Saturday, January 07, 2012
Is Employment Really Improving?
This comes from St. Louis Fed Fred, of course.
The thick green line is core employment level (right axis). In other words, the number of persons aged 25-54 who are employed.
Such persons are the least likely to be disabled or retired, and most have finished their schooling.
The sustained drop in this measure of absolute jobs cannot be accounted for by retirements, because very few in this age bracket are retired.
The thinner blue and red lines (left axis) are labor force participations for men and women of all ages. Unfortunately, participating in the labor force doesn't mean you have a job - it means you are either working or looking for work. Those rates should be slightly affected downward by retirements.
I look at this green line, and I think that the happy talk is missing the mark completely. We're not gaining much.
Here's the same thing with a bit more slices on the ages:
The bottommost line is 55 and over employment, which has been increasing. This is easily explained by older people working longer - 22% of those aged 65 and up are still working. If you turned 65 last year, you have to wait until 66 for full retirement, so it's not surprising. Also a lot of retired people are unable to make ends meet and are working part-time, if they can.
The top blue line is just full-time workers. Note that we are having trouble climbing back on that measure as well.
The red line second from the bottom is 45-54 workers, which has declined a little but not much. This means that the 25-45 bracket has sustained huge job losses without recovery as a result of the Truly Bad Recession That Is More Like A Depression, henceforth to be referred to with the acronym TBRTIMLAD. There is nothing "great" about what we are experiencing.
You can't explain this by demographic movements - here are US population pyramids for 2006 and 2011:
The really big 2006 bracke between 45-49 moved in the 50-54 bracket.
The lower age brackets increased more than is immediately obvious, due to immigration and a move up of a larger group that were 20-24 in 2006.
The bottom line is that the young are seeing vicious levels of unemployment, which has a huge amount of impact on the future economy.
I really wonder what younger people are thinking as they wander around trying to deal with this. I don't think Obama can get reelected without their votes, but an increasing number of younger people must be desperate.
Update: Adding a new series to show just how rough it really is for so many out there:
One of the aspects of this that seems to be masking a real problem is higher employment among those of retirement age:
We've gained close to a million jobs right there.
Which is most of the gains for the 25 and older population? Aggh. Uggh. Gut punch.
But of course this implies a substantially smaller growth impetus in the general economy.
I'm still stuck on the overwhelming nature of this job gap, though.
"White House says jobs data suggests economy improving: MSNBC"
I guess it all depends on who looks at the data. Myself, I'll trust what you say. Cause Obama has said so many things that have not come to pass.
I blame Mom & Dad for allowing Junior to take a worthless major on someone else's dime. Junior may not have the aptitude for hard sciences, but if Junior wants to major in History or Political Science, he needs to put the first half of work in at a junior college.
With most major retail establishments going to a shorter and unpredictable work week, the old options for liveable wage jobs don't even exist for many young people.
I agree about community/junior college. Some of the brightest young people I know have chosen that route. I know one 19 year old who intends to be a doctor, and probably will succeed, who chose a community college for that reason.
An anecdote: My youngest niece is graduating high school this year. Because it is a sort of "charter" school, the students are all basically in the 25+ ACT score range. Basically, good students, all likely college-bound. And it's a highly competitive school, the unwritten-but-constantly-uttered goal is to get the kids into prestigious universities.
The school had a College Financing Night for the parents recently. I tagged along ('cause ol' Unk has a policy of giving a decent chunk of change toward senior year tuition if the kid has earned it). The Q&A session was 90% filled with questions along the line of "Since I'm required by law to pay for my child's education, what do I...?"
Mom, Dad, and Unk looked at each other in despair. If the smartest people in the country are this stupid, the only way to survive is to have a completely opposite attitude. In short, the kid is going to start at junior college unless she gets a free ride (which ain't likely). Most of the "full scholarships" being offered are for tuition - but tuition amounts to only 20% of the total bill (room, board, and "fees" cover the rest). And we were probably the only adults in the room who did not look at junior college with disdain. (We also were likely the only adults in the room who actually WENT to junior college.)
When I say Mom & Dad are working longer to pay for useless degrees, this is exactly what I mean. They are letting their kids take majors without ANY idea of what the job market for such "skills" is expected to be. Pre-Med? Probably an excellent choice. Pre-Law? Maybe not so good. Not all degrees are created equal, and it has little to do with the prestige of the university. Plenty of unemployed Ivy League history majors out there.
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