Consider the statistics concerning the current labor market. While the most sober and objective of analysts agree the unemployment rate understates the weakness of job opportunities by a wide margin, this wouldn't be obvious to anyone who listens to the talking heads describe last week's jobs report and unemployment rate. Why? They commit "statisical abuse," that is, they cite statistics which they allege "prove" their assertions.
For example, the talking heads are ignoring the “missing workers,” those potential workers who--due to a poor jobs market--are neither employed nor actively seeking a job. So, the talking heads cite the most recent numbers to paint a rosy picture of the jobs market, one that extends the rosy picture they painted based when discussing the previous jobs report, and so on ad infinitum until the talking heads are finally cut off from their fillibustering to go to a commercial break.
Talk about "putting lipstick on a pig"!
Hope is on the horizon, however.
To provide greater objectivity and transparency to decision makers, the folks at EPI have introduced a weekly "Missing Workers Estimate" that's designed to provide a key gauge of the current health of the labor market. Here's this past week's estimate (that is, what the talking heads didn't say):
Current “missing worker” estimates at a glance
Updated July 3, 2014, based on most current data available
Total missing workers, June 2014: 5,980,000
Unemployment rate if missing workers were looking for work: 9.6%
Official unemployment rate: 6.1%
As important (and depressing) as those figures are, John Mauldin carefully culled EPI's data, finding the part-time aspect of the current jobs market:
Employed persons at work part time:
Part time involuntarily......................... +275k
Because hours cut back.................... +72k
Because that’s all they could find...... +111k
Part time voluntarily............................ +840k
Mauldin then commented:
That is seriously pathetic and makes me wonder about the Retail adds
+40k and the Leisure & Hospitality adds +39k. Low-paying, less than
40 hour a week jobs? You bet. Ditto Health care and social assistance,
which clocked in with a hefty 33.7k.
But it also explains why, with 288k bodies added, the average work
week is not budging. Translation: they are hiring more workers instead
of increasing the hours of existing workers. Which suggests that maybe
this is more of what we have seen already: the quest to hire part time
employees to avoid the benefits baloney.
Use your head. If we really created 288k jobs. And 275k folks were
made involuntarily part-time, then this suggests that there are still way
more candidates than there are openings.
Okay, that's fairly obvious. But then, as Mauldin is wont to do, he connects the dots:
When some of us pointed out, when the Affordable Care Act...
was being debated way back in 2010, that the bill would result in an
extraordinarily large number of temporary and part-time workers, we
were called delusional and told we were just using that argument to
oppose the ACA. It turns out, Mr. Krugman et al., that we were right. An
unintended consequence of the ACA is a dramatic increase in part-time
employment, especially among young people. There is no disputing this,
unless you are willing to ignore the clear data from the BLS.
Precisely when young people are starting their careers and should be
able to land “starter jobs” and look forward to establishing themselves,
they now have to hold down multiple part-time jobs in order to simply
survive. Gods forbid they have a kid or two.
Don't believe Mauldin? Examine this EPI chart:
Based upon her analysis of the EPI data, Mauldin quotes Joan Shierholz:
Even if we saw June’s rate of job growth every month from here on out,
we still wouldn’t get back to health in the labor market for another two and
a half years.
Two and one-half years? That's after the 2016 presidential election!
The Motley Monk knows that many people's eyes "glaze over" when economic topics are the subject of conversation...and even worse if the post is long, like this one. However, now that the conversation has ended insofar as legislating Obamacare is concerned, people's eyes won't be glazing over as they personally experience the reality of what Obamacare is doing not only to the nation's economy but also to the jobs market...especially all of those young people who fell for the mantra of "hope and change."
They got what they wanted. Now, even if there is "buyer's remorse," today's young people--tomorrow's middle agers--will be on the hook for the bill for the remainder of their working lives. After all, Uncle Sam doesn't serve any free lunches. Someone pays for them.
Let the discussion begin...
To access EPI's weekly jobs estimate, click on the following link:
To read John Mauldin's "Thoughts from the Frontline," click on the following link: