It’s Important Only When It Suits Us
The Wall Street Journal, November 2009:
Grim Milestone as Jobless Rate Tops 10%
Bad news for then. Today, we hear that the unemployment rate fell yet again, to 6.6%, the lowest it has been since Bush exploded job losses in 2008.
So, what’s the Journal’s headline today?
Ignore the Unemployment Rate
Not that I expected anything different. Conservatives almost gleefully pinned the unemployment rate to Obama, making a huge deal of it, even before he entered office. Now that it’s getting back down to more reasonable levels, they’re acting like it’s no big deal. The current WSJ article doesn’t even say what the rate is now.
And in truth, the numbers are in fact deceptive. However, the issue is not how accurate the numbers are; it’s how baldly conservatives claim they’re vital when they can use it as a political weapon.
The curious thing is that the US is entering a demographic transition now:
http://research.stlouisfed.org/fred2/graph/?g=rPq
blue is jobs, red line is the important one (age 25-54 population), showing that we’re not getting demographic expansion like we did when the boomers were still all in their prime working years (1990-2000).
For 2014, the boomers are aged 50 to 68, so we actually don’t need as much “growth” as we did in the past, as replacement will be accelerating, the new regime will be basically a boomer leaving the workforce and a Gen Yer entering at the bottom, and/or if we’re lucky a Gen Xer getting promoted to take the boomer’s job.
More analysis, comparing Japan:
http://research.stlouisfed.org/fred2/graph/?g=rPu
blue is YOY age 25-54 expansion for US, red is Japan.
This shows the stunning strength of the postwar Japanese baby boom, which was concentrated in 1947-1950 and then quickly faded for some reason, while the US baby boom rolled on for 14 more years, and we saw peak demographic pressure in the 1980s.
Gen Y — the boomer echo — is age 12 – 30 now and so they’ll be surging into the workforce this decade and next.
Japan is of course weird. You can get demographic xls here:
http://www.stat.go.jp/english/data/nenkan/1431-02.htm
looking at the 2012 spreadsheet, I see:
Population age 5-24 was 23.6M
25-44 was 33.8M
45-64 was 34.1M
There were 3.2M age 20-24 vs. *5M* age 60-64! (the baby boomers)
Once retired, people will consume less, so there’s a lot of deflation baked in I guess.
But if Japan can get their export economy rolling again they could buffer the domestic demand shock. Problem with that is that they have to compete with E Asia low-wage labor centers, which Japan Inc has had a large role in establishing, especially SE Asia and China. And Japan faces a lot tougher export picture compared to the 1970s and 80s, when their products were world-beaters.
Now, a single cell phone replaces so much of what was their mfg strength:
http://consumerist.com/2014/01/17/the-smartphone-has-effectively-replaced-all-the-technology-offered-in-this-1991-radio-shack-ad/
I love thinking about this stuff but damn if I can figure out what’s going to happen.
But overall I’d want Japan’s demos compared to the US’s.
Fewer people actually don’t require “growth”, just reallocation. A market economy doesn’t do reallocation all that well — politically picking winners at the expense of losers — but that’s why we have government, to do what the market can’t or won’t.