The American worker disappearing like a Cheshire cat

Maybe you heard the news? It will be in all the papers tomorrow.

Cheshire cat

Employers, according to the Bureau of Labor Statistics, added 169,000 jobs in August and the jobless rate dropped to 7.3 percent, the lowest in nearly five years — because those who can’t find jobs have given up and are no longer counted as unemployed. “The proportion of Americans working or looking for work reached its lowest point in 35 years,” AP reports.

Actually, if you apply the unadjusted numbers, it is worse than even that sounds. While 169,000 found jobs in August, there were 621,000 fewer employed people in August than July. And 1.4 million more Americans left the labor force entirely from July through August. If just that one month’s worth of discouraged workers were added to the unemployment rate — much less the millions who have dropped out since the recession ended shortly after Obama took office — the rate would be 8.3 percent.

aug13joblessjpg

17 comments on “The American worker disappearing like a Cheshire cat

  1. Winston Smith says:

    Bernanke’s “Jobless Recovery” strikes again!

  2. Steve says:

    June and July were not really better revising the data.

    “The revised job growth for June and July shrank the previously estimated gain for those months by 74,000. July’s gain is now estimated at 104,000 — the fewest in more than a year and down from a previous estimate of 162,000. June’s was revised to 172,000 from 188,000.”

    From the AP.
    http://tinyurl.com/kbf3rnl

  3. Milty says:

    If we luck out and the bombing campaign against Syria expands into a protracted regional conflict, that should help the employment situation.

  4. Rincon says:

    Where are jobs supposed to come from when demand is down?

  5. Milty says:

    The estimable (thank you for introducing that word to me, Nyp) Paul Krugman says that if the 2009 stimulus had only been three times bigger, everything would be fine now.

    http://www.nytimes.com/2013/09/06/opinion/krugman-years-of-tragic-waste.html

  6. Steve says:

    Sure.
    Dig the hole three times deeper.
    OK
    It does make sense. Everyone knows the earth gets warmer and more stable the deeper one digs the hole.

    :mrgreen: ouch

  7. Bruce Feher says:

    Of the “found” jobs, I’d like to know what kind they are? Bet they aren’t high paying manufacturing jobs!

  8. Milty says:

    Looks like 59% of the jobs created this year are part-time jobs.

    On the bright side, a new McDonald’s is being built down the street from where I work. They’re advertising for shift workers, starting wage is $8.25/hour.

    http://www.deptofnumbers.com/links/2013/09/#2013-09-06

  9. Milty says:

    Here’s an interesting article claiming that there’s no shortage of STEM workers. If the article’s claims are true, it makes me wonder why businesses are pushing for more H1B visas.

    http://spectrum.ieee.org/at-work/education/the-stem-crisis-is-a-myth#.Uis0iqYk3jQ.twitter

  10. Rincon says:

    An interesting article, Milty. Gives you an idea how tricky statistical studies are. A couple of anecdotes might shed a little light:

    The article addresses mostly workers with degrees, which implies college. My friend that manufactures pumps says that his shortage isn’t with engineers, but with people who can operate sophisticated machinery – usually educated in a trade school. On the other hand, I have an employee with a biology degree (STEM, right?)and works for me as a veterinary technician because there are no jobs in our area for a biology degree holder. The statistics would say that she’s one STEM worker and the pump mfgr has one STEM job – a perfect match, which is, of course, as wrong as it can be.

  11. Milty says:

    “The statistics would say that she’s one STEM worker and the pump mfgr has one STEM job – a perfect match, which is, of course, as wrong as it can be.”

    I agree, Rincon, it’s as wrong as it can be. But in all this, where is the justification for additional H1B visas?

    Additional H1B visas wouldn’t benefit your friend who has a biology degree. Additional H1B visas would benefit your friend who manufactures pumps, but at what cost? The pump manufacturer is your friend, so you would know better than me what his attitude about this is. My guess is that a lot of people in his position are taking the attitude, “Our education system isn’t producing people who can fill these technician positions, so I either need to make our education system more responsive to my needs (which will take a long time), or I need to insource technical education in my factory and home grow my technicians (which is costly and runs the risk of losing these people to my competitors once they’ve been trained), or I need to look for technicians elsewhere (outside of this country).” The easy short term solution is to find people outside the country who are already capable of doing these jobs. The unfortunate side effect of this attitude is that no one really cares that our education system isn’t doing its job because they’ve figured out a way around this issue.

  12. Steve says:

    Many who decry the spending levels on education today are simply refusing to understand that education follows the needs of organizations who want to employ the people who are graduating from the schools.

    Here’s the problem with claiming we need to adequately fund generic education. Just what are we trying to produce? In the case of Nevada our major industry is hospitality, hence UNLV has the best hospitality courses in the country and little else of repute.
    The local education establishment constantly claims we have to spend money on them if we want to attract “new business” they never say just what this “new business” will be or what types of educated individuals the so called “new business” will require.

    The first thing is to get the new business imported with its current specially trained employees or home grown with imported specially trained employees. Then we would be able to develop the educated people this new business would want and need in its future.

    It simply is not possible to predict what types of education a future business might need, hence education follows business, education does not beget business.

    This is the trouble we have in Nevada.

    In states like Massachusetts and California the business/education relationship has been in place for over two centuries.
    For states like Nevada importing skilled labor is going to be key to importing or creating new industry. It will take everything we can offer to allow those potential new industries a good chance at success and growth. Keeping them here is key if we want them to add to funding of education in the types of skills they will need in their own future. This takes tax breaks, low lease rates and willingness of all parties involved in seeing these potential new industries remain here well into the future.

    In Nevada, tax breaks of a generational nature are one indispensable thing in this process. Our state and local leaders do not understand this. They keep wanting to toss unbelievable amounts of money at education in hopes they produce people with skills companies will want. At its very best, this is nothing more than poorly performed prognostication.

    Successful business will build education. This is what is obvious in Massachusetts, Vermont, Hawaii and California. Business’s stay in these high tax states mainly due to the very deep roots they have laid down and one of those is a large stake in the education they have built over those years.

    So H1B visas, if used in places where little or no industry currently exists (like Nevada) would be a good thing. In places like California or Massachusetts? No, they would be a bad idea. They would hurt those local economies by depressing skilled labor wages.

    We also need a new outlook on just what we need from the education establishment and those people need to stop demanding more and more, they need to start listening and learning. (I love irony, don’t you?)

    http://www.forbes.com/sites/joshbersin/2012/12/10/growing-gap-between-what-business-needs-and-what-education-provides/

  13. Rincon says:

    Isn’t government artificially manipulating the market if they restrict the ability of business to import labor for whatever it needs? Maybe they should just get out of the way and let free competition work its magic.

    In my friend’s case, he invited a high school counselor to visit his facility in an effort to inform the local students of the opportunity available to them with only a couple of years of education. The counselor declined to visit. I think college appeals much more than trade school to the academics that teach our children.

  14. Steve says:

    Its not restricting business to limit immigration. Its investing in your own people. Getting out of the way would also mean limiting the feds to the original purpose outlined, defending the borders.

    One the second point, it figures that college is the goal. All teachers are constantly pushed back through college. While likely not intentional, the outcome is for teachers and counselors to push students into the same hierarchy they themselves know and trust.

    Another outcome is a continued ignorance of real community needs and a glut of degree’d people working in jobs for which they have little or no education.

    “Welcome to Walmart” said the masters degree in liberal arts…

  15. Nice analysis of the H1B visa issue, Milty.

  16. Rincon says:

    So should we allow immigrants and if so, what should be the basis of their selection?

  17. […] only reason unemployment is down is because more people have given up looking for work and dropped out of the labor […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s