The Scariest Unemployment Graph I've Ever Seen Yet

  • tokugawa

    Posts: 945

    Jul 22, 2010 7:10 PM GMT
    http://www.theatlantic.com/business/archive/2010/07/the-scariest-unemployment-graph-ive-seen-yet/60086/

    median+weeks+of+unemployed.png
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    Jul 23, 2010 11:25 PM GMT
    Honestly it says nothing about the rate of unemployment, just the duration of those unemployed.

    This current period of unemployment (while recent numbers leveled off) has actually been moderating.

    For a more realistic look below, you can see that we are similar to the 70's with actual unemployment and less severe than the early 1980's. The only other time it has been higher was at 25% in the depression. This is why you will hear economists talk about "post world war periods" because the mistakes made in the depression era were: no social security, no unemployment benefits, AND they decided to balance the budget and raise taxes (to tighten belts) when people had nothing. This is why the stimulus was important, and unemployment benefits are important, the FDIC is important, and this is why in NO POST WAR PERIOD have we ever had such severe cicumstances. Unemployment is not going to go to 25% if you ask me.

    Also keep in mind that at NO OTHER TIME IN HISTORY HAVE WE EXTENDED UNEMPLOYMENT BENEFITS FOR SO LONG. (So there is your duration increase, explained).

    When things pick up, I expect that it will create capacity to hire those with lower skill levels back into the system. The highest rates of unemployment are the new grads, and those without an education, or not many demanded skills.

    Unemployment%20Rate%201948%20Jan%20-%202
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    Jul 23, 2010 11:35 PM GMT
    xuaerb saidHonestly it says nothing about the rate of unemployment, just the duration of those unemployed.


    Yes. This is duration of unemployment, not an unemployment rate.

    Here's my guess. If we dig deeper we will find the definition of "duration of unemployment" has changed. It's always good to investigate the facts directly than to believe the characterization of them that appears in any article.
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    Jul 23, 2010 11:44 PM GMT
    By the way, here is the website for the Bureau of Labor Statistics.

    http://www.bls.gov/home.htm

    In there, you will find a definition of unemployment rate and its various measures.
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    Jul 23, 2010 11:59 PM GMT
    Here are the unemployment rates.

    http://research.stlouisfed.org/fred2/data/UNRATE.txt

    It looks like the low was 4.4% in 2007 and the rates steeply increased from then to April 2009...a slow increase, and now a slow decrease.

    From 2007 to the end of his Presidency, therefore, Bush was associated with a 3% increase over 1 1/2 years. In the 1 1/2 years Obama has been president the rate went up 1.9% to its high, and now has decreased slightly.

    Hence, the statistics do not bear out the conservative mischaracterization of the unemployment figures. By the way, who was the sitting president during the highest unemployment rates of the last 30 years, 1982-83? Guess.

    I have those figures included them underneath the recent figures. Remember guys, always check the actual data. Not the mischaracterization of them by the tea partiers.

    2007-05-01 4.4
    2007-06-01 4.6
    2007-07-01 4.6
    2007-08-01 4.6
    2007-09-01 4.7
    2007-10-01 4.7
    2007-11-01 4.7
    2007-12-01 5.0
    2008-01-01 5.0
    2008-02-01 4.8
    2008-03-01 5.1
    2008-04-01 5.0
    2008-05-01 5.4
    2008-06-01 5.5
    2008-07-01 5.8
    2008-08-01 6.1
    2008-09-01 6.2
    2008-10-01 6.6
    2008-11-01 6.9
    2008-12-01 7.4
    2009-01-01 7.7
    2009-02-01 8.2
    2009-03-01 8.6
    2009-04-01 8.9
    2009-05-01 9.4
    2009-06-01 9.5
    2009-07-01 9.4
    2009-08-01 9.7
    2009-09-01 9.8
    2009-10-01 10.1
    2009-11-01 10.0
    2009-12-01 10.0
    2010-01-01 9.7
    2010-02-01 9.7
    2010-03-01 9.7
    2010-04-01 9.9
    2010-05-01 9.7
    2010-06-01 9.5

    1982-09-01 10.1
    1982-10-01 10.4
    1982-11-01 10.8
    1982-12-01 10.8
    1983-01-01 10.4
    1983-02-01 10.4
    1983-03-01 10.3
    1983-04-01 10.2
    1983-05-01 10.1
    1983-06-01 10.1
  • tokugawa

    Posts: 945

    Jul 24, 2010 12:39 AM GMT
    xuaerb saidThe only other time it [unemployment] has been higher was at 25% in the depression. This is why you will hear economists talk about "post world war periods" because the mistakes made in the depression era were: no social security, no unemployment benefits, AND they decided to balance the budget and raise taxes (to tighten belts) when people had nothing.


    Social security was passed while FDR was president, DURING the Great Depression, in 1936. For this, and his policies which reduced the unemployment rate from 25% to about 15%, FDR was re-elected in 1936 by a landslide.

    FDR engaged in deficit spending from 1933-1936. After his 1936 election, FDR shifted gears and tried to balance the federal budget. The results were a disaster. Unemployment, which had been steadily declining since 1933, went up from 15% to 18% in 1938; and budgets deficits did not disappear. Reduced tax revenue, because more people lost their jobs, may have actually caused the federal budget deficit to get bigger.

    FDR's failure to end the Great Depression was his stimulus program was not big enough. When federal spending skyrocketed to pay for World War II, unemployment dropped to its lowest level ever recorded; in 1943, less than 1% of the U.S. labor force was unemployed.

    The lesson for Obama is that attempts to reduce the deficit during a major economic downturn will likely INCREASE unemployment. The danger to the economy is not inflation, but DEFLATION.

    The economy is currently in what Keynes called "the liquidity trap." The usual way to stimulate the economy, using MONETARY POLICY, will not work if the interest rate is close to zero, like it is now.

    The private sector is not investing in new plant and equipment because of the large amount of unused capacity it already has. GM is not going to build a new auto assembly plant when it has dozens of shut down plants which could easily be restarted.

    FDR's success was based on putting people to work: Hoover Dam. Tennessee Valley Authority. Civilian Conservation Corps.

    When private industry is unable to provide jobs for close to 10% of the labor force, the government should step in with public works projects. Financially strapped states and cities, unlike the federal government, are constitutionally required to pass balanced budgets. Cities and states are in desperate need for federal funds SO THAT THEY DO NOT NEED TO FIRE ANY MORE CITY AND STATE GOVERNMENT WORKERS. Without the 2009 Obama stimulus package, the current unemployment would be higher, maybe 11% or 12%.
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    Jul 24, 2010 1:48 AM GMT
    I got tired of being unemployed, so I've employed myself. I used to make $75.00/hour, then I was on unemployment for 19 months. Now I make $7.50/hour and work at least 20 hours a week. I now qualify for group health insurance in my state of residence. I won't die of HIV, and will live to play another "hand" tomorrow!

    I win!

    P.S. SB, I passed on the welfare, food stamps, etc. I did get the bus pass, though.
  • Webster666

    Posts: 9217

    Jul 24, 2010 2:10 AM GMT
    tokugawa said
    xuaerb saidThe only other time it [unemployment] has been higher was at 25% in the depression. This is why you will hear economists talk about "post world war periods" because the mistakes made in the depression era were: no social security, no unemployment benefits, AND they decided to balance the budget and raise taxes (to tighten belts) when people had nothing.


    Social security was passed while FDR was president, DURING the Great Depression, in 1936. For this, and his policies which reduced the unemployment rate from 25% to about 15%, FDR was re-elected in 1936 by a landslide.

    FDR engaged in deficit spending from 1933-1936. After his 1936 election, FDR shifted gears and tried to balance the federal budget. The results were a disaster. Unemployment, which had been steadily declining since 1933, went up from 15% to 18% in 1938; and budgets deficits did not disappear. Reduced tax revenue, because more people lost their jobs, may have actually caused the federal budget deficit to get bigger.

    FDR's failure to end the Great Depression was his stimulus program was not big enough. When federal spending skyrocketed to pay for World War II, unemployment dropped to its lowest level ever recorded; in 1943, less than 1% of the U.S. labor force was unemployed.

    The lesson for Obama is that attempts to reduce the deficit during a major economic downturn will likely INCREASE unemployment. The danger to the economy is not inflation, but DEFLATION.

    The economy is currently in what Keynes called "the liquidity trap." The usual way to stimulate the economy, using MONETARY POLICY, will not work if the interest rate is close to zero, like it is now.

    The private sector is not investing in new plant and equipment because of the large amount of unused capacity it already has. GM is not going to build a new auto assembly plant when it has dozens of shut down plants which could easily be restarted.

    FDR's success was based on putting people to work: Hoover Dam. Tennessee Valley Authority. Civilian Conservation Corps.

    When private industry is unable to provide jobs for close to 10% of the labor force, the government should step in with public works projects. Financially strapped states and cities, unlike the federal government, are constitutionally required to pass balanced budgets. Cities and states are in desperate need for federal funds SO THAT THEY DO NOT NEED TO FIRE ANY MORE CITY AND STATE GOVERNMENT WORKERS. Without the 2009 Obama stimulus package, the current unemployment would be higher, maybe 11% or 12%.




    I agree with every word that Tokugawa said.
    The huge piece of the puzzle that is missing from the Obama economic recovery plan is Public Works Projects. And, the economy will continue to just creep along unless he makes that change.

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    Jul 24, 2010 7:58 AM GMT
    I think our economy is getting better than it was few years ago. I don't think that chart is right...
  • BIG_N_TALL

    Posts: 2190

    Jul 24, 2010 8:29 AM GMT
    I can believe it. My full-time job is trying to find a full-time job icon_neutral.gif
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    Jul 24, 2010 8:50 AM GMT
    southbeach1500 said
    VP Biden has said that the Obama administration's policies have saved or created 3 million jobs.


    No they just extended unemployment basically.
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    Jul 24, 2010 8:51 AM GMT
    RYAN_SC saidI can believe it. My full-time job is trying to find a full-time job icon_neutral.gif


    OMG no shit! You have to work your ASS off just to get a HUMAN to say NO to you, let alone get an interview. And the worst part about this job is you don't get paid to do the most painful research of trying to contact human beings who don't seem to care about you. It sucks ass.
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    Jul 24, 2010 8:59 AM GMT
    tokugawa saidhttp://www.theatlantic.com/business/archive/2010/07/the-scariest-unemployment-graph-ive-seen-yet/60086/

    median+weeks+of+unemployed.png


    I looked at this graph, and this is what i concluded:

    1. The graph has nice colors

    2. There are wavey lines

    3. and i understand the 1965 to 2015

    When i took stats, my teacher always mentioned it'd be useful. All i wished now is that i didnt cheat on the asian kid next to me during tests.