Jobs Growth Meaningless Unless Qualified

(This is a rare comment on the US economy, as I'm home for Christmas in Wisconsin until the 12th January.)

'The mainstream media' is reporting today that last year the US economy created 1 million jobs. They are reporting in a manner that makes it seem like good news, like evidence of a return to normal from this Great Recession. But the 'media' is once again blindly reporting rather than stopping to qualify the fact.

To explain, I'd like to make a comparision: every month for the last six months the British media has also reported jobs growth but it usually goes something like this: 'Office of National Statistics reports jobs growth bolstered by part-time jobs.' The economic situaiton isn't returning to normal. Companies aren't confident enough about the scant economic growth (leaving aside that 'growth' might be due to shifting resources within economies rather than creating any new economic value) to begin hiring again.

Creation of more part-time or temporary jobs in an economy aren't evidence of the return to economic business as usual.  Part-time and temporary work doesn't offer the benefits, security, nor indeed spending power of growth in full-time jobs.  If we agree with the mainstream economics of the pre-recession-- that economic growth is to be lead by consumer spending-- then consumers (workers) will not have enough (disposable) income to bolster economic recovery at a level sufficient enough to bring the economy back to recovery. 

So what do we know about US jobs creation and unemployment in 2010, to qualify that 1 million new jobs? According to the US Bureau of Labor Statistics, Current Employment Statistics Survey from the end of last year: Average hours worked per week has increased from January 2010 but still are not as high as pre-recession levels. This fact seems to suggest that people are starting to work more hours. However, average hourly earnings are still decreasing and poverty is higher than the previous year (by several metric methods) which seems to suggest that people who are still employed are working more hours.  Growth in temporary or help jobs, according to the CES is also increasing faster than any other sector jobs for the last year.

Of course, you could argue that the current state of the labour market as it is shifting to more creative and intellectual skilled industries is also a shift to contract and temporary work (freelance revolution?).  Whilst this may be true, the question becomes whether there is a sufficient level of growth in those temporary and contract jobs to justify optimism?

So simply stating that the US labor market is recovering on the basis of 1 million jobs created in the previous year or indeed that online job postings are up is irresponsible. Missing the bear, US media? Well, let's be honest, that's not surprising.