Posts Tagged ‘jobless rate’

Middle Class Wages Are Going DOWN Under Obama, Gas Prices Are Going UP And The Real Jobless Rate Is More Like 19 Percent

October 3, 2012

Hey, don’t forget to get out there and vote for Obama so you can have more of this:

September 7, 2012, 7:38 p.m. ET.
Those Jobless Numbers Are Even Worse Than They Look
Still above 8%—and closer to 19% in a truer accounting. Here’s a plan for improvement.
By MORTIMER ZUCKERMAN

Don’t be fooled by the headline unemployment number of 8.1% announced on Friday. The reason the number dropped to 8.1% from 8.3% in July was not because more jobs were created, but because more people quit looking for work.

The number for August reflects only people who have actively applied for a job in the past four weeks, either by interview or by filling an application form. But when the average period of unemployment is nearly 40 weeks, it is unrealistic to expect everyone who needs a job to keep seeking work consistently for months on end. You don’t have to be lazy to recoil from the heartbreaking futility of knocking, week after week, on closed doors.

How many people are out of work but not counted as unemployed because they hadn’t sought work in the past four weeks? Eight million. This is the sort of distressing number that turns up when you look beyond the headline number.

Here’s another one: 96,000—that’s how many new jobs were added last month, well short of the anemic 125,000 predicted by analysts, and dramatically less than the (still paltry) 139,000 the economy had been averaging in 2012.

The alarming numbers proliferate the deeper you look: 40.7% of the people counted as unemployed have been out of work for 27 weeks or more—that’s 5.2 million “long-term” unemployed. Fewer Americans are at work today than in April 2000, even though the population since then has grown by 31 million.

We are still almost five million payrolls shy of where we were at the end of 2007, when the recession began. Think about that when you hear the Obama administration’s talk of an economic recovery.

The key indicator of our employment health, in all the statistics, is what the government calls U-6. This is the number who have applied for work in the past six months and includes people who are involuntary part-time workers—government-speak for those individuals whose jobs have been cut back to two or three days a week.

They are working part-time only because they’ve been unable to find full-time work. This involuntary army of what’s called “underutilized labor” has been hovering for months at about 15% of the workforce. Include the eight million who have simply given up looking, and the real unemployment rate is closer to 19%.

In short, the president’s ill-designed stimulus program was a failure. For all our other national concerns, and the red herrings that typically swim in electoral waters, American voters refuse to be distracted from the No. 1 issue: the economy. And even many of those who have jobs are hurting, because annual wage increases have dropped to an average of 1.6%, the lowest in the past 30 years. Adjusting for inflation, wages are contracting.

The best single indicator of how confident workers are about their jobs is reflected in how they cling to them. The so-called quit rate has sagged to the lowest in years.

Older Americans can’t afford to quit. Ironically, since the recession began, employment in the age group of 55 and older is up 3.9 million, even as total employment is down by five million. These citizens hope to retire with dignity, but they feel the need to bolster savings as a salve for the stomach-churning decline in their net worth, 75% of which has come from the fall in the value of their home equity.

The baby-boomer population postponing its exit from the workforce in a recession creates a huge bottleneck that blocks youth employment. Displaced young workers now face double-digit unemployment and more life at home with their parents.

Many young couples decide that they can’t afford to start a family, and as a consequence the birthrate has just hit a 25-year low of 1.87%. Nor are young workers’ prospects very good. Layoff announcements have risen from year-ago levels and hiring plans have dropped sharply. People are not going to swallow talk of recovery until hiring is occurring at a pace to bring at least 300,000 more hires per month than the economy has been averaging for the past two years.

Furthermore, the jobs that are available are mostly not good ones. More than 40% of the new private-sector jobs are in low-paying categories such as health care, leisure activities, bars and restaurants.

We are experiencing, in effect, a modern-day depression. Consider two indicators: First, food stamps: More than 45 million Americans are in the program! An almost incredible record. It’s 15% of the population compared with the 7.9% participation from 1970-2000. Food-stamp enrollment has been rising at a rate of 400,000 per month over the past four years.

Second, Social Security disability—another record. More than 11 million Americans are collecting federal disability checks. Half of these beneficiaries have signed on since President Obama took office more than three years ago.

These dependent millions are the invisible counterparts of the soup kitchens and bread lines of the 1930s, invisible because they get their checks in the mail. But it doesn’t take away from the fact that millions of people who had good private-sector jobs now have to rely on welfare for life support.

This shameful situation, intolerable for a nation as wealthy as the United States, is not going to go away on Nov. 7. No matter who wins, the next president will betray the country if he doesn’t swiftly fashion policies to address the specific needs of the unemployed, especially the long-term unemployed.

Five actions are critical:

1. Find the money to spur an expansion of public and private training programs with proven track records.

2. Increase access to financing for small businesses and thus expand entrepreneurial opportunities.

3. Lower government hurdles to the formation of new businesses.

4. Explore special subsidies for private employers who hire the long-term unemployed.

5. Get serious about the long decay in public works and infrastructure, which poses a dramatic national threat. Infrastructure projects should be tolled so that the users ultimately pay for them.

It’s zero hour. Policy makers need to understand that the most important family program, the most important social program and the most important economic program in America all go by the same name: jobs.

Mr. Zuckerman is chairman and editor in chief of U.S. News & World Report.

A version of this article appeared September 8, 2012, on page A15 in the U.S. edition of The Wall Street Journal, with the headline: Those Jobless Numbers Are Even Worse Than They Look.

We’re a slight breeze away from the entire house of cards collapsing America into a depression that will make the one that started in 1929 look like a walk on a sunny beach.

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The Secret Of The Dishonest Unemployment Report Revealed – 4 Million Jobs DESTROYED Under Obama And Worst Labor Participation in 31 Years

September 24, 2012

I’ve written about the disastrous hollowing-out and destruction of the American economy by the Job-Destroyer-in-Chief before.  It’s good to see it being echoed by excellent conservative sites such as American Thinker and even BETTER to see it taken up by Reuters:

September 23, 2012
The ‘hidden’ unemployed
Rick Moran

Every month when the jobless numbers come out, Obama critics take pains to point out that the “official” number is very misleading.

One of the major reasons is that the published unemployment rate does not include such “hidden” workers as those working part time who would like to work full time, and those who have given up looking for work.

Reuters has a good piece today on the latter:

Economists, analyzing government data, estimate about 4 million fewer people are in the labor force than in December 2007, primarily due to a lack of jobs rather than the normal aging of America’s population. The size of the shift underscores the severity of the jobs crisis.

If all those so-called discouraged jobseekers had remained in the labor force, August’s jobless rate of 8.1 percent would have been 10.5 percent.

The jobs crisis spurred the Federal Reserve last week to launch a new bond-buying program and promise to keep it running until the labor market improves. It also poses a challenge to President Barack Obama’s re-election bid.

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one has fallen by an unprecedented 2.5 percentage points since December 2007, slumping to a 31-year low of 63.5 percent.

“We never had a drop like that before in other recessions. The economy is worse off than people realize when people just look at the unemployment rate,” said Keith Hall, senior research fellow at the Mercatus Center at George Mason University in Arlington, Virginia.

The participation rate would be expected to hold pretty much steady if the economy was growing at a normal pace. Only about a third of the drop in the participation rate is believed to be the result of the aging U.S. population.

The economy lost 8.7 million jobs in the 2007-09 recession and has so far recouped a little more than half of them.

Economists say jobs growth of around 125,000 per month is normally needed just to hold the jobless rate steady.

Given the likelihood that Americans will flood back into the labor market when the recovery gains traction, a pace twice that strong would be needed over a sustained period to make progress reducing the unemployment rate.

Last month, employers created just 96,000 jobs.

Some areas of the country are better off than others jobs-wise, but that last factoid from Reuters should give us pause. There have only been two months during the Obama administration that have seen more than 250,000 jobs created. If there ever is anything like a normal recovery, the real unemployment rate will skyrocket once the discouraged workers are counted again by the BLS.

No one knows the future but God.  That said, it is my belief that if Obama is reelected, you will see a widespread dive in joblessness as small businesses that have just been hanging on hoping the turd would be voted out variously come to the conclusion, “The hell with it.”

Miniumum Wage Increase Means Maximum Employment Decrease

July 27, 2009

The Democrats raised the national minimum wage from $6.55 to $7.25.  They claim that the additional earnings will help the economy.  Just like their stimulus did (right?).

Of course, raising the minimum wage is effectively a tax increase imposed primarily on small businesses.  Things always seem so easy when your spending other peoples’ money.

The road to hell is paved with good intentions, goes the saying.  Whoever first said that surely must have had Democrats in mind.

The economist who literally wrote the book on Minimum Wages predicts that the minimum wage hike will result in the loss of 300,000 jobs.  And that’s a HUGE number, consider there are only 2.8 million minimum wage workers; it’s 10.7% of the total minimum wage work force!

THAT’S the way to help the economy!  THAT’S the way to help poor workers!

Anthony Randazo at Reason.org has an article entitled, “My Plan to Save 300,000 Jobs by Monday,” writing:

Supporters of the minimum wage like to believe that they are helping to raise wages. But since the pool of earnings for any business is not infinite, any increase in wages decreases the firms profitability. Generally this leads to some people getting fired, and many, many others not getting a job in the first place. With an unemployment rate of 9.5%, the government should be doing everything possible to encourage firms to hire people. How does making businesses pay their employees more in this down economy help create jobs?

U. Cal-Irvine economist David Neumark estimates in a study for the National Bureau of Economic Research that the impending wage increase will kill “about 300,000 jobs for those between the ages of 16-24.” The White House has projected (not counted) that the stimulus money has created 150,000 jobs so far. Even if that is true, it will soon be wiped out by this new limitation of business development. It is pretty simple math. If you don’t raise the minimum wage, the jobs are saved. End of story.

The U.S. Bureau of Labor Statistics is on the record essentially saying that the Obama administration’s claim of having “created or saved” 150,000 jobs is tantamount to looking at clouds and seeing animals in the sky.  Which is just one among many, many reasons to laugh at the Obama “job creation” record.  Sadly, 300,000 actual real jobs lost is twice as many as the fake pretend jobs Obama claimed to “create or save.”

The Wall Street Journal has another catchy-titled article, “Mandating Unemployment: Congress prepares to kill more jobs:

Here’s some economic logic to ponder. The unemployment rate in June for American teenagers was 24%, for black teens it was 38%, and even White House economists are predicting more job losses. So how about raising the cost of that teenage labor?

Sorry to say, but that’s precisely what will happen on July 24, when the minimum wage will increase to $7.25 an hour from $6.55. The national wage floor will have increased 41% since the three-step hike was approved by the Democratic Congress in May 2007. Then the economy was humming, with an overall jobless rate of 4.5% and many entry-level jobs paying more than the minimum. That’s a hard case to make now, with a 9.5% national jobless rate and thousands of employers facing razor-thin profit margins.

There’s been a long and spirited debate among economists about who gets hurt and who benefits when the minimum wage rises. But in a 2006 National Bureau of Economic Research paper, economists David Neumark of the University of California, Irvine, and William Wascher of the Federal Reserve Bank reviewed the voluminous literature over the past 30 years and came to two almost universally acknowledged conclusions.

First, “a sizable majority of the studies give a relatively consistent (though not always statistically significant) indication of negative employment effects.”
Second, “studies that focus on the least-skilled groups [i.e., teens, and welfare moms] provide relatively overwhelming evidence of stronger disemployment effects.”

Proponents argue that millions of workers will benefit from the bigger paychecks. But about two of every three full-time minimum-wage workers get a pay raise anyway within a year on the job. Meanwhile, those who lose their jobs or who never get a job in the first place get a minimum wage of $0.

Mr. Neumark calculates that the 70-cent per-hour minimum wage hike this month would kill “about 300,000 jobs for those between the ages of 16-24.” Single working mothers would also be among those most hurt.

Keep in mind the Earned Income Tax Credit already exists to help low-wage workers and has been greatly expanded in recent years. The EITC also spreads the cost of the wage supplement to all Americans, not merely to employers, so it doesn’t raise the cost of hiring low-wage workers.

For example, consider a single mom with two kids who earns the current $6.55 minimum at a full-time, year-round job. In 2009 she receives a $5,028 EITC cash payment from Uncle Sam — or about an extra $2.50 per hour worked. Other federal income supplements, such as the refundable child tax credit, add another $1,900 or so. Thus at a wage of $6.55 an hour, her actual pay becomes $10.02 an hour — more than a 50% increase from the current minimum. (See nearby table.)

But that single mom can’t collect those checks if she doesn’t have a job, and the tragedy of a higher minimum wage is that it will prevent thousands of working moms striving to pull their families out of poverty from being hired in the first place.

If Congress were wise and compassionate, it would at least suspend the wage hike for one or two years until the job market recovers. We know this Congress won’t do that, but someone has to speak up for the poorest, least skilled Americans.

Democrats speak up all the time, of course, but that’s just rhetoric and demagoguery.  They create mess after mess, and disaster after disaster, in the name of “saving the day.”  And then they ride off to let the American people suffer the consequences of their policies, realizing that with the mainstream media’s willing participation they can attribute the agony inflicted on the poor to the Republican’s “lack of compassion.”

Minimum wage hikes clearly have more impact at the lower end of the wage distribution.  They effect low skilled workers and the primarily small business employers who hire them.  Minimum wages reduce employment.  There’s been a substantial body of evidence accumulated over 20 years of recent research and still another 80 years of other research.  And it clearly shows that, essentially – just like when the price of gas goes up people use less gas, or just like when taxing cigarettes people smoke less – when you raise the wages of extremely low-skilled labor employers invariably will try to use something else.

The 300,000 jobs won’t hit tomorrow.  You won’t pick up the paper the day after the wage hike to read the headline, “300k jobs lost,” although given our level of media propaganda you might well see a headline that reads, “300k jobs not lost, dire predictions about the minimum wage hike false.”   But the fact remains that low wage labor market is filled with jobs that turn over very quickly.  And if an employer simply slows down his or her hiring, employment will nevertheless fall pretty quickly.

This is just another in a long line of terrible economic policies in the name of “helping the poor” that will invariably end up HURTING the poor.

According to polls, 57.4% of Obama voters had no idea which party controlled the Congress for the last two years when our economy went from strong to terrible.  That makes it easy for Democrats to demagogue fiction out of fact.  For the record, it was Democrats.  The Dow Industrial Average was at 11,986.04 on November 3, 2006 when Republicans were last in control of Congress. The unemployment rate for October of 2006 was at 4.4% when Republicans last ran things.  Nancy Pelosi, Barney Frank, Harry Reid, and Chris Dodd brought us from 4.4% to 9.5% unemployment which by nearly all accounts is going to get worse and worse.

The fact of the matter is, the Republicans tried to regulate the housing industry, and Democrats – true to form – denied there was a crisis, blocked the Republican effort, and clung to Titanic-sized economic landmines in the name of “helping the poor.” Even right before the housing mortgage industry completely imploded, Barney Frank was claiming that Freddie Mae and Fannie Mac (which DOMINATE the housing mortgage industry) was “fundamentally sound.”

What we come to find out is that “fundamentally sound” just means that liberals are getting everything they want and it hasn’t completely blown up yet.

Democrats are like nurses who bring thirsty patients their very favorite brand of Kool-Aid.  It’s a tasty beverage; don’t worry about the fact that it is  contains arsenic (which just happens to be the primary ingredient in rat poison).  It’s ultimately a terrible way to die, but what the heck, it sure taste good going down.