Why the Jobs Outlook Is Worse Than It Looks

Mortimer Zuckerman US News June 24, 2011

Home > Opinion > Why the Jobs Situation Is Worse Than It Looks

By Mortimer B. Zuckerman

Posted: June 20, 2011

The Great Recession has now earned the dubious right of being compared to the Great Depression. In the face of the most stimulative fiscal and monetary policies in our history, we have experienced the loss of over 7 million jobs, wiping out every job gained since the year 2000. From the moment the Obama administration came into office, there have been no net increases in full-time jobs, only in part-time jobs. This is contrary to all previous recessions. Employers are not recalling the workers they laid off from full-time employment.

The real job losses are greater than the estimate of 7.5 million. They are closer to 10.5 million, as 3 million people have stopped looking for work. Equally troublesome is the lower labor participation rate; some 5 million jobs have vanished from manufacturing, long America's greatest strength. Just think: Total payrolls today amount to 131 million, but this figure is lower than it was at the beginning of the year 2000, even though our population has grown by nearly 30 million. [Check out a roundup of political cartoons on the economy.]

The most recent statistics are unsettling and dismaying, despite the increase of 54,000 jobs in the May numbers. Nonagricultural full-time employment actually fell by 142,000, on top of the 291,000 decline the preceding month. Half of the new jobs created are in temporary help agencies, as firms resist hiring full-time workers.

Today, over 14 million people are unemployed. We now have more idle men and women than at any time since the Great Depression. Nearly seven people in the labor pool compete for every job opening. Hiring announcements have plunged to 10,248 in May, down from 59,648 in April. Hiring is now 17 percent lower than the lowest level in the 2001-02 downturn. One fifth of all men of prime working age are not getting up and going to work. Equally disturbing is that the number of people unemployed for six months or longer grew 361,000 to 6.2 million, increasing their share of the unemployed to 45.1 percent. We face the specter that long-term unemployment is becoming structural and not just cyclical, raising the risk that the jobless will lose their skills and become permanently unemployable. [See a slide show of the 10 best cities to find a job.]

Don't pay too much attention to the headline unemployment rate of 9.1 percent. It is scary enough, but it is a gloss on the reality. These numbers do not include the millions who have stopped looking for a job or who are working part time but would work full time if a position were available. And they count only those people who have actively applied for a job within the last four weeks.

Include those others and the real number is a nasty 16 percent. The 16 percent includes 8.5 million part-timers who want to work full time (which is double the historical norm) and those who have applied for a job within the last six months, including many of the long-term unemployed. And this 16 percent does not take into account the discouraged workers who have left the labor force. The fact is that the longer duration of six months is the more relevant testing period since the mean duration of unemployment is now 39.7 weeks, an increase from 37.1 weeks in February. [See a slide show of the 10 cities with highest real income.]

The inescapable bottom line is an unprecedented slack in the U.S. labor market. Labor's share of national income has fallen to the lowest level in modern history, down to 57.5 percent in the first quarter as compared to 59.8 percent when the so-called recovery began. This reflects not only the 7 million fewer workers but the fact that wages for part-time workers now average $19,000â??less than half the median income.

Just to illustrate how insecure the labor movement is, there is nobody on strike in the United States today, according to David Rosenberg of wealth management firm Gluskin Sheff. Back in the 1970s, it was common in any given month to see as many as 30,000 workers on the picket line, and there were typically 300 work stoppages at any given time. Last year there were a grand total of 11. There are other indirect consequences. The number of people who have applied for permanent disability benefits has soared. Ten years ago, 5 million people were collecting federal disability payments; now 8 million are on the rolls, at a cost to taxpayers of approximately $120 billion a year. The states today owe the federal insurance fund an astonishing $90 billion to cover unemployment benefits. [See cartoons about the deficit and debt.]

Can we really blame one president, or one political party for this situation? Wouldn't it be nice if the world really was black and white, good and evil, Republicans and Democrats? That's the kind of world politicians and marketers want us to believe in. But aren't we smarter than that?

Preserving freedom, democracy etc. takes intelligence, maturity, honesty. Insulting Obama or Bush or trotting out ideological panaceas just goes to show how unintelligent, immature, and dishonest the republicrat politicians and the marketers have made many of us. This crisis has been decades in the making, there's plenty of blame to go around, and there aren't any good options. Keynes won't revert it, but neither will Friedman. All we can do is try to learn from it and make the most of a bad situation. That means looking at it with an open mind, not claiming it proves some point or other.

Patrick of MA @ Jun 23, 2011 23:00:47 PM

Most of the jobs left this country long before Obama came on the political scene, so I suggest you conservative business types take a hard look in the mirror and also look at the labor policies of those you supported and elected in the past 30 years. Jobs started leaving this country when big business wanted cheap labor in foreign countries. (read shareholders not happy with profit and are greedy) In the 1980's, your conservative idol Ronnie Reagan and your own ilk put those cheap labor policies into place where they continued under

Bush I, Bush II and also Clinton. Conservatives also wanted cheap labor in California and other border states so down came border enforcement and Reagan gave amnesty to existing illegal aliens. All of this so the masses could wear a $3.99 shirt made in China and purchased at Wal-Mart and the shareholders and CEO's could drive luxury cars made in Germany. Do you think Obama can just

snap his fingers and thus open up rusted out, gutted, and empty factories? By,

the way are you personally driving American and are your in a wad white tighties made in America? Or are you just whining and expecting miracles?

Linda in KC of MO @ Jun 23, 2011 22:42:19 PM

Job creation is not government jobs. They cost government money and paid out of our taxes. We need jobs in private sector creating revenue for government. Beginning the unholy circle of raising taxes to try and pay for government jobs is losing battle. Problem is history has proven raising tax rate on rich does not increase government revenue. Democrats SPEND OUT OF RECESSION failed as it had to. Now Democrats want to build dams & roads. We did "shovel ready"? plan. For what, so barry could say he know not what it meant ? Laugh.

Getting rid of barry passed laws that had mostly bad polls is esential. Doing things like Ryan plan that demands strength from Republicans to do the right thing. Democrats have not got the balls to make the hard choices. Why NO 2011 budget by Democrat controlled Congress due Oct. 1, 2010. barry stupid 2011 budget would add $$$ 9.5 trillion to our debt in the long run according to CBO report.

_____

Right the wrongs that hold back business expansion, is how jobs are created:

Difference between high taxes and low taxes:

"Texas jobs creation machine vs. California"

"In 2008, 70 percent of all the jobs in the country were created in Texas. In 2009, all of America's top five job-creating cities were in Texas."

"More recently, "Texas created 129,000 new jobs in the last year -- over one-half of all the new jobs in the U.S."

"Texas is home to 64 Fortune 500 companies -- more than any other state in the union. (California has 51 and New York has 56.) For five years in a row, Texas has topped Chief Executive magazine's poll of the best state to do business."

"Meanwhile, California is ranked dead last in the Chief Executive's survey. California state treasurer Bill Lockyer even went so far as to pen a Dec. 20 op-ed in the Los Angeles Times denying "the claim that we have a hostile business climate."

"He goes on to explain the tax differential which also heavily favors low tax Texas. My regular readers are familiar with these statistics, but there is cumulative data that support to the superiority of the Texas model."

http://prairiepundit.blogspot.com/2011/02/texas-jobs-creation-machine-vs.html

Bill Hedges of MO @ Jun 23, 2011 20:14:08 PM

Click cartoon to view larger image

Get information on a member of Congress, a congressional committee, or see the industries influencing Congress.

Enter Name Select State Any AL AK AS AZ AR CA CO CT DE DC FL GA GU HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA PR RI SC SD TN TX UT VT VI VA WA WV WI WY Select Chamber House & Senate Senate House if (USN.Serialize) { var theform = $$('form.congress_search')[0]; Event.observe(theform, 'submit', function(event){ Event.stop(event); var rawparams = Form.serialize(theform, true), params = {}; for (var k in rawparams){ var v = rawparams[k]; if (v == '' || v.toLowerCase() == 'name' || v == 'all' || v == 'Any') continue; k = k.split('.'); k = k[k.length-1].split(':')[0]; if (k != 'y' && k != 'x' && k != 'search') params[k] = v; } var params = USN.Serialize.encode(params); window.location = theform.action + '/' + params; }); }

Two Takes On... Are Recall Elections a Good Idea?

Yes, recall elections enhance democracy, says Mike Tate. No, they cause chaos, says Tom Cochran.

Photo Gallery The Big Picture

See the best sights in and around Washington, D.C.

dblclick('rectangleB'); Thomas Jefferson Street Blog GOP 2012 Field Is Incomplete Peter Roff

Before Palin, Perry, and Giuliani decide, all the polling and debating is a lot like baseball during spring training: It doesn't matter much.

Media Matters Attacks, Does Not Educate Doug Heye

Media Matters for America receives tax-deductible donations to mount a campaign against Fox News.

Perry's Good--But Not Sure--Shot at 2012 Peter Roff

The Texas governor has a lot to answer for as he begins to face the national electorate.

Supreme Court Upholds EPA's Authority Peter Roff

But efforts in Congress to stop the EPA from killing jobs mean the debate is not over yet.

Meet the GOP House Freshmen Class Jamie Stiehm

Financial markets and newspapers worldwide are getting fitful and skittish over whether the House of Representatives will do the right thing on debt.

GOP's Obama Impersonator a Poor Choice Doug Heye

Republican Leadership Conference made a poor choice in hiring an Obama impersonator who told "black jokes".

The Media Fears Sarah Palin Peter Roff

There has been a concerted effort to turn potential 2012 candidate Sarah Palin into a national joke.

Weiner Press Conference Resignation a Mistake Mary Kate Cary

Why Anthony Weiner thought he had to resign in person, to a horde of New York reporters and elderly spectators, is beyond me.

Michelle Obama » Photo Gallery: The First Lady Congress Tracker » Which Industry Has the Most Influence?

Campaign contributions are only part of the picture, but see which industries have the deepest pockets.

Political Cartoons » Gallery: The Latest Images From Illustrators The Energy & Climate Bill » Reality Check

Take a look at nine types of energy that may shape the environmental policies of the U.S. in the near future.

2012 Election » 10 Reasons Palin Would Make a Good President

dblclick('leaderboardB'); News Opinion Washington Whispers Congress Tracker White House Tracker RSS Employment Opportunities Contact Us Site Map Privacy Policy Masthead Advertise With Us Subscribe

Use of this Web site constitutes acceptance of our Terms and Conditions of Use and Privacy Policy.

USN.load('Analytics'); USN.Form.zeroInputField('nav-search'); USN.Form.zeroInputField('newsletters'); DM_tag(); dblclick('stitial'); dblclick('anchor'); USN.load('Widget'); USN.load('Share'); USN.load('Comment'); var dc_AdLinkColor = '#005497' ; var dc_PublisherID = 74751 ; Powered by the Parse.ly Publisher Platform (P3). (function(s, p, d) { var h=d.location.protocol, i=p+"-"+s, e=d.getElementById(i), r=d.getElementById(p+"-root"); if (e) return; e = d.createElement(s); e.id = i; e.async = true; e.src = h+"//static.parsely.com/p.js"; r.appendChild(e); })("script", "parsely", document);