Is Job Report Really Good News?

Is Job Report Really Good News?

By Ed Kociela

The recent employment report issued last week provided some good optics for Democrats, who cheered the addition of 236,000 new jobs.

The country is still in the hangover stage of the destruction caused by COVID-19 and its long-standing effect on the economy. Add to it the factors that also added the roots of a recession and it is easy to see why the base numbers themselves are enough to have a segment of politicos thumping their chests and patting themselves on the back for a job well done.

But, like with all things, you’ve got to peel that onion back beyond the headlines and see what really is at play here.

Most of those new jobs, you see, came in the area of leisure and hospitality work, which added some 72,000 jobs, 50,000 of them in bars and restaurants. Those jobs are not a good indicator of economic growth, most paying well below the minimum wage as those workers rely on tips for the bulk of their income. It’s low-risk for the business owner who can ramp up staff quickly without laying too much cash on the table.

State and local governments added another 30,000 jobs, healthcare some 34,000 jobs. Construction lost 9,000 jobs and factory pay was cut for the second consecutive month.

Real growth is not reflected in leisure and hospitality work. Flipping burgers at Mickey D’s is not often part of a planned workplace career. Neither is running a cash register at a tourist spot or waiting tables.

Real growth comes when you build things, make things, sell those products and plant roots in a community. While the Golden Arches may remain a staple of communities from here to Timbuktu not many are going to build a career toward a gold watch retirement from the fast food chain and you will not find many who will make up the beds in a Motel 6 for the remainder of their working lives.

In no way do I intend any disrespect for people employed in that way. It is good, honest work. The thing is, we are at a place now where that good honest work is still way below the pay grade that those on the unemployed rolls need to feed their families.

COVID-19 changed it all, of course, as business owners found they could make many cuts to streamline their operations – layoffs, remote work opportunities, greater perks for those who remained on the payroll and the natural savings that come from cutting overhead from facilities to fractional utility bills. It was precarious, of course, because major cultural change in the workplace always carries a certain amount of risk. But, the smart ones endured. Now, however, there are still some COVID-19 casualties out there on their own who are blameless victims of circumstance that nobody could foresee. Add to it the economic turmoil that played a major role as the world went on lockdown and the misplay of leadership that still looked to feed the rich instead of tend the poor and you can see that in many ways, it is remarkable that the damage was not greater. We had a novice at the wheel who steered us into unchartered waters that even the most brilliant minds would have found difficult to navigate.

When do we take some real solace in a job report?

When we return to what the United States used to do with much ease: When we make things again.

The economy should be rated by the types of jobs we have and how much they pay, not just numbers that can be manipulated. All jobs are not equal and we should not delude ourselves into believing they are. That’s why I would have had more confidence if the new report showed a blazing increase in the technological, manufacturing, research fields rather than hospitality.

The country was built on the backs of those who built cars, those who worked to move our technological savvy forward, those who worked in our labs creating new and better drugs to save more and more lives. The country was built on the backs of construction workers who built houses for families; the butchers, bakers, and candlestick makers who turned those houses into homes; the teachers and doctors and nurses who served our minds and bodies.

You can politicize this all you want and we can point fingers in many directions, but this decline can be traced back many, many years as technology and advancements in our daily world moved at hyper-speeds, racing ahead and eliminating so many traditional sources of employment. Add to it the out-sourcing of the manufacturing of such essentials as televisions, computers, telephones, you name it, and you can see why this job report seems so heavily weighted in employment not exactly deemed acceptable to the educated class. Seriously, how many MIT grads are flipping burgers these days,   especially when housing and food prices are starting to rise?

What we need is another Bill Clinton-esque economic mind with a view of the long-term as well as immediate to understand what is needed to steady the ship. Clinton was a lot of things – some good, some bad – but he was on the mark when it came to the economy and knew how to relieve wallet fatigue while encouraging the banks and market to grow with ultra-moderate concepts that proved successful. He understood that the Ronald Reagan-George H. Bush idea of trickle-down economics was bad hoodoo and applied more sensible and practical solutions.

“The president (Bill Clinton) probably had a better hands-on feel for the economy than his economists,” wunderkind Alan Greenspan once said. He added that Clinton should be given credit for his focus on reducing the government deficits and for also recognizing the importance of technology in boosting the economy in a non-inflationary way.

Today there is really nobody in the administration capable of pulling it all together in a similar manner.

But, I guarantee you that adding jobs in the leisure and service industries is not a great way to bolster a fragile economy, regardless of how good the optics look.

They can spin it all they like, but the truth is until they start adding real, well-paying jobs, it is nothing but hype, something we get far too much of from the Washington crowd.

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