The Job Market’s Cues Are Falling Loose
Last week, The Economist reported that the U.S. corporate-tax rate would be cut by 1 percentage point to 16.4%, the first cut in 30 years. It found that the country’s overall economic growth—the Fed’s preferred measure for gauging an economy on the brink of a recession—had turned negative and would turn negative again before the year is out.
That was followed the next day by a report that more people were quitting their jobs or changing their jobs than were being hired at firms throughout the country. And it was followed again the next day by even more data that showed that employment growth was slowing, and the unemployment rate was rising, in much of the country.
“This is not a good sign,” says Paul Ashworth, chief U.S. specialist at Global Insight. “It indicates a slowing economy.”
Of course it’s not just the economy that’s struggling. Over the past year, the labor market has also been weakening. The economy may be cooling, but employment has been shrinking more rapidly—and more profoundly—for the past few years than it has for the past few decades.
More Americans are now working part time because they lost their jobs. And many Americans who have retired are now not collecting enough from Social Security to live on.
Over the past few years, more people in the United States have worked part-time than full time, and in some cases, fewer people had a job. In 1990, the proportion of people working part time was 36.4%; in 2009, it had dropped to 28.3%. Americans are being paid less than they were making before the recession, and have less money than they did before the recession started.
Even more are working part time without jobs: In 1990, Americans who worked part time without a job was 18.9%; in 2009, it had dropped to 15.7%.
It’s not just that people are working less. They’re also working more slowly. In 1990, the median weekly earnings of U.S. workers was $434; in 2009, it was $365—and that represented a real earnings loss of more than 18