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Why There Are No Jobs

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April 08, 2014 – Comments (19)

U3

Hey, unemployment is improving! No, not quite. The official unemployment rate is technically called the U3. Yes, there are many different ways to measure how many people do not have jobs. To me, the best way is the labor participation rate: that is, of all able-bodied adults, what % have a job? Today, this % is at historic lows.

 

Free Medical Insurance

The PPACA (aka “Obamacare”) was celebrated, since many thought they would be getting free insurance. Not quite. True, many more will end up with health insurance who did not have it before, but one way this is happening is by forcing employers to pay for same. They will respond by firing workers, not hiring new ones, and/or reducing wages or hours.

 

Minimum Wage

Increasing same might be merciful, but this will inevitably cause some to lose their job. There are whole classes of workers who might barely be worth $7 an hour, but not $10. These marginally productive workers will not have a job, not to mention new hires with little if any skills of economic value.

 

Here, Have More Unemployment Insurance

Extending UI might be humanitarian, but how will this help people find a job?

 

Shovel-Ready Jobs

Remember this one? The Prez backed-up a dump truck full of cold, hard moola to industry so they can hire more workers. Not. In the end, it only funded those construction projects that would have gone ahead anyway.

 

XL Pipeline

Oddly, this a shovel-ready project. Everything is ready to go: all it requires is O's blessing, which is not forthcoming. The cost to gov't is $0.00, and will create thousands of jobs almost immediately. Sigh...

 

Illegal Immigration

Presence of same in the job market takes jobs away from the rest of us. This is a simple case of supply and demand, regardless of the politics involved.

 

What To Do, What To Do...

If I knew the answer, I would be sipping drinks with a tiny, paper umbrella on a tropical beach somewhere being pampered head-to-foot. Unlike some, I am not arrogant enough to claim that I have the answer. The only useful thing I have to say is that the deck sure seems to be stacked against the job-seeker.

19 Comments – Post Your Own

#1) On April 08, 2014 at 8:24 PM, awallejr (75.54) wrote:

I know the answer but no one will listen.

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#2) On April 09, 2014 at 12:42 PM, EnigmaDude (85.75) wrote:

There are lots of jobs available here in Colorado. Your perspective is skewed by your obvious political bias. The labor force is changing and there are not as many jobs available for unskilled workers unless you want to pick lettuce or work in fast food, which are the types of jobs many of those illegal immigrants are apparently taking away from "the rest of us".

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#3) On April 09, 2014 at 12:49 PM, TMFHousel (90.64) wrote:

Labor force participation is nowhere near historic lows. It was 58% in the 1960s versus 63% today. 

The primary driver behind the decline since its peak in 1999 is demographics. Demographers predictd the decline a decade before anyone had ever heard of Obamacare, or even of Obama, Keystone or stimulus. More here:

 

http://www.fool.com/investing/general/2012/10/09/why-are-so-few-people-working.aspx 

 

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#4) On April 09, 2014 at 5:18 PM, drgroup (69.18) wrote:

Who cares about Colorado? How many humans exist there outside of the ski/hunt/play industry? 

 Labor force participation is nowhere near historic lows.OK,but it is also nowhere near the 6.7% number being congured by this corrupt administration....

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#5) On April 09, 2014 at 8:06 PM, jerryguru69 (95.33) wrote:

@awallejr—try me

@EnigmaDude—I always get a similar remark when I opine about illegal aliens, and this is the problem. The economy and value of employees therein has many moving parts and defies simple solutions. Eliding the parts is a natural reaction, but moves one towards an incorrect concusion.

@TMFHousel—ummm...sorry, beg to differ slightly. The participation rate for males fits my snap view, but you are technically correct. However, the curve is camel-humped due to the entrance of women. Since 1980, when I began work as college grad, even the women could not stem the overall decline. I noticed that you did not include a similar graph of women's participation and commentary on how this changes the %.

@drgroup—this is my point about U3. It is useful as a comparison over time for bureaucratic purposes, but is not indicative of the magnitude of the pain being suffered by the unemployed. 

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#6) On April 09, 2014 at 9:20 PM, awallejr (75.54) wrote:

Just go back to the Eisenhower tax code (adjusted for inflation).  Force the 1 pct to actually SHARE the wealth like they were back then. With a low tax rate on top earners you just incentivize them to keep as much as they can and ship obs overseas.  By "capping" you force them to share.

When did we have a thriving middle class?  Under Eisenhower. Never have under low top tax rates.  Never have never will. 

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#7) On April 09, 2014 at 9:20 PM, awallejr (75.54) wrote:

obs=jobs

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#8) On April 09, 2014 at 10:03 PM, devoish (96.26) wrote:

Perhaps there are to many jobs. 

There are certainly a lot of jobs being done that do not help anybody or anything.

I would not be at all surprised if our Country spends more money on paying clerks to decide who should or should not get healthcare or how good that care should be than it it would cost to to just provide good healthcare.

We have hundreds of thousands working as salesmen, clerks, investment managers and news writers to sustain a retirement system that pales compared to the success of SSI and supports more thieves and cheats than it will retirees.

No, Americans do not need more jobs, we need something worth doing.

Best wishes,

Steven 

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#9) On April 09, 2014 at 10:05 PM, jerryguru69 (95.33) wrote:

@awallejr—nice try, but disagree. Comfortable employment under Eisenhower (and JFK and LBJ and Nixon) had to do with the preponderance of "blue collar" jobs (Google it, people). This job allowed a male breadwinner to buy a house, raise a family, and send them to college, all w/o the wife having to enter the workforce. These jobs no longer exist. It had nothing to do with taxes or exporting jobs or the 1%. 

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#10) On April 10, 2014 at 7:47 AM, TMFHousel (90.64) wrote:

Yes, LFPR rose from the 1960s-1990s largely due to women entering the laborforce. Sicne 1999 it's declined largely due to the retirement of baby boomers. In both cases we can't say the change is being driven by the strength or weakness of the economy, Obamacare, unemployment benefits, or immigration. 

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#11) On April 10, 2014 at 10:19 AM, jerryguru69 (95.33) wrote:

@TMFHousel—well, perhaps.

However, what if the "retirement" of boomers is largely involuntary (cuz employers prefer not to hire older workers or "wilted lettuce"), and therefore functionally equivalent to being unemployed? Surely, in this case, economic decline, health insurance, and/or the existence of illegals willing to do the same job at sub-legal wages discourages employers?

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#12) On April 10, 2014 at 12:11 PM, ikkyu2 (99.15) wrote:

My small business' healthcare costs went up 50% this year.  The plan is as similar to last year as my insurance agent could make it; deductibles are 50% higher and out-of-pocket maximums have increased across the board.

I am glad I was told this was a result of the "Affordable" care act, because I would not have been able to infer that fact from the results which I noticed. 

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#13) On April 10, 2014 at 12:28 PM, awallejr (75.54) wrote:

You are wrong jerry.  It was those blue collar jobs that got squeezed out through automation and shipped overseas.  And for a simple reason.  Cost cutting.  Labor is the biggest expense of most businesses. If I now get to keep 85 % instead of 8 % I would be incentivized to squeeze every penny.  And that is exactly what has happened.

What you have now is a case of two Americas,  one with hope and one without. And largely because we think it more important to help and encourage the 1 pct.

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#14) On April 10, 2014 at 1:09 PM, EnigmaDude (85.75) wrote:

The employment trend is regional and as Morgan points out also based on shifting demographics. Here is an interesting map that highlights the regional nature of what is happening in the US with respect to unemployment versus shifting populations (based on 2010 Census data):

http://storymaps.esri.com/unemploymentpopulation/

 

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#15) On April 10, 2014 at 4:33 PM, awallejr (75.54) wrote:

Interesting chart.  You really do see the impact of fracking growth.

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#16) On April 11, 2014 at 11:49 AM, TMFHousel (90.64) wrote:

Here's some more data from a recent study, disecting the BLS surveys that ask those who drop out of the laborforce whether they want a job: 

"But most of the postrecession rise in prime-age nonparticipation is from the people who say they don't currently want a job."

http://macroblog.typepad.com/macroblog/2014/04/reasons-for-the-decline-in-prime-age-labor-force-participation-.html

A lot of this is due to the rise in the percentage of young Americans attending college.  

 

 

 

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#17) On April 15, 2014 at 9:47 PM, jerryguru69 (95.33) wrote:

@TMFHousel

umm...wait a second. Are you maintaining that decline in labor force % rate is most voluntary, and not due to job prospects or economic conditions? 

Quoting your link:

"But most of the postrecession rise in prime-age nonparticipation is from the people who say they don't currently want a job. How much does that increase reflect trends established well before the recession, and how much can be attributed to the recession and slow recovery? It's hard to say with much certainty. For example, participation by prime-age men has been on a secular decline for decades, but the pace accelerated after 2007..."

 (emphasis mine). The resource you cite does not address (nor does the link towards the end of the blog) reasons for the "secular decline", nor the effect of the economic weakness since 2008 on same.  

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#18) On April 15, 2014 at 10:16 PM, awallejr (75.54) wrote:

It could be a reflection of retirement.  Remember boomers are doing that when they can now.

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#19) On April 15, 2014 at 10:23 PM, jerryguru69 (95.33) wrote:

@awallejr

I agree: us old folks seem to be of marginal value to S&P500, and are retiring, cuz no one wants to hire us so take early SSI. 

But,that is not what @TMFHousel is saying: it is just people going to college. Based on my 4 decades of employment, his point escapes me.  

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