How Serious is 8.5 Percent. . . .

[Bird of Prey]

Unemployment in U.S. Increases to 8.5%, 25-Year High




By Bob Willis
http://www.bloomberg.com/apps/data?pid=avimage&iid=iaRm68UJ2RRE

April 3 (Bloomberg) -- The U.S. unemployment rate climbed in March to the highest level since 1983 and the economy lost more than 650,000 jobs for a fourth consecutive month, a sign renewed reductions in spending might slow a recovery.
The jobless rate (http://www.bloomberg.com/apps/quote?ticker=USURTOT%3AIND) increased to 8.5 percent, as forecast, from 8.1 percent in February, the Labor Department said today in Washington. Employers cut 663,000 workers from staff, bringing total losses since the recession began to about 5.1 million, the biggest slump in the postwar era.
Evaporating jobs and declining pay mean President Barack Obama (http://search.bloomberg.com/search?q=Barack%0AObama&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1)’s pledge to create or save 3.5 million jobs through tax cuts and government spending may fall short of what’s needed to revive the world’s largest economy. Federal Reserve Chairman Ben S. Bernanke (http://search.bloomberg.com/search?q=Ben%0AS.+Bernanke&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) has conceded joblessness could top 10 percent under a worst-case scenario.
“The labor market has gotten worse,” Conrad DeQuadros (http://search.bloomberg.com/search?q=Conrad+DeQuadros&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), senior economist at RDQ Economics LLC in New York, said before the report. “Weak labor-market conditions will result in consumer spending being weak throughout most of 2009.”
After the report, stock futures extended gains and the yield on 10-year Treasury notes rose.
The job cuts have been spreading from manufacturers such as Johnson Controls Inc. and Dana Holding Corp. to service providers like International Business Machines Corp. and even the U.S. Postal Service.
Revisions subtracted 86,000 workers from January payrolls while’s February’s drop of 651,000 was not revised.

November 1983

The last time the unemployment rate was at 8.5 percent was in November 1983, when the economy was recovering from the 1981- 82 recession that pushed the rate to almost 11 percent. Then Fed Chairman Paul Volcker (http://search.bloomberg.com/search?q=Paul+Volcker&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) boosted interest rates to quell soaring inflation following the 1970s fuel crisis.
Payrolls were forecast to drop by 660,000, according to the median of 80 economists surveyed by Bloomberg News. Estimates ranged from losses of 525,000 to 750,000. . . .

http://www.bloomberg.com/apps/news?pid=20601087&sid=aG_Qy7Fq15hg&refer=home

Trivia: Off the top of your head, do you remember who was President in 1983?

I'm not sure the magnitude of 8.5 percent has been demonstrated yet, but it seems to me that - given an enormous increase in population since '83 - there are all kinds of mitigating factors as to whether this "recession" will or won't be as seriously felt. I have a feeling we're better off overall than we were back in 83. I think it's an utterly different world.

[James81]

Wow, this is the first article I've seen yet that hasn't mentioned the words "Great Depression" and has actually compared our situation to a more realistic time frame (the early 80's).

[icerose]

Add my husband and 8 other people to the jobless list this summer.

[Bird of Prey]

Add my husband and 8 other people to the jobless list this summer.


I was hoping you could tell me how long unemployment benefits last.

[DeleyanLee]

Trivia: Off the top of your head, do you remember who was President in 1983?

Why, that would be the highly esteemed Mr. Ronald Reagan with his "Reaganomics"--which I never understood what the wonderful hoopla was about. Seemed to me then that it sucked and seems to me now that it helped set the stage for the current suckage.

But what do I know? I just pay the taxes and keep praying my job will still be there in the morning.

[James81]

Why, that would be the highly esteemed Mr. Ronald Reagan with his "Reaganomics"--which I never understood what the wonderful hoopla was about. Seemed to me then that it sucked and seems to me know that it helped set the stage for the current suckage.



Reagan, like Obama, inherited a pretty massively shitty economy. So blaming Reagan's policies for the economic situation in 1983 is pretty harsh (despite him being in office for like 2 years). By the end of his two terms, things were pretty decent.

[nahalwi]

Do those numbers reflect just the people receiving unemployment, or do they have some other way to determine that? Because I would imagine the numbers might be higher if that is the case.

The way the unemployment is, at least in my state, a company can just fib or say whatever reason for letting people go and it being a 'right to work' state and then the employees don't get a dime. Maybe you can fight it, but how many people are going to put forth the effort into fighting for that instead of just immediately looking for a new job?

Also situations like mine, I had to leave my job for health reasons. I had to be on 7 different meds ($200 a month not including doctor's visits) just to be able to work there, was there over 3 years and it just finally got to be too much. Of course, you can't get worker's comp to do anything about the situation without months/years of fighting and I don't qualify for unemployment, so I'm stuck in this bubble of unemployment chaos. But I'm healthy(ier) again!

[icerose]

I was hoping you could tell me how long unemployment benefits last.

6 months is what we've been told. We have until Christmas to find another job. This is going to be a really lean year if we can't, which if it follows current trends is going to be pretty difficult. We've been looking for January because we had a feeling we would be, we lose our job officially the first of August, then we're on our own from there on out. So far we haven't had any luck. He's going to retrain this fall in a wide swath of fields to increase his job chances if he doesn't have a job by then, so who knows.

I do know unemployment won't cover our bills by about 90 bucks, then food and gas and anything extra are above and beyond that.

[Bird of Prey]

6 months is what we've been told. We have until Christmas to find another job. This is going to be a really lean year if we can't, which if it follows current trends is going to be pretty difficult. We've been looking for January because we had a feeling we would be, we lose our job officially the first of August, then we're on our own from there on out. So far we haven't had any luck. He's going to retrain this fall in a wide swath of fields to increase his job chances if he doesn't have a job by then, so who knows.

I do know unemployment won't cover our bills by about 90 bucks, then food and gas and anything extra are above and beyond that.

I assume you both work at the same place. Are the doors closing or is it just downsizing??

[Romantic Heretic]

Considering that the actual unemployment stats are probably twice that, it's very bad.

Governments have been spending the last 30 years 'redefining unemployment' so they can avoid looking bad.

[My-Immortal]

November 1983

The last time the unemployment rate was at 8.5 percent was in November 1983, when the economy was recovering from the 1981- 82 recession that pushed the rate to almost 11 percent. Then Fed Chairman Paul Volcker (http://search.bloomberg.com/search?q=Paul+Volcker&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) boosted interest rates to quell soaring inflation following the 1970s fuel crisis.

Trivia: Off the top of your head, do you remember who was President in 1983?

Bolding mine.

Without looking any deeper into this, there seems to be some sort of similarity between then and now...

Fuel prices skyrocketed in recent years and now we're in another recession. Going on the assumption that those two events are linked, then it would seem that you are blaming Reagan for the problems of the early 80s....though he wasn't president during the fuel crisis.

Are we to assume then that you'll also blame Obama in another year or two for the current situation (assuming we're still in some sort of depression) rather than Bush?

Thanks for the discussion.

[icerose]

I assume you both work at the same place. Are the doors closing or is it just downsizing??

No, just him. I am a stay at home mom and freelance writer but I don't make anywhere near enough to carry us through. Mine is more emergency fund kind of money.

I just say "we" because we're in this together.

As for the job itself, we work for the school district, school budgets were cut 12% this year in Utah and are being cut another 12% next year. They let go 6 teachers, 4 teacher's aids, 1 custodian, didn't replace one custodian and two teachers that retired.

It's amazing, they are always downsizing the staff while the administration gets bigger.

[My-Immortal]

Why, that would be the highly esteemed Mr. Ronald Reagan with his "Reaganomics"--which I never understood what the wonderful hoopla was about. Seemed to me then that it sucked and seems to me now that it helped set the stage for the current suckage.

But what do I know? I just pay the taxes and keep praying my job will still be there in the morning.

If I recall, the idea behind Reaganomics was basically the trickle down effect, right? Money would be given to the rich in hopes that it would trickle down to the poor.....right?

How exactly is what the government doing now by bailing out the banks, automakers, etc. by giving taxpayers money to the hugh corporations any different? Isn't the government giving this money to the banks hoping they'll in turn loan it to the little people (primarily us), basically the same idea?

If it didn't work then, how will it work now?

Just curious....

[jodiodi]

Unemployment benefits depend on your state of residence, I believe. I drew mine for almost 6 months, though part of it was the emergency extension. When my disability finally came through, it was a relief. I tried to find work, but no one was willing to hire me because of my memory/medical issues (can't say I blame them, but the experience was still soul-crushing).

Fortunately my unemployment benefits lasted until my SS Disability was approved. I told my husband if I hadn't had to pay so much in Income Tax over the years, I'd have plenty of money to live off of now. I sometimes paid more than my parents made. Disgusting.

[kikilynn]

Here in utah the unemployment rate is only 4.6%, which only increased by 1% in the last year. A huge surprise since 20,400 more people are out of jobs.

[DeleyanLee]

If I recall, the idea behind Reaganomics was basically the trickle down effect, right? Money would be given to the rich in hopes that it would trickle down to the poor.....right?

How exactly is what the government doing now by bailing out the banks, automakers, etc. by giving taxpayers money to the hugh corporations any different? Isn't the government giving this money to the banks hoping they'll in turn loan it to the little people (primarily us), basically the same idea?

If it didn't work then, how will it work now?

Just curious....

Honestly, I haven't a clue. I've never studied economics or any of that stuff. If I'm a little harsh on Reagan, it's because I became an adult during his administration, which is where my awareness begins, and started struggling to survive from the get-go and it pretty much hasn't stopped to the present day.

I feel for anyone without a job and facing personal hardship. Been there, done that many times in my life. The unemployment figures are newsworthy, but I tend to look at it this way: 8.5% are reportedly unemployed, which means to me that 91.5% are reportedly still employed. Looked at that way, it doesn't seem so entirely gloomy.

But, as I said before, I just pay my taxes and keep praying my job will still be there in the morning--but that's my life experience, not the economy, talking.

[icerose]

I feel for anyone without a job and facing personal hardship. Been there, done that many times in my life. The unemployment figures are newsworthy, but I tend to look at it this way: 8.5% are reportedly unemployed, which means to me that 91.5% are reportedly still employed. Looked at that way, it doesn't seem so entirely gloomy.


It just sucks when you're part of that 8.5%.

But that figure isn't entirely accurate either. Some places have an unemployment rate of up to 25% while others are in the 3% range. It's not balanced equally across the board and some are in dire straights.

[Williebee]

Ronald Reagan took office in 1981, from one termer Jimmy Carter. So, yeah, he was two years in. Carter, among other things, gave us price controls on oil. Perhaps a reaction to the energy crisis of the late 70's. Which brings me to this (ETA: Source http://www.wtrg.com/prices.htm):

http://farm4.static.flickr.com/3336/3409817044_01bda68b18.jpg?v=0


One of Pres. Reagans first acts was to remove the price controls on oil, followed by reducing and later eliminating the Windfall Profit Tax. I seem to remember being told that was because the energy crisis was followed nearly a decade later by oil surplus, and falling oil prices.

And wondering if the the price of oil can function as a reflection of the economy as much as it does a driving force. (Does that make any sense?)

[Cranky]

It just sucks when you're part of that 8.5%.



You bet. My husband is having trouble even landing interviews, and the last time he went job hunting (besides the fact that he already had a job then), he was juggling different offers and had several interviews right off the bat.

It's rough out there right now.

[Bubastes]

One of my best friends was laid off yesterday. We live in a high unemployment area. It's ugly out there.

[Contemplative]

If I recall, the idea behind Reaganomics was basically the trickle down effect, right? Money would be given to the rich in hopes that it would trickle down to the poor.....right?

How exactly is what the government doing now by bailing out the banks, automakers, etc. by giving taxpayers money to the hugh corporations any different? Isn't the government giving this money to the banks hoping they'll in turn loan it to the little people (primarily us), basically the same idea?

If it didn't work then, how will it work now?

Just curious....

Reaganomics aimed to use government spending to induce and amplify the boom aspect of the boom-bust cycle, stimulating business largely via military keynesianism in order to produce a better economy for everyone in America. It did work, kinda-sorta if you squint -- it's just that the rich profited vastly more than the poor, even if the poor benefited as well. The whole culture of the "me decade" also served to screw the poor out of the (tiny) benefits they would have gotten from Reaganomics. And then when the bust cycle came around, it was amplified as well by all the government debt, and the poor and middle-classes were less equipped to cope with it than the rich.

Rather than trying to amplify a boom, what Obama is doing is trying to lessen the effects of an already-in-progress bust. The stimulus package isn't, and never has been, billed as a package specifically to help the poor. Instead, it's a package to prevent the collapse of the economy in general, and to prevent the collapse of specific entities which employ large numbers of lower-middle class Americans in particular. It's not trying to fix anything that was wrong before -- it's an attempt to prevent things from getting much, much worse.

There's a theoretical difference here that's important -- the desire to exploit versus the desire to minimize the boom-bust cycle. I personally theorize that a high-magnitude boom-bust cycle benefits the rich and greatly harms the poor, so in my eyes Obama's policies are far more egalitarian.

[StephanieFox]

I just heard that my sister-in-law was laid off. So were two of my husband's cousin. So was several of his friends. So were a couple of my friends. If I wouldn't self-employed I could say the same, but since my work has simply dried up, and I didn't technically lose a job, there's no unemployment insurance for me.

[Phoebe H]

Of course, the unemployment rate that includes people who would like to work, but have given up looking, and people who only work part-time but want full-time jobs, is 15.6% (http://www.bls.gov/news.release/empsit.t12.htm)

The 'official' unemployment rate is always on the low side, since they started excluding people who were so discouraged they had quit looking for work.

[shawkins]

My company laid off about 10% of its workforce today, including one of the smartest guys I know.

[MattW]

Sadly, I know a few people who allow pride or self-entitlement to keep them from being employed at all.

Always looking for better than what they had, or what they think they deserve, while their spouses slave away at one or more jobs and have to feed the ego as well as pay all the bills.

[Zoombie]

Work is work.

I'd jump to do almost any work. Paid work that is. Non-paid work is slavery and illegal last time I checked.

There is only one job I will never do:

Game testing.

It will pretty much kill gaming for me, and I don't want to give up my pass time.

Now, if only I could be some kind of...gigolo...too bad its illegal. And there are STDs.

And I'm butt ugly.

[Haggis]

The good news: Our local paper is down to about a page and a half of help wanted ads on Sunday. The bad news: The paper is shutting down in July.

Michigan unemployment now is somewhere between 12 to 13 percent. That figure represents (to my understanding) only those people drawing unemployment checks. It does not include those whose time on unemployment has run out. It would not shock me at all to find out that the real unemployment rate was double that number.

[Magdalen]

<snip>Michigan unemployment now is somewhere between 12 to 13 percent. That figure represents (to my understanding) only those people drawing unemployment checks. It does not include those whose time on unemployment has run out. It would not shock me at all to find out that the real unemployment rate was double that number.

I heard 22% for the City of Detroit, formerly known as Motown
:e2drown:

[Haggis]

I heard 22% for the City of Detroit, formerly known as Motown
:e2drown:

Not a shocker. Michigan was at 8% several years ago.

[robeiae]

Sadly, I know a few people who allow pride or self-entitlement to keep them from being employed at all.

Always looking for better than what they had, or what they think they deserve, while their spouses slave away at one or more jobs and have to feed the ego as well as pay all the bills.
Get. Off. My. Back. The right spot will come along any day now. I can feel it...

[Magdalen]

I used to like to go to work but they shut it down
I got a right to go to work but theres no work here to be found
Yes and they say were gonna have to pay whats owed
Were gonna have to reap from some seed thats been sowed
And the birds up on the wires and the telegraph poles
They can always fly away from this rain and this cold
You can hear them singing out their telegraph code
All the way down the telegraph road


From one of my all time favorite dire straits tunes. And the guitar solo ain't bad either.

[robeiae]

Roller girl, she's takin chances...

[Magdalen]

Awesome song, awesome album (ok, I've had it on vinyl, cassette and CD) !!!

[emc07]

The good news: Our local paper is down to about a page and a half of help wanted ads on Sunday. The bad news: The paper is shutting down in July.


The Detroit Free Press is down to 3 days a week too. Never thought we would see that. The newspaper industry is really hurting. I work for a company that owns malls. It's pretty morbid most days in our industry too. Sad all around.

[Unique]

Michigan unemployment now is somewhere between 12 to 13 percent. That figure represents (to my understanding) only those people drawing unemployment checks. It does not include those whose time on unemployment has run out. It would not shock me at all to find out that the real unemployment rate was double that number.

It was once before. (~22% ) Unfortunately, they didn't learn from that experience. :(

[SHBueche]

I know a few people laid off from their jobs, and I live in an area (Central Texas) that is supposedly one of the rare areas in the country that hasn't been affected in quite the same way, the rest of the country has, by the economy. On a positive note, library usage is way up, people are using the computers and reading library books, with spare time on their hands. Of course local library hours and new book titles have been cut back.

[Don]

Considering that the actual unemployment stats are probably twice that, it's very bad.

Governments have been spending the last 30 years 'redefining unemployment' so they can avoid looking bad.

Of course, the unemployment rate that includes people who would like to work, but have given up looking, and people who only work part-time but want full-time jobs, is 15.6% (http://www.bls.gov/news.release/empsit.t12.htm)

The 'official' unemployment rate is always on the low side, since they started excluding people who were so discouraged they had quit looking for work.
Yeah, that's a real issue that few people are aware of. That 15.6% doesn't quite tell the whole story either; try almost 20%.

Explanation of the following chart here (http://www.shadowstats.com/article/employment).

http://www.shadowstats.com/imgs/sgs-emp.gif

[robeiae]

Eh. It's the trend that matters, not the actual number.

[Don]

Yeah, that chart kind of proves that point, doesn't it?

[robeiae]

Yeah, that chart kind of proves that point, doesn't it?
Absolutely.

[dclary]

The last time we had 4 months + of continued decline in employment numbers was in 1945, as the country was scaling down from the war, and soldiers were coming home looking for work.

Has anyone in Obama's administration considered what's going to happen to unemployment figures if he brings those half million boys home from Iraq he's promised to do this year?

Have you?

[Enzo]

That doesn't mean they're all going to leave the military, is it?
Their return could mean more spending in local stores and restaurants, make a small contribution to local economies. They'll need to buy their food in the US, not in Iraq.