Unemployment Rate: Have we turned the corner? Not even close....
Today the Federal Government announced that the Unemployment rate fell from 10.2% to 10%. Don't start cheering, though.... by Tully
(libertarian)
Saturday, December 5, 2009
One of the most frustrating aspects of our modern culture is the superficial, misunderstood, and unquestioned reporting of economics statistics by the mainstream media. As an Economics teacher, I am constantly asking my students to 'dig deeper' and uncover the real data under the cliche-ridden news reports, and today was no exception.
This morning the media hailed the apparent reduction in the unemployment rate from 10.2% to 10%. Accepting those figures at face value, headlines all over the web and on the television excitedly asked, "Have we turned the Corner?!"
Much to their chagrin, the answer is a non-negotiable NO.
Here are the facts behind that supposed 'reduction' in Unemployment (all facts easily ascertainable from the report itself, if they would read further than the equivalent of a tweet...)
1) The number of Americans out of work long-term - 27 weeks or more actually ROSE to 5.9 million, the highest number since 1948. Only the very short-term jobless rate (less than 14 weeks) decreased, and that due largely to temporary seasonal retail hires.
2)Of those who found employment, 55% found employment in Temp Hiring Agencies. In other words, these are temporary positions. It does not reflect a new confidence on the part of business calling back workers or expanding; rather it reflects the continued fear that businesses have and their reluctance to hire. Worse, it means that these newly-Temp-hired workers are almost unanimously worse off than they were in their previous jobs, because few (if any) Temp agencies offer benefits such as health insurance or sick days, and they certainly do not offer any long-term job security or comparable wages.
3)The current rate excludes the 9.2 million workers who, threatened with the loss of their home, shut-off of utilities, or lack of basic food and fuel, took jobs at lower paying rates using less-efficient skillsets than they they had before. As soon as someone takes a job - even a part-time, poorly-paying job - they no longer count in the unemployment rate. When these people are added into the rate, however, the total amount of Unemployment plus "Under"employment now exceeds 17% of the American workforce, the highest on record. [note: this statistic was not kept during the Great Depression, which was admittedly worse. That's hardly a consolation, though...]
4)Much has been made by liberals in the past that the poorest families are single-parent headed families headed by women. These same liberals should look at the demographic breakdown of the current unemployment rate, because the numbers border on frightening: In Female Head of Household families - already one of the poorest per-capita groups in America - the unemployment rate has increased to 11.4%.
The only thing to note in this report is the abject failure of both Fiscal Policy and Federal Reserve operations in relieving the current economic meltdown.
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Barrack tells of his elation when his economics advisor came in early Thursday morning, telling that the unemployment rate went from 10.2% to 10%. This was just before his Pennsylvania jobs workshop. I watched just enough to keep myself from gaging again as he praised the effect of his program. Ain't this just sickening to think it plays in Peoria ?
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