My story today was really depressing.
I've been trying to feel more optimistic about the economy. But I couldn't sustain that today. Not after hearing Dean Baker and Heidi Shierholz explain how bad the job market is.
Just to stay even with the new workers entering the job market every year, the economy needs to produce about 130,000 jobs a month. We're losing more than 300,000 jobs. To begin whittling down the unemployment rate, you need job growth of around 300,000 jobs a month.
That means we need a turnaround of 600,000 jobs a month!
We're a long way away.
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Maya McGinness got it right today, the two party system has become the problem. Both are waiting/allowing the bottom to fall out before doing what's needed.
Independents realize that our Republic yearns for release from crushing regulation which stifles small business from hiring new workers, excessive government spending due to politically protected union perks, and lack of leadership on a national level to guide energy, technology, and financial investments.
Tea Baggers as a third party?
Good post. Add to the current economic woes and the enormous number of jobs required to keep pace with new workers, let alone make up lost ground, the fact that ever increasing automation and productivity gains help decouple economic growth from job growth. Each successive wave of product innovation comes with an increase in manufacturing efficiencies. Similarly, increasing sophistication and power of both computer hardware and software sees us eliminating scores of service jobs on an ongoing basis.
All of this may continue for some time but, eventually, the lack of income available to US, and other, consumers will lead to a dearth of consumption, a brake on growth and increasing social discord and unrest.
Capitalism's great success has led to this "productivity" conundrum. It's going to be one of the main challenges of our generation to maintain the innovative energy of the system while compensating for the human costs. No small challenge.
The loss of value in the stock market in 2008 made a number of eligibles change their minds about retirement. DB plans have been frozen and k-plans and personal investments have taken major hits. So people are now working longer. That means those jobs won't be available.
There are those who have already retired and whose economic situation has turned for the worse. They go back to work as consultants, without benefits, for a fraction of what the job would normally pay just to supplement their retirement income. Salaries for new hires are affected because companies can now get more experienced talent for far less the cost.
If the health care plan does away with Medicare or dramatically changes its benefits, more and more people will continue to work past what would would be normal retirement so that they can have access to their employer's health coverage. That means those jobs won't be available.
This means the number of new jobs created will have to be even more than projected if we're to whittle down the unemployment rate. We're not talking just about new people coming into the workforce. We're now dealing with a number of people who aren't leaving the workforce.
James,
That is a great way to think about this challenge.
It's not entirely bad that analysis is beginning to reflect the sobering reality. I find it reassuring that the expert consensus is finally coming around to match my own opinion from two years ago. I hope that in another 2 years we will begin seeing the practical solutions that should have been put in place today.