Examining the Entrails of the U.S. Employment Situation –
Daniel Alpert at Nouriel Roubini’s Economonitors offers a through, data supported (but in real English as well), description of what is happening in our economy, and why some things that might look puzzling are not so hard to see with some careful reading:
I have a story to tell you about the U.S. employment picture. A story that you may find far more interesting than the media and government-led backslapping that has been forthcoming on “jobs days” in the first half of 2013:
“Economists are notorious for getting worked up by numbers, and these days no data dump triggers a sharper frisson of excitement than the two dozen or so tables of employment numbers released at exactly 8:30 a.m. on the first Friday of every month by the Bureau of Labor Statistics at the U.S. Department of Labor.
It’s not just economists who eagerly await—or dread—the U.S. “Jobs Day,” as this Friday has become known in Washington. It’s also politicians, stock analysts, policy wonks, and journalists. Amid the worst economic run of our lifetime—a crisis that keeps morphing and whacking us again—everyone is looking for signs of what’s coming next.
Interesting post by Daniel Alpert at Economonitor:
Some Charts:
High versus Low Wage Jobs:
Wage Growth and Lack Thereof:
Where is the Job Growth Happening?
It appears much of the job growth has been in low wage opportunity which forces people to do with less and detracts from demand led economic growth. The economic bump in taking a lower wage paying job is just not that great; average Unemployment Wages ($12.86/hr) as opposed to a Retail Opportunity at $15.80/hr. “less taxes say about $80—or the paltry sum of $4,160 per year of additional consumption.”Daniel Alpert
Interesting comment on falling Prticipation Rate being tied to babyboomers retirement:
“The Labor Force Participation Rate has also declined and is, more or less, continuing to decline—but its downward trend began well before the Great Recession. There is therefore a correlation between the falling LFPR and certain ongoing demographic changes in the CNIP.
Chiefly, such demographic changes arise from an aging U.S. population with growing longevity—typified by the ongoing aging-out of the enormous baby boom cohort from the labor force. But as real as those changes may be, the fact remains that the LFPR declined by all of 1 percent—to 66 percent from around 67 percent between 2000 and the beginning of the Great Recession. Since 2009, however, the LFPR has fallen nearly an additional 3 percent. This acceleration of the earlier trend is unlikely to merely be a demographic phenomenon.”Daniel Alpert
And what if the PPACA is behind much of the low wage and temp job growth?
“Some have surmised that this year’s increase in part-time workers is related to employer concerns about being forced to provide health care benefits for full time workers under the Patient Protection and Affordable Care Act (Obamacare). That might be a more plausible argument if newly created jobs were more evenly spread among low-wage and high-wage sectors. Anecdotal Obamacare-scare stories abound, but they seem pretty specious at best. After all, when 70 percent of the jobs created in Q2 2013 were in low-wage sectors in which casual and limited-hours hiring is not atypical (restaurants, temporary services and retail sales, for example), what else could be expected? There is no empirical evidence that hiring practices relate to concerns over benefits, and a heck of a lot of evidence that the people being hired for new jobs are earning less than workers already employed and that the jobs that a significant proportion of jobs being created are not full time because of the sectors they are in. If the Obamacare hiring meme were accurate, the tendency game the law would be to game the system by hiring people to work just under the 30 hour “full time” cut off under the act. But that does not appear to be the case either (see the next section). It’s the nature of the jobs, not the fears of the employer.” Daniel Alpert
I can not find myself disagreeing with much in Daniel’s article and I am glad Dan took the time to put the portal and the intro up on Angry Bear. This is a great review of Employment in the US, where the jobs are, what is happening with wages, BLS stats, etc. It is worth the read. http://www.economonitor.com/danalperts2cents/2013/07/24/the-new-sick-onomy-examining-the-entrails-of-the-u-s-employment-situation/#sthash.ipXgOsSo.dpuf