On Jobs: February 2012

As the unemployment rate continues to slowly lower, I offer the following thoughts.

  • In January 2008, 7.6 million were unemployed (4.9%)
  • In the 7 months prior to Sept 2008, unemployment grow by 1.259 million
  • From September 2008 through March 2009, unemployment grow by 5.779 million
  • In the 9 months following March 2009, unemployment grew by 1.495 million

If 8.533 million Americans lost their job in the economic collapse of 2008-2009 – and improving the job market by 100,000 per month will take approximately 86 months – that is over 7 years to return to the unemployment rate of January 2008 (4.9%), of course with assumptions.

However, the 86 months does not account for colleges continuing to graduate people ready to enter the job market, nor military personal returning to the civilian workforce – oh, surely we haven’t forgotten that the unemployment rate in those two groups is higher than the average.

If job growth continues to improves, the discouraged worker (unemployed, but not looking) will seek work, thus unemployment could rise. See this graph from Bruce.

Of course given that unemployed has an official definition and that other categories exist, this provides more statistics so any partisan can find numbers to justify their point and to say what other partisans want to hear.

Republicans continually complain about the slow jobs numbers, but they continue never to address the following:

  • Being for smaller government, how many federal workers do you plan to layoff?
  • Being against the auto bailout, how many additional workers would have lost their jobs in addition to the 8.533 million?

To the Democrats and the White House I ask the following:

  • Because the sensible already know, when are you going to stop emphasizing the inherited situation?
  • When are you going to admit that you spent too much political capital on the health care debate at a time when the economy was at the top of the list?

I could go on, but I have already set forth other tough economic questions in these posts: March 2011 and September 2011.

Although none of us are perfect and each of us use a preference filter of some sort, the American public needs to remove their head from their ideological anal orifice, shed the partisan filters, stop listening to political horseshit, and learn to understand the situation – thus checking out what the accuracy and inaccuracies from the talking heads. Then, and only then, the public can have meaningful discussions to not only agree and disagree, but to also determine the course.

Ah – at least now I feel better, but I have little hope for this.

47 thoughts on “On Jobs: February 2012

  1. Hi,
    We are also seeing job loses here in OZ, not good, and unfortunately is only going to get worse, more talk of job loses in todays paper. :(

    I really hope things will soon get better for everyone, the world is going down the gurgler.

    • Mags,
      Ouch … bummer news about the employment numbers in Australia (which I didn’t know). Possibly this is like a weather cycle – that is, an area getting too much rain means somewhere is getting too little. Thus if numbers are going down somewhere, they are increasing elsewhere. Oh well … best of luck to the OZites. Thanks for reading.

  2. We still have not gained enough jobs back to get us to the 2007-2008 peak. Forget Great Recession, start calling this thing what it really is: The Jobs Depression. To the Republican list of questions you might add: if the stimulus which widened the deficit did not work, how will tax cuts that will do the same thing help? To the Democrats list, you might add they spent a lot of capital on the Stimulus Bill and the Green Economy agenda in 2009. We heard more about bullet trains, than rebuilding real infrastructure that makes our economy efficient like highways and airports.

    • Randel,
      Welcome first-time commenter – and I hope you return. Correct about not yet returning to the 2007-2008 peak, which as you know would show on a different graph – but I did state something similar. There are many questions for each party, which I have asked in the previous posts I linked within this one – which are pertinent posts with questions. Thanks for your suggestions and for commenting.

      • Thank you. As for the big leadership weakness in the Western nations during this world wide Job Depression, make sure you put some blame on the economics profession. There is not one school of thought in macroeconomics that has a remedy for what we are in. Worse than that, many are still applying worthless math models. The Economics profession has taken a real beating. At the recent AEA conference in Chicago, they finally after 100 years adopted an ethics code whereby they have to reveal who paid for their reserarch. This is astonishing. Yes there is weak leadership. But the economic experts are woefully lacking. With zero percent interest rates in the US we should either be booming or having hyperinflation, and neither have shown up. We need a genius to step forward and explain the way out. I keep praying it will happen sooner than later. Too many people are suffering.

    • I want to see the Dems spend more. The little bit of infrastructure money that’s been trickling out is way too small to do anything. We need a big project – we can borrown the money at almost no cost right now. turn a lot of unemployed into tax payers again and lift spirits! I say go for the frackin bullet train AND the agnng bridges and airports.

      • Moe,
        Simple economics says the gov’t should be investing during down times and contracting during good times. Of course, the later may be an inconceivable thought. One would think that updating infrastructure would be a common ground issue. Thanks for stopping by.

  3. The problem with the American people and their ideological orifices (seems like there should be a special plural for that…), is that many of us don’t believe we are ideologically blinded. We just believe the other side is.

    Well said, Frank. And from your mouth to god’s ears…

    • Guapo,
      Great point about the only the other side is ideologically blinded. As you know, I try to keep an even keel here, but oh no – I’m damned for hell now. Thanks for commenting.

  4. And just how much of the money being poured down the bottomless drains of the new Super PACs could be going toward strengthening various businesses in order to create more jobs? And just how much time are lawmakers spending on the growingly-infinite campaign cycle?
    And most importantly – who put up the bloody “Check your common sense at the door” sign at the entrance to Congress? ;)

    • John,
      Interesting point about Super PAC dollars, but I’m saving that one for a future post. In terms of campaign cycle, it sure seems that it is now perpetual, thus the reason why they put up the sign at Congress’ door. Thanks for commenting.

  5. Excellent Frank. Great analysis. I think it also points out the problem of a two party system. The good news is that if the job numbers improve in 7, or even 10 years, that will still be faster than government being able to achieve any sort of consensus on anything that is truly beneficial for the people. Of course I miss the glory days when people acted on their own and didn’t depend on government to “bail them out” of every situation. We need a good private sector entrepreneur that will build companies and create jobs. Hmmmm I wonder what Billy Gates is doing with all his billions?

    • Mobius,
      Thank you for the kind words. Good point about economic cycles! Because you liked this post, I suggest you see the other two posts I did that I link within this post. Thanks for commenting.

  6. The biggest question leading up to the 2012 elections is: “Do people take seriously the government’s published monthly unemployment rate?” The GOP’s national and local candidates think (hope) NOT, and offer a broad spectrum of privatization and tax cuts for the rich as the solution for a FALSE recovery. The DEMS think (hope) YES, and offer government assistance and tax increases for the rich to continue a REAL recovery. Whichever side is right, your entry, supported by Bruce’s graph, suggests it may be impossible to replace the 8.533 million American jobs lost during the 2008-2009 downturn. Even if true, that’s too far into the future to influence the 2012 elections. Until November, perception of the unemployment rate will be reality.

    • Tim,
      Some believe that “7” is the key number …. how soon will unemployment reach 7? How many months before the election will the the unemployment rate begin with 7? The current unemployment rate is 8.3% (January) – and at a drop of one-tenth per month, 7.9% would be the May report (in June) … which leads to 7.5% (Sept) reported in October. Then again, that is a what if. And yes … it is very impractical to replace 8.533 million jobs by November … heck, maybe even by 2014. But who knows what tomorrow brings. Thanks for commenting and sharing your thoughts.

  7. But what that graph doesn’t show is that many of those new jobs are shitty jobs, to paraphrase Bush, that you can’t “put food on your family” with.

    This is nothing new. It’s been the story of the last couple decades. The jobs that are being lost are better than the ones being created. Even if the amount of jobs are the same, the net value of these jobs is lower.

    We may have levelled off from the current crisis, but let’s not kid ourselves. Things may peak and valley a lot. (I expect another crash within a few years) However, the inescapable long-term reality is that we’re in a prolonged, downward, slide that shows no signs of stopping. We’ve hidden it with debt and bogus housing values for a long time, but that overall decline is still there.

    Not only have few in the political class been proposing even semi-plausible solutions, very few even seem to give a damn. Why should they? They’re all doing just fine the way things are.

    • Sedate Me,
      Welcome first-time commenter. Based on what you have said,
      1. The graph doesn’t share the job differential you noted because that is not the intent of this graph.
      2. You mentioned leveled off fro the current crisis, there is no evidence of that in this post nor did you mention any.
      3. Your pronostication of a prolonged downward slide is not the purpose of neither this graph nor this post.
      4. Thanks for providing evidence supporting my claim.

      • 1) I know that’s not the intent of the graph. Tracking raw employment numbers is its intent. That’s why I mentioned those other, more meaningful, things. (Even “Bruce’s graph” is considerably more meaningful.)

        2) That graph has a huge plummet and then returns to a pattern similar to that of before the huge plummet. Many would consider that a levelling off. I also said “may have levelled off”, implying that the posted stats don’t necessarily confirm that.

        3) My prognostication was never meant to be anything more than just that. I actually indicated it was tangential to the graph. Other than “I see unemployment numbers”, just about every comment would be tangential other than the ones trying to answer the questions you posed to Republicans and Democrats, of which I am neither.

        4) You don’t seem all that keen on getting more posts from me.

  8. Interesting post Frank….

    The funny thing about chickens is they ALWAYS come home to roost. The American public continuously takes no interest in what goes on in Washington until it directly affects their pockets…then the answer is to find a scapegoat.

    • Alex,
      Good description of scapegoating. All I’m trying to say is examine the numbers; then again, I acknowledge that this is only one set of numbers – and a thorough analysis involves many sets. Thanks for visiting.

    • I fully agree. If you look at popular tags and categories on Word Press you will find that interest in policy setting by the elites is not even in the top tiers.

      • Randel,
        Thanks for your confirmation of my thoughts. And if I as a non-economist can ask some sensible questions to cut through the rhetoric, I wonder why so many can’t see these? Ah yes, the power of both rhetoric and the partisan lens. Thanks commenting.

    • Elyse,
      I am very much for health care reform! My point is that the White House spent a lot of political capital on that issue during a time when economy/jobs were in a downward trend – thus having less political capital available when turning to the economy/jobs. Thanks for commenting.

  9. I think you set things in perspective my friend. And your questions to the republicans are very valid. As is the first question to the democrats. I am not sure the second is particularly relevant. Removing or decreasing health care is not gonna create more jobs, while the contrary might just do that. Of course I say so coming from a country with a different history of health care.

    • Otto,
      Thanks for your perspective, and I know that not only your country, but the Scandinavian region looks at health care a lot differently than the US. And if my memory is correct, isn’t Norway’s government operating at a surplus?

      My question about health care to the Democrats is about the amount of political capital it spent on the health care debate, thus the effect of having little capital thereafter. I ask it that way because I am a support of as we say health care reform. Thanks for the feedback and for visiting.

  10. I think the most frustrating thing to me is to hear people complain and think that the job market was supposed to immediately fix itself. We all have to adjust, spend more wisely, and be patient. Maybe I’m just an optimist, but I do believe everything will work itself out, IF and only IF, people take themselves out of it and work for the greater good. But I know that’s easier said then done for most people.

    • Kay,
      Oh how I appreciate your line about people thinking the market will immediately fix itself. Granted, one who is affected is less patient and more concerned than someone who is employed, but these type of job-loss numbers will take time! I commend your optimistic view because things will work out in time – but how much time is the great unknown. Thanks for bringing up realistic points!

  11. ok, i’ll throw in my spin…

    1. the GOP is in no hurry to fix anything because the worse things get, the more likely there will be a GOP win this coming november.

    B. fun with numbers! when the white house says that “1 million jobs were created this month,” it’s a gross spin. that claim is based on the number of people no longer collecting unemployment compensation. however, it’s more likely that their benefits have run out – thus removing them from the unemployed list – and they haven’t really found jobs.

    • RMV,
      1. No doubt about that.

      2. Spin, spin, spin, is the favorite political game. First all, the chart clearly those that statement is not even close. On the other hand, the 2010 yearly total easily over 1 million. And yes, knowing the official definitions is important to understand the numbers and the spin.

      Thanks for commenting.

    • Guapo,
      Many thank. Although I get the prickly hair in the butt crack at the end, my goal was to stimulate thought. I encourage you to see the two past posts that I linked in the post (March 2011 and September 2011) because each adds complexity to an important issue.

  12. Well said Frank, and thanks for the ammo for tonight’s poker game! I’m pretty sure I only need to throw out a few choice sentences to raise the blood pressure of my right-wing friends and distract them long enough to take their money. And they do hate to lose. And lose they will.
    It’s kind of depressing to really think about and realize the true nature of political spin and the vortex of deceit and distraction the political players have created. Argument for or against seems to be futile. Who’s the best liar? Who’s the most trustworthy?
    Great post and love stream of comments!
    Thanks again for the heads-up!

    John

    • John,
      Oh my …. what timing … that is, just in time for the poker game. Now that is cross-country karma! You gotta let me know how it goes.

      Spin is crazy and then then it is processed by people with a preferred lens. I recognize that this is not the only set of employment data out there, but I tried to stimulate thought about this data set. Add another data set, and one learns even more.

      Good luck with the cards tonight, and thanks for visiting.

  13. Those academy awards, awarded some of my all time favourite movies – Tootsie – has there been a better movie? So sad the director has passed away. An Officer and a Gentleman – we have the stage show opening in Sydney this year. And Ghandi – that certainly launched the career of Ben Kingsley – how good was he in Schindler’s List!

  14. Wow…you stirred up the comments here! Here I am trying to decide if I should stay in the States or not. Thinking of teaching English as a second language somewhere. We’ll see.

Comment with respect.

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