New entrants to the labor market need jobs too.
Gallup released an interesting poll a few days ago. Most people in the United States are not very happy about the state of the economy. They report they are not doing very well, and they don’t have much faith that things will get better any time soon.
That is in direct opposition to what President Biden and Fed Chair Jay Powell say about the condition of the economy.
Fed Chairman Jay Powell recently said “The labor market is strong because the economy is strong”.
President Biden agrees, saying, “I stand here tonight after we’ve created…12 million new jobs — more jobs created in two years than any president has created in four years…”
You don’t have to look far to find why people surveyed by Gallup aren’t seeing eye to eye with the experts and politicians.
It’s because the experts and politicians are avoiding an uncomfortable truth.
Take the so called labor shortage and unemployment rate for example. The people actually in the labor market know that things are nothing like what they are hearing from leaders.
One obvious indicator shows why.
Mainstream analysts studiously avoid including the natural expansion of the labor market into their explanations.
The number of people on earth keeps growing and so does the number people entering the labor market. More people are entering the labor market than are leaving it. There are fewer and fewer jobs to go around. It’s a lot easier to ignore that fact than to acknowledge it.
Every year the number of people entering the labor market gets bigger and new jobs need to be created for them. It’s not enough to create enough jobs for the ones that were lost three years ago. In those three years the labor force expanded by quite a bit.
How much does the labor force grow every year?
The Bureau of Labor statistics estimates labor force growth at about one half of one percent every year. That doesn’t sound like much, but if you take the latest figure for the size of the labor force in January of 2023 from FRED, — 165 million — multiply it by .05 you…