[Sixstrings]

Why the Jobs Situation Is Worse Than It Looks

The Great Recession has now earned the dubious right of being compared to the Great Depression. In the face of the most stimulative fiscal and monetary policies in our history, we have experienced the loss of over 7 million jobs, wiping out every job gained since the year 2000. From the moment the Obama administration came into office, there have been no net increases in full-time jobs, only in part-time jobs. This is contrary to all previous recessions. Employers are not recalling the workers they laid off from full-time employment.


The real job losses are greater than the estimate of 7.5 million. They are closer to 10.5 million, as 3 million people have stopped looking for work. Equally troublesome is the lower labor participation rate; some 5 million jobs have vanished from manufacturing, long America's greatest strength. Just think: Total payrolls today amount to 131 million, but this figure is lower than it was at the beginning of the year 2000, even though our population has grown by nearly 30 million.

The most recent statistics are unsettling and dismaying, despite the increase of 54,000 jobs in the May numbers. Nonagricultural full-time employment actually fell by 142,000, on top of the 291,000 decline the preceding month. Half of the new jobs created are in temporary help agencies, as firms resist hiring full-time workers.

Today, over 14 million people are unemployed. We now have more idle men and women than at any time since the Great Depression. Nearly seven people in the labor pool compete for every job opening. Hiring announcements have plunged to 10,248 in May, down from 59,648 in April. Hiring is now 17 percent lower than the lowest level in the 2001-02 downturn. One fifth of all men of prime working age are not getting up and going to work. Equally disturbing is that the number of people unemployed for six months or longer grew 361,000 to 6.2 million, increasing their share of the unemployed to 45.1 percent. We face the specter that long-term unemployment is becoming structural and not just cyclical, raising the risk that the jobless will lose their skills and become permanently unemployable.

(snip)

The inescapable bottom line is an unprecedented slack in the U.S. labor market. Labor's share of national income has fallen to the lowest level in modern history, down to 57.5 percent in the first quarter as compared to 59.8 percent when the so-called recovery began. This reflects not only the 7 million fewer workers but the fact that wages for part-time workers now average $19,000—less than half the median income.

Just to illustrate how insecure the labor movement is, there is nobody on strike in the United States today, according to David Rosenberg of wealth management firm Gluskin Sheff. Back in the 1970s, it was common in any given month to see as many as 30,000 workers on the picket line, and there were typically 300 work stoppages at any given time. Last year there were a grand total of 11. There are other indirect consequences. The number of people who have applied for permanent disability benefits has soared. Ten years ago, 5 million people were collecting federal disability payments; now 8 million are on the rolls, at a cost to taxpayers of approximately $120 billion a year.

(snip)

Clearly, the Great American Job Machine is breaking down, and roadside assistance is not on the horizon. In the second half of this year (and thereafter?), we will be without the monetary and fiscal steroids. Nor does anyone know what will happen to long-term interest rates when the Federal Reserve ends its $600 billion quantitative easing support of the capital markets. Inventory levels are at their highest since September 2006; new order bookings are at the lowest levels since September 2009. Since home equity has long been the largest asset on the balance sheet of the average American family, all home­owners are suffering from housing prices that have, on average, declined 33 percent (compare that to the Great Depression drop of 31 percent).

No wonder the general economic mood is one of alarm.
http://www.usnews.com/opinion/mzuckerman/articles/2011/06/20/why-the-jobs-situation-is-worse-than-it-looks_print.html

Pretty stunning.. think about it, no new full time jobs have been created under Obama -- just part time jobs. And every single job created since the turn of the century has been lost. We have the same number of jobs as we did in 2000, but 30 million more people.

Unions don't strike anymore. They're effectively dead, and fighting for the right to legally exist.

Lots of other problems the article doesn't mention.. multinational corps have no interest in creating jobs for Americans to do. The future is in China, in India, in Brazil -- America is toast.

For example, Apple only employees 50,000 people in the US. 30,000 of those jobs are in their retail stores; mostly part time, and paying like $9 an hour. So that's what, only 20,000 decent jobs from Apple. Meanwhile, the Chinese suppliers who actually make all the Apple products employ ONE MILLION over in China.

With no jobs and no options, the disability rolls are soaring.

And all this is the BEST we could do after the many hundreds of billions (what was it, half a trillion or a cool trillion) of quantitative easing and government stimulus. So how bad does it get if the quantitative easing ends for good.. how bad does it get if government really has to cut back..

But hey on the bright side.. the world's governments have all agreed to release oil from their strategic reserves to get the price down a bit and "help the economy."

[Timo]

See??? The US Chamber of Commerce plan is all working perfectly! Nothing to worry about! Want a job? Move to India. That's where half the jobs that the Chamber off-shored went. It's all about money. Greed is good, and if you're not in favor of uncontrolled, unregulated profit by huge multi-nationals and their buddies on Wall Street, then you're just Un-American! Capitalism is the American Religion. If, in fact, you're really not an American, then this doesn't apply to you. Us REAL Americans don't really care what you think, anyway. Just don't get in our way, and if you see us coming, lay down and play dead, and stay there until we've used up all of your natural resources.

[evilgenius]

In the first place, stimulus money is failing to reach the middle class. In the second place, US workers are hardly ready to enter the knowledge economy that awaits them. Why look for hiring from employers that don't have the capital to hire? Why look for those that could be hiring, if they had the means, to do so if a bunch of nail pounders and meth addicts is all that they have to choose from?

[Bill Hicks]

A friend of mine who is in his mid-40s and has worked as a retail manager for several different companies all his adult life was laid off at the beginning of this year and is still unemployed. He's only had a handful of interviews since then, the last one for a position paying HALF of what he was making before.

Anyone out here in the real world should instinctively know the truth despite all the MSM obfuscation and cheerleading.

[lper100km]

Outsourcing started in earnest in the 80s. It should have been obvious that as manufacturing jobs are diminished, over time the ability to support an internal economy is also diminished. It’s taken only 30 years to get there, but this is the inevitable result. No jobs, no money, no national sales, no export sales, unemployment rises, welfare costs rise, taxes can’t. Unless you have investment income, pension or subsistence income and no debt, you are now personally screwed. Eventually, the investment based incomes will become worthless as the global economy inevitably tanks. Oil use will plummet, no matter how ‘affordable’ it becomes because it won’t ever be. Eventually, all will be united in poverty, a nation of hardscrabble nomads. The only good news (for libertarians) is that just about all vestiges of government regulation will have long ago dissipated.

I am arriving at a point where I see PO as a peripheral factor only ie not the main cause, of decline. Rather, the unfettered activities of multinational, self interested corporate entities has grossly distorted and hollowed out developed national economies, infrastructure, knowledge and skills. By developing commercial empires built on the poverty of local workers and selling cheap goods abroad, they are now the major contributors to the impoverishment of their target markets, reducing them to navel gazing service economies. In the sense that oil is the enabling raw stock and energy facilitator of this economic activity, its declining availability would have a significant effect on the survival of a global economy. However, I am thinking that the economic distortions brought about by the rapidity of the growth of the global economy will cause its own even more rapid collapse through demand destruction. Thus, the oil business would become a victim of eventual global economic decline, not the prime cause. It would indeed be ironic if economic collapse decimated the oil business to the extent that oil was unaffordable at any price and was thus left to languish in the ground and eventually forgotten. Only hard core environmentalists, if they even had time to think about it, could achieve satisfaction from that.

[Outcast_Searcher]

... US workers are hardly ready to enter the knowledge economy that awaits them. Why look for hiring from employers that don't have the capital to hire? Why look for those that could be hiring, if they had the means, to do so if a bunch of nail pounders and meth addicts is all that they have to choose from?

+1

THIS (the education issue) is a, if not THE central problem, especially longer term. (I'm speaking for the U.S. here, as that's where I have the experience. I'm a moderate who will call out the left AND the right on their faults as I see them, so don't assume I'm some right wing family values nutcase).

I am amazed at how little this basic education issue comes up -- or at least as anything other than the left being upset that voters want EFFECTIVE education for their kids, vs. stronger teachers' unions.

Short term - we're massively screwed, because this problem is NOT quickly fixed.

Longer term, we need to make this a major priority, but with the ongoing degrading of values in this country to cater to the "I want something for little or nothing" class, which is an increasing share of voters -- I DON'T SEE IT HAPPENING. An of course the right doesn't want to pay taxes or do anything to hurt short term profits.

And thus we slip into second world status, or worse. as time goes by. And blame everybody but ourselves.

And before you dismiss me as crazy, consider:

1). For the displaced corporate labor problem, at least until about 1990 for KNOWLEGE workers, major companies would offer retraining as an alternative when certain menial work went overseas. IBM, which I worked for, was a classic example. When, for example, typewriter (and later PC) production went overseas for labor arbitrage, people would be trained to be programmers or marketers or something along that line, as long as they would make the effort an show progress. (The basic industrial production jobs were already pretty much screwed by labor arbitrage by the early 80's, lest you think I'm ignoring that sector).

Now -- generally, if you want any education IN THE "BEST" COMPANIES then you must pay for it youself and get it on your own time. Well, if you get laid off, you have the time but probably not the money. And often not the basic educational background either. (see 2).

2). There may be many causes, including lax parenting, generally lax values toward a good WORK ethic, etc. From my teacher friends and life partner, I learned that the idiots running the grade schools mainly got IN THE WAY of teaching the basics of the class content. If there were issues, they backed the parents instead of standards. It was all political -- PLEASE the parents. Social promotion.

And look at the results. The typical high school graduate couldn't run a cash register at McDonalds if they had to do the math. All they can do is push the button that looks like a hamburger. (If you doubt this, watch what happens when the LAN goes down. Not only can't they make change -- they don't even comprehend that the OPERATION required to calcuate correct change is subtraction). If you do the subtraction in your head and point out that they owe you say $1.37, they act like you're a genius. Frightening -- THIS is going to compete in a global tech savvy jobs future?

3). We've still got a lot of decent colleges, but that's degrading too. 60 Minutes on CNBC recently did a a great piece showing how young workers:

a). Get mommy or daddy to yell at the mean professor (who generally caves -- since from experience she knows the dean will override her) if they don't get that "A" they didn't earn. After all, they're PAYING for it...
b). Plan to live at home until they're 30 or later. That way if they don't like their job, or can't compete, they just quit. Employers confirme this. Employers become cheerleaders and babysitters. Imagine what THAT does for competitiveness!
c). Naturally the parents are aiding an abetting this, or it couln't occur. They THINK they are doing their children a favor by "giving" them the best.
d). The trend seems to be accelerating. This isn't everyone, but it's getting to be a LOT of folks under 30 -- even in this economy where you'd think jobs would be valued.

4). So you still think I'm crazy? It's all evil rich people or something? Fine. Consider places like Singapore where education is valued. Consider Asia in general. These people are simply kicking our asses in the job market - including many tech jobs. And it isn't the climate or their appearance.

...

So, do we continue to yell about evil corporations and evil rich people while the U.S. slides into the financial (and then livability) abyss?

Or do we grow up, make some SACRIFICES, set some long term positive priorities, and at least TRY to fix the fundamental educational mess?

This is ONE place where I feel government fundamentally MUST be deeply involved (companies are too focused on short term profit to fix this).

Most of what I see on this thread (aside from e-g's comment above) seem to be focusing on short term stuff or "it's mean old "X's" fault. That won't get it done.

Redistributionism won't get it done either -- it will just speed up the slide as the productive have less and less incentive to produce. Given the trends from BOTH parties for about the past 25 years -- I am very pessimistic about what the substance of the decisions will be.

And its easy to predict -- the worst the redistributionism makes things, the more the masses will cry out for it. Absolutely freaking fabulous.

[John_A]

He's only had a handful of interviews since then, the last one for a position paying HALF of what he was making before.

I heard the term "adjust expectations" recently, and realized it applies to both those looking for work and home owners, for the same reasons.

Anyone out here in the real world should instinctively know the truth despite all the MSM obfuscation and cheerleading.

Yep. If you have a job, you had better be doing it better than the next couple of people around you so when the feces hits the fan, it lands on someone else.

[dissident]

Anyone out here in the real world should instinctively know the truth despite all the MSM obfuscation and cheerleading.

Yep. If you have a job, you had better be doing it better than the next couple of people around you so when the feces hits the fan, it lands on someone else.

Assuming the management cares enough about real performance metrics and not rewarding brown nosers. Judging by the BP contractor culture they reward the latter.

[prajeshbhat]

I think unemployment is more of a social problem than a technical problem. The real danger is not the actual unemployment percentage. The real danger is the large number of easily manipulated youth who feel the world is their enemy and it must be destroyed through violence. It happens in the third world on a daily basis.

Here's an interesting article that says that US uses a planned unemployment approach to labor through Fed.

http://www.exponentialimprovement.com/cms/labor.shtml