This page has been archived and commenting is disabled.
Exposing The Lie Behind The "Strong Jobs Recovery" In One Chart
With all eyes glued to Friday's payrolls report, we thought it worth reiterating some 'facts' about US employment data. As ECRI notes, the sustained decline in the official jobless rate – now approaching the Fed’s estimate of “full employment” – is a misleading indicator of labor market slack. The data shows that the so-called jobs recovery has been spearheaded by cheap labor, with job gains going disproportionately to the least educated — and lowest-paid — workers.
Indeed, the stagnation in nominal wage growth is consistent with the weakness in the employment/population (E/P) ratio. That said, even the E/P ratio may be overstating the health of the jobs market.
After dropping to three-decade lows in the wake of the Great Recession, the E/P ratio, has barely improved since the fall of 2013, reversing only about one-fifth of its decline from its pre-recession highs. Furthermore – as a breakdown of the E/P ratio by education level shows –this modest improvement is illusory.
Since 2011, when the E/P ratio for those with less than a high school diploma bottomed, that metric has regained almost two-thirds of its recessionary losses (orange line in chart). But the E/P ratio for high school or college graduates – i.e., eight out of nine American adults – has not recovered any of its recessionary losses, and stands about where it started, one, two and three years ago (purple line).
This data shows that the so-called jobs recovery has been spearheaded by cheap labor, with job gains going disproportionately to the least educated — and lowest-paid — workers.
This is scarcely a good basis for resilient consumer spending driven by “solid” job growth that the consensus – including the Fed – is banking on.
»
- 26455 reads
- Printer-friendly version
- Send to friend
- advertisements -
Here are the fucking facts on unemployment:
David Stockman looks at 5.5% unemployment:
At the present time, there are 210 million adult Americans between the ages of 16 and 68—to take a plausible measure of the potential work force. That amounts to 420 billion potential labor hours, if we accept the convention that all adults are at least theoretically capable of holding a full-time job (2,000 hours/year) and pulling their share of society’s need for production and work effort.
By contrast, during 2014 only 240 billion hours were actually supplied to the US economy, according to the BLS estimates. Technically, therefore, there were 180 billion unemployed labor hours, meaning that the real unemployment rate was 42.9%, not 5.5%!
http://davidstockmanscontracorner.com/the-warren-buffett-economy-why-its...
http://www.shadowstats.com/alternate_data/unemployment-charts
+1; Fast work.
And, of course, all the new jobs created in the last 15 years went to immigrants and aliens.
& bartenders...
Of course, ~10-15 million people snatched it all up... all of it. Immigrant (illegal or otherwise) employment is at a static 100%. This is why none of them are using any public assistance... /sarc off
You need a four year degree just to sweep floors nowadays so I don't expect things'll get better, but much worse is a good bet.....
Hell man if you know a kid graduating from high school this year and doesn't know if he should go to college. Tell him not to and to work for a municipality, get a foot in the door early in life, have them pay for his college and move up the ranks internally. He will get a debt free education, be in the retirement system nice and early and have good benefits. Most likely if he plays his cards right will be making about $70,000 a year in about 5- 8 years so he will be 26 with no debt and a ton of savings. This will only work if he is disciplined.
http://www.bizjournals.com/houston/morning_call/2015/09/analyst-chevrons...
Bingo. We can't change this system and we sure can't win by fighting it. Strong municipalities will be the last dominoes to fall because they can control costs and they may not be able to issue currency but they sure can issue debt. And they will protect their workers above all else. They also have big balance sheets. I mean big.
Froze, I know a kid graduating from high school - and he is hell-bent on becoming a Marine, for all the wrong reasons.
TPTB cannon fodder.
Amen!
My wife would fit into your numbers, however, she chooses to be a stay at home mom. She is not looking for work so I don't think you could count her hour availability into your UE figure. You would need to filter out those who choose not to work. Probably would also need to filter out how welfare effects that number....people who could work but won't because the check in the mail gets them by.
Yes. That would explain why I see so many people pushing shopping carts where there aren't any stores.
And all those 'campers' down by the river.
Fake numbers lie. Real numbers punch you in the face. Stockman is a good voice - still plays for empire, but his soul is not black.
@AjaxUSB: There's been a 2-3x increase in homeless people everywhere recently. Lots of shopping carts. I was in SF on Monday - tents... tents everywhere.
42.9% unemployment? That's silly, seriously. You'd think with sensationalism like that, David would be tyring to sell a book or something, wait...what?
Yes, we have to allow for non-working wives, students, the disabled, early retirees and coupon clippers. We also have drifters, grifters, welfare cheats, bums and people between jobs, enrolled in training programs, on sabbaticals and much else.
http://davidstockmanscontracorner.com/the-warren-buffett-economy-why-its...
Unemployment is probably around 23% as John Williams calculates using an earlier methodology instead of the official 5.3%:
http://www.shadowstats.com/alternate_data/unemployment-charts
yes, 23% is really the correct number.
Ignore my post above. I'd have to say 23% sounds about right from what I've seen.
Goodrich Petroleum Corp. is the latest Houston-based energy company to be warned of delisting from the New York Stock Exchange.
http://www.bizjournals.com/houston/news/2015/09/02/latest-houston-energy...
I wake up every morning to the smell of another bankruptcy or delisting of an energy company or retailer in this Robust Rekovery.
Yeah 42% is difficult to use and pass a common sense test.
I wasn't going to say anything, but think you and just observing corrected the figure to 23%.
I would say after 2011 I was hearing we needed 20 Million good paying Full Time Jobs. I would even go higher than that if we look at population increases that require 200,000 new jobs a month.
Talking about Good Paying Full Time Jobs is more useful.
But we can also talk about fewer self employed people, fewer small businesses, and the trend toward fewer large corporations like in the banking sector (5,500 commercial banks total).
Business Dynamism studies seem to help also explain.
http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20...
http://www.oftwominds.com/blogapr13/small-biz-decline4-13.html
Even if you use the methodology that Clinton scrapped in 94, you're still at 10+%, or double the bullshit rate, per Shadowstats.
this falsehood is a no brainier...the writing on the wall is all around the place...ppl with 3 jobs,and still not making it...duh..i ain't a econ type,but common sense is my strong suite.
This article says, in other words, that jobs are going to non-americans (illegals) and/or more Americans are not graduating high school.
JOBS have no meaning anymore - low paying, part time, retail/restaurant/fast food based or not.
The only thing that matters are the fortunes of the .01 - 1%. And those high level, bonus-driven jobs on Wall Street and similar places. That's it !!! All monetary policy (in the absence of fiscal policy which is impossible by design due to the donors who instill oppositional politicians w/out regard to party so nothing can get done) is driven by the needs of the banksters and super wealthy.
If these clowns could add worker ants to the data we'd be at 1% UE...the report will miss just so they can now say " Oh gee see we can't raise rates just yet " its a fucking farce, they know it we know it.
The US is an imperial rentier-socialist plutocracy. There must be no unemployment for rentier-socialist oligarchs and their plutocrat benefactors.
The inherent value of fiat debt-money is the imputed compounding interest in perpetuity that accrues to the creator and owner of the claims accruing to the creation of the debt-money.
"Our money" is "their money", i.e., the top 0.001%. We only borrow the plutocrats' debt-money at compounding interest in perpetuity to circulate for subsistence, if we're lucky.
Property-less serfs/peasants are not supposed to "own" anything, not even their labor product, apart from a few personal possessions. Property wealth in a neo-feudal system is only for the elites.
"Capitalism" does not exist when the vast majority of the population has little or no actual capital with which to create income and accumulate additional capital wealth.
Nice summary of the overall issue...
Not everyone knows it. There is a much larger proportion of of "intelligent" sheep out there than I used to think. college educated professionals, middle class and upper middle class that believe the offical party line (both parties .gov) stats. I had to quit trying to explain how the mesurements changed several times over the last few decades so the results would look better. "The government can't lie about these things", and "you're wrong" were the nicest responses I got.
Wages are no more than the crumbs from an oligarch's table.
Let them . . . watch oligarchs eat cake.
Lower minimum wage, lower taxes. Then businesses can hire more, more people working willwill then bring in more taxes, without having to raise taxes. It's not that hard to figure out.
One appropriate eCONo-speak term to better describe the labor market situation is labor UNDERUTILIZATION, which is demonstrably higher than any period since the Great Depression.
The conditions hereafter will be exacerbated by accelerating automation and elimination of paid employment (including well-paying professional middle-class jobs) and purchasing power from robotics, biometrics, Big Data analytics, AI, bioinformatics, quamtum/molecular computing, nano-electronic sensors, etc. These technologies are now converging at a blinding rate.
The evolving techno-economic paradigm implies the potential for the emergence of a kind of new "humachine" consciousness operating 24/7/365, in the dark, and the speed of light and against which virtually no one will be able to compete for jobs, purchasing power, socioeconomic status, etc..
We are like Neanderthals first encountering Modern humans or Mesoamericans when they initially came into contact with Europeans.
Not to worry. I already have a repaired left knee, right elbow, and right shoulder - ready to join the revolution and get a chip in my head that makes me smarter and allows me to communicate directly with computers of all kind (my desk, my phone, my car, my 3-D printer - all that shit), and a chip on the back of my left hand that allows me to charge shit on my uni-card (after a retinal scan verification).
If yah can't beat 'em, join 'em...
(Do I need a /sarc tag on this? Naaaaaaw.)
Might as well get a bionic member while you're at it - configurable to her desire of course.
Nobody, you have been absorbed. No resistance was required, thus no futility. Welcome to the Borg mind, brother.
Total US local, state, and federal gov't spending is near 100% of private wages.
Gov't spending plus private "health" care, "education", and debt service is an equivalent of 54% of GDP.
Gov't spending (including most "health" care and "education" spending) for the EZ is ~50% of GDP.
The English-speaking world's economies have more private debt and debt service costs than the EZ. Accounting for the former, the US is in the same situation as the EZ.
Growth of US real final sales per capita since 2007 has been ~0%, which was the same for Japan after 1996-97.
Not only has the US turned Japanese but European. We're truly an international economy. Hai! Ja! Oui! Si! Bugger bloody right!
Absolutely. Why in God's name would we want poorly educated unskilled people to have a job? It would be much better for them to be sitting on a couch collecting benefits.
Moreover, why would anyone want a job that pays them at a level as if they were poorly educated and unskilled, even if they're not?
+1'd you, but I have been one of those people.
Underutilized and underpaid isn't fun, but go at it with a plan to improve your situation. I loaded freight and worked in the trucking business while working on my MBA. Couldn't find a "real" job that paid any better, so as my mom said, I took jobs that were "beneath" me. I was working alongside high school dropouts and guys 5+ years older than me doing grunt work. They thought I was crazy working those shifts and doing that job with a degree. I didn't care. I had opportunities to move up in that business just because I showed up on time and worked hard every day. It paid my bills, I went to school and was broke all the time, but it worked, and I graduated and moved on.
The majority looking for work won't take a job that after taxes,transportation,insurance,fuel,maintenance etc. costs more than what they can get on the dole. Not to mention being on the dole and doing some type of cash business. This btw is why they can not institute a cashless system as would implode the current economy.
DO NOT FEAR:
U.S. lenders earned a record $43 billion in profits for the second quarter -- a 7.3 percent increase from a year ago, the Federal Deposit Insurance Corp. said Wednesday.
Higher revenue at more than two-thirds of banks and lower litigation costs pushed net income to a level that exceeded the previous mark set in 2013 by $2.6 billion, the agency said in its report on industrywide performance.
Loan balances rose by $185 billion during the quarter, including a $25 billion increase in residential mortgages and $49 billion in commercial and industrial lending. Meanwhile, trading income fell 14.1 percent, the FDIC said.
Net charge-offs declined for a 20th consecutive quarter, falling 11 percent from a year earlier to the lowest level since the third quarter of 2006, before the credit crisis.
FDIC Chairman Martin Gruenberg said in a statement that the agency continues to be concerned about the industry’s vulnerability to interest-rate risk, noting that net interest margins are “under pressure” as maturing high-yield assets are replaced with investments with lower yields.
Total annual net flows to the financial sector equals total annual nominal GDP output.
Similarly, imputed cumulative compounding interest for total credit market debt outstanding to average term is now an equivalent of 100% of GDP in perpetuity.
That is, there can be no growth of US real GDP per capita after total net debt service costs.
Rentier parasitism has completely infested the US economy, financial system, society, and political system.
Where's the exterminator when one needs one?
Well it's even worse than that because people with education who show as employed are also taking jobs that don't even require the education - a lot more often than people without even a high-school education end up as brain surgeons, anyway.
I'm offended to be labeled the purple line?
I'm offended to be labeled the orange line?
Your colorful language does not offend me.
You must be black or white; pun intended.
I'm color sight challenged. I sometimes snore and get tongue tied, too.
https://www.youtube.com/watch?v=fVsaFclbhtE
Obama is out to destroy America and will complete it by the end of 2016. He supports our enemies, like Cuba and Iraq and disrupts our friends like Egypt & Libya. He allows the flagrant violation f the rule of law and lies all the time.
Check this analysis in in 8 minute video.
https://www.youtube.com/watch?t=327&v=WT9K2shh3qk
------------------------------
Where is the military marksmen who can place a bullet within a 2in circle from a mile away?
lol at "wage pressures"
I've had several jobs come back and say they only offer $10/hour. Most part time, no benefits.
I'll play poker, thx
I've been informed that one might be able to sell one's blood and excrement for more than $10/hour for the time spent.
I've have yet to perform the necessary analysis to determine the hourly compensation for selling one's bodily organs, but it has to be a well-paying gig.
Croc, one could insert the name of every POTUS going back to, say, Ike or JFK and make the same point.
Obomba was a Manchurian Candidate vetted, bought and paid for, and skillfully constructed by Wall St. and the Rockefeller-Rothschild int'l banking syndicate, oil, entertainment, and war profiteering principals. The subsequent POTUS will be no different.
The same interests spent trillions of dollars and 20-25 years building up the economy of the Middle Kingdom as a mfg. client-state of Anglo-American empire. Now they plan a profit-making enterprise from going to war with China-Russia in the Pacifc, Central Asia, Africa, and perhaps the western hemisphere.
Economics is politics. War is the extension of politics with other means. War is the business of empire, and war is good business for imperialists.
Therefore, economics is politics is war for profit for Anglo-American oil empire.
Economists are intellectual sophists in service to the Anglo-American, militarist-imperialist, rentier-socialist corporate-state.
Newnormal - I would add Carter to your list - he wasn't a particularly good president, but he was a good and decent man (which was maybe why he wasn't a particularly good president). But the shrubs and clinton and the present incumbent are not good men, though I would hedge Bush Senior, who had redeeming qualities.
Nobody, I don't disagree about the man's character, but he was a product of the Rockefeller CFR as was Slick and Obomba/Obummer. Under the circumstances faced by Carter, I suspect no one would have been a "good president".
The rentier Power Elite don't want/need "good men" as POTUS; rather, they need flawed, overly ambitious, and self-delusional types so they can be bribed, blackmailed, and controlled to serve the interests of the former.
Tyranny depends upon the victims of their plunder, the producers, to clothe, feed, and service them.
At some point, the "optimal plunder point," there are more producers than needed by tyranny, and this superfluous population becomes a "tax" upon tyranny's lifestyle, and a seething danger to their lives as well.
There are only two ways to rectify such a situation: Gulags, slave labor concentration camps, and genocide. The gulags are self-explanatory, but genocide requires one to think of the mass starvations of the southern Soviets (Ukrainians) after the Zionist-Bolshevik takeover in Russia, the mass starvations of Mao China, the deliberate starvations by the DC US against the American Indians, etc.
We are at the "optimal plunder point."
Either the people eat tyranny, or tyranny will eat us.
Zion is a scheme, not an ethnicity..
My guillotine is starving.
That is the consistent precedent of human nature and history. Now with 7 billion human apes on the planet, even more fun times ahead for all per capita.
Its getting AWFULLY crowded on this planet.
Tell us something we *don't* know. Every damn administration since Carter has fudged the jobs/gdp/inflation numbers. Every one.
The black convertible caddilac rides slowly through town, with the people's candidate standing in the back seat with a bullhorn, shouting to all the people living in tent cities, and abandoned building with no water or electricity, "See how wonderful everything is? And you owe it ALL to us. The People's party! Don't elect "the other party", they hate people"