Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at:
http://www.mail-archive.com/[EMAIL PROTECTED]/ <A HREF="">ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
--- Begin Message --- -Caveat Lector-
Americans Drop Out of Labor Force,
Posing Risks for Bush
March 8 (Bloomberg) -- Anthony Whitmore lost his job as a die press operator at Midland Steel Products in Cleveland 10 months ago and holds little hope of finding work. In Chester, Pennsylvania, Chris Rabzak, a former aerospace engineer with a law degree, is stretching out his master's program in business administration rather than jumping into the labor market.
``Every month some economist comes out and says that next month or next year things will get better -- I don't believe them anymore,'' said Rabzak, 36. ``In this economy, I'm not optimistic about finding a job,'' said Whitmore, 40.
Rabzak and Whitmore are among the 1.6 million Americans who have dropped out of U.S. workforce in the past year. The percentage of those working or looking for jobs has skidded for four years and fell in February to 65.9 percent, a 16-year low, the Labor Department said Friday in Washington. Last month, 588,000 people left the labor force as the economy created just 21,000 jobs, a sixth of the median forecast in a Bloomberg News survey of 65 economists.
Erosion of the so-called participation rate underscores dangers for the Federal Reserve and President George W. Bush as the fastest economic growth in 20 years, a projected 4.6 percent this year, fails to produce many jobs. The Fed is holding the fed funds rate at a 45-year low, betting jobs will surge before inflation. Bush, who won approval from just 48 percent of 771 registered voters in an Associated Press poll on Wednesday, risks alienating more voters before November's election should slower growth in income and spending hobble the economy.
Today's labor market ``would pose a serious challenge to any incumbent president,'' said Anthony Chan, chief economist at Banc One Investment Advisors in Columbus, Ohio, who helps manage more than $175 billion, in an e-mail Friday. ``The American people's patience may soon be tested if labor market conditions don't improve significantly.''
Politics
Massachusetts Senator John F. Kerry, 60, who will lead the Democratic Party's challenge to 57-year-old Bush in November, on Saturday called the president a ``walking barrel of broken promises.'' Kerry, speaking in Houston, said he would lower unemployment by closing tax loopholes that send jobs and revenue overseas, enforcing the terms of trade agreements, increasing government funds for education and lowering health-care costs.
Bush, at a press conference at his ranch in Crawford, Texas, said Saturday that the ``economy's getting a lot stronger'' and that ``raising taxes will make it harder for people to find work,'' a reference to Kerry's plan to end tax cuts for people making more than $200,000 a year.
`Far Below Potential'
Job growth averaged just 60,000 a month since September, and the U.S. has shed 2.3 million positions since Bush became president in January 2001, according to Labor Department statistics. To keep up with population growth, the U.S. needs to create 150,000 jobs a month, according to Fed estimates.
After growing at a 6.1 percent annual rate in the second half last year -- the fastest six months since 1984 -- the world's largest economy may expand 4.6 percent this year, based on the median estimate in a Bloomberg News survey last month.
``If we get 4 percent growth this year and the participation rate is declining, it means we are far below potential,'' said James Glassman, senior economist at J.P. Morgan Chase & Co. in New York, in an interview Friday.
Growth in productivity as companies invest in computer equipment is limiting job gains. For all of last year, productivity rose 4.4 percent following a 5 percent gain in 2002 -- the first back-to-back years above 4 percent since record keeping began in 1947.
Productivity
Purchase, New York-based PepsiCo Inc., the world's second- largest soft-drink maker, is spending more this year on computer equipment and software to become more efficient, while raising prices 0.5 percent on its syrup sold to bottlers, the smallest increase in several years. In December, the company said it would fire 750 workers and close a snacks plant in Kentucky.
``We are definitely in the mode of looking at efficiencies,'' said Gary Rodkin, chief executive officer of PepsiCo's food and beverage businesses in Chicago.
San Jose, California-based Cisco Systems Inc., the world's largest maker of equipment to link computers, will consider adding to its 34,000 employees when revenue per employee passes $700,000, spokeswoman Kim Gibbons said. In Cisco's fiscal second quarter ended Jan. 24, the amount was $632,000, a 6 percent increase from the first quarter, she said.
A survey published Wednesday by the Business Council, a 150- member group of executives, found that while the percentage of chief executives who planned to hire rose, 45 percent said they will hold payrolls steady and 22 percent predict declines.
``The biggest loss of jobs has been to productivity,'' said Hank McKinnell, chief executive of Pfizer Inc. and the Business Council's chairman, in a conference call Wednesday.
Lag After Recessions
In addition, economists cite the traditional lag between economic recovery and employment growth. It took about two years for the U.S. to regain all of 1.3 million jobs lost in the eight- month recession that ended in March 1991. Of the 2.34 million jobs lost since the most recent recession started in March 2001, [almost half] have been lost since the recovery beginning in November 2001.
The situation is ``very astonishing,'' said Lyle E. Gramley, a former Fed governor and now a senior economic adviser with Schwab Soundview Capital Markets. ``Here it is, two-and-a-quarter years into the recovery, and we're still having trouble creating jobs. My confidence about when the job pickup is likely to begin is waning.''
Companies will add an average of 166,000 workers a month to payrolls this year, a February survey of economists by the Blue Chip Economic Indicators found.
Schroeder's Incentives
In the dozen nations that use the euro, labor force participation is about 8 percentage points lower than in the U.S. or Japan, according to 2002 statistics published on the European Central Bank's Web site.
Employment in the euro region probably dropped 0.2 percent last year, as the $8.7 trillion economy recorded the slowest growth in a decade. In Germany, Europe's largest economy, employment will probably decline in 2004 for a third straight year, according to forecasts by the European Commission.
German Chancellor Gerhard Schroeder, trying to increase incentives for people to return to the workforce, this year started forcing the country's 2 million long-term jobless to accept any position, even if it pays below union rates, or face curbs on their benefits.
In the U.S., the average duration of unemployment rose to 20.3 weeks last month, the most since January 1984.
Frustration
``Folks are getting frustrated that they can't find a job and are just giving up,'' said economist Ken Goldstein of the Conference Board, a New York-based research group, in an interview Friday.
Cleveland's Whitmore lost his $13.70-an-hour job making steel parts for medium and heavy trucks last April.
``I was angry in the first few months, but I've learned not to look back,'' Whitmore said. He blames the Bush administration for the movement of factory jobs abroad. Since Bush took office, the U.S. has lost 2.9 million manufacturing positions.
``They're encouraging it,'' Whitmore said. ``Bush is a major part of the problem.''
The U.S. added 21,000 jobs in February, just one sixth of the 130,000 media forecast of economists polled by Bloomberg News, the Labor Department reported Friday. The results fall short of what would be needed to raise this year's average nonfarm payroll by 2.6 million jobs to the 132.7 million level predicted by the White House last month. Bush and his advisers have since declined to back that target.
`Not Satisfactory'
Treasury Secretary John Snow, who in October said he would ``stake my reputation'' on a pickup in job growth by Christmas, said the jobs picture shows Congress should make permanent the $1.7 billion in tax cuts Bush has won in his tenure. On a bus trip to Washington and Oregon last month, he also said Bush ``inherited an economy that was in steep decline'' from Democratic President Bill Clinton.
``Those growth numbers aren't satisfactory,'' Snow said in an interview Friday. ``We want to see a lot more jobs created.''
The exodus of workers from the labor force may mean the nation's unemployment rate of 5.6 percent in the past two months looks better than it really is. Returning discouraged workers to the labor market and adjusting the participation rate back to the long-term trend would increase the unemployment rate last month to 7.1 percent, said Ian Morris, chief U.S. economist at HSBC Securities USA Inc. in New York, in an interview Friday.
``The unemployment rate is really understating the lack of job availability,'' said Harry Holzer, a former chief economist at the Labor Department who is now a professor of public policy at Georgetown University in Washington, in an interview Friday. ``The drop in the participation rate is telling us that the labor market is weak.''
Consumer Spending
Slow job growth may weigh on consumer spending, which accounts for 70 percent of the U.S. economy, said Alice Rivlin, a former vice chairman of the Federal Reserve who is now an economist at the Brookings Institution, in an interview Friday.
Last month, average hourly earnings rose 0.2 percent, depressing the annual rate of growth to 1.6 percent, matching the record low in 1986. Consumer spending has increased an average 0.2 percent a month since March 2001, half the rate of the previous five years.
``Unless job growth picks up, the recovery is likely to sputter,'' Rivlin said.
People may be going back to school for retraining, which ``will pay back in productivity later on,'' said Erica Groshen, a labor economist and assistant vice president of the Federal Reserve Bank of New York, in an interview Friday. Some of them may be staying home and helping to educate children, which also may pay dividends, and ``if they are doing nothing, then their skills are eroding.''
Rusting Skills
In any case, a declining participation rate ``doesn't suggest strength, Groshen said. ``The question is how much weakness it suggests.''
Some shifts in the participation rate can be separated by age and gender. Among people 16 through 19, the participation rate in the decade through 2000 was 52 percent, based on a 12 month moving average that smoothes out jumps for summer jobs. For the 12 months ended in February, the average had sunk to 44 percent.
Among people 55 to 64, the percentage of people holding jobs or looking for work has increased from 59.6 percent at the end of 2000 to 63 percent last month. Among people 20 and older, the participation rate in February was 75.6 percent, a record low, and 60.3 percent for women, about the same as a decade ago.
Back to School
Rabzak, the MBA student at Widener University in Pennsylvania, said he graduated from Pennsylvania State University in 1991 with a bachelor's degree in aerospace. He worked for NASA in Cleveland as an engine researcher and as a design engineer at Boeing Co. in Seattle before starting law school at Widener, he said.
After finishing his law degree in May 2002, he said, he stayed on in business school because he didn't get any interviews with law firms. Rather than finishing the business degree last May, he said, he reduced his course load.
``I stretched it out so that I could stay in school, given this economy,'' he said. ``The U.S. can't sustain years and years of unemployment, or you're going to have a lot of unhappy people like me.''
To contact the reporters on this story:Simon Kennedy in Washington at [EMAIL PROTECTED] Torres in Washington at [EMAIL PROTECTED] contact the editor of this story:Kevin Miller at [EMAIL PROTECTED]
www.ctrl.org DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply.Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at:
http://www.mail-archive.com/[EMAIL PROTECTED]/ <A HREF="">ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
--- End Message ---
