Captain Rick: U.S. Job Growth is not keeping up with population growth. The 8.7 million jobs lost during the Great Recession will never return. Despite the ‘glory employment talk’ presented by the Obama Administration, America’s job situation qualifies among the worst since the Great Depression. I present the simple math to expose a monumental economic problem developing that will help deliver America to the edge of the pending ‘real fiscal cliff’.
BLUE LINE: 185,000 jobs need to be created each year to keep up with U.S. Population growth of 0.7%
RED LINE: 177,000 jobs represents the average number of jobs created during the past year. This demonstrates a negative pattern that is not keeping up with population growth.
Great Recession Job Losses are Gone Forever
8.7 million jobs were lost during the Great Recession of the late 2000s. It has been stated that 8 million of those have been restored. Simple math proves this to be incorrect. In actuality, none of those jobs have been restored when considering the jobs needed to be added each year to keep pace with population growth. America is running a significant job deficit.
Captain Rick’s Job Numbers Math
317,725,000 U.S Population
0.7% growth rate (*.007)
2,224,075 people enter job market every year
185,340 people enter job market every month
*12 months *5 years
11,120,375 jobs needed to be added in past 5 years since prior to great recession to keep up with population growth
-8.7 Million jobs lost
+8 Million jobs regained
.7 Million jobs still needed to be recovered
+11.1 Million jobs needed to be added to keep up with population growth
11.8 Million jobs short since prior to the Great recession 5 years ago.
At the current pace of job growth, which is not keeping up with population growth, the jobs lost during the ‘Great Recession’ will never be regained.
Where the new jobs were created
The U.S. economy added 175,000 jobs last month
Construction added 15,000 jobs, restaurants and bars added 20,100 jobs and education and health services added 33,000 jobs.
By far, the strongest hiring came from professional and business services industries, which include accountants, architects and technology workers. This sector alone added 79,000 jobs last month.
Wages are up: Average earnings ticked up 9 cents, to $24.31 an hour in February. It was the largest monthly wage gain in more than two years.
Long-term unemployment and underemployment remain high
Long-term unemployment remains high. As of February, 3.8 million Americans were unemployed for six months or more.
The underemployment rate — technically known as the U-6 — was 12.6%. That includes the unemployed, plus part-time workers who want to work full time, and people who want a job but haven’t searched for one in the last four weeks.
Labor Participation is lowest since 1978
Labor participation lowest since 1978; just over 63% of the population is engaged in the workforce, driven partly by Baby Boomers retiring, but also by workers who had simply given up hope after long and fruitless job searches. It means that a smaller chunk of the population is paying for promised entitlements such as Social Security and Medicare. If a smaller share of the country is working, it will also act as a drag on economic growth.
What does this Employment data mean concerning the future of America?
America is stuck in a land of anemic growth…actually declining in real growth because its economy can not consistently produce enough jobs to keep pace with America’s 0.7% population growth. In reality, this means that America is declining in economic strength. In the coming few years America faces an astronomical increase in expenditures due to entitlement programs like Social Security, Medicare and welfare programs like Medicaid and Obamacare. America’s relatively level revenue will not be able to cover the mushrooming expenditures. Congress will not be able to address this problem by simply ‘kicking the debt can down the road’ as it has in recent years. At some point soon, the fiscal mess that is brewing will explode as America plunges over the pending ‘real fiscal cliff’. At the bottom lies America as a third world country.
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