Monday, September 10, 2012 – by Paul Craig Roberts
Paul Craig Roberts
Friday's payroll jobs report says that 96,000 new jobs
were created in August and that the unemployment rate (U.3) fell from
8.3% to 8.1%. As 96,000 new jobs are not enough to keep up with
population growth, the decline in the U.3 unemployment rate was caused
by 368,000 discouraged job seekers giving up on finding employment and
dropping out of the work force as measured by U.3. Discouraged workers
are not included in the U.3 measure of unemployment, which makes the
measure useless. The only purpose of U.3 is to keep bad news out of the
news. the U.3 unemployment rate only measures those who have not been
discouraged by the inability to find a job and are still actively
The government produces another unemployment measure, U.6, which
includes people who have been discouraged by the inability to find a job
and have been out of the work force for less than a year. This measure
of unemployment is 14.7%, a number that would get attention if reported.
When the long-term (more than one year) discouraged workers are
included, the US unemployment rate is about 22%. In other words, the
real US rate of unemployment is almost three times higher than the
reported–headline rate–of 8.1%.
What is the purpose of reporting an unemployment rate that is about
one-third the real unemployment rate? The only answer is deception
through Happy News.
Let's have a look at those 96,000 jobs. What kind of high-tech,
high-income super jobs is "the world's only superpower, the
indispensable nation, the world's greatest economy and capitalist
heaven" creating? The answer is lowly paid third world jobs, which is
why there is not and cannot be an economic recovery. All the good jobs
have been moved offshore in order to maximize the incomes of the rich.
According to the US Bureau of Labor Statistics (BLS), 28,300 of the 96,000 jobs or 29% are waitresses and bartenders.
Health care and social services, primarily ambulatory health care
services and home health care services, provided 21,700 jobs or 22.6% of
So 52% of the new jobs created by the American superpower are lowly
paid waitresses, bartenders, practical nurses and hospital orderlies.
Highly paid manufacturing jobs declined by 15,000. The incomes lost
by these jobs most likely exceed the income gains from the waitresses,
bartenders and hospital orderlies jobs.
Where did the other 46,000 jobs come from?
Formerly, in hard times government employment would expand but,
despite Republican propaganda, not today in today's mean times.
Government (federal, state and local) lost 7,000 jobs.
Professional and business services gained 28,000 jobs, primarily in
computer systems design and related services (mainly Indians on H-1B
work visas) and management and technical consulting services (mainly
former corporate professional employees who now eke out a living by
consulting, without pension or health benefits, with their former
employers; in other words, they are working the same for less).
These three categories account for 81% of the new jobs.
Where are the remainder?
A few thousand jobs in finance and insurance, jobs that absorb
consumer incomes but produce no product. Telephone, cable, water,
electricity and heating produced 8,800 jobs. Transportation and
warehousing to store unsold goods produced 5,700 jobs. Retail trade,
primarily food and beverage stores (alcohol), produced 6,100 jobs.
And there you have it. The "powerful American economy" is an economy
that cannot produce its own clothes and shoes, or the manufactured
products, including high technology products, that it consumes, or its
own energy, all of which it imports by issuing more debt.
The "great hegemonic American economy" is on the verge of total
collapse, because the only way it can pay for the imports that sustain
it is by issuing more debt and printing more money. Once the debt and
money creation undermine the dollar as world reserve currency, the US
will become overnight a third world country, much to the relief of the
rest of the world.
Last week Mr. Draghi, the head of the European Central Bank, announced for propaganda purposes that the ECB would buy up the sovereign debt of the troubled EU member governments if, and only if, the assisted member governments agreed to the conditionality that would be imposed.
In other words, Draghi told Greece, Spain and italy that the ECB will
buy your bonds if you do what we tell you. Draghi's conditions are a
combination of austerity on the countries' populations and the surrender
of the countries' financial sovereignty. Since the troubled debtor
countries already had that option, Draghi's scheme doesn't change
anything. However, the NY Stock Exchange used Draghi's announcement to
gin up day-trading profits.
Draghi says that the money that the ECB will pour into purchasing
Greek, Italian and Spanish bonds will be offset by draining reserves
from the European banking system, hardly a helpful operation to stressed
banks and European recession.
It is difficult to image worse news than Draghi's. Yet stock markets
rose. This result is more evidence that financial markets are not to be
But you will never, ever, hear this fact from the financial press.
A financial system based on lies and deceptions cannot forever last.
This article originally appeared at www.paulcraigroberts.org, republished here with author's permission (copyright Paul Craig Roberts).
Thanks to: http://jhaines6.wordpress.com