Healthcare jobs expand servicing many older Americans with little to no savings – Since the recession started top employment fields related to healthcare. Over 10 million Americans no longer in the labor force.
- 2 Comment
Get used to sluggish growth. Although the political season is in full force and every candidate is promising you unicorns and roads to utopia if you vote for them, the reality is we have some built in challenges that neither party can easily fix. The unemployment rate has trickled lower thanks to lower wage jobs being added but also, a gain in the number of those not counted as part of the labor force. The number of Americans deemed “not in the labor force” has surged by 10,000,000+ since the recession started. As a consumption based system, what happens when the middle class begins to thin out? At the core you need a good number of people with disposable income to fuel industry. The ultra-rich are not going to buy 1,000 Ford’s just because they can and the 46 million on food stamps are not going to add any hidden boosters. The stock market’s lack of volatility is basically betting on the Fed and European Central Bank bringing out a monetary bazooka. The problem of course is that they’ve been throwing monetary RPGs at the system for years now and look at the results.
The growing number of those not in the labor force
We have an older and aging population. The number of people not in the labor force was expected to go up simply because of demographics but the recession simply added more to this figure with job losses:
That is a 10,000,000+ increase. Naturally, these people are not factored into the unemployment rate. Theoretically the more you add to this figure the better the headline unemployment rate will look even if no jobs are added. A deeper issue at hand is the fact that we are facing structural issues in the system:
Many have been out of work for many weeks. The probability of re-employment has fallen dramatically for both categories above (those below 27 weeks and those above 27 weeks). This suggests that many of the jobs lost during the recession are simply not going to come back. Even if we look at the jobs that were added since the recession hit, we see the impact of the aging and lower wage trends:
The number one job that was added was in nursing. Yet look at the next two fields. These pay less than the average per capita wage of $25,000 per year. Out of the top 10 fields three have solid wages. What is more telling is how heavily dependent job growth has become on the healthcare industry. Given that 1 out of 3 Americans have no savings, how are they going to pay for all that expensive healthcare that is paying the wages of the top growing fields? You see where the fiscal cliff problems become more obvious.
Simply adding lower paying jobs and hardly any that are goods producing is not a balanced way to expand our economy. The fact that so many people have dropped out of the labor force is telling. In recent years many have dropped out to pursue goals in higher education. The cost of college has far outpaced inflation and is looking incredibly bubbly especially when you compare it to wage growth for most Americans. As the silly season continues remember that any party in office is going to face challenges and with many millionaire Congressmen, remember that your interest probably falls very low on the list of priorities.