Implications Of Poor Job Creation

The implications of poor job creation are massive. The biggest may be that a huge number of people are dropping from the work force. Often these people have little in the way of savings, this means the burden of caring for them will be transferred to society. If to many people shift into this category we will slowly wear down through attrition. Finding a fair way to share and balance the work load that goes on every day may be one of the most important problems facing our modern world. Not discovering a solution to this dilemma bodes poorly for our consumer driven economy and adds to the toxic problem of inequality.

The recent increase in U.S. productivity in the first quarter was a bit lower than initially thought and hourly compensation for American workers posted a huge decline according to newly revised government figures. Hourly compensation plunged 3.8% in the first quarter instead of rising 1.2% as initially reported. That's the biggest decline since the Labor Department began keeping track in 1947, with the largest drop occurring in the manufacturing sector. Over the years as government grew it tended to offer good salaries and benefits that pulled pay throughout society upward, with budget cutbacks the effect has turned in the other direction.

That brings us to the heart of the matter: Nearly all the decline in the U-3 unemployment rate has been the result of there being fewer workers in the labor force as a percentage of the employable population. If the Labor Force Participation Rate had not fallen from October 2009, when unemployment hit its Great Recession peak of 10 percent, unemployment would today still be around 10 percent. Moreover, if the LFPR were held constant from its highest pre-recession level of 66.40 percent in January 2007 (when unemployment was 4.6 percent), the U-3 unemployment rate would be nearly 12 percent today.

- See more at: http://www.economonitor.com/danalperts2cents/2013/07/24/the-new-sick-onomy-examining-the-entrails-of-the-u-s-employment-situation/#sthash.q75jZVyu.dpuf

hat brings us to the heart of the matter: Nearly 100 percent of the decline in the U-3 unemployment rate has been the result of there being fewer workers in the labor force as a percentage of the employable population (the CNIP). If the Labor Force Participation Rate had not fallen from October 2009, when unemployment hit its Great Recession peak of 10 percent, unemployment would today still be around 10 percent. Moreover, if the LFPR were held constant from its highest pre-recession level of 66.40 percent in January 2007 (when unemployment was 4.6 percent), the U-3 unemployment rate would be nearly 12 percent today. Figure 4 illustrates the foregoing.
Figure 4. Labor Force Participation Rate: Different Scenarios

- See more at: http://www.economonitor.com/danalperts2cents/2013/07/24/the-new-sick-onomy-examining-the-entrails-of-the-u-s-employment-situation/#sthash.q75jZVyu.dpuf

hat brings us to the heart of the matter: Nearly 100 percent of the decline in the U-3 unemployment rate has been the result of there being fewer workers in the labor force as a percentage of the employable population (the CNIP). If the Labor Force Participation Rate had not fallen from October 2009, when unemployment hit its Great Recession peak of 10 percent, unemployment would today still be around 10 percent. Moreover, if the LFPR were held constant from its highest pre-recession level of 66.40 percent in January 2007 (when unemployment was 4.6 percent), the U-3 unemployment rate would be nearly 12 percent today. Figure 4 illustrates the foregoing.
Figure 4. Labor Force Participation Rate: Different Scenarios

- See more at: http://www.economonitor.com/danalperts2cents/2013/07/24/the-new-sick-onomy-examining-the-entrails-of-the-u-s-employment-situation/#sthash.q75jZVyu.dpuf

hat brings us to the heart of the matter: Nearly 100 percent of the decline in the U-3 unemployment rate has been the result of there being fewer workers in the labor force as a percentage of the employable population (the CNIP). If the Labor Force Participation Rate had not fallen from October 2009, when unemployment hit its Great Recession peak of 10 percent, unemployment would today still be around 10 percent. Moreover, if the LFPR were held constant from its highest pre-recession level of 66.40 percent in January 2007 (when unemployment was 4.6 percent), the U-3 unemployment rate would be nearly 12 percent today. Figure 4 illustrates the foregoing.
Figure 4. Labor Force Participation Rate: Different Scenarios

- See more at: http://www.economonitor.com/danalperts2cents/2013/07/24/the-new-sick-onomy-examining-the-entrails-of-the-u-s-employment-situation/#sthash.q75jZVyu.dpuf

hat brings us to the heart of the matter: Nearly 100 percent of the decline in the U-3 unemployment rate has been the result of there being fewer workers in the labor force as a percentage of the employable population (the CNIP). If the Labor Force Participation Rate had not fallen from October 2009, when unemployment hit its Great Recession peak of 10 percent, unemployment would today still be around 10 percent. Moreover, if the LFPR were held constant from its highest pre-recession level of 66.40 percent in January 2007 (when unemployment was 4.6 percent), the U-3 unemployment rate would be nearly 12 percent today. Figure 4 illustrates the foregoing.
Figure 4. Labor Force Participation Rate: Different Scenarios

- See more at: http://www.economonitor.com/danalperts2cents/2013/07/24/the-new-sick-onomy-examining-the-entrails-of-the-u-s-employment-situation/#sthash.q75jZVyu.dpuf

hat brings us to the heart of the matter: Nearly 100 percent of the decline in the U-3 unemployment rate has been the result of there being fewer workers in the labor force as a percentage of the employable population (the CNIP). If the Labor Force Participation Rate had not fallen from October 2009, when unemployment hit its Great Recession peak of 10 percent, unemployment would today still be around 10 percent. Moreover, if the LFPR were held constant from its highest pre-recession level of 66.40 percent in January 2007 (when unemployment was 4.6 percent), the U-3 unemployment rate would be nearly 12 percent today. Figure 4 illustrates the foregoing.
Figure 4. Labor Force Participation Rate: Different Scenarios

- See more at: http://www.economonitor.com/danalperts2cents/2013/07/24/the-new-sick-onomy-examining-the-entrails-of-the-u-s-employment-situation/#sthash.q75jZVyu.While many drone on about training and additional schooling the most important skills many workers learn are those only garnered from real work experience, so called on the job situations.This makes "entry level" positions even more important then in the past. Years ago these skills were developed and picked up through the family business or on the farm where you lived. Many of these opportunities no longer exist as big business and government regulations have laid waste to these small community rooted and based enterprises.

While people drone on about the need of additional training and more education the problem goes far deeper. Issues such as will a job exist after training is complete and does a demand exist for their skills is of major importance. In the past family businesses did much of the basic training and prepped many people with the basic skills that they needed later in life. Over the last few decades as big business and government regulations crushed smaller community based enterprises this training has ceased to exist. This means that many of the lessons and values that were passed on including responsibility and dependability are not nearly as common.

After leaving school if someone cannot find employment they never really learn to work, getting up in the morning, having to do unpleasant task you would rather avoid, taking orders, these are why it is called work and not fun. Sadly when you hear a person talking about getting a job it is often a vague and distant thought, like a wish instead of a goal, something that may do in a few months, after they finish doing this or that. To many people the problem is not getting a job, but keeping one, employers have little incentive to keep workers of poor quality and who show little initiative.

Another quiet and often somewhat unnoticed cultural effect of  long-term underemployment is a marked increase in corruption and other low level crime. Unemployment is corrosive to society, it can in effect create an army of downtrodden hopeless victims. Prostitution, gambling, and human trafficking  as well as other forms of  black market activity tend to fill the days of those needing money. Illegal businesses and a shadow economy that sidesteps regulation and laws may take root as a way for people to "get by" as they wait for things to get better. This creates a decline in the moral fabric of society and acts as a cancer on the values we often hold dear.

Many of the numbers and budget projections of the government have been based on far better employment numbers then we are currently facing or will be facing if this continues. The long-term implication of poor job creation will drastically impact in a negative way both the wealth and future of our children and America. It will mean some people never work or go decades without a job. The alternative to working and producing is to use up your savings or be sustained by the government, family, or friends.  The longer someone is out of the workforce the harder the adjustment to reentering becomes, they call it work for a reason, and one of those reasons is that often it means doing unpleasant things.


 Footnote;  Your comments are welcome and encouraged. If you have time check out the archives for other post that may be of interest to you. Below are three other post related to this subject,
                     http://brucewilds.blogspot.com/2013/04/society-must-better-divide-labor.html
                     http://brucewilds.blogspot.com/2013/01/unemployment-and-its-effect-on-culture.html
                     http://brucewilds.blogspot.com/2014/04/planning-sustainable-future-for-mankind.html