So I'll do you all your journalists a favor, I'll give you a quick little lesson in economics.
The economy is at full employment. That means anybody who wants a job, pretty much has one, and those 4.6% are probably not looking hard enough, are in no particular rush to find a job (but have not given up, thus are still in the labor force), or perhaps are of a specialized skill set and the job in that industry are not as liquid in the labor market.
Anyway, here's a pretty little chart to show you where unemployment has been.
ahh but that data is based on data who are claiming unemployment or elgible to claim unemployment sir. not the actual number of people who can not/will not/ find a jobby job.
ReplyDeleteYa know - I'm no economist, but that uneployement trend seems to parallel quite nicely the rise and fall of Keynsean-based government interference in the economy. Please, correct me if I'm wrong.
ReplyDeleteHio!!! To quote Ed McMahon,
ReplyDeleteYOU ARE CORRECT SIR!
That being said, Keynes recommended government internvetion through fiscal policy to control the ebb and flows of the economy. One could argue Reagan was a Keynesian in that to stop the malaise of the 70's he embarked on a massive fiscal stimulus program, read deficit spending.
Bush Jr can be accused of the same thing to fight off the would-have-been recession due to the Dotcom Crash coupled with the terrorist attacks.
SAdly, in both cases, politicians learned that by using debt they can fool the people into thinking they can have their cake and eat it too, boosting government spending, but then lowering taxes.
Of course it results in increased debt, but they'll be dead long before any voter realizes what's happening.
Mulk -
ReplyDeleteisn't the data based on the labor force, like you suggest, people who aren't looking for jobs aren't included. Well, it would be silly to include people who A)aren't looking for jobs, B)the institutionalized, C)the retired, etc. So yeah, if you don't have a job, you did want one, but you gave up your search, content to be a welfare leech, then there's no reason why you should count the same as someone who is looking for a job.
Hey Mulk,
ReplyDeleteYeah, the labor force are only those "looking for a job."
If my memory serves me correctly, you are officially NO LONGER considered part of the labor force if you're on unemployment for 13 weeks or maybe it's 26.
Regardless, it's always difficult to ascertain who exacly is in the labor force and who isn't.
My questions comes with a preface...I am no economist.
ReplyDeleteFirst, it looks like unemployment is a trailing indicator on the state of the economy by about 6-12 months. The peaks seem to be after a recession.
Second, I noticed a recession and an unemployment spike every 10 years. Any theories on that?
doinkicarus, let me clarify and expand
ReplyDeletethere are plenty of people out there looking for jobs who can no longer claim unemployment so it would not be silly because they are in fact a part of our economic system regardless.
CC - depends on how long you worked with a company in regards to unemployement benefits and how much they had stashed away for this very situation. I was told that you were still part of the "force" if you were claiming such things.
Hi Tony,
ReplyDeleteWell some would argue that employment is the economic so it doesn't "lag." ie-people know they're unemlpoyed and things suck, they don't need to wait for GDP figures to come out and tell them that. In that sense GDP is the lagging indicator.
What is interesting though it how housing starts USED TO be a pretty good indicator of unemployment, usually 6-12 months heads up.
As for the 10 year cycle, nah, random. Has a lot to do with demographics, society, work ethic, fiscal policy, etc. You can have an idiot like Robert Mugawbe come in and tank an economy in literally 1 month. You can have somebody like Reagan who turns it around in about 2 years. Very much like an oil tanker, hard to keep her from listing, very easy to sink.
Hi Mulk,
ReplyDeleteWell I went to the BLS and found this that officially defines a discouraged worker;
"Discouraged workers (Current Population Survey)
Persons not in the labor force who want and are available for a job and who have looked for work sometime in the past 12 months (or since the end of their last job if they held one within the past 12 months), but who are not currently looking because they believe there are no jobs available or there are none for which they would qualify."
So from the sounds of it, you can still technically be looking, but if you haven't found a job in 12 months, then you are considered out of the labor force.
You'd think it'd be easy to find a definition of the labor force that addresses this issue at the BLS, but it's not.