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unemployment/jobless recovery - your thoughts

Discussion in 'Other Off Topic Forum' started by tifosi, Mar 27, 2004.

  1. tifosi

    tifosi F1 Veteran
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    Sep 5, 2001
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    I am not an economic expert but just thinking a little about John Kerry's plan to add 10 million jobs over the next 4 years?

    The current work force is about 146m people, of that work force about 6% are looking for work but cannot find it - say 9 million people. I think we all agree you will never have full employment and most economist's agree an unemployment rate below 4.0% for a sustained period will lead to staggering inflation and I think we all agree that each year the workfoce will decline due to the aging population issue we have in this country. So I ask, 10 million new jobs in four years? sure it will help some of the 9 million but my sense is if he could do it doesn't it mostly benefit new immigrants who are not even in this country yet? nothing wrong with that but why make it a top issue for today's voters. Not saying Kerry is the only one making it an issue, the Bush team and economists do as well. I view it as one (of many) indicators of economic growth not the dire straits of 10s of millions of people currently starving in the streets. What am I missing.
     
  2. dm_n_stuff

    dm_n_stuff Global Moderator
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    Ok, let me qualify this. I'm a democrat, and a business owner. I run a manufacturing firm and employ about 30 people. So I have some experience with both the "democratic agenda" and employment/unemployment issues.

    I don't usually agree with you,tifosi, but I guess I do here. The last 3-4% unemployed are, in my experience, the chronically unemployed. No skills, and sometimes, don't really seem able to get/keep/want a job. We have higher turnover on our entry/unskilled labor when unemployment is low. I attribute that to the quality of that 3-4% of the workforce that we use to fill those jobs.

    Where does that cause problems? When the workforce has no employable talent left, those that are employed get more expensive. The longer an employee stays at an entry level job, the more that job pays. The fewer qualified candidates for a job, the more that job has to pay to attract anyone with talent.

    Those 10 million new jobs will go to new entries into the workforce, if we can find them, not to the long term, unskilled, under or unemployed, probably mostly first time hires (HS and college grads) and immigrants, new to the US.
     
  3. PeterS

    PeterS Three Time F1 World Champ
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    Kerry is no expert either, he is just the first to use the published stats from the Department of Labor Statistics which state that after 2008, a huge number of baby boomers will be retired, thus the opening of 10-12 million new jobs. When I read that it's HIS plan, I just want to puke! Just another politician trying to fly under the radar of ill-educated citizens.
     
  4. bkaird1

    bkaird1 Karting

    Nov 7, 2003
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    I think this is true...also even people who are technically "unemployed" may not really be. For example, someone who is switching jobs (so never really unemployed) will be counted as unemployed during the trasition. And this is also higher when the turnover is higher, like you said before.

    On a personal note... my wife is currently looking for work. She's almost finished college and while employers aren't beating the door down, there are certainly opportunities out there and she just got a call from a big company located here in Atlanta.
     
  5. ross

    ross Three Time F1 World Champ
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    good points made on the unemployment rate, so i'll throw my 2 cts at the jobless recovery question.
    as you have probably heard, it depends on what count you give more credence to: the polling of fortune 500 companies, or the household employment poll. the former is the one that you hear about all the time in the news and they are asking major companies what their employment numbers are. the latter is calling people at home and asking how many are unemployed, and in this one you have about 1pct less unemployment than in the former, ie about 4.5%. why? because it counts every type of job or employer vs only counting jobs for major companies. since the biggest employer in the USA is small business' of less than 10 employees - you can quickly see where the discrepancies are coming from.

    anecdotally, and perhaps way off base, i have numerous friends who were layed off in the past 3 years and have since found work either in smaller companies and/or starting their own business' (and sometimes employing people themselves!), and yet under the corporate counting method they would still be considered unemployed, and so would the people who work for them!

    i'll go ahead and throw in a footnote about the job exporting issue that will surely come up in this thread as well. the notion that this is bad for the US economy is spurious, and an election year red herring. the same was said of nafta in '92 (most notably by perot with his 'big sucking sound' of jobs going to mexico), when in fact 12 years on it is well documented that the US received a net increase in jobs directly related to those industries that exported jobs - they were just different than the ones that went south. the same can be said of the current situation - the US overall will come up with other different jobs in which our citizens (temporarily) have an edge over those in india or china, which will replace and outstrip the jobs that have left.

    furthermore, it is the only way to keep our various companies and industries competitive, and therefore our economy.
     
  6. dm_n_stuff

    dm_n_stuff Global Moderator
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    Bureau of Labor Statistics is responsible for publishing the unemployment rate.

    "Each month, the Bureau of Labor Statistics (BLS) analyzes and publishes statistics on the labor force, employment, and unemployment, classified by a variety of demographic, social, and economic characteristics. These statistics are derived from the Current Population Survey (CPS), which is conducted by the Census Bureau for BLS. This monthly survey of the population uses a sample of households that is designed to represent the civilian noninstitutional population of the United States. "

    That's the unemployment rate you see on TV all the time. The BLS publishes the "seasonally adjusted unemployment rate" It is not a survey of employers, nor is it a collection of data from regional Unemployment Offices" It is an estimate, based on employable, vs. employed. To be considered employable, you have to be looking for a job, actively, within the 4 week period that the report applies to. People who give up, or who withdraw from the labor pool do not count.

    The highest it has been in the last 10 years was 1994 6.6%, and the lowest, is 3.8% in 2000. So, at 5.6 percent, there would appear to be some good candidates left in the pool, and some room for it to move down, say 1-1.5%. But, at least according to the statistics, it is a jobless recovery, with about a 1/2 point drop in unemployment since the economy turned around.
     
  7. judge4re

    judge4re F1 World Champ

    Apr 26, 2003
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    My $0.02

    How much credit can you really give the president on business cycles? They'll take credit when times are good and get blamed when times are bad. If you look at the data (which can be interpretted a million different ways), one metric that has gone up is productivity. American business is doing more with less. We've always been good at finding ways to do it better, cheaper, faster.

    I worry any time politicians raise they're head and say "we're going to create jobs". Most of these people have never really been successful business people, but merely professional wind bags. Keep talking the rhetoric, leave the running of business to the pros.
     
  8. bkaird1

    bkaird1 Karting

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    Ross is correct... there are two different surveys. The establishment survey (payroll survey) polls certain companies for their employment. The household survey polls households. Therefore, payroll misses people who are self employed or people who work for a recently started company. If you look at the household numbers, they are up almost 2 million jobs in 2003.

    There have been many articles recently written about the differences. A quick google search will bring them up.

    This is from the BLS website:
    The Current Employment Statistics survey, also known as the payroll survey, excludes unpaid family workers, domestic workers in private homes, agricultural workers, proprietors, and other self-employed persons, all of whom are covered by the Current Population Survey (CPS), a survey of households. Moreover, the payroll survey counts a person who is employed by two or more establishments at each place of employment, but the household survey counts a person only once, and classifies the individual according to the major activity. Certain persons on unpaid leave for the entire reference period are counted as employed under the household survey but are not included in the employment count derived from the payroll survey.

    The household survey emphasizes the employment status of individuals and provides much information on the demographic characteristics (sex, age, and race) of the labor force. The survey is not well suited to furnishing detailed information on the industrial and geographic distribution of employment. The establishment survey provides limited information on personal characteristics of workers; however, it is an excellent source for detailed industrial and geographic data. In addition, it provides hours and earnings information that relates directly to the employment figures. The payroll and household surveys thus complement each other.
     

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