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Tags: Unemployment

Extending the Debate on UI Benefits



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Policy analysts from the left, right, and center continue to debate the wisdom of extending unemployment insurance benefits to the long-term unemployed. On July 1, 2013, my home state of North Carolina became the first to exit the extended-benefits program as part of a comprehensive reform of the state’s UI system that pulled North Carolina out from under a federal grandfather clause. At the start of 2014, the entire extended-benefits program expired for the country as a whole.

Republican leaders in Congress and most conservative analysts agreed with the expiration of extended benefits, citing a well-established conclusion in the scholarly literature that extended or rich UI benefits create disincentives for unemployed workers to make decisions that are painful or challenging in the short run but in their interest in the long run — such as accepting a less-than-ideal job, moving to another location where jobs in one’s field are more plentiful, returning to school to retrain for a new career, or starting a business. But some conservatives, including NRO contributors, argued that Congress should have made a deal with President Obama to extend UI benefits once again. They doubt the significance of the disincentive effect and worry that the long-term unemployed losing benefits would simply drop out of the workforce and end up on public assistance (or worse).

Because North Carolina exited the program six months before the rest of the country did, its experience is obviously of great interest. I’ve written about it multiple times, as have other analysts. My latest piece is a lengthy response to a thoughtful article by Brookings Institution fellow Justin Wolfers that ran in the New York Times a couple of weeks ago. My conclusion is that while Wolfers is a far better critic of North Carolina’s decision than most, his interpretation of the data is debatable. Using a broad range of valid, relevant economic statistics suggests that North Carolina’s labor market and broader economy improved faster during the last six months of 2013 than both the national and regional averages, and that ending the disincentive effects of extended benefits likely played some role (although not a massive one, since most unemployed workers were never eligible for UI in the first place and thus aren’t directly affected by changes in UI benefits).

I end the piece by observing that Wolfers’ interpretation (extended benefits have no macroeconomic effects either way) and my interpretation (ending extended benefits has positive macroeconomic effects) are only two of three positions on the issue:

The third possible interpretation, still favored by liberals and some conservatives, is that ending extended benefits had deleterious results for the labor market and larger economy, first in North Carolina in the last half of 2013 and then in the nation as a whole during 2014. I’m unaware of any persuasive evidence for this conclusion. Since the entire extended-benefits program expired at the end of 2013, the American labor market has clearly experienced substantial improvement. The U-3, U-4, U-5, and U-6 rates are all down substantially. The employment-population ratio is up. Fewer people are on food stamps. The gains appear to be particularly strong among the long-term unemployed.

In short, the supporters of UI extended benefits predicted dire economic consequences from the expiration of those benefits. The predicted consequences didn’t happen. On that, Wolfers and conservatives agree.

Tags: unemployment insurance , Unemployment

NY Times: Recent U.S. Economic ‘Progress, in Fact, Is a Mirage’



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The New York Times notices a phenomenon of the labor market, in the context of why Democrats aren’t benefiting more from what they contend is a long-awaited recovering economy:

While the number of women out of work appears to be much improved, the number of women employed compared with the total female population is 55.2 percent, actually worse than it was in October 2010. Progress, in fact, is a mirage, the product of what economists call the disappearing work force: people giving up and dropping out.

This is not news to many of us. You may recall my video from (gasp) five years ago, discussing the rise of the “discouraged workers” not showing up in the official unemployment rate because they had stopped looking for work.

Tags: Women , Unemployment , Labor Statistics

A Thoroughly Depressing Streak



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The Wall Street Journal points to the other side of the story on last Friday’s jobs report: “February was the 34th consecutive month that saw more unemployed workers stop looking for a job than find one.”

Tags: Unemployment

Unemployment Up; Obama to Travel to Talk Gun Control



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The unemployment rate is up to 7.9 percent again.

The new year started off with an old story: Employment grew again in January but not at a pace able to lower the jobless rate.

Nonfarm payrolls rose 157,000 for the first month of 2013 while the unemployment rate edged higher to 7.9 percent, news unlikely to alter the Federal Reserve’s monetary policy or instill confidence that the recovery is gaining steam.

BusinessWeek looks ahead:

Higher Social Security taxes are reducing take-home pay for most Americans. A person earning $50,000 a year will have about $1,000 less to spend in 2013. A household with two high-paid workers will have up to $4,500 less. Taxes rose after a 2 percent cut, in place for two years, expired Jan. 1.

Analysts expect the Social Security tax increase to shave about a half-point off economic growth in 2013, since consumers drive about 70 percent of economic activity.

Today President Obama will awards medals to scientists and inventors; on Monday he travels to Minneapolis for an event to discuss gun control.

Tags: Barack Obama , Gun Control , Unemployment

With Everything Going So Well, Time for Another Photo-Op!



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So, looking at the headlines this morning . . .

Jobless Claims Bounce Higher

U.S. economy contracts for first time since recession

Chinese Cyber Hackers a Growing Threat

U.S. faces new Al Qaeda threat as terror group’s ‘strike map’ is revealed

Report: Iran, Hezbollah terror threat rising

Iran Is Said to Be Set to Accelerate Uranium Enrichment

Syria, Iran threaten retaliation against Israel

And what’s going on at the White House?

Mark Knoller: “Today at the White House: No public events on the president’s schedule today, though Vogue is bringing camera gear into the White House this morning.”

Beautiful day for a photo-op, isn’t it?

Tags: Economy , Iran , President Obama , Unemployment

Will We Get a Jobs Report Friday? At Least a Soggy One?



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With roughly 7 million in the Northeast without power, some Morning Jolt readers may have bigger problems on their minds than political news. But the Tuesday edition is written and off to the editors, and should reach most folks this morning. Political news seems second-tier at most at moments like this, but for what it’s worth . . .

No Jobs Report Until After Election Day? You’re All Wet!

Wait, you’re saying we may not have much reason to watch CNBC at 8:30 on Friday morning this week?

Hurricane Sandy might force the Labor Department to delay the release of the monthly report on the nation’s unemployment, due Friday morning, the most hotly anticipated piece of economic data to come out before the election.

The Bureau of Labor Statistics, the data and statistics division of the Labor Department, is scheduled to release the October jobs report at 8:30 a.m. on Friday. But the hurricane has shuttered government offices and closed public transportation in and around Washington, and that might lead the department to delay the release of the report.

“We will assess the situation when the weather emergency is over and notify the press and public of any changes at that time,” a bureau spokesman, Gary Steinberg, wrote Monday in an e-mail.

Another Labor Department spokesman, Carl Fillichio, said in an e-mail that employees were “working hard to ensure the timely release of employment data” at the end of the week. “It is our intention that Friday will be business as usual regarding the October Employment Situation Report.”

The Labor Department has already completed the monthly surveys of about 60,000 households and 140,000 businesses and government offices that provide the raw data for the jobs report. But bureau specialists need to translate that raw data into the jobs report every month.

Economists do not expect great surprises in October’s jobs figures. The unemployment rate is expected to stay about where it is and the slow, steady pace of jobs growth to continue. In September, the unemployment rate dropped to 7.8 percent, the lowest rate since President Obama took office but still elevated because of the recession.

Last month’s surprise drop that was so perfectly timed, folks like Jack Welch were charging the numbers had to have been cooked. Still, just about every economist who knows the inner workings of the Bureau of Labor Statistics says an effort to fudge the numbers is unthinkable. Perhaps the unemployment number merely was a statistical anomaly, a rare fluke that just happened to align with the desires of the Obama administration.

Douglas Holtz-Eakin laid out just why the numbers looked so weird — in fact, even weirder if they weren’t cooked:

In September, the payroll survey — derived from asking employers how many people they employed that month — showed that the economy created 114,000 jobs. This is consistent with an economy growing at 1 to 2 percent. The household survey — derived from asking households who in the house has a job — showed a stunning 873,000 new jobs. This is this highest that number has been since June of 1983. This makes no sense; it is out of line with any of the other data on the economy for September.

Even more amazing, more than 560,000 of those are part-time jobs. That is really stunning. One would expect that as extended unemployment benefits expire (and they are), some workers would migrate back to employment — that is a tried-and-true economic link. Some of those might first end up in a part-time setting. But why 560,000? And why in September?

If it was some weird quirk of the household survey, one would expect the following month to look “normal,” with households reporting a number much lower than September’s sudden 873,000 jobs. So thus, more interest than normal in what the October numbers say.

No rush to get those new numbers, say the liberals at FireDogLake:

Accuracy of the data matters far more than whether voters get a noisy, rushed data point on which to base their voting decision. If the BLS can’t make the numbers in time, they absolutely should delay it. But given how conservatives unilaterally decided that the last jobs report was rigged, I can only imagine their response to a hurricane-caused delay.

BuzzFeed points out that the Bureau of Labor Statistics fans, who dismissed talk of playing games last month, will find a pre-election delay hard to explain:

Former Bush administration official Tony Fratto — a strong defender of the BLS from charges of political interference — warned that any delay could post a “reputational disaster” to the agency.

“As you know I have been a loud, public defender of the Bureau,” he told BuzzFeed. “They are professionals, non-political, and the very best in the world at what they do. But my recommendation to them — as someone who wants to protect their credibility — please report the data as you see it. It would be a reputational disaster if BLS delayed under these circumstances. Move heaven and earth to report the data on time. Hurricane Katrina numbers were able to be reported and explained. Find a way to report these numbers, too.”

But Jazz Shaw concludes sometimes natural disasters happen: “Not for nothing, but if the BLS labor numbers are a little late because of a freaking hurricane, it’s not necessarily a conspiracy.”

ADDENDA: My brother: “This morning I hugged a tree, because how else do you thank it for not falling on your car?”

Nonessential federal workers in the Washington, D.C. area are off today, as well.

Tags: Unemployment

A Plurality Think the Last Jobs Report Was ‘Mixed’ News?



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This polling result, spotlighted by Allahpundit, is pretty amazing:

One more data set for you on jobs, which might help explain why Obama and Romney are neck and neck on who’ll do better to create them. This comes from Gallup. Never forget, my friends: There are an awful lot of low-information voters out there.

Column three is the killer, of course. Overall, a plurality actually rates last Friday’s jobs-report stinkbomb as having been “mixed,” “somewhat positive,” or “very positive”(!) (40 percent, seven percent, and two percent, respectively). Just 42 percent say it was either somewhat or very negative. I don’t know how to explain that except to speculate that a huge chunk of voters simply have no idea of what constitutes healthy job growth. They hear that 60,000 jobs have been created and they think “hey, great” without paying close enough attention to know that that’s far below what we need to bring down unemployment. I think that’ll change later this year as people start focusing more on political news in anticipation of election day, but who knows? Maybe The One will surf to victory on a wave of idiots who think 50,000 jobs a month is pretty goshdarned impressive.

A couple of points: One, there are probably a considerable amount of people who when asked by a pollster if they follow a topic closely, instinctively say “yes,” because they don’t want to admit that they’re not paying attention to current events.

Two, some folks are hardcore partisans, and will insist that bad news under their guy is really good news. That’s how I would score a portion of the 9 percent who claim to follow the news closely and insist the report was positive.

But yes, there are a lot of voters out there who aren’t really up to speed on what “good” job creation looks like.

Tags: Jobs , Unemployment

Politico’s Sudden interest in Individuals in Romney Web Videos



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Politico finds it important that a man who appeared in Mitt Romney’s video was convicted of “assault on a peace officer” in 2005. Their research indicates the man served his sentence.

He appears to be a carpenter, working on staircase repair at a hotel; he refers to an anecdote of writing his daughter’s name underneath a stair that appeared in the Des Moines Register.

So… why is this important?

The Register wrote about the ad, and did not mention the man as some local troublemaker or ne’er-do-well.

I suppose an argument could be made that the man’s run-ins with the law contribute to his long-term unemployment and under-employment. But the man’s need for a job, and ability to support himself and pay his child support, is real. Iowa’s unemployment is a relatively low 5.2 percent, but that still adds up to 86,978 Iowans looking for work. It’s unlikely that the other 86,977 currently unemployed are all struggling to find work because of criminal records.

Over at Ace of Spades, Drew M. writes:

The bigger issues is [Politico reporter Maggie] Haberman appears to have taken it upon herself to do background checks on people appearing in Romney videos. There are no links or sources in her piece so it’s either original reporting or she’s just running opposition research dumps for the Obama campaign.

I wonder if Haberman has done background searches on everyone who appears in an Obama ad. If not, why not?

The rules are clear, if the media isn’t going to do this stuff conservatives will have to. No more playing a gentleman’s game when the other side is playing for keeps. Everyone who appears in a Team Obama ad better be prepared.

I guess we know why Obama prefers to cite “composites” like “Julia.” They never found the little girl whose family couldn’t afford a winter coat that John Edwards kept citing again and again.

Tags: Iowa , Mitt Romney , Politico , Unemployment

The Bureau of Labor Statistics’ Lost City



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This is the point a lot of folks are wondering about in today’s otherwise good-looking numbers in the monthly jobs report:

Population estimates for the household survey are developed by the U.S. Census Bureau. Each year, the Census Bureau updates the estimates to reflect new information and assumptions about the growth of the population during the decade. The change in population reflected in the new estimates results from the introduction of the Census 2010 count as the new population base, adjustments for net international migration, updated vital statistics and other information, and some methodological changes in the estimation process. The vast majority of the population change, however, is due to the change in base population from Census 2000 to Census 2010.

The adjustment increased the estimated size of the civilian noninstitutional population in December by 1,510,000, the civilian labor force by 258,000, employment by 216,000, unemployment by 42,000, and persons not in the labor force by 1,252,000. Although the total unemployment rate was unaffected, the labor force participation rate and the employment-population ratio were each reduced by 0.3 percentage point. This was because the population increase was primarily among persons 55 and older and, to a lesser degree, persons 16 to 24 years of age. Both these age groups have lower levels of labor force participation than the general population.

The Zero Hedge site suggests this is a deliberate revision to make the unemployment rate appear lower than it is:

A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that’s not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million.

Except that these people weren’t showing up in any other category in the figures of previous months; pretend the BLS discovered a city of 1.5 million people that it had previously overlooked. But that city is probably a college town with a lot of retirees and small children, since only 216,000 of the residents are working and only 42,000 of them are “officially” out of work, meaning actively looking for a job. (Remember my video with my son’s little figures. If you stop looking for work long enough, you’re no longer “officially” unemployed.) The vast majority of this Missing City is made up of people who are “not in the labor force,” and they’re disproportionately women: 297,000 men, 955,000 women.

It is fantastic that the number of Americans working is increasing. But those working Americans are supporting more and more non-working Americans. There are a lot of reasons to leave the labor force, some by choice and generally happy (parenthood, going back to school, affording early retirement) and bad and unhappy ones (despair, unaffordable involuntary early retirement). The number of Americans not in the labor force jumped from 86,001,000 to 88,784,000 with this revision. While they may have been invisible in the previous figures, the bottom line remains the same: a gargantuan number of Americans who could be working aren’t.

As noted before, we usually see the size of the labor force growing consistently under “normal” growth times. Between January 2006 and December 2008, 4.4 million Americans joined the labor force. We’ve been largely stagnant since then: 154,236,000 in January 2009; 154,395,000 last month.

As long as your labor force doesn’t grow, even anemic-to-modest job growth can chip away at the unemployment rate.

Tags: Unemployment , Unemployment Rate

Government Union Head Envies Private Sector’s On-Site Spas



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Colleen M. Kelley, president of the National Treasury Employees Union, which represents 150,000 workers in 31 government agencies, takes to the editorial page of the Washington Post today to argue:

The federal pay system aims to find a balance between offering a fair and competitive wage, a secure retirement and a satisfying work environment for those who believe in public service. Especially for the most educated, highly skilled and highly compensated federal employees, the importance of the mission, the challenge of the work and the commitment to public service provide non-monetary incentives.

It is clear that the public and its representatives in Congress do not support compensating even the most educated and skilled employees at the level they could attain in the private sector. Nor would these employees ever see the kinds of monetary and non-monetary perks their counterparts in the private sector receive, such as paid sabbaticals, 12 weeks of paid maternity leave, bonuses, stock options, on-site spas and more.

What it seems almost no one in the federal workforce recognizes is that those generous perks in the private sector are largely, if not entirely, contingent upon the performance of the private company. A corporation that spends all of its (after-tax!) earnings on an on-site spa will likely go out of business.

A lot of factors go into the performance of a private company, but one that is almost impossible to ignore is service to the customer. If the customers don’t like the quality of the service or good, they can take their business elsewhere.

The federal government has a monopoly, unless citizens want to renounce their citizenship and immigrate elsewhere. Whether the public is pleased, displeased, or irate about the level of “service” they’re getting from the federal government, they pay their taxes year in and year out. There are few, if any, financial consequences for bad service to the citizenry. Considering the rarity of firings in the public-sector workforce (“Federal employees’ job security is so great that workers in many agencies are more likely to die of natural causes than get laid off or fired, a USA TODAY analysis finds“), it could be argued we’re witnessing a whine about a lack of sabbaticals from representatives of government workers who already enjoy effective “tenure.”

Finally, after four years of recession, on a day we’re allegedly supposed to be celebrating that unemployment is all the way down to 8.3 percent, doesn’t it seem extraordinarily tone-deaf for the head of a public-sector union to lament publicly that highly skilled government workers are undercompensated because they don’t get paid sabbaticals, bonuses, stock options, and on-site spas?

Why, it’s almost enough to make you want a president who likes being able to fire people who provide services to us.

Tags: Government Jobs , Unemployment

How the Unemployment Rate Drops When Folks Stop Looking for Work



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In response to the latest unemployment numbers, I’m seeing people still wondering how the unemployment rate can go down if people stop looking for work. Way back in February 2010, I made a short video explaining the phenomenon of “discouraged workers” (although I never got into how one is considered part of the labor force). If you can stand the poor audio and video quality, it’s still accurate:

I taped that shortly before my second son was born. With my older boy now into superheroes and Legos, I have much more fun little figures to use if I ever do demonstrate how people depart the labor force.

Tags: Barack Obama , Unemployment

Where Are America’s Workers Going? Off the Books.



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The unemployment rate declined to 8.6 percent last month . . . as 120,000 net Americans found jobs, but also about 315,000 Americans left the work force.

You’ll recall yesterday I spotlighted an interesting phrase and assessment from CNBC’s Jim Cramer: That for the first time in American history (or at least recent memory), the country is developing a sizable and significant “off-the-books” economy.

Obviously, it’s hard to quantify a phenomenon that is set up to not be measured, but it appears the Great Recession has greatly accelerated this trend, which isn’t good for employees, isn’t good for tax revenues, isn’t good for the rule of law, and probably is not, in the long-term, good for employers. (Wouldn’t an employer rather have happy, loyal, on-the-books employees?)

There hasn’t been a ton of discussion of this phenomenon, but this January 2011 Uptowner article talked about the phenomenon in New York City:

“The underground workforce is made up of individuals from many walks of life,” Susan Pozo, an economist at Western Michigan University, says via e-mail.

Smith says, “They can be tailors, janitors, nannies, dog walkers.”

While he thinks the undocumented workforce is on the rise, it’s tough to find data to support the claim. Pozo estimates that, based on the documented unemployment rate in upper Manhattan, off-the-books workers constitute roughly 13 percent of the labor force. She knows of no estimate of the total worth of the country’s underground economy.

Harvard economist Lawrence Katz says via e-mail, “There is no good systematic data on the size of the underground economy.”

Even government authorities can’t provide any figures. “We really don’t have data,” Martin Kohler, regional economist with the Bureau of Labor Statistics, says in an e-mail. “And I am not sure who would.” . . .

While undocumented immigrants always work off the books, the population of legal residents joining their ranks may be growing. “It is always on the rise,” says Richard Weiss, communications director for the Construction and General Building Laborers Local 79 union, serving New York City.

Those working without any benefits, legal protections, or without paying taxes don’t prefer to work off the books, but may do so out of desperation. “I have to pay for electricity, rent, gas, phone, food and I need some work for that,” says Browne, who was laid off a year ago from the restaurant where he worked.

“Can’t survive on welfare and unemployment,” he adds.

Weiss says, “These people are exploited due to their economic situation.” He adds that many times underground workers are paid less than minimum wage while their employers also evade taxes. “They are treated as disposable commodities,” he says.

Change has come to America.

Tags: Barack Obama , Unemployment

Newt’s Right: Put the Kids To Work



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From Williamson’s Political Dictionary, Vol. 1: newt, [noot; nyoot] v., to put one’s foot in it while putting one’s finger on it.

The usual half-wits (and quarter-wits, and hemidemisemi-wits) are having a great deal of fun with Newt Gingrich’s characterization of child-labor laws as “truly stupid,” a comment that launched a thousand Dickensian exaggerations. Never mind that Newt Gingrich was undeniably correct, even if he does have a knack for saying the right thing in a way that makes it sound wrong.

The former speaker is working from the radical notion that if we lower barriers to work-force participation then we might reasonably expect to see higher levels of work-force participation, and that if we erect barriers to work-force participation, we might reasonably expect  to see less of it.

Here are a few truths that rarely are spoken: About half of Americans will not really benefit from a four-year college education, and we should not waste the time and resources to put them through four (or five, or six) years of undergraduate work at a satellite campus of Mediocre U. And let us not overlook the fact that one of the most precious resources being wasted is the time, energy, and money of millions of 18-to-24-year-old Americans who could be making better use of their youth. The evolution of the bachelor’s degree into a general professional license has resulted in the massive misallocation of human capital (and financial capital) that mostly serves the economic interests of a very narrow and parochial special-interest group: college faculty, staff, and administrators, a reliably overpaid and underworked population of sinecure-clingers insulated from economic realities by our baroque education-funding system and protected by such medieval institutions as tenure.

Gingrich was right to say that the real value of a first job isn’t the money one earns but the lessons one learns: how to show up on time, how to be honest, how to be dependable, how to take direction, how to separate one’s personal life from one’s professional obligations, etc. Having fewer 16-year-olds working as part-time janitors does not mean that you will have proportionally more of them fine-tuning their Harvard admission essays. Having more 16-year-olds working as part-time janitors does not mean that we will have proportionally fewer rocket scientists and Ezra Pound scholars down the road. Most of our young people aren’t headed down that route.

One of the most dangerous and destructive tendencies in American public life is the upper class’s habit of generalizing its own desires, tastes, approaches, and interests onto the body politic at large. Thus did (for example) Governor Reagan help transmit the Hollywood elite’s culture of at-will divorce to the middle and lower classes. Unlike the rich and famous, the women and children of the middle and lower classes are not protected by vast amounts of money and social capital, and therefore were poorly positioned to endure the havoc that no-fault divorce wrought upon American family life, a development from which the nation probably never will recover. (Oops.) Our elites seem to be imagination-challenged, and they can never quite realize that other people are making their life choices while consulting a very different menu of options. This class blindness is the source of Karl Rove’s sputtering horror at the idea of his children “picking tomatoes.” It is also the source of Barack Obama’s managerial liberalism, which implicitly holds that if the poor ignorant wretches in the non-elite classes would only make the same life decisions as Barack and Michelle Obama, then they would get (roughly) the same outcomes. But that is not the case.

There is a relatively small minority of high-IQ Americans who form what Charles Murray famously called the “cognitive elite.” There is a larger group, but still a relatively small one, of very driven people who are attracted to a particular occupation early in life — those people who always knew that they were going to become doctors, truck drivers, teachers, boxers, newspapermen, farmers, automobile mechanics, what have you, and take the necessary steps to do so early in life. But there is a relatively large group of young people who are of average or below-average IQ, have no particular skills, and no clear path set for them early in life. Early work experiences are critical for people in this group, both because they instill necessary habits and provide necessary experience, and because having a variety of early work experiences provides a richer range of options. The more work experiences one has early in life, the more likely one is to encounter an occupation that matches one’s talents and interests.

In the course of doing a little reporting on long-term unemployment in New York (see “Keeping Blacks Poor,” National Review, February 2010), I learned some depressing stuff:

There’s not much other work to be had in the Bronx, where unemployment is currently at about 13.1 percent. Much of the Bronx is young and black or young and Hispanic. Nationally, the unemployment rate among blacks rose to 16.2 percent in the year-end numbers, while the rate for whites fell to 9.0 percent. For black youths, the numbers are startling: 50 percent for 16–19-year-olds, 26 percent for 20–24-year-olds. A study from the Community Service Society of New York puts actual work-force participation among black men 16–65 years of age in New York City at about 50 percent, and the number for young black men nationwide is just 40 percent.  Never mind the jobless recovery: For a great many black Americans, it’s been a jobless eternity, in good times and in bad. Why? 

One of the factors that stood out in my interviews was lack of early work experience. These perennially unemployed thirtysomethings hadn’t lost jobs at factories or been the victims of outsourcing: They had never had a real job of any kind. In many cases, many of the men in their families and circles of acquaintance had never had a long-term job of any kind, either:

At 35 years old, C has never held a job. His friends, acquaintances, known associates (C is a little foggy on whether he’s on probation or parole, but he’s got some known associates): no jobs, never really had them. His father? Do not ask C about his father. In fact, the only people C can think of who have jobs are women: His mother worked, the mother of his children works. He did know a woman who was dating a taxi driver once. C says he would like to work but is more of an independent businessman. He describes the informal work he has done as “this and that.”

There are always economic tradeoffs, of course. But the alternative to work for a lot of teen-agers is not lacrosse or volunteering on the Obama campaign or putting in a couple extra hours of study for the SAT. If you want to say that as a general rule we’d prefer to keep teen-agers away from work during the school year because we want to emphasize academic achievement, fine: But you should have the intellectual honesty to admit that you are simply elevating the interests of one group of young people over those of another. It’s a lot like the minimum wage: You may think that putting a floor on wages is worth the tradeoff of higher unemployment for low-skilled workers and permanent unemployment for the least-skilled workers, but you’re still making a trade. (And maybe you’re not the person best situated to judge the economic interests of people you’ve never met and about whom you know nothing?)

Gingrich’s suggestion that young people be employed doing manual labor at the institutions charged with educating them is characteristically insightful and bold — meaning that he’s already walking it back a little bit, because All The Right People are aghast that somebody, somewhere, may not be dreaming of seeing the leaves turn in Princeton.

—  Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, published by Regnery. You can buy an autographed copy through National Review Online here.

Tags: Politics , Unemployment

Unemployment Rate Down Slightly; Standard of ‘Good News’ Down a Lot



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What has President Obama lowered the most?

The total number of Americans in the U.S. labor force? (154,424,000 in February 2009, 154,198,000 in October 2011)

The total number of Americans employed? (141,687,000 in February 2009, 140,302,000 in October 2011)

The employment population ratio? (59.6 percent in February 2009, 58.7 percent in October 2011)

All good guesses, but I would argue that what Obama has lowered most is our expectations.

AP: “The jobs crisis may be easing on the strength of a fourth straight month of modest hiring and a dip in the unemployment rate.”

Reuters: “Jobs report hints at some improvement.”

All of these relatively cheery headlines and ledes because of 80,000 jobs added, and unemployment moving from 9.1 percent to 9.0 percent. (As I have noted before,  the size of the labor pool normally grows from month to month, and while economists disagree on precisely how many jobs need to be added each month just to keep pace with the additional workers, it generally ranges from 100,000 per month (AP) to 100,000–125,000 (Heritage Foundation) to about 130,000 (New York Times).)

Tags: Barack Obama , Unemployment

Just Imagine How Much He Would Raise if More Folks Were Jobless!



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Higher unemployment translates into higher donations to the Obama 2012 campaign. Who says his economic policies aren’t achieving their goals?

An Associated Press analysis of Obama’s fundraising since April found his supporters opened their wallets more often this election cycle in places with the worst unemployment rates. That’s compared with the same period four years ago, just months before the country was thrust into a major recession . . .  Among Obama’s supporters, however, there has been an uptick in donations from Democratic- and Republican-leaning counties, even as more than 1 in 10 people are out of work in those places. In the Detroit area, where unemployment has exceeded 14 percent, supporters wrote hundreds of more checks — albeit in smaller amounts when adjusting for inflation — to Obama’s campaign than the same period in 2007.

Winning!

By the way, how many years of consecutive high unemployment and low growth are required before a president has to stop bragging that he “prevented another great depression”?

Tags: Barack Obama , Fundraising , Unemployment

Obama, Vastly Overstating What His Jobs Bill Can Do, Again



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Today’s jobs report is actually not that bad — unemployment steady at 9.1 percent, 103,000 jobs created, although that figure includes about 45,000 striking Verizon workers who returned to their workplaces. Of course, the broader jobless rate, the U-6 number that includes people who have stopped looking for work or those who are working part-time but who want to work full-time, hit its highest level this year.

Taking a look at Obama’s comments in his press conference yesterday, it is striking that he seems absolutely convinced that by offering a jobs plan, he is inoculated against dissatisfaction about the economy by 2012.

He’s probably quite wrong. For starters, he writes, “this jobs bill can help guard against another downturn if the situation in Europe gets any worse.” But it’s not merely that hard economic times in Europe means they’ll be buying fewer American products. (And even this factor can be overstated; only five of the top 15 countries for U.S. exports are in Europe: The U.K. is 5th, Germany is 6th, the Netherlands is 8th, Belgium is 12th, and France is 13th.) It’s that high-end European labor will suddenly get a lot cheaper.

Daniel Amerman writes:

There will be tens of millions of highly trained European workers who will abruptly be far cheaper to employ than US workers, as a direct result of the economic devastation in Europe and the European currencies being worth far less than the US dollar.  When it comes to exporting anywhere else in the world, or even maintaining market share in the US, European workers will suddenly be much cheaper and able to take market share from US workers, as a result of the soaring differential between Euro collapse and the triumphantly powerful US dollar.

Obama also insisted:

Independent experts who do this for a living have said this jobs bill will have a significant effect for our economy and for middle-class families all across America. And what these independent experts have also said is that if we don’t act, the opposite will be true. There will be fewer jobs; there will be weaker growth.

Except that there’s no unified definition of the term “significant.” It would be really hard to spend $450 billion and not create any jobs. Even critics of the Iraq and Afghanistan wars acknowledge that high military spending can, at least within the first five years, increase GDP, increase industrial production, and increase employment.

The question is whether Obama’s $450 billion plan, or any comparable one, can really alter the dynamics of a $14.5 trillion economy or make a noticeable dent in an unemployed population of 14 million, plus 1 million discouraged workers, plus 9.3 million working part-time when they want to work full time. Obama is boasting that his plan would create 1.9 million jobs, which means that even if it lives up to the hype, his plan would help 1 out of every 13 people in this U-6 category.

Of course, Obama knows his plan is unlikely to pass, either a GOP House or an increasingly reticent Democrat-controlled Senate. But he thinks that voters will go into the voting booths in November 2012, with unemployment around 9.4 or 9.5 percent (according to Goldman Sachs’s projections), and believe, “if Congress had just passed Obama’s plan, back in fall 2011, this economy would be fixed by now.”

Just how likely is that?

Tags: Barack Obama , Unemployment

Ghost in the TelePrompTer



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Ladies and gentlemen, the president of the United States . . .

Mr. Speaker, senators, members of the House, distinguished colleagues, legions of the unemployed, my fellow Americans:—

Let me begin by saying—Wait, legions of the unemployed? Is somebody messing with my TelePrompTer? Can I, uh, wait . . . okay—sorry. Yes, sorry, let me begin by saying, “I’m sorry.” Really, truly, sincerely sorry. About this. About all this. But, hey, it’s not like I don’t have some skin in the game, here. Quite a bit, in fact: I’m guessing that if unemployment goes up much in the next ten to twelve months, I’m, uh, basically done. That’s all she wrote, as I might say if I were trying to be folksy. Would that help? Folksiness?

Look, I don’t know what you want me to do. I gave a speech. I gave several speeches. Beautiful speeches. I’m here to give a speech again. You know how beautifully I speak, especially compared to George W. Bush. Remember him? Remember that guy? Awful times, right? But it’s okay. I’m here. I’m in charge. And I’m speeching, er, speaking, giving a speech, as it were. Let me be clear about that.

You know, you learn a lot on this job. There’s no real preparation for it. I mean, there’s some preparation you can get, like being a governor or a mayor, or an executive in charge of a large enterprise of some sort. Uh, yeah. But, you know, as things turned out, I didn’t. And I think I may have made a little strategic error, here, to the extent that I’ve in a way conflated the significance of giving a speech with the significance of actually doing something about the thing you’re giving a speech about. It’s mostly a communication problem, meaning that I’ve done a lot of communicating about the problem, the problem of unemployment, but my communication hasn’t been effective, at least not in the sense that might show up in the unemployment data, or, for that matter, in your paychecks and bank accounts. But I have made it very clear: I am opposed to unemployment. Unequivocally so. I have a vision, and in my vision unemployment is very low, especially around October and  November of next year. That’s my vision. Now, some people don’t share that vision. Because they like unemployment. Or something. I’m pretty sure my vision is mine, and shared by the members of my party, and of course the top experts I was in grad school with and that guy over at the New York Times who always writes what I’m already thinking. That’s our vision. A vision for America.

Except . . . and let me be clear, I’m putting it all out there, since, really, at this point I don’t have much left to lose that I’m not pretty darned likely to lose next year, anyway. So, I’ve decided to set aside the proposal I was going to make, which was—surprise!—extending the payroll-tax cuts, some make-work spending on stuff I’m still going to call infrastructure and clean energy, but which I’m sure as heck not going to call “stimulus” anymore—lesson learned!—and extending unemployment benefits, and more or less the same stuff I’ve been doing for a while now, but more so, or still more so, or, compared with the original stimulus, less so, but less in a way that is more on top of the more we did before, if you get my meaning. No?

Okay, so this is it: Armageddon. Really, is this the prepared text? I don’t think this is the prepared text. Okay, whatever. So, since the speeches aren’t really working, here’s what I’m going to do.

First, I’m putting a cap on federal spending. I’m not talking about any baseline shenanigans. I mean that I will veto any spending bill that goes one thin dime beyond what we spent this year. I’ll leave it to Congress to figure out how to do that. Yeah, Paul Ryan: I’m a big-picture president, now. You can figure out the details, tough guy. Good luck with that Medicare reform.

Second, I’m raising your taxes. Sort of. Since I’ve deleted Nancy Pelosi from my iPhone contacts list, I have a strange feeling of liberation. So, I’m asking Congress to pass the Simpson-Bowles tax plan: Cut the rates, eliminate the deductions, net tax increase, but I can make it look like a tax cut. I’m really that clever. In fact, if nobody has any use for Jon Huntsman — and I’m pretty sure nobody has any use for Jon — he’s got basically the same idea, so I’m going to put him in charge of it, and that’s the closest he’s going to get to the White House. You guys want bipartisanship? He’s still a Republican, and it’s too late to kick him out. So, there you have it. But we’re not doing this Bush-style: no “sunsetting” the changes so we have to fight over them every couple of years. This is one and done, at least as far as I’m concerned.

Third, I’m calling for the repeal of Sarbanes-Oxley and Frank-Dodd. I know: counterintuitive, right? Instead, we’re going to impose stricter old-fashioned capital requirements and limits on leverage, with the particulars specific to each class of financial firm — banks are one thing, insurance companies are another. You guys like simple, straightforward regulation, right? It doesn’t get much simpler than that. And speaking of things financial, we’re selling the Fannie and Freddie portfolios on a ten-year schedule, and then we’re closing them down.

Fourth: Lisa, Tim, Hilda, Steve, Rebecca, and Lisa — did I already mention Lisa? Well, Lisa twice, then. You’ve served your country honorably. Really. A fine crew. But you’re fired. It’s a bottom-line issue, guys. It’s not like you were going to keep your job in a Romney administration, and God knows what Perry would do with you. “Treat you pretty mean,” I believe the saying is. Also . . . Ben? Ben, I can’t fire you, you know, but keep that CV fresh, is all I’m saying.

So, now, I’ll pretend to take your questions, and try not to roll my eyes . . .

Tags: Fiscal Armageddon , Unemployment

The ‘O’ Turns to ‘0’



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As you have probably heard, the latest jobs report from the Bureau of Labor Statistics is somehow not merely disappointing but psychologically jarring:

That’s a zero, as in zero net jobs created.

August is traditionally a slow month for the unemployment rate, so no one should have expected a big drop in unemployment. Most of the figures were unchanged from July. But some weren’t so stable, and they’re bad news, too:

  • The number of persons employed part-time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.4 million to 8.8 million in August.
  • About 2.6 million persons were marginally attached to the labor force in August, up from 2.4 million a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

The preliminary figure is that private-sector employment increased by 17,000, so Obama can, if he wishes, continue bragging about the number of months of consecutive private-sector job growth. Of course, when we add 100,000 to 200,000 new workers per month on average, the news is worse than it first appears. As I mentioned last week, we’ve rarely hit the threshold that is required to keep pace with new workers and actually bring down the unemployment rate.

UPDATE: Number-Cruncher, my favorite stats-and-numbers minded reader, looks at these new figures and says that the news isn’t good, but it’s not quite as dire as some may think:

The positive in this s report is that the Household Survey we gained 331,000 Jobs in August. Accordingly the Employment Population Ratio ticked up (that’s a good thing) by 0.1% (58.2% versus 58.1%).

BUT . . .

On a cautionary note, this not the first time this year the Household Survey had an outlier result. Thus, we are still in critical condition. If October and November follow duplicate this report (e.g. we add 300k jobs), real Job growth is on the horizon . . . despite anything we might see with the establishment survey. One report cannot erase a year of anemic job growth (according to the Household Survey) A comparison snapshot from the household survey from August 2010 to August 2011 indicates that we have added only 360,000 jobs the last 12 months while at the same time our able-bodied employable population has grown by almost 1.77 million (e.g. “Civilian noninstitutional population”).

So I conclude by saying that what we have is another “mixed” report. If this report is duplicated for the next three months (e.g. establishment data poor/household survey positive), the establishment survey data would be poised to gain significant steam in early to mid-2012 (something the administration wants desperately). The Caution however is that the household survey is a statistical number. To wit, it is not immune (despite a 60k sample size) to outlier results. Moreover, the results I am citing are seasonally adjusted and I am not privy to the data and calculation methodology. One report cannot not answer the question are more people getting jobs who pay their taxes quarterly, give us three in a row and we can start talking.

Number-Cruncher also notices that the unemployment rate for African-Americans is at its highest in 10 years at 16.7 percent. Since 2009, it has bounced around quite a bit, starting at 12.7 percent and hitting 16.5 percent in March and April of 2010, so it might be a more volatile figure than the broader range of the whole population. But if the numbers are accurate, African-American unemployment jumped eight-tenths of a percentage point last month.

Tags: Barack Obama , Unemployment

The Week Ahead: Perry, Romney & the Jobs Report



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Today Texas governor Rick Perry addresses the national convention of Veterans of Foreign Wars. Tomorrow his rival Mitt Romney does the same. If Romney wanted to draw a contrast, it would be an easy venue to do it in and give him the last word. . . . The bad news for Romney is, it’s in San Antonio, Perry’s home turf, and to the extent there are policy differences between Romney and Perry, they’re not particularly pronounced on issues of national security, defense, veterans’ concerns, and this realm of policy.

The other expected big news of the week comes on Friday, September 2, when we get the next Bureau of Labor Statistics Report on unemployment, this time updated with August’s numbers.

Reuters previews:

The payrolls report on Friday is expected to show the U.S. economy created 80,000 jobs this month, according to economists polled by Reuters. In contrast, 117,000 jobs were added to U.S. non-farm payrolls in July.

The U.S. unemployment rate is seen steady at 9.1 percent.

The unemployment rate increased three-tenths of a percent in August 2008, two-tenths of a percent in August 2009, and one-tenth of a percent in August 2010. In the preceding six years, it either remained flat or went down one-tenth of a percentage point. For obvious reasons (people going on vacations, etc.), August does not seem to be a big hiring month.

Romney and Barack Obama both give major speeches on the economy on September 6, the Tuesday after Labor Day. It’s unlikely that Friday’s report will provide the president any significant good news, putting extra spotlight on the two speeches.

Tags: Mitt Romney , Rick Perry , Unemployment

Obama’s ‘Consecutive-Months of Job Creation’ Smoke & Mirrors



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In today’s article about the ubiquitous “unexpectedly” adverb in economic reports, I note that President Obama likes to talk about how many consecutive months the American economy has seen private-sector job growth.

What Obama says is technically true — I suppose Vice President Biden would say “literally” — but increasing the number of private-sector jobs doesn’t necessarily bring down the unemployment rate. The single biggest factor is that the size of the labor pool normally grows from month to month, and while economists disagree on precisely how many jobs need to be added each month just to keep pace with the additional workers, it generally ranges from 100,000 per month (AP) to 100,000 to 125,000 (Heritage Foundation) to about 130,000 (New York Times). Some say a “sustained recovery” requires 250,000 jobs per month.

For perspective, the U.S. economy lost 8.8 million jobs in this recession.

All figures are from the Bureau of Labor Statistics.

Private-Sector Job Growth, by Month
July 2011 154,000 (preliminary)
June 2011 80,000 (preliminary)
May 2011 99,000
April 2011 241,000
March 2011 219,000
February 2011 261,000
January 2011 94,000
December 2010 167,000
November 2010 128,000
October 2010 193,000
September 2010 112,000
August 2010 143,000
July 2010 117,000
June 2010 61,000
May 2010 51,000
April 2010 241,000
March 2010 158,000
February 2010 62,000
January 2010 16,000
December 2009 -83,000

Depending on your measuring stick, during these 19 months of private-sector job creation, the U.S. only “gained ground” in 12 of them (if the threshold is 100,000) or 9 of them (if the threshold is 130,000). At no point has job creation hit the “sustained recovery” threshold.

One last point: In April 2010, Vice President Biden declared, “I’m here to tell you, some time in the next couple of months, we’re going to be creating between 250,000 jobs a month and 500,000 jobs a month.”

Tags: Barack Obama , Jobs , Joe Biden , Unemployment

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