FRONT PAGE CONTRIBUTOR
The American workforce collapses on top of the young
Here’s a simple media analysis tool for you: if you hear a “news report” describing the March unemployment report as good news in any way, you are listening to a propaganda operation, a political organ of the Democrat Party, not a “news organization.” Make a note, and treat all further “news” from this source with great suspicion, at least until you receive word of large-scale staff turnovers.
There is absolutely nothing to celebrate about a month in which a mere 88,000 jobs were created – far below the level needed to keep pace with population growth, and even farther below the “expert” projections of 200,000 new jobs. Not after long years of merciless unemployment and anemic GDP growth, with numerous world crises and the job-smashing avalanche of ObamaCare on the horizon. This economy is nowhere near strong enough to face the challenges that are coming, and there really aren’t any good surprises to hope for.
At the same time job creation went off a cliff, an astounding 496,000 people departed the workforce entirely. Workforce contraction is one of the big under-reported stories of the Obama era. Just about every monthly “reduction” in the official unemployment number has been “achieved” due to people giving up and ceasing their search for work, which takes them out of the equation. And this situation is not improving. The official unemployment rate just “dipped” to 7.6 percent, but if we still had the same size workforce that existed just one year ago, it would be 8.3 percent. Barack Obama has given the America of 2013 the workforce of 1979. Forward!
Obama apologists love to mumble about “demographics” when forced to confront the workforce collapse. It would seem reasonable to suppose that some of the people exiting the job market are retirees. The Baby Boom is reaching its golden years, a demographic tsunami that will soon annihilate the social programs we’ve been told not to think too carefully about. As they get older, they stop working.
But demographic shifts are not nearly enough to explain the timing or magnitude of the workforce decline. If they were, we would expect to see a low unemployment rate among young people, drafted into companies to replace the retiring cohort. In a healthy economy, large numbers of jobs would not vanish from attrition when a senior employee retires, particularly given that retirees remain consumers. The money they spend throughout their retirement should be creating job demand. Obama is a great believer in the consumer-driven economy, isn’t he?
Instead, we’ve got crushing unemployment among the young. The overall unemployment rate for ages 18-29 is 11.7 percent, rising to 12.6 percent for Hispanics, and 20.1 percent for African-Americans. And they’ve been dropping completely out of the workforce in horrifying numbers, too. Generation Opportunity, which studies employment trends among young people, says that “If the labor force participation rate were factored into the 18-29 youth unemployment calculation, the actual 18-29-unemployment rate would rise to 16.2 percent.”
And that’s not all. Contrary to the “aging population equals workforce decline” spin, ZeroHedge says we actually have an “age-bifurcated jobs market” in which older workers are actually doing far better than young people:
Since the arrival of Obama, the US workforce has been effectively split into two separate job markets: those 54 and younger (condolences) and those 55 and older. Specifically, since January 2009, the number of jobs created has been focused solely on the gerontocratic component of the US labor pool, those aged 55 to 69 (or more – gray line below), and who can no longer afford to retire as expected thanks to Bernanke’s genocidal ZIRP policies which have made a mockery of savings.
These older workers have seen a grand total of 4.02 million cumulative jobs created. Everyone else (or those 54 and younger – red line below)? A grand total of 2.8 million jobs lost, and now deteriorating once more, with those in the prime work demographic of 25-54 having lost the most jobs, 2.2 million, since the coming of Obama.
Here’s the graph ZeroHedge refers to, which throws that age-bifurcated job market into stunning, sharp relief:
This is not a demographic shift moving older people out of the working population. It’s a combination of older people who can’t afford to retire, plus employers desperate to retain experienced employees, even as they shed jobs to survive in Obama’s economy. Thanks to ObamaCare, the cost of labor is skyrocketing. The law gives employers hard, cold reasons to reduce the number of full-time employees. Why gamble on untested, inexperienced young people when you can hang on to senior staffers, who are nervous about retirement?
And remember, our huge student-loan bubble means a lot of younger people are delaying entry into the workforce, both when seeking first jobs and when attempting to build more serious careers. High employment among twentysomethings mixes with that mountain of student-loan debt to tell a very sad story.
I also find myself wondering how the dissolution of the traditional family plays into the high unemployment among young people. It might prove difficult to gather the data needed to prove it out, but I wonder how much kids are suffering from the absence of a father who can prevail on personal or business connections to help them find that first job, begin an apprenticeship, or begin a career. Moms can do those things too, of course, but there’s no doubt that the single-parent family leaves kids with one less parent to open doors for them. And those parents are often younger, and working less stable, shorter-term jobs. The connections needed to give their children a hand into the job market are less common than they used to be. A powerful, subtle network that once helped young people interface with the job market has gone offline.
A growing population should bring more opportunities. Each new person is both a provider of labor, and a consumer of goods and services. All have needs, and all have something to offer in return. It is profoundly disturbing to watch so many people slide off the grid, year after year, becoming dependents instead of participants. And bringing them back into the workforce will not be easy – anyone who has suffered long-term unemployment can tell you how tough it can be to get back into the game, when your resume has gaps months or years wide. When the job market does come back, experienced workers will have a great advantage over young people.
But it might not be coming back any time soon, because Barack Obama dragged America so far to the Left that the effective strategies for a true, healthy recovery – tax cuts, de-regulation, privatization, and above all the repeal of ObamaCare – are unthinkable. The political class won’t even discuss the things we should be doing. All we can do is wait for the next round of excuses from sweaty political hacks and their public-relations teams in the “news” room.