[Peace-discuss] Guest Commentary

Sun Jun 19 15:15:01 CDT 2011

This chart from Shadowstats.com shows the gap between the headline news
measure of unemployment (U-3) and the U-6 figure also reported
by the Gov't.

John Williams (the statistician not the woodcarver gunned down
by police in Seattle) also reports the pre-1994 unemployment
calculation.

u6 u3

I am not aware of any action to reduce or reverse this in the
short to intermediate term.  One would expect it to get
much much worse before any significant improvement.

06/20/11 1:27, David Green wrote:
> This was published in this morning's NG.
> *Despite increased production, employment and earnings data show 
> long-term economic decline in Champaign-Urbana region*
> David Green
> 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.
> 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.
> 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.
> 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.
> 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.
> 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.
> By two measures of compensation, it’s clear that earnings do not 
> reflect this increased output. 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.
> 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.
> 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.
> 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.
> 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.
> David Green lives in Urbana, and can be reached at 
> davidgreen50 at gmail.com <mailto:davidgreen50 at gmail.com>. He is a weekly 
> contributor to News from Neptune, heard on WEFT radio and seen on UPTV.
>
>
>
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>    

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