On November 8, 2013, Adam S. Hersh writes a commentary on MarketWatch.com:
The Bureau of Labor Statistics released new data today about the October employment situation that show the surprising resilience of U.S. labor markets — even as extreme conservatives in Congress risked economic calamity by hijacking the political debate.
The U.S. economy added 204,000 net new jobs in October, even with the loss of 12,000 federal workers from the public service. Although the government shutdown disrupted the administration of these economic surveys, the data do not appear to be systematically affected, according to the BLS. Read the full report.
While providing a bright spot in the recent economic data, underlying statistics in the report reveal that the U.S. economy is far from being out of the woods.
At 7.3 percent, the unemployment rate remained basically unchanged in October, though this constancy belies 720,000 people exiting the labor force — an indicator used in calculating the unemployment rate — which would tend to understate the severity of unemployment. The report provides other, more indicative measures of a widespread unemployment problem.
The broadest measure of employment in the United States — the share relative to the overall civilian population level — stood at 58.3 percent in October, down from nearly 63 percent at the start of the Great Recession, according to data in today’s release. Since the labor market hit bottom in February 2010, this overall employment ratio has barely budged, indicating there are more than 10 million people in “disguised” unemployment in the U.S. economy.
Even at a gain of 204,000 jobs this month, overall employment is not growing fast enough to restore the economy to full employment in any reasonable time frame. We are now nearly six years into the United States’s “lost decade,” and at this pace, it will be many years before we get back to a healthy, recovered labor market.
And of the jobs created in October, more than half were in parts of the economy where wages, productivity, and prospects for career advancement are low. A full 57 percent of new jobs gained since the labor market began growing in February 2010 have come from the retail trade, leisure and hospitality, health-care services, and temporary jobs, paying an average of $15.71 for nonmanagement workers.
Given the poverty pay and infamous working conditions in many of these occupations, it is no wonder that in the past year, workers have organized nationwide strikes against fast-food companies and big-box-store employers for a living wage.
The pace and quality of job growth is particularly foreboding for two key demographic groups: young workers in their early careers, often referred to as “Millennials,” and highly experienced late-career workers nearing retirement age.
The American people continue to be misled and misdirected with “bad news” presented as “good news.” The reality is that the real unemployment rate is at least 13.8 percent, not 7.3 percent if those who have given up looking for work and those who are working part-time when they need a full time job are counted. The situation, according to Social Security data is that if your income from wages and salaries is $30,000+ you make more than 60 percent of Americans wage earners.
What is dreadful but a reality that can no longer be ignored is that tectonic shifts in the technologies of production will ever more replace more jobs than will be created and at the same time devalue the worth of labor. Such technology innovation is occurring all over the world. Technology can be adopted in “now” time without the requirement of historical time-spent invention and innovation, and, as a result, can create a level playing field on a global scale. It means the graduates of American universities have to now compete with the educated and non-educated young living throughout India and Eastern Europe, and as well as throughout Asia and China. Jobs as an income source will not be sufficient for the majority of unskilled and uneducated Americans to afford high-cost necessity commodities like education, healthcare and energy, which have had double-digit cost growth.
And while technology is the future driver of economic growth and the big money maker, the need for those who know how to build and manipulate machines and software will be far less than the need to provide job opportunities with decent middle-class wages and salaries for the majority of the population. Such job opportunities for the unskilled and uneducated just will not be forthcoming unless there is substantial economic growth. Those educated to build and manipulate machines and sophisticated digital software operations will become more financially successful on average than people in other sectors. The reality is that private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. This non-human factor of production will continue to drive economic growth with ever more technological invention and innovation.
What is needed is to broaden the personalized ownership of FUTURE wealth-creating, income-producing productive capital assets embodied in America’s viable and prosperous corporations as they finance future growth with the goal being the building of a FUTURE economy that can support general affluence for EVERY American citizen. And while we need to extend equal opportunity to EVERY American citizen to share as owners of FUTURE productive capital assets, this does not mean that ALL outcomes will be equal. There will always be the entrepreneurial risks of starting new companies, which in time may prove to be viable and prosperous corporations whose growth is financed in ways that simultaneously broaden employee and non-employee ownership.
To implement such opportunity will require extending insured capital credit to EVERY American to purchase shares of qualified stock in corporations growing the economy. An essential requirement will be that corporations pay out full profit earnings as pre-tax dividends to pay off the insured loans and once paid ALL future dividends would be taxed at the personal tax rate applicable to each owner’s income level from all sources. Corporations committing to this finance mechanism would be exempt from corporate taxes as long as they fully paid out earnings and extended full voting rights to EVERY individual stock owner. The loan insurance would be provided by commercial capital credit insurers and, if necessary the Federal Reserve as a reinsurer.
If we are to create a FUTURE ownership culture and society in which EVERY American owns a viable and sustainable portfolio of income-producing productive capital asset wealth, then tax incentives must be extended. As competitive and diversified sector corporations adopt this new finance opportunity, they will be able to finance their growth and simultaneously create more “customers with money” to purchase the products and services that the economy can create, thus sustaining future economic prosperity and opportunity.
The above is a simplified component of a much larger policy agenda, which is known as the Just Third Way Movement. The central piece of legislation proposed for this implementation is the Capital Homestead Act.
Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797. Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm. See the full Act at http://cesj.org/homestead/strategies/national/cha-full.pdf
For a broader overview see “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624 and “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490.
