Posted on 06/01/2017 11:23:02 AM PDT by SeekAndFind
There's something weird going on with the US economy.
It's steadily adding new jobs, at a pace of about 185,000 every month. Unemployment keeps falling: at 4.4%, it's at its lowest since May, 2007. But people's wages aren't growing at the rate you'd expect them to when unemployment is this low and hiring is so healthy.
So what's happening? One explanation is there's a larger pool of people who are starting to look for work — people who weren't previously considered unemployed. If that's the case, companies don't need to boost wages to compete for workers, because there's more people out there who had given up even trying to find a job until recently — and now they're coming back into the workforce.
That scenario depends on what percentage of the adult population are "participating" in the labor market, either by working or looking for a job. The labor force participation rate has been in decline since 2000, thanks in large part to the aging US population. But it held steady in the last two years, and the unemployment rate fell to a historic low, suggesting plenty of people who were counted as being out of the labor force have been rejoining it as the economy improves, even as older people drop out entirely.
Why those people left the workforce, and why some are returning, has become a popular guessing game among economists trying to figure out one of great mysteries of today's economy.
Federal Reserve researchers argued in 2014 that "nearly half of the decline" in labor force participation was due to the the growing number of baby boomers hitting retirement age. But what about the other half?
(Excerpt) Read more at buzzfeed.com ...
I can think of a few reasons:
* The new jobs are entry-level and don’t pay well
* The new jobs are service jobs and do not pay as well as manufacturing or construction
* Unemployment isn’t as low as it is being reported
1. The U-3 is baloney and 2. those 95 million people taken out of the workforce during Obama’s administration and not counted anymore.
The key is that the real inflation rate is not what is reported, so while social security income is not rising very much the costs of goods and services that seniors use (health care, food, and rents are the major ones) are rising very quickly.
As a result the seniors that are “out of the work-force” are re-entering the workforce and competing for many (especially service sector) jobs.
The employment surge began in earnest in January. It'll take a little longer.
Lastly, these need to be REAL jobs. Too many people working fast food and part time.
When part time jobs become full time, then wages will rise.
Because the unemployment numbers have been falsified for the last eight years.
Wages will rise when a substantial number of the illegal aliens in the workforce are deported and a substantial number of those American INVOLUNTARILY unemployed and considered not in the workforce begin to reenter employment.
I think you are touching on something.
It might not be that they are all “entry” level, but in the past year we’ve updated a lot of our telecom systems and the result was that we could handle more calls with a lot fewer people. And since we could route the calls to the proper group (with the proper skills) the “new jobs” were not only entry level, but the skill set to do the job dropped by a measure of two or three.
Literally, the toughest skill for the entry level job is the ability to show up on time, and communicate in english.
Obamacare killed the 40-hour work week, forcing small businesses to keep people's hours under 30 per week?
Obamacare made small businesses keep headcount under 50?
-PJ
You bring up a good point. Do What should the labor participation rate be to show strong employment?
The unemployment rate is a phony. The people who became frustrated and gave up aren’t counted. They may be starting to come out of the woodwork as things improve. In any case, the pool of the unemployed is much greater than 4.4 pct.
1. Required employment skills advance..., education and labor skills decline.
2. Definition of BLS "Unemployment" revised to understate the true employment conditions.
3. Employment of illegal aliens continues to become the "Norm", thus reducing the value of labor... Add others as you will....
Under Obama, the Feds screwed with the formula. The measurement matrix should be reset back to the pre-Obama norm.
Yup.
I’ll take “Because the Numbers are Bogus” for $100, Alex.
I think the unemployment numbers have been falsified for a lot longer than eight years. I was a young man in the sixties when the unemployment rate was officially slightly HIGHER than what they claim now. Anyone who did NOT want a job had to hide. People with well paid full time jobs often had a part time job as well. It bore absolutely no resemblance to the current situation. If we got to that point now they would have to report the unemployment rate as MINUS ten or more percent.
I only wish I had had the maturity to take full advantage of the opportunity that was everywhere then.
No, mfg jobs growing rapidly. Lots of high wage jobs.
Real unemployment falling.
There is no wage inflation (although Americans’ household income is at RECORD highs) because we are still catching up from a massive 20 year worldwide DEFLATION.
Many of the businesses that are coming back will require investment in factories and equipment and that takes time. Most of the manufacturing companies left behind empty and decaying buildings
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