The views expressed in this column are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates
Sitting in the balcony Saturday night watching the Stylistics perform in their 45th year, I couldn't help thinking about job security. Just two of the original members remain, but given the stress, talent, and dedication it takes to perform over such an extreme time period to mostly middle-of-the-road responses, I was amazed at the passion that shone through.
If we could all come to work each day with such desire, the world - economically - would surely be a better place.
Many employment statistics tossed around today are showing asteady, if disappointing recovery. Monthly job gains are averaging nearly 200,000 for nearly two years. Initial jobless claims have been on a steady downward slope since peaking in early 2009. And the unemployment rate has dropped nearly 25 percent to 7.6 percent, near the Fed's stated goal of 6.5 percent before it begins considering raising interest rates.
Source: Bloomberg, SVB Asset Management
These traditional statistics paint a picture of steady,consistent recovery in the jobs sector.
But, as someone once said: "Statistics are no substitute for judgment."
So, attempting to use some independent thought and judgment I would attack the question of job market health differently: First, ask what needs are fulfilled by work. Then assess whether those needs can be achieved through some other methods. Finally, attempt to measure how much work is getting done in relationship to society's needs.
There are likely many reasons people work on an individual level, but I am more curious on a societal level. Afterall, we are attempting to assess the health of the economy overall - not
any one individual or group.
On a societal level, we work for a variety of reasons: money, a sense of purpose, altruism, escape from one's home-life, etc.
But from an economic sense, I am most interested that people work to pay the bills, increase social standing, and provide a "better" life for their children.
Satisfying each of these latter concerns necessarily occurs through the use of money as it relates to the prices of goods and services sold (meaning, after inflation).
Can This Be Satisfied Without Working?
Depending where you lie in the social construct, it may beenough to achieve all of these goals to your satisfaction by receiving government and private sector support. Should one
have material and social desires low enough, one can even live on the streets, homeless and happy.
But let's leave that discussion for another day and focus on those of us who want "more." Striving for more involves offering society a contribution that will be appreciated and
reciprocated in like fashion - typically through compensation in money.
Setting lottery winners and card-counters aside, I would say no, the goals listed above cannot be achieved without working.
The Current Job Situation
Before diving into the numbers, let us consider that not everyone must work.
In fact, humans as pack animals tend to specialize within their packs (or families) with only one or two members working in order to contribute to the pack as a whole.
Taking a broader view, all people in the U.S. must be supported by the working individuals. Whether being part of a pack that contains a worker or two, or living off government and private
sector support, the ratio of productivity driven by workers to the population seems a good way to derive a view of the current employment statistics with regard to macroeconomic health.
To repeat: all individuals in the population are supported by "work" whether they are the ones working or not.
Now, we can look at the ratio of "people working" to "people supported," which is the population as a whole.
Source: Bloomberg, SVB Asset Management
As you can see in the above chart, the crisis hit hard driving a drastic decline of about 4-5 fewer workers per 100 people in this country and we've yet to see any meaningful recovery. This
effectively lifted the burden on the working population by about 8-9 percent.
Said another way, workers have to produce nearly 10% more value each in order to maintain an equivalent lifestyle for the population today vs. prior to the crisis.
Seen through this lense, it is difficult to accept that employment has "recovered."
The views expressed in this column are solely those of the author and do not reflect the views of SVB Financial Group, or SVB Asset Management, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
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