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Why Employment is Really Declining

Every month, we get some kind of increase in the jobs numbers – often lackluster and barely ahead of population growth – and every month, the White House effuses that we’ve seen 20 months in a row of job growth while carefully adding, in case those without jobs start bitching about it, there’s more work to do.

Well, turns out there’s even more work to do than the White House lets on.

Writing in the Wall Street Journal today, economist and former Bush economic advisor Edward Lazear notes that employment has actually fallen in four of the last six months because the number of hours worked has declined.

Stated simply, while more people are working, they’re working fewer hours. And if you turn those fewer hours into jobs by adding them up into 40-hour work weeks, then the number of jobs being lost has outpaced the number gained since September.

Lazear writes:

The average workweek in the U.S. has fallen to 34.2 hours in February from 34.5 hours in September 2013, according to the Bureau of Labor Statistics. That decline, coupled with mediocre job creation, implies that the total hours of employment have decreased over the period.

The labor market’s strength and economic activity are better measured by the number of total hours worked than by the number of people employed. An employer who replaces 100 40-hour-per-week workers with 120 20-hour-per-week workers is contracting, not expanding operations. The same is true at the national level.

The total hours worked per week is obtained by multiplying the reported average workweek hours by the number of workers employed. The decline in the average workweek for all employees on private nonfarm payrolls by 3/10ths of an hour—offset partially by the increase in the number of people working—means that real labor usage on net, taking into account hours worked, fell by the equivalent of 100,000 jobs since September.

Likely part of the reason hours are declining is that companies are trying to get below 50 full time employees so they are not subject to Obamacare.

The workforce participation rate is at historic lows. Nevertheless, “We’re on the right side of the issue of that matters most to the public: Jobs and the economy,” declared White House senior advisor Dan Pfeiffer Sunday.

Delusional, perhaps. A hint that aggressive spin is on the way, for sure. Or maybe it’s because White House economists really do presume work is a bad thing and people don’t want to do it.

From each according to his ability, to each according to his need!

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13 Responses to Why Employment is Really Declining

  1. Just a personal opinion of work:
    As one who had worked continuously from the teenage Christmas job at Woolworth’s 5 &10 to a retirement at 66, not working at all becomes a new way of life.
    Assuming it’s the same for the young who live on welfare or unemployment benefits and even part-time work, expectations of a better life-style dim with time. Adjustments are made, priorities change, and a modest lifestyle becomes familiar.
    We buy what we need, and hope to save enough to buy what we want.

    This mindset of less expectations can be measured in how many, and what kind of retail establishments fold or reduce their presence. We don’t need RadioShack so much anymore, don’t have the means to support all of the local fast food companies and they respond by closing stores or just reducing the number of employees on site.
    Shorter work hours, low employment or high unemployment are the new normal for the US.
    Until the federal and state government agencies take their foot off of the neck of business, lower the tax rates, and allow for the free market to expand, this is our new future; dim.

    • Plus you lose identity when you don’t work. I used to define myself by my work–I was a this, a that. People said that was not good–but now I wonder–work is part of your identity. Last year is the first yr I made no money freelancing–and I used to make enough to support my family, buy a house, buy cars. Now–they want to pay $10 an article. It’s all crummy, if you ask me.

  2. I’m not an economics expert, but Obama’s policies are not business friendly. Neither are his buddies in the unions who are more concerned about their war chests than their members.

  3. Since Obama is on the “right side of the issue” (except for when all they really believe in is all that’s LEFT), the next Executive Action looks to be Mr. Obama requiring overtime pay (starting at $16.00 per hour) for anyone working more than 20 hours a week.

  4. Instead of Obama’s promise of “an administration built on the cornerstone of law”, he delivered one built on lies, deceit, vengeance on those who disagree with him or his policies and brought dishonor to the Presidency.

  5. No one has come out with an estimated figure of how many people became unemployed because of O Mess.
    These people worked hard, held the jobs they had, mostly for the coverage they had at that job. THAN they were layed off just before< during< or just after OMESS kicked in. These people held very good jobs at smaller companies (mostly private owned companies). They were given different reasons why they were layed off.

  6. We used to have one of the best economies in history, but then it took an arrow in the knee.

    Meanwhile, Obama continues to steal our childrens’ sweet rolls.

    (I will look like an absolute idiot if nobody gets the reference…)