Saturday, July 6, 2013

Behind the Jobless Numbers (July 2013)

UPDATED: Yesterday in a statement acting Labor Secretary Seth D. Harris said we've had "7.2 million private sector jobs over the last 40 consecutive months of growth" (That would be from March 2011 to June 2013).

According to the Bureau of Labor Statistics (BLS) 11.8 million Americans are currently unemployed (making the unemployment rate 7.6%) -- and of those counted as unemployed, 4.3 million were long-term unemployed (they were jobless for longer than 6 months) --- meaning that, according to the BLS, the great majority of the unemployed (7.5 million) had lost their jobs only recently...within the past 6 months. But how could that be?

The BLS reported that 116 million Americans have jobs, but of those, 8.2 million are part-time workers. And of those 116 million who have jobs, 7 million are also multiple job holders.

According to the new jobs report, U.S. employers added 195,000 jobs in June. Leisure & Hospitality had especially strong job growth, but their average hours worked was only 26 per week --- and part-time jobs are exempt from the health care mandate.

The BLS also reported that 52,000 food service jobs were added in June, and pays an average of $18,000 per year. The most recent data from the Social Security Administration shows that 50% of all wage earners earned a net of $26,965.43 a year OR LESS.

Congressional attention to jobs reached its peak in 2011, when the word "jobs" was mentioned, on average, more than 2,000 times a month (according to the Sunlight Foundation’s Capitol Words tool). By 2012, the average mentions of “jobs” per month had slowed to 925. By May of this year, the pace was under 500. As House Speaker John Boehner once used to ask, "Where are the jobs?"

Robert Oak at the Economic Populist reports that the U-6 alternative unemployment rate still leaves out many people wanting a job who are not considered part of the labor force. The U-6 increased 0.5 percentage points to 14.3%. And the long term unemployed are now 36.7% of the total unemployed. (See Robert's post from last year: Long Term Unemployment is the Crisis of Our Time)

Robert goes on to note that "one of our favorite statistics from the CPS survey is how many people who are considered not in the labor force, but want a job now. It is a direct survey question from the CPS. The survey asks people who are not being counted in the unemployment statistics and official unemployment rate if they want a job. The number who answer yes currently stands at 6,580,000. A year ago [2012] this figure was 6,556,000. In other words, not much has changed and there are an astounding number of people not counted who report they actually want a job and roughly 2.2 million higher than before the recession."

In 2010 Mike "Mish" Shedlock wrote on his economic blog: "At least 6,927,372 have exhausted all of their unemployment benefits." These people were known at the 99ers because many of them could collect up to 99 weeks in unemployment insurance benefits. I also made a mention of this on my blog in 2012: 8 Million Unemployed Not Counted by Labor Dept: "To date they have exhausted all their unemployment benefits without ever finding work again. Also, they are no longer being counted in either the media's reported U-3 unemployment rate or in the Bureau of Labor Statistics' reported U-6 rate -- as either 'marginally attached' or as 'discouraged workers'" --- those who left the workforce.

*Also see my recent post: Congressional Hearing: Long-term Unemployment for Older Workers)

How many NET new jobs were since created? As of last May, the Department of Labor reported that 6.8 million net new jobs were created over the previous 3 years (2010, 2011, 2012). More recently, yesterday in a statement acting Labor Secretary Seth D. Harris said, "7.2 million private sector jobs over the last 40 consecutive months of growth" --- that's from March 2011 to June 2013. According to a recent Bureau of Labor Statistics' JOLT report, all the hiring done between April 2012 and April 2013 only yielded a net employment gain of 1.8 million new jobs (and most other hiring was for TEMP jobs.

As of 2011, according to the Bureau of Labor Statistics, out of the 13.7 million Americans who were then unemployed, there were 8.1 million who were "job losers" --- workers who either lost their jobs or completed temporary jobs without ever being rehired again. According to the Center on Budget and Policy Priorities, 8.7 million jobs were already lost between the start of the recession in December of 2007 and June of 2009.

So with about 8 million jobs (give or take) lost and about another 8 million jobs (give or take) gained since the unemployment rate peaked in October 2009, why aren't be back to full unemployment today?

Because according to the National Center for Educational Statistics ( ) America's schools and colleges have a record number of students attending school as the population has continued to increase and enrollment rates have also continued to exponentially rise --- there were 3.4 million high school graduates this year alone --- but there weren't 3.4 million net jobs created for them. Since the unemployment rate peaked in October 2009 (at 3 million graduates a year) over the past 4 years alone, that equals about 12 million high school graduates first entering the work force (About what the U-3 unemployment rate is today).

In a nut shell: So in round numbers, 8 million lost jobs during the recession and exhausted all their unemployment after 99 weeks (over two years ago) and since then, they ("the very long-term unemployed") were no longer counted. About 8 million kids graduated from high school since that time and most today are either part-time workers or unemployed. Because most jobs were only temporary, 8 million lost their jobs within the past 6 months and are now being counted among the 11.8 million jobless, and the rest were unemployed longer that 6 months --- and are still counted, but will no longer be counted after they've been unemployed longer than 12 months (the BLS will say they "left the labor force") --- then they will join the other uncounted 8 million jobless who aren't included in ANY government statistics (the 99ers). TOTAL CURRENTLY UNEMPLOYED: At least 20 million (not 11.8 million) with a real unemployment rate closer to 14% (not 7.6%). And if you included the "marginally attached", the U-6 rate would be nearer to 23%.

Census reports:
  316,198,616 - July 3013
  308,745,538 - April 2010
The population grew by 7.5 million over the past three years. (2010, 2011, 2012)
Bureau of Labor Statistics reports High school graduates in 2012 was 3.2 million X 3 years = 9.6 million (2010, 2011, 2012)
Social Security disability awards: 3 million (2010, 2011, 2012) plus 3.3 million new retirees (June 2010 to June 2013) Total: 6.3 million Department of Labor reports 6.8 million net new jobs were created over the previous 3 years 4 months (2010, 2011, 2012)
Bureau of Justice Statistics reports during 2011, the total U.S. prison population declined for the second consecutive year to under 1.6 million Centers for Disease Control and Prevention reports for 2010 the number of deaths: 2.5 million and number of births: 4 million

Do you see the table just above? Job creation has not been keeping up with natural population growth. The long-term unemployed aren't being counted as part of the labor forces as new people are first entering the labor force (that's why the jobless numbers have been so consistent for so long (See my post: The Conveyor Belt Theory).

Now add in the guest worker visas, cut hours, the escalation of TEMP jobs, the continued offshoring of more jobs and further downsizing...and we have a national unemployment crisis not seen since the Great Depression. But because the DOW JONES is breaking all-time records, everybody thinks the economy is improving. But it's not for most people, and especially for the unemployed, TEMP workers and part-time workers.

What the New York Times has recently been saying about part-time workers...

Regarding a New York Times article by Annie Lowrey titled A Surge in Part-Time Workers, I needed to respond with a comment regarding her statement about part-rime employees qualifying for ObamaCare:

Rather than saying, "It also makes part-time jobs more attractive for workers", it might be more accurate to say "it makes someone's part-time job more survival" -- because most people would rather work full-time (for the cash) and then estimate whether or not they can afford any particular healthcare plan based on their earnings (if their employer doesn't already offer it through a union negotiated contract or if it is offered as a company fringe benefit).

The Bureau of Labor Statistics' last JOLT report indicated that many people are being hired as TEMP workers...forcing people to job hop. So employers aren't necessary NOT hiring just because of ObamaCare, because for the last 5 years this has been the pattern --- long before ObamaCare was ever to be implemented. Employers are just doing more with less, to primarily save on payroll expenses.

Then I later added another comment referencing another New York Time article by their editorial board, titled Letting Employers Off the Hook, for Now - "The majority of the millions of companies in the United States have fewer than 50 employees; they are not required to offer health insurance but many are eligible for federal subsidies if they wish to do so. Most companies with more than 50 employees already provide affordable insurance." So what's the REAL reason why employers aren't hiring? (And why mostly as TEMP workers or part-time?)

In another New York Times article by Catherine Rampell titled Yes, the Sequester Is Affecting the Job Market, she says, "As you can see, in the last few months, the defense-sensitive industries have been shedding jobs, while the rest of the country’s employers have been adding jobs over all."

So I also felt compelled to leave a comment here as well: "The defense industry offshores a lot of their work, and many times, gets bogus parts in return. Defense spending is still high. For FY 2014, the Federal government anticipates it will spend $618 billion for defense (not including our nukes, which is budgeted under the Department of Energy)."

Almost two years ago Fed Chairman Ben Bernanke had said high unemployment poses a "national crisis". Guess what? It still does. But lately Fox News, CNN and MSNBC has been more focused on the George Zimmerman trial after losing ratings to HLN when they covered the Jodi Aries trial. I suppose video footage of people being evicted from their homes doesn't make for dramatic and sensational news stories.

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