Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
2Activity
0 of .
Results for:
No results containing your search query
P. 1
Carvin Unemployment Wake Up Briefing Aug 2012

Carvin Unemployment Wake Up Briefing Aug 2012

Ratings: (0)|Views: 75 |Likes:

More info:

Published by: William F. B. O'Reilly on Aug 23, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

08/23/2012

pdf

text

original

 
 The economic crisis in the United States has become a jobs crisis. Here is a comprehensive look 
at the scope of the nation’s unemployment problems.
 
 
The official unemployment rate of 8.3% is unacceptably high.
o
 
This represents approximately 13 million unemployed workers looking for a job.
o
 
The average unemployment rate over the last 25 years is 6.0%
1
 
o
 
This is the longest streak of unemployment greater than 8% since the GreatDepression- 42 months
2
 
o
 
The Obama administration and Democratic Congress that passed the Stimulus Billin 2009 predicted that unemployment today would be less than 6% without thestimulus bill and 5.6% with the bill. This prediction is off by over 4 millionworkers.
o
 
Th
e administration’s own Office of Management and Budget last week released
its mid-year update to its forecast. It projects unemployment at 7.7% for 2013,
7.3% for 2014 and doesn’t get back below the long
-term average of 6% until2017. This represents almost a decade of below-average employment.
 
The official unemployment rate understates the problem.
o
 
Many economists prefer to look at the U6 rate, which includes people who havegiven up looking but would still like to work and people working part-time butwant to work full time. This rate is currently 15.0%. Prior to this downturn, ithad never exceeded 12% as far back as the data goes to 1994.
3
 
o
 
If the labor force stayed the same as before the downturn, the officialunemployment rate would be 10.9%. In other words, the economy is so bad thatit is causing people to give up looking for work. This causes the unemploymentrate to look better, since it is measured against those looking for work.
o
 
On a related note, employment as a percentage of the working age population iscurrently at 58.4%, down from an average of 61.3% over the last decade.
4
This
number hasn’t been this low since the ‘70s, before many women entered the
workforce (except briefly during the Reagan recovery).
 
Certain vulnerable sectors of the population are being even harder hit than average.
o
 
Unemployment for ages 16-24 is currently 16.4%, nearly double the average.Studies indicate that substandard employment for young people leaving schoolreduces their earnings for years before they can recover to where they should havebeen.
 
This is further exaggerated by the high student loan balances so many of them carry.
1
Bureau of Labor Statistics, retrieved from: http://www.bls.gov/cps/prev_yrs.htm, 8/21/12
2
Bureau of Labor Statistics, retrieved from: http://www.bls.gov/data, 8/21/12
3
Bureau of Labor Statistics, retrieved from: http://www.bls.gov/data, 8/21/12
4
Bureau of Labor Statistics, retrieved from: http://data.bls.gov/timeseries/LNS12300000, 8/21/12
 
o
 
Black unemployment is 14.1%, nearly double that of whites.Many people in their 50s and early 60s are being forced to retire early, at a timewhen their savings have been decimated by the financial crisis.
 
The administration continues to insist that the problem is caused by the problems theyinherited over three years ago, but the facts do not support this.
o
 
In most recessions, jobs are back to their pre-recession level in 2 years (therecession that Reagan inherited took 4 years).
5
In the current case, it has been 5years since the start of the recession and jobs are still 4% below their startingpoint. (Graph B)
o
 
Under the current administration, we have been averaging 75K jobs/month for atotal of 2.7 MM after 3 years. Under Reagan, job growth averaged 273K/ monthfor a total of 9.8 MM. (If you adjust for the size of the population, this equates to360K/ month and a total of 13 MM.)
6
(Graph A)
o
 
Unemployment was 6.8% in November 2008 when Obama was elected.
 
The administration has been touting recent job growth but it is not enough.
o
 
We need 88,000 jobs a month just to keep up with new entrants to the job marketand keep unemployment unchanged. Following a loss of 12 MM jobs from thestart of the recession to the end of 2009, we have only kept pace with this job
market growth and have not narrowed the gap at all. Even if we grow at Reagan’s
equivalent pace of 360K/month, it will take 3 years to close the gap.
o
 
Last three months have averaged 75K growth in payrolls, not enough to keep upwith growth. Some claim that the private sector is doing fine, but its growth overthe last three months has averaged 91K, barely enough to keep up with growth of labor force and not enough to reduce unemployment rate.
 
The current administration is largely responsible for unemployment. 
o
 
The stimulus did not work; it was mainly a short-term boon for the states to keeptheir payrolls up for another year in the face of a declining economy.
o
 
There is so much uncertainty about the future course of the economy, includingthe fiscal cliff, that it is keeping firms from hiring.
o
 
Obamacare’s increased regulations and the costs it imposes on businesses are also
keeping firms from hiring.
5
 
“Reagan’s Recession,” Pew Research Center, December 14, 2010, retrieved from:
http://pewresearch.org/pubs/1818/reagan-recession-public-opinion-very-negative
6
 
Rily, Charles. “Obama vs Reagan: A Tale of Two Recoveries,” CNN Money, 2/6/12, retrieved from:
http://money.cnn.com/2012/02/06/news/economy/obama_reagan_recovery/index.htm

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->