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.
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!