Thanks for the Great Recovery, Mr. President!

The biggest problem facing Americans for the last several years is the lack of jobs. Recent surveys have shown that most middle class Americans are worried about hanging on to what they have rather than striving to improve their lot in life. Young Americans are particularly concerned for their futures. But, our fearless leaders in Washington seem to think that the most important issues improving  the rights of gays, improving the rights of illegal immigrants, and reducing our First and Second Amendment rights.

Many times on this page I have talked about graph of workforce participation rate.

Graph of Civilian Labor Force Participation Rate

Since Obama took office, when the so-called recovery began, the workforce participation rate has fallen from 66.3% to 63.3%. That means, depending on which source you look at, that there are between five and six million fewer Americans working today than when the recovery supposedly began. Yet every month the media and the Obama administration tell us how many more private sector jobs have been created. The latest report was that 166.000 more jobs were created in April and the unemployment rate fell 0.1% to 7.5%. What they never want to tell us, however, is that the unemployment figure is improving because so many people have given up looking for work and so they are not counted as being unemployed. And, there is more bad news they are not telling us. They are not telling us that the well paid middle class jobs that were lost are being replaced by low paying part-time jobs.

Louis Woodhill, writing for Real Clear Markets, was not impressed with the latest jobs report, either. In fact he this latest jobs report is signalling that bad times are coming our way. He has been looking at other Bureau of Labor Statistics data from their Household Survey, which are not being touted by this administration or by the media. He found this disturbing bit of information:

Total employment rose by 293,000 during April, but part-time jobs increased by 441,000. As a result, full-time jobs declined by 148,000.

It’s not surprising the BLS Household Survey generates a different jobs number than what the BLS reported from their  Establishment Survey. The two surveys different methodology and each method has its pluses and minuses. What should disturb you is that all of the job gains in April appear to have come from part-time jobs and that we actually lost 148,000 full-time jobs.

Mr. Woodhill goes on to talk about a metric used by the BLS that I wasn’t aware of.  It’s called the Full Time Equivalent jobs (FTE). FTE is calculated as the number of full-time jobs plus fifty percent of part-time jobs. So, if an employer had 100 employees and 50 were working full-time and 50 were working part-time,that employer’s Full Time Equivalent (FTE) jobs would be 75. When the FTE for a nation gets smaller, it means there are fewer people working full-time and more people working part-time. According to Woodhill, the FTE for the US has fallen for each of the last five months, which he says has always meant that a recession is on the way. Are we heading for a bust without having had a boom? Maybe.

Although I find the FTE an interesting metric, I was disappointed that Mr. Woodhill didn’t elaborate on the actual percentage of our workforce that is employed part-time and what are the trends. So, your humble but trusty observer of the asylum went searching through the world-wide-web. I found what I was looking for in a New York Times article from March of last year. The title of the article is: The Rise of Part-Time Work it contains a couple of revealing graphics:

Source: Bureau of Labor Statistics, via Haver Analytics.

It should be alarming that when the recession began the percentage of part-time workers was 16.9% and by December of last year the percentage had climbed to 19.2 %.  And, if what Mr. Woodhill reported is correct, part-time workers are probably about 21% of the workforce today.

The other graph in the NYT articles tells us that many people are working part-time because they have no other option.

Source: Bureau of Labor Statistics, via Haver Analytics.

It appears from the above graph that we have about 7 million people working part-time that want to be working full-time.

So, while the Obama administration and the media are touting growth and an improving recovery, what we really have is fewer people participating in the workforce and growing percentage of those who are participating are only able to find part-time work.

Thanks, Mr. President!

Well, that’s what I’m thinking. What are your thoughts?

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20 thoughts on “Thanks for the Great Recovery, Mr. President!

  1. Just as bad as the pastime employment issue, is for those left with full time jobs. Many now are expected to work longer harder hours with less benefits. The quality of life has been diminished for many, a stat that cannot be graphed.

  2. I have friends who have either had no job for the past five years or part time.

    Part time jobs are the wave of the future. Full time temp actually. No company is going to hire employees anymore. Everything will be outsourced to temp agencies. The job I have now (though I was eventually hired by the company – the first four years I was outsourced and a contractor.)

    But you won’t hear the MSM talk about that. Doesn’t fit the narrative.

  3. Jim, you know else likes that FTE metric? Obamacare. Businesses that think they can escape the 50 full-time employee threshold by simply moving to a part-time workforce will get burned by the FTE metric as it is utilized in Obamacare.

    Net job creation is a loser compared to population expansion, yet most seem to think we’re still progressing albeit too slowly. We are not. The stock market is no longer valid as an economic strength indicator as lean companies making profits and paying dividends pay no mind to full-time jobs as opposed to part-time nor do they factor in the country’s growth rate.

    The BLS numbers are skewed as are many other measures such as inflation and now the GDP numbers will be artificially raised up with the changes upcoming to the R & D measure included.

    It all adds up to the creation of the mother of all bubbles as Americans won’t even see it coming until it bursts.

  4. The Labor Force Participation Rate is a revealing report.

    You can see that participation was in decline before Obama took office. With the boomers retiring, the decline was inevitable.

    However, the graph shows that Obama’s Administration is responsible for SPEEDING up the decline!

    When touting job creation every month, the Administration just pretends that the millions of jobs that were lost can simply be ignored. We are a long, LONG way from recovering jobs, despite over 5 years of population growth.

    Obama is not responsible for all those job loses. What he is responsible for is failing to bring them back. Obama only talks about private-sector job growth because it exceeds anything his administration has done.

    I get sick of reading this same line every month, month after month, and year after year from Alan Kruger:
    “While more work remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression.”
    http://www.whitehouse.gov/blog/2013/05/03/employment-situation-april

  5. Given today’s column… here is something amusing I just learned…

    President Obama is kicking off his “Middle Class Jobs and Opportunity Tour” tomorrow in Austin.

    I just happen to be in Austin. The President is going to visit a high tech high school and a high tech company only a stones throw from where I am this very minute.

    I’m sure he will solve the jobs problem all over again with this newest campaign tour. Yeah! Right! LOL

    He undoubtedly will make a speech somewhere in Austin, but I don’t know if it will be in either place I’m close to. He has a stop downtown and that is probably where he will “campaign”.

    I’ll have to see if I can catch a glimpse and maybe take a picture.

  6. Only in Obama’s world could people giving up on getting work be considered a victory! But of course this means more people will be dependent on the government and that is his ultimate goal.

  7. Good work.
    Yes, the unemployment statistic more widely used is U-3, reported as 7.5% for April, is as simplistic as is misguided. That is what makes the headline, but it is a measurement full of holes. You do a good job of showing some of those holes here.

    The better measure of unemployment is U-6, which takes into account “marginally attached workers” and part time workers versus fully employed workers. That was reported as 13.9% for April, from 13.8% in March. As you can see, it moved in opposite direction of U-3, which validates your presentation in this post.

  8. most middle class Americans are worried about hanging on to what they have rather than striving to improve their lot in life

    At the rate that things are going down the tubes, the middle class is rapidly becoming the serf class.

    This generation of middle class — high schoolers and college students — will, for the vast most part, not have the same standard of living as their parents. I see no possible recovery from that plight!

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