Bush Legacy

[Rex Kickass]

Our unemployment numbers are bogus indicators to begin with. Unemployed workers are only considered unemployed for six months.

 

Other countries don't make that distinction. So 11% unemployment in Germany for example, would be more like 6.5-7% here. Still high, but not drastic.

[Balta1701]

I just want to speak to this part of the post.  There is one better, but obviously not perfect, way of measuring underemployment IMO, and that is to use the average hourly wage numbers that get put out.  Interestingly enough those have been steadily increasing over the years, and I can't figure out why.  We always read about layoffs from high paying jobs, but this number never really goes down, and I have not been able to figure out why.  I don't know if it is just we always hear about the layoffs and assume that all high paying jobs are gone, or if there really is high wage job creation going on, but just in different fields from where people are getting laid off of, and we never hear about that either.  Then again it could be all statistical manipulation as well, and we would never really hear about that either.

However, it is worth specifically noting that the average hourly wage has been, in particular in recent months, increasing at or below the rate of inflation in this country. Therefore, in terms of net purchasing power, it actually is going down relative to the costs of goods.

[spiderman]

I've made this point before, and I'll make it again...it is absolutely useless to compare the "Unemployment" numbers published by the government between even the early years of an administration and the later years of that same administration.  This goes for Clinton, Bush 1, Bush 2, etc.

 

Why?  Because the "Unemployment" numbers published by the government don't really measure the number of people out of work.  They measure a certain subset of that group; the unemployment percentage numbers specifically exclude the long-term unemployed (people who haven't been able to find work for many months), those on any sort of disability or government assistance, or those who are getting any sort of education (i.e. you lose your job and go back to school).  All of these groups have significantly inflated under both Clinton and Bush 2, which has allowed both administrations to claim that the unemployment percentages say that either the economy is doing great or is really not that bad...when in reality all they've done is exclude enough people from the count so as to make it look better.

 

Furthermore, there is no way to gauge the percentage of "Under-employment" in this country either - people with high level degrees stuck working at WalMart, that sort of thing, which can be just as much a drag on the economy as the former.

 

Those unemployment numbers are the same ones that many, don't know about you, pointed to during the Clinton years, and now point away from during the Bush years.

[Steve Bartman's my idol]

Full blown socialism. If you make above a certain limit, then any remaining money should go to people below a certain limit.

 

At least you seem to be admitting it.

<{POST_SNAPBACK}>

If having the "haves" help out the "have-nots" is Socialism, then I guess I'm a Socialist.

 

(As opposed to being a selfish, greedy "Capitalist").

Edited November 28, 2005 by Steve Bartman's my idol

[jackie hayes]

Our unemployment numbers are bogus indicators to begin with. Unemployed workers are only considered unemployed for six months.

 

Other countries don't make that distinction. So 11% unemployment in Germany for example, would be more like 6.5-7% here. Still high, but not drastic.

I think you're wrong. If someone has been out of work for a long time, but is still looking for work, I'm pretty sure they're counted as unemployed.

 

Documentation?

 

Edit: Numbers for October (in thousands) -- 2695 unemp less than 5 weeks, 2040 unemp 5-14 weeks, 960 unemp 15-26 weeks, 1386 unemp 27 or more weeks. Which add up exactly to the total, 6964 unemp (all the numbers are in thousands). So the long term unemployed are included.

Edited November 28, 2005 by jackie hayes

[Balta1701]

Those unemployment numbers are the same ones that many, don't know about you, pointed to during the Clinton years, and now point away from during the Bush years.

It is just as impossible to compare the unemployment numbers between the Clinton and Reagan economies as it is impossible to compare the unemployment numbers between the Bush and Clinton economies. It is completely ignorant of the numbers to say things like "the unemployment was at a historic low during the Clinton years", because the unemployment number was not actually measuring total unemployment. I know other people use those numbers to support Clinton's economy, and I fire off as many LTE's to them as I do LTE's to people who parrot the unemployment number to try to argue that Bush's economy hasn't hurt people that badly.

[Balta1701]

I think you're wrong.  If someone has been out of work for a long time, but is still looking for work, I'm pretty sure they're counted as unemployed.

 

Documentation?

 

Edit:  Numbers for October (in thousands) -- 2695 unemp less than 5 weeks, 2040 unemp 5-14 weeks, 960 unemp 15-26 weeks, 1386 unemp 27 or more weeks.  Which add up exactly to the total, 6964 unemp (all the numbers are in thousands).  So the long term unemployed are included.

The US Government classifies people who have not looked for work within a month in a different category...they're known as "Discouraged" and do not get included in that number...from the BLS's own October numbers;

 

Persons Not in the Labor Force (Household Survey Data)

 

  The number of persons marginally attached to the labor force was 1.4 mil-

lion in October, down from 1.6 million a year earlier.  (Data are not sea-

sonally adjusted.)  These individuals wanted and were available to work and

had looked for a job sometime in the prior 12 months.  They were not counted

as unemployed, however, because they did not actively search for work in the

4 weeks preceding the survey.  There were 392,000 discouraged workers in

October, little changed from a year earlier.  Discouraged workers, a subset

of the marginally attached, were not currently looking for work specifically

because they believed no jobs were available for them.  The other 1.0 million

marginally attached persons had not searched for work for reasons such as

school attendance or family responsibilities.  (See table A-13.)

 

I'll also give a block of detail on another point...the "Disabled" issue...this comes from the LA Times in December of 2003 (Use Lexis to find the article if you have it available to yourself and want the full text - its behind a subscription wall)

 

"More than half of the additional people who would have reported themselves as unemployed in a previous big recessionary period … aren't," a puzzled UC Berkeley economist, Brad DeLong, wrote on his website. "They're reporting themselves as out of the labor force instead."

 

"Out of the labor force" means you're not working for even one hour a week and don't want to, either. It's the traditional category for students, married women with young children, flush retirees and idle millionaires.

 

A new way that people seem to be joining this category is by getting themselves declared disabled. This designation makes them eligible for government payments while removing them from the unemployment rolls.

 

From 1983 to 2000, economists David Autor and Mark Duggan wrote in a recent study, the number of non-elderly adults receiving government disability payments doubled from 3.8 million to 7.7 million.

[jackie hayes]

The US Government classifies people who have not looked for work within a month in a different category...they're known as "Discouraged" and do not get included in that number...from the BLS's own October numbers;

I'll also give a block of detail on another point...the "Disabled" issue...this comes from the LA Times in December of 2003 (Use Lexis to find the article if you have it available to yourself and want the full text - its behind a subscription wall)

Yeah, but that's a lot different than not counting long term unemployed. The statements were wrong. If the person's looking for work, they're counted as unemployed, and that's that.

 

Look, I understand that the unemployment rate is not the end-all, be-all statistic of economic health. But the BLS does collect data on discouraged and marginally attached workers. If you want to say, Indicator X is better, I'll listen. But this scorched earth idea that unemployment numbers are worthless is just silly. Ceteris paribus, a lower unemployment rate is better. Other things matter, but if you want to make a case around them, cite those numbers, don't just inveigh against the unemp rate.

[Balta1701]

Yeah, but that's a lot different than not counting long term unemployed.  The statements were wrong.  If the person's looking for work, they're counted as unemployed, and that's that.

 

Look, I understand that the unemployment rate is not the end-all, be-all statistic of economic health.  But the BLS does collect data on discouraged and marginally attached workers.  If you want to say, Indicator X is better, I'll listen.  But this scorched earth idea that unemployment numbers are worthless is just silly.  Ceteris paribus, a lower unemployment rate is better.  Other things matter, but if you want to make a case around them, cite those numbers, don't just inveigh against the unemp rate.

Here you go: an indicator which would be better is "The percentage of the total work-aged population currently employed". For that you need 2 numbers; the number of people in the workforce, and the number of them that are working.

 

This metric is out there...and it includes all of the other problems - you can't escape being counted by being put on disability, you aren't just missed if you don't look for work, etc.

 

Why do I like this statistic? Because it's possible to look at how it varies and actually evaluate why the changes are happening. We've heard at least a dozen times in teh past few years that the unemployment percentage has dropped a tenth of a point because fewer people were looking for work. That would not happen with this metric. It would measure exactly 1 thing...the change in the number of jobs relative to the population. Therefore, if the population went up but there weren't enough jobs tso keep pace, it this metric would show a bad number, and if jobs were plentiful, this metric would show a good number. It would not be possible for it to be divorced from the actual situation like the numbers are now.

 

Unfortunately, I can't cite those data, because no one place collects them all. The BLS reports a couple of items, but they don't report the disability numbers I mention above, and I don't know where to get them. Also, I don't know what else might be excluded, because I'm just not enough of an expert on the topic.

 

And yes, all things being equal I would agree that lower unemployment is better. However, things are not equal. A lower unemployment rate right now can mean a higher rate of disability, it can mean that the economy is so bad that fewer people were looking for work, etc. (Think about this last point...if the economy is so bad that fewer people look for work, the unemployment percentage would go down...hence it could very well decrease in the event of a worsening economy and a worsening job market. How useful of a metric can that be when it can go both up or down with a worsening job market?)

[jackie hayes]

This type of problem affects all statistics. Population is a bad statistic, b/c more people become homeless during a recession, and the homeless are not measured well, so what use is population? Illegal immigrants are not counted accurately, and they occupy jobs, and perhaps there are more during an expansion. Etc, so your measure is clearly useless...

 

I understand the problems with the statistics. But if I want to know how many people are available for work but not looking for it, I will look at the BLS published "Number of people available for work but not actively searching", not blame a number which doesn't claim to measure anything about such people.