-- Posted Thursday, 9 June 2011 | | Disqus
By: Dr. Jeffrey Lewis
May’s employment report couldn’t come at a better time. As soon as the Fed officially ends its quantitative easing program, new jobs data shows that the recovery investors have long been waiting for is still out of reach.
At the most topical level, the employment report was dismal – ignoring the obvious manipulation of the figures with birth and death estimates, seasonal but unreliable adjustments, and revisions to the downside that have become frequent with old employment data, there is still a gem to be found tucked deep inside the numbers.
That gem is who is doing the hiring. Not all jobs are good jobs, and not all jobs are a positive development. Remember the many hundreds of thousands of new hires who were hired to work for the 2010 census? That short boom lasted only months.
Last month, the headline figure of 62,000 new jobs was a positive development, even if it wasn’t as positive as the markets were looking for. Beneath the headlines, though, we can see that there may be very little gain at all from these new jobs, as most are for minimum wage work. Of the 62,000 jobs added to the American economy last month, analysts report that as many as 35,000 can be attributed to fast-food giant McDonald’s.
Hiding Important Data
The Labor Department does not report which employers are and aren’t hiring. We can attribute this to their desire to keep secret intimate details about companies public or private, or we can make a less than bold claim that this is done for a purpose. Most jobs added since the recovery add very little economic value, and they hardly justify claims of a growing economy.
In looking at unemployment data spanning the length of a full year, it becomes clear that new job growth is coming from unskilled labor. Since this time last year, the unemployment rate by education level is shocking: the only column to show growth is the column for high school graduates.
Americans who did not complete high school and those who have some college education or who completed a bachelor’s degree have all experienced higher unemployment rates. Those who have a bachelor’s degree have it the worst – this group saw their unemployment rates rise from a low 4.1% to 4.5%, a 10% increase at the margin.
Swapping Jobs
The US economy is not growing, and jobs are not being added; they’re merely being swapped. As the United States loses many high-paying technical jobs, it is adding only low-paying, service sector work. The numbers we see in the headlines aren’t showing us the full story.
If the United States is to sustain a high standard of living for all Americans, it can’t do it by adding fast food labor. Nor can it sustain a high standard of living by replacing jobs with full benefits packages for jobs without any benefits at all. The trend is clearly unsustainable. Investors should take the time to look past the headlines and look at what’s really happening to the US economy.
Main Street has more workers, but it has less money.
Dr. Jeffrey Lewis
www.silver-coin-investor.com
-- Posted Thursday, 9 June 2011 | Digg This Article
| Source: GoldSeek.com
