Why the January Jobs Report Is Alarming
The January nonfarm payroll number was 130.27 million, but what does that actually mean for the economy?
The short story is that 573,000, or fully 85%, of the 677,000 nonfarm jobs that have been created since December 2009 are in the Part-Time Economy. These are the low-pay third-of-a-job entries in the BLS reports which excite the high-pay Wall Street spin doctors who show up at 8:30 a.m. on the first Friday of each month to peddle buy, buy, buy.
But the Breadwinner Jobs graph tells the real story. It goes back to January 2000 and covers the long “Greenspan Boom” through December 2007, the two-year Great Recession through December 2009, and the “New Normal” representing the last 13 months of alleged “recovery” as of the January 2011 report.
First, there were slightly less than 72 million Breadwinner Jobs before the 2001 recession and the same number by the time the Greenspan Boom peaked in December 2007. Put differently, the greatest financial boom in US history did not generate a single net job in the core middle class economy. Then, 6.6 million, or nearly 10%, of these jobs were eliminated during the 24 months of the Great Recession. And as of 19 months after it ended, we have lost another 217,000 Breadwinner Jobs. Moreover, within this broad category, the 6,000 jobs per month we have been gaining from the mild rebound in manufacturing and 7,000 in professional and business services is being more than offset by a 15,000 monthly rate of job loss in government -- a trend that is only likely to worsen in the months ahead.
The Part-Time Economy graph is a testament to the capacity of Wall Street economists to gum endlessly about comparatively meager concepts. For five years during the boom they jabbered about the economy’s amazing jobs fecundity, only to have the 2.5 million “one-third” jobs created in this sector through December 2007 completely disappear during the next 24 months of downturn. Moreover, after full credit for 85% of the job recovery since December 2009, even the count of low-pay part-time jobs in the US economy is hardly statistically different than it was at the opening of the 21st century.
Finally, a word on the HES Complex jobs completes the picture. This sector has been the American economy’s jobs evergreen. During the seven years of the Greenspan Boom, about 66% of the total gain -- about 4.7 million jobs -- was attributable to health, education and social services. There remains a mystery as to how we pay for $2.5 trillion of goods and services we import from the rest of the world each year based on what is overwhelmingly a cradle-and-grave job market; that is, one focused on educationally nurturing citizens before they enter the job market and providing health-care palliatives afterward.
But the more immediate problem is that the fiscal crisis is steadily closing down the government’s new spending spigot on which the decades-long expansion of the HES complex output and jobs was based. Indeed, Obama Care will shrink the flow of new private dollars into the health-care system as employers cut back and opt out; at the same time, busted budgets at all levels of government will drastically squeeze what has heretofore been the open-ended flow of publicly financed employment. The graph makes this trend unmistakable. After generating 49,000 new jobs per month during the long Greenspan Boom, the rate of growth slowed to 35,000 per month during the Great Recession, then dropped to 26,000 per month during the last year of the New Normal, and, in fact, slowed further to 13,000 in January.
That might be considered a somewhat alarming trend -- unless you are counting snowmen. Indeed, when coupled with the continued loss of Breadwinner Jobs, it is hard to see why you would not characterize the true job situation as anything less than alarming. But perhaps those Wall Street economists who take such great comfort in the hiring of a few more bartenders and bellhops are actually doing field research -- such as moonlighting for their own next job.
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