Tuesday, March 12, 2013

Job Numbers Not That Great

While many people think that the recent jobs report was great, it should be noted that these reports are complex and not always accurate. Remember, Obamacare was recently put in  play, under Obamacare, the definition of full-time employment is 30 hours. The Bureau of Labor Statistics cutoff is 34 hours. At 30 hours, companies have to pay medical benefits so they have been slashing the number of hours people work. The  reduction in hours people are allowed to work by companies is providing an incentive for many workers to take on an extra job.

We can see the effect in actual BLS data. After declining for years, the percentage of those working two or more jobs is again on the rise. In the past month there was a surge of 679,000 in the number of people working multiple jobs. The participation rate is currently 63.5%, down from 66.2% at the beginning of the recession, matching a 31-year low. If the participation rate were still at 66.2%, the unemployment rate would be 12.1%. This may be a reflection of the fact that we continue to see larger businesses fare better then the small shops on main street.

Another troubling sign is that the 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. This bodes poorly for our consumer driven economy.

A Gallup survey on jobs released Thursday shows the percentage of workers working part time but wanting full-time work was 10.1% in February, an increase from 9.6% in January and the highest rate measured since January 2012. Gallup notes "Although fewer people are unemployed now than a year ago, they are not migrating to full-time jobs for an employer. In fact, fewer Americans are working full-time for an employer than were doing so a year ago, and more Americans are working part time, all indications are that this is not by choice.

Footnote; a recent post that received a lot of attention focused on the problem of creating "real jobs", current policies do not reinforce or promote this trend.

No comments:

Post a Comment