Part time nation

The job market is looking dismal- and part time:

WASHINGTON — The 162,000 jobs the economy added in July were a disappointment. The quality of the jobs was even worse.

A disproportionate number of the added jobs were part time or low paying — or both.

Part-time work accounted for more than 65 percent of the positions employers added in July. Low-paying retailers, restaurants, and bars supplied more than half July’s job gain.

‘‘You’re getting jobs added, but they might not be the best-quality job,’’ said John Canally, an economist with LPL Financial in Boston.

So far this year, low-paying industries have provided 61 percent of the nation’s job growth, even though these industries represent just 39 percent of overall US jobs, according to Labor Department numbers analyzed by Moody’s Analytics. Mid-paying industries have contributed just 22 percent of this year’s job gain.

‘‘The jobs that are being created are not generating much income,’’ Steven Ricchiuto, chief economist at Mizuho Securities USA, wrote to clients.

Chart courtesy stevengoddard

And it’s not keeping up with inflation even at a low rate:

That is one reason Americans’ pay has not kept up with even historically low inflation since the Great Recession ended in June 2009. Average hourly pay fell 2 cents in July to $23.98 an hour.

Part-time work has made up 77 percent of the job growth so far this year. The government defines part-time work as being less than 35 hours a week.

Weak economies overseas have reduced demand for US goods and, as a result, for better-paying US jobs in manufacturing. Government spending cuts have taken a toll on some middle-class jobs, too.

The Obama team predictions for employment were off- by a mile:

On the surface, the July jobs report — the unemployment rate dipped to 7.4% last month thanks to a shrinking workforce as the economy added a disappointing 162,000 net new payrolls — is just another dismal data point in America’s “new normal” recovery. But it’s also an important milestone and metric for judging the Keynesian fiscal experiment known as Obamanomics.

In January 2009, Team Obama economists put together a report – half quantitative analysis, half sales pitch — outlining the potential economic impact of the proposed $800 billion stimulus. (See above chart from that report.) If Congress passed the plan, the report forecasted, the economy would generate enough additional demand, output, and employment that two big things would happen:

First, the unemployment rate would never reach 8%. Unfortunately, we hit 10% unemployment in October 2009. Failure number one.

Second, the unemployment rate would return to its long-term “natural rate” of 5% by July 2013 (a jobless rate, it should be noted, above the low points of the Bush and Clinton presidencies). Labor markets would be back to peak health. The Great Recession would truly and finally be over.

Mission accomplished by this jobless report.

So were their predictions for the economy:

Of course, we now know conclusively that this prediction — based as it was on the pixiedust magic of Keynesian fiscal multipliers — was a total failure, one even beyond what the July job numbers suggest.

This is important: Obama economists assumed the unemployment rate would return to 5% even without a stunning collapse in labor force participation. Why? Government stimulus would reignite the private economy, causing a return to 4% GDP growth or higher, growth not seen since the late 1990s.

In August 2009, the White House predicted GDP would rise 4.3% in 2011, followed by 4.3% growth in 2012 and 2013, too.

In its 2010 forecast, the White House said it was looking for 3.5% GDP growth in 2012, followed by 4.4% in 2013.

In its 2011 forecast, the White House predicted 3.1% growth in 2011, 4.0% in 2012, and 4.5% in 2013.

In fact, the economy has only grown at half that pace during the recovery; even slower over the past year.

And once you take that labor force decline into account, adjusted for the aging of the US population, the “real” unemployment rate is between 9% and 10% while the combined unemployment/underemployment number is 14.0%. As a recent report from the Century Foundation calculates it, almost the entire decline in the unemployment rate during this recovery was because of declining labor force participation rather than increased labor demand.

Most of the jobs created in 2013 are part time jobs:

When the payroll report was released last month, the world finally noticed what we had been saying for nearly three years: that the US was slowly being converted to a part-time worker society. This slow conversion accelerated drastically in the last few months, and especially in June, when part time jobs exploded higher by 360K while full time jobs dropped by 240K. In July we are sad to report that America’s conversation to a part-time worker society is not “tapering”: according to the Household Survey, of the 266K jobs created (note this number differs from the establishment survey), only 35% of jobs, or 92K, were full time. The rest were… not.

In fact, most of the jobs created since 2009 are part time:

House Republicans have crunched the numbers and say that since President Obama took office, the economy has added seven times more part-time jobs than it has created full-time jobs.

Since January 2009 the country has added a net total of 270,000 full-time jobs, but it has added 1.9 million part-time jobs, according to the House Ways and Means Committee.

The numbers come as Republicans argue that the president’s health care law is pushing businesses to save money and push workers into shorter schedules to avoid the penalties that come from hiring more full-time workers, who under the law will be required to be covered with health care insurance.

We are becoming a part time nation accelerated by Obamacare:

Proof Positive Obamacare is Accelerating the Move Towards Part-Time Employment

Anecdotal Evidence. But there’s been a tsunami of stories about real-world employers who in fact have shifted to part-time workers precisely to avoid the Obamacare mandate. These include:

Restaurants and fast-food establishments: Buffalo Wild Wings, CKE Restaurants Inc., owner of the Carl’s Jr. and Hardee’s hamburger chains, Del Taco, Subway franchises, Wendy’s franchises, White Castle
Colleges that rely on part-time instructors: Community College of Allegheny County (PA), Kean University (NJ), Northern Virginia Community College, Palm Beach State College (FL), University of Arizona in Tucson, Youngstown State University, (OH)
Movie theaters: Regal Entertainment Group, which operates more than 500 theaters in 38 states
State government employees: Virginia
Local government employees: Long Beach (CA), Dearborn (MI)

The CEO’s of these organizations are on record as attributing their shift to part-time employees to a desire to avoid the added costs of complying with the Obamacare mandate.[2] Each of these decisions affected real live workers who now will have to manage with working fewer hours for less pay. It’s certainly possible that some are exaggerating the influence of Obamacare on making an unpopular decision, but it seems improbable that all are.

Ratio of New PT Workers to New FT Workers Explodes in 2013. For the most part, an examination of metrics measured in millions (e.g., involuntary PT workers or total PT workers) masks what is really going on. A much better sense is given by comparing the changes in PT employment to the changes in FT employment. Because the monthly Current Population Survey are so volatile, it is easier to see what is going on by calculating an average monthly figure for each calendar year to get a sense of whether the number of PT or FT is rising or falling. We only have six months of data for 2013, but this method allows us to compare the average monthly count for the year to date with the average monthly count from prior years on an apples-to-apples basis. We can then calculate the ratio of new PT workers in an average month to new FT workers in an average month. Obviously this ratio will turn negative in years that either FT or PT workers have declined on average. So over the past decade, there’s only 4 other years with which to compare the 2013 experience.

Part time nation. Where will it all end?

[youtube]http://www.youtube.com/watch?v=Ll6LLGePYwM[/youtube]

DrJohn

DrJohn has been a health care professional for more than 30 years. In addition to clinical practice he has done extensive research and has published widely with over 70 original articles and abstracts in the peer-reviewed literature. DrJohn is well known in his field and has lectured on every continent except for Antarctica. He has been married to the same wonderful lady for over 30 years and has three kids- two sons, both of whom are attorneys and one daughter on her way into the field of education.

DrJohn was brought up with the concept that one can do well if one is prepared to work hard but nothing in life is guaranteed.

Except for liberals being foolish.