Last week, I took an in-depth look at the employment situation (see here, here, here and here). After looking at the data, there are my thoughts
Despite being responsible for a fairly large percentage of GDP growth, manufacturing jobs just aren't growing by a large amount. There are a lot of reasons for this, but I believe the biggest one is the increased use of automation in the manufacturing process. It just doesn't take that many people to make things anymore -- a trend which is probably going to continue for the foreseeable future.
I thought it was interesting that financial jobs are still declining. This indicates there was a glut of jobs in this area at the top of the last expansion.
The relative weakness in retail jobs adds credence to the "lack of demand" arguments regarding the economy as a whole.
Education and health care jobs were more or less immune to the recession -- although, in fairness, I think the real issue here is the continued growth in health care jobs rather than education jobs.
The continual, slow bleed of government jobs is a huge problem, and one that cannot be over-stated. As I've stated many times, I believe this continual, slow-bleed is responsible for initial unemployment claims hovering around the 400,000 mark for most of this year.
Professional job growth has actually been pretty fair.
However, at the heart of the issue is slow growth in relation to total jobs lost. This is the biggest problem we face. While the worst of the job losses is over, the lack of meaningful job gains is what is really driving people's concerns. And while the economy has created over 2 million jobs during the expansion, this rate of creation has not made a dent in the unemployment rate. That is the real issue we face.
Links for 05-22-2013
8 minutes ago
6 comments:
I think this chart has a lot to do with most people's distress: Higher cost of living, More productive work, and No meaningful wage increases for 30 years. Not to mention that most people's home equity and retirement plans have been ruined. Throw in a lack of accountability for those who caused their distress, and is it any wonder there are now middle-class protesters in the streets of cities around the country?
They say it takes time for History to make a judgement about a presidency. Isn't it time we decided that the Reagan Presidency was a failure for 99% of America?
At the peak of the dot com bubble there were 112 million private payrolls. In 2007 before the financial crisis there were 116 million private payrolls. I forget what it dropped down to but we are back up to 110 million private payrolls. Without a bubble I don't see why private payrolls will increase. We had the recovery and the economy as it stands with its structural and policy problems is at full employment; that is, all the people employed that it needs.
I agree that automation has eliminated a lot of manufacturing and farming jobs that would have employed many more people at the start of the 20th century. What now? If 60% or 80% of the population can provide all the food and housing and toys that those who can afford those things need, what do we do with the other 20-40% whose work is not needed?
Maybe part of the manufacturing problem is that easy simple tasks are now done in Asia for a dollar an hour instead of in the USA for twenty. A secular trend.
The only thing wrong with "the continual, slow bleed of government jobs" is the "slow" part. Let's speed that sucker up!
"I agree that automation has eliminated a lot of manufacturing and farming jobs that would have employed many more people at the start of the 20th century. What now? If 60% or 80% of the population can provide all the food and housing and toys that those who can afford those things need, what do we do with the other 20-40% whose work is not needed?"
I think you've come to the wrong conclusion. The economy can support more employment, but as has been documented here on several occasions, that employment comes at much higher levels of education.
A better way to put it would be: we don't need any more manufacturers and farmers than we have today, and going forward, we will need less and less. We need engineers. We need scientists, mathmeticians, economists. We need a highly educated workforce (in industries besides law and finance), and we don't have an education system or an economy designed to produce them. So we're not getting them, and everyone is made to suffer for it.
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