Weekend News & Commentary – March 10-11, 2018
On Friday, the Labor Department reported 313,000 new jobs in February. This is the largest single-month gain during the Trump presidency, and largest gain since July 2016. The unemployment rate remained at 4.1 percent, a 17-year low. The numbers are likely the result of robust job creation and a large work force. The raise in hourly wages has not been as dramatic. Hourly wages rose 0.1 percent, with the 12-month average at 2.6 percent. This is higher than last year’s average, but some economists think that given the tight job market, wage recovery should be higher.
According to the Boston Globe, errors and ambiguities in the new tax law are causing headaches for both small and large businesses. Companies and trade groups would like the Treasury Department and Congress to fix provisions that negatively impact some farmers, retailers, restaurateurs, and large corporations. Late last week, the Chamber of Commerce sent the Treasury Department a 15 page document requesting clarification on how portions of the tax bill are meant affect smaller pass-through entities, mutual funds, and large multinational corporations. While the Treasury Department can offer guidance on ambiguities in the bill, correcting actual errors will require legislation, which may be hard to pass. Errors in the tax bill could lead to a situation similar to the years following the passage of the Affordable Care Act; Republican resistance to lending votes to correct errors in the bill led the Obama administration to take unilateral executive action to ensure enforcement of the Act.
Home Depot announced that it will donate $50 million to the Home Builders Institute to train approximately 20,000 people as construction workers over the next decade. The move is intended to address shortages in the construction field that are slowing the construction of new homes and driving up house prices. The Home Builders Institute plans to use the donation to train veterans, high school students, and disadvantaged youth. The Institute usually depends on funding from the Department of Labor, states, and local workforce boards. Home Depot’s sizable donation will increase the number of graduates by approximately 2,000 per year, or 60 percent. The donation also suits Home Depot’s interests, and fits into its larger goal of helping veterans. As of December 2017, there were 158,000 job openings in construction, an increase from previous year. Home improvement retailers like Home Depot can experience decreases in sales if there are not enough construction workers to undertake projects. The donation also complements the company’s commitment of $250 million through 2020 to provide housing for veterans.
Robert Atkinson and Michael Lind offer a robust defense of Big businesses in the Atlantic. In pointing out the differences between the alleged negative perceptions of big companies and reality, the authors focus on the treatment of workers and job creation. The authors argue that small businesses are four times more likely to lay off employees, and that employees of large businesses earn 54 percent more than employees of smaller companies. The authors identified other benefits of working at large companies, including better insurance and retirement benefits, increased likelihood of unionization, and more diversity. Big companies also create more jobs than smaller companies. For more, read Atkinson and Lind’s piece here.