[Marxism] Stagnant economy
lnp3 at panix.com
Fri Apr 5 08:14:56 MDT 2013
What a mischievous title for the article. It should actually be "U.S.
Adds Only 88,000 Jobs; Jobless Rate Falls to 7.6% because of discouraged
workers giving up".
NY Times April 5, 2013
U.S. Adds Only 88,000 Jobs; Jobless Rate Falls to 7.6%
By CATHERINE RAMPELL
The United States economy posted disappointing job growth in March.
The nation’s employers increased their payrolls by 88,000 last month,
compared with 268,000 in February, according to a Labor Department
report released Friday. It was the slowest pace of growth since last
June and less than half of what economists expected.
It was also the third consecutive spring in which employers tapered off
their hiring, even after adjusting the numbers for seasonal changes.
Economists have started calling the phenomenon the “spring swoon.”
“The general tenor of the report underscores what our overall data have
been indicating – a growing but not accelerating economy,” said Steve
Blitz, director and chief economist at ITG Investment Research.
The unemployment rate, which comes from a different survey, ticked down
to 7.6 percent from 7.7 percent, but primarily because more people
dropped out of the labor force, not because more people got jobs.
The labor force participation rate has not been this low — 63.3 percent
— since 1979, a time when women were less likely to be working. Baby
Boomer retirements may account for part of the slide, but discouragement
about job prospects in a mediocre economy still seems to be playing a
large role, economists say.
“The drop in the participation rate has been centered on younger
workers,” said Joshua Shapiro, chief economist at MFR Inc., “many of
whom have given up hope of finding a decent job and are instead
continuing in school and racking up enormous amounts of student debt,
which has contributed to the recent surge in consumer credit outstanding.”
Stock market indexes were down sharply at the start of Friday’s trading.
Still, as always, economists cautioned not to read too much into one
month’s report, since the numbers will inevitably be revised.
“Remember that we’ve had a pattern of upward revisions,” said John
Ryding, the chief economist at RDQ Economics, noting that the government
on Friday revised January and February’s net growth upward by a total of
“Before we read too much into it, bear in mind we have at least two more
cracks of the whip before the number is really finalized,” he added.
March’s job gains were concentrated in professional and business
services and health care, while the government again shed workers, as it
has been doing for most of the last four years. Economists expect more
government layoffs in the months ahead as the effects of Congress’s
across-the-board budget cuts make their way through the system. This
so-called “sequestration” process does not seem to have appreciably
affected the numbers in March though. Meanwhile, some policy makers have
started to publicly address deficiencies in the quality of the jobs
being created by the private sector, in addition to their quantity.
“It’s important to look at the types of jobs that are being created
because those jobs will directly affect the fortunes and challenges of
households and neighborhoods as well as the course of the recovery,”
said Sarah Bloom Raskin, a member of the Federal Reserve Board, in a
Relatively low-wage sectors like food services and retail have accounted
for a large share of the job growth in the last few years; a report in
August from the National Employment Law Project, a liberal advocacy
group, found that a majority of jobs lost during the downturn were in
the middle range of wages, and a majority of those added during the
recovery have been low paying.
Ms. Raskin also expressed concern about temporary-help jobs, which
account for a growing share of total employment.
Usually an increase in temp hiring is considered a good thing, at least
at the start of a recovery, because it indicates that employers are
thinking about taking on permanent workers. So far, though, employers
seem to be sticking with those temporary contracts.
“Temporary help is rapidly approaching a new record,” said Diane Swonk,
chief economist at Mesirow Financial, who noted that there was also a
rapid increase in temp hiring during the boom years of the ‘90s. “That
of course means more flexibility for employers, and less job security
Perhaps more distressingly, 7.6 million workers who want full-time work
still can find only part-time work, and their missing work hours do not
count toward the official unemployment rate. The number of workers in
involuntary unemployment fell slightly from February, but is still about
where it was a year ago.
“You gotta do what you gotta do,” said Amie Crawford, 56, of Chicago.
After four months spent fruitlessly looking for a new job as an interior
designer, a middle-class career she had practiced for 30 years before
the recession, she accepted a part-time cashier position at a
quick-service health food cafe called the Protein Bar.
She keeps asking for more hours, but her manager’s response is always
the same: “He tells me, ‘I try to give you as many hours as I can, but
everybody wants as many hours as they can,’ ” said Ms. Crawford.
People like Ms. Crawford are the lucky ones, at least compared to the
workers who are still pounding the pavement and may have no source of
income at all. Long-term unemployment — joblessness lasting more than
six months — has been a persistent problem and could permanently affect
workers’ skills, networks and employability.
“This seems to be a long-term sleeper crisis too, as we think about
long-term unemployed workers who are in midlife and older workers who
are likely dipping into retirement savings in order to stay afloat,”
said Christine L. Owens, executive director of the National Employment
Law Project. “We’re setting ourselves up for somewhere, 10 years down
the road, when a lot of retirees who didn’t expect to live in poverty
are going to be in poverty.”
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