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This Is Not a Healthy Job Market |
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By Jeffrey Tucker |
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Commentary Going into the weekend, we were again bombarded by crude propaganda from the Biden administration. The topic was the jobs report, which claimed another half-million jobs had been created. Plus, they cite the unemployment rate, which is 3.5 percent, shockingly low but it means absolutely nothing. It only counts the number of people in the job market who can find a job but excludes everyone else. That statistic is so useless at this point, it might as well not be collected at all. Labor force participation is still substantially lower now than it was before lockdowns, and fully 6.7 percent below a high reached in 2000. There is much broken in this market but nothing more so than the shell game going on right now in tallying full-time vs. part-time and multiple job holders. Here is where the decay is truly evident, and it is a problem that profoundly affects people’s lives. I dutifully dug through the latest report when it was first released in the morning, suspecting that something was wrong with the spin. But reading through the text put out by the Bureau of Labor Statistics, nothing jumped out at me. I gave it a rest until the afternoon. A few economists on Twitter spotted a problem, so I had another look. Sure enough, buried deep in the data, we find something incredibly interesting and downright frightening. It turns out that between June and July, the United States lost half a million full-time jobs. That’s the largest loss in this category since the lockdowns. Where does this net job creation claim come from? Get this: the same data set reveals that there have been one million new part-time jobs created, for a net of half a million. Multiple job holders soared. Do you see what’s happening here? It’s no different than cutting a hamburger in half and claiming you just made 100 percent more food. People are losing full-time work and replacing such jobs with part-time jobs, with people taking two or three to attempt to match the income. In other words, this is a genuine calamity unfolding before our very eyes. And yet, absolutely no one in any official position dares mention it. |
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The trends are not headed in the right direction, if by that a vibrant job market with high-wage full-time employment. Instead, those jobs are gradually fading and being replaced by gigs and paycheck foraging. The Bureau of Labor Statistics completely obfuscated this alarming trend in their discussion. Even the data bureaus are now thoroughly politicized to the point that you can’t believe what they say. |
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(Data: Federal Reserve Economic Data [FRED], St. Louis Fed; Chart: Jeffrey A. Tucker) |
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As for the wages that people 16 and older are actually earning, they are now at the same rate they were before the lockdowns. The stimulus payment proved to be a short-term fix, a boost of nothing that was quickly taken away by inflation. Now matter what the White House says now—it’s basically all lies—wages have been in a prolonged state of stagnation ever since the great disaster of March 2020. Very likely, we have not really left that forced recession. There will be no soft landing because there is nothing to land. Most of the growth is fake and wages are stuck in real terms. |
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(Data: Federal Reserve Economic Data [FRED], St. Louis Fed; Chart: Jeffrey A. Tucker) |
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Whatever happened to progress? What happened to the idea of gradually living better than our parents? That vision is gone in America, especially among young people, replaced by a dour culture of just getting by. Let’s leave aside the data for now and dig into what life is like for today’s young college graduates. Much depends on training and experience but one case in my mind really sticks out because this young man did everything right from secondary through college and graduate school. He chose an Ivy education that was very expensive and focused on American and European literature, receiving very high marks throughout college, exactly as high-soaring SATs would have predicted. At 24 with a master’s degree, he is super well-educated and erudite, not to mention mannerly, mature, and earnest. But now he confronts the one thing that his education never prepared him for: getting a job out of college. It’s incredibly cruel how this works. Once the university has cashed your final check and handed you a degree or two, they completely wash their hands of you. He has discovered within a few weeks that the job boards like Indeed are completely useless. He sent off 100 well-formed applications with customized resumes. He heard back from 8 of them. Of those he received three interviews, only one of which called him for an in-person interview. That went well, he thought, but never heard back from them, not even so much as a polite no. They ghosted him completely. So here he is with high credentials, the best possible education, flawless manners and speech, and is unable to get a job that fits with his years of training. In the old world, a person like this would work for a high-end publisher or perhaps an encyclopedia publisher or a cultural publication. Those jobs are in high demand now because there are ever fewer of them. Every institution out there is also hiring from within existing networks of which he is not part. It doesn’t help that nothing about him checks any of the boxes to enable him to become tokenized in the name of diversity compliance. That’s because he is a white male, which these days serves as a mark against him, as he was daily reminded in college. What’s the next step? There are plenty of jobs out there in the service industry. But taking such a job would mean having to recognize that the years of training in literature, language, and writing were a waste of time from a professional point of view. No one wants to do that. And journalism seems like a good path but the major media is entirely captured by ideological interests. There are not enough positions available in alternative media to support all those willing to go in that direction. I’m struck by the difference in the world he confronts versus what I faced when I left college with an economics degree. Truly, it never even occurred to me what I would do when I left. I chose a journalism path and ended up in a variety of positions in the nonprofit and for-profit world. But my main point is that there was never a lack of opportunity for me or anyone in my generation. We had it so good that we didn’t have a care in the world about getting a job. Times have dramatically changed. The labor market is undergoing huge shifts, away from the high-paying Zoom jobs that dominated the market for 15 years. We live with vast surpluses in those sectors, with every major business culling its ranks of the fanciest jobs that people once snagged solely due to credentials and connections. At the same time, there are vast shortages for workers who actually do real stuff in the real world. The adjustment is not going to be without tremendous pain. A major reason concerns the heavy regulation in the labor market itself. Unions are not as much a pressing problem. The key issue is regulation and compliance. Every business that wants to hire faces incredible costs at every step along with legal risks of litigation. Small business is the future of hiring but such enterprises are throttled with a thicket of rules, mandates, and a culture of fear. As a result, the entire sector is likely to be bogged down for years to come. It’s all an unnecessary tragedy but don’t expect the Bureau of Labor Statistics to report any of it. They are too busy burying the bad news in piles of numbers hardly anyone bothers to discover. |
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