The real decline in jobs -- full-time ones, that is
I see that Warren Buffett made the observation that simple population growth has virtually wiped out a good portion of the alleged (pre-adjustment) growth in the GDP. More noteworthy, however, is that mainstream news organizations actually repeated the connection between jobs and population growth. Besides challenging the pro-Republican concept that GDP rather than employment level should be used to define when we are in a recession or not, wouldn’t it be nice if business and economics reporters got it through their very thick heads that an increase in jobs that doesn’t even keep up with population growth in the working-age population is not, in any real sense, an increase in jobs? Last month, the cheerleaders – Wall Street, Republicans – crowed about the fact that the Bureau of Labor Statistics found “only” a job loss for April of 20,000, compared to some 85,000 that economists allegedly had expected.
On the one hand, the BLS has a history of correcting preliminary numbers reported, and it certainly seems like the later adjustment in recent years, reported when fewer people are paying attention, has usually been in a negative direction. More fundamentally, though, the U.S. economy needs to produce about 130,000 new jobs every month simply to keep up with growth in the working age population. An economy humming along at a decent pace should do that. If it’s really smokin’, as in the 90s (which just happened to coincide with a Democratic administration), then more jobs will be created than the population growth. An economy barely limping along may show nominal or paper increases that really are declines, because it cannot keep up with those who would like to have a job if they could find one.
It’s a really, really bad economy that even loses jobs in nominal terms, as it is doing now. In real terms, the job losses were 150,000 last month. Lord only knows how bad we should call it when the raw-number jobs losses are worse than the mythical "expectations" of “economists.” As we know, too, an economy can actually be bad even when the upper classes aren’t suffering – the ones who have the biggest voices and are the focus of attention in the media. All that does is mask the massive infection underneath the surface. Maybe someday we'll see a show hosted by Robin Somebody-or-Other, "Lifestyles of the Poor and Anonymous."
The best indicator is not the official unemployment rate, which misses all the people who just dropped out of trying, but the employment-to-population ratio. Economist-blogger Brad DeLong has been emphasizing that lately, and so Has Paul Krugman. I would go even further, however. One thing that tends to get ignored is the number working “part-time for economic reasons,” the BLS terminology for those who presumably acknowledge affirmatively in the survey process that they would prefer a full-time job if they can find one. They are just lumped in to the gross “employed” figure. The number of these part-time jobholders since January 2001 has increased by almost 2 million.
Looking at full-time jobs, certainly a better indicator of the health of an economy than total employment, we get this: in January 2001 59.4% of the working age population had full time jobs. It has dropped since by almost three (3) full percentage points, to 56.4. We are talking a base here of over 230 million, so what may at first glance look like marginal percentage point drops represents a whole lot of people. A mere one percentage point equals about 2.3 million people today. How many in the rest of the family dependent on the wage earner does it also cover? Are we really talking about 15-20 million more Americans since 2001 who have been hit with the consequences of unemployment or underemployment in one form or another?
The bottom line is this: if the economy had merely been growing enough to maintain the pace with population growth since January 2001 – about what one might theoretically expect out of laissez-faire economic policy -- there would be almost 7 million more full-time jobs than there are now. That is the real job loss under the right-wing Republican economic policies of George W. Bush and Richard Cheney: 7 million more Americans who would like to have a job working either not at all or a lot less than they want to (at, most likely, much worse pay).
So much for a 5.0% official unemployment rate. It’s time for the reporting community to recognize it’s basically garbage. (Or at least it’s been made into that during this administration, and that’s a-whole-nother story that even the liberal economists don't want to face.)
On the one hand, the BLS has a history of correcting preliminary numbers reported, and it certainly seems like the later adjustment in recent years, reported when fewer people are paying attention, has usually been in a negative direction. More fundamentally, though, the U.S. economy needs to produce about 130,000 new jobs every month simply to keep up with growth in the working age population. An economy humming along at a decent pace should do that. If it’s really smokin’, as in the 90s (which just happened to coincide with a Democratic administration), then more jobs will be created than the population growth. An economy barely limping along may show nominal or paper increases that really are declines, because it cannot keep up with those who would like to have a job if they could find one.
It’s a really, really bad economy that even loses jobs in nominal terms, as it is doing now. In real terms, the job losses were 150,000 last month. Lord only knows how bad we should call it when the raw-number jobs losses are worse than the mythical "expectations" of “economists.” As we know, too, an economy can actually be bad even when the upper classes aren’t suffering – the ones who have the biggest voices and are the focus of attention in the media. All that does is mask the massive infection underneath the surface. Maybe someday we'll see a show hosted by Robin Somebody-or-Other, "Lifestyles of the Poor and Anonymous."
The best indicator is not the official unemployment rate, which misses all the people who just dropped out of trying, but the employment-to-population ratio. Economist-blogger Brad DeLong has been emphasizing that lately, and so Has Paul Krugman. I would go even further, however. One thing that tends to get ignored is the number working “part-time for economic reasons,” the BLS terminology for those who presumably acknowledge affirmatively in the survey process that they would prefer a full-time job if they can find one. They are just lumped in to the gross “employed” figure. The number of these part-time jobholders since January 2001 has increased by almost 2 million.
Looking at full-time jobs, certainly a better indicator of the health of an economy than total employment, we get this: in January 2001 59.4% of the working age population had full time jobs. It has dropped since by almost three (3) full percentage points, to 56.4. We are talking a base here of over 230 million, so what may at first glance look like marginal percentage point drops represents a whole lot of people. A mere one percentage point equals about 2.3 million people today. How many in the rest of the family dependent on the wage earner does it also cover? Are we really talking about 15-20 million more Americans since 2001 who have been hit with the consequences of unemployment or underemployment in one form or another?
The bottom line is this: if the economy had merely been growing enough to maintain the pace with population growth since January 2001 – about what one might theoretically expect out of laissez-faire economic policy -- there would be almost 7 million more full-time jobs than there are now. That is the real job loss under the right-wing Republican economic policies of George W. Bush and Richard Cheney: 7 million more Americans who would like to have a job working either not at all or a lot less than they want to (at, most likely, much worse pay).
So much for a 5.0% official unemployment rate. It’s time for the reporting community to recognize it’s basically garbage. (Or at least it’s been made into that during this administration, and that’s a-whole-nother story that even the liberal economists don't want to face.)
posted by KISSWeb | 2:29 PM
1 Comments:
Great blog. Strips the bedazzle with bullshit propaganda of the Bush Administration.
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