New Jobs Data Shows That People Have Become Hopeless

The Labor Department came out with the jobs data for August today and it was pretty depressing. American employers added only 96,000 jobs in August and the unemployment rate fell to 8.1%. Even more depressing is that the number of people looking for jobs has decreased significantly. According to The Wall Street Journal, nearly 3 million people who were unemployed in July were out of the labor force in August, suggesting they quit looking for jobs. By comparison, just 2.3 million people went from being unemployed in July to working in August. People are giving up hope, which makes these numbers even more depressing.

The state of jobs in this country is one of the most important issues in the campaign and could be the swaying factor for undecided voters. In his speech Thursday night, President Obama acknowledged incomplete progress in repairing the still-struggling economy and asked voters to remain patient. “The truth is, it will take more than a few years for us to solve challenges that have built up over the decades,” Obama said.

This new data has, of course,  given more ammunition to the Romney campaign. It’s another disappointing monthly figure,” Mitt Romney told Fox News Channel’s Bret Baier in Sioux City, Iowa, a day after President Obama wrapped up the Democratic National Convention in Charlotte, N.C. “If you look over the last several quarters, last several years, you see the continued pattern which is that we are not creating the jobs we need to create to put Americans back to work. For every net new job created, about four people dropped out of the workforce. So we’re going in the wrong direction.”

Romney didn’t catch Obama’s speech but he did read it. “I was disappointed with the speech,” Romney said. “Of course, it has been a disappointing four years. There was nothing in the speech that gives confidence that the President knows what he is doing when it comes to jobs and the economy. As a matter of fact, he hardly even mentioned jobs or the economy.”

But the low numbers are also a result of more young Americans staying in school. We know that for the first time in three decades there are more young women in school than in the work force. According to Catherine Rampell of The New York Times, the number of women ages 18 to 24 in school increased by 130,000, compared to just 53,000 for men the same ages. We’ve all heard other stats that support this: In 2010, women made up 55% of American college graduates. Women also make up the majority of medical school and law school students.

Rampell writes:

Though young women in their late teens and early 20’s view today’s economic lull as an opportunity to upgrade their skills, their male counterparts are more likely to take whatever job they can find. The longer-term consequences, economists say, are that the next generation of women may have a significant advantage over their male counterparts, whose career options are already becoming constrained.

Why are women focusing on school more than men? When the job pickings are slim — low-paying jobs requiring weekend shifts, for example — women are likelier than men to decide not to work at all. As  Jonathan L. Willis, an economist at the Federal Reserve Bank of Kansas City, tells Rampell, “The jobs out there just aren’t very good, and men seem more willing to take them for whatever reason. The women are looking at those same jobs and saying, ‘I’ll be more productive elsewhere.’”

 

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    • Lastango

      As background, it’s important to understand that the unemployment rate is ABSOLUTE bunk.
      The rate calculation is artificially held down by reducing the number of people considered to be in the labor force. (If you’re not considered to be in the labor force, you’re not counted as unemployed if you aren’t working.) For the new figures, which relate to last month, Washington arranged to drop a whopping 581,000 people out of the labor force so they wouldn’t be counted in the unemployment stats. That’s why the unemployment rate declined to 8.1%. (The month before, 348,000 were dropped from the labor force.)
      Believing Washington’s stats requires some enormous leaps. For instance, one would have to think it is somehow possible that last year, when the civilian population rose by 3,695,000, the labor force only rose by 971,000 — and that the other 2,724,000 people did not want to work.
      ======
      The upshot of all this is that the true unemployment rate is much higher the reported rate. So is the under-employment rate — people working fewer hours, for lower pay and for reduced commissions and bonuses. (In some professions — sales, for instance — commissions and bonuses are a significant part of compensation. When business drops, so do the paychecks.) That’s one reason why the average income of the median American has been falling for years. Every year, we get poorer.

    • Lastango

      As background, it’s important to understand that the unemployment rate is ABSOLUTE bunk.
      The rate calculation is artificially held down by reducing the number of people considered to be in the labor force. (If you’re not considered to be in the labor force, you’re not counted as unemployed if you aren’t working.) For the new figures, which relate to last month, Washington arranged to drop a whopping 581,000 people out of the labor force so they wouldn’t be counted in the unemployment stats. That’s why the unemployment rate declined to 8.1%. (The month before, 348,000 were dropped from the labor force.)
      Believing Washington’s stats requires some enormous leaps. For instance, one would have to think it is somehow possible that last year, when the civilian population rose by 3,695,000, the labor force only rose by 971,000 — and that the other 2,724,000 people did not want to work.
      ======
      The upshot of all this is that the true unemployment rate is much higher the reported rate. So is the under-employment rate — people working fewer hours, for lower pay and for reduced commissions and bonuses. (In some professions — sales, for instance — commissions and bonuses are a significant part of compensation. When business drops, so do the paychecks.) That’s one reason why the average income of the median American has been falling for years. Every year, we get poorer.