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Power Sheet – March 28, 2016

The issue of jobs is going to be a minefield for both parties’ presidential frontrunners. Will Hillary Clinton or Donald Trump dare to think about it creatively and campaign on it unconventionally?

We’ll hear more about it on Friday when the March jobs report is released. Economists expect it to show that about 200,000 new jobs were created this month, not great but not bad, and the unemployment rate should hold around its current 4.9%, an impressively low number. Here’s why that seemingly strong trend is actually a problem for Clinton: She has wrapped herself in President Obama’s record on many issues, including the economy—he inherited a historic recession, and now look, the economy has created millions of jobs and the unemployment rate is the lowest since before the recession began; it’s a beautiful picture. Trouble is, the employment picture is actually terrible.

That’s because the world of work is changing so profoundly that traditional measures don’t tell us what matters most. The unemployment rate, for example, makes no distinction between full-time and part-time workers; if you’re working at all, you’re counted as employed. Dig deeper and you find that even now, after almost seven years of economic recovery and expansion, the number of people working part-time “for economic reasons” is still higher than at any time since the worst part of the mid-1990s. In addition, the number of people unemployed for 27 weeks or longer is still higher than at any time since the worst effects of the 2001-2002 recession. The combined percent of people who are unemployed or who want a job but have given up looking or who are working part-time for economic reasons is likewise higher than at any time since the worst effects of the 2001-2002 recession.

In other words, the employment picture by many measures looks like it did at its worst in previous recessions—but this time it’s after seven years of growth. Clinton is being forced to argue that a jobs situation we’ve always considered awful is now excellent. Making that case to voters will not be easy.

All this plays straight into Trump’s hands, right? Not necessarily. He has famously promised that “I will be the greatest jobs president God ever created.” But how? One can certainly criticize Obama’s economic policies and Clinton’s proposed policies, but evidence suggests that today’s terrible employment picture reflects more than just conventional policy mistakes. Consider American men age 25 to 54, the group that our society most expects to be working. In the 1950s and 1960s, only about 5% of them were not working. Today about 15% of them are not working, and the increase has been more or less steady. Something large is going on independently of who’s president.

Disincentives to work in the form of richer social insurance benefits are likely a factor, as is cheap overseas labor. It also seems highly likely that advancing technology may be a factor, and Trump’s strongest supporters, men with less-than-college educations, are exactly the group that technology has displaced most easily.

Trump hasn’t described a policy for that problem, or any employment policy other than closing the borders to imports. In fact, neither Trump nor Clinton nor anyone else has described a comprehensive policy for helping Americans adapt to a fast changing new world of work as technology advances. Will any candidate dare to talk about it? I doubt it, because I doubt that any of them has a persuasive proposal. That’s all the more reason for us to remember, as the candidates talk about jobs, that they’re probably evading the central question.

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What We’re Reading Today

How the relationship between Ackman and Pearson grew…  

…and eventually busted. To outsiders, activist investor Bill Ackman couldn’t have been more different than Valeant CEO Michael Pearson. But Ackman seemed to appreciate the way Pearson did deals and cut costs. This eventually led Ackman to take a large stake in Valeant. But as troubles—such as questionable accounting practices and drug pricing—destroyed Valeant’s stock price, the relationship faltered, leading Ackman to push for a replacement. While Pearson will remain CEO until Valeant finds a successor, the two now have to work together since Ackman’s on the board. Fortune

Clinton’s rift with Biden

Democrats believe that Hillary Clinton should tap Vice President Joe Biden to help with her campaign, particularly in an effort to appeal to white and more liberal voters. But the two have a contentious relationship, in part due to hard feelings over Biden’s potential presidential run. The issue has gained strength, since Democratic leaders think Clinton should tap Biden for help, especially after losing the Alaska, Hawaii, and Washington primaries to Bernie Sanders this weekend. WSJ

Sharp and Foxconn to seal merger this week

The two companies have been close to merging for about a month now. Hours after Terry Gou‘s Foxconn announced that it would buy the Japanese company Sharp for $4.3 billion, it discovered new liabilities that Sharp hadn’t disclosed. After discussions, the purchase price is likely to be about $90 million less than the previous agreement. Reuters

Netflix’s efforts to become a global company

As Netflix released the latest season of Daredevil to viewers in 190 countries, there wasn’t any grand applause or unexpected breakdowns. A button was pushed and the show went live. The company now gets to track and monitor which marketing efforts are successful and when people watch. All of this data will help guide future efforts by Reed Hastings‘s company, in an effort to provide more content that appeals to a global audience. Wired

Building a Better Leader

Idled workers are returning to the office

The people who stopped looking for a job in frustration during the recession have returned now that the market is searching for qualified employees.  USA Today

The most in-demand jobs this year are…

…nurses and truck drivers. Managers make the list as well, and businesses reportedly want to hire quickly.  Fortune

California strikes deal to raise the minimum wage to $15

The state’s previous wage floor was $10, and it will rise incrementally to $15 by 2022. Los Angeles Times

Worth Considering

Avon deals with activist investor

After facing a potential proxy fight by Barington Capital and NuOrion AG Partners, the company is set to add another independent director to the board, as well as former FedEx executive Cathy Ross. It’s a big win for Avon CEO Sheri McCoy, as a proxy fight threatened her job. But by selling the American business, cutting its workforce, and relocating Avon’s headquarters to the U.K., she has relieved some of the tension between investors and the board. Fortune

Businesses prepare for Brexit possibility

As the vote for Britain’s potential breakup with the European Union comes on June 23, businesses across the U.K. have begun to develop contingency plans in case a change occurs. While many of Britain’s leaders, like Prime Minister David Cameron, have warned of the dangers of such a breakup, companies are assessing the risk in case voters disagree. The plans include breaking up with clients and firing employees.  Reuters

A big week for Elon Musk

On Thursday, Musk will unveil the Tesla Model 3. It’s the car that’s supposed to appeal to the masses, with a $35,000 price tag. It’s also a big test for electric vehicles in general, as it will show how much of an appetite middle-class Americans have for a vehicle that can go 200 miles before needing a new charge. Quartz

Fortune Reads and Videos

Could Apple go charger free?

Analyst Ming-Chi Kuo predicts that Apple could introduce wireless charging next year.  Fortune

U.S. Presidential candidates are blaming free trade

The anti-free trade talk employed by Donald Trump and Hillary Clinton  is used as a way to show the candidates’ frustration with economic inequality. But killing free trade deals would seriously damage the U.S. economy. Fortune

Google Search broke the China firewall…

…for at least an hour. It hasn’t been allowed in the country for six years due to censorship. Fortune

John Oliver, the leader 

Oliver has tackled large social and political problems with comedy and has had an impact on the conversation about those issues. Fortune

Happy Birthday

Henry “Hank” Paulson, who has served as Treasury Secretary and CEO of Goldman Sachs, turns 70 today.  Biography

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Produced by Ryan Derousseau