Census data would indicate otherwise. The actual percentage of the population living on farms in 1930 was about 25%. This possibly increased slightly during the worst years of the depression, but hardly would have reached 50%.
------------------------------------------------------------------------------ There’s an old joke among economists that states: A recession is when your neighbor loses his job. A depression is when you lose your job.
Nope. Once again, here’s how unemployment is calculated:
http://www.bls.gov/cps/cps_htgm.htm
In summary, the unemployment rate is the number unemployed divided by the labor force, not the total population. The March '03 value is about 8.4 million persons unemployed, although this figure is seasonally adjusted (I’m too lazy right now to dig through to get the unadjusted figure).
scot, if you want to determine depression by sheer numbers of unemployed, you could deny that we hit a depression by pointing out that there are more people employed now than were during the 1930s.
Which would be a meaningless statistic, like yours. The work force is larger now than in 1929. Percentages are used because we are looking for a measurement of the relative impact of unemployment on the economy.
Which is the worse situation - a work force of 100, with 3% unemployment, or a work force of 1000, with 1%. Which is producting more wealth? Which is better, 97 jobs, or 990? Even if it means 10 unemployed instead of 3.
Regards,
Shodan
Also, thanks to economies of scale and technology, 1000 people can produce more wealth per capita than 100. In other words, our larger, more technologically advanced society can afford to have more people temporarily unproductive than they could in the 30s.
Case in point, while I have been unemployed for a while now, I still manage to live quite comfortibly in NYC. In the 30s, I probably would have had to sell pencils and apples, live on the street and worry about getting set upon my roving gangs of Irish until I found new work.
It’s important to point out that even in a healthy, roaring economy, you’re still going to have 3-4% unemployment. People moving between jobs, re-training, etc. Once unemployment drops below these levels, you start to get serious wage inflation, and the economy is held back due to labor shortages.
So really, 7% unemployment should be seen as, “3% unemployment over ‘full employment’ levels”.
Or look at it this way: Many countries in Europe have double-digit unemployment. Canada’s unemployment rate today is right around 7.5% - and it never got lower than 6.5%, even at the height of the last economic boom.
So let’s not start with the panic.
Anyone who thinks we’re in a depression and don’t like the hard facts presented here showing we aren’t, go ask your grandparents, or someone who was alive in the 30s. You might gain some perspective.
This is a good thing. Immigration creates jobs.
Interesting, in terms of semantics. But the candidate has already emerged and was used in this thread: “downturn”.
In any event, comparing the current “downturn” to the depression of the 30’s is fairly premature, if not hyperbolic. From the previously mentioned Bureau of Labor Statistics site, unemployment rates were:
1990 5.6
1991 6.8
1992 7.5
1993 6.9
1994 6.1
1995 5.6
1996 5.4
1997 4.9
1998 4.5
1999 4.2
2000 4.0
2001 4.7
2002 5.8
Show me a six point jump in unemployment in a single year, then I’ll show you a comparable depression.
Thanks for the correction, desdinova. I believe that a more or less comparable percentage of the total population comprises the workforce today as it did in the 1930s, and with a greater population, a smaller percentage of unemployed can mean the same number of people out of work. If the percentages of population making up the work force are not comparable, I will suggest they are higher today due to the baby boom and their oldest children. It does not diminish my point.
msmith537, I am gald you are living comfortably in New York, given the high prices I saw on my recent trip there. Having seen the cost of living there myself, I know that you have some form of income, either in the form of day labor, a second income in your household, wisely planned savings, or charity from landlords and other creditors. This does not change the fact that those with no income have no means other than the good will of the state to take advantage of the greater wealth generated by a larger workforce. Good luck in the job hunt.
Shodan, let’s really compare apples to apples and say your workforce of 1000 has only .3% unemployment, and the same 3 people are out of work and have no income. They can’t afford their housing or food. Should they suddenly describe their hardship as less severe in a larger workforce, because they represent a smaller percentage of it?
The entire point of that part of my post is that the actual number of people out of work these days could reach Depression-era levels without having anywhere near the same impact on the total economy. Those who say the economy, even with the same unemployment numbers, is healthier today than back then are correct, but it makes no difference to those who are unable to get a salary that turns some of that greater prosperity their way.
To talk only in terms of percentages is to say “Sure, the lines at the soup kitchen are as long as they were in photographs from the thirties, but since I’m not one of them, and the situation creating their hardhip does not affect me the same way as it would have then, why does it matter?”
The failure of the Depression-era economy to support that many individuals in the was terrible, and the inability of today’s economy to support the same number of individuals would be equally terrible, regardless of how deeply or not it affects the remaining employed.
True, a healthy economy needs a certain number of people out looking for work, or new businesses can not start, and existing businesses can not grow. But to see the unemployment rates in a positive light, the unemployment rate must be offset by a proportionate number of new jobs created, so that, month to month, the unemployment percentages are less likely to represent the same individual people still out of work.
Right now, we are not seeing an encouraging number of new jobs created, so there is cause for concern about the unemployment rate.
Scott:
“I believe that a more or less comparable percentage of the total population comprises the workforce today as it did in the 1930s”
This is probably true for men, but almost certainly not true for women. In fact this raises an intersting question. When unemployment rates are compared over time, how does it take into account those people, mostly women*, who never work outside the home? Do you have to first have a job, and lose it to count as unemployed?
*Pls don’t hit me for being a sexist. I could’ve couched that statement in all kinds of PC language, but the fact remains that many more women are homemakers than men.
You keep using " I believe" and other speculation here… this data isn’t exactly unknowable. What you’ll find out is that the labor force participation rate has steadily increased over the past century, due in no small part to the fact that a lot more women work now than in 1900. This data, back to 1948, is available from the BLS, and you can probably get the rest from the Census Bureau.
So the point is, even with a lower unemployment rate we can have a comparable or higher absolute number of unemployed persons. So what? Economic catastrophe is a lot more than just how many people are sitting on their hands. There’s also a significantly larger number of people who are employed. Further, the marginal productivity of this vastly greater number is likewise significantly higher than it was in 1933. So we’ve got significantly more people making significantly more stuff. In turn, our federal government appropriates a larger portion of it, which it then partly uses to support the number that are unemployed.
I think the best way to phrase my point is this: would you rather be unemployed in 2003, or in 1933? Who is better off? I don’t see how anyone with any knowledge whatsoever of the Great Depression could answer the former, and to me that means we are demonstrably and significantly better off today than seventy years ago.
Are we headed for another Great Depression? My opinion is no, no, a thousand times no. But this is prognostication… weather forecasters have better tools than us economists, and they only have to provide 5-day forecasts.
I can see your point, but the problem is that your argument intermixes local phenomena with global comparisons, relative with absolute values. The sheer percentage or number of people affected by a given event doesn’t really help us much in finding the humanity or inhumanity in the situation–we only gain perspective on the relative enormity. When using quantitative values to measure suffering, one often risks undercutting one’s own argument by implying people as statistics in the first place.
Similar historical comparisons about the war (reporters mentioning WW2 bombing, Rumsfeld saying the war was unlike any in history, both statements being accurate and inaccurate at the same time) can be equally misleading when applied in certain contexts.
I don’t think we’re headed for another Great Depression. However, in my corner of the world, we are losing lots of manufacturing jobs. It’s still easy to find work, provided you’re willing to work in the low-paying tourist industry. It’s a lot harder to find a job with benefits and wages comparable to those in manufacturing. A service-sector job is a lot better than no job at all, but it has caused significant readjustment and strain for many families.
And by “we”, you mean those of us who still have jobs, which is exactly what I was talking about. If you lose your job, and can’t get a salary to give you a share of this wonderful wealth we now can generate, then by your own argument, I can sweep you under the rug as insignificant.
If I looked out of my office window in the 1930s and saw 2000 otherwise fully-employable people lining up for a handout because they had run out of other options, I would say to myself “times are not good”. If I were to look out in 2004 and see the same number lined up, I woudl STILL say, “times are not good”. To say otherwise would requre a level of suspension of disbelief that I do not find constructive.
Would I rather be out on the street wondering where my next meal is coming from in 1933 or 2003? Well, in general, living in squalor is living in squalor, regardless of the decade, so I’d rather just be employed.
But if I had no choice, I’d look at it this way: In 1933, we had a President who said, “Let’s use the resources of the government to provide every opportunity we can think of for these people to contribute to society and make themselves a living, and things will get better.” This had never been tried before, and although its successes were certainly not as conclusive as some would like to say they are, it did work to some extent. In 2003, we have a President saying “Let’s use the resources of government to give as much money as we can think of to the people who already have plenty, let everything else go, and things will get better”. This HAS been tried before, and in my opinion, it did NOT work under Reagan/Bush OR Coolidge/Hoover.
So I’ll take 1933.
Heavens yes, their situation is less severe. They are part of a society with a much greater capacity to supply charitable relief, and where their chances of finding employment are much higher.
Unemployment figures are reflective of groups, not individuals. A society of any size, all other things being equal, is better off with a lower unemployment figure than another with higher unemployment. Up to Sam Stone’s point of more-than-full-employment, and so forth.
Are you arguing otherwise? I don’t feel like I understand your position.
Regards,
Shodan
I didn’t see your post on preview.
If you are seriously arguing that the unemployed were better off in 1933 than they are today, I will request a bit more evidence than “this has to be a depression, because Bush is President”.
In particular, it would be interesting to hear why the enormous number of jobs created during the Reagan economy, and the decline in the poverty rate of the same period, are signs that we are in a depression. Or whatever you are saying.
It seems you never heard one of the more sustainable accusations against Reagan - that he hated the poor so much, he made less of them.
Regards,
Shodan
Capacity to provide charity is meaningless without including society’s actual willingness to provide it. Since this is an entirely hypothetical pair of situations, we have no indication of relative desire to provide charity within the larger society, so there is no ability to compare levels of hardship. If there is sociological evidence that a larger workforce is more willing to provide charity for the jobless, we’ll have something to talk about on this point.
An economy that can not find three jobs for these people is an economy short three jobs, regardless of the size of the total workforce. Again, we have surrounded our situation with no indication of the number of jobs available, so we are simply left with three people out of work in either case.
You are correct, the society is better off with a lower percentage of unemployment, (down to a certain minimum, assuming a healthy level of job creation), but how much better off are the actual people who can not actually find work in either case?
PLEASE!
Reagan’s main contribution to reducing the number of poor people consisted of setting the Poverty Line to a lower income level.
Sure, the Eighties and early Ninetlies were a great time for all, weren’t they? As Rush Limbaugh put it, “Those who had money did really well!”
Shodan, on your point about whether or not we are in Depression right now, I do not think we are, either in terms of the percentage of people in hardship, or the numbers of people in hardship.
My point is, in today’s situation, we can get Depression-level hardship for a Depression number of people without seeing Depression-level percentages.