Thursday :: Jul 22, 2004

Takin' What Their Givin'


by pessimist

The Bush Economic Recovery is dead.

Despite all of the happy talk over the last couple of months (some of which was accurate), all of the indicators seem to be disagreeing with the public pronouncements that all is well in the working world.

Bank One/J.P. Morgan to cut 10K jobs nationwide

Mitsubishi to cut 1,200 workers at Normal plant

Capital One Reports 42 Percent Profit Increase, To Lay Off 1,400

And then, using the same data source, one can find that either both or neither event is happening:


Mass layoffs rise in June
Fewer mass layoffs in June

The last two links actually cover Ohio (more layoffs) and Alabama (fewer layofs), but I couldn't resist - it was too good to pass up.

But seriously, things aren't very good out there:

Nationwide, U.S. employers cut 134,588 jobs in 1,379 mass layoffs, compared with May's total of 87,501 initial claims for unemployment from 988 mass layoffs. In June of 2003, U.S. employers took 1,691 mass layoff actions, resulting in 157,552 initial claims for unemployment.

And in "Girly-mon" Ahnoldtlandt:

California as usual led the nation with 438 mass layoffs, putting 39,179 people out of work.

I can hear our good friends from the Wrong-wing exclaiming "But all sorts of jobs are being created!"

Let's take a look at that contention:

More Jobs, Worse Work

More than a million jobs have been added to total nonfarm payrolls over the past four months, the sharpest increase since early 2000. These gains certainly compare favorably with the net loss of 594,000 jobs in the first 27 months of this recovery.

"See - we TOLD You so!"

Not so fast!

But there's little cause for celebration: the increases barely make a dent in the weakest hiring cycle in modern history.

From the trough of the last recession in November 2001 through last month, private sector payrolls have risen a paltry 0.2 percent. This stands in contrast to the nearly 7.5 percent increase recorded, on average, over the comparable 31-month interval of the six preceding recoveries.

Nor is there much reason to celebrate the type of jobs that have been created over the past four months. In general, they have been at the lower end of the economic spectrum.

By industry, the leading sources of hiring turn out to be restaurants, temporary hiring agencies and building services. These three categories, which make up only 9.7 percent of total nonfarm payrolls, accounted for 25 percent of the cumulative growth in overall hiring from March to June.

Hiring has also accelerated at clothing stores, courier services, hotels, grocery stores, trucking businesses, hospitals, social work agencies, business support companies and providers of personal and laundry services. This group, which makes up 12 percent of the nonfarm work force, accounted for 19 percent of the total growth in business payrolls over the past four months.

Lower-end industries, which employ 22 percent of the work force, accounted for 44 percent of new hiring from March to June.

According to the Bureau of Labor Statistics, the total count of persons at work part time - both for economic and non-economic reasons - increased by 495,000 from March to June. That amounts to an astonishing 97 percent of the cumulative increase of the total growth in employment measured by the household survey over this period. By this measure, as the hiring dynamic has shifted gears in recent months, the bulk of the benefits have all but escaped America's full-time work force.

It turns out that fully 81 percent of total job growth over the past year was concentrated in low-end occupations in transportation and material moving, sales and repair and maintenance services.

While there has been an increase in job creation over the past four months - an unusually belated and anemic spurt by historical standards - the bulk of the activity has been at the low end of the quality spectrum. The Great American Job Machine is not even close to generating the surge of the high-powered jobs that is typically the driving force behind greater incomes and consumer demand.

Under unrelenting pressure to cut costs, American companies are now replacing high-wage workers here with like-quality, low-wage workers abroad. With new information technologies allowing products and now knowledge-based services to flow more easily across borders, global labor arbitrage is likely to be an enduring feature of the economy.

It was only a matter of time before the globalization of work affected the United States labor market. The character and quality of American job creation is changing before our very eyes. Which poses the most important question of all: what are we going to do about it?

I admit that I don't have the answer to this question. Any ideas?


1,400 Might Lose Jobs At Eckerd Headquarters

Kimberly-Clark Cutting 350 New Milford Jobs

Layoffs push SC unemployment rate to 6.6% in June

....

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pessimist :: 5:11 PM :: Comments (21) :: Digg It!