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The Jobs Gap (3 graphs)

June 23, 2014 2 comments

from David Ruccio

Screen Shot 2014-06-06 at 11.30.08 AM

With 217,000 new jobs created in May, the U.S. economy is finally—finally, after 50 months!—back to the pre-recession employment level.

Except it isn’t. Not by a long shot. Not when we consider the “jobs gap”—which we can calculate in one of two ways: by the amount of time it will take at this rate to get back to pre-recession employment levels while also absorbing the people who enter the labor force each month (4 years) or by the difference between payroll employment and the number of jobs needed to keep up with the growth in the potential labor force (6.9 million jobs). Read more…

Categories: unemployment

Five economic policy changes for 2014 that could boost employment and reduce climate disruption

January 27, 2014 5 comments

from Mark Weisbrot

The U.S. economy is still weak, with 7 percent unemployment, many millions more underemployed and less people employed in November than there were six years ago. At the same time – and not unrelated – we are still devolving along a path toward increasingly ugly inequality, with 95 percent of the income gains since the Great Recession going to the top 1 percent of the income distribution.

Meanwhile, the crisis of global climate change is moving toward more irreversible catastrophic damage each year that the United States, which is responsible for more of the cumulative carbon emissions than any other country, procrastinates in making the necessary changes to reduce fossil fuel consumption.

There are feasible policy changes that can address all of these problems – and we don’t have to sacrifice employment or a more just and decent society in order to make progress on climate change. Here are five of them: Read more…

Chart of the day – Young and jobless across Europe

November 23, 2013 4 comments

from David Ruccio

Europe-young

Read more…

Categories: unemployment

US Unemployment edges down as people continue to leave the workforce

October 23, 2013 Leave a comment

from Dean Baker

The unemployment rate edged down to 7.2 percent in September, the lowest level since November of 2008. The Labor Department’s establishment survey showed a gain of 148,000 jobs. With modest upward revisions to the prior two months’ data, this brings the average rate of job growth over the last three months to 143,000. This compares with an average rate of job growth of 186,000 a month over the last year.

In spite of the September drop in unemployment, the employment-to-population rate (EPOP) remained unchanged at 58.6 percent. This continues the pattern that we have seen throughout the recovery as the unemployment rate falls mainly because workers leave the labor market. The unemployment rate is now down by 2.8 percentage points from its 10.0 percent peak in October of 2009. However, the EPOP is up just 0.4 percentage points from its low point in June of 2011. Over the last year the EPOP actually edged down by 0.1 percentage point, while the unemployment rate dropped by 0.6 percentage points. This drop in labor force participation is now occurring at an equal pace among men and women, with the participation of both dropping 0.5 percentage points in the last year. Read more…

Categories: The Economy, unemployment

Greece’s unemployment rate by month (graphics)

from David Ruccio

Greece-unemployment

The unemployment rate in Greece [pdf] climbed to a new record high of 26.9 percent in April (significantly higher than the 23.1 percent registered in April 2012), while the youth jobless rate is now a truly dire 57.5 percent (up from 51.5 percent a year ago)! Read more…

Robert Samuelson finds economics is way too complicated (2 graphs)

April 26, 2013 5 comments

from Dean Baker

That is quite literally what he told us in his column. His second paragraph tells readers:

“Among economists, there is no consensus on policies. Is “austerity” (government spending cuts and tax increases) self-defeating or the unavoidable response to high budget deficits and debt? Can central banks such as the Federal Reserve or the European Central Bank engineer recovery by holding short-term interest rates near zero and by buying massive amounts of bonds (so-called “quantitative easing”)? Or will these policies foster financial speculation, instability and inflation? The public is confused, because economists are divided.”

See, we don’t know what to do, so we just can’t do anything. All those suckers who are unemployed or seeing stagnant wages, well we just don’t know. And the fact that those on the top are getting rich with 60-year high shares of national income, well what can we do about that? It’s just too confusing. Read more…

New Keynesians, price stickiness and involuntary unemployment (wonkish)

January 16, 2013 7 comments

from Lars Syll

There are unfortunately a lot of neoclassical economists out there who still think that price and wage rigidities are the prime movers behind unemployment. What is even worse – I’m totally gobsmacked every time I come across this utterly ridiculous misapprehension -is that some of them even think that these rigidities are the reason John Maynard Keynes gave for the high unemployment of the Great Depression. This is of course pure nonsense. For although Keynes in General Theory devoted substantial attention to the subject of wage and price rigidities, he certainly did not hold this view.

Since unions/workers, contrary to classical assumptions, make wage-bargains in nominal terms, they will – according to Keynes – accept lower real wages caused by higher prices, but resist lower real wages caused by lower nominal wages. However, Keynes held it incorrect to attribute “cyclical” unemployment to this diversified agent behaviour. During the depression money wages fell significantly and – as Keynes noted – unemployment still grew. Thus, even when nominal wages are lowered, they do not generally lower unemployment.   Read more…

No evidence of “structural unemployment” in the US (2 graphs)

December 16, 2012 6 comments

from David Ruccio

Beveridge

Rand Ghayad and William Dickens (pdf) have discovered a shift in the so-called Beveridge Curve (Figure 1) associated with the growth in long-term unemployment (Figure 2).*

Their study is significant in that Read more…

Categories: unemployment

Young, educated, and jobless in America?

December 7, 2012 4 comments

from John Schmitt

The New York Times has a piece by Steven Erlanger on the “Young, Educated and Jobless in France” that gets most of the facts right, but still might leave its readers with the wrong idea about the real labor-market challenges facing Europe and the United States.

The story focuses on the plight of young, college graduates in France (and several other European countries) who have been unable to find work despite their college degrees and other post-secondary training.  Read more…

Categories: The Economy, unemployment

Unemployment is cyclical: taking Jeffrey Sachs to school

August 13, 2012 Leave a comment

from Dean Baker

Jeffrey Sachs has played a useful role in challenging the economic orthodoxy in many areas over the last three years. However, when he tries to tell us that the current downturn is structural not cyclical he is way over his head in the quicksand of the orthodoxy.

Let’s start with his simple bold assertion:  Read more…

Structures of unemployment in the United States

August 10, 2012 12 comments

from David Ruccio

Jeffrey Sachs wants desperately to position himself outside the mainstream of the current unemployment debate, arguing that there’s no “quick fix” to the current level of joblessness. But there are no structures in Sachs’s structural analysis.

Let me explain.

Sachs is appropriately critical of the three existing “miracle cures”:    Read more…

Can you spot the recovery? (graph)

August 2, 2012 2 comments

from Edward Fullbrook

United States Employment-Population Ratio
http://data.bls.gov/timeseries/LNS12300000
Data extracted on: August 2, 2012 (4:39:26 AM)
 
 

  Read more…

Housing bubbles are not funny

July 29, 2012 12 comments

from Dean Baker

The United States has more than 20 million people unemployed, underemployed or out of the workforce altogether because of a burst housing bubble. We also have more than 10 million homeowners who are underwater in their mortgages. And, we have tens of millions of people approaching retirement who have seen most of their life’s savings disappear when plunging house prices eliminated most or all of the equity in their home.

This situation could have been prevented if the government had taken steps to stem the growth of the housing bubble before it reached such dangerous levels. It is incredible that the Bush administration’s economics team failed to see the dangers of the bubble. It is even more remarkable that Alan Greenspan, Ben Bernanke and the Fed ignored the growth of the housing bubble. But even more astounding is the fact that no one in a position of authority has learned any lessons from this disaster.

At the moment, there are housing bubbles in the United Kingdom, Canada, and Australia that are arguably larger, relative to the size of their economies, than the one that collapsed and wrecked the U.S. economy. The basis for saying that house prices in these countries are in a bubble is that there has been a sharp increase in the sale prices of homes that has not been matched by a remotely corresponding increase in rents. Read more…

United States of declining minimum wage

July 14, 2012 2 comments

from David Ruccio

In the midst of the First Great Depression, Secretary of Labor Frances Perkins made the case for a federal minimum wage. In making her argument, she quoted the Massachusetts Commissioner of Labor and Industries: Read more…

Categories: depression, unemployment

Youth unemployment in Europe

July 12, 2012 2 comments

from David Ruccio

Youth unemployment, according to Eurostat, is now over 21 percent—21.4 percent for the euro area and 22.1 percent for the European Union.  Read more…

Categories: unemployment

Austerity—American style (3 graphs)

June 14, 2012 5 comments

from David Ruccio

Ben Polak and Peter K. Schott are right:

It has become commonplace to contrast the American and European responses to the Great Recession, with stimulus in the former and austerity in the latter. European austerity has been at the level of member states and local governments — there is no meaningful federal government of Europe to provide either stimulus or austerity. But the United States has also seen unprecedented austerity at the level of state and local governments, and this austerity has slowed the job recovery.

Here is what government employment looks like since 2007: total, state, and local (from the Bureau of Labor Statistics). Read more…

Categories: unemployment

The Human Disaster of Unemployment

May 16, 2012 10 comments

from Dean Baker and Kevin Hassett

In 2007, before the Great Recession, people who were looking for work for more than six months — the definition of long-term unemployment — accounted for just 0.8 percent of the labor force. The recession has radically changed this picture. In 2010, the long-term unemployed accounted for 4.2 percent of the work force. That figure would be 50 percent higher if we added the people who gave up looking for work.

Long-term unemployment is experienced disproportionately by the young, the old, the less educated, and African-American and Latino workers.

While older workers are less likely to be laid off than younger workers, they are about half as likely to be rehired. One result is that older workers have seen the largest proportionate increase in unemployment in this downturn. The number of unemployed people between ages 50 and 65 has more than doubled.

The prospects for the re-employment of older workers deteriorate sharply the longer they are unemployed. A worker between ages 50 and 61 who has been unemployed for 17 months has only about a 9 percent chance of finding a new job in the next three months. A worker who is 62 or older and in the same situation has only about a 6 percent chance. As unemployment increases in duration, these slim chances drop steadily.

The result is nothing short of a national emergency. Millions of workers have been disconnected from the work force, and possibly even from society. If they are not reconnected, the costs to them and to society will be grim.  Read more…

Categories: unemployment

USA employment and unemployment levels – 5 graphs

May 14, 2012 2 comments

To be young, unemployed, or working for free in the USA

from David Ruccio

As the semester draws to a close, I’ve been hearing from my students about their job prospects. And it’s pretty ugly.

Some have landed decent-paying jobs, either for the summer or upon graduation. But many others have not been able to find a real job or they’re going to be underemployed or they’ve accepted unpaid internships. And they’re pretty sad.

It may not help much but they should also know they’re not alone why they join the ranks of the unemployed/underemployed/unpaid youth in this country.

According to the Bureau of Labor Statistics, the official unemployment rate among young people (ages 16 to 19 years) is 24.9 percent, up from 23 percent a year ago. And, according to the Associated Press, the weak labor market already has left half of young college graduates either jobless or underemployed in positions that don’t fully use their skills and knowledge. Read more…

Categories: unemployment

Work Sharing: The Way for States to Reduce Unemployment

April 19, 2012 33 comments

from Dean Baker

It is clear that we are not going to see any major action from the federal government to reduce unemployment any time soon. There is no hope that this Congress will support another round of stimulus and not much more hope from the next Congress, even if the Democrats somehow regain control.

What that means is that we are looking at a long, painfully slow recovery. Assuming that the economy continues to generate 200,000 jobs a month, roughly its average over the last three months, we will not get back to more normal levels of unemployment until somewhere near the end of the decade.

And it is certainly plausible that progress will be worse. That story assumes a recovery lasting for more than a decade, something the United States has never experienced.  Read more…

Categories: jobs, unemployment
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