Ezra Klein: All measures of unemployment are falling

[babylonsister]

http://www.washingtonpost.com/blogs/ezra-klein/post/all-measures-of-unemployment-are-falling/2011/08/25/gIQAX5U5tQ_blog.html

All measures of unemployment are falling
Posted by Ezra Klein at 11:03 AM ET, 02/06/2012



(Graph: Ezra Klein; Data: Bureau of Labor Statistics)


Mitt Romney is in a tough political spot: He can’t seem unhappy about a falling unemployment rate. But he can’t be too laudatory about an economic recovery that appears to be strengthening on President Obama’s watch. And so he’s embraced a third option: arguing that “if you take into account all the people who are struggling for work or who have just stopped looking, the real unemployment rate is over 15 percent.”

Romney is referring here to the so-called “U6” measure. It is not, strictly speaking, a measure of unemployment. It’s a measure that groups the unemployed, the involuntarily part-time and the no-longer-looking together into one index. It’s the broadest measure of labor-market misery we have. And it also means that, technically, Romney is wrong: You have to take into account part-time workers who would like to be full-time before you get above 15 percent. But he’s right to say that there’s more economic pain than the basic unemployment rate shows.

snip//

All this tells us what we already knew: The economy has been very bad, but it’s beginning to get better. Indeed, U6, the indicator Romney chose, has actually experienced the largest drop of the three: 2.1 percent, as compared with U3’s 1.7 percent, U4’s 1.6 percent, and U5’s 1.5 percent.

[DevonRex]

1. Oh, wow. That is wonderful.

Thank you so much for letting us know. It is indeed halftime in America and we're stronger in the second half!

[wyldwolf]

2. ruh roh! What will all the DU debbie downers say?

[treestar]

3. Not a good place for Mittens to be

Having to claim the economy is not doing well.

[Tarheel_Dem]

4. An excellent & exciting read. Thank You.

[lumberjack_jeff]

5. Almost all

Employment-population ratio



The above graph represents the percent of the population working.

[treestar]

8. Retiring baby boomers

A lower percentage will be natural for a while.

[lumberjack_jeff]

9. There's an element of whistling through the cemetery evident here.

Jobs growth, although welcome, is barely enough to keep up with population growth.

[DCBob]

12. I think this graph is a bit misleading.

Last edited Tue Feb 7, 2012, 12:44 AM - Edit history (1)

You should show a wider year range.. the peak was around 2000. Clearly the slumping economy has some impact but retiring workers and women deciding to be stay-at-home moms have also had some significant impact.

[lumberjack_jeff]

13. It's entirely about slumping economy and low demand

a) your chart stops at 2009. Job growth since then has only been sufficient to accommodate newbies entering the workforce. Overall rate of suffering remains the same.
b) The only people leaving the job market en masse are men.

[DCBob]

15. "Entirely".. are you sure? Nothing to do with boomers retiring?

One could argue the peaks in 2000 and 2007 were the result of unrealistic bubbles.. ie the dot com and housing bubbles. It very likely a value of something around 60% is more normal.

[lumberjack_jeff]

16. If we were at full employment, wages would be going up.

Wages didn't go up, even when we were at 63 or 64%.

5% of the population didn't simply decide to collectively retire in 2007 without kids or grandkids to take their place.

[DCBob]

17. We are not at full employment obviously... that would be a rate of about 5%.

My argument is even when we get to 5% the employment-pop ratio will still be lower than it was in 2000 and 2007.

[lumberjack_jeff]

18. if unemployment were to get close to 5%...

... more applicants who were formerly "retired" or "discouraged" would come out of the woodwork.

We won't get to full employment (meaning wage inflation) before we reach about 65% or so employment-to-population ratio.

[DCBob]

19. 65% employment-to-population has never been reached in the history of this country.

The average over the past 60 years is about 60% and most of the time is has been below that. See graph I posted above.

[lumberjack_jeff]

20. For all practical purposes, the employment to (workforce) ratio was 80% when I was a child.

In 1953, 85% of men (essentially "the workforce&quot were employed. Women weren't expected to work outside the home.

Wages have been stagnant since 1980 when I graduated from high school. In those days 75% of adult men had jobs. Today it is 64%.

Capital-driven efficiency has given us a labor surplus. Until the labor supply is constrained, it will only get worse. Instead of bills making fewer people eligible for overtime, we should have bills shortening the work week, increasing the number of workers eligible for overtime and implementing mandatory paid leave.

[DCBob]

23. That may be true but it will be nearly impossible to ever to get to the numbers you want.

That's simply not realistic given the current state of affairs.

[lumberjack_jeff]

26. I'm arguing about "true", not "realistic".

Until labor becomes a constrained resource, wages will continue falling. Period.

Nothing is realistic until it happens, then in hindsight, inevitable.

WWII and the new deal rebuilt the economy primarily by making labor scarce and thus more valuable.

[DCBob]

29. Its nice to dream but most of us need to focus on reality.

[lumberjack_jeff]

30. Okay. Let's share dumpster diving tips.

Rats are chockablock full of protein.

[joshcryer]

21. Looks quite good to me.

If they keep that line relatively flat it'll do better than the projections.

Meanwhile the participation rate can only trend downward.

We have 70-80 million baby boomers retiring.

Population growth is negative (including immigration).

[lumberjack_jeff]

24. First, the population grew by 2 million+ in 2011 and is expected to continue growing.

http://www.census.gov/popest/data/national/totals/2011/index.html

Second, the chart you provided is not the employment to population ratio. The workforce participation rate is irrelevant because it excludes all those who have simply stopped looking for work.

So long as there's a surplus of workers (and "this looks pretty good to me" guarantees it for the forseeable future) workers will continue taking it in the backside.

I don't doubt that the participation rate will continue downward, because that is the goal of capital.

[Beacool]

25. They don't want to know about the 5.5 M people who dropped from the work force.

Governments have manipulated the unemployment figures for decades. But heck, don't burst their bubble. Happy days are here again. Let's uncork the champagne.

[lumberjack_jeff]

27. I don't enjoy pissing in anyone's wheaties.

I'm happy that there are wheaties to be had... job growth which keeps up with population growth is better than job losses.

But yeah, uncorking the champagne is both premature and counterproductive. Here's Krugman on the topic.

And every time we get a bit of good news, the purge-and-liquidate types pop up, saying that it's time to stop focusing on job creation.

Sure enough, no sooner were the new numbers out than James Bullard, the president of the St. Louis Fed, declared that the new numbers make further Fed action to promote growth unnecessary. And the sad truth is that the good jobs numbers have definitely made it less likely that the Fed will take the expansionary action it should.

So here's what needs to be said about the latest numbers: Yes, we're doing a bit better, but no, things are not OK - not remotely OK. This is still a terrible economy, and policymakers should be doing much more than they are to make it better.

http://www.chron.com/opinion/outlook/article/Krugman-Resist-urge-to-purge-economy-3082521.php

[Beacool]

28. I read it yesterday in the NY Times.

Things Are Not O.K.
By PAUL KRUGMAN
Published: February 5, 2012

.............So, about that jobs report: it was genuinely good, certainly compared with the dreariness that has become the norm. Notably, for once falling unemployment was the real thing, reflecting growing availability of jobs rather than workers dropping out of the labor force, and hence out of the unemployment measure.

Furthermore, it’s not hard to see how this recovery could become self-sustaining. In particular, at this point America is seriously under-housed by historical standards, because we’ve built very few houses in the six years since the housing bubble popped.........

That said, our economy remains deeply depressed. As the Economic Policy Institute points out, we started 2012 with fewer workers employed than in January 2001 — zero growth after 11 years, even as the population, and therefore the number of jobs we needed, grew steadily. The institute estimates that even at January’s pace of job creation it would take us until 2019 to return to full employment.

http://www.nytimes.com/2012/02/06/opinion/krugman-things-are-not-ok.html?_r=1

[Comedywriter1214]

6. Not so fast...

Friends, in 2008, I was the first national blogger to endorse Dennis Kucinich. I was, and an a Paul Wellstone Progressive.

Please ask yourself who was the lsat president, democratic or republican...that didn't report glowing numbers. In every measurable capacity in the last ten months before their own re-election attempt?

American Airlines, and countless others have announced huge layoffs and the postal service is still negotiating a force reduction perhaps as high as 300,000.

Where are these alleged new jobs coming from? True, companies like Starbucks are eliminating 40 positions for all non-managerial employees. So, sheth those employees, who hours are cut in half, go out and get another job to replace the 20 hours lost at Starbucks...is THAT one out the NEW JOBS?

It is simply not as simple sd even Mr. Klein is suggesting. Thoughts at 3 A.M. http://thoughtsatthreeam.blogspot.com/?spref=tw

[thelordofhell]

7. republican response.......

"Turn those machines back on!!"

[JoePhilly]

11. LOL ... is that a "Trading Places" reference?????

[lumberjack_jeff]

14. "Mortimer, your brother is not well. We better call an ambulance" n/t

[Number23]

10. The fact that this post is in the same forum, three posts down

from another thread where half the posters are insisting the president has done NOTHING for jobs unless you are the 1% is nothing short of incredible.

The sense of denial it takes to pretend that nothing has gotten better for this economy since January 2009 is three times the length of Montana and twice as wide.

[Major Hogwash]

22. It was much worse in 2008 and Mitt wants to take us back to those "good ol' days"!!!

What a doofus!!!