This is Not a Recovery

Today's jobless numbers headlines (including a drop to 7.8%) are "too good to be true" according to our friends at Zerohedge.  The key quotes from that piece; first from economist David Rosenberg.

If it's too good to be true, then it probably is. 

But this is why the headline unemployment plunged, and that is what is very likely to make the front pages of the Saturday newspapers. Digging beneath the veneer, the quality of these so-called Household jobs is called into question, seeing as part-time work for 'economic reasons' dominated with a 582k run-up in September. And upon closer inspection of the actual amount of slack in the labour market, the more inclusive U6 unemployment rate that does a much better job at capturing underemployment, remained stubbornly stuck at 14.7%.

In other words, the key reason for the drop is that part-time work is now a full time job in the new survey.  Key measures of employment health that are not as volatile as the "household survey" (and therefore less manipulable, do not show the same rosy picture.  First, the labor force participation rate; a key metric of how many people are in the work force had a slight uptick, but we have seen this before and it constitutes statistical noise in a month on month basis.  Look at the data yourself.

Another measure of employment health is the percent of the population that is working. This is important because ultimately, these are the folks driving the economy, paying taxes and investing.

These numbers also had an uptick, but again, it looks like noise to me, not a trend.  I incorporate the actual data from the Federal government's Bureau of Labor Statistics, so that you can make an informed decision yourself.  On both of these measures, we see that nothing the administration has tried to do has made a difference in actually getting a recovery going.

More succinctly, fellow SLOB sent me this picture, which sums up the current situation.

Speeding Up and Multi-tasking - Worker Burnout in Today's Economy

Monika Bauerlein and Clara Jeffery at Mother Jones discuss the plight of workers in an economy where jobs are scarce and employers are reluctant to take on new staff. For the record, they come from a very left wing perspective, and I disagree with their conclusions, but I think they have hit on some things that need saying. They argue that we are harming Americans by the constant pressure to be available 24/7 via technology and through our attempts to handle our overwhelming workload through multitasking. With corporate productivity up and but employment not so much, they argue that the greed of evil corporations is at the root of the trend.

They make any number of sweeping generalizations in the article, but I do that as well on this blog. I'd like to share some salient paragraphs.

Sound familiar: Mind racing at 4 a.m.? Guiltily realizing you've been only half-listening to your child for the past hour? Checking work email at a stoplight, at the dinner table, in bed? Dreading once-pleasant diversions, like dinner with friends, as just one more thing on your to-do list?

Guess what: It's not you. These might seem like personal problems—and certainly, the pharmaceutical industry is happy to perpetuate that notion—but they're really economic problems.

. . .

What about offshoring? That's certainly a factor. But increasingly, US workers are also falling prey to what we'll call offloading: cutting jobs and dumping the work onto the remaining staff. Consider a recent Wall Street Journal story about "superjobs," a nifty euphemism for employees doing more than one job's worth of work—more than half of all workers surveyed said their jobs had expanded, usually without a raise or bonus.

In all the chatter about our "jobless recovery," how often does someone explain the simple feat by which this is actually accomplished? US productivity increased twice as fast in 2009 as it had in 2008, and twice as fast again in 2010: workforce down, output up, and voilá! No wonder corporate profits are up 22 percent since 2007, according to a new report by the Economic Policy Institute. To repeat: Up. Twenty-two. Percent.

. . .

Multitasking seems the obvious fix—let me just answer this email while I help with your homework! But here's the scary research news: Minus a few freakish exceptions, most of us cannot actually multitask. Try to keep up a conversation with your spouse while scanning the BlackBerry, and empirical data shows (PDF) that you do both things poorly. And not only that: If you multitask constantly, your actual mental circuitry erodes, and your brain loses its ability to focus. (Same with sleep: Aside from a tiny minority of mutants, humans perform distinctly and progressively worse when they get fewer than eight hours a night. Go ahead and cry.)

So of course the reason for all of this is Citizens United, I know you jumped to that conclusion as well and union busting. But these trends were in place before that decision and union membership in the private sector has been declining for years. I have previously discussed regulatory uncertainty as a key reason for the jobless recovery, but I will admit that this may not explain these trends fully either.

Bauerlein and Jeffery state that corporate profits are up, so there is no excuse for this behavior. However, much of the growth in corporate profits have come from the financial sector (sorry that I can't find the link for that), where the fed has been force feeding liquidity. Only recently have sales shown improvement. So for most sectors, finance aside, it made sense to keep staff hiring on a short lease, especially with future worker costs so uncertain.

Meanhwile, the authors point to an example of at least one successful company that is trying to put a lid on the excess.

Mule Design Studio, a web-design shop with a number of blue-chip clients, has a saner policy: "Our office hours are Monday through Friday 9-6. We do not hand out our cell phone numbers. On the weekend, we cease to exist."

Ultimately stupidity like what we are currently suffering through has a way of passing. As corporations figure out that their employees are making bad decisions because they are multitasking and not getting enough sleep, I think the speedup and offloading will slack off. Americans will always work hard, but the current maniacal levels of activity just aren't productive and are due to end.

And the answer isn't repeal of Citizens United and more unionization.