Jobs - Lots Of Churning, Little Job Creation

Piece by piece we're seeing the truth about our economy.

Middle class lives, middle class families, and middle class opportunities are diminishing economically.

Mostly, things are stagnant for the middle class: staying the same while costs go up is not improvement.

This article is a further indictment of this weak economy and it discusses an important aspect about hiring that needs to be understood. PB
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From Investors.com (Investors Business Daily):

The key determinant of labor market health is hiring, and hiring remains well below normal...

During the typical month when jobs increase by about 100,000, 5.1 million workers are hired and five million separate from their jobs, resulting in a net change of +100,000 jobs.

During the worst month of the most recent recession (June 2009), when net jobs decreased by almost half a million, there were still 3.6 million hires.

The labor market is dynamic; even through sluggish periods, there is tremendous churn.


Reductions in employment during recessions come about primarily because the hiring rate declines, not because layoffs pick up...

During the recession and first three years of the recovery, hires averaged about 4.2 million per month...

The labor force is larger now, so more hires are needed, specifically about 5.2 million in the average month...

High rates of labor-market churn enhance economic efficiency.

GDP was reduced by about one-half a percentage point per year for each year of the recession and weak recovery because of well-below normal rates of hiring and separation.

The low levels of churn in recessions mean that workers get stuck in the wrong jobs and produce less than they could in a better labor market....


Eventually the number of layoffs also declined — but quits did not rise because hiring was slow...

It is impossible to generate job growth by reducing layoffs because once that channel is exhausted, nothing more can be done.

But to produce a truly healthy labor market, we need to create a positive environment for hiring.

Active hiring means job growth and also ensures that workers are moved to their most efficient uses, improving economic performance, profits and wages.

Policies that lead to high investment, high labor productivity and a fluid labor market are the ones most conducive to job growth.
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Link: http://news.investors.com/ibd-editorials-brain-trust/081914-713894-net-job-creation-remains-stuck-at-below-normal-levels.htm?