Article 43

 

Monday, September 10, 2018

Fake Recovery

image labor force participation september 2018

See that chart above?  It’s not a pretty picture.

It’s the CIVILIAN LABOR FORCE PARTICIPATION RATE that shows in one easy-to-understand graph the PERCENTAGE OF AMERICAN adults that are working.

Remember the JOBLESS RECOVERY they pushed on us five years ago? What the heck is THAT supposed to be?

Today we may as well call it a fake recovery, because there still is no recovery, yet it’s all over the news that the economy has NEVER BEEN BETTER.

It’s more of the SAME FICTION I’ve been reading and reporting about for years - PROPAGANDA AMERICAN STYLE.

Check out some of the headlines.

PRESIDENT TRUMP:

“Great financial numbers being announced on an almost daily basis. Economy has never been better, jobs at best point in history.”

U.S. DEPARTMENT OF LABOR:

“The August jobs report shows continued, strong job growth with 201,000 jobs created and an unemployment rate holding at 3.9%.  More than 4 million jobs have been created since November 2016.  Since 1970, the unemployment rate has registered below 4% just nine times; four of those months have been recorded during 2018.

“It is remarkable to see steady positive news regarding job growth month after month.”

REUTERS:

The number of Americans filing new claims for unemployment aid fell to near a 49-year low last week and private payrolls rose steadily in August, pointing to sustained labor market strength that should continue to underpin economic growth.

WALL STREET JOURNAL:

Now, recruiters say, the tightest job market in decades has left employers looking to tamp down hiring costs with three options: Offer more money upfront, LOWER THEIR STANDARDS or retrain current staff in coding, procurement or other necessary skills.

Let’s look at some more charts BEFORE WE BELIEVE the DOL and Reuters news reports.

LONG-TERM UNEMPLOYMENT is still over 20% of the total unemployed - that’s almost one in four unemployed that’s jobless over 27 weeks.  (Soon after that they STOP LOOKING, AREN’T COUNTED as unemployed anymore, and move into the NOT IN THE LABOR FORCE category)

image: BLS table a-12 September 2018

The LONG-TERM UNEMPLOYMENT rate is easy to calculate because the BLS breaks down the statistics each month in the EMPLOYMENT SITUATION SUMMARY. The number of people who have been unemployed for 27 weeks or more is in TABLE A-12. It also calculates the percentage they make up of the total unemployed. This table gives you the data for the previous three months, seasonally adjusted. It also allows you to compare the last two months and year-over-year, not seasonally adjusted.
- Failure, March 15, 2018

How many are out of work (and counted as not in the labor force) that want a job?

More than 20 years ago:

image: bls chart people that want full time job

IF JOBS WERE SO PLENTIFUL - long-term unemployment wouldn’t even be a vocabulary word, never mind over 20%, and employers would be banging on our doors begging us to work for them.

We need over 200k new jobs per month to keep up with POPULATION GROWTH. And DECENT jobs to be reasonably happy.

image: gig economy

I didn’t even touch on the GIG ECONOMY that’s turning us all into SERFS - on track to be near HALF OUR WORKFORCE in a few years.

As usual - the complete story isn’t what THE NEWS is telling us.

image: no longer counted as unemployed

More Jobs Fictions

By Paul Craig Roberts
September 7, 2018

According to today’s payroll jobs report from the Bureau of Labor Statistics, the economy created 200,000 new jobs in August. These jobs, assuming that they exist, are reported to be in low paid domestic service jobs such as transporting and selling goods, ambulatory health care services, and waiting tables and mixing drinks. There are none in manufacturing or in the “high tech” clean fingernail jobs that neoliberal economists promised the American work force in exchange for letting the industrial and manufacturing jobs go to Asia.

The great mystery is how these jobs can possibly have been created when the Bureau of Labor Statistics HOUSEHOLD DATA (TABLE A) reports that the civilian labor force declined by 469,000 in August from the level in the previous month (July); that employment declined by 423,000 in August from the previous month; and that 692,000 Americans dropped out of the labor force in August. Year over year (August 2017-August 2018) 1,531,000 Americans have left the labor force. This is inconsistent with a booming economy at full employment.

It is not explained how during August the Household Survey found unemployment to rise by 423,000 and the work force to shrink by 692,000 for a total of 1,115,000 missing working people, but the economy created 200,000 new payroll jobs.

According to the financial presstitutes, we have a booming economy and labor shortages stemming from a 3.9% unemployment rate, which if it were real would probably be the lowest in my lifetime. Economists are puzzled why there is no upward pressure on wages when there are not enough workers to go around. All of this mystery is due to the fact that the unemployment rate does NOT COUNT workers who CANNOT FIND JOBS and have dropped out of the work force. If an unemployed person has not looked for a job in the past four weeks, the unemployed person is NOT COUNTED as unemployed.

The EMPLOYMENT SITUATION SUMMARY states that there are 4.4 million workers who are involuntary part-time workers because they cannot find full time jobs. So we have a booming economy in which there are more workers than full time jobs!

The Employment Situation Summary also says that there are 1.4 million workers who are not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

The financial presstitutes are not doing their job. All the financial presstitutes do is to print the headline on the press release that is handed to them - 200,000 new jobs in August.

Consequently, considering all the contradictions in the BLS data and the inaccurate measure of unemployment, we really have no idea of the STATE OF THE ECONOMY.

SOURCE

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Labor has lost much in past four decades: Fed threatens recent gains

By Mark Weisbrot
Tribune News Service
September 8, 2018

The vast majority of Americans who need to work for a living still have a long way to go before they recover what they have lost over the past four decades.

The real inflation-adjusted median wage is only about 10 percent above what it was in 1979.

As economist Dean Baker has noted, we can also see part of this transformation of the United States into a more shamefully unequal society if we look at the distribution of national income between profits and labor.

If not for this redistribution from wages to profits from 2000-2016, the average worker today would have an additional $4,000 per year in annual income.

This historic redistribution of income and wealth was the result of choices made by our political leaders and decision-makers. Among them:

They chose to maintain higher levels of unemployment and interest rates than necessary.

They subjected workers to increasingly harsh international competition while protecting highly paid professionals and CEOs.

They increased protectionism for patent holders, including pharmaceutical companies who charge tens of thousands of dollars for cancer drugs that would sell for a small fraction of these prices in competitive markets.

They changed labor law so that unions bargaining power would be reduced to levels not seen for most of the 20th century.

The Trump administration claims that workers’ long night is over, as evidenced by the current headline unemployment rate of 3.9 percent; and that it is responsible for the historically low unemployment.

But this reduction in unemployment is the continuation of an economic recovery that began under the Obama administration, and is overwhelming the result of policy decisions by the Federal Reserve, not the president or Congress.

Beginning in December 2008, the Fed kept short-term interest rates near zero for seven years and also created trillions of dollars during much of this period to push down long-term rates.

The Fed is the main determinant of the rate of unemployment; but what the Fed giveth, the Fed taketh way. The Fed began to reverse these policies in 2015; it has raised rates twice this year and is expected to raise them two more times before the year is over.

The Fed has had no valid reason for these interest rate hikes. The Fed targets an inflation rate of 2 percent, but its preferred measure of inflation is still at 1.9 percent. And inflation has been below target for almost all of the past 9 years.

Most Americans dont know this, but when the Fed raises interest rates it is intentionally slowing the rate of job creation, in order make unemployment higher than it would otherwise be; and thereby putting downward pressure on wages.

Since World War II, the Fed has caused all of the recessions in the US except for the last two, which were caused by the bursting of the stock market bubble in 2000 and then the housing bubble in 2007.

Most immediately, the Fed threatens to reverse much of the gains in employment that we have made in the current economic expansion, even though real wages did not even grow over the past year.

For the longer term, Trump and his congressional allies have moved to continue the march towards greater inequality: for example with the tax give-away to corporations and the rich and Trump’s selection of anti-labor and right-wing judges for the federal courts, increasing inequality in education, and other policies.

Reversing labors losses over the past four decades will therefore require blocking the Fed from increasing unemployment - or worse, tipping the economy into recession and then undoing some of the structural changes that have created such obscene levels of inequality.

SOURCE

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Trump’s Fake Boom: Growing Despair Amidst Insecure Economic Recovery

By David Rosen
Counterpunch
August 31, 2018

It’s now almost a decade since the last fiscal crisis, launching what was dubbed the “Great Recession.” It wreaked havoc on the U.S. banking system and the housing market, leaving millions of Americans is desperate free-fall.  While many conventional economic indicators suggest that the economy has rebounded, a significant portion of the American public feel stuck, their futures looking bleak.

On August 6th, Pres. Trump tweeted, “Great financial numbers being announced on an almost daily basis. Economy has never been better, jobs at best point in history.” So, with such good news, why do an increasing number of Americans feel un-well?

Two recent studies point to the deepening despair shared by many Americans and unacknowledged by Trump and the mainstream media. The Federal Reserve study, REPORT IN THE ECONOMIC WELL_BEING OF U.S. HOUSEHOLDS IN 2017 [LOCAL COPY] and the GALLUP-SHARECARE WELL-BEING INDEX - detail this despair in complementary ways.  Taken together, they paint a disturbing picture of the suffering being endured by Americans, especially the nations most vulnerable.

While Trump seeks to dismiss all challenges to his empty bluster as “fake news,” there is a growing perception among Americans that the once proudly proclaimed “American Dream is over.” This perception is shared by critics of capitalism and some mainstream pundits as well as (incoherently) by those who back Trump and his call to “make America great again” - with its emphasis on “again,” a wish for what was once but nevermore.

The Federal Reserve report champions the slow economic recovery that’s marked the decade following the Great Recession. It notes that “fewer people are finding it difficult to get by, or just getting by, then was the case five years ago.  This decline in financial hardship is consistent with the decline in the national unemployment rate over this period.”

However, it warns - two in five Americans don’t have enough savings to cover a $400 emergency expense, and one in four don’t feel they are “at least doing OK financially.” It adds, more than one in five said they weren’t able to pay the current months bills in full, and more than one in four said they skipped necessary medical care last year because they couldn’t afford it.  These are signs of the decline in well-being.

The Gallup-Sharecare study was initiated in 2008 to gauge the overall well-being of adult Americans.  It’s a comprehensive poll involving interviews with more than 160,000 adults from all 50 states.  Its most recent 2017 survey found that between 2016 and 2017, the overall well-being score dropped 0.6 points, to 61.5 from 62.1.  As Gallup declares, “this decline is both statistically significant and meaningfully large.”

The Gallup-Sharecare study identifies a range of factors that make up its well-being metrics, including: experiencing significant worry, little interest or pleasure in doing things, clinical diagnoses of depression, daily physical pain, a decline in having someone who encourages you to be healthy and dissatisfaction with ones standard of living (compared to peers). Other symptoms of decline in well-being include unmanageable debt as well as increased obesity, drug addiction (e.g., opioids) and alcoholism.

Both the Fed and Gallup-Sharecare studies identify those suffering the greatest loss of well-being. The Gallup-Sharecare study notes: “Women have had a substantial 1.1-point drop in their Well-Being Index score, while the score for men is unchanged.”

The Fed adds: “Across the four major racial and ethnic groups, well-being has dropped the most among blacks and Hispanics, although it has also come down to a lesser degree among whites and Asians.” And it warns: “Americans living in lower-income households saw a significant drop in well-being, while their higher-income counterparts saw a smaller decrease, no change or a slight increase.”

The Fed furthers this perception, arguing, “The overall positive trend in self-reported well-being masks some notable differences across groups.” Adding, “More education is associated with greater economic well-being; however, at each education level, blacks and Hispanics are worse off than whites.”

Most revealing, the Fed finds that whites with only a high school degree are more likely to report doing okay financially than blacks or Hispanics with some college education or an associate degree. It concludes, “this pattern, combined with the fact that blacks and Hispanics typically have completed less education, results in substantially lower overall economic well-being for black and Hispanic adults.”

Gallup-Sharecare report makes sadly clear that many of those experiencing the decline in their sense of well-being are supporters of Trump and the Republicans.  Some 21 states witnessed significant declines in their relative well-being, including many Ӕred states strongly supportive of Trump.  Among those suffering the largest declines in the ostensible well-being are Arkansas, Indiana, Louisiana, Mississippi, Nevada, Ohio, Oklahoma, Rhode Island and West Virginia; West Virginia had the lowest level of well-being.

Not asked by either the Fed or Gallup-Sharecare studies was what are the consequences of the loss of well-being?  In particular, whether the decline in well-being breads rage, a deeply-personal sense of revenge toward those who ostensibly ended their American Dream?

SOURCE

Posted by Elvis on 09/10/18 •
Section Dying America • Section Workplace
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