Why the job market feels so dismal

Wiseacre

Retired USAF Chief
Apr 8, 2011
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San Antonio, TX
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.
 
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.
 
Lowering taxes and elimination regulations will do nothing to change the fact that foreign workers work for a fraction of their American counterparts.
 
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.
 
Today's (monday) ... 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...

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?
 
Today's (monday) ... 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...

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?

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.
 
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.
Mazda and Ford operate the AutoAlliance International plant in Michigan as a 50-50 partnership. Citing unnamed company sources, the Nikkei said Mazda is considering selling its stake to Ford as the Japanese automaker tries to restructure its global production. Mazda cars sold in the U.S. will be shipped from Japan and Mexico starting around 2013, according to the Nikkei.

In response, Mazda issued a short statement saying the report was not based on information it had released. "Mazda and Ford are jointly studying various possibilities for AAI, and we have nothing to announce at this time," Mazda said. "We do not comment on speculation." The plant in Flat Rock, Michigan manufactures the Mazda6 midsize sedan and the Ford Mustang. It employs about 1,700 workers, according to Ford.

The U.S. automaker has essentially agreed to maintain current worker levels by expanding the models it builds at the facility, Nikkei said. The two companies loosened their longtime auto alliance last year when Ford cuts its stake in Mazda from 11 percent to 3.5 percent. At the time, Mazda President Takashi Yamanouchi insisted that the two companies would continue to cooperate through joint ventures and technology exchanges.

Mazda's latest financial results revealed tough times for the Hiroshima-based company. Its net losses swelled to 60 billion yen ($742 million) in the fiscal year ended March 31, from 6.5 billion yen the previous year. The company blamed a persistently strong yen and lackluster sales in Japan, as well as the March 11 earthquake and tsunami that disrupted auto production.

Report: Mazda to stop making cars in US | CNSnews.com
 
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.
The report, released late on Friday, July 1, shows that stimulus spending is now supporting fewer jobs than it did in the previous two quarters – supporting approximately 2.4 million jobs in the first quarter of 2011. According to the report, because stimulus spending is receding, the jobs estimated to have been supported by that spending are beginning to disappear as well. At the height of its effectiveness – the second and third quarters of 2010 – the CEA estimated that the stimulus was supporting 2.7 and 2.8 million jobs respectively.

When Obama signed the $787 billion stimulus spending into law -- the American Recovery and Reinvestment Act (ARRA) – on Feb. 17, 2009, he said, “Now, what makes this recovery plan so important is not just that it will create or save 3.5 million jobs over the next two years, including 60,000-plus here in Colorado. It's that we're putting Americans to work doing the work that America needs done -- in critical areas that have been neglected for too long; work that will bring real and lasting change for generations to come.”

The CEA said the federal spending had caused employment to be higher than what it would normally have been without the stimulus, arguing that the jobs’ figures it presented reflected the number of jobs created or saved by the federal spending. “In terms of direct impact on employment and GDP, the ARRA was intended to stop the economic slide and to be temporary stimulus to fill part of the substantial hole in aggregate demand left by the crisis,” the report said.

However, the CEA also noted that as stimulus spending declined, so too would its impact on jobs, meaning that the stimulus would support fewer and fewer jobs. “The Act was designed to have a peak cumulative impact in the second half of 2010,” reads the report. “Because the ARRA was not designed to be permanent, these outlays and tax reductions will decline over time and thus the impact on GDP and employment are phasing down.” In other words, because stimulus spending was always designed to be temporary, so too were the jobs it supported, meaning there will be fewer and fewer jobs supported by government spending in the future.

MORE
 
Thanks Obama...
:redface:
2.4 Million Fewer Americans Working Now Than When Obama Signed Economic Stimulus
Friday, July 08, 2011 – There were approximately 2.4 million fewer Americans working in June 2011 than there were when President Barack Obama signed the economic stimulus bill on Feb. 17, 2009, according to data from the Bureau of Labor Statistics (BLS).
According to the BLS, there were approximately 141.68 million people counted as “employed” in America back in February 2009. By June of 2011, that number had fallen to approximately 139.33 million, yielding a net reduction in jobs of approximately 2.4 million. When the economic stimulus – the American Recovery and Reinvestment Act -- was created, Obama promised that the then-$787-billion spending package would create or save 3.5 million jobs, saying it would preserve the “American dream” for millions of people.

“We have begun the essential work of keeping the American dream alive in our time,” Obama said on Feb. 17, 2009 in a speech marking the signing of the stimulus bill. “What makes this recovery plan so important is not just that it will create or save three-and-a-half million jobs over the next two years,” Obama said, “It's that we are putting Americans to work doing the work that America needs done in critical areas that have been neglected for too long – work that will bring real and lasting change for generations to come.”

June marks the 29th straight month that unemployment has been higher than the 8 percent level Obama promised it would stay below when the stimulus was signed.

Source

See also:

Real Unemployment Rises to 16.2% in June -- 25.3 Million People
Friday, July 08, 2011 – The real unemployment rate rose to 16.2 percent in June, the Bureau of Labor Statistics (BLS) reported on Friday, marking a return to levels not seen since January 2011.
The “real” unemployment rate is technically a combination of three measures of unemployment: the unemployment rate, the number of people working part-time who want full-time work, and the number of people “marginally attached” to the workforce. Those who have left the workforce but would still like to be employed are considered marginally attached. This figure is considered a more complete measure of unemployment because it captures a broader spectrum of those affected by the weak economy. Merely counting those who apply for unemployment benefits as “unemployed” does not fully account for everyone who is out of work or underemployed.

This real unemployment rate – known as the U6 rate – has been climbing since February 2011 when it was at 15.9 percent. Real unemployment peaked in October of 2009 at 17.4 percent, before falling into the 16 percent range for much of 2010.

It now appears that the real unemployment rate is returning to its 2010 levels, trending upward after staying slightly below 16 percent from February to May. The total number of people who were truly unemployed in June was 25.3 million -- the 14.1 million who were unemployed, the 2.7 million who were marginally attached to the workforce and the 8.6 million who were underemployed.

Source

Related:

Warren Buffett Predicts Job Growth When Housing Rebounds
Friday, July 08, 2011 - Billionaire investor Warren Buffett says the nation's employment picture will improve significantly once residential housing construction rebounds.
Buffett spoke to Bloomberg Television Friday morning before the Labor Department released a weaker-than-expected monthly jobs report, but his comments were more about the long-term picture.

The head of the conglomerate Berkshire Hathaway Inc. says he thinks people will be surprised how quickly employment improves once the excess houses are bought and normal levels of construction resume. He says the nation is still working off the excess homes created during the housing bubble.

Buffett expects unemployment to fall to about 6 percent within a few years, and the 2.5 million jobs lost in the recession will be replaced. The June unemployment rate rose to 9.2 percent.

Source
 
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Did any of you see the definition of "working" in the stupid community census form?
In this census - you will be counted as "working" even if you helped your neighbor build a deck if they fed you while your worked.
Mow someone else's lawn anytime in the last year - your working.
Have a paper route that pays $150 a month - your working.
Help your church do some landscaping and were fed in the process - your working.

The government is trying very hard to improve those numbers everyday.
 
...The government is trying very hard to improve those numbers everyday.
The problem's not the BLS it's the press that focuses on the numbers that support the partly line. The BLS uses a loose definition in one data set and a much tighter one in the payroll numbers. Same for unemployment; the press likes the one that's 'only' 9.2 but the BLS tracks another kind of unemployment rate with a percent that's twice the 'headline' number.
 

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