IMHO, the official payroll jobs data may well be seriously under-counting real job creation. There are far more independent contractors in the economy, whether legal or illegal ones (in tax law terms, not talking about drugs); on top of that, cheap imported manufactured goods and cheap imported labor (immigrants) may well be enabling more family to afford having one parent spend more time with the children. That shows up in the decoupling between official job creation numbers and official jobless numbers, given the population increase.
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I think the decoupling you note comes from legitimate people falling off the charts, either not working at all or now working "off the books." Less people file new claims when less people are eligible to file those claims because they haven't found gainful employment with honest employers. So officially unemployment data always indicates a strong job market. It's driven not by an expansion of the job opportunities but by a dearth of jobs that pay a decent wage. The closer you live, trade and do business with immigrant communities the more you can understand the mechanics of this phenomena. Primarily this economic movement is about the lowest tier of worker and that's the illegal immigrant. It's very true that both the employer and the consumer enjoy higher living standards off the backs of the underground workers. Where you go dramatically wrong though, in a quite calculated way is describing the undeground economy's workers as "independant contractors." The guy pushing a vending cart through East Los Angeles or selling oranges by the freeway offramp is no more of an independant contractor than a 12-year old girl in a factory in Indonesia. The guys picking strawberries, lettuce and avacados are treated by the IRS and the labor department as contractors for one basic reason. That's so both EMPLOYERS and CONSUMERS can evade the responsibility of treating them the way our labor laws were constructed to treat American workers with the protections won by unions over many generations. We're beating back high wages and working conditions with inflation and payroll tax evasion and calling it productivity. Then again, they're not REALLY Americans anyway, are they?
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