I’ve been trying to get to this since Thursday but haven’t had either the time or the energy to do it justice. Steven Roach, chief economist for that bastion of radical Commie progressives, Morgan Stanley, wrote a long article in the NYT on ‘the state of the American labor market’ that makes sober reading.
The state of the American labor market remains the defining issue of the current economic debate. Through February, the United States was mired in the depths of the worst jobless recovery of the post-World War II era. Now, there are signs the magic may be back. 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. 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.
An equally dramatic picture emerges from the survey of American households. 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.Finally, the occupational breakdown of the American labor market, as also sampled by the survey of households, provides yet another facet of the character of the recent hiring upturn. 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. At the upper end of the occupational hierarchy, increases in construction and professional jobs were partly offset by sharp declines in the numbers of production workers, who mainly toil in manufacturing plants.
That’s us, folks. The Bush economy which has been so good for corporate profits and CEO salaries has been deadly for everyone else, particularly those of us who count on production jobs. Cleveland alone has lost some 60.000 production jobs to robots and outsourcing. (AirAmerica News) Bush Commerce Secretary Don Evans told workers they should ‘quit whining’ about massive job offshoring, and went on to insist that globalization was ‘good for the economy’. What Roach is saying is that the ‘economy’ it’s good for is measured by corporate profits alone; the rest of us are sliding downhill and our attempt to stop the slide is making things worse.
Consequently, from three different vantage points – employment breakdowns by industry, by occupation and by degree of attachment – the same basic picture emerges: 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.
This puts households under enormous pressure. Desperate to maintain lifestyles, they have turned to far riskier sources of support. Reliance on tax cuts has led to record budget deficits, and borrowing against homes has led to record household debt. These trends are dangerous and unsustainable, and they pose a serious risk to economic recovery.
(emphasis added by me)
Roach’s question is very simple: ‘What are we going to do about it?’ The answer is: Bush plans to do NOTHING. That’s the way he wants it, that’s the economy he has been trying to bring about his whole first term, and now he has it. It’s an economy that is exclusively anti-worker and pro-corporate, and what Roach is seeing is the result of that deliberate skew.
But Roach clearly sees what the Bush Administration ignores: who’s going to buy all this shit when the job market finally collapses and the middle-class is wiped out? What happens after the radcons succeed in turning America into an Argentine-style third-world country steeply divided between the haves and the have-nots with all the money at the top? Do they even care what happens then?
The economic picture is a lot bleaker than it looks on the surface, especially for us, and so far nobody’s doing a damn thing to reverse this course.