August 4 2014
Unemployment on the Rise?
The latest jobs numbers are out and instead of the unemployment rate declining again, it actually increased – and that’s a good thing this time.
July’s unemployment rate is 6.2 percent and marked a tick up following months of consecutive declines. The economy added 209,000 jobs – which marks six straight months of the economy adding jobs.
A good trend is behind this: discouraged workers who left the job market are lured back in driven by the prospects of employment.
According to MarketWatch the number of people who counted as officially unemployed rose by 197,000, with most of the increase due to people rejoining the labor force or entering for the first time. Half of the 9.67 million unemployed people are there because they lost a job; the rest are people who have started looking for work.
A good question to ask is what kind of jobs these workers are finding and how all workers are actually doing in this economic “recovery.” When we dig deep we are we may not like what we find.
First, paychecks for Americans have yet to recover. Fox Business reports:
Stagnant wages and average weekly working hours have crimped paychecks, curbing demand for goods and keeping inflation below the Fed’s target rate of 2%. Inflation has ticked higher in recent weeks, a factor noted on Wednesday in the Fed’s statement following its July meeting...
In July, the average workweek for nonfarm workers was 34.5 hours for the fifth straight month. The manufacturing workweek decreased by 0.2 hour in July to 40.9 hours, and factory overtime edged down by 0.1 hour to 3.4 hours, according to the Labor Department. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.7 hours for the fifth consecutive month.
The average hourly earnings for nonfarm employees barely rose by 1 cent to $24.45. Over the past 12 months, average hourly earnings have risen by 2 percent.
Second -and related-is that the types of jobs being added have increasingly been part-time rather than full-time positions and lower-wage services jobs. U.S. News explains that ObamaCare has created a disincentive for employers to hire fulltime workers:
Full-time jobs plunged by over half a million, or 523,000. What’s increased is part-time jobs. They soared by about 800,000 to over 28 million. Just think of all those Americans working part time, no doubt glad to have the work, but they also have lower pay, diminished benefits, and a lack of job security. And then there’s the effect on self-esteem and the stress of managing a household.
Yet all the attention earlier this month wasn’t focused on part-time America, but only because the government and headline writers treated part-time jobs as if they were full-time jobs. There is a crying need for good, well-paying, full-time jobs, yet only 47.7 percent of adults in the U.S. are working full time…
There are a number of reasons for our predicament. But there is one political contribution to the dismal trend. Many employers cut workers below the Affordable Care Act 30-hour threshold and took on new part-time workers to fill the void. Sometimes two people worked the same number of hours as one had previously worked.
In addition, different demographics are weathering unemployment differently. The data reveals that the unemployment rate for white women rose from 5.3 percent to 5.7 percent, while the rate for blacks jumped from 10.7 percent in June to 11.4 percent in July.
We’re glad to see discouraged workers returning to the marketplace. It’s demoralizing and difficult to desire work but being and unable to find It. However, we have to cautiously accept the headlines and congratulatory notes from the White House and those in Washington that paint the economy as back on track.
This is a recovery that left millions of American workers, higher wages, and fulltime jobs behind. There is little to celebrate about that especially over the long run.