The White House has been trying hard for the last couple of years to reduce unemployment, and most people would say the results have been quite disappointing. I’m starting to wonder if those lost jobs are gone forever, and unemployment is going to stay around 9% for years to come.
Any opinions on what eh future holds for unemployment?
Yes, it’s the new new normal. But it doesn’t really matter.
Nobody cares whether the unemployment rate is 9% or 9.2 or 8.8 or 7.5% or 5.1%.
There is only one number that matters:when the unemployment rate hits 100%—because you are jobless.
Other than that, the numbers are irrelevant.
What matters are not the numbers…what matters is people’s general psychology—how they feel in their gut about their personal future, and how they respond.
Everybody knows that the old, secure jobs are gone forever.
For blue collar people,nobody expects a factory job in a Toyota factory to last 40 years…Next month, the factory could move to Mexico, or to Albania.
And for white collar jobs-nobody expects to spend their entire career at one company any more.
The real question is how easily people will adapt to and accept the modern reality.
Here’s an example: Gas Prices.
2-3 years ago, gas prices jumped beyond the ultimate, unheard-of,unbelievable and unbearable barrier : 4 dollars a gallon!!!
People panicked. Every politician talked about the “Price at the pump”. And these boards were full of threads about it. Real, genuine concern—how high can it go? how will we survive?, etc etc.
But now, gas is again near the $4 mark, and nobody is talking about it.
My theory: there has been a deep, permanent change in the American psyche over the past couple years. People have finally accepted that old order is gone forever.In external politics, the 20th century era of American dominance is fading, similiar to the way the British Empire did.
And in internal politics, America’s ability to provide the good life for every citizen, is over, too.
Most Americans seem to understand this, and know that there is nothing they can do about it. You simply can’t control your personal future, so you just try to be as responsble as you can: apply for a job at Walmart and hope for the best.
The economy goes in cycles and yet for some reason, everyone seems to belive that how things are now are how they will be forever. Here’s a political cartoon bemoaning unemployment from 1837. I remember people complaining about the economy permentantly going into the shitter back in the 80s and the 70s.
And the 90s weren’t all about dot com millionares.
There has been a deep permanent change in the American psyche until the Next Big Thing[sup]TM[/sup] hits. And then it will be the Roaring 20s, Dot Com 90s or Real Estate Bubble 00s all over again.
Try as they might, presidents simply can’t do very much to affect economic cycles. The levers they have to pull are simply too short, and we honestly don’t understand enough about exactly how the whole system works anyway. The economy is a tremendously complex system with all sorts of positive and negative feedback mechanisms.
Some jobs are gone forever. It’s very unlikely, for example, that the newspaper industry is ever going to recover to historical levels. But that doesn’t mean that the ratio of employed to unemployed will permanently decrease. There will be other jobs to replace them.
When was the last time it was above 10% nationally. Here in Florida the unemployment rate is over 10%, but I can’t recall the last time it was nationally over 10%.
It’s like if they say unemployment is now in the double digits people will panic.
Nobody talks about the people who have given up (exhasted unemployment benefits and are working in the nderground economy).
If these were included, I’d bet unemployment is over 15%.
I know college grads who cannot find work at McDonalds.
This is beginning to look like the 1930’s.
1983
There is plenty of work for Americans to do. Our infrastructure needs upgrading. We need to get health care costs under control. We need to move to a more stable source of energy in an orderly sort of way. We need to help Third World countries solve their problems lest they become ours. We need to get our financial system working so it SUPPORTS our manufacturing and service sectors instead of feeding off them like a parasite.
We need to think about these things in an adult and rational manner and act on them in a reasonable way.
There’s the rub.
1983 was the last time unemployment was nationally over 10%. I wonder if they ar fudging the numbers to keep it under 10%? Hmmm?
Actually, I seem to recall it was just over 10 percent for a few months in 2009.
I thought he meant prior to the recent economic crisis.
How can you compare the economy today with 1837?
By and large domestically it seems employers really don’t need or want to hire anyone. I don’t see that changing. They can just demand lower wages and higher productivity from their workforce and keep the proceeds as higher profits (profits have almost doubled since the worst of the recession). If they do need to hire someone they can either set up shop overseas and use cheap labor or if they hire domestically they will hire temps and contractors who get lower wages, no benefits and can be fired more easily. On top of that the economy is still hovering on the edge, and could collapse any day again (Europe is on the brink of financial catastrophe, the US may face a debt crisis, etc) so nobody wants to invest and nobody wants to buy. In historical recessions we should be doing better by now, but in this one we are not. There is no demand and no security. Even if demand goes up and even if security goes up, they can just hire temps/contractors who will be grateful for the work. Things are so bad that people are (I’ve heard) paying to volunteer as interns, paying the employer to do work for them w/o compensation. There is no incentive to create good jobs when people are lining up to work for free. If jobs do come back, they’ll all be crappy temp/contract jobs in a 2-tier wage structure.
There is no incentive for business to create good jobs domestically. All the incentives point to everyone saving their money and whatever jobs are created are either created overseas or temp/contract part time labor domestically. What incentive does an employer have to create a domestic job that is secure and offers 60k a year in wages and benefits? None.
I don’t know when that will change. Or why it would. The recession is going on year 4 and the global economy is still on the brink of insolvency and still struggling.
The Panic of 1837? A 5 year depression triggered by the bursting of a speculative bubble and the failure of major banks? No similarities there.
We were also on the silver standard and not really part of a global economy that affected supply, demand, inflation, etc. We also didn’t have the level of academic knowledge of economics at the time (supposedly Bernanke’s academic familarity with the depression helped us avoid another one this time around, so I’ve heard).
Fine, I don’t see the government resurrecting the WPA and hitting the infrastructure up again. I know the CCC was still in existence in the beginning of the 80s because a friend of mine worked in a state park for the CCC repairing pathways …
If the infrastucture needs work, why not bring back the WPA and CCC and hit the damned road and fix the roads and bridges. Replace the old utilities under the roads, reharness the US to underground fiber optics while we are at it. Kick the engineers in the ass and redesign the nuke plants, it is time for an update to the old designs and lets build 1 or 2 in each damned state and get rid of the damned coal plants. Lets find all the fallow farms in the middle of the country, plant with soybeans and corn and make biofuels. Lets call the Loremo guys and plunk them into an empty car factory in Detroit and make some cars that get 100 MPG onto the damned market. Hell, lets tear down Detroit and rebuild with Old Man River City, and drag the area kicking and screaming into the 21st century.
How many jobs would that all create?
There is a lot of handwaving here. Who is going to pay for all these grand ideas?
The same people who are paying 10% of the workforce to go through the motions of looking for jobs that, by and large, do not exist?
I seem to recall some commentator mentioning that the persistence of the high numbers could mean that more of those who would otherwise be expected to fall off into the “discouraged workers” categories were seeking to remain in/reenter the formal workforce, than in prior crises.
If I can throw twist in all of this, the dearth of full-time employment for many people was predicted a long time ago except in the opposite way. It was considered a goal of the future. It has always been pretty obvious to those that were paying attention that efficiency gains couldn’t just translate into more and more material gain for everyone indefinitely. People simply don’t need that much stuff and there are only so many raw materials to go around. Not everyone can have 40 acre spreads and a personal jet.
The top of the efficiency/consumption curve looks like it happened in the late 1990’s. After that, consumption flattened out or dropped overall while efficiency continued to grow. The science fiction stories from much earlier made it sound great that people wouldn’t have to work that much to sustain a certain lifestyle. The problem is that there isn’t a good way to distribute those efficiency gains. Even the poorest people in the U.S. have it pretty good compared to much of the world and the vast majority of people throughout history but sitting around all day isn’t good for the individual or society. It is like a Twilight Zone episode where you have to be really careful what you wish for.
Now the talented and hard working full participants in the employment pool want to benefit from their gains as much as possible. That is perfectly understandable from their perspective. On the other side, you have some people that simply aren’t superstars at anything and don’t have the drive to make anything whatsoever work no matter what it takes. Those people are going to become more common over time and they will be left behind. There is no current mechanism in place to ensure employment for everyone if efficiency gains continue upwards. We will simply run a surplus of workers which devalues the ones that do have jobs. The people that aren’t among the best at what they do will not gets jobs and the cycle will continue because they can’t build experience. You can be the 2nd or 3rd best candidate for every job you apply for and never get anything to show it once the competition builds past a certain point.
No matter how efficient how everything becomes, it doesn’t translate well into things like reduced work hours or flexible work schedules because most employers have talented people willing to work as much as it takes on their own to fill all of position to endure the most financial gain possible for themselves and their families. That also happens to be the model that is most efficient for employers and there isn’t a good way around that.
