions led to. His actions were to drop a pistol in a crowded public venue and then recklessly snatch it up off the floor, in the course of which he snagged the trigger. The result of his actions was to inflict a gunshot wound on a bystander. Those results led to today's remarkably light sentence.
Bishop, who was in Denver on FBI business when the incident occurred, will serve his probation in Georgia. Brody said she could be receptive to ending his probation after one year if Bishop complies with the terms.

“This is a tragic situation,” Brody said after she announced Bishop’s sentence. “It’s a lesson for everyone: How decisions, when you’re not being conscious of what you’re doing, decisions you make carelessly, with negligence, can turn into really serious consequences.

“I think in the future,” she said to Bishop, “you will never make that kind of mistake again.”

I'm not so sure about that. A prison sentence and a stiff fine would make a much bigger impression on Special Agent Bishop, I say, not to mention on any other law enforcement officers who carry while they drink and party. In fact, today's piddling one year probation and $1,600 fine from a judge who sounded apologetic about giving him even that much is more likely to embolden than to deter other negligent gun carriers.
Reddington spoke emotionally Friday about how that one June night at the bar changed his life. He lost his job at the Amazon warehouse. He has chronic pain in his leg. He doesn’t think he’ll ever be able to run again.

“I have done months of physical therapy,” he said. “I have sought counseling. However, being in public, especially seeing law enforcement with guns, makes me very uncomfortable.”

“I’ve done stupid things at bars to impress girls, too,” Reddington said.

Reddington said he didn’t believe Bishop deserved years in jail for what he did.

“The only thing I’m hoping for,” Reddington said, “Is that he doesn’t carry a gun for a long time.”

Mr. Reddington sounds very understanding. But I'll bet none of the stupid things he ever did to impress girls involved negligently shooting someone. Does he really think he got justice from Judge Brody for his chronic pain and loss of employment? I sure don't.

Most Head Shakingly Bad Thing of the Week

Sapporo blast due to fumes from 120 emptied spray cans - The Straits Times

Imagine the carnage 120 cans of Axe Body Spray could do

Wednesday, December 19, 2018

French Protesters Crank Edith Piaf While Burning a Toll Booth

Now, that's the French way to riot: dancing the night away to old Edith Piaf songs while the police stand by and watch.

I can't quite make out which Piaf song that is but I think it might be this one, because obviously those guys regret nothing.