"Everyone agrees that the recession is over," said Larry Summers, President Obama's top economic advisor, on December 13.
Yet December's unemployment numbers announced last Friday suggest otherwise -- especially the 'real unemployment' figure.
According to the Bureau of Labor Statistics the official unemployment rate is 10%, a figure which itself caused a major headline to blare, "U.S. Job Losses Dim Hopes for Quick Upswing."
But in fact real unemployment in the United States is stuck at a dismal 19%, a figure nearly twice the so-called official number. And the economy is short a staggering 22.4 million jobs in order to have an overall full unemployment rate of 5%, which is more than twice the 9 million figure the administration is using.
These sharp contrasts arise because the BLS uses only survey data rather than much more accurate payroll data. It also excludes changes in employment among the nation's 11.2 million farm and self-employed workers, even though together they represent more than 7% of the civilian labor force. Most important, however, it does not take into account the 15.1 million workers who are either part-time-of-necessity because they can't find full-time work, marginally attached because they live on the very fringes of employment, or out of the labor force because they are discouraged and have given up looking.
With these three adjustments made, the number of real workers in all four categories of unemployment -- BLS, part-time-of-necessity, marginally attached, and discouraged -- totals 30.4 million instead of BLS's single category figure of 15.3 million. And the number of real unemployed workers has increased by 13.6 million since the start of the recession instead of by BLS's figure of 8.4 million -- in contrast, we should have been creating a net 2.6 million new jobs just to keep up with the natural growth in the labor force of around 108,000 workers per month.
Even the average full-time worker in the U.S. is now working the economic equivalent of only 33 hours per week, a record low number. And in further stark signs of the ongoing depths of this recession, unemployed workers are out of work an average of at least 29 weeks, and the real number of workers unemployed a half year or more is around 10 million.
The economic recovery that Mr. Summers was trumpeting after the meager 2.2% September GDP growth numbers came out is in fact a "jobless recovery" -- one which already involves the largest absolute number of unemployed American workers ever, and one which may see another half million jobs lost before we really bottom out. And sadly, it will take years to recover both the 13 million jobs that have been lost in just the last two years plus the 9 million additional jobs we need to find in order to get back to real full employment.
Using GDP growth alone is a very weak and misleading indicator of true economic vitality. The only measures that really matter are, initially, the "months before net job growth reemerges" and, ultimately, total employment itself.
Once the health care reform bill is passed and signed by the president later this month, it is imperative that the Executive and the Congress focus their full attention on unemployment and on charting a clear path to finding those millions of missing jobs. In short order, they need to:
Christine Lagarde, France's Minister for the Economy, recently answered the critical question of when we should declare the Great Recession of 2007 over by saying that while everyone has their own yardstick, hers is very simple: "Only when we have cut unemployment, can we say the crisis is finished."
The 30 million Americans who are now effectively unemployed on Main Street and their neighbors know Ms. Lagarde is right, just as they know that the meager 2.2% growth in third quarter GDP -- which mostly came from resuscitating (and not even reforming) Wall Street -- doesn't mean that this recession is at all "over," as some in the administration would misleadingly have us believe.
Leo Hindery, Jr. chairs the US Economy/Smart Globalization Initiative at the New America Foundation. He is the former chief executive of AT&T Broadband and other major media and telecom companies.
1. Stop threatening to tax business and impose fines and fees on them
2. Stop villifying business people
3. Enact some tax cuts for business
4. Ditch the current healthcare bill, which small business is very wary about because it makes new employees very expensive liabilities.
I think no one will believe this administration even if they say they will do these things.
So the best we can hope for is a turnover in congress in Nov. If that happens, the job situation will start turning around.
Always has, always will.
NO ONE will take the action needed to correct it because they would make they business partners mad. and would get no money for the campaign.
I say this every time END NAFTA and other UNFAIR TRADE AGREEMENTS.
Its a simple action that would create millions of US jobs because in would not be cost effective to send job away like it is now.
STAND UP AND DEMAND THEY END NAFTA!!!!!!
Nafta is not what caused unemployment we're seeing now.
The Brookings Institute did all this great work in this regard, and Obama ignored it...!
Summers bankrupted Harvard, and now he'll bankrupt America...why does Obama cling to this guy...what are they teaching up there at Harvard anyway...?
Pass cap and trade and the businesses will go with them.
And the immigrants are not the problem.
It is not an isolationist policy to demand that working conditions and compensation in foreign countries be equivalent to those in the U.S. - virtually every other developed country insists on this level of equity. It is not isolationist to tax the increase in profits of companies who ship jobs overseas at a rate equivalent to the cost of those lost jobs. It is a long term disaster to sit back and watch the American economy crumble simply to increase short term profits, while the overall economy is spiraling into decay.
Ironically, the Party of NO that has adopted the slogan of "Common sense solutions" disagrees with everything you just wrote.
Your writing made me even more angry than I already am at our horrible government. The proposals you make are good and make sense. The fact that our so-called leaders will not take actions such as these is unforgivable and will ultimately destroy our country. In my own opinion I believe that the worst is yet to come with our economy. This is really just the start of the unraveling of the fabric of our society. Some things, once broken, cannot be fixed. When you think about it we are faced with the prospect of having the same people who purposely designed these disaster capitalism scenarios try to set things right again. Scary. In this lobby driven culture of ours we stand very little chance of ever re-gaining what is lost. Hard working honest Americans are being preyed upon and lied to from every angle. They can only stand so much abuse.
Another win-win scenario is for USA to open up the restrictions on foreign physicians from working in USA. These skilled individuals will fill the existing shortage of doctors - which will increase with the new healthcare system requiring all to have insurance. One physician employs four to five people - nurses, receptionists, transcribers, billing staff etc.
Imagine giving 100,000 visas to foreign physicians. That is 100,000 new home-owners needing cars, furniture, refrigerators, washing machines, computers etc. What could be a better stimulus to our economy? This would not cost the tax-payer a dime. In fact the high-earners along with their middle income employees will be tax-paying contributors to the US Treasury.
There are plenty of highly skilled IT folks here in the states, but when jobs can be out-sourced at 1/6 of a 'high' salary; why keep jobs here?
I've worked for a couple major retailers in IT and in one case the directive came down that I was 'training my own replacement'.
I took the bait in the late 90's and went back to school (getting heavily into debt) to jump on the new IT wave becase, as it was totally advertised at the time: 'THERE WILL ALWAYS BE IT JOBS'
What a joke. Next time I lose my IT job due to a layoff and the government says I can be 're-trained' for the next industry that 'will always have jobs', I'll be happy to enter the program; only this time the government can pay for my education. Then if it wants to be re-imbursed for that cost it can figure out a way to ensure that US companies keep jobs here.
ITA. When I was doing recruiting for IT right after the tech bubble burst, we quickly found large skillsets were not represented in native-born IT workers. The explanation was that some fields had been 'bangalored'--there were so many competent H1B's in the given specialty from Asia (almost none of whom were carrying student debt from their native countries) that even if one wanted to be a Java programmer (for example), the salaries were going to be flat in the field for a long time to come. Same is true in architecture and some engineering fields.
And don'tcha love it when Bill Gates is held up as an example? Microsoft is notorious for outsourcing much of its work to temps and deliberately keeping headcount low. Now it's moved a lot of its programming to India.
The best/only technical employment available is in onsite medicine--if you're touching a patient, the job can't be offshored, and outsourcing all healthcare jobs to H1B's is politically unpalatable.
not only would this right the trade imbalance in a jiffy, but also help relieve the tax burden on business and industry
Example in point was the brilliant environmental tariff imposed on trucks coming from Mexico. it only affect a few dozen trucks, but it made Mexico mad enough to pretty much shut down some of our exports to there. Net result: Americans lost jobs.
Instead the current administration sends 3 plane loads of representatives and support staff on a boondoggle to Copenhagen. This cost each taxpayer how much? Reported unemployment here in Michigan is over 15%. How out of touch is our government?
public sector workers such as police, teachers, firemen, mailmen etc, buy houses, cars, food, insurance, medical care etc, just like private employees do
i would buy this argument if most companies that bring in major profits didn't but they do..so where is the rationale? however, small business truly suffer behind this and their profit lines prove this. but when big companies choose to save costs by attacking labor instead of their profits used to pay out million dollar bonuses, you have to question so much behind it.
A Human Investment Tax Credit program was first suggested in 1975.
Employment tax credits generated 20% of all jobs in the year following passage of the 1977 Job Tax Credit legislation, which incorporated very few of the incentives.
An update, designed to generate 3 to 6 million jobs and launch 1 to 4 million entrepreneurs, is available at: http://www.aesopinstitute.org
Articles there outline how future cars might pay for themselves, by featuring revolutionary new technology. It can turn vehicles into power plants when parked.
Included are electric cars that will need no recharge - and hybrid automobiles that can use ordinary water as fuel. One gallon may be enough for 1,000 miles of driving.
Difficult to believe? Of course!
However, as the articles state, some of this new science has begun to be validated by independent laboratory experiments - and all the rest will be, prior to anyone being expected to accept these remarkable breakthroughs as real.
To the surprise of almost everyone, they will prove to be genuine.
Imagine the implications!
Who will not want to buy such cars and trucks?
How many jobs will be generated, as the auto industry creates record breaking quantities of vehicles that will inherently have huge market demand?
We can accelerate development!
Let’s confirm the science and technology - and then rapidly create a 24/7 program - to implement exciting new answers for our pressing economic and ecological dilemmas!