Tuesday, February 19, 2008

A Closer Look At Bush's BS Job Stats & The Economy

Whenever he issues denials of our country's economic troubles, President Bush invariably points to the latest unemployment and/or job creation figures as proof of his policies' efficacy. McClatchy's Kevin G.Hall crunches the numbers and uncovers what blue collar and middle class America has known for a couple of years now, the low unemployment rate hides rise in long-term jobless. (All emphasis is mine):

The latest employment figures, released in late January, showed a 52-month streak of job creation ending with a loss of 17,000 jobs in January. The Bush administration acknowledged the contraction, but pointed to the national unemployment rate of 4.9 percent to say that the labor market wasn't a harbinger of recession.
Right. No recession to see here, people. Look straight ahead and keep on truckin'.
A closer look at unemployment data by McClatchy, however, found that jobless Americans are spending more time looking for work and that those who can't find work now make up a greater share of the unemployed.

Several measures of unemployment, in fact, show that the workforce is under the kind of stress not seen since March 2001, when the U.S. economy entered a nine-month recession, followed by a so-called jobless recovery.
The White House hauled out its biggest gun, Ed Lazear, to rebut this analysis. Lazear is notable as one of the fathers of personnel economics -- a field Lazear and others seek to explain (I prefer justify), among other things, wage gaps due to gender, sociological and other differences. Predictably, Mr. Lazear has a different read on the numbers:
The Bush administration points out that the percentage of workers unable to find work for 27 weeks or longer was only 0.9 percent of the overall workforce in January.

"So in terms of proportion of individuals who are facing long-term unemployment, it's about the same as it was in the mid-1990s and actually lower than throughout most of the past few years," said Edward Lazear, the chairman of the White House Council of Economic Advisers.
There's a reason why the White House studiously avoids counting people still looking for work 26 weeks after they cash that first unemployment check. If you know anyone who's lost a job in the past coupla years, 4 1/2 months is not a very long time to be unemployed. Lazear uncovered an equation where "Clinton" numbers are "about the same" as these current "Bush" numbers. Too bad it's a crap equation:
But when Americans unemployed for 27 weeks or longer are measured as a share of the total number of unemployed, the story is very different.

The long-term unemployed amounted to 18.3 percent of all the unemployed in January. That means that while overall unemployment is low, almost one in five unemployed workers has been jobless for six months or more.
It's no small wonder that Bush, Lazear and friends want to bury this trend. Chronic unemployment stats contradict everything they've been selling us about American jobs:
"Long-term unemployment is really very interesting and in some ways a more telling indicator," said Jared Bernstein, a labor economist with the liberal Economic Policy Institute in Washington. "It basically says that given the particularly low level of unemployment, you'd expect a much lower share (of long-term unemployed) on the jobless rolls. Job creation has been anything but robust."
Here's how the stats compare to other periods in Bush's reign two terms:
When the U.S. economy last went into recession, in March 2001, the unemployment rate was 5.7 percent and the long-term unemployed made up 11.1 percent of all unemployed. That number reached the 18 percent range 14 months later and peaked at 23.4 percent during a single month in both 2004 and 2005.

These statistics suggest that if the United States is in a recession — still a subject of debate among economists — the nation is entering an economic contraction with a much higher rate of chronically unemployed than it did during the nine-month recession in 2001.
In other words, we're fucked. Really, really fucked. In the grand scheme of things the labor market affects the economy thusly:
It's a critically important linchpin because, although we get excited about every bip and bop in the stock market, it's the labor market that matters most to most people. They're depending on their paycheck, not their stock portfolios," Bernstein said. "If the labor market is not producing enough jobs or hours of work, that's going to show up as diminished income growth and less consumption."
This chronic unemployment (and underemployment) combined with the sub-prime crisis, inflation, higher gas & heating oil prices, the real estate crash et al. Without bankruptcy protection and with property values plummeting, people default on their mortgages to pay their credit cards. Consumer confidence erodes. While the average citizen was suffering, Bush and his Lazear-led bean-counters couldn't have cared less. It took Corporate America to feel the pinch and start screaming for Bush to ask Lazear to dial up his new "stimulus package."

Hell, we'll be lucky if Bush's package doesn't make things even worse. You know it's a bad plan when libertarian think tank the Cato Institute can rip it as "a disappointing re-run of the misguided policies of Jimmy Carter." Ouch!

Add our fucked up economy to the long list of Bush Administration legacy land mines left for the next up to negotiate.


(h/t Think Progress)