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09 May 2016

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hans

Add to that 13mm the 40-50mm who are only part time (<30 hrs wk) and we have an established, and growing, underclass, half a paycheck away from desperation. Perhaps Trump isn't skillful enough to make them roar, but soon someone will.

Jack

Sir

David Stockman writes about the evisceration of jobs and the hollowing out of America that is reflected in the participation rate.

"..the bottom 90% of families have no more real net worth today than they had 30 years ago and earn lower real household incomes and wages than they did 25 years ago."

http://davidstockmanscontracorner.com/trumped-why-it-happened-and-what-comes-next-part-3-the-jobs-deal/

The bigger government has got the worse off the majority of the people. But....current "wisdom" is that untrameled government spending is the source of all prosperity. We are following Japan and the EU with more unsustainable financial policy. Voters demand a free lunch but what the majority get is falling behind. The Japanese and the Europeans are rather docile as we see with the Greeks. We Americans are armed and at a certain breaking point may revolt with vicious consequences.

mlaw

The original article appears to be a partisan hit job of no significant statistical relevance. What exactly is being said;

Statements made:
1) The historic rate of those out of the job market has increased from 34 to 37%. That appears to be a roughly 10% rise rather than a 16.8% rise.

2) The statement that the out of the market group increased 4% during the GWB administration is ambiguous; it is stated that it increased by about 4%, did the rate increase from 34 to 37% (about 9% under Bush?), or did the rate increase 16.8% from 34% to about 40% under Obama as alleged?

The article is no help, just grist for the mill.

Cortes

The following site is probably familiar to your readers, Colonel, but just in case...


http://www.shadowstats.com

An antidote to official figures.

Kooshy

Colonel for one new technology and automation, is eating up the old manufacturing jobs that are produced with intensive labor. Secondly On larger scale unless manufacturing in this country can be substituted or subsidized with cheep labor, one wouldn't be able to compete with countries with cheep lower standard of living labor. For example jobs in my industry, is getting hit from every direction including overseas cheep labor, automation, technology, now days even on medium to small productions. Unless the standard of living is lowered to where China is manufacturing jobs will go away and people with dignity opt not to go for hamburger flipping jobs. Free trade is BS it should be stopped, it is just good for big producing corporations, and their big retail corporation, and their big daddy financier, which now happens to be the biggest printing business still working three shifts, that is FRB.

dws

Pat,

Sure, no, but I'm guessing many of these supported policies that helped get us in this mess. There's a lot of nonsense and Johnson's a good example here. His suggestion that this is just Obama's fault is nuts. https://research.stlouisfed.org/fred2/series/IC4WSA: looking exactly at when Obama took office and then at the year before and after shows that.

From what I read on this blog, and I check in every day, I can't tell if there's agreement on how we got here or not. Be interesting to know. Is there agreement on the meaning of that graph? If not here, then I don't see there being much chance elsewhere.

FND

The total labor force participation rate has been going down since 2007. (since the financial crash)

http://data.bls.gov/timeseries/LNS11300000

The real median household income has gone down since 2000. (since the nasdaq bust)

http://data.bls.gov/timeseries/LNS11300000

I think there are a lot of former middle class people. I too think that's why Trump has done so well in the election cycle so far.

FND

I believe the lower wages and lower worker participation rates are cause by

- mass influx of low educated immigrants, we already have a surplus of unskilled workers

- loss of manufacturing jobs due to automation and factories moving overseas

- group-think failed monetary policies by the Federal Reserve which prohibits the clearing of debts. In fact their policies encourage more debt, and debt keeps increasing.

https://www.youtube.com/watch?v=wZASpN21OUo

ISL

Dear Colonel,

I recommend this article for an in-depth look at the issue of the labor participation rate, which is at an all time low, and what it means. My take is the US Employment/population rate looks really lousy, unless the authors really massage it (last figure).

However, if one adds in that the anemic job growth has not been accompanied by any wage growth for most:

http://www.zerohedge.com/news/2016-05-09/citi-wage-growth-only-wealthy

And then toss in the 47% of americans have trouble with a $400 bill for medical, and have no savings, while the Waltons own as much as the bottom 42% (Hmmm, wonder whose pocket the trillions printed by the fed went into, and wonder who is going to get stuck with the bill).

Well, I can see a 150 million reasons.

robt willmann

Another discussion of the subject is in an article by Dave Kranzler about the misleading non-farm payroll jobs report. Kranzler did actual financial trading as far back as the junk bond era of the 1980's, as well as financial analysis--

http://investmentresearchdynamics.com/non-farm-payroll-economy-is-collapsing/

The U.S. economy continues to be in bad shape and there has been no recovery since the 2007-2008 financial mess.

Kranzler also has an article on a new regulation being placed by the Not-Federal Reserve Bank that will prevent outside companies from getting their collateral back they put in a bank if the bank starts to go down the toilet--

http://investmentresearchdynamics.com/did-the-fed-signal-the-inevitability-of-the-next-banking-system-collapse/

Hardly mentioned at all, including in the presidential campaign, is the bad shape that pension plans and retirement funds are in. Recently, the Central States pension fund for the Teamsters Union (truck drivers and others) applied to reduce the dollar amount of benefits that its retired members were supposed to receive, and the U.S. Treasury denied the application--

https://teamster.org/news/2016/05/teamsters-applaud-treasury-decision-deny-cspf-cuts-protect-retiree-pensions

This has affected United Parcel Service (UPS), one of the great U.S. companies, as its drivers are members of the union and it is trying to keep things on an even keel between its own pension plan, the union's pension plan, and shifting federal law.

The problem with pension and retirement funds, for private and government workers, is the most serious of all because it involves older persons who in many cases have limited working capacity.

Allen Thomson

> The total labor force participation rate has been going down since 2007. (since the financial crash)

http://data.bls.gov/timeseries/LNS11300000


It's worth extending that chart all the way back to 1948 (Change Output Options).

For the period 1948 to 1978, the participation rate was *lower* than it is today. It grew from around 1960, began to level out in the 1990s, reached a peak around 2000 and then began a secular decline that has lasted until the present.

Fred

Robt,

" the bad shape that pension plans and retirement funds are in..."

It just hasn't been discussed by the Democratic candidates. The main problems are public sector pensions and that is two-fold, first politicians making promises for years to unionized employees knowing it would be years before the payments came due - which is now - and second the complete mismanagement of public institutions. See Detroit, city of, public schools of, etc. Not to mention Barack's home town, Chicago and the State of Illinois. It is in far worse shape than Puerto Rico.

Babak Makkinejad

"...Unless the standard of living is lowered to where ..."; that is called "The Snow Crash" -

http://www.amazon.com/Snow-Crash-Neal-Stephenson/dp/0553380958/ref=sr_1_1?ie=UTF8&qid=1462892350&sr=8-1&keywords=the+snow+crash

You are also omitting workers' sabotage and maleficence...

FND

The case of the Central States Pension fund is a sad one with lots of blame to go around. Originally, it was a Teamsters Union retirement fund. The Feds discovered mismanagement and raiding of the fund by corrupt Union officials and so the Federal government took it over 25 or so years ago. But then, according to a Marketwatch article: http://www.marketwatch.com/story/how-the-teamsters-pension-disappeared-more-quickly-under-wall-street-than-the-mob-2016-04-04

"A quarter-century later, the professionals who replaced them—Central States Pension Fund administrators; the Goldman Sachs & Co. and Northern Trust Global Advisors fiduciaries; and Department of Labor regulators—stood watch while the financial markets accomplished what the mob had failed to: which was to smash the fund’s long-term solvency with massive money-losing investments."

So the Feds turned the management of the fund over to wall street. Wall street was no better than the Teamsters.

Tyler

mlaw,

Shorter this fool: LA LA LA LA I CAN'T HEAR YOU

different clue

Kooshy,

This "competition" was artificially engineered to begin with by the swindelous passage of the Forced Trade Agreements. Of course $15/hour labor plus benefits in a society with Workman's Comp, anti-pollution controls, Social Security, etc. . . . can't compete with $1.00/hour labor plus zero benefits in a society with zero Workman's Comp, zero pollution controls, zero Social Security, etc.

There is no reason it should be expected to have to. The answer would be to abrogate and/or withdraw from all the Forced Trade Agreements, re-protectionize the American social body political-economic, and re-onshore our production held hostage in foreign exile.

I recently had a friend staying over. He slept in my little living roomlet. I have a grip-lamp attached to the pole of a burned out fancy floor lamp. The bulb in the grip-lamp was held a little way out of the lamp cowling by a pull-chain Edison socket extender. I had it set up to turn on/off at the wheel switch halfway up the cord. He didn't know that. He pulled the pull-chain to turn it on and of course it didn't work. Unfortunately, that one pull on the pull chain broke something inside the socket extender. That was only the third time that pull chain had ever been pulled. That socket extender was made in China. Tell me again about all the benefits I got from a breaks-on-the-third-pull pull-chain socket extender from China. If the hardware store had even carried on from America I would have bought it. I would have settled for one made in Mexico or Taiwan or Korea. But they didn't have that, either.

Miranda

Balderdash. The solution to our economic problems will not come from stealing pensions from mostly middle- and working-class citizens. Are you seriously proposing to take away Col. Lang's pension?

William R. Cumming

Another possible the so-called UNDERGROUND economy, paying no taxes, operating on barter arrangements or in cash?

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