PrintJuly 14, 2009
Zuckerman: It's worse than we think
Mort Zuckerman writing in the Wall Street Journal gives us 10 reasons why the unemployment numbers indicate the economy is in even worse shape than we believe.
A few of Mort's valuable observations:
- No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey.
- The number of workers taking part-time jobs due to the slack economy, a kind of stealth underemployment, has doubled in this recession to about nine million, or 5.8% of the work force. Add those whose hours have been cut to those who cannot find a full-time job and the total unemployed rises to 16.5%, putting the number of involuntarily idle in the range of 25 million.
- The average work week for rank-and-file employees in the private sector, roughly 80% of the work force, slipped to 33 hours. That's 48 minutes a week less than before the recession began, the lowest level since the government began tracking such data 45 years ago. Full-time workers are being downgraded to part time as businesses slash labor costs to remain above water, and factories are operating at only 65% of capacity. If Americans were still clocking those extra 48 minutes a week now, the same aggregate amount of work would get done with 3.3 million fewer employees, which means that if it were not for the shorter work week the jobless rate would be 11.7%, not 9.5% (which far exceeds the 8% rate projected by the Obama administration).
This is why people are getting angry at Obama. He globetrots around the world being adored by foreigners while sticking to his plan to remake America by taxing and spending us into oblivion. Meanwhile, unemployment is spiraling out of control and he doesn't seem to be doing anything about it. In fact, he says that he's done everything he plans on doing because the stim bill is going to work - despite the fact that unemployment has already exceeded the percentage he set as a high if we passed the bill.
Read the rest of Zuckerman's piece to get an eyeful of why things are probably only going to get worse.
Update: Steve McCann adds:
Many are trying to look into the crystal ball and predict what will happen to our economy based on the policies of The Obama Administration. One item that is often overlooked in the discussion of future unemployment rates is: the anticipated change in the labor force expected over the next five years. This is the net increase in the labor force (new entrants less those who leave or retire). Per the Bureau of Labor Statistics (www.bls.gov/opub/mlr/2002/05/art2full.pdf) the annual net increase will average 1,936,600 per year. Therefore while we are trying to recover the jobs lost over the past year (7.2 million and counting), we will have to find work for an additional 1.9 million per year every year.
This is the same scenario that has dogged Western Europe for decades and is why their unemployment rate has remained in the nearly double digit range for the past 15 years.
Therefore, with the tax and spend policies of the Obama Administration, it not out of the question to expect the unemployment rate will remain in the double digit range for many years to come.
