Nonprofit update

If it feels like the recovery that started over 3 years ago isn’t really going anywhere, there’s a reason you might be thinking that.

This is a graph of the percentage of the population that is employed. The exact description is civilian employment as a percent of the population. That means what proportion of the population is employed.

Check it out:

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The recession officially ended in June 2009, which means we’ve seen just over 3 years of recovery. GDP has finally passed the peak from before the recession. Yet it doesn’t quite feel like recovery, at least here in California. Saw another graph that shows why it feels so odd.

In a graph called The Zero Recovery, Tim Kane calculates the number of people who are employed as a percentage of the population. For the last six recessions he tracks the change in the employment to population ratio from the start of the recession. For the previous five recessions the drop wasn’t as severe as this one and there had been substantial recovery by the 4½ year point after the start of the recession.

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Why doesn’t it feel like the real GDP has recovered from the recession? 

Because employment is still in the tank.

Mark J. Perry printed an update to his graph of the GDP and employment numbers at Chart of the Day: Structural Shift in the U.S. Economy.  I mentioned this graph earlier.

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I have a post on my other blog, Outrun Change, that discusses the reshoring trend.  More companies are bringing their manufacturing back to the U.S. because of changing economics of offshoring.   One challenge in reshoring is improving the skills of American workers so they can use the latest technology.

Reshoring – huge opportunity if we want it and a skill-set challenge we can overcome

Mark J. Perry compares how long it takes to buy an electric kitchen oven in 1966 versus what you could buy today for the same number of hours of labor.  See his visual illustration at Living the Good Life:  The Good Old Days Are Now.

He translates the cost of an oven in 1966 into the number of hours labor needed to buy it at the average hourly wage then. He figures out the average hourly wage today and figures out what home appliances could be purchased for the same number of hours work.  The cost reductions are amazing.

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A:  Doing more with less.  In other words, increased productivity.

On one hand, the unemployment rate continues very high, which means there are lots fewer people working.  On the other hand, GDP has just passed the peak from before the recession, which means the size or value of the economy has recovered.

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GDP numbers announced last week show 3rd quarter growth at 2.5% rate. Wow.

That is not exactly the kind of growth you would expect if the economy were starting to falter in advance of slipping into a double dip recession.  Maybe we are not going to slip into a double dip. I discussed this idea earlier.

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After reading some comments in Russell Roberts’ book, The Price of Everything, I realized that I have a lot of servants hard at work in my home.  I have a huge number of servants working in my business.

See a partial list of servants who are hard at work at my other blog, Outrun Change:  I Have Dozens of Servants in My Home and Business.

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