The financial world is going gaga over the alleged great jobs numbers and economic gains reported about the U.S. economy over the past few months.
We’ve been over this saga many times. The methodology for calculating jobs gains is not even close to accurate. The unemployment rate is now a marketing gimmick rather than an accurate economic metric.Indeed, here are some staggering statistics that indicate just how messed up the US economy is right now.
· The labor participation rate is the lowest since 1978.
· There are over 90 million Americans without a job right now.
· An incredible 20% of all American families do not have a single member who is employed.
· There are over 47 million Americans on food stamps.
There is simply no way to spin these numbers. The US Federal Reserve has spent over $3.2 trillion and generated virtually no real job growth (accounting for population growth).
See for yourself:
Well, what about as a percentage of the population?
Has the percentage of working age Americans that have a job been increasing or decreasing?As you can see from the chart posted above, the percentage of working age Americans with a job has been in a long-term downward trend.
When the year 2000 began, we were sitting at 64.6 percent. By the time the great financial crisis of 2008 struck, we were hovering around 63 percent. During the last recession, we fell dramatically to under 59 percent and we have stayed there ever since.
And the numbers behind this chart also show that employment in America did not increase last month.
In March, 58.9 percent of all working age Americans had a job.
In April, 58.9 percent of all working age Americans had a job.
Things are not getting worse (at least for the moment), but things are also definitely not getting better.
The month that Barack Obama entered the White House, we were in the midst of the worst economic downturn since the Great Depression and only 60.6 percent of all working age Americans had a job.
Since only 58.9 percent of all working age Americans have a job now, that means that the employment situation in America is still worse than it was the day Barack Obama took office.
When you account for how the potential labor pool has grown, the number of employed Americans has gone almost nowhere but down since the 2008 recession supposedly “ended.”
At the end of the day, spending money doesn’t create real job growth. An employer only hires someone if they believe that the person’s output will have a net benefit for the firm (meaning the money the person’s output brings in is larger than the money the firm pays them for their work).
That’s what creates a sustainable job. Spending money just to create some position where a person sits at work 50% of the time doing nothing is of no real long-term value to the economy, the person, or the firm.
In simple terms, the great attempt to prop up the US economy through spending and printing money is at an end. The world takes a long time to catch on to these changes, but the shift has already begun. It’s now just a matter of time before stocks figure it out.
The issue of creating jobs is now front and center in regard to setting monetary policy. Sadly the people in Washington remain clueless in understanding how "real" jobs are created; Creating jobs in a mature market should be required to pass a certain "taste" test.
When a job that falls outside the description of government worker fails to make economic sense it becomes a form of working welfare with the taxpayer picking up the tab.
We as a country and as a society have paid dearly for each unsustainable job created through government incentives and partnerships, because of the nature of many of these jobs, we might even call them temporary.
It is becoming apparent to many that the financial system has become dysfunctional. People are forced to loan their savings to governments and banks with negative interest after adjusting for inflation.
Today for other than student and auto loans there is scant demand even at low interest rates. We must differentiate the kinds of economic growth and understand that all growth is not created equal. If you spend money, but afterwards have little to show for it, you have wasted it.
There are nearly 102 million working age Americans that do not have a job right now. And 20 percent of all families in the United States do not have a single member that is employed.
So how in the world can the government claim that the unemployment rate has "dropped" to "6.3 percent"?
It all comes down to the manipulation of how the U.S. Labor department defines who is "unemployed". For example, last month the government moved another 988,000 Americans into the "not in the labor force" category.
According to the government, at this moment there are 9.75 million Americans that are "unemployed" and there are 92.02 million Americans that are "not in the labor force" for a grand total of 101.77 million working age Americans that do not have a job.
Back in April 2000, only 5.48 million Americans were unemployed and only 69.27 million Americans were "not in the labor force" for a grand total of 74.75 million Americans without a job.
That means that the number of working age Americans without a job has risen by 27 million since the year 2000. Any way that you want to slice that, it is bad news.
Unemployment statistics have been manipulated for decades by numerous administrations from both political parties to project this distorted, artificially inflated, "happy" amount of Americans who have jobs.
Don't let anyone fool you with talk of an "employment recovery". It simply is not happening.
The official unemployment rate bears so little relation to economic reality at this point that it has essentially become meaningless.
How in the world can we have an "unemployment rate" of just "6.3 percent" when 20 percent of all American families do not have a single member that is working?Here is how that 20 percent figure was arrived at:
A family, as defined by the Bureau of Labor Statistics, is a group of two or more people who live together and who are related by birth, adoption or marriage. In 2013, there were 80,445,000 families in the United States and in 16,127,000, or 20 percent, no one had a job.So if one out of every five families is completely unemployed, then why is the official government unemployment rate not up at Great Depression era levels?
It is because, in my opinion, our government has been manipulating the numbers to make them look much better than they actually are.
Why don't they just go ahead and get it over with?
They can just define every American that is not working as "not in the labor force" and then we can have "0.0 percent unemployment". Then we can celebrate how wonderful the U.S. economy is.
And don't be fooled by the "288,000 jobs" that were added to the U.S. economy last month. For workers under the age of 55, the number of jobs actually dropped by a whopping 259,000.
If we were using honest numbers, the official unemployment rate would look a lot scarier. John Williams of shadowstats.com has calculated that the unemployment rate should be about 23 percent. I don't think that is too far off from the actual amount.
Meanwhile, the quality of the jobs in our economy continues to go down. The House Ways and Means Committee says that seven out of every eight jobs that have been "added" to the economy under Barack Obama have been part-time jobs. But you can't raise a family or plan a career around a part-time job. To be honest, it is very hard for a single person to even survive on a part-time wage in this economic environment.
As the quality of our jobs goes down, so do our incomes. The median household income has declined for five years in a row, and the middle class is falling apart.
Without middle class incomes, you can't have a middle class. Considering what we have been watching happen, it should be no surprise that the home ownership rate in the United States has dropped to the lowest level in 19 years.
Please don't blame the people of the U.S. for this mess.
The economic catastrophe of the U.S. economy, and as an extension, the world's economy should not be blamed solely on President Barack Obama's administration as he inherited a shit load of major, crucial financial structural problems from the previous Bush administration.
Also, don't dump this, as being caused by the entitlement programs such as Social Security and Medicare. It cannot be blamed or fixed on the backs of the average American who receives entitlement programs such as Social Security and Medicare that they deserve and paid for with their own money.
These Entitlement programs have NOT contributed to the financial debt of the United States (CLICK HERE), despite the popular political rhetoric that it has, or should be drastically reduced in benefits given to regular folks. The idea that these programs should be reduced or eliminated is just typical political bull shit of scapegoating the most vulnerable, instead of facing the real truths of decades where government mismanagement, waste, and corruption have bled us dry as a Country.
At a gut level, most Americans understand that things are much worse than they used to be.
The Pew Research Center recently asked people what "class" they consider themselves to be. The results were shocking.
Back in 2008, only 25 percent of all Americans considered themselves to be "lower middle class" or "poor".
Earlier this year, an astounding 40 percent of all Americans chose one of those designations.
We are in the midst of a long-term economic decline, and no amount of propaganda is going to change that.
But based on the "happy numbers" being trumpeted by the mainstream media, the Federal Reserve, Wall Street, it is slowly bringing their quantitative easing program to an end.
When quantitative easing is finally totally cut off, we shall see how the financial markets and the U.S. economy perform without artificial life support.
Personally, I don't think that it is going to be pretty.
