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OK, so you might have noticed a few headlines the last few days talking about how the economy is getting better, unemployment is dropping, and we’re all going to win Powerball tonight and retire tomorrow with our sparkly ponies.
Yeah, I ain’t holding my breath on any of those things either.
Yes, the economy is getting a little better. Slightly. But not to a level to make an appreciable difference to the millions of long term un and underemployed. As David Dayen noted at FDL News on Friday:
The reason that the unemployment rate was able to tick down, however, is that the labor force participation rate remained unchanged at 64.0%. This low participation rate means that, even with the economy growing and the job market improving, a fair number of able-bodied workers have not rejoined the labor force. When they do, and when the labor force participation rate increases, that will put upward pressure on that topline unemployment rate. And unless everyone came into found money, that’s fated to happen. The employment-population ratio also remained unchanged in December (58.5%), despite the job additions. The average workweek and average pay went up very slightly over the month.
Even if those folks who have given up and left the workforce were to stay away and not return, it will still take years for the current problems to right themselves.
Let’s pretend that we stay on the current level of seeing the official unemployment rate drop .2% each month. At the end of 2012, the unemployment rate would be at 6.1%, a number that sounds much better than it has been. But that number would still not be addressing the millions of folks working part time (probably minimum wage) jobs who want full time employment. Nor does it account for all the folks forced into being “independent contractors” or all the college grads from 2008, 2009, 2010, and 2011 still trying to get their first position in their fields.
Just today (Wednesday, January 11), MSNBC had this post with the headline, “Four job seekers for every opening, report shows”:
Though hiring picked up in November, job openings shrank by 63,000, to 3.2 million. October’s job openings were revised down by 43,000.
With 13.3 million people unemployed in November, there were about 4.2 job seekers for every job opening, down a notch from the revised October ratio of 4.3-to-1. That is roughly triple the ratio seen before the recession hit in December 2007 but down from a peak of 6.9-to-1 in the summer of 2009.
“As the job-seekers ratio shows, what’s happening is not that millions of workers have become lazy, unskilled, or unproductive; it is that there are not enough jobs available,” said Heidi Shierholz, an economist at the Economic Policy Institute.
The Wall Street Journal had this article on Monday on how “Unemployment Scars Likely to Last for Years” (you can use der Google on that title to get the full article but here’s a snippet):
The U.S. job market is showing signs of a sustained recovery. But the country’s prolonged struggle with unemployment will leave scars that are likely to remain for years, if not generations.
The latest labor-market snapshot, out Friday, gave cause for continued, if tepid, optimism. U.S. employers added 200,000 jobs in December, and the unemployment rate ticked down to 8.5%, its lowest level since early 2009.
But economists gathered here for the American Economic Association’s annual convention took a longer and generally dimmer view. Even if recent progress continues, the recession already has had a lasting effect on a generation of workers. Worse, the crisis has laid bare problems in the U.S. labor market that won’t quickly recover when the economy eventually rebounds. And the longer that unemployment remains high, the greater the risk that it will create structural problems that will endure.
But hey! Let’s make sure we don’t hurt the fee-fees of the Private Equity Vulture Capitalists (NY Times via MSNBC):
The titans of private equity have long feared this moment. As Mitt Romney has established himself as the front-runner for the Republican nomination, not only has his record at Bain Capital come under intense scrutiny and withering attacks — but so has the private equity industry.
Mr. Romney’s opponents are the loudest, accusing such firms of carving up companies and cutting jobs. Newt Gingrich said over the weekend that Bain looted companies and fired employees, and Rick Perry on Tuesday called private equity firms “vultures.” An anti-Romney documentary calls him a “predatory corporate raider.”
The attacks have unnerved many buyout executives — especially those who have long used their fortunes to support the Republican Party. As Mr. Romney’s rivals have sought to turn the primaries into a referendum on his business career, the private equity industry finds itself under fire from those it thought were friends.
Amazing how much whining these people do. Whether they want to emulate Blackbeard or just Gordon Gecko, they’ve made their choices and should be willing to live with them.
And because I can:
Cross posted from Just A Small Town Country Boy by Richard Taylor