"Worst U.S. Jobs Data in a Year Signals Stalling Recovery," The New York Times ran as its lead headline on June 2. The Labor Department reported that the U.S. economy created 69,000 jobs during May. The three-month job-creation average was 96,000. Unemployment ticked up a tenth of a point, from 8.1 to 8.2 percent.
Once again, the media is downplaying a blockbuster story by dulling it down with a pile of dry, impenetrable statistics.
Wonder why you can't find a job or get a raise? The new jobs numbers are the key to understanding how bad the economy is--and why it's not likely to get better anytime soon.
Q: If nearly 100,000 Americans per month are finding jobs, why are securities markets tumbling?
A: Because it's actually a net jobs loss. The U.S. population is growing, so the work force is, too. We need 125,000 new jobs a month just to keep up with population growth.
"In the last 22 months, businesses have created more than 3 million jobs," President Barack Obama claimed in his January 2012 State of the Union speech. True or not, a more straightforward claim would have been net job creation: 350,000 jobs over 22 months, or 15,000 per month.
Q: If we're losing jobs, why is the unemployment rate hovering?
A: Discouraged workers don't count as officially unemployed. Neither do those whose unemployment benefits have run out. Ditto for those who are underemployed. The officially unemployed are remaining more or less steady. Since the number of long-term unemployed is rising, however, the unofficially unemployed is growing fast.
To muddy things up further, the feds have rejiggered the numbers to make it look like there are fewer officially unemployed than there used to be. The respected blog Shadow Government Statistics, which calculates unemployment using the way the Labor Department did until the 1980s, says this Alternate Unemployment Rate is about 23 percent--about the same as at the peak of the Great Depression.
Q: So what's up?
A: The jobs figures reflect a big structural problem in the U.S. economy. Real wages have been steadily dropping since the 1970s. We're creating a permanent class of unemployed and underemployed. Even if we got "up" to 125,000 new jobs a month, that would still leave at least 8.1 million people who lost jobs between 2007 and 2010 out of work.
Q: Anything else?
A: Yeah. Jobs don't equal jobs. If you replace a $70,000-a-year job with a $60,000-a-year job, that's a net decline in income. Politicians will claim that the old lost jobs have been replaced with new ones, but multiply that trend over millions of workers, and you'll see reduced consumer spending. Among the still-employed, inflation-adjusted wages are dropping.
Oh, and what about the debts people accrued while they were between jobs? Because many employers refuse to hire jobseekers with bad credit, the unemployed are punished for being unemployed.
The economy is a whale of a problem. But politicians of both parties--and the media--are only paying it the thinnest of lip service.