Everything is relative. When I was a boy, by grandfather would tell me stories of his youth in the second decade of the last century. He was born in 1910 and came over here at some point from Russia. That was always a mystery. The family was dirt poor, but he remembered it fondly. He told stories of the Depression too. Of course, he had stories from the war years. Again, all were fond memories despite the fact he and his family survived great deprivations. All of us tend to romanticize our youth when old.
Our younger years are the best of times, even when those times are terrible. The reason is youth. Being young means having hope because everything is in front of you. Even if the present is terrible, it’s all you know and tomorrow is another day. I have fond memories of the 1970’s, even though my family could barely keep the lights on. I was a kid and did not care. I had fun anyway. The turmoil in the greater society did not touch me and I have no way to compare my circumstances with the alternatives, so I enjoyed my youth.
Anyway, this post by Ashok Rao is interesting and a bit scary. Fake unemployment is at ~7.5% right now. Real unemployment is something closer to 11%. Some claim the figure, when backing out the part timers, is probably over 15%. I’ve always hated such games, but the government keeps playing games with the numbers. This WSJ article is a good read on the subject of part-time workers. What jumps out from Ashok’s post is that job gains have flattened out now. We see that in the weekly numbers and the monthly NFP.
The reason for the troublesome labor numbers is that employers are filling jobs with temporary workers when possible. There are lots of incentives for avoiding any permanent increases to their work force. There also the availability of indentured servants from abroad. No one ever talks about the fact that the labor pool keeps growing at the same pace as job growth and this is due to the flood of foreign workers. Instead, the government just keeps pushing their fake employment numbers, hoping no one notices.
What this means, form the perspective of present workers, is that we are in the bets of times. if you are a boomer looking to retire, you don’t care. The good times are gone anyway. The 20-somethings, on the other hand, are getting screwed and are going to get even more screwed. This economy, with all of them living at home and hustling part time work, is as good as it gets for a while. Looking at the recent economic data, we are headed into a period of near zero growth, when you net out money creation.
Of course, the employment numbers are largely worthless, as they assume things have not changed since the 1960’s. When the labor force was domestic and its growth was organic, the statistics meant something. Now that employers are permitted to import ringers from abroad to drive down wages and get around labor laws, those numbers are meaningless. The only number that counts for anything is the workforce participation rate, but that is never advertised as it reveals the truth of the current labor markets.