Yesterday’s employment report provided solid evidence of improvement in the jobs market. While the establishment survey found that 192,000 jobs were added in March, the “employment level” in the household survey rose by an even more impressive 476,000. But before you conclude that the good times are beginning to roll again, you need to look a little deeper.
Of those 192,ooo jobs that were added, 29,000 were temp jobs in “business and professional services” and 30,000 were in food and drinking establishments – mostly low wage jobs. 19,000 health care jobs were added, but these too were in the low wage areas of that field. Manufacturing actually lost 1,000 jobs.
And, of the 476,000 increase in the employment level in the household survey, 365,000 were part-time jobs.
There’s another point that needs to be made regarding the employment level. It’s now at the same level as June 2008, which means all of the jobs lost during the recession from that point have now been recovered. The problem is that the population has grown by 13.4 million since then. Since approximately 50% of the population is part of the labor force, that means that 6.7 million workers are now unemployed as a direct consequence of population growth.
A high unemployment rate holds down wages and benefits. Why give you a raise when there are over 15 million people out there (those 6.7 million plus another 8 million or so who are still unemployed) who are probably willing to do your job for even less? So, contrary to what economists are telling us – that we need to increase immigration to get the economy going again – it’s clear that immigration and population growth are a net drag on household incomes. It fattens corporate bottom lines, of course, but doesn’t help your bottom line one bit.
And, let’s not forget that while the employment level is near pre-recession levels, we now have 6.7% unemployment vs. 4.7% in November of 2007 when Lehman Bros. collapsed and the Great Recession began. Truth be told, were it not for the new post-recession phenomenon of the “mysteriously vanishing labor force” (people who the government would have us believe have chosen to drop out of the labor force, apparently no longer needing a source of income), unemployment would actually be 9.7% (or 17.3%, if you include part-time workers who really need full-time work).
Prior to the recession, per capita employment was at 48.4% with a much higher percentage of full-time workers. At the depth of the recession, per capita employment fell to 44.9%. By March it has risen only 0.9% to 45.8%, and a much higher percentage are now working part-time. Now the jobs picture doesn’t seem as bright as the headline numbers would have you believe.