The U.S. Job Market Is Truly in Bad Shape
For the past few months, we have been hearing all about how the U.S. job market looks great. Don’t take those jobs figures too seriously; the reality is gruesome and calls for a lot of trouble ahead.
You see, the job figures you see on the surface don’t really tell much.
Consider this: the U.S. Bureau of Labor Statistics reported that the U.S. economy added 4.8 million jobs in June, and that the unemployment rate dropped to 11.1% during the month. (Source: “Employment Situation Summary,” U.S. Bureau of Labor Statistics, July 2, 2020.)
This figure was quoted all over the mainstream media.
Great, right?
You must look into the details, however. That’s where the devil resides. And you must never rely on one data set to tell you the entire situation.
Pay Attention to the Details, They Say the U.S. Job Market Is Struggling
Here are few truths you should know about the U.S. job market.
Pay attention to those who are working part-time due to economic reasons. What does this mean? These are people who are working part-time because they can’t get full-time work.
In June, there were 9.1 million Americans who fit in this category. In February, this figure was around 4.3 million. This represents an increase of over 111%. Surely, since the lockdowns ended, part-time workers have declined as a percentage of the workforce, but it’s nothing significant.
Keep in mind, those who are working part-time don’t get the same salary as full-time workers.
Looking beyond the rise of part-time work, pay attention to those who are losing their jobs permanently. During the COVID-19 lockdowns, a large number of employees were laid off temporarily. But what almost no one seems to be talking about is the number of Americans losing their jobs permanently.
In June, the number of Americans losing their jobs permanently increased by 588,000. The total number amounts to 2.9 million, and the trend says this figure could go a lot higher.
Here’s Why You Should Pay Attention to the U.S. Job Market
Dear reader, I could go on and pinpoint several more problems in the U.S. job market.
You should know this: if Americans have jobs, they will be confident in their spending, so they will spend more. That’s how it has always worked.
Right now, there are a lot of Americans who don’t have jobs. Or, if they do, it’s not how it used to be just before the pandemic started.
The harsh reality: many of those who have lost their jobs temporarily may not go back to the same jobs they had. Their jobs may become obsolete or the business they worked for isn’t even there anymore.
I will end with this: the longer the job market in the U.S. remains in a gruesome condition, the worse the U.S. economy will get hurt. So far, the U.S. government has helped those who were unemployed since March; it raised the unemployment benefits. This may not be the case for too long though.
Once unemployment benefits decline, Americans may find themselves in an exceedingly difficult situation. I highly doubt they will buy new cars, homes, or gadgets when they are struggling financially. This will have severe consequences on the U.S. economy.