I've posted this chart from Calculated Risk a few times on the website, but might as well update it for newer readers as the 'recovery' continues (cursory green shoot chant here).
[click to enlarge]
I do like the dotted line showing job growth ex-census, nice touch to showcase the 'bounce' that really is not.
The problem with these charts is they are U.S. centric. A global chart would show a far different shape - in fact V shape! Jobs are being created, but in a global marketplace many of those that 30-40 years ago would be created in Indiana, Florida, California or Pennsylvania are now being created in Western China or Southern India. Foxconn alone has 800,000 employees - mull that for a moment as you consider that one company employes 1/10th of the nearly 8M jobs lost in the US in this recession:
- Foxconn is the largest manufacturer of electronics and computer components worldwide and mainly manufactures on contract to other companies. Among other things, Foxconn produces the Mac mini, the iPod, theiPad, and the iPhone for Apple Inc.; Intel-branded motherboards for Intel Corp.; various orders for American computer manufacturers Dell andHewlett-Packard; the PlayStation 2 and PlayStation 3 for Sony; the Wii for Nintendo; the Xbox 360 for Microsoft; cellular phones for Motorolaand Nokia; the Amazon Kindle; and Cisco equipment.
So if this was 1972 rather than 2010 Tom and Joe would be making these super cool products and making a living wage. Instead Tom and Joe are praying for a new housing bubble so they can build houses no one needs, and/or scouring Walmart in hopes of being a greeter or cashier. Then, if the ivory tower textbooks are right, in 40 years the Asian middle class will demand products from the U.S. (of course no one asks what products they will actually need from us, considering most of it is already sourced in Asia) ;) The textbook never fails those in academia so don't ask any questions beyond that. It will all work out - just give it 4 decades. Whatever the case, this is not the type of work we want in America anymore; it's old school and below us as a people. Everyone will be a high achiever, get that liberal arts degree, and do service work & avoid getting dirt under fingernails. The new bell curve of utopia.
Again, as the speculator class we love this chart, in fact 90% unemployment would be much better than 9% because that means corporations are running REALLY lean. (if only we applied these same concepts to the government). I mean if you can cut 40,000 workers just imagine if you cut 400,000 - profits galore for the remaining 4% who could afford stocks. I am taking it to the extreme but you catch the drift.
On a related note, saw a great quote in BusinessWeek for another reason (if you will) of why job gains in recoveries have been taking longer and longer... in an article titled Machines Don't Get Paid Overtime. While a controversial theory (I do agree with it) it does shine the light on *our* most recent iteration of
capitalism corporate socialism. Labor is disposable, capital is everything - no need for a balance between the two.
So as long one's core beliefs are that maximizing corporate profits, with capital owned by the top sliver of a society will lead to trickle down benefits for the masses, the U.S. is executing the game plan set into motion a few decades ago to perfection, and as a whole the society is far better off. To disagree apparently means you are a socialist of the highest order... if not communist. ;) As we apparently all were in this country in the 1950s and 1960s when this tenant of 'shareholder value maximization above every other aspect of society' was not the ideal and people had a middle class living on 1 wage. Communists!
- The stock market plays a role, too, says Sinai. By 1990 the doctrine of maximizing shareholder value had gained wide acceptance at publicly traded companies in the U.S., and executive compensation was by then firmly linked to boosting the stock price. Stocks always respond positively when head count is permanently reduced, says Sinai, because profits are then expected to come in higher. We are the only country where the mantra of maximizing shareholder value is so intense.
- Until these pay incentives are changed, and until U.S. workers become less expensive, high unemployment could be a chronic problem.