Economy Still Stagnating; Wealth, Income Gap Still Widening
By Luiz Diaz-Perez
The Bureau of Labor Statistics issued the September Employment Situation report on Oct. 22. This came 18 days after the scheduled Oct. 4 release because of the 15-day government shutdown. As expected, the September report portrays a stagnant economy, creating jobs barely at a pace commensurate with population growth and far from a rate that would reflect an economy on the road to recovery.
Nonfarm employment increased by all of 148,000 jobs, a smidge below the 150,000 or so jobs commonly believed to be needed to keep pace with population growth. This rate was half of the 300,000 new jobs that should be created monthly in an economy working its way out of the doldrums. Unchanged was the number of Americans working part time who otherwise desire fulltime work: 7.9 million.
The official unemployment figure for the month was calculated at 7.2 percent, down from 7.3 percent in August. Both the labor force participation rate, 63.2 percent, and the employment-population ratio, 58.6 percent, were unchanged. Among the unemployed, 52.9 percent have been out of work 15 weeks or more, and 36.9 percent of the unemployed (4.1 million people) have been out of work 27 weeks or more.
The number of people employed by the federal government fell by 6,000 in September, to 2.723 million, the lowest number of civilian employees since 1966. Since February 2010, the number of state, local and federal government jobs in the US fell by 590,000, led by a reduction of 344,000 jobs in local government. The federal government now employs only 2.0 percent of all employed people, down from 4.3 percent 47 years ago (http://www.wsws.org/en/articles/2013/10/23/jobs-o23.html). In September, there was little change in the government employment figures. However, the shutdown forced our beleaguered federal workforce to take a financial hit. Nonetheless, the BLS report shows there were 22,000 new hires across state governments, a counterintuitive result in the context of diminishing public budgets.
Employment in construction jumped by 20,000 and transit and ground passenger transportation added 18,000 jobs, perhaps as a result of the public’s increasing reliance on low-rate bus services. Healthcare added but 7,000 jobs.
While the main elements of the September report arrived as expected, there were a couple of minor surprises. Professional and business services, which had been adding an average of 52,000 jobs per month over the preceding year, only added 32,000 positions in September. Employment in food service and drinking establishments dropped 7,000 jobs where previously there had been consistent growth in bartending and restaurant work. Last month’s drop may reflect both a reduction in summer hospitality work and the possibility that Americans just can’t afford to go out to eat as much as they had in the past.
Another employment-oriented report, GMI Ratings’ annual poll of executive compensation, was issued the same week as the BLS report, offering more data for reflection. For the first time in the history of this annual study, none of the top 10 highest-earning CEOs made less than $100 million. GMI’s poll of pay and other compensation for 2,259 US CEOs found an average rise of 8.47 percent in pay and other compensation. The top ten CEOs alone took home more than $4.7 billion between them, while the average pay package of an S&P 500 chief executive last year was $13.7 million. (http://www.theguardian.com/business/2013/oct/22/top-earning-ceos-100m-paychecks-record)
The GMI findings are consistent with the US’ widening wealth and income gap. The top one percent of incomes grew 31.4 percent while the bottom 99 percent of incomes grew only 0.4 percent from 2009 to 2012. From 2009 to 2012, average real income per family grew by six percent, according to UC Berkeley economist Emmanuel Saez. The top one percent captured 95 percent of the income gains in the first three years of the Lesser Depression (http://elsa.berkeley.edu/~saez/saez-UStopincomes-2012.pdf).
Luis Diaz-Perez is a Chicago writer interested in the struggle for social justice and Latin American affairs. Employment reports by the CPEG.
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