Terrible Jobs Report

market trying to sell off but they just buy it back up

 

If these jobs suck so much, why has the average inflation-adjusted compensation steadily increased over the past two decades while, at the same, the number of manufacturing jobs has fallen through the floor?

Your characterization of service sector jobs is also misleading. Consider the fact that despite the massive decrease in manufacturing jobs, our manufacturing output has increased steadily? What might cause this? One cause might be that a lowly serviceman, say, a $200,000/year software developer, might have written some code to completely automate the work of 100 assembly-line employees.

 

The dollar has lost 40% of its value in the last decade as a fiat.

The standard of living among homeowners has been maintained by a circular relation between foreign financing of our debt and a speculative increase in home appreciation, which is now ending...

..a speculative appreciation that none other than Robert Shiller calls "the biggest asset bubble in the history of the world." And the Yale economist studies bubbles for a living.


Now that the house-as-ATM party has ended, we shall see what happens to our standard of living.

(Your statement about a code writer eliminating 100 manufacturing jobs with a few brushes of the keyboard cuts both ways)

 

No doubt, that's exactly what has happened. I've seen it first hand. The problem is, what happens to those 100 assembly line employees? Have they all become 200K a year software developers? No, they have become 10 dollar an hour Home Depot workers living on credit cards and home equity loans. How does this play out long term? Who knows, but the short term pain for these displaced workers is as real as it gets.

 

Not communist just might end up with a few owners and everybody else will be a nomad. After all the middle class was only good for the last century

 

Add to these problems the fact that 1/4 as many younger workers are going to have to support 4x as many older retirees, VERY SOON, with all their entitlements and government benefits - drugs, health insurance, social security payments, etc. -

- it's an inverse pyramid.

If you're in my generation (early 30s), there is a very real chance we'll be paying 60% of our wages in taxes, very, very soon, because our government is so irresponsible and short sighted.

 

It is unclear what the future will bring, but the steady erosion of the manufacturing labor force and the massive dislocations in labor around the US will not come without consequences.

Several individuals argue that the erosion of the manufacturing labor force is positive for the economic structure of a country as it shifts jobs towards more advanced industries. It also implies higher productivity and low to moderate levels of inflation. While there is some thruth to this argument there is also the other side of the coin.

The massive dislocation in labor in the US has not been backed up by proper assistance in retraining the affected labor force. While it is relatively easy to measure business profits in your business once you reduce your labor force, it is a whole different story to determine economic profits. This would include a rise in social problems in communities around the country such as higher levels of poverty, crime, health and the story goes on.

While it is too early to tell, there will be some consequences in the future. In fact, we saw some of it when hurricane Katrina hit New Orleans. I'm sure that you probably saw the images on your TV of thousands of individuals starving and in desperate need of medical attention. Those my friends, were not CEOs, CFOs and the white collar community. Those were the poor individuals that represent the disproportional misallocation of capital between rich and poor all in the benefit of higher profits and increased levels of productivity.

It's one thing to talk about business as usual, but it is another thing when you consider the social effects.

 

It's a new world.

The fact - whether one considers it sad, neutral, or positive - is that the financial structure is now set so that I have more in common with someone in a high income bracket and with a similar educational background in India or Russia than I do with my American brother who lacks the financial and educational resources he will need to survive in the 'new world order.'

I can discuss futures trading and currency swaps, as well as geopolitical events, more cogently with someone from Tokyo now, than I can with someone from a nearby city - and discuss it with them while they are 6,000 miles away, and we are both in the comfort of our offices or homes.

I have more in common with people based on socioeconomic status than national origin. We all do, whether we recognize it or not.

I didn't set the rules of this new game. They set the table, and we all have to decide whether we'll dine or fast.

 

Check out the 2nd from last paragraph.

Also, $17 per hour is $34,000 per year, which really highlights how inflation is ravaging wages.

I realize this is a mean, and not a median. I am curious what the median wage is.

More Finding Work in U.S.


By JEREMY W. PETERS
Published: March 10, 2007

http://www.nytimes.com/2007/03/10/business/10econ.html

If the economy is really slowing as much as some recent statistics suggest, working Americans have so far managed to dodge the bullet.

The Labor Department’s latest monthly report on employment, released yesterday, showed all the hallmarks of a still healthy job market in February: steadily rising wages, firm job growth and a low unemployment rate. Employers added 97,000 workers, according to the estimate, and the jobless rate ticked down to 4.5 percent from 4.6 percent.

The decent-sized job gains, coupled with yet another upward revision to the employment increases first reported for previous months, helped assuage some of the anxiety over the state of the economy.

And the latest figures provided some reassurance to investors whose nerves were still on edge from last week’s global stock market turmoil, encouraging an initial flurry of buy orders but then settling down, with both the Dow Jones industrial average and the Standard & Poor’s 500-stock index closing marginally higher.

A number of closely watched economic reports — including those that measure growth and business investment — have detected a downshift in recent months. While the economy may remain relatively sluggish, the new employment report suggests that a slower but still robust job market and rising wages should help provide the wherewithal for Americans to keep up the solid pace of spending that has prevented the economy from tipping down.

“I don’t clearly see the fingerprints of a significantly slowing economy,” said Jared Bernstein, an economist with the labor-supported Economic Policy Institute. “There are some scary clouds out there, but the clouds didn’t break this month.” As encouraging as the report was, it also contained several points of concern. Forty percent of the new jobs created last month were provided by localities, states and the federal government. Economists consider strong private sector job growth to be the foundation of a sturdy job market, yet private businesses added only 58,000 jobs in February, the lowest amount since November 2004. Businesses also trimmed the number of hours in an average workweek to 33.7 from 33.8.

“We’re creating jobs, the unemployment rate is dropping, but there is something very troubling that tells us the private sector is indeed slowing,” said Bernard Baumohl, managing director of the Economic Outlook Group. “In many ways, this is a mixed report.”

In a separate report, the Commerce Department said that the nation’s trade deficit — the difference between what Americans export and import — narrowed in January, to $59.1 billion from a revised $61.5 billion deficit in December.

The bond market took both reports as signs of strength in the economy, pushing interest rates up and prices lower yesterday.

The 97,000 extra jobs that the Labor Department found in its initial survey for February was below the January number but enough to ease concerns that businesses have begun to pull back sharply. The government also said its estimates of employment in January and December were too low. It revised statistics for those months to reflect an additional 55,000 jobs, bringing the total number of jobs created in the last three months to a respectable 469,000, or about 157,000 a month.

Given the significant upward revisions the government has made to employment figures in recent months, economists said February’s job-creation number was likely to rise, too.

“It has gotten to the point where maybe it’d be smart just to add 25,000 jobs to every number that comes out,” said Drew Matus, an economist with Lehman Brothers.

Hispanics experienced a significant change in their employment situation last month. The unemployment rate for Hispanics dropped to 5.2 percent from 5.7 percent. The rate for blacks, 7.9 percent, and the rate for whites, 4.0 percent, each fell by a tenth of a percentage point.

Workers’ average hourly earnings continued to rise at a strong pace. The average employee in a nonmanagement job earned 4.1 percent more in February than a year earlier — an increase that significantly outpaced the rate of inflation. Average hourly pay jumped to $17.16 from $16.49 in February 2006.

Lower-paying professions were some of the fastest growing last month. Pay grew the most in February for workers in the leisure and hospitality industries, which have been adding workers rapidly in recent months. Restaurants and bars, in particular, have been growing, and last month they added 21,000 jobs.

Businesses also rushed to fill building services jobs, adding 11,300 positions for custodians, landscapers, exterminators and similar professions.

But workers in factories and on construction sites were hit hard again last month, losing a combined 76,000 jobs. Most of that, 62,000 was in construction, which economists said reflected both the cold weather and the slowdown in housing. The unemployment rate for construction workers jumped to 10.5 percent from 8.6 percent a year earlier.

State and local governments added more jobs than any sector last month, hiring 35,000 people. While that troubled some economists who said it pointed to weak private sector growth, others said it would become a problem only in the long term.

“In the short term, it doesn’t matter who’s writing the check, as long as checks are being written,” Mr. Matus said. “If we see government jobs making up the bulk of the employment growth in March and in April, then I would start to worry.”

 

Well, it's been about a decade since the bottom really fell out of manufacturing employment, and while no doubt some of these former assembly line workers now work for Home Depot (which, if you ever seen an assembly line worker's day, you know working for Home Depot isn't a step down at all), but in general, our labor force has made the transition.

Now, it's true that our increasingly technology-heavy economy has probably increased income inequality to some degree. Whether income equality, in and of itself, is desirable is another matter. Regardless, this has more to do with people at upper brackets making more, rather than people at lower brackets making less.

The issue of people acquiring too much debt is totally separate. Maybe people are spending too much, and maybe they aren't, but it's a different discussion than whether manufacturing is some special type of employment that should be protected with damaging trade barriers.