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A quick note on unemployment numbers.

07 Jan

This year, Sears Holdings plans to close 42 Sears stores and 108 Kmart stores, or roughly 10% of their locations. They already closed more than 200 locations in 2016.

Macy’s plans to close 100 stores this year, 68 of them by mid-year. It is eliminating 10,000 jobs. CVS plans to close 70 stores this year. The Limited is closing almost all of its 250 stores, costing 4000 jobs, although it will offer on-line shopping.  Men’s Warehouse/Jos. A Banks is closing 250 stores. Office Depot will close another 300 stores by the end of 2018, after closing 400 stores in recent years. Walmart is closing 269 stores globally this year.

I guess the bottom line is that when you shop on-line, you are costing someone a job.

The labor force participation rate in the US remains at less than 63%. [It stands at 62.7 right now.] The labor force participation rate (LFPR) is the number of able-bodied, job-eligible, people over the age of 18 who either have a job or who are actively looking for a job. The numbers do not include the military, people in prison, those who are disabled, anyone under 18 or anyone over 65. Do note, however, that if you are unemployed, but looking for a job, you are still counted as “participating” in the labor force. Still, the LFPR is doubtless the most accurate picture of how many people are working in a country, since the other ways they use to count employment rates are so absurdly calculated as to completely discount the reports out of hand. For instance, we are told that our current unemployment rate is 4.7. Utterly impossible, given that only 63% of us have jobs or are actively seeking jobs.  I must make a note here that 100% LFPR is not to be desired, either.  Certainly, no country wants a society where everyone works: it would mean that there are no mothers or fathers staying home to raise the children or care for their elderly relatives, for one thing.  It would also imply that living expenses are so high that every single adult has to work to support themselves, as opposed to a society where one wage-earner can support a family on his/her salary.  We used to have that in the United States.  I believe the low LFPR in the 1950’s and 1960’s was a reflection of this desirable situation rather than an indication that there was massive unwanted unemployment.  In other words, one must use some discernment in looking at unemployment rates, no matter where one gets the numbers.  All that being said, let’s just go with the cold LFPR numbers as the accurate indicator of unemployment rates.

If the labor force participation rate is around 63 (i.e., 63% of eligible Americans have jobs), that means that 37% of able-bodied, job-eligible Americans do not have employment.  How does that not translate into a 37% unemployment rate?

Interestingly, I have noted that when the US media reports on unemployment in foreign countries, they use the labor force participation rates exactly as they should be used.  In Greece, the LFPR is 52, meaning that there is a 48% unemployment rate.  The US media therefore reports, usually with dismayed shock, that unemployment in Greece is 48%.  I don’t understand why it is reported accurately in the one case, and not in the other, unless the idea is to obfuscate the true unemployment numbers here in the US. (One might add “duh” here, but that would be unnecessary silliness.)

Also, I can only shake my head when I read mainstream articles that state we have “recovered all the jobs lost” since the start of the recession.  We lost roughly 10 million full-time jobs since ’08 or ’09 and we did replace them with 10 million jobs as of 2015 – all part-time, low-paying jobs – but this does not do anything about the population increase in the meantime.   Touting the equation of jobs gained = jobs lost does not take into account the millions and millions of Americans who came of age during this time frame with no new jobs actually created for them to work at.

By the way, the LFPR for Russia is currently 69.5% (making it equal to Switzerland in the high number of employed people it has).  We beat the participation rate in Ukraine by a mere 0.3% , and they are currently involved in a civil war (thanks to the “indispensable” USA).  We also have a higher employment rate than Afghanistan, Libya, and Iraq – but we kind of inflicted some problems on those countries as well, to say the least.   The US LFPR is lower than Armenia, the Philippines, Colombia, Italy, Ecuador, Latvia, El Salvador, and Malaysia, just to name a few other countries.  We have a lower percentage of employed people in our population than these countries do; think about that. (We also have a lower percentage than North Korea, but then, I think they do forced labor there.)

It’s not quite the “recovery” that occurred after the Great Depression, is it?  Does it even qualify as a recovery if you have fewer people employed now than you did at the start of the “economic downturn”?  We know for shit sure it isn’t because suddenly everyone in the US is so wealthy that they don’t need jobs any more, and we are certainly not in the 1950’s situation at all, where one person could support a household with his one well-paying job.  And still the politicians can’t fathom the disenchantment of the masses.

 

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Posted by on January 7, 2017 in economy

 

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