Tag Archives: unemployment

The Creeping Recovery, Continued

Job figures for the month of march will be released at the end of this week. The consensus is that job growth will continue at its slow, creeping pace – likely under 200,000 for the month just ended. For the time being, the United States remains a somewhat remarkable positive economic story in a world that is filled with continuous streams of troubling news from the European Union through Japan.

Visually, the continued improvement looks as follows:

Monthly Job Data Since The Great Recession

Monthly Job Data Since The Great Recession

Of course, there’s still a very long road to go until a full recovery.

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Fiscal Cliffmageddon!

President Obama & Speaker of the House John Boehner are the key players in the "fiscal cliff" negotiations.

President Obama & Speaker of the House John Boehner are the key players in the “fiscal cliff” negotiations.

In the summer of 2011 there was a rather productive conversation about the national debt and a previously simple Congressional procedure known as the raising of the debt ceiling. The conversation was productive in that it showed off how one of the two main political parties in the United States abjectly failed to comprehend how the United States spends money, borrows money, how debt markets work, and just what the effect of debt markets is on more tangible markets that you or I could touch via our paychecks or the unemployment line.

Whether on purpose or through their own embracing of anti-intelligence, the Tea Party wing of the Republican party managed to become the state personification of a crazed old person calling their credit card company daily and repeating “you know I’m really not sure if I feel like paying my bills anymore”. Stock markets reacted negatively. Businesses reacted by sharply curtailing spending and hiring since they really began to wonder just how far down the rabbit hole partisan politics were going to take us. Bond markets would have reacted negatively if there wasn’t even a larger continuous train wreck going on across the pond in Europe with their continued experiment of “let’s pretend to be a country up until the point we have to make a tough decision” with the Euro.

Eventually there was a deal, the debt ceiling was raised, and the Tea Party did not tank the fragile global economy. The deal, by the way, was to kick the can down to the end of 2011. Professional can kickers were anointed, known as the Super Committee. They proudly stood up and kicked the can even farther away, to the end of 2012. It is now December of 2012, and we’ve found the can.

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Because Twinkies!

What is this? Where are the Twinkies? What's going on with this whole strike angle? The Twinkies are dying!

What is this? Where are the Twinkies? What’s going on with this whole strike angle? The Twinkies are dying!

Hostess Brands, an American company that traces its roots to 1930 and has in its portfolio some of the most well known food brands from the 20th century, has filed for bankruptcy in a move that will eventually lead to the loss of most of its 18,500 jobs. The bankruptcy – the second within a decade – was brought on by unsustainable debt levels and unions unwilling to budge much on pay and pensions in light of absurd pay raises by executives at the company. Already mass layoffs from the company have begun, with workers facing as uncertain of a future as the brands they used to produce and deliver.

Wait. I mean…

The Twinkies! They’re all going away!

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The Really, Really Long Road to Recovery Continues

53 months into the employment recession and you are here. You will remain here for a long time to come.

53 months into the employment recession and you are here. You will remain here for a long time to come.

It has now been more than 53 months since the start of the employment recession that precluded the full on economic one. Four years and five months ago the unemployment rate was hovering around 4.5% – still stubbornly high when viewed against the previous good times in the late 1990′s, when that number reached as low as 3.9%. Our sights seemed to be set so much higher back then. Back then, an unemployment rate north of 5% seemed like a bad thing, something that should be avoided. Economic collapse and a sluggish recovery later, getting back down to 5% unemployment would seem like the glory days personified. Heck, anything under 6% would feel like paving the streets in gold.

Some 53 months ago marked the start of this employment recession, and it very well might be another 53 months before things return to previous lows, if they ever do.

Hiring has slowed down in recent months, leading to an even slower and more anemic pace of recovery. All things considered, the amount of new jobs created has lagged the number of new people entering workforce eligibility, so job “losses” are actually on the increase again. For the past three months the number of new jobs have failed to crack the 100,000 per month level, with a minimum of 135,000 – 150,000 needed per month needed just to keep up with population growth. The last time those sorts of positive numbers were seen were back in March.

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Here’s 573,000 Jobs You Misplaced

State and local government employment has been on a steady decline since 2009.

State and local government employment has been on a steady decline since 2009.

Thankfully in the most stressful times of the 2008 financial crisis, those who were in power – on both sides of the isle – decided against a strict policy of austerity unlike our counterparts in Europe. One can only imagine how much more devastating unemployment would have been if the government decided to start the wholesale slashing of jobs in the waning months of 2008. At the time the debate was between those who wanted to bail out various segments of the private sector vs. those who were in favor of some targeted bailouts but a more broad-based government spending program to get us through this.

Kneecapped, we still know that broad-based government spending as “the stimulus”. Depending on your disposition to the facts you either figure it softened the blow somewhat, prevented a second Great Depression, or was a horrible government handout fest something something where’s his birth certificate. (Sorry, going forward I will pretend all sides arguing this are rational actors. It’s too much credit for Washington, but it will have to do.)

The effects of the stimulus began to run out in 2009 as unemployment continued to rise. Thanks to carefully AstroTurf’d public relations campaigns, the mood in the country was turning decisively against additional large injections of monies into the real economy. The Federal Reserve was still able to run off with the quantitative easing that did… something… but as for dollars for main street? That was a waste. Or socialism. Or both.

Hands were wrung in despair last week as the Bureau of Labor Statistics announced that the unemployment rate was back on the rise. The economy added a paltry 63,000 jobs and once again it seems like the recovery is stalling. Unemployment rose to 8.21% from 8.1% with 12.7 million people on the unemployment rolls – up from 12.5 million. That said, what if I told you the very same unemployment report could have read a rate of 7.84% with an extra 573,000 people not on the unemployment rolls? What if I told you that with a very careful policy of not shooting one’s foot off, it’s still obtainable?

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Greeks Fire Government, Extremists Fill The Void

Greek voters took to the polls over the weekend to politically punish everyone who had anything to do with the austerity agreements that have devastated the country.

Greek voters took to the polls over the weekend to politically punish everyone who had anything to do with the austerity agreements that have devastated the country.

In addition to the end of the conservatives’ run at the top of French politics, in local and national elections across the continent the refrain was repatitive and loud: we don’t want austerity, we want growth. No where were these calls the loudest than in the country where the effects of austerity have been the sharpest and most severe: Greece.

So severe has austerity been there, and so turned off by the prospect of even more the population is, that in weekend elections the population basically threw out en-masse the entire apparatus that supported the austerity regime, and filled the void with quite literally anyone else.

The neo-Nazi party in Greece now holds 21 seats in the Hellenic Parliament. Financial crisis collateral damage.

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The Slog of All Slogs: Election 2012 Begins

Quickly now, grab your split-panel Obama/Romney pictures. It's general election time!

Quickly now, grab your split-panel Obama/Romney pictures. It's general election time!

Like a band-aid you have to rip off but don’t want to, the time has come for the most modern of American traditions – the knock-out sports-for-non-sports-fan over-budgeted escapade that is an American Presidential Election. Two men enter (others pretend they do but never really count for anything) and one man wins the honor of being erected on a pillar as all that is wrong with the planet by the opposition for the next four years.

Some optional governance is possible.

Our returning champion, President Barack Obama, was last electorally seen cruising to a 365 – 173 Electoral College pasting of Senator John McCain – taking the national vote by 7.2%. It was the largest margin of victory since independent Ross Perot siphoned off enough Republican votes to help President Bill Clinton top Senator Bob Dole 379 – 159 on an 8.5% margin.

Since the 2008 election the Great Recession has ended. An anemic recovery has ensued, facing strong headwinds from a shattered real estate market that may take a generation to recover, relentless cuts to the public sector that have methodically chipped away at job growth, European trading partners held back by a widespread debt and currency crisis, and the continuing crippling debt brought on by two unfunded wars started in the dawning years of the last decade. Unfortunately for Mr. Obama it is exceedingly hard to prove a negative, so while it is within all fair assessment to assume that a President McCain administration continuing previous policies would have exasperated the bleak economic times in 2009, without a way to visit alternate realities one cannot confirm this.

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Portugal’s Austerity Depression: PM Suggests Unemployed Abandon Country

Portugal's main stock market is off nearly 60% from its pre-crash high, 38% from the post-crash bounce back.

Portugal's main stock market is off nearly 60% from its pre-crash high, 38% from the post-crash bounce back.

As a new year dawns, the same economic problems that have gripped Europe since the worst of the Great Recession in the United States look primed to continue unabated – those problems being too much debt, a lack of ways to pay it off, and – because most European countries share a single currency – the imposition of strict austerity policies.  The economic death spiral was first done, voluntarily, by Ireland in 2008. Seeing a coming debt crisis and knowing that massive spending cuts would be needed to stave off a bailout, Ireland did just that. As a result, unemployment skyrocketed from 4.4% in July, 2007, to 12.3% just two years later. Continuing to rise, Irish unemployment has peaked and stalled around 14.5% in December of 2010 – still sitting at 14.3% as of the latest data (October 2011). Ireland’s reward for its foresight was an economic collapse anyhow, necessitating a bailout of €67.5bn in the waning days of November, 2010.

Portugal was worse off than Ireland – its economic collapse driven as much by debt concerns as it was systemic government corruption, resulting in the creation of many redundant public sector jobs, and vast mismanagement of payment the closer you got to the inner circles of Portuguese government. The country was on the verge of bankruptcy in 2011, and received a €78bn bailout in the middle of May. Portugal has also been coerced into taking on deep public spending cuts – beyond what was wasted by annual corruption – to the determent of everyday life in the country.

Average citizens are left baring the brunt of the hardship, with Portuguese unemployment barreling upwards from 8.2% in March of 2008 to a fresh crisis high of 12.9% in October of 2011. While Portugal’s journey from pre-recession unemployment to recession-unemployment heights hasn’t been as sharp as its European counterparts, its government certainly takes home the honors for least emphatic response to the concerns of the public. Facing mounting questions and complaints about Portugal’s floundering economy and dismal employment prospects – especially for the educated young – the Prime Minister suggested that if people don’t like it, they can just leave:

A wave of indignation was triggered when Passos Coelho, in the face of the growing unemployment that is hitting young people and educators extremely hard, suggested to teachers on December 18 that as an alternative they could move to Portuguese-speaking countries like Brazil or Angola.

The next day, several ministers applauded the prime minister’s remarks, saying his suggestion was a valid solution, especially for teachers.

But the governments of Angola and Brazil quickly responded, saying they had no immediate need for teachers.

Almost as entertaining as the Prime Minister’s gall for suggesting this to be a valid course of action for his citizens was the response to his suggested target countries that, in effect, “we don’t have any room here, either.” Some 120,000 left Portugal alone in the year 2011, but it has hardly been official government policy to suggest people do so. Controversy aside, it does shine some light on the frustrations that must be mounting with an increasingly systemic and intractable problem across the continent – there are no quick fixes, it’s going to hurt, and it’s going to hurt for many years to come. The debt-fueled boom-times of the 2000′s continue to fade to a distant memory as austerity-dominated 2010′s continue to soak its way into the European fabric.

The Ignorance of the “Just Get A Job” Sentiment

Ignorance on parade. With media coverage, no less.

Ignorance on parade. With media coverage, no less.

Long before the Occupy Wall Street protests vaulted the canned response of “shut up and get a job” or “go occupy a job” into the quick response lexicon, there was a data-filled and depressing reality seemingly just out of range of day-to-day view: the jobs aren’t there, and they’re coming back far too slowly.

There have been eleven recessions since the end of World War II. Until our current recession, the worst seen was the recession immediately after World War II, in 1947. In a thirteen month period, the economy lost 5.2% of its jobs. These losses weren’t driven quite as much by a terrible economy as they were by minorities and women being displaced from the workforce as men returned from overseas theaters to go back to their normal lives. Still, the drop in demand from no more war production was a drag, and if it wasn’t for the Marshall Plan in Europe to reignite demand, it is possible the 1950′s could have played out a lot differently than they are romantically remembered in Americana. Employment had returned to pre-recession levels within 11 months.

In terms of length and depth though, the job recession that began in 2007 far exceeds 1947 and is truly the worst seen since the Great Depression. It took twenty-five months to get from the start to the recession low of 6.4% of jobs lost. Worst still, it has been a full twenty months since reaching that point, and we still sit at 4.7% jobs lost. So far in this “recovery”, the economy has only grown 125,000 jobs per month. If that rate is extrapolated on top of the data we already have, it will take an additional 52 months from now to reach pre-recession employment, or about February 2016. If the economy started picking up in a more meaningful way, say adding 200,000 jobs per month, it still won’t be until July 2014 – 33 months from now – until pre-recession numbers are seen.

Better put, you are here:

At the current rate jobs are being added to the economy, pre-recession employment will not be seen until February 2016. A more optimistic view still leaves that date in July of 2014.

At the current rate jobs are being added to the economy, pre-recession employment will not be seen until February 2016. A more optimistic view still leaves that date in July of 2014.

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Michigan government decrees that 48 months of welfare is enough for lifetime

Governor Snyder has presided over very conservative policies in his first half year in office, which have stripped money from business tax incentives, schools, and soon - welfare recipients.

Governor Snyder has presided over very conservative policies in his first half year in office, which have stripped money from business tax incentives, schools, and soon – welfare recipients.

The conservative government in the state of Michigan has decided to take a more… proactive… approach to dealing with financial shortfalls than other states or jurisdictions. It has already, in so many words and actions, wiped out the democratically elected government of the town of Benton Harbor (a move that is understandably wildly unpopular there). Additionally, despite Governor Snyder’s pledge to attract new businesses and jobs to the region, his policy of rescinding tax credits to a local movie industry that was in its infancy has already began to drive away new startups – leaving the state trying to figure out how to lure them back or keep whomever remains.

Since being sworn into office earlier this year, Michigan’s unemployment rate has remained essentially unchanged, but well above the national average – 10.4% in January, 10.3% in the most recent month’s data. The story is a bit different and worse in the Detroit metro area – 11.4% in January, 11.6% most recently. The story of joblessness, and the economy in general in Michigan, is a vastly different one than that of the rest of the country.  While the United States struggles with unemployment of 9.2% and has been in an employment recession since May of 2007 (when unemployment was a scant 4.4%), Michigan sits at statewide unemployment of 10.3% – down from the recession’s peak of 14.1% (September, 2009) – but far, far away from the start of this state’s unemployment recession, March of the year 2000 (3.3%).

For some of the most vulnerable families and individuals in Michigan, life is about to get worse. The state house and senate have passed a bill that Governor Snyder is expected to sign which will kick off 12,600 recipients off the rolls of welfare beginning on October 1st. The criteria of being kicked off will be simple – any individual filing for welfare will only be allowed 48 months of welfare for their entire life. Further, this new law will be retroactive on previous welfare recipients since 2006.

There is no grandfather clause in the measure, approved 24-12, which tightens the original 2006 benefits cap that allowed for benefit extensions if the recipient was in job training or unable to work. That means most recipients who are or will be past 48 months on Oct. 1 will be cut off.

Gov. Rick Snyder supports the bill that would save some $77 million. Recipients could no longer apply to the Department of Human Services for an extension beyond the 48 months. Nor could DHS make allowances for those it determines should be exempt from work requirements.

The Senate did add language that allows benefit extensions for those caring for a disabled spouse or child.

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