After warnings from some corners — such as the Heritage Foundation claiming the Senate’s immigration reform bill will cost trillions of dollars over five decades — the Congressional Budget Office has scored the measure:

A $175 billion savings over 10 years– with $197 billion in deficit reduction and some offsetting expenses.

About 8 million undocumented immigrants would gain legal status under the bipartisan Senate bill, the CBO report.

And pay taxes.

Sponsors see a springboard in that projection:

CBO report a huge momentum boost; debunks the idea that #CIR is anything other than a boon to our economy

— Chuck Schumer (@ChuckSchumer) June 18, 2013

Today’s report from #CBO is proof positive immigration reform is good for our economy and will help reduce the deficit.

— Lindsey Graham (@GrahamBlog) June 18, 2013

The Social Security Administration has said that the bill would generate more than $275 billion in revenue for Social Security and Medicare, increase the gross domestic product by 1.63 percent and add more than 3 million jobs over the next decade.

“Comprehensive Immigration Reform” is a budget builder.

It’s a jobs bill.

Somebody tell Jim DeMint.

Original post is Immigration Bill: $175 Bln Savings by Political Capital.

Photograph by Sam Hodgson/Bloomberg

Housing construction in Rancho Santa Fe, California.

The heyday for women in the job market  may have ended with the housing boom, according to research by the Federal Reserve Bank of Dallas.

Women hold a disproportionate share of jobs — such as teaching positions — that rely on local tax revenue generated by home sales and appraisals. If the real estate market doesn’t return to its previous levels, women’s job outlooks could also remain depressed, senior economist Carlos E.J.M. Zarazaga writes in a June 2013 note.

Similar to men, women’s labor-input plunged during the recession. Men, however, began recouping the losses almost immediately after the economic slump ended, while women have seen almost no progress, Zarazaga’s report shows.

The pre-recession readings for women “may be unsustainable because of a possible link between the booming housing market during those years and the labor market for women,” Zarazaga writes. “Thus, the end of the housing boom may have also ended an era of unusually good job market opportunities for women.”

Zarazaga says coming to grips with this realization has implications for monetary policy at a time when the Federal Reserve is pursuing unprecedented asset purchases in an effort to stimulate the economy and reduce a jobless rate that stood at 7.6 percent in May.

“Policymakers would be well advised not to base decisions on the assumption that normal labor market conditions can be identified with those prevailing before the Great Recession,” he writes. Policies that try to bring labor input back to previous levels could cause “undesired inflationary pressures and/or asset bubbles that might destabilize the economy when they burst,” according to Zarazaga.

Original post is Housing Boom’s End Dims Women’s Job Outlook: Fed Report by Political Capital.

Photograph by Victor J. Blue/Bloomberg

A newly naturalized American citizen Fayick Suleman, from Ghana, center, stands for a photograph with his wife Hanadi Suleman, left, and son Laeyth Suleman, 2, with his certificate of citizenship after a Naturalization Ceremony in New York, on April 19, 2013.

Four in 10 Fortune 500 companies were started by first- or second-generation immigrants, President Barack Obama said today in a White House speech kicking off weeks of Senate debate over an immigration bill.

Immigration has been “a driving force” of the American economy, Obama said, suggesting that American law hasn’t kept pace with modern times. Too many young people from abroad are educated in American schools only to be sent home after graduation, he said. Too many undocumented immigrants live in fear.

The bill the Senate is taking up today, with leaders hoping for passage by July 4, “isn’t perfect,” the president said. Notably, Senate Republican Leader Mitch McConnell is on board for a full debate over a bill with “serious flaws.”

Yet it contains the ingredients of what’s necessary for a comprehensive overhaul of the nation’s immigration laws, tightening border security while modernizng the means of awarding guest worker visas for the higher-skilled, lower-skilled and farmworkers alike, tightening enforcement of workplace rules and allowing many of the estimated 11 million undocumented immigrants already in the U.S. a path to citizenship.

“Throughout our history, the promise we found in those who come from every corner of the globe has always been one of our greatest strengths,” he said in an East Room address. “It’s kept our work force vibrant and dynamic. It’s kept our business on the cutting edge. It’s helped build the greatest economic engine that the world has ever known.”

“Almost half of the Fortune 500 companies, when they were started, were started by first- or second- generation immigrants,” he said. “So — so immigration isn’t just part of our national character. It is a driving force in our economy that creates jobs and prosperity for all of our citizens.”

The Senate today launches work on a bipartisan bill delivered by four Republicans and four Democrats, including one Republican — Florida Sen. Marco Rubio — who insists that the border protections in the bill still need more work before he can vote for it. Democratic leaders face their own challenges, fending off demands from lawmakers who want to add gay rights, gun laws and stronger labor rules to the immigration package, at the risk of alienating Republicans reluctantly supporting the bill as it is.

House leaders also are starting work on their own legislation, hoping to push something through their own committees while the Senate acts.

Still, there are some predicting failure to enact anything the Senate, House and Obama can accept.

The toughest issue to reconcile among House and Senate proposals will be the fate of the undocumented. House Republicans don’t want any of those in line for legal status to qualify for aid under the Affordable Care Act, for instance — and many oppose citizenship as a goal for any who have broken the law.

For the White House, the path for the undocumented is an essential element of what stands to become the most significant immigration overhaul in a generation.

“They’re our neighbors,” Obama said. “We know their kids. Too often they’re forced to do what they do in a shadow economy, where shady employers can exploit them by paying less than the minimum wage, making them work without overtime, not giving them any benefits. That pushes down standards for all workers. It’s bad for everybody, because all the businesses that do play by the rules, that hire people legally, that pay them fairly, they’re at a competitive disadvantage.”

“This won’t be a quick process,” he said. “It’ll take at least 13 years before the vast majority of these individuals are able to even apply for citizenship. So this is no cakewalk, but it’s the only way we can make sure that everyone who’s here is playing by the same rules as ordinary families: Paying taxes, and getting their own health insurance.”

“For immigration reform to work, it must be clear from the outset that there is a pathway to citizenship. We’re asking everybody to play by the same rules, you gotta give people a sense of certainty, that they go through all these sacrifices –do all this — that there’s, at the end of the horizon, the opportunity — not the guarantee, but the opportunity to be part of this American family.”

Original post is Obama: Citizenship Key to Immigration, ‘Driving Force’ by Political Capital.

Photograph by Scott Eells/Bloomberg

Morning commuters exit a subway turnstile in New York.

Women earned 77 percent of what men did in 2011 for the same job, according to Bureau of Labor Statistics cited by the Institute for Women’s Policy Research, a Washington-based research group.

The figures for the most recent year available were cited as President Barack Obama yesterday commemorated the 50th anniverary of the Equal Pay Act, signed into law by another Democratic chief executive, John F. Kennedy.

“Our journey to equality is not complete until our wives, our mothers, our daughters can earn a living equal to their efforts,” Obama said during a ceremony at the White House.

Original post is Bloomberg By the Numbers: 77 by Political Capital.

Photograph by Andrew Harrer/Bloomberg

Contractors smooth the concrete on a curb at Skanska USA Building Inc.’s Inova Health System construction site in Lorton, Virginia.

The figures used by the U.S. Labor Department to adjust changes in payrolls for seasonal variations have represented a higher hurdle so far this year than in the recent past, according to economist John Herrmann.

That’s about to change.

The government reported last week that companies added 178,000 workers to their headcounts last month, following a 157,000 gain in April. In order to allow comparison from one month to the next, the data are adjusted for seasonal swings. Otherwise, for example, employment would always surge in November and December as retailers prepare for holiday shoppers and then plunge in January and February when the additional staff is let go.

May typically shows a big gain in unadjusted employment as warmer temperatures promote home-building, tourism-related industries prepare for the summer-vacation season and new college graduates join the workforce. The surge last month was even stronger than usual.

Excluding government agencies, private payrolls last month expanded by 907,000 workers before adjusting for seasonal swings, the biggest advance for any May since 2007 and the third-biggest since 1998, according to Labor Department’s June 7 report.

After making the adjustments, the 178,000 increase in May was only the biggest for the month since 2011. Using the average adjustment from the past three years would have produced about a 247,000 increase in payrolls last month, said Herrmann.

And last month wasn’t the only one facing such a constraint. In four of the first five months of this year, the number used to adjust the data depressed payrolls more than it did on average over the previous three years, according to calculations by Herrmann, director of U.S. interest-rate strategy at Mitsubishi UFJ Securities in New York.

The good news is that, statistically speaking, what the Labor Department subtracts from one month, has to be made up later so as not to influence the total readings for 2013.

And that will begin with the June payroll figures and continue to September, according to Herrmann’s projections. The seasonal adjustment will add about 40,000 jobs to the job count compared to the 2010-2012 average for this month and the next three, Herrmann said.

“The seasonals matter a lot because they have a big say in shaping people’s views and assessments of the data,” Herrmann said in an interview. “The job market should continue to gain momentum for the rest of this year and into next year. We won’t have a repeat of last summer’s soon.”

Last year, private payroll gains averaged 126,000 a month from June through September after growing at a 214,000 clip in the first five months of the year, prompting concern the economy was swooning. More positive adjustments this year may pre-empt a similar slump.

Original post is Payrolls Get U.S. Labor Boost by Political Capital.

Photograph by Daniel Acker/Bloomberg

Welders work on a joint between two sections of pipe during construction of the Gulf Coast Project pipeline in Prague, Oklahoma, on March 11, 2013.

That’s how many consecutive months U.S. nonfarm payrolls have climbed.

Payrolls rose a higher-than-forecast 175,000 in May, according to Labor Department figures released June 7. The economy has added about 5.7 million jobs during the previous 32 months, at an average of about 178,000 per month, ranging from a low of 69,000 in January 2011 to a high of 332,000 in February.

“Broad-based gains at private employers, ranging from retailers and builders to health-care providers and hotels, indicate companies are optimistic about the outlook for demand, even as government payrolls shrink,” Bloomberg’s Lorraine Woellert reported.

The unemployment rate climbed to 7.6 percent from 7.5 percent in April because the labor force participation rate rose as more unemployed workers actively looked for a job.

Original post is Bloomberg by the Numbers: 32 by Political Capital.

Photograph by Spencer Platt/Getty Images

Job seekers wait in line to meet with employers at the 25th Annual CUNY big Apple Job and Internship Fair at the Jacob Javits Convention Center on April 26, 2013 in New York City.

Unemployment rose to 7.6 percent in May — and economists say that, counter-intuitively, that’s a sign of a U.S. labor market on the mend.

About 420,000 people joined the workforce last month, the biggest gain in seven months, figures from the Labor Department’s survey of households showed today. Of those, 319,000 actually found a job, and the rest didn’t, causing the jobless rate to climb.

The so-called underemployment rate, which includes people who have left the labor force because they are discouraged by job prospects and those working part-time because they couldn’t find full-time work, actually slid to 13.8 percent from 13.9 percent in April.

Part of the reason is that fewer Americans were glum about finding work. The number of discouraged workers fell to 780,000 last month, the fewest since September 2009, according to Labor Department data that isn’t adjusted for seasonal variations. It was the fewest for any May since 2008.

“Discouraged workers are becoming more positive about the outlook for the labor market, so they’re starting to come back in and search for work,” said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh, said after the report. “We’re adding jobs at a steady clip, above the level that’s needed to absorb new entrants into the labor force. People are saying, look, the job market is getting better.”

Payrolls climbed by 175,000 workers in May, above the median forecast of economists surveyed by Bloomberg that projected a 163,000 increase. That compares with April’s revised 149,000 gain in employment.

Consumer confidence last week hovered near a five-year high, according to the Bloomberg Consumer Comfort Index, which showed Americans’ feelings about the state of the economy have improved to the best level since January 2008.

Still, stagnant wages could prove a damper to confidence going forward. Average hourly earnings for all employees on private non-farm payrolls, at $23.89, was up just one cent in May.

Original post is Unemployment Rate Increase: Growing Worker Confidence? by Political Capital.

Photograph by Mario Tama/Getty Images

Job seeker Percy Chang, right, fills out paperwork at a Long Island job fair on May 2, 2013 in Uniondale, New York.

The U.S. will need to add fewer jobs each month to reduce unemployment, a Chicago Federal Reserve study found. And the change is all about demographics.

Researchers at the Federal Reserve Bank of Chicago found that as aging baby boomers retire and population growth slows, payroll gains averaging 80,000 a month and eventually just 35,000 monthly will be enough to keep the U.S. jobless rate steady. Gains above that will help drive down unemployment.

“These estimates are lower than the conventional wisdom that 100,000 to 150,000 jobs per month are needed to lower the unemployment rate,” Daniel Aaronson, director of microeconomic research at the Chicago Fed, and Scott Brave, a senior economist, wrote in a report dated July 2013 on the central bank’s website.  “This has ramifications for the potential speed at which the economy can grow in the future.”

The new estimates mark a break with the past. Trend job growth was at about 150,000 jobs per month in the 1980s and early 1990s and increased to 200,000 jobs in the mid- to late- 1990s, bolstered by growing labor force participation and baby boomers in their peak working years.

Aaronson and Brave tracked four variables to arrive at their estimates: the labor force participation rate, population growth, the rate of unemployment that would be associated with a stable economy and the relationship between hiring as measured by the Labor Department’s household survey and changes in payrolls derived from its survey of employers.

One wild-card is immigration. Current estimates put total population growth at 1 percent, falling to 0.8 percent by 2018. If immigration rates recover to pre-recession levels, they could boost the population growth and, in turn, trend employment growth to about 100,000 jobs per month over the next two years and an average of 65,000 over the second half of the decade.

The researchers also provided estimates using the most optimistic and pessimistic scenarios. A smaller decline in labor force participation and a lower natural unemployment rate could also drive up trend employment and would mean it would take 120,000 jobs per month to steady unemployment over the second half of the decade, while the most pessimistic would mean no growth at all in payrolls will accomplish the same feat.

Original post is Unemployment Eases with Fewer Jobs by Political Capital.

Career earnings gains have cooled over successive decades just as average scores on the SAT, a college entrance exam measuring language and math skills, have declined.

Is there a link?

Economists at the St. Louis Federal Reserve Bank say the answer is probably yes.

College graduates born between 1941 and 1950 saw their earnings increase by a factor of 2.4 within 30 years of entering the workforce, down from 2.7 for those born in the 1930s and 3.5 for Americans born in the 1920s, according to an essay by technical analyst Yu-Chien Kong and St. Louis Fed Vice President and economist B. Ravikumar posted May 30.

The average verbal SAT scores of college-bound seniors from 1934 and 1950 also showed a declining trend, the authors point out. The analysts used the test scores as a proxy for “ability,” and concluded that younger people aren’t seeing as big of gains in pay because, well, they aren’t as bright as prior generations.

“The average SAT score is one example of an imperfect measure that provides some evidence on the differences in ability across birth cohorts,” the authors write. “To the extent that the decline in the average SAT score suggests lower average ability of college graduates from the later cohorts, the life cycle earnings model implies that the life cycle earnings profile would be flatter.”

Original post is SAT Scores: Key to Earnings? by Political Capital.

Photograph by Spencer Platt/Getty Images

Job seekers speak to representatives of employers at a job fair at the Jewish Community Center in Manhattan on March 6, 2013 in New York City.

Thinking of finally buying a house?

If you do, you might help to increase your state’s long-term unemployment rate.

New research finds that high home-ownership levels correlate with high joblessness levels down the road, although unemployment comes after a time lag of as much as five years.

“High levels of home-ownership do not destroy jobs this year,” reads the National Bureau of Economics May 2013 working paper, written by Dartmouth economist David G. Blanchflower and Andrew J. Oswald of the University of Warwick in the U.K. “They tend to do so, on our estimates, the year after next.”

The reasons? States where a higher proportion of residents own homes also have lower labor mobility, meaning people don’t relocate as much to find jobs.

States with high home-ownership have longer commuting times, too, raising costs for employers and employees, the researchers write.

Finally, high home-ownership rates correlate with lower business formation rates. The study’s authors guess that that might be the result of zoning restrictions, though they don’t have a clear reason.

“Our results seem relevant to, and should perhaps be seen as worrying for, a wide range of policy-makers and researchers,” Blanchflower and Oswald write.

The numbers are relevant in the U.S., they say, where home-ownership has increased from an average 46 percent in 1900 to 65 percent by 2010, having peaked at 69 percent in 2004.

In the U.S., a doubling of home ownership would be associated with more than a doubling of the unemployment rate in the long run, researchers find.

The researchers note that their study doesn’t claim that homeowners have higher unemployment than renters, and their research has weaknesses — it doesn’t assess the impact of outside changes in the structure of the housing market, for instance.

Still, “economists currently lack a full understanding of the interplay between the housing and labor markets,” the authors write.

“We believe these issues demand the profession’s attention.”

Original post is Home Ownership = More Joblessness by Political Capital.