Broader Measure of U.S. Unemployment Stands at 17.5%
Earl Evleth
Capitalism in keeping a high fraction of the population
in a precarious economic state.
*****
Broader Measure of U.S. Unemployment Stands at 17.5%
By DAVID LEONHARDT
For all the pain caused by the Great Recession, the job market still was not
in as bad shape as it had been during the depths of the early 1980s
recession � until now.
With the release of the jobs report on Friday, the broadest measure of
unemployment and underemployment tracked by the Labor Department has reached
its highest level in decades. If statistics went back so far, the measure
would almost certainly be at its highest level since the Great Depression.
In all, more than one out of every six workers � 17.5 percent � were
unemployed or underemployed in October. The previous recorded high was 17.1
percent, in December 1982.
This includes the officially unemployed, who have looked for work in the
last four weeks. It also includes discouraged workers, who have looked in
the past year, as well as millions of part-time workers who want to be
working full time.
The official jobless rate � 10.2 percent in October, up from 9.8 percent in
September � remains lower than the early 1980s peak of 10.8 percent.
The broader rate is highest today, sometimes 20 percent, in states that had
big housing bubbles, like California and Arizona, or that have large
manufacturing sectors, like Michigan, Ohio, Oregon, Rhode Island and South
Carolina.
The new benchmark is a sign of just how much damage financial crises tend to
inflict. A recent book by Carmen M. Reinhart and Kenneth S. Rogoff, two
economists, found that over the last century the typical crisis had caused
the jobless rate in the country where it occurred to rise for almost five
years. By that standard, the jobless rate here would continue rising for two
more years, through the end of 2011.
Most economists predict that the rate will in fact begin to fall next year,
largely because of the federal government�s aggressive response � fiscal
stimulus, interest-rate cuts and a variety of creative steps by the Federal
Reserve and Treasury Department. Friday�s report showed that monthly job
losses continued to slow recently, though the improvement has been gradual.
At the White House Friday, President Obama signed a bill to extend
unemployment benefits and a tax credit for home buyers, and said that he was
looking at ways to enact more stimulus. On Wednesday, the Fed announced that
it expected to leave its benchmark interest at zero for �an extended
period.�
Nearly 16 million people are now unemployed and more than seven million jobs
have been lost since late 2007.
Officially, the Labor Department�s broad measure of unemployment goes back
only to 1994. But early this year, with the help of economists at the
department, The New York Times created a version that estimates it going
back to 1970. If such a measure were available for the Depression, it
probably would have exceeded 30 percent.
Compared with the early 1980s, a smaller share of workers today are
officially unemployed and a smaller share are considered discouraged
workers.
But there are many more people who would like to be working full time and
have been able to find only part-time work, according to the government�s
monthly survey of workers. The rapid increase in their ranks and in the
officially unemployed has caused the rate to rise much faster in this
recession than in the early 1980s. Two years ago, it was only 8.2 percent.
One of the more striking aspects of the Great Recession is that most of its
impact has fallen on a relatively narrow group of workers. This is evident
primarily in two ways.
First, the number of people who have experienced any unemployment is
surprisingly low, given the severity of the recession. The pace of layoffs
has increased, but the peak layoff rate this year was the same as it was
during the 2001 recession, which was a fairly mild downturn. The main reason
that the unemployment rate has soared is the hiring rate has plummeted.
So fewer workers than might be expected have lost their jobs. But those
without work are paying a steep price, because finding a new job is
extremely difficult.
Second, wages have continued to rise for most people who still have jobs.
The average hourly wage for rank-and-file workers, who make up about
four-fifths of the work force, actually accelerated in October, according to
the new report.
Even though some companies have cut the pay of workers, the average hourly
wage has still risen 1.5 to 2.5 percent over the last year, depending on
which government survey is examined. Average weekly pay has risen less �
zero to 1 percent � because hours have been cut. But average prices have
fallen. Altogether, the typical worker has received a 1 to 2 percent
inflation-adjusted raise over the last year.
In the other two severe recessions in recent decades, workers with jobs
fared considerably worse. At the same point in the mid-1970s downturn, real
weekly pay had fallen 7 percent; in the early 1980s recession, it had fallen
4 percent.
It is a strange combination: workers who still have a job are doing better
than in other deep recessions, but the unemployment and underemployment have
risen to their highest level since the Depression.
Jigsaw1695
Obama is really doing a great job of destroying this country.
Jigsaw
Earl Evleth
8885688f-9f3d-4ee9...@m26g2000yqb.googlegroups.com,
"Jigsaw1695" <Jigsa...@aol.com> wrote:
>
> Obama is really doing a great job of destroying this country.
You missed the point that Capitalism is to blame, neither
political party can control this monster.
And you yourself found employment in the public area.
You have less experience in the private sector than I do.
And you are up through the night posting, you can't sleep.
So something is on your conscience, the guilt of supporting
an economic system which exploits your fellow man.
Your shame is overwhelming you .
Mike
>
> "Jigsaw1695" <Jigsaw1...@aol.com> wrote:
>
> > Obama is really doing a great job of destroying this country.
>
> You missed the point that Capitalism is to blame, neither
> political party can control this monster.
Capitalism is the only way out of this mess. I mean, does the
Government actually create anything of value that will sustain the
economy? Aside from printing money out of thin air and moving it
around the playing field?
Earl Evleth
2c1afb43-0649-4670...@g23g2000yqh.googlegroups.com, "Mike"
<foeha...@yahoo.com> wrote:
> I mean, does the
> Government actually create anything of value that will sustain the
> economy?
In this case the stimulus is to stimulate economic activity.
In economics 101, you would have learned that for
every dollar injected into the economy will create
an multiplier effect.
read
Runge17
"Jigsaw1695" <Jigsa...@aol.com> a écrit dans le message de
news:8885688f-9f3d-4ee9...@m26g2000yqb.googlegroups.com...
hls
"Earl Evleth" <evl...@wanadoo.fr> wrote in message news:C71C9E83.187989%
>
> In this case the stimulus is to stimulate economic activity.
> In economics 101, you would have learned that for
> every dollar injected into the economy will create
> an multiplier effect.
Injected? Maybe. Applied as an enema is less likely to show the desired
results.
John Rennie
Indeed. Many of those dollars and pounds have been
'loaned' to the banks. Have they been able to inject
credit to the rest of the economy? No. Those dollars
are needed to reduce their leverage as it's called
these days or to put it simply to balance their
books against the huge amounts of toxic debts that
are still there even if their balance sheets don't
record them. So much for transparency.