A. The Labor Situation
I. Numbers of workers, composition of labor force
1)Gradual increase in working age population from late 1940s until late 1960s. But the increase also meant that new homes/apartments were needed as well as furnishings, etc. Then a rapid growth took place in annual increase in working age population (baby boom), especially in the 1970s, with peak in the years 1973-1975. The 5-year average of the annual increase in population peaked at over 3 million (over 2 percent annual increase) and dropped rapidly to around 2 million per year in 1984 and staying at that level until the late 1990s, when the children of the baby boomers came of age. (SEE CHART 1 for this info) We are still apparently in this 2nd wave, which is smaller numerically (and in percent) than the baby boom years, but the 5-year average also peaked at over 3 million per year in 2003-2004, but the percent increase was only 1.5% at its maximum.
2)The labor force participation rate and percent of the population actually employed started to rapidly increase in the early 1970s, around the same time that there was a huge increase in the numbers of people entering the labor force. During this period, 1970s-1990s, it was the increase in women in that caused the increase in labor force participation rates—with women’s participation in the labor force increasing from around 43% to 60%. [Note: with so many more men losing jobs than women in the Great Recession, women are close to comprising 50% of the labor force.] At the same time, male participation rates actually decreased, reaching 73% in 2007. SEE CHART 2 for total participation rates.
3)If the labor force participation rate stayed at its highest level there would be some 5 million more people counted as part of the labor force (SEE CHART 2A and NOTE: these are not counted as unemployed because they are not part of the labor force.
4)Not sure whether is worth going into the issue, but I think that a discussion of net job loss (or creation) as a function of new jobs minus jobs eliminated might be worthwhile for people to get a better handle on what happens (ie—even in the midst of the Great Recession there are new jobs being created—just many fewer than the number being eliminated). I’ve some charts on this.
II. Private vs. government employment
1)Private employment growth tended to diminish from the 1970s to the 1990s. But it fell dramatically after the recession of 2001, so that even before the Great Recession began (at the end of 2007), the 10-year average growth rate of private sector jobs was only 1% a year. And for the 10-year period 2000-2009 the average annual growth was negative (-0.1%). (SEE CHARTS 3&4)
2)From the mid 1949 through the early 1960s, government employment growth was around 1/3rd of the total growth in jobs. [See CHART 5]
3)Most of the job growth in the government sector was in local (including county) with some in state employees. Relatively little growth in federal employees (CHART 6).
4)Most of the people in the government sector would be classified as being in “services” – police, fire, teachers, etc.
III. Private sector employment
1)Employment in manufacturing reached a peak of close to 20 million workers in 1980, then dropped to around 17 million during the recession of the early 1980s and stayed close to that level until 2000. Starting in 2001, there is almost a “free fall” and the number employed in manufacturing by the end of 2009 were around 11.5 million. (CHART 7).
2)Because of a) a huge increase in productivity in the manufacturing sector while b) numbers employed remained roughly the same (until 2001), and c) wages stagnated---- there was a dramatic fall in the amount of value added in the labor process that actually went to labor — from 27% of value added to 15%. (CHART 7A)
3)On the other hand, because of the increase in construction jobs, the total number of people working in goods producing stayed about even.
4)While total goods producing employment remained fairly constant, services grew rapidly (SEE CHART 8) and increased from around 50% of the private labor force to 81% by 2008. (CHART 9) Some of these services are certainly important – transportation, health care, education. Others, not so. There are now more workers in the retail trade than in producing goods (SEE CHART 10)
- Union membership in private and public sectors, role of federal government in the war on unions, etc.
V. Current situation and future prospects.
1)The private sector has produced no net jobs during the 10-year period 2000 through 2009. The severe stagnation of the period was only alleviated to a certain extent (and only for a short period) by the construction boom associated with the housing bubble and the increase in debt-derived purchases.
2)The number of weeks that the unemployed remain unemployed has increased since 1970, with the 5-year average currently about 18 weeks. [SEE CHART 11]
3)FROM THE FEB. NFTE “In November, there were 15.4 million officially unemployed persons (these were not employed and actively seeking work in the past four weeks). As bad as the high rate is, a record one-third of the officially unemployed (5.8 million people) have been without work for twenty-seven weeks or longer. And if we add those working part-time involuntarily (hours cut or only able to secure part-time work) and those "marginally attached to the labor force" (want work and have looked in past year), we get an unemployment rate of 17.2 percent, or 26.9 million persons. If we were to count as unemployed all those who want a job but have not looked in the past year, the unemployment rate would be in excess of 20 percent. The slight fall in the unemployment rate in November is accounted for by the increase in discouraged workers, that subset of those marginally attached to the labor force who have stopped looking for work because they believe no work is available for them. Given that there are about six times as many job-seekers than job openings and a job-seeker can expect to look for work for about half a year before finding a job, it is easy to see why people would stop looking for work. And a recent New York Times/CBS poll of the unemployed tells us that a fearful toll is being taken of those without work: anxiety, fear, shame, insomnia, depression, family problems, and deteriorating health.” Over 100,000 jobs needed to be added to the economy every month just to keep pace with the growth of the working age population. Krugman has estimated that the US economy needs to add 300,000 jobs a month for five years in order to bring "anything that feels like full employment."
4)Although the shedding of net jobs is slowing and may soon cease, it is not at all clear what will provide the needed employment in the future. Judging from the recent past, it seems highly unlikely that the private sector can produce 300,000 jobs per month for five years. In order to relieve the economic and psychological misery that the Great Recession has caused, a massive federal government program akin to the WPA will be needed. However, given the makeup and orientation of congress as well as the conventional orientation and priorities (such as war) of the Obama administration (and the accumulating large national debt) it seems very unlikely that anything close to what is needed in the way of federal programs will occur absent a massive public mobilization.
A more detailed look at where the major growth in jobs took place.
GROWTH OF JOBS AND RATES OF GROWTH
1)Using the general categories from the EROP 2009 and total growth in jobs (and information discussed above)—there was quite a burst of net job creation in the 1980s and 1990s—enough to increase the percent of population in the labor force and the percent actually employed (this increase, as pointed out previously, was due to women entering the labor force in large numbers—as male participation rate actually declines).
2)The job category that added the most jobs was “health and education” (which includes BOTH government and private jobs)—more than 15 million jobs from 1960 through 2007 (CHART 12 --the first one in the ppt document called “job category growth”). This was followed by “professional and business services” with over 14 million, “leisure and hospitality” and “retail trade” with each adding around 10 million, “financial services” with close to 6 million, and “Construction” with around 4.5 million. The top four of these categories (health & ed, prof. & business services, leisure and hospitality, and retail trade) added 59% of total of all the jobs added to the economy from 1960 to 2007 (83 million, or an average of 1.7 million per year. NOTE: in only about 25% of the years did jobs grow at 3 million or more. And only in the late 1970s and late 1990s did growth exceed 3 million per year for 3 years in a row. ).
3)I’ll discuss the job categories (in EROP) that grew the most. In Chart 13 (one can see:
- Retail trade employment grows as a pretty straight line, implying that the percent growth per year in this category is actually declining (see chart 14). As mentioned previously—there are now more people employed in “retail trade” than in producing goods.
- From the early 1980s through the mid-1990s growth in “health and education” increases more and more rapidly—actually, it’s a fairly constant rate (percent per year) growth of jobs, around 4.5% per year. After the mid 1990s this sector continues to grow, but at an increasingly slower rate.
- Although “professional & business services” employment grows along a path similar to employment in “health and education,” it is growing slower rate in the 1980s (3.5-3.75%), takes a hit in the early 90s recession, grows rapidly in the late 90s and then starts to crash beginning with 2003.
- SO- the rates of growth of employment in top four labor growth sectors during the 1960 to 2007 period began to decline in the 1970s (retail trade), 1980s (leisure & hospitality), 1990s (education and health), and early 2000 for financial services. THUS, all top growth sectors were producing fewer and fewer jobs before the Great Recession set in.
Other important issues re labor situation:
- Differences between white and black unemployment. As the percent unemployment of whites increases by 1%, unemployment among blacks increases by 2%. I have charts on this—might be best as a table. Types of jobs, seniority issues(?), discrimination.
- Wages in various types of jobs as well as median wages for all labor over time.