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10% unemployment is here to stay

ElFenix

ElFenix

Elite Member
Super Moderator
http://www.foreignpolicy.com/articles/2011/01/05/10_percent_unemployment_forever

As time passes, it is harder to avoid the notion that a lot of those old jobs simply weren't adding much to the economy. Except for the height of the housing boom -- October 2007 through June 2008 -- real GDP is now higher than it has been in the entirety of U.S. history. The fact that the United States has pre-crisis levels of output with fewer workers raises doubts as to whether those additional workers were producing very much in the first place. If a business owner fires 10 people and a year later output is almost back to normal, it's pretty hard to make the argument that they were doing much in the first place.
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basically, the jobs were marginally productive and the wrecking of the economy forced those jobs to be eliminated. and they're not coming back.
 
In other news, unemployment reports dropped the national unemployment rate to 9.4% today.

Of course efficiency is higher right now. AFAIK, that happens quite frequently during a recession, or basically anytime when employers have more power than employees. It's very easy to look at a piece of paper and deem those other employees unnecessary if you don't start asking yourself more complicated questions.
 
I wouldn't say that, you just had an unemployment report today saying that revised data from prior months combined with essentially even employment growth in December (which will be revised upwardly at some point most likely), and the fact that a shit ton of people are actually looking for work now more than they were before (I think it's hit 490,000+, which is supposedly near saturation) means that the unemployment rate will certainly get below 9%. It dropped to 9.4% today.

Though, I would agree with you if the total labor work force were be substantially under-represented in the unemployment figures, but just the opposite is (finally) true now.
 
Everytime we pass legislation and higher taxes you have to realize that companies and corporations find it easier and easier to shift prodution to oversease locations along with technology workers, and programmers. Even banks hire people form overseas to input checks. Once checks are scanned they can be processed anywhere.
 
First said:
I wouldn't say that, you just had an unemployment report today saying that revised data from prior months combined with essentially even employment growth in December (which will be revised upwardly at some point most likely), and the fact that a shit ton of people are actually looking for work now more than they were before (I think it's hit 490,000+, which is supposedly near saturation) means that the unemployment rate will certainly get below 9%. It dropped to 9.4% today.

Though, I would agree with you if the total labor work force were be substantially under-represented in the unemployment figures, but just the opposite is (finally) true now.
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9% ~ 10%. it's close enough for a headline. the main thrust is we're not getting to 6% or 5% any time soon.

and the jobs report wasn't that great. ~100,000 are needed a month just to keep up with population growth. we basically treaded water in december.
 
piasabird said:
Everytime we pass legislation and higher taxes you have to realize that companies and corporations find it easier and easier to shift prodution to oversease locations along with technology workers, and programmers. Even banks hire people form overseas to input checks. Once checks are scanned they can be processed anywhere.
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It's almost like taxes have decreased significantly and we've been deregulating for decades now and your post makes zero sense. Literally GOP.txt
 
I don't get how we could say that since no one is hiring the unemployed the economy does not need them because its working fine. Thats like saying we can't increase the population because the economy can't support them. The economy can always accommodate more people into the workforce.
 
Also, just a few weeks ago I looked at a report that had some of the most positive data I've seen since the recession began ~3 years ago. It stated that business cash reserves were at their highest level since 1952. This indicates a couple things to me, specifically that businesses are uncertain to hire back as quickly as they normally did before the recession because of the fear and uniqueness of this particular recession WRT financial collapses, and secondly it indicates what most of us already know; that corporate profits are near record levels and that they just need to hire again. Of course, with highly skilled jobs in significant demand, it's pretty easy to see the shift in labor priorities and skills; i.e. it'll take time to train people with 21st century skills. On that note, I agree with you Felix that a lot of jobs that were lost at record levels in early 2009 won't come back because they're 19th/20th century jobs (heavily manufacturing, construction).
 
ElFenix said:
9% ~ 10%. it's close enough for a headline. the main thrust is we're not getting to 6% or 5% any time soon.
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Unquestionably, we're not getting to 5% or 6% soon. But we have averaged 6.5% unemployment since 1980, so getting to near 7% would be a good accomplishment and pretty close to historical norms within the next 2 years.

and the jobs report wasn't that great. ~100,000 are needed a month just to keep up with population growth. we basically treaded water in december.
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Yeah, ADP reported 300,000 added jobs in December so I wonder if they'll be significant revisions to the BLS employment data at some point in the next 1-2 months.
 
First said:
Unquestionably, we're not getting to 5% or 6% soon. But we have averaged 6.5% unemployment since 1980, so getting to near 7% would be a good accomplishment and pretty close to historical norms within the next 2 years.



Yeah, ADP reported 300,000 added jobs in December so I wonder if they'll be significant revisions to the BLS employment data at some point in the next 1-2 months.
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The problem with jobs added in Nov/Dec is that many are seasonal and "expire" in January the followign year.
 
Between our own population growth and unrestricted immigration, there will never be enough jobs to go around.
 
dmcowen674 said:
I don't think so.

Between people offing themselves (see OT), the baby boomer generation dying off by old age, America no longer the place to flock to (see Mexicans going back to their country) and the Republican Death panels put in place, the population will drop enough to go back to what is known to be a healthy 6% unemployment rate.
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Would these be the same Republican "Death Panels" you made up here and still haven't answered questions about?

http://forums.anandtech.com/showpost.php?p=30899675&postcount=31
 
Common Courtesy said:
The problem with jobs added in Nov/Dec is that many are seasonal and "expire" in January the followign year.
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Except temp holiday workers didn't make up the majority of U.S. private sector hires in November and December according to the numbers. Besides, we added 100,000 private sector jobs in September and 200,000+ private jobs in October. A good percentage of temp holiday workers are also kept on as temps past January.
 
The people who are hit the worst are the least educated. Their jobs dont produce a lot. It is possible when these people are re-employed we wont see a huge increase in real output anyways. So I think it is a little premature to say these jobs are gone forever. It is just as possible demand hasnt required these low fruit jobs to be back on the production line.
 
Genx87 said:
The people who are hit the worst are the least educated. Their jobs dont produce a lot. It is possible when these people are re-employed we wont see a huge increase in real output anyways. So I think it is a little premature to say these jobs are gone forever. It is just as possible demand hasnt required these low fruit jobs to be back on the production line.
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Probably some truth to this. If we cut off unemployment and all social services I would say 60% of these people would die. This would be good for the economy as they wouldnt consume my tax dollars. We can then use this money for defense.
 
JSt0rm said:
Probably some truth to this. If we cut off unemployment and all social services I would say 60% of these people would die. This would be good for the economy as they wouldnt consume my tax dollars. We can then use this money for defense.
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Hyperbole laden nonsense for 1000 Alex.
 
Common Courtesy said:
The problem with jobs added in Nov/Dec is that many are seasonal and "expire" in January the followign year.
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Which is why we get seasonally adjusted numbers which smooth out that fluctuation. Meaning, you don't have to worry about it rising in Jan/Feb.

Average BLS unemployment in Nov/Dec 1999: 4.05% and in Jan/Feb 2000: 4.05%

end of 2000 / early 2001: 3.9% and 4.2%
end of 2001 / early 2002: 5.6% and 5.7%
end of 2002 / early 2003: 5.95% and 5.85%
end of 2003 / early 2004: 5.75% and 5.65%
end of 2004 / early 2005: 5.4% and 5.35%
end of 2005 / early 2006: 4.95% and 4.75%
end of 2006 / early 2007: 4.45% and 4.55%
end of 2007 / early 2008: 4.85% and 4.9%
end of 2008 / early 2009: 7.15% and 7.95%
end of 2009 / early 2010: 9.95% and 9.7%

So, in the last 11 years it rose 5 times, dropped 5 times, and it was equal once. Meaning that you should look up information next time and don't just blurt the first thought that comes to mind.
 
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Phokus said:
It's almost like taxes have decreased significantly and we've been deregulating for decades now and your post makes zero sense. Literally GOP.txt
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HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHA yeah in bizzaro world.
 
First said:
But we have averaged 6.5% unemployment since 1980.
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That was an unusual statistic to quote. So, I looked it up. The average is acutally 6.3% since 1980. You were basically right on. But, 1980 is still just a random date to pick. I'll pick another random date that covers all years that today's workers were working, since 1970 the average was, yep, 6.3%.

Your point is taken though. I think people want to get back to the 4% rate that we had in the year 2000. That is an unrealistic goal. We should really be striving for 6.3%.
 
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