Tag: unemployment

Just as it does every month one week after it announces its estimates of unemployment and related statistics, last Friday the Bureau of Labor Statistics reported its evaluation of the employment situation in the individual states and regions. As has been the case for much of the past four years, there is good news and bad in the numbers.

As Niraj Choksi at the Washington Post points out, 16 states now have unemployment rates lower than they have been in four years:

  In all but two, October unemployment was at its lowest level since late 2008 or the early months of 2009. In Minnesota, unemployment hasn’t been this low since January 2008. And it’s been more than a decade since North Dakota saw an unemployment rate of 2.7 percent as it did in October. (The last time was August 2001.) In all, unemployment dropped from September to last month in 39 states. And only three states-Arkansas, Oklahoma and Ohio-saw nearly two-year highs.

  But the situation isn’t as rosy as those statistics suggest. The jobs recovery still pales in comparison to the recoveries following the 1981, 1990 and 2001 recessions, according to data from Doug Hall, director of the Economic Analysis and Research Network at the Economic Policy Institute, a think tank focused on the needs of low- and middle-income workers.

In fact, 70 months after the Great Recession began in December 2007, in only nine states is the official unemployment rate now below the five percent pre-recession average. And that only tells part of the story.

Just how slow the growth in jobs has been nationwide is reflected in the fact that in only one state-North Dakota-has job growth outpaced population growth. That is a factor of the oil production boom in the state’s Bakken formation. For every other state, however- as we’ve reported for years-the drop in the unemployment rate is mostly due to Americans leaving the work force. As of October, the labor-force participation rate was 62.8 percent, its lowest level since March 1978.  

A portion of that is demographic. The first wave of post-World War II baby boomers is retiring, although the percentage of people over 65 who have continued working-out of desire or necessity-has grown significantly since 2008. EPI estimates that about one-third of drop in the civilian work force is a consequence of such retirements. Meanwhile, labor-force participation among adults 16-24 is continuing a long time downward trend and is now nearly nine percent below its 1987 peak of 79.1 percent. But the key statistic, the most worrisome one, is that job participation of people in their prime working years-25-54 years old-remains down from its 2007 peak of 80.3 percent at 75.8 percent.

Despite the millions of private-sector jobs created since the recession was officially declared over in the summer of 2009, there continues to be a substantial jobs deficit and that has distorted the unemployment rate. Excluding retirees, EPI calculates that if those who have dropped out of the labor force or never entered it because of the weak economy had chosen to stay in, the official unemployment rate right now would be 10.8 percent, not 7.3 percent.

What these numbers point to, have pointed to for years, is the need for what many economists and activists have long sought: a multi-faceted full employment program.

Four years ago next month, President Obama held a jobs summit that was billed as a think session to kick-start employment growth. Unfortunately, partly because of the summit’s agenda, which failed to focus on the big picture, and partly because even the modest proposals that emerged from it were hamstrung by naysayers in Congress, the improvements that could have been made were not. Which means the economic pain of millions of Americans was not alleviated even though the policy tools were available to do so.

And they remain so. Heading the pack are the setting forth an industrial policy like those every other developed nation and some emerging economies already have and investing in rebuilding and innovating America’s crumbling infrastructure. But few of our elected representatives have come close to making such policies a priority or even mentioning them at all. What will it take to get them to show leadership in this realm?

The push for an increase in the minimum wage has grown with the recent passing of an increase in New Jersey from $7.25 to 8.25 with annual increases based in inflation. The amendment to the state’s constitution passed with 61% of the vote over newly reelected Governor Chris Christie’s objection. A Gallup poll conducted Nov. 5-6 shows that an even greater percentage of Americans would vote for an even higher minimum wage. According to a White House official, the Obama administration supports the bill introduced by Sen. Tom Harkin (D-IA) and and Rep. George Miller (D-CA) to raise the federal minimum wage from $7.25 an hour to $10.10 an hour in increments of 95 cents.

The same Gallup poll that showed 76% of Americans support for the increase, also showed support across party lines with 58% of self-identified Republicans supporting it. So what’s the problem? The issue is congress’ feral children, the Tea Party coalition in both houses who have vowed to block it and would completely abolish the minimum wage if they had their way. These are the same extremists who would repeal child labor laws, as well.

Despite the objections of the radical minority, the wave for an increase of the minimum wage is swelling as RJ Eskow observes:

“There’s something happening here/what it is ain’t exactly clear …”

When Steve Stills wrote the dystopian anthem “For What It’s Worth” in 1966, it resonated with listeners who understood that great if half-hidden transformations were underway. There’s been a turn toward the dystopian in recent economic and social trends as well: Wall Street greed and criminality. The growing power of wealth over the political process. The rise of the Tea Party. The collapsing middle class. Growing inequalities of wealth. Lost social mobility.

But there were encouraging signs in 1966, as well as troubling ones, and that’s equally true today. Take the movement for a minimum wage. Voters in the state of New Jersey and the city of Tacoma, Washington voted to increase the minimum wage in last week’s election. These victories follow a series of polls which confirm that the general public holds strongly progressive views on issues which range from taxation to Medicare and Social Security.

Something is happening here.

Noam Scheiber, senior editor for The New Republic, spoke with Rachel Maddow about why economic populism is a wise strategy for Democrats.

Don’t let the enthusiasm of the stock market or some financial reports that the job market and unemployment are improving or that the economy is growing faster. It’s not. None of today’s economics news is good. As a matter of facr, it’s rather depressing.

Better Than Expected Second Quarter Growth? Is the Post Kidding

by Dean Baker, Center for Economic Policy and Research

I somehow missed this Post article touting the 1.7 percent growth rate reported for the second quarter as better than expected. First it is incredible that the piece would leave readers with the impression that this strong growth, [..]

The economy’s rate of potential growth is generally estimated as being between 2.2-2.5 percent. This means that rather than making up some of the 6 percentage point gap between potential output and actual output, the gap increased in the second quarter. [..]

The GDP data released on Wednesday also included revisions to prior quarters’ data. The revision to the prior three quarters’ growth rate (Table 1A) were sharply downward lowering growth over this period by 1.3 percentage points or an average of 0.4 percent per quarter. With the revised data, growth over the last year has been just 1.4 percent. This is supposed to be a justification for withdrawing stimulus?

July Jobs Report Masks Real Problems In U.S. Labor Market

by Mark Gongloff, The Huffington Post

Fed Chairman Ben Bernanke has said the official U.S. unemployment rate could mask the real problems in the labor market. He got proof of that in July’s jobs report.

The unemployment rate dipped to 7.4 percent in July, the lowest rate since December 2008, the Bureau of Labor Statistics reported on Friday, down from 7.6 percent in June.

But payroll growth was anemic, wages dropped and more discouraged workers headed for the sidelines, continuing the slowest job-market recovery since World War II. [..]

Employers added just 162,000 jobs to non-farm payrolls in July, the Bureau of Labor Statistics reported on Friday, down from 188,000 in June, which was revised lower from an initial reading of 195,000. Together, revisions to May and June figures subtracted 26,000 jobs from payrolls, another sign of weakness. [..]

The unemployment rate, meanwhile, fell in part because 37,000 workers dropped out of the labor force, meaning they gave up looking for work. The labor-force participation rate, which measures the percentage of working-age Americans who are working or looking for work, fell to 63.4 percent in July, near a 35-year low.

The civilian employment-population ratio, which measures how many working-age Americans actually have jobs, was flat at 58.7 percent, near the lowest in 30 years and down from more than 63 percent before the recession. [..]

The majority of the jobs that have been created during the recovery have been low-paying jobs, worsening income inequality and keeping the economy sluggish.

The job market is a long way from recovery and with the slow rate of job creation there could be a deficit of 4.6 million jobs in May 2016. Not only that but the quality of the jobs that have been created are not conducive to economic stimulus:

More than half of the jobs added last month were either in retail trade or “food services and drinking places.” People employed in those sectors tend to have much shorter work weeks and much lower hourly wages than everyone else.

Even worse, a recent paper (pdf) by Canadian researchers suggests that many of the people taking these jobs are relatively over-educated. The authors argue that, since 2000, globalization and technological advancement have reduced the demand for “high-skilled” workers. Desperate for employment, these workers ended up pushing the “lower-skilled” out of the job market entirely. This may help explain why the share of people aged 25 to 54 counted as being in the labor force has plunged by 3.5 percentage points since 2000.

The quality of jobs being created is probably connected to the depressing performance of incomes and the decline in the work week. Hourly pay has grown by just 1.9 percent over the past 12 months — basically unchanged since the end of 2009. The data from the BEA tell a similar story. Real after-tax incomes fell in June. Americans still have less purchasing power than they did in November 2012. Our standard of living has barely improved over the past year.

None of this is good news. The other question is what will the Federal Reserve do? Chairmen Benjamin Bernanke has promised to keep its target interest rate near zero at least until unemployment is below 6.5 percent.

The Fed’s chairman, Ben S. Bernanke, said in June that the Fed wanted to end its current round of bond buying around the time the rate hits 7 percent, which he predicted would happen by the middle of next year. That prediction is looking conservative, suggesting the Fed could start tapering when its policy-making committee meets in September.

But Fed officials have cautioned that they want unemployment to fall because people are finding jobs, not because they’re leaving the labor force. And by broader measures, the job market remains weak. Growth is sluggish – just a 1.4 percent annualized pace in the first half of the year – and the share of American adults with jobs has actually fallen since the recession ended.

So the decision is unlikely to be clear-cut, particularly because Fed officials are divided about the benefits and the costs of the bond-buying campaign.

And the decision is not going to be made this week. Officials will see six more weeks of economic data, including one more jobs report.

I’m not all that well versed in economics but it seems fairly clear that there needs to be a huge influx of investment into the economy. Since it doesn’t appear to be coming from the private sector, which is more concerned about profits than quality job creation, then it need to start coming from the government. The likelihood of that happening any time soon is still rather grim.

In a recent survey from the Associated Press, it was revealed the 80% of Americans will face near poverty and unemployment at some point in their lives.

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend. [..]

As nonwhites approach a numerical majority in the U.S., one question is how public programs to lift the disadvantaged should be best focused – on the affirmative action that historically has tried to eliminate the racial barriers seen as the major impediment to economic equality, or simply on improving socioeconomic status for all, regardless of race.

Hardship is particularly growing among whites, based on several measures. Pessimism among that racial group about their families’ economic futures has climbed to the highest point since at least 1987. In the most recent AP-GfK poll, 63 percent of whites called the economy “poor.”

The host of MSNBC’s Now, Alex Wagner discussed the growing jobs, the middle class and bridging the gap in income inequality with Maya Wiley, Founder and President, Center for Social Inclusion; Jacob Weisberg, Chairman, Slate; and Jennifer Senior, Contributing Editor, NY Magazine.

At FDL News Desk, DSWright noted President Barack Obama’s admission in a New York Times interview that “he was worried that years of widening income inequality and the lingering effects of the financial crisis had frayed the country’s social fabric and undermined Americans’ belief in opportunity.” He sums up that the president is finally facing the facts:

Hope has its limits, eventually people want the eloquence of rhetoric to be matched by the eloquence of action.

But there is little incentive to help the lower classes of American society. The Bush and Obama Administrations bent over backwards to bail out the rich during the financial crisis the rich caused and they’ve done a heck of a job. According to the Federal Reserve, while most Americans saw their wealth go down by 40% during the Wall Street crash and resulting Great Recession, the rich actually got richer.

So now the 99% are getting wise to the fact that the game has been rigged against them and that continuing on this course will only lead to poverty and stagnation – a realization that is scaring elites. People may be done hoping for change, they finally be understanding that power concedes nothing without demand.

In Part 5 of a series of interviews by Paul Jay of Real News Network, journalist and author, Chris Hedges discusses how the Democratic Party and the so-called Liberal Elite betrayed the people they said they would protect. He talks about how that changed with Bill Clinton and has gotten worse with Barack Obama.

“Barack Obama can get up and say all the right things, but in the end, you know, it’s Wall Street and the corporations that are pulling the strings on the puppets,” he says.  [..]

“When you have the figures like Obama who continue to speak in that traditional language of liberalism and yet cannot respond to chronic unemployment, underemployment, you know, foreclosures, bank repossessions, and everything else, and in fact are running a system where the assaults against the underclass are only getting worse, then what happens is there becomes a deep disdain for not only liberal ideology but traditional liberal institutions-you saw the same thing in Weimar-so that when there is an uprising, oftentimes people want nothing to do with not only liberal elites, but the supposed liberal values, quote unquote, that these elites were purportedly espousing,” Hedges says.

“And that is a very real danger,” he continues, “because when you have figures like Obama that present themselves as traditional liberals and yet are unable to be effective in terms of dealing with the suffering and the misery of the underclass, that-and this is what happened in Yugoslavia-that when things exploded, you vomited up these very frightening figures-Radovan Karadzic, Slobodan Milosevic, Franjo Tudman-in the same way that the breakdown in Weimar vomited up the Nazi Party. And that’s what frightens me, because we don’t have the movements, the populist movements on the left, and because we live in a system of political paralysis.”

Where the hell is the outrage? That is the question that senior fellow at Campaign for America’s Future and former executive at AIG, Richard (RJ) Eskow asks about the current state of the US econoomy:

From the first breath of life to the last, our lives are being stolen out from under us. From infant care and early education to Social Security and Medicare, the dominant economic ideology is demanding more lifelong sacrifices from the vulnerable to appease the gods of wealth.

Middle-class wages are stagnant. Unemployment is stalled at record levels. College education is leading to debt servitude and job insecurity. Millions of unemployed Americans have essentially been abandoned by their government.  Poverty is soaring. Bankers break the law with impunity, are bailed out, and go on breaking the law, richer than they were before.

And yet, bizarrely, the only Americans who seem to be seething with anger are the beneficiaries of this economic injustice — the wealthiest and most privileged among us.  But those who are suffering seem strangely passive.

As long as they stay that way, there will be no movement to repair these injustices. And the more these injustices are allowed to persist, the harder it will be to end them.

Where the hell is the outrage? And how can we start some?

He notes that Paul Krugman, too, is feeling grim about the possibility that high unemployment has become acceptable and that the “political and policy elite” see no need to find a solution, one that is staring them right in the face:

First of all, I think many of us used to believe that sustained high unemployment would lead to substantial, perhaps accelerating deflation – and that this would push policymakers into doing something forceful. It’s now clear, however, that the relationship between inflation and unemployment flattens out at low inflation rates. We can probably have high unemployment and stable prices in Europe and America for a very long time – and all the wise heads will insist that it’s all structural, and nothing can be done until the public accepts drastic cuts in the safety net.

But won’t there be an ever-growing demand from the public for action? Actually, that’s not at all clear. While there is growing “austerity fatigue” in Europe, and this might provoke a crisis, the overwhelming result from U.S. political studies is that the level of unemployment matters hardly at all for elections; all that matters is the rate of change in the months leading up to the election. In other words, high unemployment could become accepted as the new normal, politically as well as in economic analysis.

Eskow points to the factors why Americans have learned to live in a “quiet state of desperation” and offers a Action Plan for the solution:

1. Expand our avenues of political expression: First, we need to remind ourselves that electoral politics is not the only productive avenue for political activism -that we need strong and independent voices and movements.

2. Refuse to let politicians use social issues to exploit us economically: We also need to reject the exploitation and manipulation of progressive values by corporatist politicians who use social issues like gay marriage and reproductive rights exactly the way Republicans do — to manipulate their own base into ignoring their own economic interests. Politicians who don’t take a stand on economic issues should be rejected, up and down the ticket.

3. Explain what is changing — and contrast what is with what should be:We need to do a better job of explaining what’s happening, so that we can make people aware of the harmful changes taking place all around them.And it’s not just about “change”: It’s also about contrast – between economic conditions as they are, and conditions as they should be and could be, if we can find the political will.

4. Expand the vocabulary of the possible: The “learned helplessness” outlook says “the rich and powerful always win; we don’t stand a chance.” History tells us otherwise. From the American Revolution to the breaking up of the railroads, from Teddy Roosevelt’s trust-busting to FDR’s New Deal, from Ike’s Social Security and labor union expansion to LBJ’s Great Society victories, we need to remind ourselves of what we’ve accomplished under similar conditions.

5. Tell stories: And we need to tell stories — human stories.

Some of those human stories started 22 years ago when Bill Moyers began documenting the stories of two families ordinary families in Milwaukee, Wisconsin who had lost good paying factory jobs and how they have managed over the years. In a 90 minute special on PBS’ Frontline, Moyers revisits the the Stanleys and Neumanns anf their struggles to finding other jobs, getting retrained yet still finding themselves on a “downward slope, working harder and longer for less pay and fewer benefits, facing devastating challenges and difficult choices.”

Over at AMERICAblog, our friend Gaius Publius has posted his interview with RJ Eskow that was taped at this year’s Netroots NAtion in San Jose, CA. It’s an excellent conversation.

The June employment report from the Bureau of Labor Statistics reported that the US added 195,000 jobs but the unemployment rate remained at 7.6%. This better than expected number, along with upward revisions of the April and May jobs numbers led to some speculation by Wall Street analysts to speculate that the Federal Reserve would start to back away from part of its stimulus program.

But hold your horses on the optimism. The reality is that this an anaemic recovery with flat growth and low productivity, as Dean Baker points out in his article:

First, it is important to remember the size of the hole the economy is in. We are down roughly 8.5 million jobs from our trend growth path. We also need close to 100,000 jobs a month to keep pace with the underlying growth rate of the labor market. This means that even with the relatively good growth of the last few months, we were only closing the gap at the rate of 96,000 a month. At this pace, it will take up more than seven years to fill the jobs gap.

It is easy to miss the size of the jobs gap since the current 7.6% unemployment rate doesn’t seem that high. However, the main reason that the unemployment rate has fallen from its peak of 10% in the fall of 2009 is that millions of people have dropped out of the labor force and stopped looking for jobs. These people are no longer counted as being unemployed. [..]

This gets to the type of jobs that have been created in the upturn. Over the last three months, three sectors – restaurants, retail trade, and temporary help – have accounted for more than half of the jobs created. These sectors offer the lowest-paying jobs, with few benefits and little job security. [..]

Workers take these jobs when there are no better alternatives available.

There is also the impact of sequestration that has yet to have its full impact on the economy and Congress seems content to leave in place with one side blaming the other. There is little chance that a budget or any significant legislation will get through this Congress:

Do you see the problem here? The president’s adversaries lament his lack of warmth and his remote intellectualism; his supporters see the same quality as an analytical and cool-headed virtue. This could be a cute “the president is from Mars, Republicans are from Venus” thing – if it weren’t for the fact that several important issues this summer, including the budget and food-stamp funding, hinge on whether these two crazy kids will ever figure it out. At the base of their problem is an absence of mutual respect and a lack of legislative sportsmanship.

Until the players figure this out – and there’s no sign they ever will – we’re going to be stuck in an endless loop of revisiting these unhelpful battles that drag on for years. This summer is the last chance for any legislation to get through. Starting in the fall, the campaigns for the 2014 midterm elections are going to start, and the window for serious legislative action will have closed – at which point you can kiss any progress on major bills goodbye. [..]

the sequestration cuts are not a question of “one side” winning or losing. They’re a question of the nation, the economy and the American people losing. They’re a question of poor people losing: Meals on Wheels will suffer, as will those living in federal housing.

No one, so far, is winning at all. Even more concerning, it’s not abundantly clear that anyone in Washington knows how to play the game anymore.

Voters need to start making greater demands on their congress critters and start threatening to throw them out for ones who will represent the people and not Wall Street and their own self-interests.

That’s right. Remember my last diary where I did prove without a shadow of a doubt that the austerity that this administration has put forth right now, and in effect right now, does not make this President a Keynesian? I provided a lot of reference material on Keynes proving each point I made, because that’s what we encourage on this site. That’s called backing up one’s assertions with facts and data. I did.

The same facts were put forth by economist Jared Bernstein who used to work for VP Joe Biden and is now a senior fellow at the Center for Budget and Policy Priorities. As a Post Keynesian MMT proponent, I don’t have the same outlook on economics, to say the least, as the CBPP on a number of things, especially on public debt and deficits. However, there’s no reason to doubt the data in this paper from Richard Kogan; it is clearly well sourced from the CBO and the President’s own Office of Management and Budget analyzing the Budget Control Act of 2011 signed into law by the President.

CONGRESS HAS CUT DISCRETIONARY FUNDING BY $1.5 TRILLION OVER TEN YEARS: First Stage of Deficit Reduction Is In Law

This proves without a shadow of a doubt that anyone who shows up in every thread and types that “cuts only happen in the future” must not be very intellectually curious. After all, as most can see with thier own eyes, the 70% of recommended cuts from Bowles Simpson going into effect this year, the year 2013, occurring until the start of fiscal year 2023 actually happen every year accumulating up to 1.5 trillion in real cuts. These are the indisputable facts.

President Obama has done a brilliant job for the 1%.

 

Under Mr. Obama’s leadership, after a tremendous, near utter collapse of the economy brought about by a corrupt finance sector, trillions of public dollars have been poured into the coffers of bankers. One recent study showed that the big banks got an annual government subsidy of $83 billion dollars a year – equal to the amount of their alleged profits.  Hold onto your hats, another recent study, by Chris Whalen and endorsed by noted economist Nouriel Roubini demonstrates that the subsidy is much larger, at least $780 billion dollars a year:

$360 billion in Federal Reserve subsidies, by creating an artificial “spread” in interest rates

$120 billion in federal deposit insurance (through the FDIC, backed by the Treasury)

At least $100 billion in government-guaranteed loans, especially mortgages

At least $100 billion in monopolistic advantages in the secondary market for home mortgages

More than $100 billion in fees in the over-the-counter (OTC) derivative market. (The lack of capital required in these transactions and other special dispensations from the Fed provide the zombie banks with unlimited leverage and almost no public scrutiny.)

The first study indicates that the too big to fail banks are barely breaking even and they are getting fat and demanding on our largesse; the second study indicates that they are indeed not profitable at all.  They are nothing but corporate welfare queens with a large budget to purchase politicians.

Up Date 14:26 EDT: The House of Representatives has adjourned until Monday December 31

New Year’s Eve is four days away but you may want to start drinking now. True to form Congress is right on track to do nothing about anything, except maybe to try to repeal the Affordable Care Act. The House is still in recess, under what Senate Majority Leader Harry Reid (D-NV) called the “dictatorship” of House Speaker John Boehner (R-OH), with some major issues still in need of resolution. There is the mythical Cliff with its draconian spending cuts to everything except Medicare, Medicaid, and Social Security; the expiration of the Bush/Obama tax cuts and the end of unemployment benefits for two million long term unemployed. There is the farm bill that has lingered undebated in the House which will most likely result in steep spikes in the cost of dairy products and to throw another log on the fire, Treasury Secretary notified congress yesterday that the debt limit will be reached on December 31.

This past Sunday on MSNBC’s Up with Chris Hayes, host Chris Hayes discussed how the president and congress almost came up with a deal to avert a non-crisis and how Speaker Boehner’s “Plan B” failed. Chris’ guests were former Governor James Florio (D-NJ); Heidi Moore, Finance and Economics Editor for The Guardian newspaper; Dean Baker, Co-Director of the Center for Economic and Policy Research; and Dylan Glenn, Senior Vice President of Guggenheim Advisors and former Special Assistant to Pres. George W. Bush. Keep in mind that Social Security has nothing to do with the deficit. It is on the table because President Obama put it there.

Warning: Dylan Glenn and the lack of push back from Hayes and the others on Social Security may have you throwing things at your monitor, so secure any damaging objects before watching.