First published in 2015, I’ve updated it for today. In an ideal world, I’ll be able to update it again next year, with a yet more optimistic tone.
The Wall Street Journal asked some questions on Labor Day 2012, and supplied some answers. Here are some of those questions and answers, which remain as valid this Labor Day.
- Q: How are America’s workers doing? Not good. Over the past decade, over the ups and downs of the economy, taking inflation into account, the compensation of the typical worker — wages and benefits—basically haven’t risen at all. … The Labor Department recently said that 6.1 million workers in 2009-2011 have lost jobs that they’d had for at least three years. Of those, 45% hadn’t found work as of January 2012. … Federal Reserve Chairman Ben Bernanke said Friday that unemployment is still two percentage points higher than normal….
- Q: Things ARE getting better, though. The US economy is creating jobs, right? Back in December 2007 when the recession began, there were about two jobless workers for every job opening. When the economy touched bottom in mid-2009, there were more than six unemployed for every job. At last count, the BLS says there were 3.4 jobless for every opening.
- Q: How much of this elevated unemployment is because the unemployed just don’t have the skills that employers are looking for right now? …the bulk of the evidence is a lot of the unemployment really is the old-fashioned kind: the kind that would go away if the economy was growing at a stronger pace. Mr. Bernanke said as much at the  Jackson Hole conference….
In 2019, the jobs situation was drastically improved. The overall unemployment rate was at an historic low, and there were more job openings than there were folks to fill them. The black unemployment rate was at a record low. The Hispanic unemployment rate was at a near record low. The women unemployment rate was at a near record low. Wages, both real and nominal, were growing.
I add a couple of questions for this year.
- Q: What about the COVID-19 virus situation? It hit us hard last winter, when we knew nothing about it, and much of the data we did have had been falsified, with other, critical, data withheld from us by foreign entities for critical weeks. However, the initial spike has collapsed, and the latest, end-of-summer surge is waning. The fatality rate, given an infection, is a small fraction of 1% for most age groups and in the 3%-5% range for those in their 60s and older. Vaccines are on the horizon, and mitigating treatment techniques and drugs are in effect that greatly lessen the severity of most infections and shorten significantly hospital stays, and decrease drastically mortality rates for those hospitalized. It also turns out that children are the least harmed by this virus, neither likely to pass infections among each other nor to adults; schools can re-open for critically important face-to-face teaching and learning, and many of them are. Associated resurgences of infection are turning out to be minor.
- Q: But what about the economy? This was a politically-forced, not an economically-induced, shutdown of our economy, and so it can be re-opened just as politically or by simple business decision to do so. And it is, in broad swaths of our economy. GDP is on a sharp rise, the unemployment rate is around 8.4%, which is well below the Panic of 2008 rate, and the current rate is falling. The employment participation rate is rising again. Businesses are reopening, furloughed employees are being recalled.
In sum, our exceptional American economy is coming back.
Happy Labor Day.