Why the job market feels so dismal

Discussion in 'Economy' started by Wiseacre, May 16, 2011.

  1. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Today's (monday) WSJ has an op-ed with this title, and some interesting information about the recent May Jobs Report. Here are a few pieces:

    "
    First, the increase in job growth that occurred over the past two years results from a decline in the number of layoffs, not from increased hiring. In February 2009, a month during which the labor market lost more than 700,000 jobs, employers hired four million workers. In March 2011, employers hired four million workers. The number of hires is the same today as it was when we were shedding jobs at record rates.
    We added jobs because hires exceeded separations, not because hiring increased. There were 4.7 million separations in February 2009. In March 2011 that number had fallen to 3.8 million. The fall in separations reflects a decline in layoffs, which went from 2.5 million per month in February 2009 to 1.6 million per month in March 2011. One small piece of good news is that the just-released April data showed hires up about 2% over last year's average and 12% above the low reached in January 2010. "



    " Bear in mind that the U.S. labor force has more than 150 million workers or job seekers. In a typical year, about one-third or more of the work force turns over, leaving their old jobs to take new ones. When the labor market creates 200,000 jobs, it is because five million are hired and 4.8 million are separated, not because there were 200,000 hires and no job losses. When we're talking about numbers as large as five million, the net of 200,000 is small and may reflect minor, month-to-month variations in the number of hires or separations.
    The third fact puts this in perspective. In a healthy labor market like the one that prevailed in 2006 and early 2007, American firms hire about 5.5 million workers per month. Recall that the current number of hires is four million and it has not moved much from where it was two years ago. The labor market does not feel like it is expanding if hiring is not occurring at a recovery-level pace—and that means at least a half million more hires per month than we are seeing now. "


    "
    The combination of low hiring and a large stock of unemployed workers, now 13.7 million, means that the competition for jobs is fierce. Because there are now many more unemployed workers, and because hiring is only about 70% of 2006 levels, a worker is about one-third as likely to find a job today as he or she was in 2006. It is no wonder that workers do not feel that the labor market has recovered.
    One final fact is worth noting. Healthy labor markets are characterized not only by high levels of hiring, but also by high levels of separations. Although it is true that the importance of quits relative to layoffs rises during good times, even the number of layoffs was greater in the strong labor market of 2006-07 than it is now. No one would suggest that layoffs are good for workers, but what is good is a fluid labor market, where workers and firms constantly seek to produce better products and to find more efficient ways to produce them. High labor market churn is a characteristic of a strong economy. It generally means that workers are moving to better jobs in growing sectors that pay higher wages and away from declining sectors that pay lower wages. "


    http://online.wsj.com/article/SB10001424052748703730804576317142210698436.html


    My 2 cents:
    So, a lot less upward mobility. People are hanging on to what they got cuz getting a better job is just too hard or too risky. The author (Edward P. Lazear) closes the piece by saying the prescription is simple: lower taxes on capital investment, avoid excessively burdensome regulations, and open markets here and abroad. If we don't improve the business climate here, it's not likely we'll see a dynamic and growing labor market.
     
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  2. Trajan
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    Trajan conscientia mille testes

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    thank you, I have read this too.

    And I have made the point here that there is always activity in the job market, like eddys deep in the ocean, independent of what the surface water tell you, people came and went even during the depression, what, did people think the other 80% or so of eligible workers were doing? completely staying put? nobody got hired at all? Or fired? of course not.

    the folks who are 'mobile' or hire-able in times like these especially are educated and skilled or one of the other to one extreme or another.

    example- My wife works for Fortune . 500 co., recently she has become a SAPs rpm mng./super user, she just walked her entire grp. thru 8 months of installation and trng.......any additional skill is a huge plus.

    Now as a finance major with decades of service and a fairly high up position if she were laid off she might spend a month or 2 before being offered employment ( in 09 she tested the market, hired a head hunter who found her a position she would take in 5 weeks) with out the SAPS maybe 3. *shrugs* her position and background isn't really anything special, the eddys move even in the dimmest of times.

    Those minus with degrees but specialties, are somewhat ok, those with degrees and secondary ed etc. are fine and there after those above that line are fine, so it has been since the 70's, so it is today.


    The new shift I think is; the non hiring of folks who(m?) has been out of work for anything longer than 6 months, and its brutal, my wife sits on her dept interview team, they won't touch anyone who(m?), minus special circumstances has been out of work for 6-9 mo's, period. They won't even call in anyone over a year.
     
  3. Mr Clean
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    Mr Clean Gold Member

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    Lowering taxes and elimination regulations will do nothing to change the fact that foreign workers work for a fraction of their American counterparts.
     
  4. signelect
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    signelect BANNED

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    So do illegal immigrants or is that what your are calling foreign workers. Really I know what you are saying but we don't tax goods coming in from china or India or the others, we will pay a little more but we will have full employment. I think it is worth it.
     
  5. expat_panama
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    expat_panama Silver Member

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    Sorry, that one stopped me cold.

    Words should mean things, and 'job-growth' should mean more jobs than before. Right now there are five million fewer people working than when Obama got elected. There has not been any job growth. We've lost five million jobs.

    Unless someone here can point out something I'm missing maybe?
     
  6. pinqy
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    pinqy Gold Member

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    Well, first, there's a difference between "jobs" and "employment." If there are 100 people working and 4 people have 2 jobs and 1 person has 3 jobs, then employment = 100, but jobs = 106

    And the official jobs numbers exclude agriculture, the self employed, unpaid family members and private households, while employment includes them.

    But in any case you say there has been no jobs growth...let's look: February 2010 there were 129,246,000 non-farm payroll jobs. April 2011 there were 131,028,000 That's jobs growth.

    Looking to employment, yes we have approx 5 million fewer employed than in Nov 2008 (4,394,000), but we have 1,714,000 MORE than we did in Dec 2009.

    So there is job growth, there is employment growth. We're not back up to pre-recession levels yet, but we're not at the bottom and things are improving slightly.
     
  7. Truthmatters
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    Truthmatters BANNED

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  8. expat_panama
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    expat_panama Silver Member

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    --and the article did say 'last two years' meaning since '09.

    thanks.
     
  9. waltky
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    waltky Wise ol' monkey Supporting Member

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    Mebbe a good stiff tariff on their cars will change their mind...
    :confused:
    Report: Mazda to stop making cars in US
    Friday, June 03, 2011 - Mazda Motor Corp. plans to leave its joint venture with Ford Motor Co. and stop building cars in the U.S., the Nikkei financial daily reported Friday.
     
  10. waltky
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    waltky Wise ol' monkey Supporting Member

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    Stimulus jobs fade away as money runs out...
    :eek:
    White House Economists: Stimulus Jobs Slowly Going Away
    Tuesday, July 05, 2011 – The jobs created or saved by the federal government’s economic stimulus spending are steadily going away, according to a report from the White House Council of Economic Advisors (CEA). As stimulus spending declines, so too does the support it provided to employment.
     

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