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This chart from Shadowstats.com shows the gap between the headline news<br>
measure of unemployment (U-3) and the U-6 figure also reported<br>
by the Gov't. <br>
<br>
John Williams (the statistician not the woodcarver gunned down<br>
by police in Seattle) also reports the pre-1994 unemployment<br>
calculation.<br>
<br>
<img alt="u6 u3" src="cid:part1.06050603.03000708@pigs.ag" width="500"
height="320"><br>
<br>
<br>
I am not aware of any action to reduce or reverse this in the<br>
short to intermediate term. One would expect it to get<br>
much much worse before any significant improvement.<br>
<br>
<br>
<br>
06/20/11 1:27, David Green wrote:
<blockquote cite="mid:236900.46202.qm@web65413.mail.ac4.yahoo.com"
type="cite">
<div
style="color: rgb(0, 0, 0); background-color: rgb(255, 255, 255); font-family: times new roman,new york,times,serif; font-size: 12pt;">
<div>This was published in this morning's NG.</div>
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style="font-family: times new roman,new york,times,serif; font-size: 12pt;">
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style="font-family: times new roman,new york,times,serif; font-size: 12pt;">
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style="color: rgb(0, 0, 0); font-family: times new roman,new york,times,serif; font-size: 12pt;">
<div> </div>
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<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><b><font
face="Calibri">Despite increased production, employment and earnings
data show long-term economic decline in Champaign-Urbana region</font></b></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">David Green</font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">Recent economic data (until the most recent) show
decreases in unemployment. Such reports are uninformative if not
deceptive for at least three reasons: First, decreases in the rate of
unemployment are largely attributable to a decline in labor force
participation since its peak prior to the recession, in late 2008.
Second, a focus on unemployment since the beginning of the current
recession obscures a long-term decline in employment—relative to
population—over recent decades. Third, emphasizing unemployment rather
than production and earnings data obscures long-term trends regarding
productivity, profits, wages, and inequality. </font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">These trends belie what little optimism can be
manufactured from trivial and unstable employment gains. Employment and
earnings of the median (middle) earner and household have suffered from
long-term decline; barring radical or at least rational political
measures, there’s no reason to predict a brighter economic future for
most of us.</font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">These observations generally apply to the nation as a
whole, and can be characterized by local data, which highlight the
difference between worker productivity and total production on one
hand, and general prosperity on the other. The Champaign-Urbana
Metropolitan Statistical Area (MSA) is a geographic definition used in
data collected by the U.S. Census, the Bureau of Labor Statistics
(BLS), and the Bureau of Economic Analysis (BEA). All the data below
are accessible at government websites. </font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">The C-U MSA includes Champaign, Ford, and Piatt
counties. Between 1990 and 2010, its population grew from 203,000 to
231,000, or 14%. During that same period, the number of employed grew
by 5%. Employed workers as a percentage of the entire population
decreased from 52.5 to 48.5; in current terms, this means over 9,000
fewer jobs. There are currently nearly 112,000 jobs in the C-U MSA, but
this number was first surpassed in April 2000, over 11 years and 20,000
residents ago.</font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">Decreased unemployment rates currently reflect
decreased labor force participation more than job creation. In March
2010 there were over 111,775 jobs and a 9.2% unemployment rate, while
in March of this year there were 111,930 jobs, and a rate of 7.8%. Over
the past year, lower unemployment rates primarily result from nearly
2,000 discouraged workers dropping out of the labor force, a
perspective regularly omitted from newspaper articles on the job market.</font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">Nevertheless, data over the past decade show increased
worker productivity, lower collective compensation, and growing
economic equality among workers and households. From 2001 to 2009, the
gross domestic product of the C-U MSA, which includes both private and
government investment and spending, continued to grow steadily, from
$6.2 billion to $7.5 billion in constant 2001 dollars. This reflects an
overall 8-year absolute increase of 21% in output concurrent with a
population increase of less than 10% and a numerically stagnant labor
force—a steady increase in the productivity of local workers.</font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">By two measures of compensation, it’s clear that
earnings do not reflect this increased output. <span> </span>Per
capita income, which reflects the average income of all residents in
the C-U MSA, decreased by 2.7% when adjusted for inflation. In 2001,
each resident earned on average $34,600 in 2009 dollars, while in 2009
only $33,700 in current (2009) dollars. While output grew steadily in
real terms, total earnings and purchasing power declined.</font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">Second, median household income declined even more
rapidly during this eight-year period, from over $48,000 in 2001 (in
2009 dollars), to under $44,000 dollars in 2009 in current (2009)
dollars. This entails an 11% decrease in the real earnings of
households at the middle rung of the income ladder.</font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">Throughout the vicissitudes of the bubble economy,
tri-county workers continue to expand the per capita real output of all
residents. Fewer workers as a proportion of the population are employed
to produce this output, leaving more unemployed. Well over half of all
households are rewarded with lower total incomes, while the vast
majority at best break even. All economic rewards accrue either to the
top 20% or fewer of local households, or to non-residents who are
beneficiaries of corporate profits and/or management earnings.</font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">If management salaries and corporate profits increased
at a rate that reflected increases in worker productivity, then all
workers’ earnings would also increase at that rate if those increases
were fairly divided among them. In neither case is this true. Moreover,
high unemployment and lower earnings constitute a vicious cycle of
desperation and lowered expectations.</font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">These realities are the result not of markets but of
public policies. But it’s clearly not in the interest of the
beneficiaries of these policies for the majority of the population to
understand either the realities or the policies. From the media to
academia, economics has to be made to seem more technical or mysterious
than it really is. Meanwhile, the data show that our economy is one of
legalized theft.</font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri"> </font></div>
<div style="margin: 0in 0in 10pt;" class="yiv118120126MsoNormal"><font
face="Calibri">David Green lives in Urbana, and can be reached at </font><a
moz-do-not-send="true" href="mailto:davidgreen50@gmail.com"
rel="nofollow" target="_blank" ymailto="mailto:davidgreen50@gmail.com"><font
color="#0000ff" face="Calibri">davidgreen50@gmail.com</font></a><font
face="Calibri">. He is a weekly contributor to News from Neptune,
heard on WEFT radio and seen on UPTV.</font></div>
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face="Calibri"> </font></div>
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face="Calibri"> </font></div>
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face="Calibri"> </font></div>
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face="Calibri"> </font></div>
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face="Calibri"> </font></div>
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face="Calibri"> </font></div>
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face="Calibri"> </font></div>
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face="Calibri"> </font></div>
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