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Post by unlawflcombatnt on Oct 2, 2009 16:20:49 GMT -6
Today's employment report is not only bad, it's very hard to believe. Using the government's own Household Survey number--571,000 Americans simply stopped working in September, who didn't really want to work in the 1st place. Really. Total employment fell by a whopping -785,000 according to the BLS Household Survey, but the number "unemployed" increased by only 214,000. This indicates the remaining 571,000 aren't even trying to find jobs. In the past, this discrepancy would have been explained away by the government claiming 571,000 workers just "dropped out" of the labor force, and stopped looking for work. But in this case, that determination must have been made in the span of less than 1 month. (Maybe they asked terminated workers on their last day of work whether they had started looking for a new job yet. ) In this case, the "not-actively-looking-for-employment" soundbite is not plausible. The number of newly "unemployed" workers is less than 1/3 of the number of jobs lost. This implies that the remaining 2/3 losing jobs in September don't even want to work. Apparently, they were happy to lose their jobs, and didn't really want to work in the 1st place. Is it really believable that 571K Americans quit or lost their jobs in the middle of a deep recession, and aren't even looking? How can the government even determine that 571K workers quit or were fired from their jobs in the last month, and had already given up on finding employment? I guess it's because all those workers are just very easily "discouraged."
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Post by waltc on Oct 2, 2009 22:34:19 GMT -6
How can the government even determine that 571K workers quit or were fired from their jobs in the last month, and had already given up on finding employment?
They can't, I think the measuring system they use is either broken or can no longer deal with the continual massive loss of jobs.
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Post by agito on Oct 3, 2009 1:48:04 GMT -6
I don't agree with the tenets of what this author writes (although I do agree that raising the minimum wage causes job loss in the short term, the real question is how much it leads to job increases in the long term by increasing demand). However- he comes up with a number that looks like it complies pretty readily with your missing 500k- online.wsj.com/article/SB10001424052970203440104574402820278669840.htmlthey "disappeared" because they were teenagers and "didn't count". (since they are still technically students)
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Post by waltc on Oct 3, 2009 10:01:36 GMT -6
Couple of things
Service(minimum wage jobs) are the first to suffer when the higher wage jobs in the area go since they are dependent on the higher wage earners for survival. The ratio IMS is 3 service jobs for every high income job.
Also if a business can't handle a minor raise in the minimum wage, it probably means they need to go out of business or change their business model .
Secondly, its well documented that older adults are now taking the minimum wage jobs that were once the domain of teenagers. I can see that in Lowes and Home Depot's where two years ago you had pimply faced youth and now you have middle-aged types performing the same job. This means teenagers are being frozen out of jobs.
Third, we have a adjusted 16% unemployment rate - which means jobs are scarce period.
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Post by unlawflcombatnt on Oct 3, 2009 13:31:18 GMT -6
(although I do agree that raising the minimum wage causes job loss in the short term, the real question is how much it leads to job increases in the long term by increasing demand). I agree. The short-term effect of raising the minimum wage may well cause some workers to become unaffordable. But in the long-run, increasing the minimum wage increases aggregate wages and buying power. And that increase goes to those who spend the highest fraction of their wages—the lowest paid workers. To some extent it works as a downward redistribution of wealth—going to those with the highest marginal propensity to consume. This's exactly what's needed when consumption is faltering—increased wage-financed buying power of the poorest workers (as opposed to increased debt-financed buying power). Businesses need consumers with more buying power--not more "investment" power for themselves to buy more stocks and bonds, or produce more goods that no one can afford to buy. --------- Also if a business can't handle a minor raise in the minimum wage, it probably means they need to go out of business or change their business model. Exactly. I remember making this same point on this forum a couple of years ago. If a business's profit margin is that thin, they need to "restructure" or just go into something else. A business that's can't survive if it has to raise wages to $7.25/hour is not helping the overall economy, and is not going to exist much longer to begin with. Secondly, its well documented that older adults are now taking the minimum wage jobs that were once the domain of teenagers. I can see that in Lowes and Home Depot's where two years ago you had pimply faced youth and now you have middle-aged types performing the same job. This means teenagers are being frozen out of jobs. You also see 'em at places like CVS. Employers often believe an older employee will be less likely to demand raises, less likely to be absent, and more likely to remain with the job. And unlike younger women, older women don't lose time due to pregnancy, maternity leave, and unanticipated child care. Regarding employment numbers, I think there are only 5 numbers worth watching—2 of which are derived from the other numbers (from the Household Survey): Thus, 41% of our potential workforce (or 97.46 million) is not employed. We have a potential labor surplus of 97.46 million. This excess supply definitely reduces workers' bargaining power, including the suppression of their wages.
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Post by jeffolie on Oct 3, 2009 15:20:08 GMT -6
"Thus, 41% of our potential workforce (or 97.46 million) is not employed. We have a potential labor surplus of 97.46 million. This excess supply definitely reduces workers' bargaining power, including the suppression of their wages."
A lot of this results from the gobalization and wage arbitrage that comes from sending jobs to dirt cheap labor countries. The multinational corporations have won so many battles that Obama looks like a Republican puppet.
I am very upset and predict the end of the financial world as we know it by 2012-13.
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Post by agito on Oct 3, 2009 21:29:22 GMT -6
alright- glad that my post prompted good discussion- but it seems like a better explanation might be that the BLS reset their "benchmarks". I found my info by way of this article: www.dailykos.com/story/2009/10/3/789459/-10-Stunning-New-Truths-On-Wall-St.,-Economy,-Jobless I guess every quarter they go over tax returns and do a "better count" of actual jobs rather than a sampling of the population- and then adjust their sampled numbers to reflect what they see in actuality. Kind of like when you force balance your check book.
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Post by unlawflcombatnt on Oct 4, 2009 3:53:24 GMT -6
alright- glad that my post prompted good discussion- but it seems like a better explanation might be that the BLS reset their "benchmarks" Yes, I've downloaded and saved many of the BLS's previous monthly reports, and I've seen where they've revised previous employment numbers downward. Even more interesting, however, is the downward revision of the total working age population, which in 1 month was revised downward by over 500K (I commented on that on the forum at the time). It's suspect when most, if not all revisions, are in the downward direction. By revising a previously published number downward, it makes the current number look less bad. Both the BLS and BEA do this routinely, and by "routinely" I mean over 1/2 their reports have downward revisions of previously overstated numbers. This applies to all their numbers, especially GDP, total employment, and the "imputed" jobs that are added to each month's payroll employment number. These downward revisions are why current numbers--like private employment--are lower than they were 10 years ago. (Private employment is now more than 500K less than it was in September 1999.)
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Post by jeffolie on Oct 4, 2009 9:12:51 GMT -6
In my opinion the Federal government is corrupt and lies about economic numbers on purpose. I suppose that the Federal government economic analyis techniques are just incompetent and not intentionally deceptive but I doubt it. One merely has to look to the county numbers as to how many are on general relief, welfare to get a better handle on the scope and magnitude of the general demise of the American workers.
The employment situation is so bad that illegals are returning home where they can be close to family members rather than lonely and unable to pay rent in America.
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Post by waltc on Oct 4, 2009 12:32:05 GMT -6
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Post by unlawflcombatnt on Oct 6, 2009 3:00:23 GMT -6
Good find. Here's an excerpt: "Oct. 2 (Bloomberg) -- The U.S. economic slump earlier this year was so severe it short-circuited the government’s model for calculating payrolls, raising the risk that today’s jobs report may be too optimistic.
About 824,000 more jobs may be subtracted from the payroll count for the 12 months through last March when the figures are officially revised early next year, a Labor Department report showed today. The revision would be the biggest since at least 1991.
The bulk of the miss occurred in the calculations for the first quarter of this year, the Labor Department said. The economy shrank at a 6.4 percent annual pace in the first three months of 2009, the worst performance since 1982.
The figures raise the possibility that the government’s calculations continue to miss the mark.
“We are probably still underestimating job losses,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “There could be another 30,000 to 40,000” that the data isn’t picking up, he said.
That would mean the loss of jobs for September could turn out to be as high as 300,000, rather than the 263,000 reported today by the Labor Department. Today’s report also showed the jobless rate climbed to 9.8 percent last month, a 26-year high.
The potential revision for the year through last March would mean that the economy lost 5.6 million jobs for the period instead of the 4.8 million now on the books. "That stimulus plan and TARP are sure working well now, aren't they.
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