I hope everyone enjoyed the weekend and various holiday observances and forgot about the economy, stock market, Federal Reserve, debt, crumbling educational standards, demise of morality, embrace of mediocrity, and flaccid economic recovery because this week could be very taxing as it illuminates all of those things and more. I'm not even sure where to begin with Friday's jobs report, which once again reflects an economy bumping along at a fraction of its underlying potential. Moreover, it speaks to a grassroots movement that is more prevalent than what's happening on the left or right of the political aisle-people abandoning the job market.
On one hand you wonder: how anyone could just check out of the jobs market and still live an almost normal life? The answer is there are enough programs out there to soften the blow and avoid what would have been a one-way ticket to being a bum or a tramp. The fact that there is no fear of such a faith is troubling and dangerous. The fact is we must motivate Americans to spark not only that elusive virtuous cycle but also to unleash innate abilities that blossom into ideas. In a real virtuous cycle, it's the plumbing that ensures duration and future success. Such duration must be organic. At some point everyone jumps on the ship and begins to row in the same direction. Oddly, those watching the rowers are now portrayed as victims that must be paid even more for watching from the safety of the shore and government assistance.
Optimism: a disposition or tendency to look on the more favorable side of events or conditions and to expect the most favorable outcome.
In the movie Modern Times, Charlie Chaplin poked fun at capitalism and its fat cats that sat around smoke-filled rooms with giant desks and even bigger cigars while everyone else did yeoman work at barely livable wages. Historians point out that the movie also underscores that even in the darkest period, the American Dream of a wonderful family, nice home, and tranquility resided in the minds of even the most down trodden. Despite the fact Chaplin's tramp is down and out, he doesn't give up thinking about success, and on the contrary, he remains optimistic. Yet it should be noted that the difference between a tramp and a hobo is the former travels to avoid work while the latter travels to find work.
A bum doesn't travel or look for work.
I'm not calling people that drop out of the job market tramps, hobos or bums, but they are making an economic situation worse. I understand the notion that if there are no jobs why should anyone look. I get that particular cop out, but the reality is the alternative is so much more attractive that it's okay to sit out the recession and wait for the right job to come around or maybe just coast off taxpayers. All those derogatory terms for what might now be called a vagrant or homeless person emerged during economic times that were harsher than today and called on people to reach deep into pure survival skills. The hobo came about in England and referred to ho boys or men that moved from estate to estate doing garden work. Some say these were the first migrant workers.
It's right to help those in need, but it's not right to assist in the rusting of someone's soul along with work skills and optimism.
In economics the greatest worry is a deflationary death spiral where people know prices are going lower so they don't buy, and since they aren't buying, you guessed it, prices go lower. It's happening in the housing market, which is why it would have been smarter and even kinder to let it hit terra firma sooner rather than later. This brings me back to the job dilemma. Sure, businesses are still afraid to go all out in the face of acceleration in the war on their success and increased efforts to confiscate their profits. But the element to this sluggish jobs improvement can be sourced to a greater problem of fading optimism.
What's happening with this void of optimism among Americans is akin to a pessimism death spiral that impacts the jobs market and economy. The less optimistic we are, the fewer opportunities arise, and in turn, the fewer opportunities mean we become less optimistic. So, the first line I looked at when I printed out the jobs report from the Bureau of Labor Statistics was civilian labor force in the Household Data survey. As it turns out, civil labor force decreased 164,000 in March from February's level. In fact, not in labor force leaped by 333,000. I know some economists have tried to explain these phenomena away by saying older people are dropping out in some kind of natural attrition.
But it's the younger people that are giving up and losing optimism.
A piece that got too little coverage last week points out that employment for workers 55 and older climbed 277,000 in February from January with the unemployment rate holding steady at 5.9%. Since the start of the recession, employment for 55 and older increased 3.9 million, although payrolls are down 4.1 million. It is telling that last month the 20 to 24 year old employment category decreased by 24,000 and the unemployment rate spiked to 13.8% from 13.2%. There is something awfully wrong in that space and it must be addressed. One thing is certain, older people are working in part because they want to work and also they are considered hard workers.
In the meantime, younger people are dropping out of the workforce and settling for a seat on the sidelines. Interestingly, these kids will be drawn once again to messages of hope and promises to make the sidelines even cushier than they are now. It may be nuanced, but I think there is a big difference between hope and optimism. The former leaves one there waiting for miracles and a savior, the other gets you moving toward a solution because the savior is that person in the mirror.