Mortimer Zuckerman in the WSJ: Too Much Part-Time Work Reflects a Weak US Economy Yes, the unemployment rate is going down; but most of the jobs created are part-time, while Americans who seek full time employment cannot find it

WASHINGTON – The well established conventional wisdom in US politics is that the mid-term elections, (coming up in November), are mostly a referendum on the incumbent President’s economic policies. This tenet rest firmly on another one: The US President is in essence the “CEO of USA Inc.” Indeed, it is (wrongly) assumed that the President has the ability to make the US economy go up or down. If it goes up, he gets the credit. If it goes down, then it is his fault, and his party loses seats in the mid-term elections.

Good news for Obama?

Well, based on these assumptions, as the US economy is doing a bit better, President Obama should be doing reasonably OK and therefore the Democratic Party should be optimistic about the upcoming November mid-term elections in which the country will vote for a new House of Representatives and 1/3 of the Senate.

But the polls contradict this. President Obama’s favorables are way down. And most analysts believe that the Democrats will lose seats in November.

But how is this possible, with the US economy picking up? The “official view” is that, while the American economy is not doing great, it is steadily getting better. For instance, if you look at the unemployment rate, it is going down. We are now at around 6%; still a bit high; but “almost” normal. Based on all we know, Obama should be getting credit for this “turnaround”.

More jobs, more demand for goods and services

Indeed, based on what we are told by the analysts, lower unemployment must be good news. More Americans getting a pay check means more people buying additional goods and services, and this translates into a growth in aggregate demand and therefore into an incentive for employers to increase production and hire more workers in order to meet this additional demand.

So, all in all, good news for the economy and therefore for Obama, right? Well, in principle, yes. However, if we look into the details of the employment trends, the news is not so good. In fact, it looks rather disheartening.

Most jobs are part-time jobs

In a very well argued and well documented op-ed piece in the WSJ, (The Full-Time Scandal of Part-Time America, July 14, 2014), Mortimer Zuckerman, Chairman and Editor in Chief of US News & World Report, gives us the unvarnished picture of a declining economy.

The central piece of information provided by Zuckerman is that most of the new employment recently created is in part-time jobs. Right now, only 47.7% of US adults are working in full-time jobs. And, make no mistake, most of those who got part-time employment did so involuntarily. They would like to have full-time jobs; but they cannot get them.

There is plenty more (mostly bad) news in Zuckermans’s piece, and I encourage you to read it carefully.

Get the whole picture

But this snapshot is enough to let anyone appreciate that the way the US Government provides labor and economic statistics is at least misleading. Yes, more people are getting jobs. And this is better than having no jobs, of course. But we are trending down.

Do keep in mind that those who have stopped looking for work (usually long-term unemployed) are not counted anymore as unemployed; while the Government does not tell us how many of the new part-time workers would really like to have full-time jobs. Obviously part-time jobs pay less and include fewer, if any, benefits.

This growth of part-time employment, while full-time jobs go down means that millions of Americans are in precarious economic conditions, depending on smaller incomes that may easily disappear.

Please, provide all relevant data

If both the Government and the media wanted to tell the real, unvarnished truth, they should provide all the relevant data. And this should include what kinds of jobs have been created, and the average take home pay they provide. The picture should also include how many Americans out of work are long-term unemployed, and how many people have actually given up looking for work. Finally, we should also be told the related numbers of the overall percentage of adult Americans employed.

Here is the current snapshot. Most new jobs are part-time jobs. Most of the people obtaining part-time jobs are adults who used to have and would like to have full-time work. Millions of Americans have given up looking for jobs. And finally, as Zuckerman writes, “The proportion of Americans in the labor force is at a 36 year low, 62.8%, down from 66% in 2008”.

Got that? We are at a labor force 36-year low.

We cannot fix the problem, if we are not told the entire story

Look, this exercise is not about assigning blame, and scoring political points. All sane people should know that the US President, Obama or anyone else, is not the “CEO of USA Inc.” Yes, the President has some leverage in setting more or less benign economic policies. But he does not manage, let alone control, the US economy.

Still, if we want to understand our predicament and do something about it, we should at least have all the facts. Yes, the unemployment rate is going down. But the employment situation is poor, sadly reflecting a weak and uncertain economy.


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