Do you remember when real reporters existed? Those were the days before the Clinton regime concentrated the media into a few hands and turned the media into a Ministry of Propaganda, a tool of Big Brother. The false reality in which Americans live extends into economic life. This month's employment report was a continuation of a long string of bad news spun into good news. The media repeats two numbers as if they mean something—the monthly payroll jobs gains and the unemployment rate—and ignores the numbers that show the continuing multi-year decline in employment opportunities while the economy is allegedly recovering.
The so-called recovery is based on the U.3 measure of the unemployment rate. This measure does not include any unemployed person who has become discouraged from the inability to find a job and has not looked for a job in four weeks. The U.3 measure of unemployment only includes the still hopeful who think they will find a job.
The government has a second official measure of unemployment, U.6. This measure, seldom reported, includes among the unemployed those who have been discouraged for less than one year. This official measure is double the 5.3% U.3 measure. What does it mean that the unemployment rate is over 10% after six years of alleged economic recovery?
In 1994 the Clinton regime stopped counting long-term discouraged workers as unemployed. Clinton wanted his economy to look better than Reagan’s, so he ceased counting the long-term discouraged workers that were part of Reagan’s unemployment rate. John Williams (shadowstats.com) continues to measure the long-term discouraged with the official methodology of that time, and when these unemployed are included, the US rate of unemployment as of July 2015 is 23%, several times higher than during the recession with which Fed chairman Paul Volcker greeted the Reagan presidency.
An unemployment rate of 23% gives economic recovery a new meaning. It has been eighty-five years since the Great Depression, and the US economy is in economic recovery with an unemployment rate close to that of the Great Depression.
The labor force participation rate has declined over the “recovery” that allegedly began in June 2009 and continues today. This is highly unusual. Normally, as an economy recovers jobs rebound, and people flock into the labor force. Based on what he was told by his economic advisors, President Obama attributed the decline in the participation rate to baby boomers taking retirement. In actual fact, over the so-called recovery, job growth has been primarily among those 55 years of age and older. For example, all of the July payroll jobs gains were accounted for by those 55 and older. Those Americans of prime working age (25 to 54 years old) lost 131,000 jobs in July.
Over the previous year (July 2014 — July 2015), those in the age group 55 and older gained 1,554,000 jobs. Youth, 16-18 and 20-24, lost 887,000 and 489,000 jobs.
Today there are 4,000,000 fewer jobs for Americans aged 25 to 54 than in December 2007. From 2009 to 2013, Americans in this age group were down 6,000,000 jobs. Those years of alleged economic recovery apparently bypassed Americans of prime working age.
As of July 2015, the US has 27,265,000 people with part-time jobs, of whom 6,300,000 or 23% are working part-time because they cannot find full time jobs. There are 7,124,000 Americans who hold multiple part-time jobs in order to make ends meet, an increase of 337,000 from a year ago.
The young cannot form households on the basis of part-time jobs, but retirees take these jobs in order to provide the missing income on their savings from the Federal Reserve’s zero interest rate policy, which is keyed toward supporting the balance sheets of a handful of giant banks, whose executives control the US Treasury and Federal Reserve. With so many manufacturing and tradable professional skill jobs, such as software engineering, offshored to China and India, professional careers are disappearing in the US.
The most lucrative jobs in America involve running Wall Street scams, lobbying for private interest groups, for which former members of the House, Senate, and executive branch are preferred, and producing schemes for the enrichment of think-tank donors, which, masquerading as public policy, can become law.
The claimed payroll jobs for July are in the usual categories familiar to us month after month year after year. They are domestic service jobs—waitresses and bartenders, retail clerks, transportation, warehousing, finance and insurance, health care and social assistance. Nothing to export in order to pay for massive imports. With scant growth in real median family incomes, as savings are drawn down and credit used up, even the sales part of the economy will falter.
Clearly, this is not an economy that has a future.
But you would never know that from listening to the financial media or reading the New York Times business section or the Wall Street Journal.
When I was a Wall Street Journal editor, the deplorable condition of the US economy would have been front page news.
UPDATE: During the recovery year July 2014 – July 2015, the labor force participation rate fell from 62.9% to 62.6%. The number of Americans not counted as part of the labor force rose by 1,795,000. These are people who are discouraged from inability to find a job and have ceased looking for work. The 93,770,000 Americans considered to no longer be in the labor force are 60% of the size of the 157,106,000 Americans in the civilian labor force.
This article was originally published on the Paul Craig Roberts website under the title The US Economy Continues Its Collapse.
Hi. Good concise analysis. One quibble: media consolidation began long before Clinton. His and the DLC's staffs, evil geniuses that they were/are, just thought to tap into it. See Herman & Chomsky's Manufacturing Consent, 1988. Cheers!
"This measure does not include any unemployed person who has become discourage from the inability to find a job and has not looked for a job in four weeks."
Those "discouraged" workers may still be looking for a job. We're not asked about our employment searches after we're no longer eligible for unemployment benefits... at least I know I've not been asked.
It’s a question of integrity and accountability in continuing to
As the Federal Reserve readies to start choking off the economy, the overwhelming majority stand to suffer as we have yet to recover from the “Great Recession” and the “Labor Participation” rate is at record setting lows!
It’s a question of integrity and accountability in continuing to give us a chance to catch up on the standard of living that our parents enjoyed before we bore the weight of the financial system as it teetered on the edge of oblivion due to some thoughtless decisions by those who are well insulated from poverty.
Please allow us marginally employed a steady good day's wage for a good day's work. Since it is a struggle of part time jobs in attempts to make simple $600 monthly rent payment and additional to put groceries on the table, I guess we are supposed to be convinced that prosperity is here.
One of my contract jobs that recently ended sometimes didn’t even pay for gas needed to deliver the Edible Arrangements, another contract limited my auto dealership test drives to one location visit per year. While payment for my bank secret shopper efforts are undependably invoiced and paid 60 days later unlike my fourth company where I get paid every 2 weeks for trimming hedges.
It could still be worse; last year after scrapping up $500 cash to get my DirecTV satellite certification, I begged and borrowed for 3 months for expense money to pay gas and tolls to do installs before I finally started receiving payments towards my wages instead of the full amount due to me.
And then there is my unpaid truck driving wages due since workers desperate for income must accept risks of non-payment issues. Since Federal, State or Local authorities do not enforce the laws when trucking companies cheat the drivers, paychecks usually fall far short of compensation wages I actually earned.
Complaints of extensive promised but unpaid diverted loads in the Texas oil country fall on deaf ears at the Department of Labor where they focus on “minimum wage issues” to companies who stretch the truth and mislead drivers about allowable axle spreads to leave the drivers personally liable for the thousands in overweight fines merely to be replaced with more of the trusting naive willing to take a chance to put food on their family’s table.
And the local law enforcement who decline to prosecute the fully documented thousands in bad check’s paid to the drivers or the punishment for those refusing to drive CDL risking overweight, poorly maintained death traps and fatigue conditions potentially endangering the unsuspecting public.
Inflation concerns would be better muted and municipal service expense burdens better shared with higher property tax rates on the glut of vacant commercial properties. Fewer vacant properties equals more business and jobs.
It’s a question of integrity and accountability to allow us marginally employed to continue with prospects of a steady good day's wage for a good day's work. Give us a chance to catch up on the standard of living that our parents enjoyed before we bore the weight of the financial system as it teetered on the edge of oblivion due to some thoughtless decisions by those who are well insulated from poverty.