The New Normal, Beyond 'Hope and Change'

[Annie]

Mort Zuckerman: The American Jobs Machine is Clanging to a Halt - US News and World Report

Mort Zuckerman: The American Jobs Machine is Clanging to a Halt
Even the 9.6 percent unemployment rate underplays the economic disaster

By Mortimer B. Zuckerman

Posted: October 1, 2010

America's private-sector jobs machine has been the marvel of the economic world since 1940. When farm jobs were eliminated by mechanization, factories hired more. When factories increased productivity and moved work offshore, jobs opened up in services such as healthcare and education. Today that machine is clanging to a halt. For the man in the street, these are the worst times since the 1930s. Even those who have not suffered know someone—a friend, a neighbor, a family member—who is being hurt. A majority of Americans worry that the recession is far from over.

The history of job numbers gives no cause for optimism. Private-sector jobs increased about 3.5 percent a year from the 1950s through the 1970s, 2.4 percent in the 1980s and 1990s, and less than 1 percent annually during the last decade. From 1985 to 2008, U.S. unemployment averaged 5.6 percent, compared with about 7.5 percent for the six largest economies in the European Union. Today, many of those countries now have lower unemployment rates than ours. In the 10 years after December 1989, the U.S. economy gained 21.7 million jobs. By contrast, from December 1999 through December 2009, we lost 944,000 jobs. Even without counting the end-of-decade recession, and comparing the first eight years of the 1990s to the same span in the 2000s, payroll employment rose by less than half—under 7.5 million jobs compared with nearly 16 million.

The composition of this unemployment is equally troubling. In the normal cycle, the men and women laid off can expect to be taken on again somewhere. Not now. Millions have been looking for work for six months. One opening has hundreds seeking to fill it. The rise in unemployment among permanent jobholders (that is, jobholders not on temporary layoff) is astounding. The rate rose from 1.7 percent in 2007 to a 5.6 percent peak in October 2009, and still remains at about 5 percent. Similarly, the long-term unemployment rate, as a share of the labor force as a whole, increased from 0.9 percent in November 2007 to 4.4 percent in June 2010, way above the previous postwar peak of 2.6 percent in June 1983.

Perhaps most troubling is the proportion of unemployed who have been out of work for six months or more: a remarkable 42 percent, according to the latest data from the Bureau of Labor Statistics. The concern is that as the spell of unemployment lengthens, skills erode and behaviors tend to change, leaving some people unqualified for the work they once did well. They face the horrible prospect that they may never work again...

So it seems to be according to Zuckermann that we've lived in a bubble for years. Now that bubble is bursting.



...The headline unemployment number underplays the disaster. The 9.6 percent quoted does not reflect those who have stopped looking for work since mid-2008—that would give a rate of over 11 percent. Private incomes remain about 5.4 percent below the level of the third quarter of 2008, a dramatically bigger drop than in any previous postwar cycle, when private incomes never declined at all.

The true figure of our jobs predicament is 17 percent: the combination of the unemployed and the underemployed—those who can only find part-time work. That 17 percent is the highest figure since the 1930s.

Men are bearing the brunt of the crunch. Recently, their unemployment rate was 11.4 percent; women's was 8.8 percent, making for the largest jobless gender gap since tracking became possible in 1948. Why? Because men predominate in manufacturing and construction, the hardest-hit sectors, which have lost almost 4 million jobs since December 2007. Women, by contrast, are a majority in recession-resistant fields such as education and healthcare, which gained slightly fewer than 600,000 jobs during the same period...

Men are paying the price disproportionately. Why? It's hinted at, though not acknowledged.

 

[Mr Natural]

Welcome to the 21st Century!

Sucks so far, doesn't it?