Ten Years and Basically No Private Sector Job Creation

It is common knowledge that the employment situation is at one of the worst states ever for the US (illustration below shows the last 5 years). But it has now reached an apex. Private sector job creation for the last decade is at a virtual 0%. This makes me think three things.

  • The first is that the world is flat and anything that can either be automated/made routine will be.
  • The second thought is there hasn’t been any employment game changers since the internet. For instance, in the early part of the decade the automobile changed the US. Then science took over with nuclear energy and bombs. Then computers. Health care and energy each have the potential, but they are so political that organic ideas get choked off.
  • And finally, the third is that leadership is no longer bold. Many leaders simply protect what they have, they play it safe. JFK wanted a man on the moon before the 1960s ended. And it happened. Ask yourself when the last time you were inspired?

Check these job charts out (courtesy of the NY Times):

July 2009 Jobs Report and Wages

Here are the job market and compensation numbers for July 2009 (based on the job report):

loss of 247,000 jobs in the month (revised to a final loss of 344,000)

  • Analysts expected a loss of 325,000
  • nineteen straight months of job losses
  • The total of unemployed person remained decreased to 14.5 million
  • June was revised to loss of 443,000 jobs (from a loss of 467,000, revised to a final loss of 504,000)
  • May was revised to a loss of 303,000 jobs (from 345,000 originally to 322,000 last month, revised to a final loss of 347,000)
  • Involuntary part time workers was unchanged at 8.8 million. This number has leveled off over the last four months
  • Since December of ’07, payroll employment has fallen by 6.7 million
  • Long term unemployed increased  to 5.0 million persons (people out of work longer than 27 weeks)

Unemployment rate declined to 9.4%

  • Analysts predicted a rise to 9.6%
  • This number is tempered by the fact that a large number of people dropped out of the pool since they quit looking for work
  • The average length for an unemployed person is now at 25.1 weeks
    • A year ago it was 16.3 weeks

Specific Segment Job numbers:

  • Manufacturing lost 52,000 jobs
  • Construction lost 76,000 jobs
  • Retailers lost 21,000
  • Leisure and Hospitality Services gained 9,000 jobs
  • Government sector grew by 7,000
  • Health care grew by 20,000 jobs


  • The average weekly paycheck (seasonally adjusted) is $612.87
  • The average hourly earning (seasonally adjusted) is $18.56 – up 3 cents
  • The average hourly work week was up 0.1 to 33.1

Bureau of Labor Statistics

Job Report Stats Summary

The Value Twist

I knew a boy when I was younger. He was a candidate for braces when we got to high school and he tried hair styles that weren’t quite right. He was skinny and loafed a bit when he walked. But one summer day it was 90 degrees. Where we grew up that was a pretty hot day. Since we were young boys, it was completely normal for us to jump on our bikes and ride over to the ice cream parlor – the Eagle’s Nest. We scrounged around for our $1.25 and each ordered a medium soft serve twist. I like the twist the best because it’s chocolate and vanilla. We killed about 30 minutes hanging out there and enjoying our tasty treat on such a scorcher.

My reminiscing story is tied to this blog because its about value, and particularly thick value. Umair Haque wrote about thick value and thin value in a blog called The Value Every Business Needs to Create Now. Thick value is providing something that makes each transactor better for for doing the deal. Each party is in a better position because of it. Thin value is where one party benefits and the other deals with it because no viable alternative exists. My story about ice cream is an example of thick value. It was hot, I was 13 with time to kill, and a twist was within my price range. I got a treat and the Eagle’s Nest made a sale. Sadly, examples of thin value abound now-a-days. As Haque points out, the cell phone industry loves thin value. It might be the 15 seconds it takes to leave a voicemail (I know how voicemail works and they know I know how voicemail works, but 15 seconds used listening is 15 seconds closer to the overage charges) or the fees associated with every nuance. Competition is supposed to address these unneeded expenses, but for some reason, there seems to be more of them everyday.

Today Paul Krugman discussed something similar to thin value in his Op-Ed piece titled Rewarding Bad Actors. The main point of this entry is that two factions on Wall St are making money by gaming the system. In one case you have Goldman Sachs issuing trades based on data that’s milliseconds faster than what other investors is getting. This technological advantage provides a window into the trading market that both protects as well as directs the future of different securities. It segregates this world even more into haves and have nots. But as Krugman points out, the point of these trades isn’t to better allocate funds to those that can generate the greatest return (thick value), its to profit from these slight timing discrepancies in knowledge and then to scale it up to maximize the profit. The actual company, the one that the securities represent, is irrelevant. They could make a revolutionary diaper, a non-polluting pesticide, or semiconductor chip designs, it doesn’t matter. The point of these trades is to make money on the bid and  the ask.

The optimist in me thinks that there is always a place for thick value. If you can create something of value at a reasonable price, there will be a market for it. Go forth entrepreneurs.
The pessimist in me is very scared. There are just so many special interests and a real breakdown of what’s right.

These are things I didn’t think about with my friend at the ice cream parlor. 

Define Success that Accounts for Fortunate and Unfortunate Breaks

Alain de Botton speaks in the video below about the different circumstances of success. Malcolm Gladwell in his book Outliers hits on it too. That there is a certain amount of right place right time to success. Unless, you define success to include these parameters.