The US Labor Force Continues Its Transition Into Third World Status

Unemployment - Public Domain

The Bureau of Labor Statistics headline this month reads: “Payroll employment increases by 248,000 in September; unemployment rate declines to 5.9%.”

Happy days are here AGAIN! I stress AGAIN, because the lamestream media has been saying that for years now, yet the real numbers show that there is NO RECOVERY.

Meanwhile, the number of people NOT working is the highest ever at  92,584,000. Let’s look at the breakdown of the jobs created in the last month:

Of the claimed new jobs in September, 230,000 or 93 percent were jobs filled by those 55 and older. Employment of Americans of prime working age (25-54) declined by 10,000 jobs in September.  US real median family income has declined to the level of twenty years ago.

“US corporations are investing in buying back their own stocks, not in new business ventures that produce new jobs.  According to the Census Bureau’s Poverty Report, US real median family income has declined to the level of twenty years.”  says Dr. Paul Craig Roberts.

Roberts goes on to say, “Consumer credit and real retail sales are not growing. Construction is limited to rental units. Construction shows 16,000 new jobs, half of which are “specialty trade contractors” or home remodelers.

The payroll jobs report lists 35,300 new jobs in retail trade. How is this possible when J.C. Penny’s, Macy’s, Sears, and the dollar store chains are in trouble and closing stores, and shopping centers are renting space by the day or hour?

At a time when there is a surfeit of office buildings and only 500 new jobs in “heavy and civil engineering construction,” the jobs report says 6,000 new jobs have been created in “architectural and engineering services.” What work are these architects and engineers doing?

The 4,900 computer systems jobs, if they exist, are likely short-term contracts from 6 to 18 months. Those who have the jobs are not employees but “independent contractors.”

The payroll jobs report gives an unusually high number–81,000–of “professional and business services” jobs of which 60,000 are “administrative and waste services,” primarily “temporary help services.”

“Health care and social assistance” accounts for 22,700 of the new jobs, of which 63 percent consist of “ambulatory health care services.”

“Performing arts and spectator sports” gave the economy 7,200 jobs, and 20,400 Americans found employment as waitresses and bartenders.

State governments hired 22,000 people.

Let’s overlook the contribution of the discredited “birth-death model” which overstates on average the monthly payroll jobs by at least 50,000, and let’s ignore the manipulation of seasonal adjustments. Instead, let’s assume the numbers are real. What kind of economy are we looking at?”

“We are looking at the workforce of a third world country with the vast bulk of the jobs in low-pay domestic service jobs. 
People working these part-time and independent contractor jobs cannot form a household or obtain a mortgage.”

qine americans prime years not working chart

“As John Titus, Dave Kranzler and I have shown, these jobs are filled by those aged 55 and over who take the low paying jobs in order to supplement meager retirement incomes. The baby boomers are the only part of the US labor force whose participation rate is rising.

Of the claimed new jobs in September, 230,000 or 93 percent were jobs filled by those 55 and older. Employment of Americans of prime working age (25-54) declined by 10,000 jobs in September from the August level.

As the US labor force continues its transition from first world to third world, real median family income will continue to decline.

Ladders of upward mobility will continue to be dismantled, and income and wealth will continue to concentrate in the pockets of the One Percent. America is truly a country run for the few.

Part of this is coming from the trend of creating a very large low wage labor force in America.”

The recession destroyed many good paying jobs and replaced them with many lower wage jobs. Given that inflation is happening (just look at the price of food, housing, cars, college, etc) and you will realize that having less income is not healthy when most costs of goods are going up.


On the same Nonfarm Payrolls Jobs report, Peter Schiff, economist and owner of Euro Pacific Capital says, ” It gets worse when you look beneath this number.  The pundits are focusing on this one piece of good news  and ignoring the more numerous pieces of bad news.
The unemployment rate dropped to 5.9% People think is great, and the first time we’ve seen that number since 2008. Conveniently, it might help the democrats in November because this would probably be the last job numbers before the election.

The markets are looking at the unemployment rate and the increase in payrolsl as confirmation as to the strength of the recovery, and as to  the Fed raising interest rates.

You have to understand why the unemployment rate is coming down.  Average hourly earnings were unchanged for the month. There is a new low in the labor force. Why is the labor force shrinking if the economy is so good?

The transformation of the workforce from full time to part time workers explains one part of that.  Employers  generally need more part-time workers, to make up the hours needed. If you are an employee with 2 part time jobs, then it counts as 2 jobs.

As a result, the net number of jobs is higher, but the quality of these jobs is collapsing. The job report doesn’t care if they are good jobs, they count a part time job at Mcdonalds as the same as a software engineer job.

At the end of last year, Congress did not extend the unemployment benefits. As a result , a lot of people are taking low paying jobs, that while they still had unemployment benefits, they refused to take. The vast majority of the jobs are low paying jobs in hotels, leisure, retail trade.

Now the unemployment gravy train is over and they are forced to take low paying jobs. This is not good news, nor does it mean that the economy is strong. This also helps explains the dichotomy about what the statistics say and what the people are saying.

This jobs report was not good and is not a sign of a strong economy. Eventually the number of jobs create will be below 100,000 a month. Some people are holding onto working in anticipation of the future recovery and their optimism about it .

If the economy were really good, the unemployment would be rising, because the record number of people that dropped out would be coming back in ,looking for jobs. The same about wages. It wouldn’t be flat. If the economy were good, people would quit the low paying jobs and taking higher paying jobs, if we had a strong economy.

If you had been hoping for a good paying job, but are settling for a low paying crappy job, are you going to feel good about that?”

The recent setback in sentiment has been concentrated among lower-income households, underscoring the need for faster wage gains as the labor market recovers. Last week’s drop in confidence capped the strongest quarter since the recession, indicating consumers see halting progress in the economy.Consumer confidence fell last week to a four-month low as Americans grew more pessimistic about the economy and their finances.”

Why is confidence going down if all these jobs are being created?

Schiff adds, “All these people who would prefer to have a good job, but have a lousy job; they aren’t happy about their circumstances. That’s why when they are polled about how they are satisfied with the economy, they all answer it’s terrible, but this is why.”

Article authored by Carol Serpa. You can find the original story right here.

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