Sunday, May 05, 2013
Employment Numbers Improving, Or Not...
Total nonfarm payroll employment rose by 165,000 in April, and the unemployment rate was little changed at 7.5 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, food services and drinking places, retail trade, and health care.The stock market reacted positively. But, the stock market runs as much on psychological factors as solid financial information. The government unemployment numbers are groomed to give a positive a picture as "reasonably" possible. Some think that employment still has a lot of improving to do.
James Pethokoukis at the American Enterprise Institute points out that "the report contained worrisome signs that President Obama’s health care reform law is hurting full-time, high-wage employment."
While the American economy added 293,000 jobs last month, according to the separate household survey, the number of persons employed part time for economic reasons — “involuntary part-time workers” as the Labor Department calls them – increased by almost as much, by 278,000 to 7.9 million. These folks were working part time because a) their hours had been cut back or b) they were unable to find a full-time job. At the same time, the U-6 unemployment rate — a broader measure of joblessness that includes discouraged workers and part-timers who want a full-time gig – rose from 13.8% to 13.9%.Emphasis added.
What’s more, there wasa 0.2 hour decline in the length of the average workweek. This led to 0.4 percentage point drop in the index of average weekly hours, “equaling the largest declines since the recovery began,” notes economist Dean Baker of Center for Economic and Policy Research.
Let’s see, more part timers and fewer hours worked. Economist Douglas Holtz-Eakin says what we’re all thinking: “This is not good news as it reflects the reliance on part-time work. … the decline in hours and rise of part-time work is troubling in light of anecdotal reports of the impact of the Affordable Care Act.”
Nancy Cook at the National Journal points out "the huge number of Americans who remain out of the workforce."
The glaring caveat to this jobs report is the huge number of Americans who remain out of the workforce. Called the "labor force participation rate" in wonkspeak, that number held steady in April at 63.3 percent—the lowest level since 1979.Just as with inflation, the government figures don't give a complete picture and the larger picture doesn't look so hot. What can we expect as Obamacare continues to be implemented? It doesn't seem to be doing very well so far. Will the government suffer a revenue shortage due to increasing Social Security, disability and unemployment payments combined with a falling number of taxpayers? Stay tuned for our next episode of Walking on the Edge of Disaster.
Demographics and retirements certainly played some role, though economists cannot agree on the extent. About 6.7 million people have stopped looking for work since late 2007, says Heidi Shierholz, an economist with the left-leaning think tank Economic Policy Institute. Roughly 3 million to 5 million of them left because they could not find jobs, economists estimate.
Mind you, these are not people who collect unemployment insurance and send out resumes in search of their next gig. These are people who—at least, temporarily—have exited the workforce. In March, the jobs report showed that 496,000 had dropped out.
Missing workers can translate to a decrease in tax revenue, coupled with an increase in the use of government benefits, such as food stamps and disability insurance. The number of Americans collecting food stamps hit a high of 47.8 million people in December 2012. A similar spike has occurred in enrollments for the Social Security disability payments.
Oh. We need to look at this chart again to remind us of how well Obama's recovery plan has served us.
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