The Hiring dips dramatically. You can also read this version of the bad news. It’s all over the net.
Employers added 32,000 workers to their payrolls in July, seasonally adjusted, the smallest monthly gain since December and the fourth-consecutive month in which the pace of job growth has slowed, the Labor Department reported. Analysts had projected the July numbers to be in the range of 215,000 to 240,000.
You’ll note that Bush promoted the fact that the unemployment rate went from 5.6 to 5.5 -percent. It couldn’t get much better than that. The problem, of course is that the number is bogus. Here is one explanation for the calculation
An unemployment rate in the double digits usually indicates a depressed or stagnant economy. Some economists agree that a rate below 4 percent is considered full employment—the point at which the number of available jobs matches the number of people seeking work. If unemployment rates drop below the full employment level, a labor market may begin to experience labor shortages and upward pressure on wages.
The unemployment rate has specific limitations. It can’t differentiate between full-time and part-time jobs. It doesn’t account for people who are underemployed, or working in jobs for which they are overqualified because they can’t find a good job. It won’t tell you how many people have become so discouraged in their job search that they have given up hope of finding a job.
And what about that drop in the unemployment rate? If 32.000 means a point-one-percent drop in unemployment that means the total workforce in the USA is 32 million out of nearly 300 million citizens. Sounds like nearly 90-percent of the country isn’t working.
It was a time like this that Reagan used to pound Carter with the line, “Are you better off than you were four years ago?” It got a lot of sympathy and votes. Apparently since Reagan did the line already the Democrats can’t bring themselves to use it. What weenies.
I’m actually more surprised by friends of mine who are almost starving to death who have become huge Bush supporters. They lost their jobs four years ago and have not been able to get work ever since. They blame Clinton although they were making a lot of money while he was President. It’s baffling.
Since I’m on my high horse, I should mention this anomaly. The apologists all say that the reasons the economy is doing piss-poor is because of 9/11 and the new War on Terrorism. Shouldn’t 9/11 and the War on Terrorism put the country into full employment? A boom? Since when do you go into a depression or a slow down during war and rebuilding? Has this ever happened before? The logic eludes me. I think someone is screwing up. Big time!
Snow Job
Here we are with a guy named Snow, who replaced Paul O’Neill as Sec. of the Treasury. O’Neill left Washington, like a you leave a vacation resort after a week of hail, high winds and constant rain. We had reservations, it just worked out God planned a storm that week he didn’t tell us about!
Back to Snow and his new job. Snow said he was encouraged by other statistics that portrayed the jobs situation in a better light, including a drop in the jobless rate to 5.5 percent from June’s 5.6 percent and an increase in overtime and average hours worked by factory workers. Snow conceded that the Bush administration was “not happy — not satisfied” with July’s estimated growth. So this is how it works today. I’m not real happy with the estimated growth. This is like running the country the way remodeling contractors operate. Here’s an estimate Mr. Smith. Five months later: Sorry about this but the estimate was on the low side. The contractor has walls torn out a pile of gravel in the yard and a big mess in general going on, then says hey I’m not satisfied until you are, then hits you with a work order for $600.00 over the original estimate. But hey that was just an estimate and he aims to please. You can say you aren’t happy shelling out 600 bucks for extras, then again he can quit answering his cell phone and start 3 jobs on the other end of town and leave your job sitting because he’s waiting on supplies that are back ordered. The next thing you know a month turns into 3 and the contractor is now out of business. Here you are with 7 grand into an addition and sun deck. Now you got a pile of gravel in the yard, a new wall built an old wall laying against the side of the house and wiring and plumbing in different phases of not done. The country is all being renovated and at least those factory jobs are growing, with people working overtime paying off home improvements.
This is a flat out lie. The CIA world fact book states clearly that the labor force in the USA is 141.8 million, not 32 million as stated in this blog. This means that 55% of americans have jobs, not 10% as stated.
Alex,
Uh, I hope you know I was joking…I just wanted to show how bogus the numbers were when you do the math.
do I have to spell it out?
Then again you might be kidding too with this post.
Bush and Kerry keep talking about what they’ll do as President. Ask not what your country can do for you, ask what you can do for yourself and your country. It doesn’t matter what they offer the public, it’s what the public is prepared to do in the face of increased instability. We’ll figure it out, we always have.
Alas, during the Clinton administration we were in an imaginary economy with imaginary jobs in imaginary industries.
It was awesome, everyone was WAY overpaid. Especially in the technology sector as all eyes were on the Gold Rush of the Dot Com Boom.
Absurd companies, absurd business plans and everyone getting paid the big $$$ to be the dot-com who cornered the market in (insert silly idea here, pet food, etoys, egroceries, etc.).
It was great living in the economy of the late 90’s … be overpaid, spend a lot of money, be a paper millionaire with your crazy stocks.
But now we’ve got the hangover economy and it’s back to reality.
… At least this economy can’t tank, everyone is underpaid so unless robots take our jobs or they figure out some way to export drive-thru window jobs at McDonald’s, at least this economy is as solid as a rock.
But still, I dream of another Gold Rush style economy. I think another one is one the way, and it too will have to do with the internet. There is a breakthrough technology coming down the road on the internet; when it comes there will be another boom. You can already see it coming, but it won’t reach critical mass for another few years.
[Hint … right now every web page on the internet is essentially static. The internet has a large amount of information — but not nearly enough. Most non-static sites that draw large amounts of information from other sites are from large corporations and done in a manner that requires a large amount of effort. When it becomes easy for sites to interact and in such a manner that does not require one to be a large company, Internet Boom 2 will begin. The reason for the Boom will be that a large amount of effort will be required to assemble new information, organize the information and — automate@!@! . Boom 1 occurred when an empty internet needed filled with content; Boom 2 occurs when an underutilized internet suddenly has it’s information potential skyrocket. Imagine being able to create single web pages that draw content from hundreds of sources in a way relative specificly to the viewer. Not canned crap that someone else views as relevant, but content assembled at the will of the user. And not useless information like “Today’s Top Stories” but actionable and relevant information. When this occurs, a major effort will be made to get actionable and relevant information on the internet, and then to automate the ability to ACT on it. The internet then becomes an information control center and major cost reducer; a single web page that has the power of 1000 servants. There are 2 barriers to this occurring and one bad consequence and one intangible factor that will become readily apparent after the 2 barriers melt (these are attitudinal barriers, not technological ones … the resistance factors will be privacy of the consumer and the tendency of businesses to like pricing secrecy … these will MELT at superspeed as the consumer will sacrifice privacy to make/save $$$ and for convenience and the business will quickly shed pricing secrecy when forced to either participate or be left behind). The bad consequence is that usually a single company will be able to dominate a certain type of need via economies of scale and the complicated intangible issue is that not all things in life can be reduced to raw data (apples vs. oranges)]
Just another one of my typical posts.
Hmm..imaginary or not I ate better. The food seemed real.
Great observation about the war and the economy. It’s an extremly polarizing issue, so Bush couldn’t do this (not to mention it downplays the success of his economic moves), but I think a good chunk of the economic recovery was due to the War in Iraq. He could try to spin himself as a mini-FDR, but can’t because of the perception by much of the American public about the war.
John, you know the trade deficit … where the US imports more $$$ than it imports.
Well, I wonder how much $$$ the US economy absorbed from foreign investors from the dot boom. I am sure a large amount of foreign investment was consumed by the dot-com boom — foreign investments that evaporated.
My point is that I wonder what the net US profit was made by sucking in foreign investment dollars in the dot-coms that ended up losing major $$$. $100 billion? $500 billion?
The point being, such a sucker’s economy was an investor fueled mania that must have pumped up US wages at the eventual expense of foreign investors. Such a bizarre economy is not normal and cannot be sustained.
If I were a Democrat, I could make the case it was a vast conspiracy of grand larceny on a planetary scale to suck up and devour foreign investments on a planetary scale. Of course, the dot-com boom wasn’t a conspiracy, but still devoured an enormous amount of foreign capital and consumed it in a black hole that mostly fed U.S wages.
Funny … no one has focused on this strange net effect of the dot-com boom, that the US sucked up foreign funds like a vacuum cleaner and turned them into US wages. Unintentional and unplanned, certainly. But very real.
You convinced me, taxing the “rich” will do it. I did not realize you were such a government needs to fix everything type of guy.
Oh well, life is full of disappointments. An independant who thinks and talks like a Democrat, hmmmmm.
DId I say that government should fix “everything?” Let me ask you something. What the heck do we have a government for, anyway? The logic of todays “conservative” seems a lot like that of an anti-all-government anarchist. “No government is best.” There is a government. Make them do some work is what I say! They’re getting most of the money already.
Independents, by the way, are allowed to think like Deomocrats, Republicans or Lyndon Larouche for that matter. That’s the idea. Anything to get away from knee-jerk litanies prmoted by dogmatists.
Government is great at doing all those things that the rest of us haven’t got around to doing or don’t have the resources to do. Look at the help the farmers get. They have crop development, protection, insurance and if that isn’t enough, if you have a farm, there are programs that will pay you not to grown anything. This is done under the program that ensures farmland preservation, because growing crops would ruin the farm. Then we have sprawl. This is a big fight it out crusade against all the stuff we’ve built for the last 50-60 years, like the mall or any suburban office complex. The people worked up over sprawl can be counted on for government meetings opposed to any new roads, malls and Starbucks. A corporation proposes something dumb and it lives or dies. The market decides and that’s business. We’re stuck with all the concrete that gets poured. Life goes on!
Another new idea is private prisons. This is an idea somebody with a brother in law in government must of thought up. Crime doesn’t pay, hey maybe we can start running that federal prision. Now it does! I guess the point I’m trying to make is this. I remember seeing a big rig all the time when I was a kid, with a big sticker that said ‘Trucking wouldn’t pay, if the government ran it.’ I live near a midsized city and let me tell you, these people running the city are making sure doing business in the city doesn’t pay. What the heck do we have a government for, anyway? I’m not totally sure, but I know what we don’t have government for and it usually runs fine anyway. The stuff government does has value, like plowing the snow, it just isn’t marketed it’s just done. Ironically, a bunch of stuff that is marketed and has no value (YOUR PRODUCT HERE). It’s like information sprawl with popups, spam and general BS on the digital landscape, except there aren’t any public meetings to go to and say this developer or corporation is wasting everyones time. The interesting thing is that without government we wouldn’t be online right now, we’d be heading for the mall or a meeting complaining about sprawl or buying something we wanted but didn’t really need. Government isn’t really bad, it’s only as good as the technology it has to work with and empowers its people with. If it wasn’t for government, only the government would have the Internet today. How would we all download patches for buggy programs? I’ve never seen a popup ad on a government web site. That’s technology the government should share! In our city, if your car is stolen and the police find it and it goes to the city auto pound, you’ll pay to get your car back. Like a 140 bucks! This is how the city government makes money around here. That’s not right. For the city, car theft is a bonanza. Crime does pay. Then they wonder why people move to the suburbs. Duh!
The 90s weren’t all that they’re chalked up to be as far was rates and wages for programmers and other IT workers. True, the late 90s (96-99) saw a big rise in compensation but it still was lower than it was in the 70’s and early 80’s (if you normalize the dollar and account for inflation and COL differences…).
Labor market is being squeezed from four sides:
* Mergermania PacMan consolidation is reducing the number of jobs at large companies. This is a trend that has been going on for the last 20 years and shows no sign of abating.
* Advances in technology and automation, including computing advances, enable commerce to be performed with less physical workers. Machines are handling more of the work load. We’re still a far ways from total Robotic Nation, but fact is workers are being displaced by improvements in technology.
* Outsourcing and importing of visa workers. Much has been made of how insignificant these numbers are but those claims are off the mark IMV. They don’t take into account the transfer of contracted work to offshore vendors from domestic service providers. A good portion of IT staffs in this day and age is comprised of consultants or vendor supplied contractors and/or independents (I’ve worked in such an arrangement for the last 10 years). So when Fortune 500 company moves business from domestic account to offshore vendor (like Tata or InfoSys or Wipro or Syntel), it doesn’t tally as a “layoff” since they’re replacing the hired hands, not employees.
* Finally, the great influx of illegal immigration puts a squeeze on the lower end of the labor market. It drives down wages and has created a vast underclass.