The good news is that unemployment is going to continue to decline, says a new research note from investment house Goldman Sachs. The bad news is that doesn’t mean you’ll necessarily have a job as the joblessness rate continues to decline.
“The unemployment rate is falling,” reports IBT, “but that traditional sign of health for the American
worker can be misleading. A larger share of the U.S. population is now out of
the labor force than at any time since 1977 -- an era when manufacturing was
king and most women didn’t have jobs. As the drop in workforce participation
continues to vex economists and policymakers alike, Goldman Sachs economists
are projecting the trend will roll on.”
More and more people are voluntarily
opting out of the workforce, and while some of that can be pinned on an aging
workforce, much of it— almost everyone agrees— is because this economy blows
chucks. It’s thus more likely that the trend of dropping labor force
participation rates will continue, reports Goldman analysts. That in turn will
artificially lower unemployment to rates not seen since those heady, good
economic times we enjoyed under the George Bushes.
That’s what it has come to now: the
Obama-Sanders-Hillary coalition has so broken the economy that if you give up
looking for work, you stop being a part of the “problem” and start being part
of their “solution”.
In other words, Democrat math has it
that everyone will be employed just as soon as people stop wanting jobs. If you are confused by this then you
probably aren’t a Goldman analyst, at least one of whom seems to be confused as
a Democrat looking at a federal budget.
"The downward revision to our
participation forecast has directionally hawkish implications for monetary
policy," says David Mericle, a New York-based economist at Goldman
according to Bloomberg.
"Nevertheless, it is also worth keeping in mind that our results still
show a considerable amount of remaining labor market slack, which is consistent
with the continued softness of wage and price inflation.” Hawkish policy means higher interest
rates because of more inflation because of higher growth.
Excuse me if I inject a little
reality into the “good-news-unemployment-is-falling” chorus, but you don’t get
higher prices when fewer people have jobs. And that my friends is what a lower
labor participation rate means: fewer jobs, for fewer people, with lower
economic growth.
Much of what is wrong with our
country can be pinned on the predictable, but ignored demographic trend that
more people will retire, while insufficient population growth by either birth
or immigration will leave fewer workers to support those who don’t work.
In other words: Tax revenues will to
go down just at a time when federal outlays will start to soar. And that of
course only makes those jobs that are disappearing through voluntary
divorce from the workforce much more vital than they would have been at any
other time in our history.
The whole sad mess is an indictment
of poor fiscal policy, the enshrinement of the social state and government by
hindsight, rather than foresight. A good immigration policy bringing in more
people from around the globe who truly love and understand America— and there
are many of those— versus those who can just walk in would be helpful here.
Today federal types are tutting
congratulations to themselves as the sixth consecutive decline in the federal
deficit comes in at "only"
$435 billion. But that’s just the calm before the deficit storm breaks upon us
in earnest. Without a solution the deficit is expected to be running back in
the trillions within ten years.
And whatever solution Congress and
some other president are intent on crafting, that solution would look better if
it started with jobs.
http://affluentinvestor.com/2015/10/the-fake-falling-deficit-and-the-phony-unemployment-drop/
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