We're making progress, but it's slow going and less than needed for a full and complete economic recovery. That said, the "good news" is that jobs growth is getting stronger and it's happening consistently.
But what kind of jobs are being generated in this fourth year of economic recovery while the official rate of unemployment stays at a high 7.6% and the more telling broader number of discouraged, underemployed and part-time rate remains at a nose bleed rate of more than 14%?
We're becoming a nation of underemployed, early retired, low paid, part-time and discouraged workers. Unemployment and underemployment are, or at least should be, jobs #1 and #2 for America.
Jobs report underestimates underemployed is subtitled 'Growth is happening in the wrong places':
"The market’s upbeat reaction to Friday’s tiny improvement in unemployment suggests that this is an economy on the mend.
The reality is far less sunny.
In fact, low-paying jobs that are being created will keep
the recovery moving at a snail’s pace and will be a drag on wages for some time
to come.
“Quality matters as much if not more than quantity, and
the quality of jobs we are generating is abysmal,” says Diane Swonk, chief
economist at Mesirow Financial. . . .
People working part time, referred to as “involuntary
part-time workers” because their hours had been cut or they were unable to find
full-time work, rose by 322,000 to 8.2 million.
That reflects a disturbing trend in this recovery that
the recent job growth has come in sectors that tend to be low-paying, such as
leisure, retail and hospitality, and in temporary work. At 7.6%, the rate of
joblessness is a striking improvement from the 10% rate of four years ago, but
it is still uncomfortably higher than the average 6% unemployment rate for the
24 years before the recession started.
However, those numbers don’t tell the real story of what the government refers to as “labor underutilization.” That measures unemployment at a jaw-dropping unadjusted 14.6%, which includes people jobless for 15 weeks or longer as well as those considered “discouraged” because they can’t find jobs and have given up and those working part-time jobs because that’s all they could find, according to the Bureau of Labor Statistics.
Temporary work has accounted for roughly 25% of net
employment gains since the recession ended, and is approaching a new record.
“Let’s not kid ourselves,” says Gary Burtless, a senior
fellow of economic studies at the Brooking Institute, “all these indicators of
labor market hardship suggest the job market is slowly recovering…(and) we’re
still a long way from full employment.
“Of course, none of these indicators tells us the number
of full-time or part-time workers who hold jobs in occupations that are far
below their occupational and educational qualifications levels,” he adds.
Jobless figures are an important economic barometer for
sure, but the backbone of any growth in the economy is consumer spending, which
accounts for three-quarters of the U.S. gross domestic product.
When people are underemployed or rely on part-time work and a variety of arrangements in so-called “contingent work,” they tend to remain in fear of finding themselves totally jobless and tighten the reins on spending. Remember too that they’re making much less money than they were when they were fully employed, further intensifying that clutch. . . .
Also worrisome is that this drop in wages will not be recovered and could lead to a bevy of social issues that hamper economic growth for generations to come.
In a “Recessions and the Cost of Job Loss,” National Bureau of Economic Research associates Steven J. Davis, a professor at the University of Chicago, and Till von Wachter, an associate professor at Columbia University, found that job loss, particularly during a deep recession, wipes out earnings over a 20-year period. It’s not gender specific, but it hits men much harder than women. Men under the age of 50 are likely to see the present value of their earnings drop by an estimated $77,557 throughout the rest of their lives.
What’s more, earnings losses spike considerably higher as unemployment rises, the report says. If a man loses his job when the jobless rate is at 6%, he can expect to see an average earnings loss equal to 1.4 years of what he made when he was employed.
Add another two percentage points to unemployment and men will see themselves out of nearly three years worth of earnings from what he made before he lost his job. The unemployment rate in the U.S. has hovered near or above 8% since January of 2009, according to the Bureau of Labor Statistics. Economists believe 360,000 jobs need to be added to the labor force each month to bring unemployment down to 6% over the next three years.
“Job displacements lead to large and highly persistent earnings losses for the affected workers,” according to the study.
There’s a ripple effect to that too — on health, mortality and the children of displaced workers. In the short run, for example, a child’s academic performance will suffer when a parent is jobless. In the long run, “it appears that a lasting reduction in the earnings of fathers reduces the earnings prospects of their sons,” the report says. Parental job loss is also tied negatively to the educational attainment and cognitive development of children.
David and von Wachter also note that other studies have found that layoffs lead to higher divorce rates and infertility. Not surprisingly, they also cut into home ownership — a cornerstone of economic growth — and hike the rate of application to and entry into disability insurance.
“Last but not least, and perhaps not surprisingly given the magnitude and range of adverse consequences…job loss and unemployment also lead to a reduction in happiness and life satisfaction,” the two add.
A sad note to an already depressing situation."
Summing Up
Government is killing our chances for a decent economic recovery.
And unless and until we get that decent economic recovery underway, jobs and pay will continue to be by far the biggest long term challenge for our society and traditional American way of life.
Meanwhile, what the government elitists have been doing or, perhaps better said, not doing, to encourage private sector investment through tax reform and reduced government spending and waste is SHAMEFUL.
All that said, their all-politics, all the time, electioneering focused behavior is likely to continue through next year's election in 2014 and beyond. Politics sucks.
We desperately need a dose of common sense governance and not short sighted politics.
That's my take.
Thanks. Bob.
No comments:
Post a Comment