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I was looking at some statistics about unemployment in the past and came up with this interesting chart. Unemployment nationally was 10.8% in 1982. It was up to nearly 20% in some communities. Will it reach that point this year? I read somewhere that President Reagan would not admit that we we were in a recession back then and he and the Federal Reserve actually created the recession on purpose so they could break the cycle of inflation.
I was looking at some statistics about unemployment in the past and came up with this interesting chart. Unemployment nationally was 10.8% in 1982. It was up to nearly 20% in some communities. Will it reach that point this year? I read somewhere that President Reagan would not admit that we we were in a recession back then and he and the Federal Reserve actually created the recession on purpose so they could break the cycle of inflation.
I don't want to be the voice of doom and gloom, but statistics can lie. All you have to do is change how you measure. The unemployment rate only counts people who are actively looking for work, and are on unemployment insurance. If those benefits run out, those people become invisible. Also, people who are working part time because they gave up looking for full time work aren't counted, either. Therefore, the real unemployment rate might be higher than the numbers show.
I don't want to be the voice of doom and gloom, but statistics can lie. All you have to do is change how you measure. The unemployment rate only counts people who are actively looking for work, and are on unemployment insurance. If those benefits run out, those people become invisible. Also, people who are working part time because they gave up looking for full time work aren't counted, either. Therefore, the real unemployment rate might be higher than the numbers show.
Exactly. The government has been changing the measurement method for the past 20 years. If you use 1980 methods of calculating the unemployment it is really about 2x of what the government says it is. So we are probably at 12-15%.
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The quotes today are called U3 stats, but there's a broader measure called U6 which isn't publicized much - it corresponds more to what was publicized in the 80's.` I think that's right around 14%, or was last time I looked.
But the early 80s were pretty bad .... I'd just graduated with computer science degree in 1983, which was a much bigger deal back then than it is now, and couldn't get a job in that field. I had to settle for a job taking care of disturbed, retarded teenagers at near-minimum wage.
That will give you any and all unemployment rates you need. The U3 is more useful as a way of measuring whether or not people are bringing in money AT ALL for bills, food, etc. (which is what most people are interested in) while the U6 is a better measure of economic efficiency (are people doing the jobs they are most skilled at, or are they doing something to pay the bills) and perhaps job satisfaction. Currently, the U6 is hovering at around 13%. This includes people who are employed, but not "satisfied" with their job (just doing it to pay the bills), marginally attached workers (want to work, but aren't searching for a job and aren't currently employed). U3 includes all unemployed who want to work, can work, and are actively searching.
In the 80s, they released U4 or U5, which currently stand at 7.6% & 8.3% respectively, still relatively lower than the 10-11% rate of 82 (for now...). U4 includes U3+ "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them. U5 is U4 + other marginally attached workers, or those who would like and are able to work, but have not looked for work recently. U6 is U5 + Part time workers who want to work full time, but can not due to economic reasons.
Quote:
The unemployment rate only counts people who are actively looking for work, and are on unemployment insurance. If those benefits run out, those people become invisible.
Actually, the U3 counts ALL unemployed persons as a percentage of the labor force who are looking for work, not just those on UE insurance. The U1 counts those who have been unemployed 15+ weeks (not having to do w/ UE insurance) which is at 2.9%. U2 is the percentage of labor force who lost jobs or completed temporary work.
IMO the most useful stats are U3 to see if people are employed and if those who don't work are looking for work. The U4 is useful when read w/ the U3 (looking at the gap between them can give you an idea of how long it will take to get a job if laid off [short, medium, long, or hella long, basially]). The more discouraged workers in relation to the U3, the less likely it will be easy to get a job. I'm not as big a fan of U5 because it includes "wishy washy" folks who don't care as much (I know, that's a generalization, but many of those don't necessarily HAVE to work for survival but want to advance their career or have summer/holiday employment (ie. teenagers, housewives w/ well-off husbands, etc.).
U6 would be decent if they broke it into those who can survive on their part-time incomes and those who can't. However, like I said, it's good for measuring whether or not we have the most efficient people in certain fields.
So, most useful for the general population just trying to pay bills and such would probably be U3 combined with U4 (again, IMO)
In the 1980s there were fewer retail and service sector jobs for people who had been laid off their factory jobs to fall back on. Also there were few Americans with credit cards and cash advances to fall back on. Today many unemployed people can borrow their way out of financial ruin just like the federal government.
I wasn't cognizant then, but I suspect that the economy was in far more dire straits back in the early 80s than it is today. It was the death knell for the manufacturing industry, which employed a very high share of Americans before that point. Few were educated, and therefore couldn't grab "white collar" jobs. As a result, they were trapped between a rock and a hard place.
And I don't think things will get as bad as they did even then. I think the GDP numbers today confirm that it's probably not as bad as many people "think". I do think this is the worst recession since the early 80s one, however. Also, I think we should be more concerned about 3-5 years down the line, when Baby Boomers deplete Medicare and Social Security. That's when the s*** will hit the fan, especially if the economy is still lethargic. And I don't expect a big turnaround...more likely a "jobless recovery" starting in the 3rd quarter, with unemployment peaking around 8-8.5%, and staying above 7% through at least the beginning of 2010.
I wasn't cognizant then, but I suspect that the economy was in far more dire straits back in the early 80s than it is today. It was the death knell for the manufacturing industry, which employed a very high share of Americans before that point. Few were educated, and therefore couldn't grab "white collar" jobs. As a result, they were trapped between a rock and a hard place.
And I don't think things will get as bad as they did even then. I think the GDP numbers today confirm that it's probably not as bad as many people "think". I do think this is the worst recession since the early 80s one, however. Also, I think we should be more concerned about 3-5 years down the line, when Baby Boomers deplete Medicare and Social Security. That's when the s*** will hit the fan, especially if the economy is still lethargic. And I don't expect a big turnaround...more likely a "jobless recovery" starting in the 3rd quarter, with unemployment peaking around 8-8.5%, and staying above 7% through at least the beginning of 2010.
Actually I disagree. Back then the mantra was to retrain for high tech jobs and that's what they did. Today high-tech has gone offshore and more white collar people are getting laid off.
So today you have high paid white collar people losing their jobs and nothing "higher up" to re-train for. Instead they are lining up for jobs at Wallymart and such.
The economy has no signs of reversal or bottoming out. Port statistics came out and every port in NA is down with their numbers.
That is a number that we won't feel today but will in 2-3 months when possible shortages start showing up.
Things are not pretty now but I"m pretty tired of Obama and the media blitz scaring everyone by this whole "Worst financial crisis since the Great Depression" stuff. Carter years weren't so great: double digit unemployment and inflation, gas lines, and he was off with his head in the sand in the Middle East.
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