Labor force

Our Fragmented Labor Markets Defy Outdated Conventions

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laborCharles Hugh Smith – Conventional economists/media pundits typically view the labor market as monolithic, i.e. as one unified market. The reality is the labor market is highly fragmented. Thus it’s little wonder that conventional measures are giving mixed signals on employment, wage inflation, etc.

Here is a typical chart of the labor market: the annual rate of change in hourly earnings, going back to the late 1960s. I’ve annotated the chart to show that hourly earning rose sharply in the inflationary 1970s, but since then have only popped higher in asset bubbles–the dot-com era and the housing bubble:

labor

Generalized measures that lump all wage earners together give us a snapshot of trends, but they fail to describe the realities of today’s labor markets. The reality is much more complex, and thus beyond the outdated conventions that divide the labor force into broad sectors: Continue reading →

Whatever Became Of Economists And The American Economy

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PaulCraigRobertsAccording to the official economic fairy tale, the US economy has been in recovery since June 2009.

This fairy tale supports America’s image as the safe haven, an image that keeps the dollar up, the stock market up, and interest rates down. It is an image that causes the massive numbers of unemployed Americans to blame themselves and not the mishandled economy.

This fairy tale survives despite the fact that there is no economic information whatsoever that supports it.

Real median household income has not grown for years and is below the levels of the early 1970s.

There has been no growth in real retail sales for six years.

How does an economy dependent on consumer demand grow when real consumer incomes and real retail sales do not grow?

Not from business investment. Why invest when there is no sales growth? Industrial production, properly deflated, remains well below the pre-recession level.

Not from construction. The real value of total construction put in place declined sharply from 2006 through 2011 and has bounced around the 2011 bottom for the past three years.

How does an economy grow when the labor force is shrinking? The labor force participation rate has declined since 2007 as has the civilian employment to population ratio.

How can there be a recovery when nothing has recovered?

Do economists believe that the entire corpus of macroeconomics taught since the 1940s is simply incorrect? If not, how can economists possibly support the recovery fairy tale? Continue reading →

A Lie That Serves The Rich

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“The offshoring of US manufacturing and tradable professional service jobs has resulted in an economy that can only create new jobs in lowly paid, increasingly part-time nontradable domestic service jobs, such as waitresses, bartenders, retail clerks, and ambulatory health care workers.” – Roberts, Titus, Kranzler

The labor force participation rate has declined from 66.5% in 2007 prior to the last downturn to 62.7% today. This decline in the participation rate is difficult to reconcile with the alleged economic recovery that began in June 2009 and supposedly continues today. Normally a recovery from recession results in a rise in the labor force participation rate.

The Obama regime, economists, and the financial presstitutes have explained this decline in the participation rate as the result of retirements by the baby boomers, those 55 and older. In this five to six minute video, John Titus shows that in actual fact the government’s own employment data show that baby boomers have been entering the work force at record rates and are responsible for raising the labor force participation rate above where it would otherwise be. http://www.tubechop.com/watch/3544087 Continue reading →

The Financial Press–A Disinformation Machine

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Paul Craig Roberts May 5 2013

Bureau of Labor StatisticsDave Kranzler of Golden Returns Capital declares the April payroll jobs report that was released on May 3 by the Bureau of Labor Statistics to be “fictitious.”

Statistician John Williams (shadowstats.com) says both the jobs report and unemployment rate are “nonsense.”

I agree with both. But don’t expect the financial press to report the facts.

Let’s take a walk through the BLS report and you can arrive at your own conclusion.

The BLS report says that the private sector created 185,000 service jobs in April. Even if this report were true, it would have negligible effect on the unemployment rate as about 127,000 new jobs are needed each month just to stay even with population growth and current unemployment rate.http://www.economicpopulist.org/content/how-many-jobs-are-needed-keep-population-growth

But is the BLS report true?

We can answer that question by examining the areas where the jobs reportedly materialized: 29,300 in retail trade with general merchandise stores accounting for about half of that number, 73,000 in professional and business services with temporary help services accounting for 42 percent of that number, 26,100 in health care and social assistance with ambulatory health care services accounting for 52 percent of that number, 45,100 in accommodation and food services with waitresses and bartenders accounting for 84 percent of the jobs, and 8,600 jobs created for bill collectors.

That’s it. The federal government lost 8,000 jobs, the postal service lost 4,900 jobs, state government lost 1,000 jobs and local government lost 2,000 jobs.

There were zero jobs created in manufacturing.

Considering the credit-restrained and hard pressed consumer, the jobs figure for bill collectors is likely correct. But why would there be 29,000 new jobs in retail trade when real retail sales are falling? Why would there be new professional service jobs when large consulting companies such as IBM are reducing the hours of their contract employees? How can 38,000 waitress and bartenders be hired in one month when consumers have so little discretionary income?

Continue reading →