Tag archive for unemployment

Reworking unemployment (oh, and the payroll tax cut)

From a front-page New York Times story today. Here are the details that were hidden in the fight over the payroll tax cut and the unemployment (UI) extension. 

Congress and the President agreed on some shockingly good ideas, including importing the concept of "work sharing" from (no!) Europe. 

The bill additionally expands “work sharing” programs that can help reduce layoffs at big businesses. In effect, businesses would have the option of cutting the hours of five workers by 20 percent each, say, rather than laying off one worker. The business could then use unemployment insurance money to help supplement the workers’ wages to make up for the lost hours.

[snip]

Economists also applauded the work-sharing provisions, which have found success in states including Connecticut and Rhode Island as well as in countries like Germany.

“Work sharing is an incredibly smart thing to do,” said Heidi Shierholz of the Economic Policy Institute, a research institution in Washington. “But it’s a tragedy that we didn’t do that on a large scale over the past four years.”

Yes. Sigh. 

The provision may help reduce layoffs in the coming years, Ms. Shierholz said, supporting the recovery. She also said that being laid off tended to hurt a worker’s earnings and career prospects down the road. Work-sharing helps to minimize economic pain and keep families afloat, she said.

This part of the bill was a bipartisan effort, evidently. Amazing if true. 

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Unemployment falls, surprising/pleasing pundits

The New Yorker is thrilled:

This is the best piece of economic news that President Obama has received in many a moon.

On CNBC’s Squawk Box, a former chairman of the White House Council of Economic Advisers said, “The trend I am seeing … is that things have turned around.” And he went on: “People don’t feel good about the economy until the labor market turns around. And the labor market has been lousy for a long time. I am pretty hopeful.”

No, those weren’t the words of Austan Goolsbee, Obama’s former chief economic advisor. (He was on the show too, and, as you might expect, he was pretty chipper.) The upbeat comments came from Ed Lazear, the Stanford professor who headed the Council of Economic Advisors from 2006 to 2009 under President George W. Bush.

In his analysis, tough-minded John Cassidy points out that the fall below 9% is probably not a statistical aberation, and is not simply a case of a rise in discouraged workers.

Well, let's hope he's right — the numbers do look pretty good on a graph. 

Unemploymentchart
Don't they, though? 

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Unemployment: The unheard fire bell in the night

Robert Schiller, one of this nation's most respected economists, writes today in The New York Times that the unemployment we face today could be ruinous for our society for years, perhaps decades, to come: 

The stakes are very high here, and they are not just economic. As anger rises in today's economy, I'm reminded of Thomas Jefferson's words about the danger of "angry passions" arising between the North and South over the question of extending slavery to the Missouri territory. In an 1820 letter, he wrote that "this momentous question, like a fire bell in the night, awakened and filled me with terror." He went on to predict, from his observations of such rancor, the secession of the South that was to come 40 years later.

Our country is a much more stable and just society now than it was in 1820.  Still, we should regard the current economic dispute as another fire bell in the night. It is important to recreate the sense of a just society, without anger – and an important step in that direction is to ensure that there are enough jobs. 

Ted Rall looks at the economic picture — the release of a Census-based study showing that nearly one of three Americans lives in poverty — and suggests a solution. 

RallonUSpoverty
But this really is a problem we could solve, as Schiller points out. Painful to contemplate.  

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A new American class: the involuntarily retired

Our local daily newspaper has an excellent story on a new class of unhappy Americans: the involutarily retired.

Kim Lamb Gregory introduces the idea with a study, and then grounds it in Ventura County reality:

"We are witnessing the birth of a new class — the involuntarily retired," said a report called "The Shattered American Dream."

The report, released in December by the Center for Workforce Development at Rutgers University, was a follow-up to an August 2009 survey of those who had been unemployed in the previous year. The follow-up showed that 62 percent of those respondents 55 or older were still unemployed in November 2010, compared with 57 percent of those 35 to 54 and 47 percent of those younger than 35.

According to a report released by the Urban Institute in January, fewer than a quarter of workers 50 and older who lost their jobs between mid-2008 and 2009 found work within 12 months — much lower than the rate for younger workers.

Of course, it's not just older folks that are suffering, and what's really notable about the study is the outright despair of the unemployed. The Rutgers team reported on 1200 unemployed people:

It is hard to overstate the dire shape of the unemployed. Over the space of the 15 months we have been tracking our panel’s progress, just one-quarter have found full-time jobs. And virtually all of those jobs were for less pay or benefits, with 40% having to change fields or their career path to find employment.
One of the casualties of the Great Recession has been a core American principle since the founding of the nation — that if people work hard and play by the rules, they can get ahead. Now, the majority of the unemployed do not believe that simple hard work will guarantee success. They feel powerless, and voice little confidence in the government’s ability to help them.

They lack that confidence for good reason. Washington really doesn't care. Washington Post columnist Dana Milbank recently profiled the President's chief economic advisor, Austan Goolsbee, who has been counseling against any more stimulus, saying that would be "rash." Goolsbee's argument: 

The private sector has stabilized, profits have returned, productivity is high, American competitiveness has improved, and large sums of money have accumulated on corporate balance sheets.

Notice anything missing? Meanwhile, outside of D.C., even middle-of-the-road economists are troubled. 

Clive Crook warns in the Financial Times that "the recovery" looks like a chimera:  

One alarming possibility is that the traits the US has relied on to drive growth in the past – labour market flexibility, rapid productivity growth – might have become toxic. If the US is unlucky, traits seen as distinctive strengths are now weaknesses, and a “lost decade” of stagnation, like Japan’s in the 1990s, might lie ahead. 

Paul Krugman, quoted admiringly in Crook's piece, has a devastating graph to illustrate what a "lost decade" he's been warning us about for over two years now might look like. 

Employmentvspop
Today Felix Salmon points out that unemployment is much worse in the U.S. than in comparable nations: 
Change
He adds:

It’s entirely intuitive to believe that structural unemployment rose significantly over the course of the recession, and that it’s now painfully high. And that the Obama Administration is, to a first approximation, doing absolutely nothing to address this crisis head-on.
In other words, the doubt and despair of the unemployed is totally justified. 

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How to understand the unemployment numbers

A slight fall in the number of new jobless claims has thrilled Wall Street. This is great news, and as I wrote in a long economic story a couple of weeks ago, there is reason to think a recovery is on the way. 

But for perspective, lets look at the unemployment numbers geographically, courtesy of Derek Thompson at The Atlantic

— Payrolls have shed the equivalent of Virginia since the recession started in December 2007.
— The entire populations of Virginia, Colorado, and Rhode Island are unemployed.
— The entire metro areas of Chicago and Los Angeles have been unemployed for six months or more.
— The entire metro area of New York City is working part time for economic reasons.
— The whole of Kentucky has left the labor force since the start of the recession.
— The workweek population of Washington, D.C., has given up looking for work.

Or, for the stats-impaired, a visual representation

Economix-04jobsreport-custom1
Or, to put it in Dilbert's charmingly despairing way:

114409.strip

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Congress won’t extend unemployment benefits: LA Times

Veteran reporter Don Lee of the LA Times already knows that Congress won't extend unemployment benefits for the long-term out of work, even before the debate is joined: 

Economists also worry that consumer spending may weaken. Confidence remains low, and unemployment benefits, which have helped prop up spending, probably won't be extended by lawmakers, given the new political sensitivity to big government deficits. Hundreds of thousands of jobless workers will see their benefits expire this month.

Will the GOP really kill benefits for the jobless in the midst of the worst recession in decades? 

Toles seems to think so

Flyingunemployed
Expect to hear lots of "Scrooge" references from the media for the new Congress. 

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Hardly Working: The economy today, by Steve Brodner

Steve Brodner, one of the hardest-working and most-talented pencil artists of our time, is moving away from his once-lovely Drawger site…but he's still putting up fascinating work on his own site. 

To wit — Hardly Working, his depiction of the economy for lots and lots of us:

Watch the full episode. See more Need To Know.

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Media wakes up to underemployment on Labor Day

Give credit where it's due: both the Los Angeles Times and NPR's Scott Simon ran excellent stories about the difficulty of being unemployed or underemployed this Labor Day weekend.

I especially liked the LA Times story, because so often reporting on this topic falls into the either/or trap; that is, either you have a full-time job, and are sailing through the Great Recession more or less unscathed, or you have no job, and are living in your car.

I see a different truth: plenty of folks are doing all they can, and somehow are getting by, but can't scratch up enough work to make a decent living. As reporter Don Lee wrote:

Beyond the 15 million Americans who have no jobs at
all, millions more are caught in part-time or limited jobs that don't
pay them enough to maintain their standard of living — much less
contribute to the strong consumer spending needed to power the nation
out of the economic doldrums.

Economists have a technical term for these people: underemployed.

But Simon did what NPR reporters can do better (but often don't). He gave the facts an emotional spin: 

Having no job means that things people talk about so much these days —
iPads, Android phones, 3-D movies, new music or meeting friends over $4
coffee drinks — are just beyond reach. You worry about getting dull,
having nothing to talk about and losing friends. You worry about life
leaving you behind.

You may be sure that your
family loves you, but worry that they'll start feeling sorry for you,
and wonder why you have to be the one person in 10 who doesn’t have a
job. You may blame politicians, brokers and bankers, but in the middle
of the night, you might turn your eyes to the sky and wonder what you
did, didn't do or should have done.

And, most amazing of all, Ted Rall found the humor in this unhappy (no joke) situation:

Obamaoutoftouch
h/p: Fountain Not Mountain

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The Great Recession still going strong

For the unemployed, the long-term unemployed, and the underemployed — which is about 17% of the population — this is the scariest graph ever:

EmployRecessionJuen2010
via TPM and Calculated Risk.  

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The heroism of the unemployed (well, almost)

According to the Federal Reserve, it's not true that benefits for the unemployed leads to more unemployment. In the words of the government economists:

Our analyses suggest that extended UI benefits account for about 0.4
percentage point of the nearly 6 percentage point increase in the
national unemployment rate over the past few years. It is not
surprising that the disincentive effects of UI [unemployment insurance] would loom small in the
midst of the most severe labor market downturn since the Great
Depression.

No surprise there. The surprise (at least for the underemployed yours truly) is that the Murdoch-ized Wall Street Journal digs out the details of the unemployment numbers. Not only does the business-oriented paper focus on the pain, it explicitly says the unemployment is not the fault of the jobless. 

The paper notes the economic crisis of the last few years has generated
an “unprecedented” level of unemployment duration. Those unemployed for
more than six months hit 4.3% in March, “well above” the previous high
of 2.6% in 1983. The economists note that the current situation is all
the more striking because the unemployment rate peak was quite a bit
higher in that downturn, relative to what’s been seen in this episode.

In other words, back in l983, the jobless rate was higher, but the jobs came back faster. But maybe the paper is kind to the jobless, because the underemployed are propping up the economy. Though I must admit, it takes a Ted Rall to see the heroism in my plight:

Unemploymentbyrall
  

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