Sunday, September 8, 2013

The Number Of Private Sector Jobs Fell By 278,000 Last Month But The Economy Is Getting Better?

Michael Snyder
Activist Post

Have you heard about the "wonderful" employment numbers that were just released?  Last month, the unemployment rate declined to 7.3 percent.  Somehow this happened even though the percentage of working age Americans with a job actually declined and the number of private sector workers fell by 278,000.  So how did the federal government magically produce a drop in the unemployment rate even though less people have jobs?

Well, they did it by pretending that more than half a million Americans "dropped out of the labor force" last month.  If the government is to be believed, the number of Americans that want to work dropped by an astounding 516,000 in a single month even though the population of our country is constantly increasing.  The federal government continues to feed us absolutely absurd numbers month after month, and at this point "the official unemployment rate" is essentially meaningless.

But that doesn't mean that Barack Obama is about to drop the charade.  In fact, he continues to insist that the economy is getting better.  The following is an excerpt from one of Obama's recent weekly radio addresses...
Over the past four and a half years, we’ve fought our way back from the worst recession of our lifetimes. And thanks to the grit and resilience of the American people, we’ve begun to lay a foundation for stronger, more durable economic growth.
Oh really?

Does he actually believe that anyone is still buying what he is saying?

The cold, hard truth is that the U.S. economy has not recovered while Obama has been in the White House.  If you doubt this, please see my previous article entitled "33 Shocking Facts Which Show How Badly The Economy Has Tanked Since Obama Became President".

Since World War II, the percentage of working age Americans that is employed had always bounced back dramatically after a recession ended.

Unfortunately, that has not happened this time.

As you can see from the chart posted below, the percentage of working age Americans with a job has stayed below 59 percent since late 2009.  This chart reflects the most recent employment numbers...

Employment-Population Ratio 2013

So where is the recovery Obama?

Can he possibly put a positive spin on the chart above?

Of course not.

The truth is that the official unemployment rate should still be up around 10 percent like it was a few years ago.

But that wouldn't make Obama look very good, would it?  So the U.S. government has been pretending that millions upon millions of Americans have been "leaving the labor force".  This has pushed the labor force participation rate to a 35-year-low...

Labor Force Participation Rate

At this point, we have more than 90 million Americans that are considered to be "not in the labor force"...
On Friday, the BLS reported that the 90,473,000 Americans not currently in the labor force marked the first time the figure exceeded the 90 million threshold.
In January 2009, when President Obama first took office, there were 80.5 million Americans 16 years and older not in the labor force, meaning the number of Americans not in the labor force has increased 10 million during his presidency.
For men, the BLS reported the labor force participation rate, the percentage of the population working or considered looking for work, was 63.2 percent in August, basically unchanged from 63.5 percent in July. It’s also a record low.
How low can that number possibly go?

Meanwhile, the quality of our jobs continues to decline rapidly as well.  If you can believe it, at this point more than 40 percent of all U.S. workers actually make less than what a full-time minimum wage worker made back in 1968.

As a result, the U.S. middle class is steadily dying.  The following is from a recent Yahoo article...
It’s the elephant in the room no one wants to talk about…
The middle class in the U.S. economy is on the verge of collapse. Yes, I said collapse. That social class that once helped the U.S. economy grow and prosper is coming apart.
Will the U.S. economy ever be the same without it or is this the new norm?
For much more on this, please see my previous article entitled "44 Facts About The Death Of The Middle Class That Every American Should Know".

And unfortunately, things look like they may start getting a lot worse for ordinary Americans.

There are a couple of major events which could potentially cause our economic decline to accelerate greatly in September...

#1 Fed Tapering

Right now, there is not much demand for U.S. Treasury bonds.  Foreigners have become net sellers of U.S. Treasuries and domestic demand has become quite weak.  Without the Federal Reserve buying up tens of billions of dollars worth of U.S. Treasuries each month, where will the demand come from?

That is a very good question.  If the Fed starts to taper quantitative easing in September, that is almost certainly going to send bond yields soaring.  Already, bond yields have been rising steadily, and if they get too high it is going to be absolutely disastrous for the U.S. economy.

#2 War With Syria

If the U.S. attacks Syria, it will likely cause financial markets all over the planet to descend into chaos and send the price of oil skyrocketing.

And that assumes that the conflict is limited to only the United States and Syria.  If Syria decides to retaliate by launching missiles at Israeli cities, that will set off a major regional war in the Middle East and the consequences for the global economy will be off the charts.

So as bad as the U.S. economy is right now, the truth is that things could easily get much, much worse.

Let us hope for the best, but let us also prepare for the worst.

This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.


This article may be re-posted in full with attribution.


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dale said...

I am getting tired of these analyses of the labor market which disregard the simple fact that each day, 10,000 baby boomers reach 65, with 2/3 actually dropping out of the workforce. That amounts to about 2,400,000 dropouts, or roughly 200,000 a month. This will continue for the next 19 years.

As a result, any analysis of the workforce and employment situation must take this natural loss of job seekers.

Of the 278,000 workforce dropouts mentioned by this article, nearly 90% of them can be explained by the retirement of 2/3 of those turning 65 from the oversized baby boom generation.

So this natural loss of job seekers has to be balanced against the new entries into the workforce, college and high school graduates, etc.

Now it just so happens that about 100,000 millennials turn 21 each the number entering the workforce (using 21 as a convenient age) matches the number leaving because of retirement.

Therefore 278,000 fewer jobs ( realize some are public sector jobs but ignoring that for now) means that many who have not reached 65 have dropped out, lost jobs, or stopped looking. The exact match of retirees and new entrees into the job market (roughly) means that we can ignore them and concentrate on the number of jobs.

We have fewer jobs and crappier jobs. Meanwhile, the rich get richer, and the poor get poorer and stay poor more often.

The effect of fewer jobs IS crappier jobs, or at least lower paying jobs The conservative solution to employment is to reduce wages.

It sucks, doesn't it? I am 72, can't afford to retire yet, still paying for Medicare (I have had for 7 yrs) and Social Security (which I will probably never get since I always paid into a teacher's pension..but not enough to live on) and still paying higher rate than Romney and Buffet. That suggests a solution: tax the rich (individuals and corporations) at high rates of the past (70-90 at top margins) and watch all that money be re-invested instead of being taken out as lavish salaries, lifestyles, foreign investments, etc. Rather than give most to the government (ie the public treasury), at high rates, the money will be used to re-invest, which will grow the business and expand jobs.

Low taxes on the rich means low wages and high unemployment. High taxes means more money goes back into the economy creating more jobs. There is a case study of this: it is called US history from 1945-2013. It shows that shared prosperity occurs when top tax rates are high, and extreme inequality, with growing poverty and debt, occurs when tax rates on the rich are low.

The only problem is, these same rich control the political process.
Get the money out of politics and things will change, politicians will serve the public, not their corporate funders; leaders will represent ordinary people (the general welfare) instead of the economic royalty

We would be far better off to get rid of one conservative SC Justice so we can have a chance to reverse the Citizens United paradigm of the rich having unlimited, undisclosed influence over elections and policy. Let's get rid of Thomas, who hasn't spoken during court proceedings in 7 years, for incompetence

That's a start.

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Congressman #1: Break it down, Camacho!

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