by Frank Thomas
Last July 2010, I summarized in a writing “The U.S. Pattern of Structural & Long-Term Joblessness: The Big Picture.” Key data came from a report by Advance & Rutgers entitled, “America’s Post- Recession Employment Arithmetic.”
My research told me that, despite the strong job growth development during President Clinton’s term, the annual rate of job growth in the 1991-2001 economic expansion still showed a decline from prior job growth rates in the 80s and 70s. Thus, like our structural budgetary deficits, we have had structurally declining job growth rates since the 80s, reaching a never-before experienced negative growth rate during the 2008-2009 Great-Recession.
In the 80s, 90s, and 2001-07 economic expansions, the rate of private-sector job growth fell to an average of 2.7%, 2.2%, and 0.9%, respectively – compared to annual average job growth rates above 3% in the 70s and 60s. Here’s a 30-year disturbing factual summary:
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TABLE 1a: U.S. Private-Sector Employment Growth in Last Three Economic Expansion Periods Covering Nov. 1982-Dec.2010
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A. Nov. 1982-July 1990 Expansion
(7.67 Years)
Total Job Growth 18,422,000 = 200,150/month
Ave. Annual Growth 2,401,825
Ave. Annual % Increase 2.7%
B. March 1991-March 2001 Expansion (10 Years)
Total Job Growth 21,508,000 = 179,235/month
Ave. Annual Growth 2,150,800
Ave. Annual % Increase 2.2%
C. Nov. 2001-Dec. 2007 Weak Expansion
(6.1 Years)
Total Job Growth 6,208,000 = 84,800/month
Ave. Annual Growth 1,020,549
Ave. Annual % Increase 0.9%
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The average annual rate of increase in jobs fell steadily during the expansion periods of Reagan’s, Bush Sr.s’ and Clinton’s terms … and then tanked further in the weaker 2001-07 economic expansion of Bush Jr.s’ term.
Then came the severe 2008-09 economic crash causing the loss of over 7.5 million jobs plus another job need of 1.7 milllion to meet labor force growth. The result? For the first time since the Great Depresssion, the U.S. had an absolute private-sector job loss over the decade … ± 1.7 million fewer jobs than when the decade started.
In effect, the first decade of the 21st century has rightly been called, “The Lost Employment Decade,”—where job-less economic growth became the modus vivendi. To understand the “Big Picture” of this job-less structural calamity, our nation created 35.5 million private sector jobs in the final two decades of the 20th century. During the first decade of the 21st century we lost more than 1.7 million jobs! These are ominous precedents reflecting the scale and structural character of job losses.
Since January 2010, we have seen approximately 1.5 million new jobs generated, including ± 650,000 net new jobs in Jan.- April of 2011. or about 160,000 a month – of which 125,000 jobs are required for the annual ± 1.5 million growth in the labor force. So we have a long way to go to bring unemployment down 8 million from current ± 14 million to ± 6 million or a 5% unemployment rate, excluding the 8-10 million underemployed. Many consecutive years of sustained job growth – as opposed to the job-less growth of the last decade – are needed to eliminate the employment deficit of ± 8 million … again, excluding the 8-10 million now underemployed.
It’s clear that structural obstacles to job development are much DEEPER and more sinister than both sides of the political spectrum recognize. The ugly phenomenon of outsourcing, robotisizing, automating, downsizing, downgrading jobs, eliminating low-skill jobs, etc. are all factors contributing to the permanent destruction of middle-class jobs at a faster clip than they can be replaced by creative, sustainable investments, industry-focused training, better education, etc.
So far in 2011, the average job generation performance of 160,000 comes closer to the 90s performance when economic expansion was much stronger and not limited by a hugely destructive financial-casino bubble. Assuming 250,000 net new jobs are created every month for the next 7-9 years, the 8 million lost jobs (excluding the 8-10 million underemployed) plus 1.5 milllion added jobs needed to cover the labor force growth will not be employed until at least 2018-20.
Last March 30th, the Bureau of Labor Statistics (BLS) reported some telling trend data entitled: “International Comparisons of Annual Labor Force Statistics.” It further dramatizes just how shockingly deep the U.S. declining structural job generation and unemployment situation has become … for adults above 25 and for younger adults 20 to 24.
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Table 1b: OVERALL COMPARATIVE UNEMPLOYMENT RATES
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2000 2010 % Change
U.S. 4.0% 9.6% +140%
Canada 6.1% 5.2% - 15%
UK 5.5% 7.9% + 44%
France 8.6% 9.4% + 9%
Germany 7.8% 7.2% - 8%
Italy 10.2% 8.6% - 16%
Netherlands 3.1% 4.5% + 45%
Sweden 5.8% 8.3% + 43%
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It’s clear that America has had by far the greatest increase in its overall unemployment rate in the last decade. A long process of significant destruction of manufacturing jobs between 1980 and 2000 has now also started to include the destruction of service jobs in the last decade.
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Table 1c: UNEMPLOYMENT RATES FOR ADULTS 25 OR OLDER
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2000 2010 % Change
U.S. 3.0% 8.2% +173%
Canada 5.0% 5.9% + 18%
UK 4.2% 5.8% + 38%
France 7.8% 7.9% + 1%
Germany 7.7% 6.9% - 10%
Italy 8.0% 7.2% - 10%
Netherlands 2.5% 3.7% + 48%
Sweden 5.0% 5.9% + 18%
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America has had by far the greatest increase in its unemployment rate for those 25 or older. The Great Recession has caused vastly more serious unemployment problems in U.S. than in Europe. People with no high school, only high school, some college, or a college degree are all hurting.
The pervasively poor quality of pre-college education and practical, in-depth training programs continue to dim job prospects for U.S. young and middle-aged workers. Little wonder the Great Recession has hit poorly educated people extremely hard. David Autor of MIT points out that those between 24 and 34 are less likely to have a degree and to have completed college than their similar age-group in the UK, Denmark, France , the Netherlands. and Spain.
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Table 1d: UNEMPLOYMENT RATES FOR YOUNG ADULTS 20 TO 24
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2000 2010 % Change
U.S. 7.2% 15.5% +115%
Canada 9.4% 10.7% + 14%
UK 9.7% 15.0% + 55%
France 16.0% 23.2% + 45%
Germany 8.9% 9.9% + 11%
Italy 25.5% 25.1% - 2%
Netherlands 3.9% 6.7% + 72%
Sweden 9.6% 20.3% +111%
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These are truly disastrous unemployment segment-trends for the U.S. and UK, France, Italy, and (quite surprisingly) Sweden. When young people in such large numbers are failing to find work in a reasonable time frame, this leads to: intensified social-net cost problems and protections; greatly disproportionate job discrimination towards some ethnic groups; loss of skills forcing millions of Americans to accept minimum wage survival Wal-Mart or fast food jobs … fostering a race-to-the-bottom for both young adults 20-24 as well as for adults 25 or older.
And here come the Hoover Republicans recommending deeper cuts in government jobs, teachers, firemen, and policemen … even in training programs for the long-term unemployed, the less educated, the high school dropouts, the older-age discarded. Programs to get people back to work are underfunded and ineffective compared to those of the best performing countries in Europe, for example, like the Netherlands.
And here come the Hoover Republicans saying this is not the time to Invest, Cut Waste, Reform Social-Nets and wisely Raise Taxes. Rather, it is a time only to CUT All Spending (except Defense) and PRIVATIZE Social Nets (Medicare, Social Security), etc. Republican fiscal math is the same old “trickle-down fraud” on the American public, making the rich and powerful richer and more powerful at the expense of the middle-class – talking reform rather than reducing huge budget deficits and encouraging broad-based job growth. Without adequate, decent jobs for the middle class, tax revenues will decline, social costs and instability will escalate. Lower taxes for the rich and corporations – with already Low effective tax rates – will simply redistribute money to the Few and expand the flight of capital abroad for better returns causing further losses in tax revenues … insuring continuing high budget deficits. The Paul Ryans and their elitist anti-government paradigm discouraging public direct investing/investment incentives for education, worker retraining, upgrading infrastructure, achieving green energy independence will also insure prolongation of high budget deficits and unemployment. Result? Continued imbalance between income distribution and economic growth with more and more middle-class Americans numbering in the millions left behind.
In this regard, the Republican lie machine is in full display when one reads carefully some typically wily words recently spoken by the anti-government polemicist, Paul Ryan. According to him:
“The Democrats’ narrative story line is: if you go to the Republicans they’re going to feed you to the wolves in a ‘dog-eat-dog society’ (writer’s note: which is exactly what’s been happening the past 30 years of which 20 years were Republican administrations). This narrative of ‘shared scarcity’ (writer’s note: Why not also ‘shared prosperity,’ i.e., a fair playing field and broad-based participation in society’s progress and failures?) will be ‘trumped’ by the Republican story line: we want to have growth. (writer’s note: Who doesn’t? What growth and whose growth is Ryan talking about? Middle-class wages in 80% of households have gone up 12% after inflation the last 30 years while income and wealth growth/concentration of top 1%, 5%, 10% has mushroomed ). We want an ‘upwardly mobile society.’ (writer’s note: Who doesn’t? But what we have is a middle-class and state-by-state race-to-the-bottom dynamic of stagnant wages, bare-bones social services, and jobless growth – while the rich get richer).
Anyone claiming to understand such double-talk is hyping a “Market Government” free-for-all democracy over the people, by the people, for the people.” We’ve had quite a 30-year taste of this ultra-right ideological distortion of our nation’s founding governmental principles. Look where it has landed us! And still the Ryans march on embracing divisive social issues: cutting and privatizing Medicare, lowering taxes on wealthy, defending non-tax paying companies like the oil and banking industries, turning brain-dead on ideas for selective, sustainable future job-growth investments/incentives and taxes to pay for them.
Conclusion
So, the vicious deficit circles and societal inequities become self-perpetuating and selfulfilling … fed by this fiscal fantasy farce of cutting taxes, government jobs and spending, while destroying unions to solve deficits. Let’s face it. We have Lost the Way and Connection to our core egalitarian values. Cool, balanced, respectively open, creative minds are desperately needed to represent fairly and constructively the interests of ALL Americans.
It’s time we bloody WOKE UP to the sheer structural magnitude of our nation’s 30 year declining job growth rates … and a middle-class race-to-the-bottom that is financially impoverishing 80% of family households and dangerously dividing our country into a democracy for the HAVES with TIDBITS for the HAVE NOTS.
Frank Thomas
The Netherlands
May 8, 2011
