"The Job Gains Have Gone To The Least Educated, And Lowest-Paid, Workers"
One of the recurring themes in Obama's final State of the Union address was describing the strength of the economic recovery as witnessed by the number of job gains over the past 6 (if not exactly 7) years, clearly a purely quantitative metric. There was no discussion of the qualitative component of these job gains for one simple reason: as we have explained for years, the bulk of new labor has gone to undereducated, minimum wage (and often part-time) workers.
We have dubbed this the "waiter and bartender" recovery for a reason that becomes immediately clear when looking at the chart below.
We have also gotten tired of reiterating all of this (we do so every month when the BLS released its latest jobs data that just happens to lack the biggest missing piece in the Fed's "recovery" - wage growth).
So today we give the podium to the ECRI's Lakshman Achuthan who explains it so well even a US president would get it.
Fresh Data: Cheap Labor
The sustained decline in the official jobless rate – now near the Fed’s estimate of “full employment” – is a misleading indicator of labor market health.
Indeed, the stagnation in nominal wage growth is consistent with the weakness in the employment/population (E/P) ratio. 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 a quarter of its decline from its pre-recession highs. Furthermore – as a breakdown of the E/P ratio by education level shows – even 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 has barely budged in four years (purple line).
This data underscores how the jobs recovery has been spearheaded by cheap labor, with job gains going disproportionately to the least educated — and lowest-paid — workers, many of whom have to work multiple jobs to make ends meets.
This is scarcely supportive of Janet Yellen’s description of a “much healthier” consumer in justifying the Fed rate hike.
(3 votes)
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It's like what Lenin said, look for the person who benefits, and uh, like that's your man, Man!
- J. Lebowski
Technological progress has merely provided us with more efficient means for going backwards.
Aldous Huxley
Years ago I went through a industrial electrician apprenticeship for a steel plant. 3 years, 8 hours per day working with a journeyman plus 3 hours at night class three times per week. AC/DC motors, controls, SCR drives, electronic controls you name it.... for free.
Today a degree in basket weaving costing $50,000 would be far more valuable simply because it is issued by a government approved money hungry institution and has the word "Degree" on it,,, which to most means they know it all even when proved wrong. I once worked with an Electrical Engineer that could not read an electrical blueprint. Seen his pretty Diploma.
Today the "degree" has become a requirement to be considered "educated". Is it educated going in debt for $50 - $100,000 knowing the slim chances of getting employed within your discipline? And even if you do you are paid a paltry salary because of the sheer numbers of competitors and worse, imports that will accept even less. How about being a career student collecting on student loans, then complain about having to repay. Is that "educated" or is it fraud?
Education is knowledge,,, not a piece of paper.
Degrees are for thermometers.
Say rejected, you should know by now that skills and knowledge are passe. The Credentialled Elite have no use for it.
Exhibit A: Obummer.
Your comments should be on a billboard, or 'required reading' in the Public School System. Thankfully (in a perverse sort of way), grinding hardship is what will bring your sage comments back to the forefront of reality in the days ahead.
Thank You Sir ---
a bit misleading. much of the low wage, unskilled labor labor in the usa is college educated. that means there is a dirth of jobs requiring a college education contrary to the excuse given for h1b passports and illegal immigrants that american labor is not skilled nor want to do menial labor.
now the dummies want to mix it up with the chinese. the country that has the value added jobs the menial labor service economy is supported by.
the only plan here, whether by design or incompetence, is the failure of the usa.
Hey, if I was hiring a bartender or waitress, I'd want a master's degree at the very least. After all, we know the first two years of college is remedial math the kids never learned in high school. Another year is wasted on studying razor burn on aborigines and learning "how we all can get along". Crap, you still have to teach them bartending!
Punch it up a bit and resubmit.ald
there are two reasons why employers prefer the least qualified applicant, one is that they don't need to retrain them, or have them unlearn their bad habits, such as reporting dangerous conditions or faulty products, and the other one i forget. am i hired?
Its all about keeping compensation to a minimum. Gotta pay for the CEO's corporate jet somehow. But good observation. I noticed, of my graduating class, that the bottom of the class got jobs with ease, while the top half struggled valiantly before throwing in the towel. Not only do employers not want to pay the premium for top talent, but they are afraid of hiring top talent.
And.....its a race to the bottom.
Wife went to a job fair this morning in Lafayette LA the oil hub
Or should I say tried
Said it was total gridlock never seen so msy people
She wanted to apply at Costco as it was the only non retail fast food joint
Said fuck it and went back home
You would never know things are that great when you see all the new cars trucks lines out restaurants
Somebody lying thanks white house chimps
Fuck you CHEESECAKE FACTORY!!!
Because Obama Strives for excellence!
High skilled jobs are broken down into simpler tasks so unskilled people can do them.
And this is a surprise?
How can an Amercian Engineer get a job, Rasheesh from Bangalor has the job at 1/3 the American's expected salary on a H1B that YOUR congress allows.
And YOUR congress has a 92% re-election rate.
There's food for thought while you're waiting int eh unemployment line.
Squid
You forgot to mention that they will treat Rasheesh like a slave as long as he is on an H1-B visa. And even if he gets his green card, he will ahve trouble looking for work. No wonder so many Asians are going bback or to other countries. The Americano dream is more like a nightmare.