Friday, December 2, 2011

The good news and the bad news

Initial jobless claims went back up over the magic 400,000 mark last week that indicates no job growth, but today’s employer survey showed the private sector hired 140,000 workers in November, but Republicans eliminated 20,000 government jobs for a net gain of 120,000 jobs. The Unemployment rate surprisingly fell to 8.6% from 9% as determined by household phone surveys. The Republicans are unhappy with this news and cling to the workforce participation rate of 64% as proof of Obama's failure (this number isn't as bad as it sounds, but has been trending down). There were 315,000 people who left the workforce last quarter. (conservatives conveniently “misspeak” and say it all happened last month). 

The number of jobs created was revised up for the months of September and October showing a total 278,000 jobs added for the 3rd quarter. Unfortunately this is less than needed to absorb the population growth. There is however something strange about another more obscure labor survey the government does. The Adjusted Household Survey of Employment actually asks people if they are working, in contrast to the employer survey that is widely reported in the media. 

Historically the two surveys track pretty closely, but over the past year the two graphs have begun diverging. Last month it went nuts, the difference was 498,000 jobs to the positive with an overall total of 2.5 million new jobs created this year compared to the official numbers of 1.6 million jobs created. If the grain got lost in all that chaff, the kernel is:  HALF MILLION NEW JOBS in one month. 

If there isn’t something wrong with the survey (they’ve been doing this for decades so it should work) things are really picking up, but not with the big “job creators” that heavily weight the Employer Survey. That survey did place half of the new growth with small business, but they tend to completely miss certain types of small businesses, as well as start up companies and people who create their own job.

This would explain the general improvement in the economic numbers that we have been seeing despite the continued high unemployment rate and that rate’s sudden drop last month. It’s not time to start singing “Happy Days Are Here Again” for a number of reasons. For one thing we need to see this improvement sustained over time, and contrary to the conservative talking point that says, “a job is a job, take what we give you or we‘ll let you starve”, that is not how an economy recovers nor does it produce the American Dream.

A long term study of the unemployed by Rutgers University has been following people who lost their jobs in the first year of the Bush Great Depression. Only 7% have found a comparable job that allowed them to escape relatively unharmed. A third are in varying degrees of poverty having had their lives “totally wrecked” by their job loss, and 21% see this change as permanent. The middle third see themselves recovering, at least so far. 

Nationwide 25% of all full time workers make wages that keep them below the poverty rate. Companies like Walmart can’t operate without government programs to support the bulk of their workers. Food Stamps, Medicaid, housing assistance as well as Food Banks and support from worker’s families keep Walmart in business. As Red states continue to cut programs and drive down wages the pressure builds for a shift to a Mexico style economy or simply a not quite “failed state” existence. Don’t kid yourself right winger,  the Republicans have economists that explain these things to them. They just don’t care. We need to care for ourselves, we are the 99%.


Anonymous said...

For some reason after reading this blog santorum comes to mind. The polititian and the result of a google search of santorum, that happy frothy mix... one and the same. Uncle Sam's present economy and rick santorum ....frothy. It seems the dream of a middle class life style is swirling around the drain-from a previous blog of yours. It saddens me that santorum, ryan and other political frothy bas%&^ds are so beholden to provide services to the corporate diminishers of the Dream for the pursuit of profits. No sustaining jobs, no demand for impulse spending, no need to hire Americans-(we's a goin ta hire us some foriegners abroad to make nice cheap input costs to create a happier statement for the share holders) makes for a nice swirling spot around that drain. Less demand and more swirling. Lady Liberty is getting a massive swirly in the toilet of American politics. I hear santorum, ryan, mud-mouth mcconnell (maybe it's more frothy santorum), frothy john boner and others of their ilk, I appreceiate the occupiers for their concern for their and this great countries future! GOOD FOR YOU OCCUPIERS!!