The Price of Unemployment
EmailIn advance of this morning's July jobs report:
Unemployment is the metric that most concisely captures the public’s long-running economic anguish. The loss of a job – and the inability to find a new one – damage not just the individuals involved but their families, friends and associates, either through direct economic and emotional impacts, or through the fears, frustrations and pinched opportunities experienced by those still working but on tenterhooks in this shrunken job market.
At 9.5 percent, or anywhere near it, unemployment poisons the public mood, producing a damaged sense of well-being and deep frustration with political leaders. But 9.5 percent itself masks the impact, since it just measures unemployment among people who are looking for work. Check the broader measure called U6, which includes unemployed people who’ve given up looking or settled for part-time work when they really want something full-time. U6 unemployment in June was 16.5 percent – one in six members of the civilian labor force.
Look also at the duration of unemployment – a median of 25.5 weeks in June, vastly higher than the historical norm in data since 1948. This chart from the St. Louis Fed goes back to the 1960s; it's a heart-stopper.
Public confidence in the economy, already bad, has grown sharply worse in the past six weeks. Our weekly Consumer Comfort Index has dropped into what we call the death zone, -50 on its scale of +100 to -100, a level it’s seen in only 27 weeks out of the past 24 years. It’s down 9 points since late June from its best of the year (albeit dreadful) to match its worst of 2010, 4 points from its lowest on record since late 1985, set in December 2008 and January 2009. Today’s -50 compares with a 24-year average of -13.
In the index’s individual measures, 92 percent of Americans say the national economy’s in bad shape – nearly everyone, and 29 points more than the long-term average. Seventy-six percent call it a bad time to spend money; 57 percent say their own finances are hurting.
In terms of political impacts, note our Frustration Index, 67 on its scale of 0 to 100, higher only in fall 2008 and in 1992. Anti-incumbency’s at a high in our data since 1989, and President Obama’s approval for handling the economy is the lowest of his term, at 43 percent. While the Democratic Party leads the Republicans by 8 points, 42 percent to 34 percent, in trust to handle the economy, that’s down from a 19-point Democratic advantage in early 2008. And the public’s dissatisfaction puts the in-power party at greatest risk.
Sixty-two percent in our latest poll favored the latest extension of unemployment benefits; nonetheless concern about the deficit is high enough that Americans in our poll divided evenly on whether the government should spend more “to boost the economy in a way that creates jobs” or leave job-creation to the private sector. But while consensus on a solution is lacking, the economic reality’s clearly untenable – with the clear portent of a political price to be paid November.
Mitt Romney's Full Speech at CPAC 2012 
Romney Makes His Case to Conservatives at CPAC
This administration/Congress is killing jobs as fast as it can.
Posted by: Jan Saunders | August 6, 2010, 1:53 pm 1:53 pm
Jan Saunders wrote: “This administration/Congress is killing jobs as fast as they can.”
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The month this administration took over, the USA was losing 750,000 jobs per month. Now we’ve got a net gain in private sector jobs EVERY month of this year. Perhaps they could be doing better, but please explain how they are killing jobs “as fast as they can.” They’ve got a bill to help small business but the GOP is going to hold it up in the Senate until at least the elections are over: they don’t want to see America improve before then.
Posted by: The_Mick | August 6, 2010, 2:56 pm 2:56 pm
Leave job-creation to the private sector?
That’s rich. The private sector is piling on more work for those lucky enough to still have a job[in the name of productivity], and slashing benefits at the same time. The private sector cares not for the worker and kisses Wall Street’s ample rear end.
Posted by: Tom Joad | August 7, 2010, 7:46 am 7:46 am
Why isn’t anyone giving the number of citizens, who do want to work, but have run out of unemployment? This number should be given everytime the unemployment rate is announced.
Posted by: Cutts_w | August 7, 2010, 11:00 am 11:00 am
The government cannot create jobs. Jobs have to be permanent contributing to GDP and providing a product or service the consumers want. Then consumers must also have jobs in order to purchase goods and services.
Left leaning academicians, politicians and left of center bureaucrats that have never held real jobs have no concept of this.
Government pending and over-regulation kills jobs. Business is afraid of Obamacare and it will be years before the direct damage is known, even longer for the collateral damage. CBO analysis of Obamacare costs hints at rationing. Rationing will of necessity kick in the death panels. Google QALY and CER to get a hint.
CER was funded under the stimulus to keep it under the radar.
Posted by: Ed Taylor | August 10, 2010, 9:40 am 9:40 am
Look at what this so called President done to this Nation ???? C H A N G E yes change my butt
Posted by: flaguyxx | August 10, 2010, 12:14 pm 12:14 pm
It is a self-fulfilling prophecy as the historical length of unemployment is correlated to the historical length of unemployment benefits!
Posted by: tillyerkt | August 11, 2010, 3:16 pm 3:16 pm
I am one of the people fondly considered a ‘99er. I lost my job in January 2008 and have been steadily looking for employment ever since. After six months of, what I consider, total despair, a glimmer of hope came my way in the form of a state backed program called No Worker Left Behind. Because of this wonderful program I will be receiving my Associates Degree in Geographic Information Systems after the fall 2010 term. Unfortunately, what I am seeing as I near my graduation date is that it is still hard to find a job. I have put out an average of five resume’s a day for the past three months, willing to relocate anywhere and have only received one phone call. The phone call was a recruitment company. My dilemma is this; when employers are receiving unprecedented numbers of resumes for one job, how are the people who are older going to compete against the normal college students coming out with degrees? How does one overcome these odds as they are battling the depression that comes with the losses that they are experiencing in their lives?
Here is the reality for those politicians that believe that we ‘99er’s are a bunch of slackers just hanging out on our couches, or in front of our computers, living the trailer park life of our dreams, on the taxpayer’s dime. In Michigan the most that you can make on unemployment in one week is $362 and that is if you were making good money when you were working. It is considerably less for persons who held minimum wage jobs. This amount of money barely affords the necessities in life that are essential if these people are ever to have a prayers chance of getting out of their current situation. The thought that there are people in our government that honestly believe that the majority of the long-term unemployed are enjoying a free ride grates at my very being.
A person has worked most of their life at a job that suddenly isn’t there anymore. It wasn’t the greatest job, but it afforded their family the ability to hold their heads up high, knowing that their somewhat middle-class lifestyle was affordable and their bills were being paid. With the job loss there would be other losses as well, such as loss of health and other insurances. Not to mention how a loss such as this affects this person mentally in the areas of self-esteem and confidence. Depression comes in the form of a need to sleep, hoping that when they wake up things will be better. Next this person hears the major news that the banks are failing and this person witnesses the government rush to their rescue, making the decision to assist in record-breaking time. Even after certain banks were caught flagrantly spending money (remember the $6,000 for 18-holes of golf paid by members of AIG), the government graciously doled out more. Now American’s are losing jobs at an alarming rate, companies are failing and foreclosures are shooting through the roof.
This person is now collecting the, according to some, coveted unemployment, cutting out expenses that are not essential. The bills are falling behind; because there just isn’t enough money once they have made their house payment. Now this person has to make a choice. Does this person pay the bills and feed their family or does this person pay the mortgage? Where does the money come from if the car breaks down or gas prices shoot up to a ridiculous amount? Now there are millions of unemployed people and very few job prospects.
For every job that is posted there are a multitude of candidates, many young fresh faces just out of college. Where does this leave this middle-aged talented and qualified person in the job hunting world? It leaves them with extremely low prospects. The norm for many years was the natural order of things; college students came out into the job world while senior staffers were retiring. Now you have your normal young college students and middle-aged who normally would be nearing retirement, out competing for the same jobs. How is this ever going to work? Programs and or incentives are necessary for employers to be encouraged to hire older employees as well. Otherwise you most likely will see a good portion of a generation going to their graves early as broken people. Stress kills, and the fact that certain members of our government accuse these people of being “slackers” is outrageous and does nothing more than add to the stress these fine people are already under. Trust me when I say that every unemployed person out there has put themselves through the “am I good enough” question. Losing a job is as devastating as losing a loved one, trust me I know. Four months after I lost my job we lost a son-in-law and three year old grandson in a head-on collision. How many others of the millions that lost their jobs have has a loss of a loved one as well? Of those, how many have had to fight foreclosure on their homes? Now on top of that they are struggling in a jobs market that is not extremely interested in employing people that are nearing retirement age.
So to all the politicians out there that has no respect for the people that put them in office, stop and consider what devastating losses are happening in over a million peoples’ lives. Do you honestly believe in your heart of hearts that they want it this way? Wake up to the needs of the people who put you in office. It’s not only job loss that we are dealing with here; it is a national depression, which has been brought on the domino effect of losing one’s life’s work. Stand up for the backbone of America and that backbone will bring the economy back. Previous experience tells us that it won’t be the banks that bring about healthy financial growth. Without people being able to pay their bills how can we ever hope for a return to good economic health? Their only hope is the people that hold the purse-strings. Unfortunately a purse that has been wide open for the ones that caused the initial problem has been drawn tight and locked for their victims.
Posted by: Sheryl Sutter | August 16, 2010, 9:08 am 9:08 am
The facts are: Obama wants everyone to pay a fine if they cannot afford his n
ew Healthcare.Obama is in the market of
establishing new facts about people who
have no credit ratings,because of fail
ure to pay your bills on time.With Obama
care ,it makes new criminals,as when you
can not pay your preminum of from $ 100
to $ 500 weekly,when you only earn less
than $ 300 a week take home,and you defa
ult on your payments,then you now have
to pay a fine,plus go to jail.Now in Ja
il are a new felon,with a record,and n
ow you have lost your job,and your famil
y is becoming homeless. You have no whe
ere to go,no place to work,and are still
being fined for not having Obamas heal
th insurance. What a Guy!!!!???
Posted by: J P | August 17, 2010, 4:11 am 4:11 am
I’m tired of everyone blaming the other person, or company, for their situations. Yes, while some people lost jobs as part of the economic downfall, there were those who had been fired from their jobs before the nation began to fall financially. They were fired or let go from jobs that they did not truly qualify for and now are too proud to submit resumes for lower level positions. Everyone wants to be a CEO or a supervisor because they feel that they are too experienced to settle for less. If you won’t take a solid $35,000 to $40,000 position because you want to make $70,000+ a year, then don’t complain when you can’t find a job and don’t complain when the unemployment funds run dry. Two years on unemployment is enough! Heaven forbid if anyone else gets laid off legitimately — there won’t be any funds left to help them. And what happens if someone who’s been putting out resumes all over the country gets a bite in another state? Hopefully, if they are hired they’ll actually be able to keep the job. How many times have people convinced themselves that they are worthy of a position that is beyond their hard and soft skills to maintain? They interview well, land the job, and then get fired when the company realizes that they can’t perform to the level they were hired for. So what will that person do now? Go back to the state they originally came from? Probably not. Chances are they will apply for unemployment in the NEW state and suck its coffers dry.
Posted by: Robin Heim | August 25, 2010, 5:40 pm 5:40 pm
What this all comes down to is a failed capitalist system in which the workers in the USA were sold out by the profiteering imperialist tyrants. How does a USA worker hope to compete in an international economy with FREE TRADE? Because of free trade, your computers, TVs, and other sundry electronics are now made overseas. Even the space shuttle program is coming to an end. Now I see on TV that the USA is looking for knowledgeable hackers (mostly high school kids) to help with international computer espionage. Isn’t a college education worth anything anymore? The USA continues to fail as the wealthy aristocrats suck more and more money out of the system. Have you ever asked the question why if all these companies are making record profits, they still don’t raise the taxes on the rich to fix the deficit? Unions are busted, factories are closing and moving overseas, and more and more cities are becoming unsafe rat holes. Where do the unemployed go? They are sleeping at the Salvation Army, in the streets, and sometimes even in the sewers (like in Las Vegas). It is the “shame” of America to fought all those wars for this end result. Never forget that the wealthy elite, mainly the Republicans, sold you, comrades!!! Better to live in Russia and be treated decently than die in these futile wars of conquest (like in Iraq and Afghanistan) that serve no other purpose than to make a few capitalists rich!!!
Posted by: Ron | August 29, 2010, 11:39 pm 11:39 pm
We wouldn’t have so much unemployment here if our President and his staff would just get rid of all of the illegal immigrants that are here and coming here every day!
Posted by: Magnum1 | September 1, 2010, 1:06 am 1:06 am
Let’s give our Prez, Dodd, Frank, Pelosi, and Waters the credit they deserve for forcing banks to make risky loans which collapsed and got us into this mess.
Now, let’s applaud them for taking what little money I can earn, to extend unemployment benefits to three years, for people THEY put out of work.
Don’t forget to applaud them for Pelosi’s $7 mil per year jet, so she can work part time in DC, entertain her contributors, and be non-stop in her commute to the winery.
Oh yeah, thank the Prez for his tireless efforts.
“I won’t rest until no veterans are homeless” (well, maybe for 38 rounds of golf)
“I won’t rest until businesses are hiring again” (well, maybe for 14 vacations)
“I won’t rest until every American can find a job” (well, maybe for 27 concerts)
King and Queen Obama are really doing it to us.
Posted by: 1musicwayne | September 1, 2010, 5:41 pm 5:41 pm