Hey, Kid, Wanna Job?

We need north of 200,000 new jobs a month to begin to stem the tide of American unemployment, and we are long, long way from hitting that number. But the number of people working is hardly a good description of a healthy job market. I’ve already blogged about how topline real-buying-power income to average Americans has declined every year for over a decade, starting well before the big recession, how the cost of commodities and basics has also slammed into lifestyle, reducing effective remaining discretionary income, how many have just given up looking for work, how many older worked have opted for early retirement, and how over 90% of income gains since the recession have fallen only to the top 10% of earners. The hard fact is that for most Americans, the jobs that are coming online are heavily weighted in favor of part-time or short-term contract work and low-end occupations.

With 148,000 non-farm jobs added in September, according to the just-released jobs report from the Department of Labor (delayed two weeks by the shutdown), our official jobless rate has fallen slightly to 7.2%. But the trend of getting people into marginal employment, the very high rate of joblessness (and low quality work) among the younger, entry-level segment, just continue unabated. We’ve seen bad underlying numbers for months. For example, earlier this summer, “[p]art-time employment rose by 174,000 in July, compared with a gain of just 92,000 full-time jobs. Many of the new jobs were in the restaurant, retail and lodging industries... The part-time trend helped push lower the length of the average workweek on private non-farm payrolls to 34.4 hours.” Kansas City Star, August 2^nd. The trend continued in August and now September. Too many low-end jobs with no future that pay badly. Further, job expansion itself is lower than it was last year at the same time (185,000 then).

As educational costs soar to unaffordable, as the quality of our public schools continues to plummet according to just about every standardized test applied to the sector, and as we cut our grants to universities or cut direct government research, the ability of unprepared citizens to find new technologies in their own country to create new economic vectors simply dissipates. We are watching our hard patent application numbers fall, just as China’s inventive processes are sailing up to the stratosphere, patent application zooming upwards, and their schools are getting better every day. The global economy doesn’t care that you have fiscal and budget issues that prevent you from keeping up with educational and technological requirements; if you are aren’t competitive, you just plain get pushed out the door.

The Sequester ripped into government discretionary spending like a meat axe; unplanned and instant cuts to government discretionary spending ripped into GDP growth, further hammered downward by the shutdown, pushing the U.S. economy back to the edge of another recession. “A recent report from Macroeconomic Advisers, a forecasting firm, estimated that government reductions in discretionary spending as a share of the economy since 2010 had pushed the national unemployment rate higher by 0.8 percentage point than it otherwise would have been, the equivalent of 1.2 million absent jobs. Those same spending cuts have also shaved an estimated 0.7 percentage point off output growth each year. Those drags are separate from the costs of the shutdown, which are expected to reduce the annualized growth rate of gross domestic product in the fourth quarter by 0.2 to 0.6 percentage point, depending on which estimate is used.

“As a result, analysts predicted, the economy is expected to advance at roughly a 2 percent annualized pace for the fourth quarter and about 1.5 percent for the full year, or about 1 percentage point lower than might have been achieved without those fiscal hurdles to overcome.” New York Times, October 22^nd.

But wait, said the bad man, there’s more. The federal budget talks loom. About the only thing that seems to be certain in the future is that the polarization in Congress will continue to create a cost-cutting pressure at the federal level, including investments (INVESTMENTS!) in education, infrastructure and research, that may reduce short-term costs but will result in long-term cuts in Americans’ ability to earn the money necessary to restore sustainable fiscal balance. It’s never about just cutting costs. The old “penny-wise and pound-foolish” expression should be mounted on the entry door for most of those in Congress. Pork and military growth are OK, but common sense investment and planning for the future have left the Capitol, vacated the city, have streamed out of the country and are taking up residence… elsewhere. Not in the U.S.A.

I’m Peter Dekom, and I’ve said it before, but if Congress really does believe in the United States of America, they should prove it by investing in its future.