published Saturday, August 11th, 2012

Well, in that case...

Don't believe what you saw in the papers last week. The unemployment rate in this country really isn't 8.3 percent. It couldn't be that high in this booming summer of 2012. You might remember something called the Stimulus Package, passed by a Democratic Congress and proudly signed into law by a Democratic president in 2009. It was bound to create enough jobs in 2010 and 2011 to drive the unemployment rate down somewhere south of 6 percent. The administration's experts said so. All these news stories about unemployment climbing to 8.3 percent? They must be typographical errors.

If only they were. For 41 straight months now — forty-one straight months — the country's unemployment rate has stayed at or above 8 percent. It's enough to make the Carter administration's performance, at least where unemployment is concerned, look good — malaise and all.

But don't you worry your pretty little head about all that. No matter what the headlines said last week, the unemployment rate really wasn't 8.3 percent.

It was actually only 8.254 percent.

That's the word from this president's top economic adviser, Alan Krueger. (This administration keeps changing top economic advisers. And for good reason. Failure doesn't exactly guarantee job security.) Dr. Krueger posted the real, genuine jobless rate, and an explanation for it, on the White House website. You see, it was all just a rounding problem. A math thing. A few clicks the other way, and the press might have been reporting that unemployment was standing pat at 8.2 percent. Which would've been great news! Well, at least not as bad news. Or at least the same news, which of course isn't news at all.

Dr. Krueger, the latest chairman of the Council of Economic Advisers, noted that honchos at the aforementioned Bureau of Labor Statistics said the unemployment rate remained "essentially unchanged" from June to July. Then he added: "While there is more work that remains to be done, today's employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression."

Wheeee! Break out the champagne. But if this is a recovery, what would a relapse look like?

Meanwhile, the same week the chairman of the Council of Economic Advisers was putting his thoughts on the White House's website, and clearing up the whole 8.254/8.3 unemployment business, this paper reported that Invista was planning to cut 80 jobs at its Chattanooga plant and Pep Boys, the auto parts retail chain, closed its longtime Brainerd Road store.

No need to worry. We'll just tell all those workers being laid off they're the victims of a rounding error. That should take care of everything. Just listen to the president's chief economic adviser. He can explain it. We wouldn't be surprised if he could explain anything. However improbable.

7
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nucanuck said...

The most telling statistic is the labor force particpation rate and that has continued to fall for 13 years. We, and the rest of the world, have more people than we can employ and the trend continues to worsen.

This may be the time to consider whether we have a surplus of people. Are we reaching the limits to sustainable growth or have we passed those limits? Do we have enough water, energy and resourses to continue to add population to the world?

Increasing jobs may be the wrong focus.

August 11, 2012 at 1:36 a.m.
AndrewLohr said...

Job creation? Try the Institute for Justice (www.IJ.org). It knocks down regulations that discourage work.

Are we paying people not to work?

God is creative and interactive (trinitarian), and people are made in His image. We can find things to do.

August 11, 2012 at 5:57 a.m.
EaTn said...

Technical automation and cheap foreign labor have replaced our workforce. The aging population have no desire or need for "stuff" that has driven our previous economy. Times have changed and we've not figure out yet how to adjust, but instability for a whole nation is not forever.

August 11, 2012 at 7:20 a.m.
conservative said...

Arguing over tenths of one percent in the unemployment rate only exacerbates your problem and makes you look petty, Owebama. Look for Jay Leno et al to fix that 8.254 in the minds of the American people.

The current true unemployment rate (U6) is 15%!!

August 11, 2012 at 8:24 a.m.
fairmon said...

EaTn the desire for stuff (demand) has not gone down but up. The majority of good purchased are imported and not enough Americans realize the importance of buying "made in America" even though the price is competitive and quality often superior. Food products are a good example of the growing imports. Check the labels, distributed by an American company does not mean American sourced. People keep buying imported vehicles instead of Ford, Chrysler or GM and insisting on a vehicle made in America not just assembled in America or imported. Try finding an American made TV or other electronic product. Motorola produced the last American TV and gave up when the union would not give any concessions, even temporary, so they could compete. There is no textile industry in America which was once a major employment source. Would we be better off with people with no skills to offer making $12 an hour while doing something to improve their skills if they wanted to do something of greater value? Would we not be better served by redistribution of wealth with the government paying the employees salary while the private sector trained them to do a job instead of paying people not to work? Why not eliminate all legislatively imposed cost to businesses and individuals including taxes, fees etc. and redundant regulations and establishing a consumption tax that taxes people on what they spend? That would be a fair tax system while making American businesses competitive. Contrary to what the wealthy and politicians say this would be a major decrease in taxes and other hidden cost for those with lower incomes.

You want to raise the minimum wage. Pass legislation that allows the top earners to make no more than than a factor times the lowest paid workers or contracted workers doing work for the business or political entity.

August 11, 2012 at 8:49 a.m.
nucanuck said...

Harp, I agree that there are ways that we could compete better, the Chinese have proved that, but I still see labor over-supply as a new emerging world mega-trend. That would mean that any advantage a country might gain would be relatively fleeting because we are reaching the sustainable resourse/energy limits of the planet.

And Andrew, I'm pretty sure that God wants us to be good responsible stewards of our planet and that would include not driving other species to extinction and draining resourses excessively. Being fruitful and multipling no longer seems to fit the times.

August 11, 2012 at 11:41 a.m.
328Kwebsite said...

U6 unemployment for Tennessee stands at near 13.8%. The national average of undescribed unemployment is not an effective indicator. National averages include states like Nevada which have a U6 of about 22% while also including areas like South Dakota, experiencing a U1 unemployment of 1.2%. The Los Angeles area alone has a U6 unemployment of 22.5%.

Who has the 8% unemployment cited here? The state of Ohio.

http://www.bls.gov/lau/stalt12q2.htm

Let's be clear about this: the appropriate measure for unemployment is the U6 rate, because it reflects long-term unemployment. That includes Keynesian institutional unemployment. Institutional unemployment can be used to describe circumstances like those we observe here in Chattanooga, where the market's refusal to hire has nothing to do with an individual applicant's qualifications or availability.

I would remind the Free Press that habitual financial crime, perpetrated during the Bush administration, is largely responsible for the disgusting and reprehensible condition of our economy today. Fraud-based economic policies of the Republican Party are not an acceptable substitute for legal business practices. Those same crimes are the main source of our employment problems.

August 11, 2012 at 8:49 p.m.
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