The American Job Machine Purring

Nattering nabobs of negativism cloaked in coats of doom croaked like frogs when the American jobs figures were released this month.  The economy added "only" 75,000 jobs in May, they grouched.  Ersatz economists, media carpers and political pundits forecast the demise of the economic revival.

The scale of deliberate deception would make Herr Joseph Goebbels blanch.  Despite the collaborative clamor, rumors of the death of the economic recovery are greatly exaggerated.  If you doubt it, spend a few minutes delving behind the job numbers.  No media person will do it.

As a primer, job additions are a popular test of the country's economic health published monthly by the Bureau of Labor Statistics (BLS).  It tracks the total number of people being paid for work.  Often it is misinterpreted as a measurement of how many jobs industry and government created.

With that perspective, scrutiny of the May data reveals a very different interpretation than what has been offered by the cynical skeptics.  Here is an abbreviated version of what is happening: America is running out of qualified workers for an expanding number of jobs.  

The data confirms the economy is soaking up most of the labor pool, including many who had given up looking for jobs. In the last 12 months, the number of involuntary part-time workers has declined by 565,000.  That means people who were forced to work part-time, have found full-time jobs.

Since the end of the 2016, the unemployment rolls have thinned by 1,667,000 in 17 months.  The unemployment rate at the end of May stood at 3.6 percent, the lowest in 49-years. Unemployment for minorities, African-Americans (6.2%) and Hispanics (4.2%) are at historic troughs.

Only one demographic continues to experience stubbornly high unemployment: teens aged 16-19.  Unemployment averages 12 percent.  It is no coincidence they are the least educated and most unskilled in the labor force.  Fewer job opportunities exist for this group in the new economy. 

The government calculates there were 7.4 million job openings at the end of April, the latest available data.  It marks 14 consecutive months with more job openings than unemployed people.  Further evidence that there are just not enough workers to take advantage of the sonic boom in jobs.

The Labor Participation Rate, a measurement of the people aged 16-to-64 employed or seeking work, has nudged up to 62.8 percent, compared to 62.4 percent at the end of 2016.  Robust hiring has increased the size of the American workforce by 395,000 in 17 months.

According to BLS statistics, the economy has added 5,892,000 jobs since 2016.  During the previous eight years (96 months), job growth was 10,389,000.  This is an apples-to-apples comparison because the same government data source was used to calculate both figures.

To comprehend job additions, it helps to understand the derivation of the number.  The BLS tallies total hires and subtracts the job separations, which includes layoffs, firings, retirements, and employee resignations.  Total separations have remained flat while hiring has expanded.

Prophets of doom rushed to judgment on May figures.  Logically, it is an aberration.  The average monthly measure since the first of the year has averaged 164,000 jobs.  Historically, job growth figures between 100,000 and 150,000 represent a positive trend for the economy. 

The denizens of darkness have seeded the media with propaganda that low-skilled workers have been left behind.  The New York Federal Reserve has reported that for the first time in decades, it is harder to find blue-collar workers than white-collar prospects.  Low-skilled workers are in demand.

May wages for non-supervisory workers jumped 3.4 percent.  This marks the 10th consecutive month of rising pay after a dismal stretch of eight years when wage raises never attained the three percent level.  Wages rose for workers in hotels, restaurants and retail, traditional low-paying jobs.

The chronic complainers incorrectly claim job openings are mostly low wage opportunities.  Not according to the New York Fed.  Their data validates that average starting wage for full-time employees hiked from $58,035 last November to $66,415 in March, the most recent figures.

In review, job creation is pulsing.  Unemployment is sinking.  Wages are swelling.  Labor participation is ascending.  More people are joining the workforce.  More jobs are going unfilled, because hirings are depleting the labor pool.  So what's the beef about May's one-month snapshot?

The current economic surge has proven beyond a doubt that everyone, the under employed and professionals, benefit from roaring growth.  Unlike wealth redistribution and government handouts,  economic prosperity fuels competition for employees, which advantages all American workers.