As seen in two previous posts at NewsBusters, once the Associated Press's Christopher Rugaber didn't get the job market "nearing full health" he expected and briefly thought he got in Thursday's jobs report, he quickly downgraded it to "painting a mixed picture," and took it further down to "a bleaker picture" about eight hours later.
That still left the problem, six years after the recession's official end, of explaining away yet another disappointing job-market reading in three quite visible areas. How did Rugaber and colleague Josh Boak "fix" the problem? They decided to say that "this may be what a nearly healthy U.S. job market now looks like." In other words, this is merely the end of the sixth year of the "new normal."
The three main areas where the job market has continued to underperform include the following:
- First, a record number of American adults is not in the labor force; baby-boomer retirements don't explain that.
- Second, the number of full-time workers is still over 800,000 below that figure's late-2007 prerecession peak, while the economy has 2.9 million more part-time workers.
- Finally, real pay has stagnated. Even though median household income seems to be finally picking up, it's still "2.2 percent lower than ... December 2007, the beginning month of the recession."
The message from Rugaber and Boak to America: "Too bad, so sad. Learn to live with it" (bolds and numbered tags are mine):
JOB MARKET'S NEW NORMAL: SMALLER WORKFORCE, SLUGGISH PAY
Even after another month of strong hiring in June and a sinking unemployment rate, the U.S. job market just isn't what it used to be.
Pay is sluggish. Many part-timers can't find full-time work. And a diminished share of Americans either have a job or are looking for one.
Yet in the face of global and demographic shifts, this may be what a nearly healthy U.S. job market now looks like.
An aging population is sending an outsize proportion of Americans into retirement. [1] Many younger adults, bruised by the Great Recession, are postponing work to remain in school to try to become more marketable. [2] Global competition and the increasing automation of many jobs are holding down pay. [3]
Many economists think these trends will persist for years despite steady job growth. [4] It helps explain why the Federal Reserve is widely expected to start raising interest rates from record lows later this year even though many job measures remain far below their pre-recession peaks.
... the generally improving job market still bears traits that have long been regarded as weaknesses. Among them:
- A shrunken labor force.
... The growth of the labor force slowed to just 0.3 percent in 2014, compared with 1.1 percent in 2007.
... This marks a striking reversal. ...
- The retirement of the vast baby boom generation. ... [5]
- Younger workers are starting their careers later. ... [5]
... Fewer than 39 percent of 18- and 19-year-olds are employed, down from 56 percent in 2000. For people ages 20 to 24, the proportion has fallen to 64 percent from 72 percent. [6]
- The number of part-timers who would prefer full-time work remains high ... [7]
- Weak pay growth.
The average hourly U.S. wage was flat in June at $24.95 and has risen just 2 percent over the past year. [8]
Notes:
[1] — The trouble with this "baby boomer retirement" meme isn't just that it represents much less than half of the real explanation. It's also a fact that many boomers are working far longer than they thought they would have to. That's because, thanks to six years of the Federal Reserve artificially holding down interest rates, they can't generate enough replacement income from whatever nest egg they might have accumulated. They know that they should avoid digging into principal, so they've had to either take more risk than they should in the stock market, continue working — or both.
[2] — Sadly, too many young adults are graduating from college without marketable skills, and the economy hasn't been growing to the point where it is creating enough new jobs college grads could fill. As a result, we have lots of people with college degrees working in food and drinking places.
[3] — Additionally, thanks to abuse by some employers of the H-1b visa program, many of those in the vaunted STEM majors (science, tech, engineering, and math) are having difficulty finding work, because it was given instead to people who aren't citizens. That part of the problem has nothing to do with "globalization."
[4] — These problems will only "persist for years" if misguided Keynesian economics rules the public-policy roost for several more years. People were saying the same "this is as good as it gets" nonsense in the late-1970s and early 1980s. Ronald Reagan's rejection of Keynesianism turned things around.
[5] — See Items [1], [2] and [3] above.
[6] — Unfortunately, the participation level in the "prime working years" age group, i.e., 25-54, has also dropped significantly.
[7] — The seasonally adjusted total of part-timers zoomed to almost 27.8 miillion in early 2010, and really hasn't budged much since. One would have expected more growth in full-time employment and an accompanying drop in part-timers as the "recovery" progressed, but as noted above, full-time employment hasn't even recovered to its prerecession peak. Why? In unexcerpted material, as I noted in a separate NewsBusters post on Monday, an economist the AP interviewed admitted that Obamacare's 30-hour definition of a "full-time employee" was responsible for perhaps one-third of the increase in part-timers. It's probably a lot more than that, but the admission is a start.
[8] — More to the point, as seen here in a Bureau of Labor Statistics table, real median usual weekly earnings, a more relevant figure than the average hourly wage, has declined by 3 percent in the past five years (from the first quarter of 2010 to the first quarter of 2015).
The move by the AP pair to describe these unacceptable circumstances as a "nearly healthy" "new normal" would never be occurring if a Republican or conservative was occupying the White House.
Finally, for those keeping score, the closest Rugaber and Boak got to naming Barack Obama, the primary person involved in creating the current disastrous circumstances, was their citation of "the Obama administration's health care reforms" mentioned earlier.
It's far more than that, guys — and I guarantee you that if a market-oriented, regulation-controlling and regulation-eliminating president were in office, the so-called "new normal" we're supposedly stuck with would be replaced with far better circumstances, and relatively quickly.
Cross-posted at BizzyBlog.com.
