So that recession is over - really?
December 29, 2010 2:31 AM Subscribe
According to The National Bureau of Economic Research (NBER), the US recession which started in December 2007 actually ended in June 2009.
But unemployment (not to be confused with under-employment), always considered to be a lagging indicator, has continued to rise.
So is this destined to be a jobless recovery? While some blame for outsourcing for job losses, others point the finger at robots but regardless of who or what is to blame, is unemployment accurately reported? The Bureau of Labour Statistics (BLS) captures and reports data across six buckets named U-1 to U-6, but does this accurately reflect the true human cost of prolonged unemployment?
Probably not, as BLS is changing their methodology to more accurately capture and report the long term unemployed.
So is this destined to be a jobless recovery? While some blame for outsourcing for job losses, others point the finger at robots but regardless of who or what is to blame, is unemployment accurately reported? The Bureau of Labour Statistics (BLS) captures and reports data across six buckets named U-1 to U-6, but does this accurately reflect the true human cost of prolonged unemployment?
Probably not, as BLS is changing their methodology to more accurately capture and report the long term unemployed.
In a kind of supreme irony, everyone I know who did the sensible thing and went to law school or "supported their hobby on the side" has been out of work for months and months and all the art school drop outs and full-time musicians have steady gigs.
posted by The Whelk at 2:36 AM on December 29, 2010 [7 favorites]
posted by The Whelk at 2:36 AM on December 29, 2010 [7 favorites]
At first when this news came out, I thought the BLS was trying to mask the true extent of the unemployment problem by changing the definition of what was considered a 'long term' unemployed person from 2 years to 5, like how they cloak the real unemployment number by not including people 'not seeking work'. Turns out I was wrong, and they are just recording additional data for those above the "2 year" (actually 99 weeks) mark to better keep track of what is going on.
I get down on the lack of reform in the Obama administration quite a bit, but recording this extra data so it can be analyzed better is a good idea, and effective government in action.
Excellent citations Mutant, here is another one everyone needs to see. It is a from the Center of Budget Priorities, and is FULL of excellent charts that help to explain the Great Recession, the bailouts, and unemployment very well. Something I will be citing regularly in the future.
posted by novenator at 2:39 AM on December 29, 2010 [1 favorite]
I get down on the lack of reform in the Obama administration quite a bit, but recording this extra data so it can be analyzed better is a good idea, and effective government in action.
Excellent citations Mutant, here is another one everyone needs to see. It is a from the Center of Budget Priorities, and is FULL of excellent charts that help to explain the Great Recession, the bailouts, and unemployment very well. Something I will be citing regularly in the future.
posted by novenator at 2:39 AM on December 29, 2010 [1 favorite]
If I recall, every time the BLS has changed its methodology in the last 30 years, it has always made the numbers look "better" and increased the underreporting of the unemployed. If Obama fixes the numbers to be more accurate, it's gonna ironically end up making him look bad.
posted by oneswellfoop at 2:58 AM on December 29, 2010 [1 favorite]
posted by oneswellfoop at 2:58 AM on December 29, 2010 [1 favorite]
The jobs picture has some other interesting aesthetics to it as well. Cross-sectional data on wages indicate that the 55+ crowd has seen modest salary improvements (flat or dampening in other cross sections). So when you consider that wages, for all but the boomers have ceased to rise, that the jobs shed have been largely based on seniority (with the long-term employed maintaining their employment), what we see is a whole generation effectively reaching their age of productivity without the experience of ever being productive. Plus, those that are at their productivity peak, effectively are not compensated, since effectively they can neither move into a management role, nor can they escape the responsibilities of the entry level folks which aren't being hired.
I'll go further. When job growth returns, it will return principally at entry level positions, meaning that this new-lost generation will effectively be competing against an even greater supply of workers, younger than them. This means two things for wages of workers: those that have maintained their entry level status through this recession will unfortunately be compensated *slightly* higher than the actual entry level positions. This results in a massive downward push for wages up through middle management well into the 2020s - widening the gap between the haves and have-nots.
This is a perfect storm on re-valuing white collar work, demoralizing three generations of the workforce, and otherwise extracting as much money as possible from the have-nots.
I could then go off on the housing industry, and what is moving and who it is moving to. What is visible is we are moving a whole hellofa lot fewer houses to reach the same level of sales - meaning, we're seeing the high priced houses have some movement (even in their devalued state), but basically, those gen Yers and new-lost generationers that now can't build wealth without jobs, also aren't building wealth through their home, and home sales. And, more importantly, they aren't putting money back into the system through property taxes, service professionals (lawncare, cleaning services, delivery services, movers), or even goods (import professionals, and those few that are actually manufactured in the US). This unfortunately means that this deficiency will ripple through our economy for the next 50ish years. At least the rich have their homes... oh wait...
May we survive to see our tricentenial....
posted by Nanukthedog at 6:15 AM on December 29, 2010 [11 favorites]
I'll go further. When job growth returns, it will return principally at entry level positions, meaning that this new-lost generation will effectively be competing against an even greater supply of workers, younger than them. This means two things for wages of workers: those that have maintained their entry level status through this recession will unfortunately be compensated *slightly* higher than the actual entry level positions. This results in a massive downward push for wages up through middle management well into the 2020s - widening the gap between the haves and have-nots.
This is a perfect storm on re-valuing white collar work, demoralizing three generations of the workforce, and otherwise extracting as much money as possible from the have-nots.
I could then go off on the housing industry, and what is moving and who it is moving to. What is visible is we are moving a whole hellofa lot fewer houses to reach the same level of sales - meaning, we're seeing the high priced houses have some movement (even in their devalued state), but basically, those gen Yers and new-lost generationers that now can't build wealth without jobs, also aren't building wealth through their home, and home sales. And, more importantly, they aren't putting money back into the system through property taxes, service professionals (lawncare, cleaning services, delivery services, movers), or even goods (import professionals, and those few that are actually manufactured in the US). This unfortunately means that this deficiency will ripple through our economy for the next 50ish years. At least the rich have their homes... oh wait...
May we survive to see our tricentenial....
posted by Nanukthedog at 6:15 AM on December 29, 2010 [11 favorites]
others point the finger at robots
Yeah, well maybe robots should go their own economy. With blackjack! And hookers! In fact, forget the economy!
posted by I am the Walrus at 6:45 AM on December 29, 2010 [4 favorites]
Yeah, well maybe robots should go their own economy. With blackjack! And hookers! In fact, forget the economy!
posted by I am the Walrus at 6:45 AM on December 29, 2010 [4 favorites]
This is more behavioral than financial, but bear with me. I think the family aspects of long-term unemployment will definitely be something that will lead to long-term impact in society. (The "jobless recovery" linked article from The Atlantic covers this on page 3). I remember thinking when hearing that a lot of men were disproportionately losing their jobs compared to women that this might lead to some change in how families interacted -- who took care of the kids, kept up the house, etc. I'm sure it has for some, but for others it just means more stress as the unemployed person feels like they've lost their position within the family.
"In Identity Economics, the economists George Akerloff and Rachel Kranton find that among married couples, men who aren’t working at all, despite their free time, do only 37 percent of the housework, on average. And some men, apparently in an effort to guard their masculinity, actually do less housework after becoming unemployed."
It's so frustrating to hear, but it makes me wonder what can be done about the perception of roles within our culture to help others make adjustments.
posted by bizzyb at 7:45 AM on December 29, 2010 [1 favorite]
"In Identity Economics, the economists George Akerloff and Rachel Kranton find that among married couples, men who aren’t working at all, despite their free time, do only 37 percent of the housework, on average. And some men, apparently in an effort to guard their masculinity, actually do less housework after becoming unemployed."
It's so frustrating to hear, but it makes me wonder what can be done about the perception of roles within our culture to help others make adjustments.
posted by bizzyb at 7:45 AM on December 29, 2010 [1 favorite]
This is a perfect storm on re-valuing white collar work, demoralizing three generations of the workforce.
I remember my mother talking about her economics professor saying that American wages were going to have to fall to stay competitive in the world back when she was taking courses in the late 70s. Subsequent events have done nothing but prove him right, and this recession is no exception.
posted by immlass at 7:55 AM on December 29, 2010
I remember my mother talking about her economics professor saying that American wages were going to have to fall to stay competitive in the world back when she was taking courses in the late 70s. Subsequent events have done nothing but prove him right, and this recession is no exception.
posted by immlass at 7:55 AM on December 29, 2010
I remember my mother talking about her economics professor saying that American wages were going to have to fall to stay competitive in the world
this is what devaluing the dollar effectively does.
posted by JPD at 9:05 AM on December 29, 2010
this is what devaluing the dollar effectively does.
posted by JPD at 9:05 AM on December 29, 2010
I could hire a great lawyer in less than 30 days, a good ui person, software developer, real engineer, etc even going to India or China the labor market is tight. I second the art school vs law school analysis above.
posted by humanfont at 10:00 AM on December 29, 2010
posted by humanfont at 10:00 AM on December 29, 2010
I remember my mother talking about her economics professor saying that American wages were going to have to fall to stay competitive in the world
This is certainly the take-away message of the past 20 years or so, what with the constant drumbeat of "in order to compete in the global marketplace" that comes with every downsize/wage cut/benefit cut/etc. Well, that and the feeling that workers could have their wages cut to 0 and the work would still go overseas. 'Cause there's still those pesky osha, epa, etc. rules to deal with, too.
The problem comes, of course, when workers' costs don't fall as well. One can "do more with less" for only so long before the numbers simply stop working.
posted by Thorzdad at 10:06 AM on December 29, 2010 [1 favorite]
This is certainly the take-away message of the past 20 years or so, what with the constant drumbeat of "in order to compete in the global marketplace" that comes with every downsize/wage cut/benefit cut/etc. Well, that and the feeling that workers could have their wages cut to 0 and the work would still go overseas. 'Cause there's still those pesky osha, epa, etc. rules to deal with, too.
The problem comes, of course, when workers' costs don't fall as well. One can "do more with less" for only so long before the numbers simply stop working.
posted by Thorzdad at 10:06 AM on December 29, 2010 [1 favorite]
Every time I hear another unemployment statistic, I find myself thinking the same thing.
The industrial revolution was a long time ago, women have long since joined the workforce, and the age of retirement has been going up. In the US, manufacturing jobs have been exported to foreign countries where the work is often done by the disenfranchised (including children). Many (most?) jobs have been made tremendously more efficient (with the notable exception of the bureaucratic type IMO).
Isn't it time we started making adjustments to accommodate the fact that there are fewer profitable jobs to be done? (Sure, there's a lot of important work left, but it seems that too few are interested in paying for it.) How come as a culture we think it's okay that Kim Kardashian never has to work and we celebrate her posh lifestyle, but most everyone else has to fight over jobs, tighten their belts, or plunge further into debt by dedicating their prime years to advanced training for a competitive job market that is constantly shrinking and changing? Shouldn't we start to come around to thinking that maybe more people should not have to work, and that this privilege shouldn't be restricted to those who are lucky enough to be well-heeled.
When, as a species, do we get to relax a little and enjoy our success?
posted by millions at 11:03 AM on December 29, 2010 [7 favorites]
The industrial revolution was a long time ago, women have long since joined the workforce, and the age of retirement has been going up. In the US, manufacturing jobs have been exported to foreign countries where the work is often done by the disenfranchised (including children). Many (most?) jobs have been made tremendously more efficient (with the notable exception of the bureaucratic type IMO).
Isn't it time we started making adjustments to accommodate the fact that there are fewer profitable jobs to be done? (Sure, there's a lot of important work left, but it seems that too few are interested in paying for it.) How come as a culture we think it's okay that Kim Kardashian never has to work and we celebrate her posh lifestyle, but most everyone else has to fight over jobs, tighten their belts, or plunge further into debt by dedicating their prime years to advanced training for a competitive job market that is constantly shrinking and changing? Shouldn't we start to come around to thinking that maybe more people should not have to work, and that this privilege shouldn't be restricted to those who are lucky enough to be well-heeled.
When, as a species, do we get to relax a little and enjoy our success?
posted by millions at 11:03 AM on December 29, 2010 [7 favorites]
millions... the answer to that question is : never.
The success is not really what we think it is.
It's all so very much fragile bullshit.
But it's all we got.
Cheers.
posted by PROD_TPSL at 11:15 AM on December 29, 2010
The success is not really what we think it is.
It's all so very much fragile bullshit.
But it's all we got.
Cheers.
posted by PROD_TPSL at 11:15 AM on December 29, 2010
Bless you, Sir Mutant.
posted by ZenMasterThis at 5:08 PM on December 29, 2010
posted by ZenMasterThis at 5:08 PM on December 29, 2010
A chart of global unemployment rates adjusted to US reporting standards
I'm finding the data easier to compare if the data shares the same space horizontally. I remade the graph, here .
posted by -jf- at 7:06 PM on December 29, 2010
I'm finding the data easier to compare if the data shares the same space horizontally. I remade the graph, here .
posted by -jf- at 7:06 PM on December 29, 2010
My mother-in-law tells everyone she grew up during the depression. But the fact is, you ask what year she was born, and you discover that she missed the depression and was just born into an extremely poor family.
Thus my prediction that future mother-in-laws will still feel the effects of this latest recession until 2020 or so.
posted by circular at 9:18 PM on December 29, 2010
Thus my prediction that future mother-in-laws will still feel the effects of this latest recession until 2020 or so.
posted by circular at 9:18 PM on December 29, 2010
like how they cloak the real unemployment number by not including people 'not seeking work'.
This is a silly way to put it, i.e. as if it's some kind of conspiracy. The U-3 number -- the standard "unemployment rate" as reported in the media -- generally fits the international standard definition as promulgated by the ILO. The reason is largely that such persons as you describe are difficult to distinguish from those who are outside the formal labor force by choice, e.g. stay-at-home moms.
They represent, in extended recessions such as this one, a kind of shadow inventory of workers who will continue to keep U-3 high as people are hired and these U-4 through U-6 inhabitants decide that now is the time to start looking for work again. But when they aren't looking, they don't represent competition for other workers, or participate in setting the price of labor.
It's notable that using extrapolated figures to reconstruct the U-3 and U-6 numbers for the entire last century shows a pretty distinctly stable relationship. In other words, when U-3 is bad, U-6 is also bad, and when U-3 is good, so is U-6. A number that is only useful in a labor recession -- i.e. some mythical "real unemployment" that doesn't turn up in non-recessionary times -- is not much use at all.
posted by dhartung at 11:01 PM on December 29, 2010 [1 favorite]
This is a silly way to put it, i.e. as if it's some kind of conspiracy. The U-3 number -- the standard "unemployment rate" as reported in the media -- generally fits the international standard definition as promulgated by the ILO. The reason is largely that such persons as you describe are difficult to distinguish from those who are outside the formal labor force by choice, e.g. stay-at-home moms.
They represent, in extended recessions such as this one, a kind of shadow inventory of workers who will continue to keep U-3 high as people are hired and these U-4 through U-6 inhabitants decide that now is the time to start looking for work again. But when they aren't looking, they don't represent competition for other workers, or participate in setting the price of labor.
It's notable that using extrapolated figures to reconstruct the U-3 and U-6 numbers for the entire last century shows a pretty distinctly stable relationship. In other words, when U-3 is bad, U-6 is also bad, and when U-3 is good, so is U-6. A number that is only useful in a labor recession -- i.e. some mythical "real unemployment" that doesn't turn up in non-recessionary times -- is not much use at all.
posted by dhartung at 11:01 PM on December 29, 2010 [1 favorite]
How come as a culture we think it's okay that Kim Kardashian never has to work and we celebrate her posh lifestyle
Who is Kim Kardashian?
posted by telstar at 2:56 AM on December 30, 2010
Who is Kim Kardashian?
posted by telstar at 2:56 AM on December 30, 2010
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This thread has been archived and is closed to new comments
- A chart of global unemployment rates adjusted to US reporting standards (underlying data can be found here [ .xls ] )
- U-1 through U-6 unemployment rates measured state by state
- Timeline of a jobless recovery
- Will global unemployment remain high for the next two years?
posted by Mutant at 2:31 AM on December 29, 2010 [4 favorites]