Unemployment

[DavidS]

663,000 jobs lost - 8.5% Unemployment

 

[editec]

Oh, so they're saying unemployment is 8.5%?

Okay, then the real rate of unemployment is probably around 17% or so.

Yeah, judging from what I'm seeing, I'd say that's about right...17%.

FYI, this appears to me to be worse than it was in the early 80s.

 

[RetiredGySgt]

Fear not Obama swears he will create how many new Jobs?

 

[Agnapostate]

With capitalist zealots often unable to distinguish between frictional and involuntary unemployment, and believing that minimum wage increases spur unemployment, don't expect them to have any productive solutions.

 

[auditor0007]

Oh, so they're saying unemployment is 8.5%?

Okay, then the real rate of unemployment is probably around 17% or so.

Yeah, judging from what I'm seeing, I'd say that's about right...17%.

FYI, this appears to me to be worse than it was in the early 80s.

While the unemployment rate is getting higher, an even bigger problem is underemployment. There are many who are working but who have taken pay cuts as they have had to take on lower paying jobs or are only working part-time instead of full-time.

 

[xsited1]

Fear not Obama swears he will create how many new Jobs?

Actually, he said he would create or SAVE jobs. And since he's increasing the number of Federal Jobs (paid for by working taxpayers, of course), the number of jobs lost will most likely appear to be zero so he will have kept his campaign promise.

A jobless recovery... Where have I heard that before?

 

[Agnapostate]

While the unemployment rate is getting higher, an even bigger problem is underemployment. There are many who are working but who have taken pay cuts as they have had to take on lower paying jobs or are only working part-time instead of full-time.

Underemployment will also be exacerbated and increased by schemes to cut unemployment benefits. Considering the nature of job search frictions, an extensive and thorough search lends itself to skill set matches with the proper employer to a far greater degree than a hasty search would, given the nature of imperfect knowledge about labor markets. Elimination of unemployment benefits would thus increase underemployment as workers lacked a sufficient amount of time to seek out skill set matches and thus obtain greater knowledge about the labor market in question and would take the first position with a sufficient reservation wage, thus promoting underemployment in such a position, and thus inefficiency.

 

[editec]

Oh, so they're saying unemployment is 8.5%?

Okay, then the real rate of unemployment is probably around 17% or so.

Yeah, judging from what I'm seeing, I'd say that's about right...17%.

FYI, this appears to me to be worse than it was in the early 80s.

While the unemployment rate is getting higher, an even bigger problem is underemployment. There are many who are working but who have taken pay cuts as they have had to take on lower paying jobs or are only working part-time instead of full-time.

Yup!

I know know three people who in the last couple months have taken pay cuts to keep their companies going and to prevent layoffs of their fellow workers.

Other people I know have seen their hours cut back.

Underemployment is, and has been a problem for quite some time.

If you cannot find enough work? You are underemplyed.

If you are forced to do a job outside of you area of expertise?

You are underemployed, too.

Do we even attempt to keep statistics on underemployment?

I don't think we do because I think defining the underemployed is beyond our ability to define, or perhaps because our political will is to NOT WANT TO KNOW.

Underemployment indicates a sick economy just as unemployment does.

And lord knows our government has been lying to us about our economy's health pretty much our entire lives.

 

[garyd]

I know of some who would argue that if you are working a forty hour week you are under employed...

Minimum wage increases do cause unemployment among other things. In fact they can't help it.
there are only four options Mr. businessman can do when his cost sudeenly escalate for reasons beyond his control. He can increase his prices, he can go out of business or lay some people off and hope to meet his sales orders with a smaller leaner staff, he can reduce his investments (which by the way will cost jobs somewhere down the line and depress the wages of those that are still working, labor being a commodity of sorts that is affected by the law of supply and demand like everything else, or he can take life style hit which penalizes a lot of people other than himself as well. Dunne was right no man is an Island, not in a capitalist economic system anyway.

 

[Agnapostate]

I know of some who would argue that if you are working a forty hour week you are under employed...

Minimum wage increases do cause unemployment among other things. In fact they can't help it.
there are only four options Mr. businessman can do when his cost sudeenly escalate for reasons beyond his control. He can increase his prices, he can go out of business or lay some people off and hope to meet his sales orders with a smaller leaner staff, he can reduce his investments (which by the way will cost jobs somewhere down the line and depress the wages of those that are still working, labor being a commodity of sorts that is affected by the law of supply and demand like everything else, or he can take life style hit which penalizes a lot of people other than himself as well. Dunne was right no man is an Island, not in a capitalist economic system anyway.

This isn't really based on an empirical analysis of the minimum wage's effect s on labor markets; it's somewhat dubious speculation derived from a somewhat unrealistic account. To produce the former, we'd need to examine research such as Dickens, Machin and Manning's The Effects of Minimum Wages on Employment: Theory and Evidence from Britain

Recent work on the economic effects of minimum wages has stressed that the standard economic model, where increases in minimum wages depress employment, is not supported by empirical work in some labor markets. The authors present a general theoretical model whereby employers have some degree of monopsony power, which allows minimum wages to have the conventional negative impact on employment but which also allows for a neutral or positive impact. Studying the industry-based British Wages Councils between 1975 and 1992, they find that minimum wages significantly compress the distribution of earnings but do not have a negative impact on employment.

When we consider the necessary role of "equilibrium unemployment as a worker discipline device," as detailed by Stiglitz and Shapiro, we can have a greater understanding of the necessary role of unemployment in a capitalist economy.

 

[garyd]

I like to see the whole study not just the synopsis. Too many times I've seen synopses that in fact report findings that the studies themselves do not support. The IPCC is in fact infamous for this sort of behavior.

Oh and even if its correct frankly, "they find that minimum wages significantly compress the distribution of earnings" that is in and of itself a huge negative in my opinion.

 

[Agnapostate]

I like to see the whole study not just the synopsis. Too many times I've seen synopses that in fact report findings that the studies themselves do not support. The IPCC is in fact infamous for this sort of behavior.

I can likely gain access through my school library as a result of my status as a student. But there is a customary fee associated with access to the full study, unless you're a subscriber. I'm not aware of there being a widespread epidemic of abstracts mendaciously misrepresenting study conclusions in the manner that you refer to. I'd think a study wouldn't make it into any academic journal if that was the case, or it would speak rather poorly of customary peer review standards.

Oh and even if its correct frankly, "they find that minimum wages significantly compress the distribution of earnings" that is in and of itself a huge negative in my opinion.

I'd imagine that that compression is related to the degree and nature of monopsony power possessed by employers, and could be altered to an extent through alteration of said power. Regardless, you mentioned employment effects, so I attempted to address that.

 

[Shogun]

I love it when capitalistas leap onto a soapbox as if their free market globalized capitalism ISNT the core reason why jobs are being hemorrhaged to third world slave labor countries for the sake of the capital investment class.

 

[editec]

I know of some who would argue that if you are working a forty hour week you are under employed...

Depending on the person they may be right. Underemployment can be defined as not being able to find enough work in your field, and "enough" is entirely as subjective term

Minimum wage increases do cause unemployment among other things. In fact they can't help it.

Yet we see no evidence to support that theory, when minimum wages rise. Odd, isn't it?

there are only four options Mr. businessman can do when his cost sudeenly escalate for reasons beyond his control. He can increase his prices, he can go out of business or lay some people off and hope to meet his sales orders with a smaller leaner staff, he can reduce his investments (which by the way will cost jobs somewhere down the line and depress the wages of those that are still working, labor being a commodity of sorts that is affected by the law of supply and demand like everything else, or he can take life style hit which penalizes a lot of people other than himself as well. Dunne was right no man is an Island, not in a capitalist economic system anyway.

Yes, the above is true.

You seem to be under the impression that we fault businessmen for keeping minimum wages down.

I doubt many of us are saying that.

 

[neurosport]

the real question is how many people have MARKET JUSTIFIED and PRODUCTIVE jobs ?

government jobs are not productive

jobs created by stimulus packages, low interest rates, bailouts etc are not market justified

so of the people that DO have "jobs" a very large percentage of them aren't REAL jobs

if you work for GM or if you're in the construction industry or if you get one of them Obama Green jobs - consider yourself one of the unemployed. what you're getting is not salary - its unemployment insurance.

 

[ItsFairmont]

Oh, so they're saying unemployment is 8.5%?

Okay, then the real rate of unemployment is probably around 17% or so.

Yeah, judging from what I'm seeing, I'd say that's about right...17%.

FYI, this appears to me to be worse than it was in the early 80s.

I disagree. I was at the beach everyday, and I was finally getting dates.

The 80s were pretty good to me.

 

[Star]

I love it when capitalistas leap onto a soapbox as if their free market globalized capitalism ISNT the core reason why jobs are being hemorrhaged to third world slave labor countries for the sake of the capital investment class.

Starr>>> 8.1% Unemployment, 10% on Food Stamps

Looks to me like a bunch-o-the middle class got trickled down to, trickled down to -now- be known as the working poor.


One in 10 Americans gets help from U.S. to buy food
Thu Apr 2, 2009 5:11pm EDT

WASHINGTON (Reuters) - A record 32.2 million people -- one in every 10 Americans -- received food stamps at the latest count, the government said on Thursday, a reflection of the recession now in its 16th month.
Food stamps, the major U.S. anti-hunger program, help poor people buy groceries. The average benefit was $112.82 per person in January.

One in 10 Americans gets help from U.S. to buy food | U.S. | Reuters


Starr>>> Check out the above link -- "The U.S. unemployment rate was 8.1 percent in February, the highest in 25 years. Weekly claims for jobless benefits totaled 669,000 last week, the highest in 26 years, the government said on Thursday." -- see what I'm sayin'?

 

[Iriemon]

This isn't really based on an empirical analysis of the minimum wage's effect s on labor markets; it's somewhat dubious speculation derived from a somewhat unrealistic account. To produce the former, we'd need to examine research such as Dickens, Machin and Manning's The Effects of Minimum Wages on Employment: Theory and Evidence from Britain

Recent work on the economic effects of minimum wages has stressed that the standard economic model, where increases in minimum wages depress employment, is not supported by empirical work in some labor markets. The authors present a general theoretical model whereby employers have some degree of monopsony power, which allows minimum wages to have the conventional negative impact on employment but which also allows for a neutral or positive impact. Studying the industry-based British Wages Councils between 1975 and 1992, they find that minimum wages significantly compress the distribution of earnings but do not have a negative impact on employment.

When we consider the necessary role of "equilibrium unemployment as a worker discipline device," as detailed by Stiglitz and Shapiro, we can have a greater understanding of the necessary role of unemployment in a capitalist economy.

That finding supported by empirical data in the US as well, at least for the MW rates we've had in this country.

The following data shows year, real GDP percentage change for the FY in that years, and the teen unemployment rate. Periods of subpar economic activity (1% growth or less) are bolded.

The figures after the "<-" show the MW in the year it changed, the percentage change from the prior MW rate, and where change occurred in successive years the % change from earlier periods where indicated.

1948 4.4% 9.2 <- $.40
1949 -0.5% 13.4
1950 8.7% 12.2 <- $.75 (87.5%)
1951 7.7% 8.2
1952 3.8% 8.5
1953 4.6% 7.6
1954 -0.7% 12.6
1955 7.1% 11.0
1956 1.9% 11.1 <- $1.00 (33%)
1957 2.0% 11.6
1958 -1.0% 15.9
1959 7.1% 14.6
1960 2.5% 14.7
1961 2.3% 16.8 <- $1.15 (15%)
1962 6.1% 14.7
1963 4.4% 17.2 <- $1.25 (8.6%)
1964 5.8% 16.2
1965 6.4% 14.8
1966 6.5% 12.8
1967 2.5% 12.9 <- $1.40 (12%)
1968 4.8% 12.7 <- $1.60 (14%) (28% from '66)
1969 3.1% 12.2
1970 0.2% 15.3
1971 3.4% 16.9
1972 5.3% 16.2
1973 5.8% 14.5
1974 -0.5% 16.0 <- $2.00 (25%)
1975 -0.2% 19.9 <- $2.10 (5%)
1976 5.3% 19.0 <- $ 2.30 (9.5%) (44% from '73)
1977 4.6% 17.8
1978 5.6% 16.4 <- $2.65 (15%)
1979 3.2% 16.1 <- $2.90 (9%)(26% from '77)
1980 -0.2% 17.8 <- $3.10 (7%) (35% from '77)
1981 2.5% 19.6 <-3.35 (8%)
1982 -1.9% 23.2
1983 4.5% 22.4
1984 7.2% 18.9
1985 4.1% 18.6
1986 3.5% 18.3
1987 3.4% 16.9
1988 4.1% 15.3
1989 3.5% 15.0
1990 1.9% 15.5 <- $3.80 (13%)
1991 -0.2% 18.7 <- $4.25 (12%) (27% from '89)
1992 3.3% 20.1
1993 2.7% 19.0
1994 4.0% 17.6
1995 2.5% 17.3
1996 3.7% 16.7 <- $4.75 (12%)
1997 4.5% 16.0 <- $5.15 (8%) (21%from '95)
1998 4.2% 14.6
1999 4.4% 13.9
2000 3.7% 13.1
2001 0.8% 14.7
2002 1.6% 16.5
2003 2.5% 17.5
2004 3.6% 17.0
2005 3.1% 16.6
2006 2.9% 15.4

Folks can make their own comments and conclusions on the data. My observations are that the economy appears to have a much more significant impact on unemployment than minimum wage. In every period of subpar economic performance, unemployment worsened. That was not the case with minimum wage increases.

The correlation between MW and unemployment is more ambiguous. There are several periods where a MW increase was followed by an increase in teen unemployment, though few would be in the devastating category, IMO. However, many of these time periods also corrrespond to time periods of subpar economic activity, which clouds the conclusion of how much of an effect the MW increase had. Also, there are several periods where the MW was increased but resulted in no increase in teen unemployment. Such periods included 1950 (an 87% increase in the MW and teen unemployment sharply fell); '61/'63 - general decline in unemployment with a MW increase, and '96-97, increase of 21% yet teen unemployment decreased several points.

Finally, there are several periods where teen unemployment increases despite no change in MW; the change from the late '90s to the '00s being an example, the early '70s being another, but again, these periods tend to correlate with periods of subpar economic activity.

Min wage rates: http://www.dol.gov/esa/minwage/chart.htm
GDP info: BEA.gov
Unemployment rates from here: http://www.bls.gov/webapps/legacy/cpsatab1.htm

 

[Iriemon]

This table shows the teen unemployment rate compared to the inflation adjusted MW rate in $2000 (calculated based upon the GDP inflation factor used by the Bur. Econ. Analysis):

Year - Unemp. rate - MW 2000$
1948 9.2 2.44
1949 13.4 2.45
1950 12.2 4.54
1951 8.2 4.23
1952 8.5 4.16
1953 7.6 4.11
1954 12.6 4.07
1955 11.0 4.00
1956 11.1 5.16
1957 11.6 4.99
1958 15.9 4.88
1959 14.6 4.82
1960 14.7 4.75
1961 16.8 5.40
1962 14.7 5.33
1963 17.2 5.73
1964 16.2 5.65
1965 14.8 5.55
1966 12.8 5.39
1967 12.9 5.86
1968 12.7 6.42
1969 12.2 6.12
1970 15.3 5.81
1971 16.9 5.53
1972 16.2 5.30
1973 14.5 5.02
1974 16.0 5.76
1975 19.9 5.53
1976 19.0 5.72
1977 17.8 5.38
1978 16.4 5.79
1979 16.1 5.85
1980 17.8 5.74
1981 19.6 5.67
1982 23.2 5.34
1983 22.4 5.14
1984 18.9 4.95
1985 18.6 4.81
1986 18.3 4.70
1987 16.9 4.58
1988 15.3 4.43
1989 15.0 4.26
1990 15.5 4.66
1991 18.7 5.03
1992 20.1 4.92
1993 19.0 4.81
1994 17.6 4.71
1995 17.3 4.61
1996 16.7 5.06
1997 16.0 5.40
1998 14.6 5.34
1999 13.9 5.26
2000 13.1 5.15
2001 14.7 5.03
2002 16.5 4.94
2003 17.5 4.84
2004 17.0 4.70
2005 16.6 4.56
2006 15.4 4.42


Same data in chart form:

The real MW has not changed dramatically since the 50s, varying between about $4.00 and $6.00 an hour in 2000 dollars. Yet the teen unemployment rate fluctuated widely. The lack of correlation suggests to me that the MW has not had a significant effect on teen unemployment relative to other factors, like the economy.

 

[neurosport]

The lack of correlation suggests to me that the MW has not had a significant effect on teen unemployment relative to other factors, like the economy.

your post suggests to me that you have no business looking at any sort of data.