I have been watching a historical piece about the 30’s when for the first time ever I felt connected to that depression: People all around me are unemployed, there are food lines, the economy is “on its way to recovery” for 2 years now and there is no relief in sight.
Are we in a similar depression? Is the myth of that phenomena so big that we cannot see the similarities?
I seem to have missed the announcement that we’re currently experiencing 25% unemployment. Hmm… nothing on CNN.com…
The Illinois jobless rate is holding steady at around 6.7%. When it goes up to, say, 15%, then I’ll start worrying about another Great Depression.
The jobless rate right now is at a level that used be considered almost ‘full employment’ by economists.
As downturns go, this one has been incredibly mild. The economy is actually in rather good shape.
I’m guessing you’re fairly young, aka_10003. In the last 30 years we’ve had two other recessions worse than this one. And the economy has been in much worse shape structurally as well. In the 1970’s we had double-digit inflation and even higher interest rates. That, coupled with low growth (‘stagflation’), meant that real incomes were dropping rapidly. Here in Canada, some people were in situations with home mortages where they were not even paying their interest off each month - they’d owe MORE with each passing month, because the banks would rather let them keep their mortgages alive than repossess their houses.
This isn’t even a recession. A recession is defined by two successive quarters of negative growth. The U.S. economy is growing - just at a very slow pace.
Thanks. Mr. Stone. It’s not that I am young–I am in Information Technology and in New York. That gives one a certain point of view.
The unemployment rate for NYC is almost 9%, a lot higher than the rest of the country. While not a “depression”, finance and technology are two fields that have been hit particularly hard and I don’t believe that CEO Bloomberg has done too much to try to correct the situation…
Oh, you’re in IT. That explains it. (-:
Seriously, you might want to consider a career change. I don’t think you’re going to ever see the kind of insanely high salaries in the IT field again, for a long, long time. It was a demand bubble. There’s nothing about being IT that should make it worth $70K a year for something that requires a six month education. Unless you just love the work, and are willing to work for a realistic salary, IT is going to be a tough field. Especially in New York.
Our office used to have five full-time IT guys, cumulatively earning over $250K. Now we have one overworked person, probably making 50K or so. The other four guys are on the street. When we eventually hire some back, it’ll probably be at less than half the salaries we were paying before.
In my town the unemployment rate is 4.6%, as of Jan 2003, even though our town’s (and in fact, metropolitan area’s) largest employer is American Airlines, and the nation’s second largest airport. Fort Worth’s rate is around 6% and Dallas’s is around 9%, though.
Of course, those rates may change real soon…whether or not AA actually goes into bankruptcy. But it has been steadily going up since way before 9/11.
And prices for rent, houses, cars, groceries, utilities, etc., keep going up, even if only slightly, so I have a hard time finding a depression in any of this.
shot in the dark…democrat?
How about…unemployed.
How about the fact that the rates don’t include those whose benefits have run out or those who are under employed.
aka_10003. You have a right to be worried. Although the current unemployment figures are not even close to depression levels, you might find the following statistics interesting:
So, the question might be, -------is this 1929? or just another mediocre year that we’ll muddle through?
I personally think that the chances are 50/50 that we are heading for a bad, bad recession. I hesitate to call it a depression.
Housing is the key. Watch for housing prices.
What are you suggesting with those statistics? You lost me. Are you trying to draw a correlation based on one data point?
I don’t see any evidence of a deepening recession. I think we’re heading into a pretty good recovery. Productive capacity is at 75%, meaning there is room for good growth. The reason productive capacity was low was because of low demand. That in turn was triggered by, A) A loss of investment wealth from the Dot-Com boom, B) uncertainty due to terrorism, and a shrinkage of worldwide travel because of same, and C) the fog of war.
Well, the war is over, the U.S. is winning the war on terror, and the stock market is recovering, up over 1000 points from its post-9/11 low.
The fact that we absorbed a multi-trillion dollar bubble burst, fought a war, and lost a trillion dollars in assets due to 9/11, while only barely slipping into a very mild recession, seems to me to be an indication of how strong the economy really is.
I predict at least 3% growth in the U.S. next year, unless there is another major terrorist attack.
aka_10003:
What you are experiencing is a sector recession. The US is so big that nation wide averages often mask really bad or really good situations either geographicall or by business sector. Look at some statistics for the various business sectors and you will see some are growing fairly well and others, like yours, are shrinking.
Anyway, the overall economy is not doing badly. Stay flexible about your career-- don’t lock yourself into a tiny niche in the same way you don’t invest ALL your money in one industry or sector.
You know…it’s amazing how well the economy is going for those in safe jobs with wads of money to invest. The problem is most people in this country don’t fit in that category.
I don’t know how many times I have to post the address of the Bureau of Labor Statistics before people actually start reading the thing… here’s how the government measures unemployment:
http://www.bls.gov/cps/cps_htgm.htm
In summary, “underemployment” is not measured (partly because it is difficult to properly define and measure) but the BLS certainly counts people whose unemployment benefits have run out. This is done through statistical sampling, called the “Current Population Survey.”
Local agencies (state or otherwise) frequently base their numbers off of unemployment insurance claims, but even then they typically take those numbers and crank them up a bit to account for the rest… but in each case it’s up to the local agency. But the Feds use statistical sampling.
For god’s sake man, PLEASE read the website of the folks that actually measure unemployment before spouting off about it.
I think he’s got 'em mixed up with people who’ve stopped looking for work, who aren’t included in the unemployment numbers but are in the figures for discouraged workers.
The full release of the employment situation for each month is always available here:
http://www.bls.gov/news.release/empsit.nr0.htm
Discouraged workers are included here:
This is WORSE!! than the depression of the 1930’s, because in the 1930’s, when factories layed off people, they intended, and eventually did, rehire them when things got better.
Today, our factories are permantently closing, and moving to China, Canada, Mexico, India. The people let go from those jobs, will never be rehired, the jobs will never come back, the factory is going to stay in China. Lots of factories and office buildings are being built today - in India and China.
Likewise with “outsourcing”. No American company is planning to outsource less, all of them are intending to outsource more. It is cheaper to hire an Indian or a chinese, to do your IT work or your engineering work, accounting work, collections, telephone soliciting, or your call center, or whatever, at $1 an hour, instead of paying minimum wage in the United States.
Despite of all the american jobs that are permantly lost to foreign countries, we are now letting in millions into america to compete for the dwindling number of jobs with the H1-B and L-1 visa programs.
On top of it all, we are letting in 57,000 more legal immigrants to compete for fewer jobs, and maybe another additional 57,000 illegals are sneaking in.
During the depression, we all could hope for better times, we could hope for when the factories would start hiring again, when the recruiters would start hiring our high school and college grads, and when companies could ramp up again to hire out of work middle aged people. The companies that closed or outsourced during the past 10 years, will not be rehiring ever again.
Lastly, during the depression of the 1930’s, most people lived on the farm, so most people could still eat. Today, most people live in the city,and do not have crops or livestock at home to eat when unemployment benefits run out.
During the 1930’s, at least the democrats wanted to do something to get people working again. There was massive work projects, the CCC, and Roosevelt made it a priority to get people back to work.
Today, both the republicans and the democrats, want to continue the H1-B and L-1 visa programs, both parties want record immigration to continue, both parties want american companies to outsource american jobs to india and china.
A huge difference is that money supply has not been chopped off at the knees nor does it look like it will be. Much of the length and severity of the great depression can be traced to the fact that money supply was constricted.
Susanann - Lets not be alarmist now. There are plenty of call center jobs in the midwest. The companies that went through layoffs may never hire again (but they might) but there will be other companies to replace them. “Outsourced” jobs are still jobs and many of those outsourcing companies are as American as the companies that hire them. The idea that every type of job will exit a nation with as educated and diverse workforce as the US is ridiculous.
Its funny how everyone forgets how the economy is cyclical. When times are good (like 1997-2001) the good times will last forever. When times are bad (like they are now, but not nearly as bad as the 30s) no one imagines they will ever get better.
Also, it wasn’t so great to be a farmer in the Dust Bowl back in the 1930s.
Oh yeah…and when was the last time you heard of Americans starving to death? Our poor are FAT!!
Is the question: When will some official come out and just call our persistent situation a Depression?
If it is, the answer is: never.
Look at your 19th century history. Bad economic times were called Panics. By the twentieth century, smart politicians realized that calling it a Panic was a sure way to get people freaked out and not behaving in a way that would help the economy, so the less alarming word Depression came into play.
Of course, Depression came to stand for the worst economic crisis of the first half of the twentieth century, so the even less dire-sounding word Recession became the word of choice. Then the Reagan and Bush Recessions spoiled the mitigating properties of that word, but a new candidate has yet to emerge, so we simply hedge on even calling something a recession if we can.
Accorind to the numbers I get from the US Census Bureau’s US population estimates, and the Labor Department’s unemployment percentage figures for March (someone please correct me if this is not how it’s calculated, I’m no economist), something close to 17 million people can not find work right now.
Let’s take samclem’s figures from the US Census Bureau, and apply them to historical population estimates (Historical Statistics of the US, Colonial to 1957, as reproduced in my old college history text):
1929 3.2%…3,894,400 out of work
1930 8.7 %…10,681,425
1931 15.9 %…19,722,360
1932 23.6 %…29,462,240
1933 24.9 %…31,269,171
1934 21.7 %…27,423,158
1935 20.1 %…25,577,250
1936 16.9 %…21,640,957
1937 14.3 %…18,421,975
1938 19.0 %…24,666,750
1939 17.2 %…22,511,360
1940 14.6 %…19,223,674
1941 9.9 %…13,255,506
1942 4.7 %…6,361,967
1943 1.9 %…2,607,750
If you measure the doldrums of the economy in terms of percentage of unemployed, we won’t reach Depression levels until an unprecedented 72,403,569 people can’t find work. Hope that never happens.
Of course, if you see a new depression in the actual number of people standing in bread lines, we don’t need to hit 25% or even 15% to reach the worst of the Depression; we only need to get as high as 10.8% unemployment.
But even if anyone measured it these human terms, don’t hold your breath waiting for any politician of ANY party to come out and rename themselves Herbert Hoover, Jr. by declaring the start of the New Depression.