Friday, September 6, 2013

Now is the time to write future history

New unemployment claims declined last week to near post-Bush-crash record levels. The week to week tracking number has been in steady decline, suggesting that the labor market is tightening. The new jobs created were 169,000 last month according to the large employers surveyed, but the unemployment rate declined based on households surveyed suggesting jobs were created outside of the 'normal' tracking data. This would happen if a large number of really small employers were hiring or self-employment had picked up.

The pundits attributed the the lower unemployment rate to the decline in the job participation rate, even though that's been in steady decline ever since the Baby Boom Generation started to retire. Remember W making a big deal about him being one of the first boomers to reach 60? The right didn't seem to notice the job participation rate declining all through his Presidency. In fact, anyone not in the Military or in an official institution is counted as being eligible to work no matter their desire to work, or their ability to actually work at a job. Reality is not a big thing over on the Right.

According to a survey of corporate purchasing managers there was huge jump in factory orders, this should result in a steady increase in manufacturing jobs over the next several months. Of course the big problem is that new factory jobs only pay $14/hour and companies are locking out union workers to take away any benefits that go with those substandard wages. In Germany an average factory job pays $56/hour.

Economists Richard Burkhauser of Cornell University and Jeff Larrimore, a staffer on the Congressional Joint Committee on Taxation, warned that demographic factors could end up pushing incomes down for the next 30 years or more. If nothing is changed we may be at the beginning of the longest period of economic decline in American history. When they say 'demographic factors' they mean that we've reached the point where we can't have on average more jobs per household then we do now, as wages continue to decline on the same trend line that we've seen over the past 30+ years, or worse.

In 1980 we had 1.1 jobs per household, then Reagan declared war on unions and the 'two job household' became the expected norm. Jobs per household are in fact close to 2, and only fall short from that number is based on the high unemployment rate among men who would be expected to have the higher wage jobs that are now out-sourced. In the new Conservative Workforce, Pro-life means that mom gives birth on the job and never misses a day. In fact a lot of households have multiple generations working to try to keep the roof over their collective heads, (grandpa at Walmart, grandson at McD's), if you don't have that multi-generation support group, then you live in your car or in a tent by the river.

Low wage worker strikes are spreading from Fast Food restaurants to Big Box stores where wages are a third of the economic reality based on worker productivity. We're on the verge of another Progressive Revolution like we saw in Teddy Roosevelt's time, the question is are there enough people who understand what we need to do? An economy for everyone, or feudalism for the very few?  Twitter @BruceEnberg Now is the time that history is going to be made. The winners will write about it. Will it be the truth of the people, or the fiction of the Oligarchs?