Welcome to Walmart and the BS 5% Unemployment Rate
“The United States of America right now has the strongest, most durable economy in the world.”
—President Obama, 2016 State of the Union
Washington, DC is pretty proud of the 5% unemployment rate, but there are millions of Americans who think the job market stinks. Come on! It’s not the number of jobs that matters… it’s what kind of jobs there are and how much they pay. And that’s why I’m calling BS on all the self-congratulations coming out of Washington, DC. Take a look at this:
The freshly released April nonfarm payroll report showed that the unemployment rate held steady at 5%. Yippie, right? Not really.
- The labor force declined by 362,000, which means that 362,000 people decided to stop looking for work. There are a lot of reasons why someone would leave the labor force, but I think the #1 reason is the inability to find a decent-paying job.
- The Bureau of Labor Statistics defines people not in the labor force (or NILF) as those people ages 16 and older who are neither employed nor have “made specific efforts to find employment sometime during the 4-week period ending with the reference week.” The NILF number increased by 562,000 in the last month to 94 million, the highest number EVER. Yes, out of 319 million Americans who are able to work, 94 million are not part of the labor force.
- The labor force participation rate declined by 0.2% to 62.8%. Since 2008, this rate has dropped from a high of 67.3% to the current 62.6%... a 38-year low.
- The employee population ratio for prime workers (ages 25 to 54) dropped to 77.7%. We’re talking about the prime age of your working life here, and this ratio has dropped from 80.3% 10 years ago, down to 77.7% today.
- The job numbers for February were revised down by 12,000 to 233,000; March was revised down by 7,000 to 208,000.
The politicians are proud to point out that our economy created 160,000 new jobs in April… but that’s the fewest in seven months and less than the expected 200,000.
Moreover, most of those 160,000 new jobs were of the “Would you like fries with that, sir” variety.
- 38,200 were Healthcare/Social Assistance (aka Obamacare administrators)
- 22,000 were Leisure/Hospitality
- 9,300 were temporary jobs
And certain to raise the ire of Donald Trump supporters, non-US-born workers—both legal and illegal—are enjoying stronger job gains than native-born Americans, according to the Bureau of Labor Statistics. Here are the numbers:
The number of native-born Americans with a job is 125,615,000, and the number of non-native-born US residents (those residing in the United States but who were not US citizens at birth) hit 25,460,000. The BLS doesn’t break out the number of illegal versus legal residents, but I would bet my left arm that the number is significant.
Okay, here is the alarming part: since Obama became president, our economy has created 6.5 million new jobs for native-born Americans and 4.1 million new jobs for non-native Americans.
And I think it is very safe to assume that non-US-born workers—legal or illegal—generally don’t have extensive education and command of the English language and therefore have a disproportionate share of low-wage, low-skill jobs. My take is that this is just more proof that the jobs our economy is creating are crummy, low-paying jobs.
And even people that do have jobs are losing them. Outplacement firm Challenger, Gray & Christmas reported that US companies announced plans to lay off 65,141 workers in April, a 35% increase from March and the highest level since 2009!
In the first four months of 2016, total layoff announcements hit 250,061… the highest January-to-April total since 2009.
There are lots of reasons for the sluggish job growth, but I want to suggest that the Affordable Care Act (or Obamacare) is one of the prime culprits because the cost of providing health care is skyrocketing.
Worse yet, those already-expensive healthcare costs are about to get even more expensive. Oregon and Virginia are the first two states to disclose Obamacare premium proposals for 2017:
Ouch, That Hurts #1: Providence Health Plan, the largest Obamacare insurer in the Oregon Health Insurance Exchange, is seeking an average increase of 29.6%.
Ouch, That Hurts #2: Moda Health Plan wants to increase premiums by an average of 32.3% in Oregon. (Note: Rates went up 25% in 2015.)
Ouch, That Hurts #3: Kaiser Foundation Health Plan of the Northwest asked for an increase of 14.5%.
Ouch, That Hurts #4: Anthem Inc. is asking for an average increase of 15.8% in Virginia.
Ouch, That Hurts #5: CareFirst BlueCross BlueShield of Virginia is seeking a 25% increase.
Ouch, That Hurts #6: Aetna is going to raise premiums by a modest 6% in Virginia.
And don’t forget about UnitedHealth Group, which announced last month that it’s withdrawing from all but a handful of the 34 states where it was offering Obamacare plans because it’s experiencing huge losses.
To be fair, I should note that some parts of the job market are improving. For example, Walmart announced that it is increasing the number of greeters. These greeters will welcome arriving customers and answer questions.
Little noticed by the media, however, was the disclosure that these new Walmart greeters will also be checking the receipts of departing shoppers to cut down on shoplifting.
According to Fortune magazine, Walmart lost an estimated $3 billion to shoplifting in 2015 and has made reducing theft a key priority for 2016.
Yeah… the job market is great. NOT!
Last of all, GoBankingRates, a national website that tracks interest rates, reported that 28% of Americans have ZERO money in their savings account, 13% had less than $1,000, and 21% don’t even have a savings account.
“It’s worrisome that such a large percentage of Americans have so little set aside in a savings account. It suggests that they likely do not have cash reserves to cover an emergency and will have to rely on credit, friends and family, or even their retirement accounts to cover unexpected expenses,” said GoBankingRates.