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buffalonate (50.23)

Employment Is Increasing!



April 23, 2011 – Comments (4)

I keep seeing people write that employment is going down and that is obviously incorrect.  These same people also refuse to believe the unemployment rate put out by the government.  Here is a national employment report put out by payroll processor ADP showing that private employment went up by 208,000 last month. 

4 Comments – Post Your Own

#1) On April 23, 2011 at 11:54 AM, amassafortune (29.13) wrote:

I like the ADP report as a better measure of employment than BLS stats, but it seems ADP has been making their own adjustments to their data, so their data is not as pure as it used to be.

At the core of ADP data, though, is the fact that an employer is cutting a check to an employee - that is the best indicator I can think of that someone has a job.

Below the top-level view of simply counting jobs, one needs to consider the quality of that job compared to those available a few years ago. 26% of recent jobs listing have been for staffing agency jobs that pay about $10/hr and usually do not include benefits. Even the BLS numbers reflect this trend of increased employment with stagnating hours worked and pay that easily loses out to food, medical, tuition, and energy inflation.

ADP numbers are heavily weighted to private sector trends. This is positive because public sector jobs, as critical and needed as many of them may be, are all overhead. Soldiers - critical, 911 personnel - critical, firefighters, teachers, and police, all very necessary, but not one of these jobs creates a profit or is self-sustaining. It takes many private sector jobs to support each public sector job.

The heavy layoffs experienced by the public sector since 2008 is why we now have the movements in WI, IL, OH, FL, etc. to limit the power of public unions. Private sector jobs are not coming back fast enough to restore the ratio of private-to-public job support. The only ways to get this ratio back to equilibrium are to layoff public employees or cut their pay, benefits, and pension liability. Cuts are winning out over layoffs in most states. 

In Ohio, with SB5 (collective bargaining limits) now law, 350,000 public employees can expect to see their total cost of pay, benefits, and pension cost erode over time. To close the $8 billion budget gap in OH, each employee would need to take a $23K annual cut in total compensation - this will not happen. A $60K worker with $20K of benefits (30%) is not going to be cut to a total package of $57K ($80k-$23k).

This is where privatization comes in. Workers won't accept large, needed cust, but that same job can be privatized and given to a company that will accept $57K to do that job, take their cut for profit, and still fill the position for about $30K with few, if any benefits. Many jobs won't be affected, but state university food prep and non-teaching jobs, grounds maintenance, road crews, liquor control (state-owned in OH), etc. can be privatized for huge savings.

The trend is for private employment to continue to grow, but the average quality of these jobs will continue to erode, especially when measured in inflation-adjusted terms.

Another positive note, these deep adjustments in labor costs, combined with double-digit inflation and logistics cost of shipping from China, mean the flow of jobs will reverse sooner, maybe even within the next couple years.

On a negative note, China used this advantage time to think long-term and now makes their own fighter planes, commercial aircraft, autos, engineering and IS in general - all the most profitable U.S. sectors. With technology and machinery equalized, guess what, the U.S. now gets to compete on the basis of marketing and price.

Private employment is up, and will continue to rise, but the American workers' prospects and standard of living are still very much at risk. 

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#2) On April 23, 2011 at 6:59 PM, HarryCaraysGhost (87.08) wrote:

Hi buffalonate,

Since your new here I took the liberty of checking out your profile.

Of the picks you ended the majority were well over 5 points in the green. Good job, but you had about 5 or 6 ended in the red.

Just remember that accuraccy plays a huge part in your caps score so it's better to let those picks ride.

I've also noticed that you post on Alstrys blogs. It's probably best to ignore him since the message is always the same.

It's kind of funny that after all these years I've never disagreed with him yet any chace I get I will mock someone calling for a constant falling sky.


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#3) On April 23, 2011 at 7:34 PM, buffalonate (50.23) wrote:

I use Yahoo Finance a lot for the analyst estimates.  Sometimes their information is old which throws off your valuation so I have to abort picks.  Do you know where you can find accurate analyst estimates information?  I have a TD Ameritrade account and they don't seem to have analyst estimates on their site.  I like to debate Alstry because he is so extreme in his views and he can't back them up using anything but opinions.   

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#4) On April 24, 2011 at 1:15 AM, HarryCaraysGhost (87.08) wrote:

I use Yahoo or google finance.

What I was trying to say was that on Caps if you close a pick when it's not over 5 points in the green your penalized.

Accuracy is huge and I wish someone would have told me that little tidbit when I first started.

All the best.

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