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In the Bowels the Jobs Report: 15.4 Million Missing Jobs
The long-term problem in the jobs report issued by the Department of Labor today—a problem in every jobs report since April 2000—is the strangely inconspicuous Employment-Population Ratio.
It measures the percentage of people age 16 and older who have jobs. It's not perfect. But it's the purest, least corruptible employment number out there: It's not seasonally adjusted, manipulated by the infamous "Birth Death Adjustment," or dinked with in any other way—unlike the headline numbers that have become a joke. And it hovers at a 30-year low.
After World War II until 1975, it bounced up and down between 55% and 58%. As women entered the workforce in ever greater numbers, the participation rate began to edge up; and after the recession of 1983, it went on a bull run that peaked in April 2000 at 64.7%.
Then it began to decline. Whatever the cited reasons. Outsourcing, innovation, off-shoring, tax laws, technological progress, corporate shortsightedness, cheaper labor elsewhere, whatever. When the housing bubble and related activities unfolded in 2004, it stabilized at around 62.3% and increased a notch to 63.4% in 2006. As the housing bubble deflated, it began to decline again. And then it crashed.
The ugly trajectory of the Employment Participation rate since 2000:
Today, it came in at 58.2% (a rounding error up from last month's 58.1%). These are numbers we haven't seen since August 1983.
In other words, 41.8% of the working-age people in the U.S. don't have jobs, as opposed to 35.3% in the year 2000. To convert this percentage into real people: Since the working-age population in the U.S. these days is 238 million people, a decline of 6.5% in participation represents 15.4 million jobs.
There are no green shoots or improvements or recoveries in sight. It's a structural issue. Every time a U.S. company outsources production or services to entities overseas, or buys from foreign suppliers when it used to buy from domestic suppliers, it removes more jobs.
A superb example—not only because of its majestic physical aspect but also because of its economic impact—is the new San Francisco Bay Bridge, the most expensive single structure in the U.S. Incredibly, its most prominent segment was built in China.
These jobs gone offshore will continue to drag down our economy, and no amount of money-printing by the Fed and no amount of hope-mongering by the White House and no amount of deficit-spending by Congress are going to change that. Only one thing will: A collective corporate decision to reverse the trend of off-shoring production and services. Because, mathematically, you can't grow an economy by removing jobs.
Wolf Richter - www.testosteronepit.com, "Where the truth comes home to roost."
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with actual real rate OVER 20%!
Interesting, but disagree with the solution. Corporations just are just responding to incentives. Lawmakers need to adjust incentives to keep jobs here. We have an uncompetitive tax and regulatory system. It's not just about cheap wages overseas; high productivity counters that.
Companies won't do it voluntarily, or else another company will spring up, off-shore jobs, and be happy to take the market share.
"We have an uncompetitive tax and regulatory system."
Perhaps we have one that more realistically accounts for externalities?
http://www.chinahush.com/2009/10/21/amazing-pictures-pollution-in-china/
I've always been led to believe that Europe's taxation is greater, yet, there they are, doing pretty good in comparison (better looking horse in the glue factory).
This is all talk that's serving the elite masters. I don't fucking want Their "products," nor do I want to work for Them... But go ahead, spend your energy making this a better place for them to increase their profits- heaven only knows, when we make things nice and cozy businesses really care for us, just as has been shown by the loosly regulated financial sector...
How about getting rid of all these industry specific tax credits and just lowering the tax rate?
But what would all those folks on K street do if there was nothing to lobby for?
They could pick up trash, lay brick. You know, something that might actually be economically productive?
Sure, but then what about that whole infinite grow model on a planet with finite resources?
Shh! Not supposed to talk about that. As Jamie Dimon recently stated, growth is more important than debt...
The other obvious failure in logic to the "bring the jobs back" chorus is that PEOPLE ARE BROKE/IN DEBT, HOW ARE THEY GOING TO BUY SHIT? Yeah, let's bring back the production of autos to the US (in which there are more robots than people producing them) so that we can load more of them up in warehouses! Does the term "push on a string" mean anything to those in the chorus?
People just can't think past a couple of steps... We're fucked (because these are the people who will be cramming stupid-assed FAIL policies on all of us).
Maybe if more people had jobs they could buy stuff. In fact America is buying lots of stuff now, but it's not made in the US.
"Maybe if more people had jobs they could buy stuff."
Have you been away from the planet?
How much fucking STUFF do people need. Go ahead, wander around and open up garages and closets.
SATURATION of STUFF!
And this saturation has resulted in massive debt. Even with increased employment people are going to be in debt for a LONG time. iCrap v96 will be good enough.
But lets suppose that everyone was happily working, just what do you think that their wages would be like? How far UP will wages in the developing nations go? If they don't rise to be close to existing US wages then that means that US wages STILL have to drop. And as US wages drop, prices for essential things increase, how much additional disposable income, income for iCrap etc., will US "consumers" have?
Everyone wants to sing the song, but no one pays attention to the lyrics.