Straight from the Bureau of Labor Statistics report today:
In August, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.0 million. These individuals accounted for 40.0 percent of the unemployed.
In today's jobs report, you can see that more than half of all unemployed people have been that way for at least 15 weeks. And of that group, most have been out of work for 27 weeks or more -- six months and counting. It's scary to consider those numbers, both in terms of human experience and the hit to the economy. Long-term unemployment makes you more likely to end up working, finally, for less, with pay cuts of 20 percent not uncommon, and that's when you're lucky enough to find a job.
As the Atlantic noted the other day, long-term unemployment creates a situation where the economy cannot grow because so much of the labor force has become unemployable. There's even a scary word for the way the present is hauled down by the past: hysteresis.
(The other scariest number: Labor force participation lowest since 1981, lowest for men since before 1948.)
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I think one of the reasons being overlooked is the great number of Boomers who close to retirement can't find work and just gave up. I am 59 and shudder to think what would happen if I lost my job . No one and I mean no one is hiring anyone over 55 unless it is at entry level Walmart/Fastfood.
Ageism is alive and well , you just can't prove it .
It would be interesting to see a break down of the 40% by age to know what percentage is likely to just take early retirement.
Oh - just a heads up Sick-n - you will be interviewed by 25 year olds.
This link to CNN indicates that many of the new employment drop-outs are young adults rather than older workers.
http://money.cnn.com/2012/09/07/news/economy/young-adults-jobs/index.html
I guess the US is drifting towards a pre-Thatcher UK, where being on the dole becomes a way of life. Except the new dole is from relatives, not the government.
Some of this problem is being caused by employers who won't hire anyone who has been out of work for a while. This seems really backward to me, since people who have been unemployed for months, even years, would seem to be more motivated.
Nobody can declare this illegal. Employers have a right to choose whomever they want, as long as they don't violate anti-discrimination laws. But it's a really bad practice, and one that's hurting the economy.
It's also not carved in stone. Employers would reverse course quickly and expand their search criteria in a much better labor market.
I agree that employers have a right to hire who they choose. If you can find out that anabove average of the company's new hires are not working out, quitting or getting let go, then you can build a case for discrimination.
Might be pretty tough to get this information though.
And how do we address this? Education?
Say you are a business manager making a labor decision, if genetic engineer A has the same education as genetic engineer B, but the compensation package for engineer B is 1/10 that of A's, then which egineer do you choose? You may want with all your heart to choose A because they live in the US and have a middle class family, with US cost of living to contend with.
But the manager has no rational basis that they can defend before the company's management to choose A.
So outsourcing goes on and on and on. Regardless how much you educate your population. There may be some truth to the idea that US workers are smarter and worker harder. But really. Do we think that China cannot produce engineers? Do we think that one US engineer is worth 10 Chinese engineers with similar education? Are we really that much smarter and harder working? Sure in the long run, Chinese and Indian engineers will eventually receive similar pay as US engineers. How many decades before we reach a level playing field? Does the Democratic party have only offer the fantasy that education will cure this problem? Or the worse alternative tariffs on foreign products?
That's why education is good, but won't solve the central issue eroding the US middle class since the 70s.
You're right, which is why we have to offer more than that:
-A modern infrastructure
-A government that keeps your business safe without the use of bribes
-Workers that live longer, healthier lives thanks to an adequately funded universal healthcare system
-The fact that the country that still holds the keys to a significant fraction of the world's GDP is increasingly distrustful of products made outside of the USA
The fact is, we'll never be able to compete with China if we choose to play by their rules. We won't accept $0.25 wages along with coal plants in every back yard. So we have to compete in another way: Out-educate them, outlive them, out-innovate, and so on. We've done these things in the past and we can do them again, but there's a limited window of opportunity here - it won't be too long before we have to either accept paltry wages with an equally paltry standard of living or take an active stance against globalization...Which may or may not do the same thing.
These are sad facts, and yet, the stock market is booming!! Do you REALLY think the banks or the financial institutions CARE about unemployment in this country??? Nah, as long as they can play with their "funny money" they are happy! Tell me, how is THAT good citizenship?
The fact is we need more than bromides and quips about how dem adminstrations historically generated more jobs.
It seems to me a market intervention is necessary, I think you have to measure how much wealth each company is extracting from the US consumer versus how much they are returning in wages. For example, say we had the following federal law for moderate sized businesses. If the company wants to extract more than their fair share of consumer purchasing power they face a tax penalty. Of course some operations are inherently more labor intensive than others, so the immediate objection is that this sort of policy would fall hard on inherently businesses with lower labor needs. But this does not mean the policy implementation is impossible- it means it would be complex- for example to deal with this problem you could have something akin to a carbon credit. Google could buy a labor credit from the US post office.
Exactly, John
We need some new and creative ideas about how to increase employment!! The Fed giving more "stimulus" to the banks by buying "bank paper" really isn't going to help the employment numbers much. They will do what they've done with the last stimuli - sit on the money or send it overseas!! The Fed should only agree to buy mortgage bonds instead!
I don't know how we are going to combat the "greed" mentality that has infected our financial markets, but your idea is a good place to start!!
It doesn't combat greed, it leverages it. It gives the manager a hard nosed dollars and sense logic for hiring Engineer A. He can point out that there is a company shortfall in the number of earned labor credits, and the tax impact of not hiring Engineer A would be far more expensive than the higher costs of the compensation package for a domestically hired engineer. His logic is sound, so he wins the argument. There has been no Maoist overthrow of the cherished system of profit motive, but the socially desired outcome is achieved by gaming capitalism to make its invisible hand do what you want.
It is a point scoring scheme for placing a metric on an activity the interventionist needs to incentivize businesses to maximize (in this case maintaining adequate purchasing power in the US economy). The motivator is the confiscatory tax rates if the business does not generate labor credits, or purchase them from labor intensive businesses who have a surplus.
Opposition would be heavy from Oil, Telecom, and Finance corporations, but I don't see how it runs afoul of WTO rules. It is not a "Buy American" policy. It forces US businesses making sales in the US that they have to pay back into the US economy in the form of payroll. It says nothing about where they buy the goods they are selling, and that is a real part of the problem.
If you think about it, this would add to the production costs of US made products, hurting our trade imbalance. But you could apply it globally.
What's the worry. Nancy Pelosi said that unemployment helps restore and build and create a better more solid economy. "There's no better way to grow the economy than through unemployment." "People cash those checks and buy things and that stimulates the economy."
All you doubters have to do is stay the course. Be patient. As for the most recent NBC article, there is nothing Goevrnernment can do. It's not up to Obama or Romney. But I thought it was all about government.
The president should have said last this of the slow economy:
"Hey, I, I didn't build that." "Somebody else built the economy." Oh wait, he has already. A million times. "It's George Bush's fault." No Mr President you DID build this economic disaster, you ARE responsible for what's happening to our mfg industry. You have FAILED.
Of Pelosi's remarks, Maddow and her little right hand henchman blog author were all too anxious to agree ...............Obama adoring fools in a pod. What Obama is saying right now from his speech last night is exactly the very same thing George Bush was saying back in 1992, "Stay the Course." Obama, the new George Bush!
It's time for Change we can live with.
Romney/Ryan. For a BETTER America.
Pat...umm...horse@!$%#.
Cynical but true, Merkel is having to establish bond funding and austerity pull back, EXACTLY what the GOP will also be doing once they find out a Rayn's wrecking ball drives us back into depression, these people just want to be in charge when infrastructure etc. become essential government investments to staunch the bleeding. THEY want to be the heroes, been that way since 11/'08.
You are being gamed.
Perhaps, Pat, you could supply a link for your Nancy Pelosi quotes?
Is it your contention that we were in good shape on January 19, 2009, and magically, everthing fell apart the next morning? If so, you are either delusional or a disinfo agent.
(Off the clock in 02/2010)
Railroaded out, "not for performance" after almost a decade of great results including landing a $2mm account the week before.
Later , found out the bosses daughter was being dumped from a bank mortgage division VP gig, along with hundreds of others, and they used the salary, sales travel costs, etc. to carve out a niche for her.
Nepotism at it's best for the 1%.
I sunk $,$$$'s into gear, to start photo/video freelance business, barely getting off the ground now and half of the get by income from nest egg, goes to COBRA.
Thanks for playing now GTF out of here, and here'$ hoping you don't get really $ick.
I actually think that one of the ways to help in this situation would be limit the amount of hours someone making a salary can work (these are people who generally are not paid overtime for the work that they do and can work 50, 60 or more hours a week without being paid for those extra hours). This is a way some companies are getting around hiring more people in better paying jobs. The expectation previously for a salary worker was 45 hours, I can tell you that isn't happening at a lot of businesses right now, because they save money working their salaried workers past the point of ridiculousness. I know a lot of people that are experiencing this right now, and it is uber frustrating, but you just don't feel like you can complain about it because people feel so fortunate to have a job in general.
I do think that baby boomers being forced to go into early retirement is a part of those numbers, and that is not as terrible as getting no income whatsoever because you get your retirement, but if they were looking for jobs before, they probably didn't want to explore those options until they absolutely had to. Which means, that they probably aren't feeling terribly excited about the economy.
Retraining for the jobs that are available now has to be a focus in the years coming. I can't see how you can start to see those numbers going down without doing that. Especially for the individuals in these stats that are not old enough to go into retirement. Very upsetting statistics.
"No longer looking for work" = unemployment benefits expired?
The stock market is twice as high as it was during the 2008 meltdown. American corporations are flush with cash. Why aren’t they hiring in greater numbers? It is my opinion that the corporations -- members of the U.S. Chamber of Commerce and donors to Romney PACs – are holding back on hiring until after the election to make the Obama employment numbers look bad so Romney will be elected.