Monday, March 07, 2011

EconomicsUSA: Unemployment 'ugly' more than we thawt: Alternative stats on unemployment USA

A business-source website, Cashback Forex carries a significant article "Official US Unemployment down a tick, real unemployment still ugly" (Mar4,2k11).  It responds to the figures ballyhooed in the regime-supporting optimistic journo left (for example, NYT) and more restrainedly reported in more moderate mainstream publications like WaPo.  -- Economix 

It is interesting to note that the mildly decent February Jobs report had failed to bump up the dollar against the Euro today. After all, the U.S. Non-Farm Payrolls report showed an increase in 192K jobs, and the official unemployment (U3) had fallen a tick to 8.9% from its previous 9%. Some analysts had spinned this as a great sign, our lowest unemployment rate since February 2009, and a sharp move away from double digit inflation. Time to uncork the Champaign bottles and get drunk with giddiness, there is work to be had and a brighter future for all. Not so fast. 

If you shine the flashlight onto real unemployment, as opposed to official unemployment, you may be shocked to see vastly greater numbers. There are vast numbers of people out of work for too long a time who are not accounting for, those who have been unemployed for more than six months or who have used up their 99 weeks of unemployment insurance and are no longer eligible for extension. A more broader measure of unemployment, the US-6 unemployment rate put out by the Bureau of Labor Statistics (BLS), does a much better job at accounting for the unemployed, for it includes short term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment. It would be a shame to leave these people out. That US-6 number is now 15.9%, a tick down from 16%, but overall this is an ominous double digit number, depressing when you think about it. 

However, as ominous and depressing as the US-6 is, it still does not account for the long term discouraged workers who have been defined out of official existence (i.e., removed from the stats estimates) in 1994. If you add them back into the picture, the percentage of unemployed climbs into the twenties. For those of us who want the truth, there is the seasonally-adjusted SGS Alternative Unemployment Rate that reflects current unemployment methodology and includes back into the picture the estimation of long-term discouraged workers. Take a look at the chart below, courtesy of
Contextualizing this info in the present USA circumstance, we note that the Obama govt made tragically inaccurate and misleading predictions about how and how soon the unemployment figures woud soon descend to 8% from the startling official figure of 10% and above. Still, Obama proceeded with his Healthcare manipulations thru a very jacksonian Democrat-controlled Congress (led by Nancy Pelosi in the House of Reps, and Harry Reid in the Senate).  I supported the idea and law-writing project for Healthcare, but wanted the restructuring to be built more around the existing risk-taking insurance corporation, including the faith-based communal membership health insurance companies that existed and the rapid expansion of these and new such groupings, so as to get as many of the uninsured into these as possible, based on informed consent.  But the conditions of writing the new law and its enactment without having been read and debated by Congress (let alone the broad stretches of their constituents) was a definitely jackboot operation ("Chicago-style politics," supervised by Rahm Emmanuel, then-Presidential  chief gun, now Mayor of Chicago).  

But we've got the law in place, altho a Fed Judge in Florida,  Roger  Vinson, has stayed (Mar4,2k11) his earlier Jan31,2k11 determination that the law was unconstitutional and ordered the Fed govt to appeal to the Supreme Court regarding the O-P-R Healthcare law, within the week, or he woud restore his stay on carrying out the insane welter of provisions nobody had read when passed.  

But Vinson had plenty of harsh words for the White House, too, criticizing administration officials for waiting weeks before filing a motion to “clarify” the Jan. 31 ruling in which he held that the Patient Protection and Affordable Care Act’s individual mandate — and, therefore, the entire act — violated the Constitution.
The Obama-Pelosi-Reid Healthcare law was botched.  The effects of the massive botch contributed to the folding of businesses which coudn't meet the new demands, and the raising of non-govt health insurance costs as these companies struggled to stay in business and provide the necessary hi-level of care, the medical establishment raised fees to insurers and those individuals who pay out of pocket.  More largely, healthcare expenses to businesses, including small businesses, have risen to such a draconian extent that layoffs of workers and closings of companies (including Mom-&-Pops), also uncertainty of what the new law and regiulations woud cost those still functioning, have taken their toll.  This is a good part, but not all of the reason, for the inability of companies to attempt to forge ahead in their activities.  The botched Healthcare law has contributed hugely to unemployment.

-- EconoMix and Lawt, refWrite frontpage columnists

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