Why the Jobs Situation Is Worse Than It Looks- Zuckerman

Trajan

conscientia mille testes
Jun 17, 2010
29,048
5,463
48
The Bay Area Soviet
My opinion is, this whole piece speaks to a lost decade, or more.
*shrugs*


its 3 pages long so, lets try and gets past the first 1.5 IF you are going to comment or broach a point for discussion eh? .......Please?


Why the Jobs Situation Is Worse Than It Looks
We now have more idle men and women than at any time since the Great Depression

By Mortimer B. Zuckerman

Posted: June 20, 2011

snip- page 2-

In past recessions, the economy recovered lost jobs within 13 months, on average, after the trough. Twenty-three months into a recovery, employment typically increases by around 174,000 jobs monthly, compared to 54,000 this time around. In a typical recovery, we would have had several hundred thousand more hires per month than we are seeing now—this despite unprecedented fiscal and monetary stimulus (including the rescue of the automobile industry, whose collapse would likely have lost a million jobs). Businesses do not seem to have the confidence or the incentive to add staff but prefer to continue the deep cost-cutting they undertook from the onset of the recession.

But hang on. Even to come up with the 54,000 new jobs, the Bureau of Labor Statistics assumed that 206,000 jobs were created by newly formed companies that its analysts believe—but can't prove—were, in effect, born in May under the so-called birth/death model, which relies primarily on historical extrapolations. Without this generous assumption in the face of a slowing economy, the United States would have lost jobs in May. Last year the bureau assumed that 192,000 jobs were created through new start-ups in the comparable month, but on review most of them eventually had to be taken out, as start-ups have been distressingly weak given the lack of financing from their traditional sources such as bank loans, home equity loans, and credit card lines. [Read more stories on unemployment.]

Where are we today? We have seemingly added jobs, but it is not because hiring has increased. In February 2009 there were 4.7 million separations—that is, jobs lost—but by March 2011 this had fallen to 3.8 million. In other words, the pace of layoffs has diminished, but that is not the same thing as more hiring. The employment numbers look better than they really are because of the aggressive layoffs in the early part of this recession and the reluctance of American business to rehire workers. In fact, the apparent improvement in job numbers has been made up of one part extra hiring and two parts reduced firing.

Even during past recessions, American firms still hired large numbers of workers as part of the continual cycle of replacing employees. Of the 150 million workers or job seekers in America, about one third turn over in a typical year, leaving their old jobs to take new ones. High labor "churn" is characteristic of our economy, reflecting workers moving to better jobs and higher wages and away from declining sectors. As Stanford business professor Edward Lazear explains so clearly in the Wall Street Journal, the increase in job growth over the past two years is attributable to a decline in the number of layoffs, not from increased hiring. Typically, when the labor market creates 200,000 jobs, it has been because 5 million were hired and 4.8 million were separated, not just because there were 200,000 hires and no job losses. But when an economy has bottomed out, it has already shed much of its excess labor, as illustrated by the decline in layoffs—from approximately 2.5 million in February 2009 to 1.5 million this April. In a healthy labor market like the one that prevailed in 2006 and into 2007, American firms hired about 5.5 million workers per month. This is now down to about 4 million a month. Quite simply, businesses have been very disciplined in their hiring practices. [Read Zuckerman: America's Fading Exceptionalism.]

We are nowhere near the old normal. Throughout this fragile recovery, over 90 percent of the growth in output has come from productivity gains. But typically at this stage of the cycle, labor has already taken over from productivity as the major contributor of growth. That is why we generally saw nonfarm payroll gains exceeding 300,000 per month with relative ease. This time we have recouped only 17 percent of the job losses 23 months after the recession began, as compared to 207 percent of the jobs lost from previous recessions (with the exception of 2001). There is no comfort either in two leading indicators of employment, with no growth in the workweek or in factory overtime.


moooore at-

Why the Jobs Situation Is Worse Than It Looks - US News and World Report
 
USNews&WR said:
"Our political leadership in both Congress and the White House will surely bear the political costs of a failure to work out short- and long-term programs to fix the job shortage. The stakes are too high to play political games."

Zuckerman says the US gov't shouldn't 'play' politics while he ignores specific legislative issues and hints that somehow both parties are the equal and bad. If he were truly stepping back from playing games he'd have logically connected jobs with policy and policy with legislation and enforcement. Typical for a leftist approach though, just like the Zuck's idea that job creation is exclusively a government operation.
 
Great article, thanks for posting it. He laid out the situation pretty well, but no mention of any solutions. Maybe cuz he didn't have the space. Wonder what we're going to do when the UE benefits run out in Jan 2012? I don't see the situation improving much at all before then. In an election year who's going to say enough is enough?
 
Well folks...when 67% of consumer spending was on credit...when negative savings was the thing to do for over a decade, when 3/5th of the population have greater than 36% debt/income ratio...when all this comes to a head...
This is what happens.

This isn't a simple economic downturn. It is a looong-term, if not permanent - adjustment.
 
Mort Zuckerman got into publishing after the internet began killing the business. This is the reason I ignore him. He invariably comes across as reasonable, plausible, sensible and competent. If you look at his track record he is in the middle of a drawnout egoruptcy sort of like a non-bombastic Trump.
 
You know, I have trouble understanding why people think a debt to income ratio of more then 36% is high. I'm about as financially prudent as you can get and I make decent money, but between my mortgage, student loans, and car payment I'm running something like 60% myself. Tack on things like insurance, public service and all the other monthly bills that everyone has to pay and it's more like 85%.

Frankly, anyone that's got relatively recent student loans has one heck of a debt burden, because even getting a two year degree from a local community college is expensive these days. Get a degree like mine that requires 4.5 years to get a bachelors and you're looking at a small fortune. By my senior year I was spending over $1K per class.....
 
...between my mortgage, student loans, and car payment I'm running something like 60%...
That sounds like a decent financial order for someone under 40, and for someone over 60 it would be trouble. My take is most of the talk we've been hearing about US savings rates usually ignors demographics because the goal is America-bashing/to hell with facts.
 
expat,

Im actually a little over 40, but I got off to a slow start. Tried to make a go of it without a college education, then got a two year degree, then finally finished my bachelors off in my (very) late 30's.
I learned an important lesson that i can't seem to get through to my nieces and nephews-get your education out of the way when you're young. Not having that degree makes it a lot more likely that all your hard work will only bring you to the edge of success without pushing you over the top. It's also a pain in the butt to have to pay off student loans in your 40's. :)
 
"We now have more idle men and women than at any time since the Great Depression."

Does posting on an internet message board count as 'idle time'?
 
Well folks...when 67% of consumer spending was on credit...when negative savings was the thing to do for over a decade, when 3/5th of the population have greater than 36% debt/income ratio...when all this comes to a head...
This is what happens.

This isn't a simple economic downturn. It is a looong-term, if not permanent - adjustment.

yep and when you combine the fact that most of what we buy comes from overseas and that we are in a global economy now and must compete with labor costs around the world.

We MUST learn to live with less folks.
 
...an important lesson that i can't seem to get through to my nieces and nephews-get your education out of the way when you're young...
--made all the more difficult by the popular nonsense going around that US education is bad or not worth the trouble. In a couple years my daughter will have a bachelor's in mech. engineering where the starting entry level pay is around $60K...
 
...an important lesson that i can't seem to get through to my nieces and nephews-get your education out of the way when you're young...
--made all the more difficult by the popular nonsense going around that US education is bad or not worth the trouble. In a couple years my daughter will have a bachelor's in mech. engineering where the starting entry level pay is around $60K...

That's great and I applaude your daughter's hard work, ect.

But that does NOT describe the path that MOST Americans can take.


We cannot ALL be engineers. First and foremost because most people do not have the intelligence to become engineers.

Secondly because if we all became engineers, the slaries for them would plummet.

Finally, realistically speaking, we're not a 20 years old, and just starting out.

What does a 40 year old with a couple kids, a mortgage, and the normal (ie not excessive) debt load do when his job, the one that he studied for and worked at, do when HIS job goes offshore?

Does he become an engineer, too?

How?


The solutions that one might posit for some of us surely do not solve the problem that we are facing as a nation.

Micro-economic solutions for an invididual do NOT solve MACRO-economic problems that a nation is facing.
 
Mort Zuckerman got into publishing after the internet began killing the business. This is the reason I ignore him. He invariably comes across as reasonable, plausible, sensible and competent. If you look at his track record he is in the middle of a drawnout egoruptcy sort of like a non-bombastic Trump.

I thought Mort had had the US Snooze and World Reports going for decades...:eusa_eh:

Anyway, I used to subscribe , for years in fact, I gave it up when I read the campaign rah rah articles for the 2004 election edition , Kerry had an 18 page spread, bush- 6...... they always slanted lefty but that was to much for me.


I posted this because he makes a calm, logical, rational case, he is or was a big Obama sptter and is no bomb thrower. I have read and agreed with his past missives ( personal articles) ala Bush not doing well etc....so I see him as one of the reasonable folks, how I don't always agree with is actually a good thing.

I think he captures that mood and troubles pretty well and fairly succinctly too.
 
Economists spend a lot of time being surprised apparently. Unemployment is on the rise AGAIN. Particularly telling is that small business is not in a hiring mood. Since that is where we are told jobs will come from, there is little reason to be expecting change soon.
 
...What does a 40 year old with a couple kids, a mortgage, and the normal (ie not excessive) debt load do when his job, the one that he studied for and worked at, do when HIS job goes offshore...
He's got a lot of good choices and for every good choice I name you can come up with reasons why all is lost, so let's not play that game.

We pick the kind of society we want. America has successfully chosen to have a country where different abilities make different outcomes and at the same time we help those who suffer extraordinary pain through no fault of their own. When these two values conflict we rework the details.

These days employment is harder to find than it would be if policy were changed, so I vote for lower taxes and less spending on NPR, the arts, and global warming, and then I'll afford to hire more people.
 
Editec,

You do what I did. I didn't have the kids or wife (divorced, no kids), but going back to school at 37 on a 30 hour a week income wasn't exactly easy. First off, I didn't bother trying the standard classroom routine- I went to the University of Phoenix through the online program. I was able to set my own schedule, and aside from having assignments and such due on certain days of the week it didn't matter if I logged into class at noon or at 3am. Yeah, it was tough as heck at times, and finances were a major pain in the rear, but 2 months after i finished my degree my income almost doubled. Im still not on easy street (owe too much in student loans for that), but I'm not too worried about being able to meet each months bills anymore either. Instead i worry about how long it's going to take me to build up enough money to fix up my house. :)

Editec,

Whether a college education is worth the cost is totally dependent on where you're going and what you're majoring in. I spent right about 40K for a bachelors that landed me a job starting at 40k/yr, which isn't a bad cost vs benefit ratio in my book. However, what about the people that spent the same amount I did to get liberal arts degrees that won't land them a good starting job? Is it worth it to spend that kind of money to land a position with starting pay of maybe $25-30K/year?

I myself hold one "worthless" degree. I picked up an associates in veterinary sciences in my late 20's, and worked as a veterinary surgical technician for a couple of years. Problem was that i couldn't count on regular hours, and I soon found that I could make more on my part time job loading trucks then i could at my "career". I got off relatively light on that one-Only cost me about $8k, and it did allow me to cut a full year worth of general ed classes off the requirements from my bachelors in accounting.
 
One thing I do not understand ,Is the unemployment numbers seem to not reflect the truth. The numbers of filed for unemployment do not reflict those who's unemployment run out . What about those people,are they counted ,I think not.
 
One thing I do not understand ,Is the unemployment numbers seem to not reflect the truth. The numbers of filed for unemployment do not reflict those who's unemployment run out . What about those people,are they counted ,I think not.

Yes, they are counted. The Unemployment Rate has never been based on Unemployment Insurance Benefits. It's not even asked in the survey.

I find it odd you didn't mention all the unemployed who were never eligible or never received benefits, including those who never had a job. They're included too. If you're not working but trying to get a job, you're unemployed.
 
Last edited:
One thing I do not understand ,Is the unemployment numbers seem to not reflect the truth. The numbers of filed for unemployment do not...
At the same time most don't understand unemployment numbers they also hold strong opinions about them and refuse to look up the answers or listen to those that have. Opinions are so much easier than getting info. The reason finding things out is hard isn't secrecy or withheld info, it's too much info --information overload. Here's the BLS data site, and here's where they explain their data, and here's a FAQ on employment stats.

The fact there're so many sources is why I go for simplicity and look at how many people are working. Example --when Obama was elected there were 7 million more people working than there are today. The fact that so many people blame Bush for job losses is once again a case of opinion holding being easier and facing facts.
 

Forum List

Back
Top