The real jobs situation should be seen as quantity vs. quality

Bill Knight column for Thurs., Fri. or Sat., Aug, 2, 3 or 4, 2018

Appearing at a Granite City, Ill., steel mill last week, President Trump said, “We’re having the best economy we’ve ever had in the history of our country,” which was false. The Associated Press reported the comment as an exaggeration, noting, “By many measures the current economy trails other periods in U.S. history. Average hourly pay, before adjusting for inflation, is rising at about a 2.5 percent annual rate, below the 4-percent level reached in the late 1990s when the unemployment rate was as low as it is now.”

Indeed, working people used to have better jobs with decent pay. Those jobs have been replaced with worse jobs at less pay.

On its surface, the government’s June jobs report seemed positive: Businesses said they created 202,000 new jobs then, while another 11,000 were added in local governments, a separate survey showed. Unemployment rose 0.2 percent since May, to 4 percent – still the lowest since 2000.

But the number of unemployed Americans was up 499,000, to 6,564,000 people.

Also, wages improved, up 2.7 percent, but that didn’t keep up with rising costs for education, health care, and other basic needs. Higher prices mean people have less buying power, further worsening workers-as-consumers. Inflation is increasing at its fastest rate in six years – 0.1 percent in June alone, but 2.9 percent in one year. For example, the Consumer Price Index shows gas prices in Illinois are up 21.8 percent from 2017; rent rose 3.6 percent and car insurance increased 8.3 percent over the year.

A 4-percent jobless rate traditionally means the economy is at “full employment,” but Economic Policy Institute analyst Elise Gould warned, “This continued slow wage growth is an obvious sign the economy is not at full employment.”

Plus, she said, the number of long-term jobless increased by 289,000, to 1.5 million, or 23 percent of all jobless, according to BLS.

The report shows 93 consecutive months of job growth – almost eight years, which obviously includes most of the Obama administration. Financial analyst Barry Ritholtz commented, “That performance (or greater) happened 35 times under Obama, including a stretch of 21 out of 31 months from March 2014 to Sept 2016.”

Plus:

* the United States is one of the most affluent countries on the planet, but many Americans still struggle;

* Americans’ life expectancy and health are worse than people of comparable democracies; and

* income inequality is stark, the highest rate of any Western nation.

“About 40 million live in poverty, 18.5 million in extreme poverty, and 5.3 million live in Third World conditions of absolute poverty.”

That’s all according to a report by New York University law professor Philip Alston for the UN Human Rights Council (which the Trump administration quit this summer).

“Donald Trump is deliberately forcing millions of Americans into financial ruin,” Alston wrote, “cruelly depriving them of food and other basic protections while lavishing vast riches on the super-wealthy.”

Such research encourages a closer examination of jobs reports.

For example, 95,502,000 Americans are no longer even in the labor force, according to the U.S. Bureau of Labor Statistics (BLS), which added that the “entire” unemployed percentage is 7.8 percent.

Most importantly, many job gains were in the country’s lowest-paying sector: Service. Overall, service firms claimed to add 145,000 jobs in June, with professional/business services (including temporary jobs) adding 50,000 jobs, education and health services 54,000, leisure and hospitality services (including bars and restaurants) 25,000, and other services 16,000.

“As most anyone who’s worked in the service economy knows, there are an awful lot of awful jobs,” commented Paul Constant of the online magazine Civic Ventures, “ – low-wage, part-time, no-benefit kinds of jobs – in service.”

During the Great Recession, sparked by the 2008 crash caused by financiers, Service lost 21 percent of its jobs; since then it’s gained more than 50 percent, reported Barbara Garson in Mother Jones magazine. Now, BLS says there are 27,714,000 U.S. workers in service occupations (including 15,942,600 in retail), compared to 14,744,000 in construction, natural resources and maintenance, and 18,839,000 in transportation, production and material-moving jobs (including 12,795,000 in manufacturing). Further, the service sector is paying $726.38 a week, compared to $1,099.64 for construction and $902.16 for manufacturing jobs.

Finally, despite the sunshine-and-rainbows reaction to the superficial stats, there are dark clouds. There are still those 6,564,000 jobless Americans, including 415,000 construction workers (4.4 percent of them) and 546,000 unemployed factory workers (3.4 percent).