CHEMICAL HINDSIGHTS
Job Market Blues Economic slowdown, job dip, and changing world economy should bring critical analysis of the OUTLOOK FOR THE DOMESTIC WORKFORCE MICHAEL HEYLIN, C&EN WASHINGTON
U.S. EMPLOYMENT PEAKED in December 2007. The month
Democratic terms take six of the top seven spots. Republicans take fourth and the lower eight positions. marked the end of a weak and relatively short period of job growth. Striking as these data may appear, they do not establish cause This period generated a 6% increase in payrolls and lasted for 52 and effect. There are too many complications, such as the finite months. The growth phases of the eight earlier bust-and-boom emeconomic powers of the White House and the times Congress and ployment cycles since 1948 produced average payroll gains of 18% the presidency are split between the parties. And when there has and lasted an average of 67 months. been a party change in the White House, there is the inevitable cry Prior to this one, the two most recent job upturns—from 1982 to from the new Administration that it was left an economic mess. 1990 and from 1991 to 2001—both posted payroll gains of close to The counterclaim by those leaving is that any economic success 23% and lasted for 90 and 117 months, respectively. The down phase that the newcomers may enjoy is due to the solid economic founof the first eight job cycles lasted an average of 12 months. For the dation they were handed. just completed ninth cycle, it took 30 months to hit bottom. The current wars are probably not a factor in the job downturn; These sobering statistics and the near-halt to growth in the the U.S. has a record of flourishing during wartime. Demographgross national product in the fourth quarter of 2007 should have ics are not a factor because the workforce continues to grow at a brought an end to denial and obfuscation about the economy. But steady pace. And although all data from the Bureau of Labor Statisthey apparently haven’t. tics may not be ideal, the agency is widely regarded as scrupulous, In recently acknowledging some economic weakness, the Bush consistent, and credible with its measures of employment. Administration still boasted that the latest job recovery beat the This puts focus on the current turmoil in the financial and credit previous record of 48 months of uninterrupted month-to-month markets and the devaluation of the dollar—which aren’t helping— gains. This is true but misleading. as well as on technological change, worldwide competition, and During the boom phase of earlier employment cycles, payroll the outsourcing of jobs overseas. Was 1992 third-party presidential estimates occasionally showed isolated and tiny month-to-month candidate Ross Perot onto something with his little charts and his declines. But they did not break the upward momentum. More alarm over the “giant sucking sound” of U.S. jobs going overseas? than four years of uninterrupted growth may be a talking point. But what matters about an employment upturn is not perfect uninterrupted growth but how long it lasts and how many jobs it generates WHAT ARE THE IMPLICATIONS of an economy able to generate in the end. ever- increasing wealth, mostly for those who can afford it, without The publisher of Forbes, the self-styled “Capitalists’ Tool,” as consistently generating enough living-wage jobs to keep up with recently as last month assured the magazine’s readers about four population growth? economic matters they need not be pessimistic about. To wit: Despite some painful times, the U.S. did quite well from 1948 to 2000 overall. Payrolls fell for only 15% of the time and never by ■ The 70% of Americans who believe the U.S. is on the wrong more than about 3% in the past 50 years. Percentage payroll gains economic track—because they are essentially the same 70% who during the upturns since 1948 exceeded losses during the downdisapprove of the Bush presidency in general and so are not comturns by 6 to 1. menting just on the economy. During the 2001 to 2007 cycle, however, payrolls declined 37% ■ What the media is reporting about the economy—because it is of the time and payroll gains exceeded losses by a narrower 3 to 1. an election year and the “out party” always exaggerates anything The relatively high labor costs in the U.S., combined with tonegative about the economy, and the media goes along. day’s technology and the new phenomenon of a truly competitive ■ What business journalists write anyway—because they are mostworld economy that technology is rapidly engendering, do not auly incompetent, antibusiness, and left-of-center. gur well for the domestic workforce. ■ The subprime mortgage crisis—because the related losses are Avoiding a tipping point for U.S. employment will be a great not large. “In any typically volatile trading day, U.S. stocks gain challenge to the nation’s policymakers, business leaders, and sciand lose [as much] every hour,” the publisher writes. ence technology communities. How long can faith Incidentally, in the same Forbes issue, the ediin the ability to provide services and to produce tor-in-chief proclaimed there is “no way” carbon goods ever more cost efficiently—which includes dioxide has anything to do with world temperaWhat matters about the lowest possible domestic labor costs—conture changes. an employment to be seen as the bedrock of a sustainable For Democrats, a tempting partisan explanaupturn is not perfect tinue and healthy U.S.? Maybe it is time to think more tion for what’s going on with the economy is uninterrupted growth broadly. that it’s what you’d expect when a Republican is but how long it lasts in the White House. A ranking of the four-year and how many jobs it Views expressed on this page are those of the presidential terms since 1948 by the percentage payroll gains they witnessed reveals that the six generates in the end. author and not necessarily those of ACS. W W W.C E N - O N L I N E .O RG
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