The Jobs Dearth: Fewer Americans Have Jobs Today Than in 2000!
The Jobs Dearth: Fewer Americans Have Jobs Today Than in 2000!
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February 29, 20129:34 AM MST
By Michael G. Zey
The recent news that in January 2012 200,000-plus jobs were created and the unemployment rate dropped to 8.3% prompted many media pundits, economists, and politicians to suggest that the years-long jobs dearth has finally ended. Unfortunately, a closer inspection of the employment picture suggests that their optimism is premature.
In evaluating the US jobs picture, it is important to remember that the national policy goal always has been full employment, the level at which basically anyone who desires a full-time job has a reasonable chance of landing one. Full employment is achieved when the unemployment rate drops to around 4%-4.5% or lower, economists say. An unemployment rate of 8%-9%, even for a few months, is unacceptably high. Three straight years in that range is intolerable.
Unfortunately, based on current labor trends, not only are we years from reaching full- employment, but the chances of reaching that goal in the next several years seem to be diminishing. In other words, the US jobs situation is going in the wrong direction.
One glaring indicator of an overall weakening of the US labor market is the fact that fewer Americans are employed today than in 2000.
Yes, that is correct. In December of 2000, the total number of American employed in the “non- farm” sector stood at 132,481,000. As of January 2012, that number dropped by 70,000, to 132,409,000 workers.
During that same period, while the number of job-holders decreased, the US population has grown by more than 30 million people. Job increases in the 200,000 range cannot accommodate all the new workers—immigrants, college students, and other first time workers—who are entering the work force. The percentage of the working-age population that is employed peaked at 63.4 percent in December 2006, but now has been in the 58% range for months.
According to the Economic Policy Institute, the job losses in 2008-2009 have created a jobs deficit of about 10.5 million jobs. This figure represents the over 5 million jobs lost plus the more than five million jobs needed to keep up with normal growth in the working-age population.
If we continue to add jobs at the current anemic pace, it will take until 2019 to reach full employment levels. If we hope to achieve full employment by the year 2015, EPI says we would have to add 440,000 jobs per month, a rate not seen since the 1980s.
Do not expect US economic conditions to foster the creation of millions of new jobs. In 2011 the economy expanded by a recessionary 1.7%, roughly slightly higher than that of many European countries now considered in recession. Gas prices have already started to affect retail sales and corporate purchases of durable goods. The net worth of millions of American consumers is shrinking as they watch the value of their houses decline month-by-month.
If US companies anticipate a double-dip recession, which they well could in the coming months, they will most likely restrict their hiring and reduce payroll. Given the current global and national economic climate, it would not be surprising for monthly job numbers to drop to 100,000 or even lower.
Official Washington’s words and deeds clearly indicate that policy makers are becoming increasingly concerned that job creation in 2012 and beyond will be anemic at best. A Congressional Budget Office report revealed that government economists expect the US unemployment rate to remain over 8% for the next several years. In recent testimony before Congress Fed Chairman Ben Bernankeexpressed concern that high jobless rates will continue to put a damper on US economic growth. Congress just passed, and the President signed, another extension of the 99-week unemployment package. To stimulate what it perceives as a moribund jobs economy, the Fed is promising to keep interest rates at near-zero percent for the next several years, and has left the door open to the possibility of new rounds of money-printing or “quantitative easing.”
Perhaps Bernanke and Congress are monitoring the Gallup Poll jobs figures, which many consider a more accurate reflection of the real nature of the employment problem than the Labor Department’s monthly reports. Gallup’s daily polling revealed a February 2012 unemployment rate of 9.0%. However, the underemployment number, which includes discouraged workers plus those working part-time, is 19.1%.
In other words, close to one out of five Americans who want to work full time are either unemployed or working part-time unwillingly.
In a subsequent article I will outline the impact this moribund job market is having on America’s young workers, mature employees, and the very social fabric of the country.
One fact is clear. As long as the nation’s citizens must live under the continued threat of long- term unemployment and underemployment, its seems ludicrous to cling to the belief that the US has entered a period of “economic recovery.” In fact, we would be better served by recognizing that this is an economy that the US must recover from. And we must start taking the necessary steps to make a true economic recovery a reality!.
DR. ZEY'S PRESENTATION TOPICS
