Post-reading Comment.

Yeah he sort of missed the point. Came close but he didn't even see it passing him by.

If my children, who entered the job market over the last few years, are indicators, companies and municipals are taking on employees. One kid is in advertising, and found a job as copywriter for a design firm that has not had an in-house copy dept. (Small shop.)

If the employment uptick is "using up" all the available output increase, new orders etc., productivity is a bit flat, right? The optimistic view would be employers preparing for better times to come.

As a member of the labor contingent, I'm not unhappy with flat productivity, if it means pay is holding. More depressing to think it's only employers that haven't gotten around to firing workers to anticipate the looming slowdown. Excuse me, but what have the last five years been, a boom? Seemed pretty slow to me.

Your last idea sounds about right. It was evident at my last contract negotiation, in 2004. Even in a non-profit, that had a hugely inflated budget, of which labor was around one-quarter of the total, the board chairman, Bill Strong, announced he wanted a 25% pay cut from us (his only actual revenue stream).

There's definitely been a bull market in in unmitigated gall, until various chickens started roosting.

Oversaturated markets? 

What is the point of making 110 donuts if you can only sell 100?

Perhaps the large productivity growth had its limits because it relied so heavily on downsizing rather than investment, capital creation, consumption, the usual things. In other words, they tried something new, with immediate results, and then that having been tried, it's been done.

I don't mean they can't benefit further from deregulation, mergers, global outsourcing, reducing costs faster than they're reducing product and sales, and other factors promoting the strategy, although even there one can imagine some limits, as now with some highly publicized firms changing course and divesting or splitting apart. I just mean that it was a one-time boost that could have its largest benefits quickly realized. And then one has to cope with realities of lowered traditional drivers of expansion. (Of course, Jared's other points are valid, too.) 

John 

http://www.haberarts.com/

Can we expect productivity to increase indefinitely and infinitely?

Some day, we'll be making trillions of donuts with no more labour input than a hamster at a wheel?

The problem is that "productivity" is an artificially narrow measure. In addition to labor, output requires raw materials and energy.

What we have seen since the beginning of the industrial revolution is that "productivity" goes up when machines replace people. But machines require energy to run. When energy is cheap then so is running the machines. In poor areas of the world people are cheap compared to mechanization and are substituted for machines. There are lots of places where road crews are guys with picks and shovels not graders.

Economic models and short-term business practices don't incorporate the energy and raw material inputs practically. Even when they play lip service by referring to "externalities". No model, that I'm aware of, can deal with the fact that fossil fuels are non-renewable. This means that any pricing scheme for them is incomplete.

The western economies that have done well in the past twenty years (I'm thinking of the UK and Scandinavia) had windfall access to North Sea oil. This is running out. It will be interesting to see what happens next.

The US also benefited from cheap oil. We over pumped domestic oil and had favorable deals with Canada and Mexico. This is also becoming more problematical.

Productivity is just not an adequate measure to use when analyzing economic activity.

--- Policies not Politics
Daily Landscape

I've spent most of my Engineering career (to-date) developing tools that help people do their work better- in fact I have a statement to that effect at the top of my resume.

In my opinion, if you want to know who's interested in improving productivity, look at who's training and who's hiring Engineers. That is our job after all.

-Dave Adams-

John,

I think what you describe explains the acceleration of productivity in the 2000s, from ~2.5%/yr, 1995-2000, to 3+%, 2000-04.  That extra boost in the 2000s seems to have partly derived from speed-up, layoffs, etc.  From late '01 to mid-03, we had falling employment and rising output.  That shows up as faster productivity, but it cannot be sustained.

The most reasonable explanations so far (to me) are the declining marginal benefit of replacing labor with machines due to increased energy costs and the declining marginal value of squeezing more work out of each worker. Workers can't be squeezed forever, and energy and materials costs are up. Plus the fact that so much productive effort goes into the war, rather than production of goods and services that add to well-being. That has to count somehow.

I'd add to these the declining marginal value of offshoring as energy costs rise--it costs more to ship these days, especially by truck. Another factor is declining educational levels in the US--are we running out of truly skilled workers? It seems to me that the truly competent are very overworked. And because of low wages, many people have to get by on more than one low-wage job.

The fundamental problem as I see it is that the productivity gains have gone so much to management at most companies, and to the very wealthy generally, that incentives are being destroyed for people lower down. At the same time, there isn't the same climate for entrepreneurship because education is declining, capital is freezing and the markets are skewed to benefit the already-have-a-lots.

This is just silly and self serving. Many people who are interested in productivity improvements simply buy your products and have no need to hire engineers.

And it is growing productivity among line workers that comes into a fundamental conflict with the strategy of aiming for a growing profit share rather than focusing on growing total value added, since the goal of placing management in the position to claim increasing profit shares undermines the process of mobilizing production workers as active collaborators in the process of learning new skills and sharing them with workmates and management.

Isn't that what I said? (Although admittedly in a less eloquent and technically precise way.)

How about that our workforce is aging and employers have been scamming the productivity reports?

Large Companies have been scamming the productivity numbers by demanding that workers complete the work no matter how many hours it requires. The corporations are only paying for the standard 40 hours so it appears that there has been a productivity increase.

Now with the workforce aging those free extra hours are being reduced. Why reduced? The older the worker, the less likely they are to be able to sustain those high hour weeks without regular productivity dropping during the normal 40 hours.

The companies with an aging workforce with ten people in an office and suddenly you have to hire another worker to get the job completed will skew your productivity measures.

The aging workforce also has additional problems with health which will affect productivity numbers.

There is also the screw you factor coming into play. How long will people continue to carry an additional workload before they figure out that they will never get paid anymore money and the company is just using them?

The history of the US workforce rebellions is correlated with excessive distribution of wealth to the top. It is hard to motivate employees when the corporate elite are raking in more than 400% of a company’s average wage.

Another factor is the high concentration of US GDP coming from the Financial Market. When all you are doing is moving money around and automating your workforce is there really any production occurring at all?

And what about external influences on productivity like Katrina destroying the Gulf Coast and then the flooding of New Orleans? Of course the war is sucking not just material but skilled people out of the country via the high mobilization of the National Guard.

The aging workforce isn't going to get any better, the housing market won't be recovering any time soon, reconstruction of New Orleans is failing, the War and it's costs will be reducing government investment for years and the US GDP will get more and more reliant on the fantasy production of the Financial sector.

The rise in productivity since 1990 has been the result of technology integration into standard business models and the exploitation of the workforce.

The technology integration has now reached saturation and will only progress along with normal business investment.

It looks to me as if the real weakness of the US economy is finally coming out of the closet. All of our rosy Government produced and fudged measurements are being exposed as smoke and mirrors.

With the Subprime meltdown and its impact on the broader Banking situation I think we should expect next years productivity numbers to be substantially lower. If they are not then we know someone is playing fast and loose with the statistics.

I discussed Iraq in my post as well, just not in relation to the 2003 drop.

I agree with you about the precipitous drop in 2003 being attributed to Iraq; perhaps the follow on of Katrina and then the housing drop which actually began in certain locations in 2005 have kept the numbers low.

The aging workforce issue is one that I believe could have been a hidden factor prior to 2003 which was covered by rising productivity in some other broad based area. Once that area was leveled the workforce issues of age and frustration began to appear.

Your point about seeing the BLS data and the statistics used to prepare the summary report ties in to my belief that the numbers can be "cooked". Just look at the reports being revised back as far as two years. It’s like the corporate profit certification law change where suddenly the profits were restated back into prior years.

Which again raises the issue about the statistics; the employment numbers, CPI and GDP are notoriously fudged figures that use selective criteria to advance a particular agenda.

Can 2003 be attributed to real factors or did the fudge factor and selective statistical base data finally catch up in the reported numbers?

My belief is that for the longer term the aging workforce and the baby boom retirement expectations that have been lowered due to the financial markets which will cause the baby boomers to work longer will suppress productivity gains. In addition, at what point do the US workers begin to revolt against the wage stagnation and refuse to work the longer hours?

I believe, having done my time within the government that the numbers are as real as the senior executives want them to be. The incest within the financial markets between banks, brokerages, and the Federal Reserve exert a tremendous control over making sure the numbers are maintained as much as possible to serve their own interests.

Just my little bit of conspiracy theory.

Could you provide links to your favorite charts?

I believe that in general, a fair size chunk of apparent gains in US productivity over the past decade may have been less attributable to producing more stuff with fewer people than a matter of producing more stuff with fewer people here. I'm talking about the trend in offshore production of course. But I've been noticing signs for some time now in my own industry that the gravy train of outsourcing starting to lose steam, most likely for a couple of reasons that were pretty easily predictable to anyone who bothered thinking about it.

1. The set of things that can be moved to Asia is finite
2. Asia is finite (and the areas suitable for export production are more finite still)

For example the company I work for has closed two domestic factories in the past three years, the second just last year, and moved that production to China. Now, we have no more domestic production to move so domestic productivity numbers aren't going to be getting any more big one-time bumps like that from us atleast. That's a pretty common story these days.

We have also been finding it increasingly difficult to get anything produced in Asia with acceptable qulaity. So in we're probably producing somewhat less stuff these days. Annual turnover in management and engineering personnel at some of our CMs (contract manufacturers -- foreign companies can't actually own factories in China) is probably in excess of 100%. Our guys go over there and train up a team to produce a product, then six months later when quality issues start cropping up they go back and find everyone they trained has moved on. Competition for good people is fierce and many also leave to start their own companies. There are also rumors afoot that some of the people working the lines in some of these places are starting to look quite young.

As we're finding it harder and harder now to build anything we can actually sell, our sales network isn't exactly out there setting the world on fire either. So there's that.

In 2003, China surpassed the United States as the world's largest recipient of foreign direct investment. So the Chinese have the growth in foreign investment which obviously results in growth in Chinese productivity - they can buy many of the new model donut machines, while we can't buy as many new model donut machines as we could have if foreign investors continued to see the US economy as a good investment in comparison to other countries.

More investors are "outsourcing" their investments. I suppose you could call that economic blowback. How much of the economic blowback has to do with foreign policy blowback I don't believe we could quantify, only surmise.

I just posted a short essay elsewhere where I make a stronger claim. I claim that economists (and social philosophers of all stripes) don't really know how to include non-renewables into their models. It's not just that externalities aren't considered in traditional models, it's that non-renewables are, well, gone forever.

If you are interested here's the link:

Pareto and Ricardo - a Parable

--- Policies not Politics
Daily Landscape

You've got to be kidding me, Ellen.  For the past decade, the vast majority of my work has been about this very relationship--real wages, productivity, and job growth/unemployment.

See 8 editions of State of Working America for starters, but if you're really interested, read The Benefits of Full Employment, by me and Dean Baker.

Therein we show that in an economy with few unions, lots of globalization, low min wgs, and little bargaining power for most workers, it takes a combination of low unemployment (in the 4% range) and fast productivity growth (above 2%/yr) to generate broad-based wage growth.  We call it the 4/2 solution and wrote an article summarizing it for the American Prospect (for some reason I can't link to it, but it's in the Nov 2002 issue, (vol 13, #20)).

You should dig a little deeper before you shoot from the hip!

My able TPM friends will soon have the productivity graph up, I'm told, but here are two links (thanks to EPI's Chris Barbee).  The first is to the productivity graph, the second to the consumption as a share of gdp comparisons across countries (sources: BLS and OECD)

Let me apologize in advance for posting some statements that challenge the usefulness of your entire career’s work.

Theories and discussion based on irrelevant data are irrelevant.

Citing BLS or any other Government data as a basis for real economic analysis or forecasting means your work is based on the assumption of facts "not in the record".

The important discussion should be, "Why can't economists with massive computer models and years of experience accurately predict economic performance on a regular basis?"

The answer is that the data relied upon for analysis is fundamentally inaccurate and flawed.

Statistical analysis of error propagation is the best condemnation of current economic theories.

Data sets with even minor assumptions filtered through aggregation curves (based on generally assumed standards) to produce a hypothetical index produces an error rate so high as to make any conclusions or forecasts completely irrelevant.

Economists should be spending their energies on determining how to collect valid data of what “economy” really means as opposed to grand pronouncements of their expertise and ability to predict the future.

The science of economic theory is just like string theory; a great idea with no way to prove its validity. Or perhaps more easily understood as the butterfly effect in weather; economics is really chaos theory with so many independent chaotic data points that any modeling is meaningless.

Perhaps I also wonder why TPM, a political blog, even has an economic theory discussion when the best we can hope for is opinion, not science and therefore no apparent relevancy to any political issues.

Economic theory at this point can be summed up as, “I hope I have more money than the other guy”. How and why that happens (other than perhaps immediate tax redistribution) is an unknown.

"You think you dropped your keys up the block?"

"Right."

"So, why are you down here looking for your keys."

"Because that's where the light post is." 

I'm not necessarily disagreeing with you, just saying that we would need to know the details of the methodology involved before we could claim that the numbers are "cooked" (or are simply inaccurate because of factors they do not account for). And as far as hours worked goes, with non-emept workesr it would not be possible to hide their overtime since they are paid for it, though with exempt (salaried) workers I am curious to know whether they are simply reported as flat 40-hr/week workers or an attempt is made to capture their real world hours. But if there is a some inaccracy (deliberate or otherwise) why would it abruptly go away in 2003? Did someone at the BLS develop a conscience? The real problem here is the abruptness of the data change, which makes any explantion problematic.

You make some of my points for me.

"we have nothing but opinion on the majority of human behavior questions"

As you stated; economics is opinion and not the refined theory that it claims.

Weather predictions, even short range, are statements of large probabilities, i.e., 50% chance of rain. Expected temperatures are missed almost 95% of the time; they get close but it is not accurate. Now look at cloud cover prediction rates; again very large probabilities, i.e. partly cloudy. The accuracy of short term weather prediction is a myth. Is it close enough for most people to get by with it? Yes, but is it close enough for individuals that have a need for very reliable weather, such as farmers or construction or air traffic controllers, the answer is a resounding NO.

"But large-scale (low-resolution) prediction is possible over longer times." I challenge this in truly complex systems. We can use weather again; the farther into the future the forecast while still incorporating lower resolutions, accuracy drops significantly. Although all evidence of global warming is significant, the effects from predictive models are so widely variable that they change almost every day. Even low resolution predictions are at this point nothing more than guesses. Will the US get warmer and drier or warmer and wetter and will the southern hemisphere actually cool for awhile as some models predict?

To counter your statement about aggregates I remind you of the butterfly effect. Human aggregate behavior is not as statistically accurate as you would claim. It only takes the actions of a single individual to throw the predictions widely askew. Can you provide some examples of accurate predictions of human behavior in the aggregate? Almost all of the predictions have multitudes of caveats covering everything that throws the prediction out of range; if one happens to hit it right then the multitude that got it wrong are ignored.

Take away all of the caveats that set up the controlled variables in these predictions and betting on the horses will provide a better success rate.

"There is no alternative to government-compiled statistics, is there? And it is public-record, right?"

My statement was facts not in the record.

Facts and reported Government indexes are not equal. Mr. Bernstein held the post of deputy chief economist at the U.S. Department of Labor. If he can set aside his personal bias perhaps he can shed some light on how accurate he feels the reported indexes really are? My guess is that we will get an answer similar to, "the best numbers we can collect" which fails to answer the question of accuracy.

If I had a dollar for every economist with a different analysis I would be rich beyond the dreams of avarice.

To sum up, economics is a game. The economics society has established a set of indoctrination rituals that are taught at most colleges. The real life application of the game is for each economist to follow the rules of the game and then to roll the dice and make a prediction. When they are wrong they say, "I would have been right except for this unforeseeable data that I didn't have."

So for these reasons, I question having a discussion about something that isn't even real? Economic discussions should just start off with each person saying, "I wish this was true".

It's my understanding that the way that BLS calculates productivity is a pretty blunt instrument. They basically just look at the total value of sold or shipped goods and services industry by industry and divide that by the number of workers employed. I mean it's a little more involved than that but they don't actually look at where goods are produced, not even finished goods, let alone parts and sub-assemblies. So the company I work for is still classified as a manufacturer company and since we're still shipping more or less what we were four years ago and employing a few hundred less people to do it, we must be loads more productive now without those pesky factories.

Well, I think we might have to start pulling out our chalkboards in a minute.

Economic theory has no valid initial condition.

The alternative for economics reaching too far is too acknowledge that they really don't have any clue if what they are doing has any application to the real world.

Despite all of the best efforts of economists we are still doing the same routine of boom and bust that we have for centuries.

Perhaps, the alternative is just to say that monetary policy is nothing more than insurance to to keep the banks healthy and wealthy and in a crisis insure that the very top of the social pyramid stays intact.

Never discount the effect of the noise: GORE 2000.

As someone whose training and profession lies outside the field of economics, perhaps I can more easily stand back and view the issue with fresh eyes. When it comes to discussion of issues like growth, competitiveness, productivity, I’ve long been puzzled by a couple glaring irrationalities that always seem to go unquestioned:

- …that a finite planet with fixed resources and carrying capacity (Buckminster Fuller’s “spaceship earth”) can nevertheless accommodate infinite, eternal growth. In a finite, closed system, growth in one sector comes at the expense of other sectors (or by increasing indebtedness).
- …that people, with limited time and resources, with limited storage capacity in their garages, nevertheless need an infinite amount of new “stuff”.
- …that much if not most economic “growth” these days consists merely of redistribution and concentration of existing wealth, not creation of new value (e.g. corporate mergers and acquisitions).

Clearly, any trend based on the above has an end-point, yet we tend to treat the economy as though it should be an eternally upward-sloping curve. Perhaps the worrisome signs that original posting cites are more than cyclical “blips” - perhaps the fundamentals of the game are about to change.

In his book “One Dimensional Man”, Herbert Marcuse observed that “…the institutions which served the struggle for existence cannot serve the pacification of existence. Life as an end is qualitatively different than life as a means.” Please at least consider the possibility that the growth/ competition/ consumption model - which worked so well in the past century - now serves us less and less well.

One point that needs to be considered here is immigration.  We import a large number of people who are on average poor and whose jobs are generally lower on the productivity scale.  To get a really good sense of productivity growth, you would need to take all recent immigrants and compare their current productivity to that in their home country.   

"You say I'm a dreamer.  We're two of a kind.  Looking for some perfect world that we both know that we'll never find." - Thompson Twins, "Hold Me Now"

Re: Given a rising trend in the first number at the very least, a 4% headline unemployment rate in 2007 implies far more unemployment of available labor than a 4% headline unemployment rate would have implies in 1967, or even 1987.

Here I disagree. While it's quite likely there's a big uncertainty factor in the unemployment I see no reason whatsoever why that uncertainty should have been any less in years past. Moroever some of that uncertainty cuts the other way: the "underground economy" employs people off the books, notably imnmigrants, but also people collecting disability payments and other people who just don't want to pay taxes, and they are not counted in employment figures either. Also, just looking around the real world I live in, I see very few unemployed people (other than the retired). In fact many people seem to be working more than one job to make ends meet.

All's I can add here is that while the current unemployment rate is reported as 4.6%, from the wage side of the ledger, you wouldn't know it.  There's little if any wage pressure, and if anything, there's been a slight deceleration in wage growth.  Wages, even after you add in benefits, after adjusting for inflation (which has been higher over the past few years) have been largely flat since late '03.

You'd generally expect more wage pressue at this level of unemployment.  I think the job market has more slack than that rate is suggesting.

Another factor is declining educational levels in the US--are we running out of truly skilled workers?

I wouldn't call it running out, so much as failing to train a sufficient quantity of new skilled workers. Part of the problem is that young people know that in aggregate, manufacturing sector jobs are going to be outsourced, so why even go into the field?

-Dave Adams-

That's another good point. But speaking from my own narrow perspective I think that may also be less true now than it was a year ago, at least in the tech sector in the Northeast and Northwest. I manage a small software development team and a year or two ago I could hire a pretty high level programmer for pretty reasonable money just about any time I wanted -- good thing too because our little corner of the tech sector doesn't pay as well in general as some do, but we do have really cool projects (if you happen to be a geek). But lately the well seems to have pretty much run dry. I was lamenting this fact to someone in HR recently and I was told they've been seeing the same thing happening across the board on both coasts over the last few months. I even had a decently competitive salary budgeted for a change and I still only filled my recent opening on a fluke.

While it's quite likely there's a big uncertainty factor in the unemployment I see no reason whatsoever why that uncertainty should have been any less in years past.

This is not a question of uncertainty. This is the changes in the structure of the labor market that we are aware of.

Headcount unemployment never corresponded precisely to the degree of unemployment of available labor. And the critical point is that the discrepancy between the headcount unemployment rate and the amount of unemployed labor in labor markets is tending to increase.

There may be uncertainty regarding the amount of additional unemployment represented in unemployed labor hours by part time workers desiring more hours, and the number of people among the hidden unemployed, but there is no reason to doubt that the those values are larger now than they were twenty and forty years ago, so that a headline unemployment rate today certainly represents more unemployment than the same rate in 1987 or 1967.

I recently saw a pretty dour productivity forecast by economist Dale Jorgenson which argued that in a few decades, most people in the workforce would be college educated, so that the increasing skill level of the workforce would cease to be a contributing factor to productivity growth...

I don't know about that.  Seems like there's always a lot to learn and lots of groups (immigrants, persons for less advantaged backgrounds) that will need access to higher educ for a long time coming.

You say there's no reason to doubt it, but I do doubt it because no one has made a convincing case that this is so. I don't recall any paucity of part-time jobs 20 years ago and what is a "hidden" unemployed person and how are they hiding and why was their hiding place not available 20 years ago?
The underlying argument in most cases is really political: George Bush is an awful president (and amen! brother) so the economy cannot possibly be even moderately decent, thus there must be A) hidden inflation and B) hidden unemployment.
But fortunately presidents do not control the economy (and thank god for that), in fact they have rather little influence over other than who they may appoint at the Fed. So it's quite possible to have the worst president ever, but also an economy that is at least muddling through in an acceptable manner.

When an economist with his palms up chants the mantra, "On the one hand,
but on the other” some consider the "professional" to be considering
the opposing views and looking forthe best answer.

What is actual happening is a display of free market auctions at work.
The economist is holding an auction between the opposing views.

The bidders are those industries wanting their beneficial view to be the one chosen.
If questioned about these actions the economist answer,
“the free market brings forth the best answer.”

If you question this observation read the science article “A World of Eloquence in an Upturned Palm” on the New York Times Science and on the Most Popular section.

That simple gesture, the upturned palm, is one of the oldest and most widely understood signals in the world…… If that’s true, if human eloquence can be traced from a primal message signifying “Gimme,” I’m not sure what conclusion to draw about our species….. The human remnant of the crouch display is a shrug of the shoulders, which lowers the head and rotates the forearms outwards so that the palms face up…..

Another interpretation if feel that is supported by the article is that
economists do not know the answer.

They could signal, “I don’t know,” by holding both palms face up”……..

The article seems to me to support many theories, but here I sit
about to call a client on the speakerphone,
wishing for fulfillment,
with both palms up.

http://www.nytimes.com/2007/08/28/science/28tier.html?em&ex=1188532800&en=60f200def83ff583&ei=5087%0A

-----------------------------------------------
Today, are we searching for I deals or Ideals?
-Thinking

Already there are a lot of college educated individuals trying to make a living at just above minimum wage.

Waiters, Fast Food, Retail, Call Centers

The US produces large numbers of talented individuals with college degrees. In the past, liberal arts majors were hired by corporations for their critical thinking skills. Now you must have very narrow technical degrees for employment or PhD credentials for other fields.

Producing more engineers with college level only degrees is not the answer. Some type of corporate paid internships needs to be widespread to pay for engineers and others to continue their education in the real world with livable wages.

Management positions need to revert to picking up more broadly educated individuals rather than just narrowly focused Business majors.

Having large numbers of engineers won't fix anything unless we have pure science programs that provide employment. We need pure science so that the engineers have something to apply to the real world applications.

We have so focused on employing technology graduates as our saviors that we have forgotten the social investments in society in general that produces great creativity and knowledge.

I propose business majors should be required to first obtain a complete liberal arts degree before proceeding into a technocrat business degree. We need societal investment on living wage employment for individuals to pursue higher degree education in pure science. We need to value the contributions to society of the liberal arts.

We must also revamp our entire free trade policy into fair trade to recreate the higher wage production employment for those people pursuing that track instead of the college program.

All of these programs are quite easy to accomplish if we regain our country from the overly powerful large corporate masters and the incest with the military complex and large Wall Street financial gilded age gods.

It may be too late to rest our country back for the people unless there is some significant economic meltdown like the great depression to wake people up and unite them.

Social investment is the answer not just more engineers.

Re: But the discrepency between headcount unemployment and actual unemployment was also wider under Clinton than in the 60's

I keep seeing this sort of thing asserted, but without a shred of evidence to back it up. Since (as far as I know) the methodology of deriving the figures has not chaned in a long time, why would the uncertainty factor be greater? Also, if the uncertainty factor is larger, doesn't that cut both ways (there could also be less unemployment than the numbers shows)?

Thanks for the links. I loved that line in the first article, "For decades, many labor economists said that China’s vast population would supply a nearly bottomless pool of workers. So many people would be seeking jobs at any given time, this reasoning went, that wages in this country would be stuck just above subsistence levels." Every bubble begins with a perpetual motion machine of some kind, doesn't it? They really should start requiring history courses in business schools.

Of course as costs rise in China on everything from labor, to raw materials, to electronic components (resistors, capacitors, transistors and ICs), to transportation, etc., Chinese contract manufacturers locked into unit pricing under old contracts will increasingly be looking for ways to cut corners -- paint substitutions come readily to mind -- and new contracts will inevitably be negotiated at higher prices. Rising prices in consumer goods might then tend to exert upward pressure on wages here as well.

I look at the cell phone and wonder about all the opportunities not missed, since being held up in traffic or missing a flight is not the killer it used to be. My colleagues in the freelance musician business used to depend on their answering machines, then their pagers, but now have cellphones or Blackberrys.

Of course, the cell phone has helped black markets equally, or more.

I keep seeing this sort of thing asserted, but without a shred of evidence to back it up.

and regarding evidence, you have already made an assertion that there has been no trend increase in part time employment for economic reasons, without a shred of evidence to back it up.

Re: Where in anything I wrote do you find anything regarding any uncertainty factor.

When deriving any set of statistics there is a factor of uncertainty concerning the accuracy of the data: some "plus or minus X percent". If this is very large of course then the stats are pretty worthless. I'm not a mathematician and I forget the formal name for this uncertainty factor, but all I am asking is that you document it rather than simply asserting something about it without any evidence whatsoever except your own opinion.
As for "discouraged workers" how do you know they are "discouraged"? As the population ages more people will be leaving the workforce for retirement. And in some married couples it's not impossible that one will stay home, with the kids (I know two house-husbands by the way, so this is not a sexist concept). One thing is for sure: in the American economy it is impossible to survive unless one has a source of income (or someone who will share his/her income with you) and for nearly all of us the only source of income is work. The only other generally available income which pays (just) enough to survive on is social security, but that's only available for the elderly and the disabled. Both groups are increasing in numbers as the population ages, as I said. And it's not exactly unheard of for people collecting disability to work under the table (I certainly have known poeople who did that). Which of course brings up my point about the underground economy-- true, such jobs tend not to pay well or include benefits, but if someone is working for cash, should they be counted as "unemployed"?
Now, as for part time work I really have to wonder where you live and what you do. In my corner of the world the problem is the exact opposite: anyone with a full-time job frequently has more than a full-time since overtime is required and for many of us (exempt workers) that OT is unpaid. Also, to make ends meet, many people are forced to work odd jobs on the side in addition to a full time job because yes, it certainly is true, that work does not pay well enough in this country. You may wish to consider the stats about American workers having a serious deficit of leisure and vacation time before claiming that the lack of full time jobs is a problem.

I think that we shouldn't allow products to be imported and sold in this country if they come from a country that doesn't treat its workers at least as well as we treat our own.

It already works that way for Cuban cigars...

-Dave Adams-