Aggregate demand is the problem, not ‘Obamacare’
When the Bureau of Labor Statistics announced that 288,000 jobs had been added in June, critics cried foul. They said the news was misleading: The details showed a deteriorating job market, which many critics blamed on the Affordable Care Act requirement that employers provide workers with health insurance or risk prosecution or penalties.
But an examination of the data tells an entirely different story about what has hobbled the recovery from the Great Recession, which started in December 2007 and ended in the summer of 2009.
June marked 52 consecutive months of job growth. However, the number of full-time jobs actually fell in June by more than 530,000 compared with May. Total jobs increased only because part-time jobs grew by about 800,000.
At first blush these numbers are alarming. But the details reveal a more nuanced, and in some ways more disturbing, picture.
Monthly job data are frequently revised. The initial job report for May has been revised upward by 7,000 jobs, the April report by 22,000 jobs. The June report will likely be revised, too.
Why revisions? The BLS rushes the report out just three or so days after the month is over. In addition, monthly data are volatile because of many factors, such as how many Sundays are in a month, when holidays fall and extreme weather events. Trend lines, not monthly snapshots, provide the best data. Monthly job reports should always be regarded as first rough drafts.
So let’s look at what’s happened to the mix of full-time and part-time jobs under President Barack Obama, including under the Affordable Care Act, which took effect only this year.
From his January 2009 inauguration through last month the total number of jobs increased by 6.8 million full-time jobs and just 387,000 part-time. That increase is smaller than the June figure because the number of part-time jobs fell earlier in his presidency.
But go back to 2000 or 2004 or 2007, the last peak year of the economy, and the picture is very different: Since 2007 full-time jobs are actually down by 1.6 million, while part-time jobs have grown by 2.7 million.
Part-time employment for economic reasons, all industries
Source: U.S. Department of Labor: Bureau of Labor Statistics via Federal Reserve Bank of St. Louis.
Most troubling of all, the number of people who want to work full-time but can find only part-time work shot up from 4.6 million in 2007 to 7.5 million last month. This involuntary part-time employment explains, statistically, the entire increase in part-time jobs in the last six-plus years. [ … ]
Blogger’s note:
It is important to understand what’s happened to our economy since the start of the Great Recession and how the return of jobs has changed drastically from previous recoveries. David Cay Johnston does an excellent job of separating the issues and the facts from pure fiction.
Please click through to finish reading his piece here, then please share!
Curated from america.aljazeera.com