Edward Luce is the Washington bureau chief of the Financial Times, London.
The US labor market may never fully recover, recently wrote Edward Luce, who lives in the numbers and tracks them.
So what does ‘may never fully recover’ mean? It means simply that despite any actual economic growth in dollar value there is little reason for the number of jobs to actually grow in the foreseeable future.
Due in part to the duration of the Great Recession, our economy has adjusted to function without the need to rehire those that lost jobs. Please consider that consumer spending has returned to pre-recession levels since November 2010. Yet, here we are a year later with consumer spending now greater ($9.4T) than June 2007 ($9.2T) when the recession started and more are unemployed today than at the depth of the recession — despite supposedly improving unemployment numbers.
In perspective, 64.4% of Americans had jobs in January 2011. Six months after the 2007 recession began, 62.9% of Americans had jobs. Employment dropped but still stayed about 60% until March 2009 with 59.9% unemployed at the very depth of massive job losses. Yet more than two and a half years later in November 2011 just 58.5% of Americans have jobs DESPITE 14 months of supposed jobs growth and continuous growth in consumer spending.
A common mantra has been that the jobs would come back when people started spending again. Hello! They’ve been spending for a year and the actual number of Americans employed has continued to drop.
Bottomline: The marketplace has achieved efficiencies in labor usage and costs that represents a trend for our future. It is a trend that may be able to decrease the need for labor well above our population growth for the next decade or more.
Edward Luce goes on to note:
“If there is an explanation as to why middle-class incomes have stagnated in the past generation, this is it: whatever jobs the US is able to create are in the least efficient sectors – the types that neither computers nor China have yet found a way of eliminating. That trend is starting to lap at the feet of more highly educated American workers. And, as the shift continues, higher-paying jobs are also increasingly at risk … What, then, can be done to revitalise the increasingly sclerotic jobs market? If the answer were simple, it would have been on everyone’s lips a long time ago. Unfortunately, there is no precedent for the challenges America faces, and thus little consensus among economists or policymakers on the best remedies. However, almost everyone agrees on how to ensure the situation does not deteriorate.”
Bill4DogCatcher.com sez: it is time to think about how to create your own job in your own community with skills and services and products that your neighbors need. It is in someways time to return to a community-centric view of the world.