And Still We Ask: Where Are the Jobs?

It has been almost a year now since I wrote my first little post here in my own corner of the toobz. In my first few posts (here, here, here, and here), I concentrated primarily on discussing my professional skills as well as the holes in my skill set. I also tried to discuss the perspective of being one of the long term under-employed and how it can have a day-to-day impact on the individual.

Since those first few posts, I have concentrated more on the overall economic news each week and month, moving away from the strict concentration on my own situation. After all, I do recognize that no matter how wonderful an individual and how very interesting I may be, my story alone is not going to make much of a dent in the fog that surrounds the Beltway and the word clouds spouted by the Village Idiots Pundits. The reality is, while the "official" unemployment rate is at 8.8%, the rate for the un and underemployed is showing as 15.7% (U3 and U6 from the Bureau of Labor Statistics) and I am convinced that both of these numbers are artificially low.

What I have also attempted to do is point out the holes in the cheerleading. One of the items I have gotten used to tracking is the Initial Unemployment Claims filed each week that is usually released on Thursdays for the previous week. This past week (from Reuters) showed:

Initial claims for state unemployment aid slipped 10,000 to 382,000, the Labor Department said on Thursday, a touch below economists' expectations and firmly beneath the 400,000 level associated with steady jobs growth.

...snip...

The claims data underscored the strengthening labor market tenor and came on the heels of a report last week showing employers added 216,000 jobs in March, with the unemployment rate falling to a two-year low of 8.8 percent.

Last week, the four-week average of unemployment claims, a better measure of underlying trends, fell 5,750 to 389,500.

As I've mentioned before many times, this all sounds great until you realize that with nearly 15M unemployed (including over six million unemployed for more than six months) and roughly 25M to 30M un and underemployed in an economy that needs to create roughly 125k jobs each month just to keep up with new people entering the work force, 216k new jobs for a month is a pittance compared to the need.

Today's (Sunday, April 10) NY Times had a couple of pertinent articles pointing out some unpleasant (to some of the Village Idiots Pundits anyway) truths. First up is this from Christina Romer on how the currently high unemployment rate does not signify a "new normal" (which I also tried to address here back in January). From the Romer piece:

The turmoil of the last few years, however, has shaken up the economy. Is it possible that it has affected the natural rate of unemployment — increasing it to 8 or even 9 percent? Such a climb would imply that the prospects for a rebound in output and employment have been greatly reduced — and that high unemployment would be our new normal.

This is implicitly the view of some Federal Reserve policy makers, who say that there is nothing more the central bank can do to lower unemployment. And it’s the view of those who say “structural” factors are the main cause of our current high unemployment, which stood at 8.8 percent in March.

Fortunately, there is a more compelling explanation. Strong evidence suggests that the natural rate of unemployment actually hasn’t risen very much. Instead, the elevated unemployment rate appears to reflect mainly cyclical factors, particularly a lingering shortfall in consumer spending and business investment.

My bold. A "lingering shortfall in consumer spending and business investment." Gee, now why might this be so? Could it possibly be that having wages flat in overall purchasing power since the 1970s combined with the economic fall out from the "ownership society" bubble bursting and the Foreclosure Fraud taking over might have caused folks to snap the lock on their wallets?

Gretchen Morgenson in today's NY Times points out that executive compensation just might play a role in the problems as well:

As investors scan corporate proxy statements this spring and prepare to vote in annual elections for company directors, executive pay is again moving to center stage. After a few years in the wilderness, top executives are getting hefty raises, according to Equilar, a compensation analysis firm in Redwood City, Calif. But while outrage over executive pay has been eclipsed in recent years by anger over the causes and consequences of the financial crisis, compensation issues still resonate among many investors.

Of course, pay is just one item that Mr. Meyer takes into account when analyzing companies. In his search for shares he can own “forever,” he also hunts for companies with high-quality earnings — that is, those that don’t depend on accounting tricks — as well as generous cash flows and management integrity. Companies he avoids include those that award oodles of stock or options to their executives. Such grants vastly dilute the earnings left over for a company’s owners: its shareholders.

Now Morgenson is concentrating on the effects of executive pay on stocks and the shareholders but it also rolls down hill. For example, just take Jamie Dimon (please someone must want him). As I pointed out yesterday, Dimon's compensation for 2010 including $1M in regular salary, $5M in cash bonus, over $14M in stock and over $500k in various "perks." The perks alone could have funded $50k salary and $25k in benefits for six people and have $50k left over. How many top executives at banks and Fortune 500 companies are pulling down these obscene amounts of money? How many of the millions of long term un and underemployed could be brought back into the work force, paid a living wage as a productive member of society if those "salaries and perks" were to go to a few million more folks rather than concentrated at the top of the economic chain? How much better would our economy be if that were happening?

Instead, all we see are stories from the Village Idiots Pundits on how serious Rep Paul Ryan is for calling for the budget to be cut to pieces and the social safety net be destroyed at a time when it is most needed. Somewhere, there is an alternative universe where the ongoing destruction of the middle class has not been occurring. Here we just get to sing the Blues. And hang on by our fingertips.

And because I can: