What’s
Wrong Today:
We
can no longer deny that we need a new jobs equation. The August BLS
unemployment report shows that the increase in total nonfarm payroll jobs was
169,000, with private payrolls adding 152,000 jobs of the total while government
jobs increased by 17,000.
The
bad news in this report was that June and July were revised downward by 16,000
and 58,000 jobs respectively, or about 21% of the jobs we thought we had
created across the two months. Additionally, most of the jobs gained were low
paying.
To
continue an oft-repeated refrain at the Wrongologist, the US is now down 1,909 million jobs from December 2007, the start of the
last recession. Folks, that was five years, eight months ago!
Here it is
graphically:
Yes,
that trend line is encouraging, but we need to add at least 100,000 jobs each month just to match
population growth. So, since we added 445,000 in the past 3 months, that
equates to just 145,000 net jobs added above the population growth rate.
Private
Sector jobs (jobs not in government) gained 152,000 in August. The US is still down 1,366 million private sector jobs since
January 2008. Goods producing jobs, which are usually higher paying, grew
by only 18,000 (the goods sector includes manufacturing and construction jobs).
Service jobs, which include our fast food and big box stores workers,
increased by 134,000. The graph below shows private sector jobs lost
since January 2008:
On
the other hand, there were no federal government jobs created last month, maybe
due to the sequester, while local governments added 20,100 education jobs:
The spike
above in 2010 was due to temporary US Census jobs.
Looking at the graph below, Leisure
& Hospitality jobs have been a
growth sector of the economy, but it has the lowest paying jobs. This
sector gained 27,000 jobs, with 80% of those jobs being in food services and
drinking places. Food service often pays below
minimum wage, and since January 2008, this sub-sector has gained
691,200 jobs. For 2013, the US has created 252,300 jobs in
restaurants and bars. This is 17.5% of all the 1.442 million jobs gained so far in 2013.
These low paying jobs account for 7.6% of all of the private sector jobs
in this country. Since January 2010, food service jobs represent 16.6% of
the 6.76 million jobs gained:
These do you want fries with that? jobs will not support a family. Very low paying retail jobs and restaurant jobs as well as the
lower paying jobs in the health care sector are behind most of our job growth, and
this is not what America really needs for our middle class to recover.
Those employed
as a ratio to the total Civilian non institutional population stands at 58.6%, a
decline of -0.1%. This ratio has been near its 1983 record low for years, and
in 1983 there were way more families with a stay at home mom. The low ratio implies
there are many people who could be part of the labor force who are not anymore.
See the graph below:
Finally,
there are millions of people who need full-time jobs with benefits who can’t get decent
career oriented positions. The number of people who could only get part-time
work increased 54,000 to 2,719,000. We’re seeing a dramatic increase of
people who could only get part-time when they want full-time and this has not
happened since the early 1980’s as shown in the graph below:
So,
it’s clear that we need a new jobs equation and it isn’t anywhere on the horizon.
The Austerians (people who support the “Austrian” school of economic thought of Friedrich Hayek or Ludwig von Mises and desire to slash government spending
and cut deficits during a time of economic weakness or recession), may argue
that we shouldn’t create government jobs just to solve an economic problem, but
it is despicable that our government allows
millions of Americans to slide towards poverty because they cannot get a decent
job. And it continues year after year, for nearly 6 years now.
Congress is more
likely to
express outrage at chemical weapons killing children in Syria than outrage at
hungry kids in America.
Congress is more
likely to agree
to authorize spending money to bomb Syria than to increase the minimum wage.
Congress is more
likely to
debate the debt ceiling than to develop a jobs program.
And
despite their wrong-headed priorities, incumbents in Congress are most likely to be re-elected
in 2014 without a struggle.
