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.
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:
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.
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?