It's the Economy, stupid - Languishing & Lingering after the Great Recession

Job growth has been disappointing? What numbers are you looking at?

He's trying to raise the minimum wage, but guess who opposes it?

 

The recession created a job gap. Not only do we need to create jobs to make up for the deficit but we need to create jobs that correspond to new entrants into the job force. Here is a quote and link to an interactive chart.

Closing the Jobs Gap  »  The Hamilton Project

It is a shame that the administration is being misleading with our job growth situation. For most people under/un - employed they do not need charts to tell them what the problem is. For recent grads entering the work force they do not need the BS either - some people know the truth. So, a better question is why have you been buying the BS?

 

To say that this administration has been misleading about the job growth when they are using the same numbers that every president going back to Reagan seems a bit ridiculous.
Ronnie changed the system of how we determined joblessness in order to make it look like he had improved things over the Carter administration and every president since then has gone along with it.
It's only with the current POTUS that they are calling attention the problems with the system.

 

Ace is using the right wing misdirection on the jobs numbers.

U3 is the official unemploment rate and it has dropped more quickly and significantly during Obama's (t0 date) tenure than Reagan's (at the same point in his terms).



I would agree with Ace that the official U3 rate is not the best measure; U5 or U6 are a better reflection of unemployment, including discouraged workers and marginally attached workers.

Table A-15. Alternative measures of labor underutilization

But it is disingenuous (dishonest) to start using U6 now and comparing it t0 U3,4 or 5 numbers during Reagan years. Obama's U5 numbers are better than Reagan's and by any measure, Obama is on pace for the greatest net gain in private sector employment, surpassing both Clinton and Reagan and leaving both Bushs in the dust.

As to the causes of growing income inequality, the most recent study points to failed supply side tax cuts (more for the top 1%) as contributing to the income gap while adding little or nothing to economic growth or jobs.

Trade agreements under Clinton, Bush and Obama have also hurt US jobs (mostly manufacturing) which is why a majority of Congressional Democrats voted against all these agreements.

Senate Republicans blocking a second stimulus focused on infrastructure also hurt as did sequestration and Republican forced cuts of workforce development programs.

One additional cause of the higher numbers is more workers voluntarily leaving the labor force, particularly since 2007 when baby boomers (many who lost their jobs in the recession) became eligible for Social Security and took that option.

 

I stated that job growth has been disappointing.
Derwood questioned my point of view.
The President's administration reports the job growth numbers as a success.
I question that point of view and conclude that it is misleading - based on the the deep job deficit in addition to the incremental growth of new jobs needed. There is also empirical data all around me suggesting that job growth is a disappointment.
If you hold the position that I am wrong or even ridiculous, it is your right.
However, I question why you ignore the information and points I presented.
I could careless who reports information in what can be a misleading manner, Republican or Democrat, I will always do my own homework when it matters to me.
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I agree and would add the private sector. The private sector has been hoarding cash, we can argue why it is happening, but it is being done. In the private sector, I would include banks - although lately they seem to be more of a quasi-governmental agency like Fredie Mac - a private company serving a public purpose has stated in its charter.

Agreed.

It is possible that he and those in his administration don't fully comprehend the situation and the numbers.

His administration is responsible to a large amount of uncertainty in the labor market - this is mostly due to Obamacare. Business has limited hireing and cut hours of employees due to the uncertainty and costs introduced by the legislation. Even now, there are proposals to delay certain aspects of Obamacare that might impact employers.

Dem Senators Beg For Another Obamacare Delay | The Daily Caller

Sure this is not a big deal for large employers, not a big deal to those with healthcare coverage from those big employers - including government employers/employees, but it is a big deal to small business. Those caught in these kinds of crack will delay hiring if they can. I can post examples like this all day long, my gut tells me it won't matter - not even sure if you folks read this stuff - everything is cool in the job market, right? Obama is doing everything he can do, right?
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I made a simple statement that job growth has been disappointing and a Derwood asked what numbers was I looking at, I answered. The concept of disappointment is subjective, it is my view. The data is objective. My perspective on viewing the data is different than yours and the administrations'. I am looking at the job deficit. I put more emphasis on that. If you don't, that is fine - but to suggest that the job market is good is misleading no matter how we look at the data in my opinion.

So, I ask you to be clear, are you satisfied with job growth? Are you satisfied with the types of jobs being created post-recession? Are you satisfied with the unemployment situation?

I am not satisfied. I believe we should have been doing better. I think we can do better.

 

Do I think we could be doing better?
Damn right I do.
I think we could be developing and rebuilding our infrastructure, there would be thousands of real, union jobs that would provide living wages for people and a system that we don't have to be afraid will collapse on us.
In fact if we want companies to bring their frelling money back how about we invest in our country and build things like oh say train lines that are somewhere in the 20th century.
How is it that China (hell, even Africa) has better rail systems than we do?
Let's get off our asses and get this damn country rebuilt.

And while we're at it, lets put some frelling money in the space program so that we can get a real project off the ground.
Spend some real money not this trickle and invest in the future.
You want jobs that's where they are at.

 

Screw trains. Give me fiber optic Internet infrastructure coast to coast

 

That too.
Why not have both.

 

Ditto that.

Stop pouring trillions into our current game of whack-a-mole with our military in the M.E. Bring those young men and women home and put them to work rebuilding our country.

Of course if we did that the defense lobby and contractors would assassinate half the senate and probably 3/4 of the house.

 

Absolutely correct. A couple decades and people forget I guess.

Ike is one of my favorite POTUS' BTW.

 

Here is a description and a interactive jobs calculator link (you can input your own projections ) regarding how many jobs our economy needs from the Atlanta Fed.

Jobs Calculator -
Federal Reserve Bank of Atlanta


Jobs Calculator -
Federal Reserve Bank of Atlanta

The current unemployment rate is 5.5%. In order to stay at 5.5% the economy needs to create 110,010 jobs per month. during the past 12 months the economy has been on average adding 275,000 jobs per month. 275,000 - 110,010 = 164,990 net new jobs on average being added. During the recession, conservative estimate, the economy lost 8.7 million total jobs, not counting the jobs needed to be added - the real total goes over 10 million.

What do we need to get to what is considered full employment (in economic terms which allows for frictional unemployment) in the next 12 months? Full employment is debatable and some economists, including members of the Federal Reserve think we have a new normal and the economy is currently at full employment, but many still believe about 3.5% unemployment is considered full employment in economic terms. Using the calculator we need 361,000 jobs added each month for the next 12 months. We average 275,000.

Recap - Need 361,000 to achieve full employment. Averaging 275,000.

My expectations are unrealistic?!? Hardly!

And again, I would suggest you talk to some recent grads about the job market. How many with advance and undergrad degrees get multiple quality job offers? How many are delivery pizza, making coffee, stocking shelves or work retail in the local mall? How many move back in with mom and dad after graduation? Perhaps some of us have low expectations - I argue those low expectations come from the administration. Many want to compare this period in time to the Reagan era, true or not Reagan got the country believing we could accomplish anything.
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Real economic growth is going to come from true real business activity. If all we needed to do was repave roads, build bridges and rail systems the problem would be solved. Lack of infrastructure improvement is not the reason for slow economic activity. During the 80's GDP grew on average 7.7% (simple average). From 2009 - 2014 the average is - 3.4%. 2013 growth was 4.57%, in 2014 it was 4.05%, the 4th quarter of 2014 2.2% annualized - not a good trend! We need pro-business proactive action right now.

Let me add one other thing:

U.S. economic growth slows in fourth quarter; corporate profits fall| Reuters

Corporate profits do not always immediately reflect in stock prices.

 

Real economic growth is going to come from people having money in their pockets to spend.
Bad infrastructure and I include the internet in that means companies won't invest in certain areas and see no reason to expand.
They would much rather go to places that have shiny new trains, safe bridges and fast internet.
So if we want to be pro-business we need to make this country into a place they want to come.

I actually do think we should lower the tax on companies who want to bring money into the US.
Weird for a liberal, I know.
Put the rate somewhere around what Ireland has got it at but tax the fuck out of the individuals when the cash in on it.
If the company wants to invest in the their business here its not going to cost them much to bring the money in.
If they just want to spread it around to their stockholders and the CEOs than more money for the government to rebuild the country.

 

In fact, it was you who made the comparisons and unsubstantiated conclusions about the benefits of Reagan's failed supply side policies.

The numbers tell a different story in terms of net job creation.
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Added...from Forbes:

Obama Outperforms Reagan on Jobs, Growth and Investing.

 

The video listed below is a good one to review for a couple of reasons. One, as the speaker shows trends of economic growth - what I believe the data tells us is that having money to spend is not the key to real economic growth. I believe it is income that follows from economic growth. Second, I think he illustrates how preconceived notions and inadequate access and use of data can be a problem.

I think data supports the theory that it is free market capitalism and moves in that direction that has the greatest impact on real economic growth. And given the regulatory climate and regulatory uncertainties (i.e. - Obamacare) in the US, our policy makers are hindering real economic growth. In the US we need to release the restraints on business so that business invests in growth that will then result in greater incomes.






Lesson Plan: Sources of Economic Growth and Development | Economics in Plain English

 

'Restraints' on business always sounds to me like taking things back to the 1900's.
I'm sorry but we put restraints on businesses for a whole bunch of real good reasons.
Now if you say we can have strong unions, serious and consistent environmental protections, and tax levels that will support local communities services, to go with those unrestrained businesses I might be interested.

 

Here is an example of a problem. Center based daycare for a child in the US averages close to $1,000 per month and in some areas the average is as low as $300 per month and as high as $1,800 per month. 26 states receive a failing grade by NACCRRA (see the link)

Defense Department Shines in Child Care Report as States Falter | Fox News

Basically we have an industry generating $10 billion per year - much of it from working low income families, with a scatter-shot regulatory environment not very profitable nor good. They all have to be licensed.

The Average Profit Margin for Day Care | Business & Entrepreneurship - azcentral.com

Clearly there is a problem. Clearly addressing this issue in terms of services and costs can help working low income families. And clearly, this is a circumstance where streamlined national regulations would benefit the industry, helping profitability and helping the consumer. It is not always an issue of eliminating regulation with the thought that business can take advantage of consumers. A better regulatory climate would eliminate restraints on business in this industry in my view.

Another industry that caught my attention lately is payday loans. Obama recently gave a radio talk on the topic:

Obama takes aim at payday loans - The Washington Post

I agree that payday loans are not a good option for anyone. Many poor people get caught in a cycle of debt and dependence. However for some payday loans are the only option short of going to a loan-shark or suffering the consequences of having no cash - i.e., no transportation to go to work, no food, no heat, no day care for children, no shelter, etc. On the other-hand, again we are talking about a low margin business, the default rates are high on the loans. How do we fix this? It is a regulatory problem. It is too simple and wrong for regulators to say the industry is bad and basically regulate the industry out of business therby hurting poor people in need. We can have smart regulation to address all sides of this problem. I would suggest that the big banks in exchange for the free money they get make short-term loans available to working poor people as to legitimatize this business. Now big banks have the luxury of ignoring working poor people. In fact they make it in some cases impossible for poor people to do business with a legitimate bank. The irony is that now in some places in Africa it is easier for impoverished farmers to conduct banking business than it is for some segments of our poor population in this country.