Archived material is restricted to Rantburg regulars and members. If you need access email fred.pruitt=at=gmail.com with your nick to be added to the members list. There is no charge to join Rantburg as a member.
#1 Its a shame that a majority of voters in the last election were economically ignorant, and that the press has done little to help maintain an informed electorate that is vital for a functioning democracy. Their "covering" for Obama and the left has actually hurt democracy by keeping people ignorant of basic economic truth, and many adverse things they should know about, as well as being very uncritical of the administration that has doggedly continued actions that have produced these conditions.
As for these folks that are losing their "safety net" money, the current administration gets a bonus: when they drop off unemployment benefits, they tend to not be counted in the U3 unemployment rate - the "official" rate that is usually the one reported by the press and federal government.
The U3 is not an accurate sign of economic health or dysfunction anymore. The U6 is a more expressive number because it also includes so-called "discouraged workers", and part time workers who want to be full time but cannot get full time work. The U6 used to run 2-3 points higher than the U3, but during the Obama regime, it has ballooned to a 6-8 point gap. For instance, the U3 was reported nearly at 8, but the U6 remained nearer to 15%.
A better number to look at would be labor force size and participation rate- that is the total number of workers the government counts as working and available for work and what percentage of them are actually active. We now have a larger population, and original projections in 2009 by the Labor Dept had a growth in the labor force between then and now of 5 million workers based on demographics (people coming of age and entering the workforce, immigrants, etc). Despite that growth, the participating labor force is somehow smaller now than it was at the beginning of the current administration. Labor force participation has dropped from 66% to 63.2%. The numbers do not lie: the rate of participation had its most precipitous drops 6 months into the current administrations's tenure, and the rate (which dropped slightly between 2003-2008) has accelerated its decline during this administration. What happened to the missing 5 million who were expected to grow the labor force, as well as the hundreds of thousands who were working and are now "dropped" from the labor force? Furthermore, why is nobody publicizing this when economic conditions are discussed, especially when it is in relation to the actions the current administration has taken and plans to take (Obamacare, taxes, etc).
This is basic economics: labor participation is tied to economic growth, insofar as each worker is involved in producing economically beneficial outputs. More labor participation = more economic benefit produced = economic growth. A decline in labor participation is a bad thing when the reasons for that decline are that people are exiting the workforce because there are no jobs available.
As is well known by many people in various professions, relying on faulty or distorted data to make important decisions is a sure path to failure. So is rank ignorance of the real data. Yet that is what we will continue to see by this administration, thanks to a fawning press and economically ignorant voters, much to the detriment of the whole country.
Posted by OldSpook 2012-11-17 08:47||
#2 400,000 In California Face 'Sudden Stop' In Jobless Benefits in December
What? Our magic money tree died?
They're Economic Creationists who believe that money (vice Monopoly money) magically appears out of thin air.
Posted by Procopius2k 2012-11-17 09:09||
#3 Shorter Version: If the participation rate had not been falling, the unemployment rate today would be much higher. And it would be obvious even to the oblivious people that it is Obama's policies which have accelerated this damage, along with the aid of henchmen Reid and Pelosi.
Posted by OldSpook 2012-11-17 09:17||
#4 Knew a guy who discovered that by getting himself fired, his unemployment benefits would pay rent, food, and discoteching.
It was not long before he nearly killed a score of people when he DUI'd a rollover.
Posted by swksvolFF 2012-11-17 09:56||
#5 They're Economic Creationists who believe that money magically appears out of thin air.
It may lack the bitter irony and savage humor that we so love, but there's your Snark of the Day, folks.
Posted by SteveS 2012-11-17 10:48||
#6 "Socialism works until they run out of other people's money" - Margaret Thatcher
Posted by AlmostAnonymous5839 2012-11-17 11:16||
#7 Socialism works---for ants.
Posted by g(r)omgoru 2012-11-17 11:20||
#8 Good post, OS.
A decline in labor participation is a bad thing when the reasons for that decline are that people are exiting the workforce because there are no jobs available.
That's frightening, but even more frightening is the possibility that some folks have decided that working for a living is a mug's game.
Posted by Matt 2012-11-17 11:49||
#9 I think it is also possible that many people "leaving" the job market are 2nd wage earners in the household who worked when it was convenient to bring in a 2nd income. I don't know how else you can just "leave" the labor force. Unemployment doesn't last forever and single men can't get welfare, so, are we going back to the days of a single breadwinner in a household? I know several middle aged couples associated to my family that have retired the wife in the last few years. In these cases the wife's income was used more for extras like vacations, not critical core income.
Still, it will mean they purchase less.
Posted by bigjim-CA 2012-11-17 12:59||
#10 Lots of people are quietly selling homemade crafts on Ebay or Etsy to supplement their wages or generate some sort of income, the modern version of hawking apples on Broadway. Many are not passively waiting for the hiring machine to be started up again.
Separately, what odds the illegal population of California drops when the benefits run out?
Posted by trailing wife 2012-11-17 13:08||
#11 California (my home state) is the "Greece" of the USA. There is no doubt that benefits spending must be curtailed - no matter how much that clashes with agendas. Some type of crash in living standards and schooling is probably guaranteed. A rise in crime is also guaranteed.
i agree with OldSpook by the way that the labor force participation rate is a good measure - and it is sinking. The USA is caught in a long-term economic shift ... not simply a business recession. Real solutions will be very hard. I see no sources of high-paying jobs on the horizon ... no new technological miracle to generate that. So these changes will be rough.
Posted by Raider 2012-11-17 14:07||
#12 I'm with OS and others here, but one point should be made: it may be that even when (if) the economy comes back, the labor participation rate will not, and unemployment will remain high.
The reason is structural: for the last 300 years humans have been learning to do more and make more per unit of labor. We're more productive than ever, and one thing businesses learn in every downturn is that they really DON'T need all those employees. Then the economy heats up and businesses decide they have to hire.
Well this time they won't: Obamacare and the Obama-led regulations will put the clamps on that. Businesses then will discover that the employees they didn't need during the downturn, they still don't need when the economy improves.
A lot of the jobs that disappeared over the last four years just aren't coming back.
Posted by Steve White 2012-11-17 14:26||
#13 Well obviously Father Fed should put a freeze on emmigration, and transfer our underemployed komrades to locations where there is industry and business, and assign them positions in that field. Thought crime racists will be transferred to collective farms across the high plans for sustainable agriculture studies. Volunteers can join the FEMA Youth Corps, serving from 10 to 24 months of emergency calls and security. Any remaining persons will hired by the Federal Housing Authority and tasked to construct green hub cities where the government provided apartments will streamline expenses such as the mail and medical calls and checkups.
Voluntary compliance is mandatory. Failure will result in you entering the Federal Education and Betterment for All (FEBA) program. Transportation and housing will be arranged.
See, 0% unemployment right there, 100% participation.
(what Steve said, since the trend is to basically unionize the private worker I am afraid that the next step would be to put a freeze on business releasing employees, or at least a pile of paperwork and approval required. I think they are looking for a quick experiment and had Hostess been a healthier food brand we might have seen a pilot program. Its been done, especially with the recovery act, it has just had enough of a veneer to be sold, I'm talking about a blunt and obvious move, perhaps with a cereal company)
Posted by swksvolFF 2012-11-17 15:18||
#14 I don't know how else you can just "leave" the labor force.
Let's see. You could retire, go on disability, go on welfare .....
Posted by lotp 2012-11-17 18:22||
#15 ...get elected to Congress.
Posted by Procopius2k 2012-11-17 19:20||
#16 I don't know how else you can just "leave" the labor force or you can go into whoring, pimping or armed robbery...
Posted by Anguper Hupomosing9418 2012-11-17 19:52||
Posted by gorb 2012-11-17 22:44||