Real Unemployment in the US

According to the Wall Street Journal (2011):

• At least 13.9 million people are unemployed in the US today.
• More people are unemployed in the US today than there are people in any US state, with the exceptions of Florida, New York, Texas, and California.
• More people are unemployed in the US today than the combined populations of Wyoming, Vermont, North Dakota, Alaska, South Dakota, Delaware, Montana, Rhode Island, Hawaii, Maine, New Hampshire, Idaho, and the District of Columbia.
• More people are unemployed in the US today than there are people in either Greece or Portugal.

To the above, I would add the fact that more people are unemployed in the US today than at the peak of the Great Depression in 1933.

Real unemployment is measured in number of souls.

Source: Wessel, D (2011, August 19), The United States of Unemployment, Wall Street Journal Online.

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Unemployed Should Consider Emigration

Let's face it, as far as the Federal government is concerned, jobs for Main Street is no different than jobs for Eskimoes. Our nation has been turning its back on significant segments of the population since its founding, and the newest career casualties will come from those who are seeking to make a living on Main Street instead of off Wall Street or Washington. Up to 35 million people across the US will experience personal unemployment during 2010. Yet, neither the Democrats nor Republicans have any real intentions of creating jobs directly, because both parties know they have no means of doing so.

The unemployment situation in Amercia will no doubt persist through the end of the decade and perhaps longer. Those unemployed who have exhausted their 99 weeks of unemployment checks should probably begin to evaluate emigration to other countries with their families in search of work. The irony is that as more and more unemployed leave the US, the unemployment burden will subside and prosperity for the remaining population with jobs will be accelerated. In the mean time, it's time for the unemployed to face the facts and reality that the nation cannot help them, but does nevertheless wish them the best...

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Depressions Past and Present

Main Street USA in Economic Depression

Depressions Past and Present

My previous post entitled Unemployed Should Consider Emigration featured a photograph of today's signage warning the unemployed to keep out and move on. The similarities between the current Main Street depression and the Great Depression are striking...

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Unemployed Should Consider Emigration

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Human Suffering is Absolute

The expanding Main Street Depression in the US is now accelerating, and in absolute terms, the level of human suffering reached to date surpasses that of the Great Depression of the 1930's. According to the Bureau of Labor Statistics, more than 15.1 million Americans were unemployed as of July 2010. In contrast, 12.8 million Americans were unemployed at the peak of the Great Depression in 1933.

[Click image to expand]

I personally refuse to marginalize human suffering using ratio analysis, and I would urge our fiscal and monetary policy-makers to do the same. When historians study wars, they count casualties in absolute numbers of souls rather than as percentages of some given population. Likewise, economists must learn to study depressions using the absolute numbers of people effected. The Main Street Depression now imploding America is a horrific event in our nation's history that needs to be understood in absolute terms and numbers that make it real rather than abstract. Said another way, economists must learn that human suffering is absolute.

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Percentage Employed in US Continues Slide

Unemployed Should Consider Emigration

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Main Street USA in Economic Depression

US Employment to Population Ratio Declining

The latest employment data just released by the Bureau of Labor Statistics (BLS) shows that the US employment to population ratio suffered another decline in August 2010 to 58.8%, down from 59.3% for the same period last year, and from 58.9% for the previous month in July.

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached a historical peak of 64.4% on an annual basis in 2000.

Source: Bureau of Labor Statistics

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US Employment to Population Ratio Dismal

US Jobs Recovery to Take Years

Percentage Employed in US Continues Slide

Unemployed Should Consider Emigration

Depressions Past and Present

Main Street USA in Economic Depression

US Employment to Population Ratio Dismal

The Bureau of Labor and Statistics released new data today that shows the US employment to population ratio is continuing to plummet. As of July 2010, the employment to population ratio stood at 58.9%, down from 59.5% last month.

[Click to Expand]

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. Since 2000, employment in the US has declined from 64.4% to 58.9% as a percentage of the civilian noninstitutional population, its lowest level since 1982.

Source: Bureau of Labor Statistics

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Main Street USA in Economic Depression

US Jobs Recovery to Take Years

According to the The Hamilton Project at Brookings (2010, August 20), the US economy will have to create 11.6 million new jobs in order to return to pre-economic crisis employment levels. Moreover, the US economy is still shedding jobs, which means that the nation's unemployment wounds will fester into the indefinite future. Even after employment levels begin to increase in the US, Brookings reports that a full jobs recovery could take upwards of 5-12 years with the longer scenario being more likely.

The US economy will need more robust growth to close this gap. If future job creation reaches about 208,000 jobs per month, the average monthly job creation for the best year for job creation in the 2000’s, it will take almost 140 months (about 11.5 years) to reach pre-recession employment levels. In a more optimistic scenario with 321,000 jobs created per month, the average monthly job creation for the best year in the 1990’s, it will take 59 months (almost 5 years).

The chart below shows the amount of time necessary to close the employment gap for different rates of job creation based on experience data from the decade beginning in 2000.

[Click image to enlarge]

The US is now enduring the worst unemployment crisis since the Great Depression. Currently, more than 15.1 million Americans are unemployed, which compares to 12.8 million Americans at the peak of the Great Depression in 1933.

Source: Greenstone, M & Looney, A (2010, August 20), The Long Road Back to Full Employment: How the Great Recession Compares to Previous US Recessions, Brookings.

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Higher Education, Experience, and Skills

One of the questions I regularly pose to my economics students is whether a college education is a contributor to productivity. Intriguingly, what I get in response often parallels the views of Greg Ip of the Wall Street Journal (2008, “The Declining Value Of Your College Degree”), who argues “college-educated workers are more plentiful, more commoditized and more subject to the downsizings that used to be the purview of blue-collar workers only. What employers want from workers nowadays is more narrow, more abstract and less easily learned in college.” In essence, the value of a college degree is said to be “not what it was.”

Nonetheless, a college education remains an important predictor of productivity (and earnings) in the marketplace. Even Ip concedes that “the average American with a college diploma still earns about 75% more than a worker with a high-school diploma and is less likely to be unemployed.” Given these facts, how can it be that students are so vexed by the value proposition of their education?

I have previously written about our new economy, the need for good people in our society, as well as the importance of polyvalence in the workplace. I argue here that there exists today a crying need for people with versatile skills sets in what is a transforming global economy and that the university offers the best opportunity to acquire the knowledge required to succeed in this environment.

This leads to the next contention I often hear from students, that “experience counts more than education?” My response to this view is, “not really,” because what is paramount is neither experience nor education, but skills, and if one is complacent in acquiring new skills experientially, embedded knowledge eventually becomes obsolete. The good news is that experience often translates into new more refined skills. The bad news is that breadth and depth of knowledge are not assured through experiential learning. Hence, attention is required to ensure one’s career track includes a multiplicity of experiences in organization and management across a diversity of functions, and eventually industries. In my view, the university offers the most efficient place to acquire breadth and depth of knowledge, as opposed to the workplace, where resources and opportunities for the same are typically limited. Experience that does not result in additional skills has little value in the workplace.

Finally, there is the matter of college graduates who are anomalously incompetent. This happens, and when it does, these people are released for cause. Those who finish a college degree program while somehow avoiding skill acquisition, do so at their peril. Acquiring new skills is the responsibility of all workers who wish to enhance or expand their careers, but especially college graduates. To attend a college or university and not acquire new knowledge along the way is a bewildering and perplexing outcome that defies good judgment.

Concluding, a college education is the most reliable track to improving skills, productivity, and earnings. And while experience can certainly result in new skills, the typical worker will find acquiring the breadth and depth of knowledge necessary to enhance or expand a career through experience alone, challenging. A college degree is still the most profound symbol of embedded knowledge available in our society today.

US Employment to Population Ratio (Heat Chart) 1948-2012

The heat chart below depicts the unadjusted US Employment to Population ratio between January 1948 and July 2012 inclusive as reported by the Bureau of Labor Statistics (BLS). Relative intensity is reported using a spectral color range between green and red, with green reflecting a higher than normal monthly ratio for this multi-year analysis.

[click image to expand]

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached an historical peak of 64.4% on an annual basis in 2000.

*The BLS defines employment and population (civilian noninstitutional) as follows:

Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.... The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.

Source: Bureau of Labor Statistics

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US Employment to Population Ratio Unchanged

The latest employment data just released by the Bureau of Labor Statistics (BLS) shows that the US employment to population ratio stagnated at 58.6% between September and October 2010, and was down slightly from 58.8% for the same period last year. The US employment to population ratio has been trending downwards since 2000.

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached a historical peak of 64.4% on an annual basis in 2000.

Source: Bureau of Labor Statistics

US Employment to Population Ratio Shows Two Year Gain

According to the Bureau of Labor Statistics (BLS), the US employment to population ratio for June 2013 stood at 59.0%, up slightly from 58.9% the previous month, but also up from 58.9% the previous year and 58.5% two years ago. The US employment to population ratio has been trending downwards since 2000.

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached an historical peak of 64.4% on an annual basis in 2000.

*The BLS defines employment and population (civilian noninstitutional) as follows:

Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.... The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.

Source: Bureau of Labor Statistics

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A Dire Warning...

A dire warning for the world by Prof Paul Krugman:

Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.

Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.

We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.

And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending....

In the face of this grim picture, you might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy....

And who will pay the price for this triumph of orthodoxy? The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again.

I tend to share in Prof Krugman’s views and concerns for the future. I maintain that monetary contraction (as in austerity measures) risks deflation and depression. Conversely, monetary expansion (as in "printing money") risks inflation and recession. Given an opportunity to choose between these two risks, I would choose monetary expansion and the risk of inflation.

Source: Krugman, P (2010, June 27), The Third Depression, NY Times.

US Employment to Population Ratio Continues Plunge

The latest employment data from the Bureau of Labor Statistics (BLS) shows that the US employment to population ratio* fell to 57.6% for January 2011, down from 58.3% the previous month, and from 57.8% a year ago. The US employment to population ratio has been trending downwards since 2000.

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached a historical peak of 64.4% on an annual basis in 2000.

*The BLS defines employment and population (civilian noninstitutional) as follows:

Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.

The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.

Source: Bureau of Labor Statistics

Welcome to the Surreal...

Once the unemployed exhaust their 99-weeks of unemployment benefits, their future becomes even bleaker -- consider the options:

1. Live off charity from family and friends.
2. Find a lower paying job and live hand-to-mouth.
3. Steal a grocery cart, push it to a nearby city, and start a new life.

 

Welcome to the surreal -- I weep for those suffering in America…

Main Street USA in Economic Depression

I posit that Main Street USA is now in economic depression. My evidence thereof includes the record pace of regional and local bank failures, the current state of job losses and unemployment, the rising rate of personal bankruptcies, the record number of home foreclosures, and the deflation in home prices across the country. I weep for America...

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US Employment to Population Ratio 1948-2012

The heat chart below depicts the unadjusted US Employment to Population ratio between January 1948 and March 2012 inclusive as reported by the Bureau of Labor Statistics (BLS). Relative intensity is reported using a spectral color range between green and red, with green reflecting a higher than normal monthly ratio for this multi-year analysis.

[click image to expand]

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached an historical peak of 64.4% on an annual basis in 2000.

*The BLS defines employment and population (civilian noninstitutional) as follows:

Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.... The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.

Source: Bureau of Labor Statistics

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US Employment to Population Ratio Marks 2-Month Rise

According to the Bureau of Labor Statistics (BLS), the US employment to population ratio* for May 2012 rose to 58.7%, up from from 58.5% the previous month, and 58.5% a year ago. The May 2012 increase follows a similar increase in April. The US employment to population ratio has been trending downwards since 2000.

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached an historical peak of 64.4% on an annual basis in 2000.

*The BLS defines employment and population (civilian noninstitutional) as follows:

Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.... The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.

Source: Bureau of Labor Statistics

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US Employment to Population Ratio Improves

According to the Bureau of Labor Statistics (BLS), the US employment to population ratio* for April 2012 rose to 58.5%, up from from 58.3% the previous month, and 58.4% a year ago. The US employment to population ratio has been trending downwards since 2000.

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached an historical peak of 64.4% on an annual basis in 2000.

*The BLS defines employment and population (civilian noninstitutional) as follows:

Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.... The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.

Source: Bureau of Labor Statistics

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US Employment to Population Ratio Marks 3-Month Rise

According to the Bureau of Labor Statistics (BLS), the US employment to population ratio* for June 2012 rose to 58.9%, up from from 58.7% the previous month, and 58.5% a year ago. The June 2012 increase marks a three-month rise in the US employment to population ratio, which has otherwise been trending downwards since 2000.

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached an historical peak of 64.4% on an annual basis in 2000.

*The BLS defines employment and population (civilian noninstitutional) as follows:

Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.... The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.

Source: Bureau of Labor Statistics

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US Employment to Population Ratio Edges Upwards

According to the Bureau of Labor Statistics (BLS), the US employment to population ratio* for February 2013 stood at 58.1%, up from 57.9% the previous month, and up from 58.0% the previous year. The US employment to population ratio has been trending downwards since 2000.

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached an historical peak of 64.4% on an annual basis in 2000.

*The BLS defines employment and population (civilian noninstitutional) as follows:

Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.... The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.

Source: Bureau of Labor Statistics

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