Apologies in advance for the socially incorrect headline. The first week of every month since the end of the Great Recession has been painful for those who spend the time to explore below the headlines.
The data has been ugly – and is getting uglier.
Unemployment rates do not give you any sense of the crisis – and are based on polls using criteria that the average American would not agree is the proper definition of unemployment.
You are not unemployed if you never had a job. You are not unemployed if you live in Dripsville where there are no jobs – and you are not looking. You are not unemployed if you have a part time job when you need to work full time. Unemployment definitions have been changed through time so the are not backward comparable – yet our policies are based on this headline unemployment rate, and comparisons are made to past period.
Last week, Paul Krugman spoke out:
Yes, officially the recession ended two years ago, and the economy did indeed pull out of a terrifying tailspin. But at no point has growth looked remotely adequate given the depth of the initial plunge. In particular, when employment falls as much as it did from 2007 to 2009, you need a lot of job growth to make up the lost ground. And that just hasn’t happened.
Consider one crucial measure, the ratio of employment to population. In June 2007, around 63 percent of adults were employed. In June 2009, the official end of the recession, that number was down to 59.4. As of June 2011, two years into the alleged recovery, the number was: 58.2.
Econintersect has continually told you the unemployment rate was bogus. People make bad decisions when they look at ill considered data. The real unemployment situation is worse today than at any point since the recession began.
Professor Krugman and others are finally looking at employment / population ratios that Econintersect has been advocating as the proper way to look at unemployment. If you look at ratios, the USA economy is at the low levels last seen in the mid 1970’s to early 1980’s.
But employment /population ratios show the recession is NOT over – and the damage over twice the size as headlined. Please look at the related articles listed following this post for more background. Econintersect has continuously focused on employment / unemployment.
The USA economy has suffered over 10 years of poor employment administration. The current situation is worsening – and the economic doldrums will only make the bad situation worse.
July 2011 BLS Employment Better – But Still Not Good by Steven Hansen
July 2011 ADP Employment Data Shows Continued Degradation by Steven Hansen
Dissecting the Employment Numbers by Elliott Morss
Is A Budget Deficit Necessary for an Economy? by Steven Hansen
What’s Up With Employment? by Steven Hansen
JOLTS: Likely Indicating Slowing Employment Growth by Steven Hansen
Is the Stimulus Effecting Unemployment Claims? by Steven Hansen
College Training for Unemployment by Mike Konczal
Economic Damage Storm Track of The Great Recession by Ted Kavadas