Robotic Nation Evidence

Job Growth and Robots

AT 2003 CLOSE, JOBS DATA DISAPPOINT

From the article:

The U.S. Bureau of Labor Statistics (BLS) data for December came as a nasty shock for those who expected that the recent sharp upturn in economic activity was an immediate precursor of healthy job growth.

The gross domestic product has been growing since the fourth quarter of 2001, and it rose at an unusually high 8.2% annual rate in the third quarter of last year. The new BLS data, however, indicate that the total number of people employed, which has been growing slowly over the past two years after a jarring decline of 2 million in 2001, ended 2003 with a 54,000 drop from November to just under 138.5 million. This figure was up by a meager 689,000 from its peak in January 2001.

Of more concern to chemists, almost all of whom are on somebody's payroll, is the number of people on nonfarm payrolls nationwide. This number rose an inconsequential 1,000 in December over November. This puny growth left it a substantial 2.4 million below the high of 132.6 million set almost three years ago in February 2001. Total private employment remains at 3 million below its high, also set in February 2001.

Also:

There have been nine economic cycles in the U.S. since World War II. For the first eight, the downturn phase, as measured by the number of people on nonfarm payrolls, averaged about 13 months. It took an average of 10 months to regain the previous high.

The ninth decline persisted for 29 months--from February 2001 to July 2003--and dropped payrolls by 2.7 million. The five months since have brought the recovery of 278,000, or only about 10%, of these jobs.

The experience of the nation's biggest-ever boom in the 1990s indicates that a robust economy boosts payrolls by an average of 200,000 workers per month. So it will be well into 2005, at the earliest, before payrolls regain their February 2001 high--an unprecedented hiatus in payroll growth of more than four years.

As mentioned here, what is happening is a "perfect storm" of unemployment. The loss of manufacturing jobs combines with the loss of white collar jobs and the loss of jobs to robots to create employment stagnation. It will be followed by a period where, despite robust economic growth, unemployment grows. This is the nature of the Robotic Nation.