Summary: The news overflows with chaff about the economy. It’s great! It’s a recession! Neither is true. Since the 2009 trough we have had growth — but unusually slow growth.
Here we look at one measure of growth: jobs, going in slow clear steps from the wonderful headline news to the grimmer reality.
Here’s the good news that excites Janet Yellen: job openings as a percent of total non-farm jobs are back to their 2001 peak!
The bad news: the rate of hires (people actually hired as percent of total jobs) has climbed, but only back to the average of the previous expansion (2002-2007).
The very bad news: the higher rate of hires has not boosted the rate of job formation (payroll growth).
It’s just faster turnover of jobs.
This shows percent growth in jobs. It looks better when expressed in thousands because the population grows over time.
Confirming the bad news (no tight labor markets): hourly wages of workers are growing even slower than in 2001-2007.
The 2001-2007 expansion was called “jobless growth”.
The worst news: for the first time since the 1930s, America’s working age population (red) grows faster than jobs (blue).
Index: 100 = March 2001 (peak before the tech recession).
Conclusions
Jobs and wages are the key not just to prosperity in America, but to social and economic stability. Growth of an underclass — people without secure jobs, in part-time contingent minimum-wage jobs — drives a wide range of social ills.
This is incomparable with our political institutions, and tangible evidence of our failure.
For almost a generation we have tried a wide range of economic nostrums: tax cuts for the rich paid for by government borrowing — massive growth of household, business, and government debt — wild fiddling with the knobs of monetary policy (zero interest rates, massive expansion of the money supply, quantitative easing) — and even foreign wars. Nothing has worked.
Meanwhile our public infrastructure rots from insufficient maintenance and inequality grows. Hillary Clinton has little interest in these things (I’ll wager that passing the Trans-Pacific Partnership faux-trade treaty becomes a higher priority if we elect her). Trump gives us random sound bites, while his far-right advisors plan policies to help the 1%.
America is changing into something else. But the political machinery the Founders bequeathed us remains powerful, needing only our participation to make it work (voting is the starting point of citizenship, not its essence).
The clock is running. Time is not our friend.