Summary: When the new Congress takes their seats in January, the Tea Party-dominated House will have many goals. Jobs for the unemployed is not among them (they prefer to trust in the Blue Fairy). The numbers paint a sad story, one of little interest to our ruling elites. Links to additional information appear at the end.
Let’s look at America’s adult population, and how its changed during the last decade. Note how in every category the wrong group has increased. It’s a story of economic decline, unlikely to quickly reverse. Rather the aging of the boomers and number of long-term unemployed will lead to increased structural unemployment — and continued pressure on the middle class (a feature, not a bug, to our ruling elites).
Welcome to the new America, as seen in the numbers as of October 2010 for the civilian non-institutional population over 16 years of age, and the change since October 1999. These are not seasonally adjusted totals, in millions, from the BLS Current Population Survey. There are equally depressing numbers for wages, but that’s for another day.
Population: 239, up 30 (+14%). Of those people:
- 160 are in the labor force (including discouraged workers), up 16 (+11%)
- 79 are not in the labor force, up 14 (+22%)
Of those in 160 in the labor force:
- 140 are employed, up 5.4 (+4%)
- 20 are unemployed (including discouraged workers), up 10 (+110% — doubled!)
Of those 140 employed workers:
- 113 are full-time, up 0.7 (+1% — an ugly number)
- 27 are part-time, up 4.6 (+21% — businesses have learned how to avoid paying benefits)
Of those 27 part-time jobs:
- 8 million are part-time for economic reasons (workers preferring full-time jobs), up 6 (+197% — tripled!)
- 19 are part-time for non-economic reasons (workers preferring part-time), down 1 (–5%)
What about Adam Smith’s invisible hand?
Smith did not deify markets. He gave a specific and narrow definition of the “invisible hand.” It does not refer to the government-private market dichotomy, nor does he claim that it produces an acceptable level of macroeconomic stability. From The Wealth of Nations (1776), Book IV, Chapter II:
As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.
Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
For more information
Recommended: this superlative analysis by Brad DeLong (Prof Economics, Berkeley): “Battered but Not Beaten“, Berkeley IRLE ‘New Deal or No Deal?’ Conference, 29 October 2010.
Originally published at Fabius Maximus and reproduced here with the author’s permission.