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February 1, 2007

ECONOMY OF FEAR....Via Max, the Congressional Budget Office has a new report out on income volatility. CBO Director Peter Orszag makes the point that although the broad economy has gotten more stable over the past few decades (fewer big booms and busts), at the individual level it's gotten less stable. This is especially true for high school dropouts, who have considerably more income instability than more educated workers.

The chart on the right, adapted from the report, shows one of the reasons that people feel so economically insecure these days even though broad trends seem benign. Consider: Since the mid-80s the headline unemployment rate has been both steady and moderately downward trending. So why is fear of unemployment seemingly greater than ever?

Answer: because the consequences are so dire. The risk of losing your job may not actually be greater than in the past, but if you do lose your job the odds of a catastrophically long period without work are much greater than in the past. It's one thing to be afraid of losing your job for a few months; it's quite another to (justifiably) be afraid of losing your job for six months or more. Healthcare is part of it too. From the CBO report:

One study found that, on average, workers who lost a full-time job from 2001 to 2003 and found a new job by the time they were interviewed in 2004 earned about 17 percent less than they would have earned had they not been displaced. That amount was roughly double the average loss in earnings incurred by workers who were displaced in the late 1990s.

A previous CBO study...found that the former recipients of unemployment insurance benefits who went back to work within three months after their benefits ended were earning about 15 percent less than they had earned before they lost their job. About 30 percent of them lacked health insurance; 20 percent of them had been uninsured before they lost their job.

For more on the healthcare front, check out yesterday's report in the LA Times about the latest round of negotiations between grocery workers and supermarket chains in Southern California. The supermarket lockout in 2003 was eventually resolved with a new contract that reduced healthcare benefits, and the results are about what you'd expect: the number of workers covered by health insurance has plummeted from 94% to 54%. The dismal numbers are here.

Kevin Drum 12:53 PM Permalink | Trackbacks | Comments (62)
 
Comments

Why does this graphic distort the comparison between Total and Long-Term unemployment by using slightly different vertical scales, when they could easily have used the same scale?

Posted by: Nemo on February 1, 2007 at 1:34 PM | PERMALINK

And the best part is: workers who are scared don't ask for more money. Or as Alan Greenspan said ten years ago:

But even if the perceived quicker pace of application of our newer technologies turns out to be mere wheel-spinning rather than true productivity advance, it has brought with it a heightened sense of job insecurity and, as a consequence, subdued wage gains. As I pointed out here last February, polls indicated that despite the significant fall in the unemployment rate, the proportion of workers in larger establishments fearful of being laid off rose from 25 percent in 1991 to 46 percent by 1996. It should not have been surprising then that strike activity in the 1990s has been lower than it has been in decades and that new labor union contracts have been longer and have given greater emphasis to job security. Nor should it have been unexpected that the number of workers voluntarily leaving their jobs to seek other employment has not risen in this period of tight labor markets. To be sure, since last year, surveys have indicated that the proportion of workers fearful of layoff has stabilized and the number of voluntary job leavers has edged up. And, indeed, perhaps as a consequence, wage gains have accelerated some.
Posted by: Qlipoth on February 1, 2007 at 1:37 PM | PERMALINK

Economic fear keeps the electorate docile, preventing aggressive dissidence to war and social inequality.

Posted by: Brojo on February 1, 2007 at 1:59 PM | PERMALINK

I was laid off in February, 2006... and have yet to find or be offered permanent employment.

Ah, horrible, horrible, freelancing!

Posted by: Darryl Pearce on February 1, 2007 at 2:00 PM | PERMALINK

I had a full-time job that was outsourced. I found out in 2001, the company gave me a year's notice that my job was leaving. It took me almost a full year to find another job, and I took a $15,000 cut in pay, too. At least my old company did right by giving me such advance notice, giving me the opportunity to find something without ever having to collect unemployement. But it's been almost 5 years now, and I still make significantly less than I did at my old job.

Posted by: maurinsky on February 1, 2007 at 2:02 PM | PERMALINK

Income volatility is a good thing. The guy who makes a million dollars on odd number years and nothing on even number years is much better off than the guy who consistently pulls in fifty grand a year. Put another way, when Bill Gates quits working, his income will go down by billions of dollars a year. That doesn't mean he's suffering.

What it represents is the spikes and valleys in an ownership society. It's shocking that liberals can manage to spin even this into a bad thing.

Posted by: American Hawk on February 1, 2007 at 2:03 PM | PERMALINK

Like Nemo, I find the use of two vertical axes to be puzzling. There appears to be no reason to do so.

Posted by: Yancey Ward on February 1, 2007 at 2:04 PM | PERMALINK

Yancey Ward: Like Nemo, I find the use of two vertical axes to be puzzling. There appears to be no reason to do so.

The left and right vertical axes represent two different quantities (although both are dimensionless and hence can be represented in percent). Left being the percentage of people unemployed, and right being the percentage of unemployed who are long-term unemployed.

Arguably it's not the best way to draw the chart, but it's not a case of cute deceptive axis labeling.

Posted by: alex on February 1, 2007 at 2:10 PM | PERMALINK

"And the best part is: workers who are scared don't ask for more money..." Posted by: Qlipoth on February 1, 2007 at 1:37 PM

Another argument for universal health care coverage. If we had it we could *seek* out jobs we wanted instead of being held hostage to them for the benefits. Wages/salaries would also rise because of the reduced risk aversion of employees and employers to hire.

Posted by: Doc at the Radar Station on February 1, 2007 at 2:14 PM | PERMALINK

Alex,

I realize they are different measurements, but why not have the axes the same scale? It may be an innocent thing, but when I see this sort of graph, I am suspicious that the image being conveyed has a bias to it. In this case, the different scaling serves to shift the long-term curve upward and to increase the slope of the upper arrow.

Posted by: Yancey Ward on February 1, 2007 at 2:24 PM | PERMALINK

Yancey Ward: the different scaling serves to shift the long-term curve upward and to increase the slope of the upper arrow

You're right. And the left axis should top out at a smaller number than the right. Maybe it's just a dumb way not to get the two curves to fall on top of each other graphically, or maybe it is deceptively cute axis labeling.

Either way it is an interesting trend.

Posted by: alex on February 1, 2007 at 2:31 PM | PERMALINK

Yancey,

"I realize they are different measurements, but why not have the axes the same scale?" If they're different measurements (that is, where each side is a percent of something different than the other side), why would they use a single scale? It seems like you'd need a reason to make two unrelated things look similar.

A good reason for making them different would be to keep from leading people to believe that each percentage is in relation to the same whole.

Posted by: Lance on February 1, 2007 at 2:34 PM | PERMALINK

Uncertainty is the price we pay for living in a free sociiety.

Posted by: Al on February 1, 2007 at 2:37 PM | PERMALINK

I am trying to contact a Sandra Steeves, originally from Nova Scotia. Daughter of Jean Knickle Steeves. May be living in Ontario presently.

Posted by: Ethan on February 1, 2007 at 2:38 PM | PERMALINK

Kevin's chart can easily be misunderstood. The "Long term unemployment" is not a percentage of total work force. It's a percentage of Total Unemployed.

The lastest figures on the chart are 4% Unemployment and 17% Long term unemployed. Multiplying then shows that only about 2/3 of 1% of the work force are long term unemployed.

Bhy comparison, at the height of the Carter malaise, the figures were 7% unemployment and 25% long term unemployment, meaning that as a % of work force, the long term unemployed rate was 1.75%. That was 2 1/2 times what it is today.

Conclusion: the current rate of long term unemployed is pretty favorable. It's not the cause economic worries.

Posted by: ex-liberal on February 1, 2007 at 2:41 PM | PERMALINK

I was laid off in 2002 - collateral damage in corporate infighting.

I did manage to find a new job within 30 days, but I realize I was very lucky - because I got in the door only because my best friend also worked here. I worked as a temp for 18 months, making about 2/3 what I had been making, with no health insurance or vacation days, or anything like that.

The company finally started doing better, and hired me as a full employee, but now, 5 years later, I'm still only making what I was making when I was laid off in 2002.

My house payments, transportation costs, utility bills, and other expenses have not remained static for 5 years, however. I find myself almost constantly working overtime just to keep up with the house payments. And I feel damn lucky I even get compensated for overtime.

The Bush Economy is not being as good to me as the Clinton Economy was.
In fact, when Clinton took office, I was just out of college, making $12k/yr. When Clinton left office, I was rising through the ranks making $68k/yr, plus a not insignificant amount coming from stock options. I had a house, a family, toys, exotic vacations, a hobby working on my classic sports car, 8 years of prosperity. 7 years into the Bush presidency, my income went down, and has since come back up to the level it was - but if you count inflation in a REAL sense (instead of the fake sense used by economist cheerleaders) - I'm still sliding into a black hole. I certainly haven't taken a family vacation like I took in 1999 (to Tahiti). Now, I'm lucky if I can afford to go camping.

Fuck this shit, and Fuck Bush.

Posted by: Extradite Rumsfeld on February 1, 2007 at 2:41 PM | PERMALINK

Uncertainty is the price we pay for living in a free society.
Posted by: Al on February 1, 2007 at 2:37 PM | PERMALINK

If only you'd accept that argument as justification for why we need limits on wiretapping and prisoner abuse.

But you'd rather be a coward. Unworthy of the Liberty enshrined in the Bill of Rights, paid for by the blood of our forefathers.

Posted by: Extradite Rumsfeld on February 1, 2007 at 2:48 PM | PERMALINK

Bhy comparison, at the height of the Carter malaise, . . .
Posted by: ex-liberal on February 1, 2007 at 2:41 PM | PERMALINK

You mean the Nixon/Ford malaise.

Or was Carter responsible for the 1973 Oil Embargo, and Nixon's disastrous response to it?

Posted by: Extradite Rumsfeld on February 1, 2007 at 2:50 PM | PERMALINK

Lance,

I tend to lean towards that explanation. However, it makes far more sense to produce two graphs instead of one.

Alex,

Hard to determine what the trend really is. My guess is that we have a larger fraction of unemeployable people than we did 50 years ago. Also, 50 years ago, there were not nearly as many women employed outside of home as there is today. With more 2-earner households, it is easier for one to stay out of the work force longer term. Support for this view comes from the CBO paper itself in which the researchers surveyed these people and found that about half the responses indicated that it was voluntary.

And on top of that, it is easy to lose sight of the perspective that in 2005, we were talking about 18% of the 5% that were unemployed, or less than 1% of the total work force.

Posted by: Yancey Ward on February 1, 2007 at 2:55 PM | PERMALINK

My guess is that we have a larger fraction of unemeployable people than we did 50 years ago.Posted by: Yancey Ward on February 1, 2007 at 2:55 PM | PERMALINK

Define "unemployable", please, in a way that doesn't sound completely absurd in the face of massive institutionalized violation of our immigration laws just so a few corporations can skirt minimum wage laws, while they bribe politicians to look the other way.

Posted by: Extradite Rumsfeld on February 1, 2007 at 3:10 PM | PERMALINK

"Uncertainty is the price we pay for living in a free sociiety."

Stupidity is the price we pay for living in a free society where we have to hear Al.

Posted by: dee on February 1, 2007 at 3:15 PM | PERMALINK

"This is especially true for high school dropouts, who have considerably more income instability than more educated workers."

Wait, so now there are consequences for dropping out of High School?

Posted by: mantooth on February 1, 2007 at 3:27 PM | PERMALINK

Extradite,

An unemployable person might be an alcoholic, a crack user, a methamphetamine user, or even someone who didn't make it beyond eighth grade.

That, along with higher specialization in jobs themselves, could very well mean a higher fraction of unemployable people.

But if you want to crack down on illegal immigrants and deport them, then have at it. Neither party seems to want to do so.

Posted by: Yancey Ward on February 1, 2007 at 3:28 PM | PERMALINK

Extradite Rumsfeld: Define "unemployable", please, in a way that doesn't sound completely absurd in the face of massive institutionalized violation of our immigration laws

Or that are perfectly legal under laws that were passed in a corrupt way, such as the H-1B, L-1 and other guest worker programs. Even in 1998 a CBO study concluded that there was no "shortage" of programmers and engineers, and no reason to raise the H-1B visa cap. Even Milton Friedman called them an industry subsidy.

Oh, and policies and (in)actions that give us a trade deficit (current account) of almost 7%.

The bottom line is that if you really want to find out who is and who isn't employable, tighten the labor markets. In WWI black people who were considered unemployable in industrial work suddenly found themselves with good factory jobs. In WWII the same thing happened with women.

Posted by: alex on February 1, 2007 at 3:30 PM | PERMALINK

My guess is that we have a larger fraction of unemeployable people than we did 50 years ago.

My guess is that you have that precisely backwards: we have a smaller fraction of unemployable people today. But we need data, not hand waving.

Posted by: teece on February 1, 2007 at 3:35 PM | PERMALINK

An unemployable person might be an alcoholic, a crack user, a methamphetamine user, or even someone who didn't make it beyond eighth grade.

(sorry to comment twice, missed this on lack of preview).

OK, this is just silly, Yancy, you're smarter than this.

In 1950, it was perfectly normal for a woman or a black person or mexican immigrant to be nearly or completely unemployable.

Our education levels have increased, not decreased, since the 1950s. Drug use and substance abuse are not new -- there were people that couldn't work because of those things in the 1950s, and any increase in that factor today is quite likely insignificant.

Come on. You're imagining a 1950s that did not exist.

Posted by: teece on February 1, 2007 at 3:39 PM | PERMALINK

Yancey Ward: But if you want to crack down on illegal immigrants and deport them, then have at it. Neither party seems to want to do so.

Unfortunately, you're right. But just because neither major party is serious about doing anything, doesn't mean it's not a legitimate complaint. Nobody characterized this discussion strictly in terms of R vs. D.

Moreover, the D's are almost as bad as the R's when it comes to things like the H-1B program. That's because the D's collect a larger percentage of their bribes (oops, campaign contributions) from the industries that are subsidized by the H-1B program.

The finest gov't money can buy.

Posted by: alex on February 1, 2007 at 3:40 PM | PERMALINK

An unemployable person might be an alcoholic, a crack user, a methamphetamine user, or even someone who didn't make it beyond eighth grade.Posted by: Yancey Ward on February 1, 2007 at 3:28 PM | PERMALINK

So you're telling me that our public education outcomes today are worse than they were 50 years ago? And drug use is worse than 50 years ago? Despite our wildly successful "War On Drugs" for the past 25 years?

That, along with higher specialization in jobs themselves, could very well mean a higher fraction of unemployable people.

So the problem isn't unemployable people, it's incompetent employers?

But if you want to crack down on illegal immigrants and deport them, then have at it. Neither party seems to want to do so.

No. We don't have an Illegal Immigration problem in this country. We have an Illegal Employer problem.

Crack down on the folks who knowingly hire illegals. Crack down hard, so it hurts. The immigrants will go somewhere else if they can't find work here. If we don't bother to enforce our own laws, then we're not a real country.

Posted by: Extradite Rumsfeld on February 1, 2007 at 3:41 PM | PERMALINK

It may be an innocent thing, but when I see this sort of graph, I am suspicious that the image being conveyed has a bias to it.

Funny...I get the same feeling when I see "Posted by: Yancey Ward."

Posted by: Gregory on February 1, 2007 at 3:41 PM | PERMALINK

"ex-liberal" wrote: Kevin's chart can easily be misunderstood.

Oh, I'm sure it's easy if you're as deliberately and dishonestly obtuse as you, you mendacious neocon tool.

Posted by: Gregory on February 1, 2007 at 3:42 PM | PERMALINK

Yancey Ward wrote: My guess is that we have a larger fraction of unemeployable people than we did 50 years ago.

Extradite Rumsfeld rejoineded: Define "unemployable", please

Why, that's easy! Anyone not as ruggedly individualistic as ol' Yancey!

Posted by: Gregory on February 1, 2007 at 3:44 PM | PERMALINK

Gregory,

Three consecutive posts and no substantial rebuttal? While I rarely agree with Yancey, he's no troll. You, OTOH, are acting like one.

Posted by: alex on February 1, 2007 at 3:47 PM | PERMALINK

Increased risk, and therefore increased fear, is a goal actively sought by conservatives. They spend millions of dollars on think tanks to figure out ways to expose Americans, and everyone else in the world, to more risk and fear. Every one of Bush’s ‘reforms’- Social Security or healthcare- has been, at its root, about eliminating risk sharing. Not only do they think this is a way to keep the rich rich and make a more moral society but they think it will create more conservatives. They could be right.

It is clear from work at the World Values Survey that national insecurity correlates with cultural traditionalism. As nations modernize, as education and risk-sharing increase, societies become more rational and secular and less traditionalistic. The folks at the Heritage Foundation were very interested in the book Bowling Alone (the decline of American community) when it came out. Seems like suburbanization fragments community life and social interdependence in the same way ghettoization does. The only institution left for many is the radicalized megachurch with its twin appeals of personal and community renewal in end of times.

Authoritarian personalities, as described by Bob Altemeyer and others, when scored on the Dangerous World scale show a greater propensity to fear. They imagine, more than others, that the world is plagued with danger. This fear makes them aggressive. The solution for them is war and a society of retribution and imprisonment. Their long reign in the US is why the nation of liberty now incarcerates more of its population than any nation on earth and is a very eager executioner.

Posted by: bellumregio on February 1, 2007 at 3:49 PM | PERMALINK

Isn't it also the case that under- or unemployed people eventually stop showing up in the official unemployment statistics, once their benfits run out? How trustworthy is that "Total Unemployment Rate" number, anyway?

Posted by: Jake on February 1, 2007 at 3:54 PM | PERMALINK

Three consecutive posts and no substantial rebuttal?

Oh, I admit I like needling Yancey, but I think it's substantial enough to point out Yancey's being blinkered by the loony libertarian faith he has espoused in about a bazillion other posts. And for that matter, I think I also pegged Yancey's notion of "unemployable" substantially enough.

I'll readily concede, though, that while Yancey is hobbled by his loony libertarian faith, he's at least reasonably honest within that framework (a certain amount of intellectual dishonesty, of course, being inherent in maintaining that faith). For example, others have already done the heavy lifting in pointing out the, ah, unique worldview that seems to have produced Yancey's stated definition of "unemployable"; I have little to add to that, save to point out that Yancey seems to have pulled his data straight out of his ruggedly individualistic imagination.

"ex-liberal," on the other hand, is an obnoxious liar and a troll, and deserves no "substantial rebuttal."

Posted by: Gregory on February 1, 2007 at 3:57 PM | PERMALINK

Jake: Isn't it also the case that under- or unemployed people eventually stop showing up in the official unemployment statistics, once their benfits run out?

No, that's an old myth. Unemployment is measured using using both a household and an employer survey. Not that there aren't still problems. For instance, in the household survey they ask if you're looking for work. How do you know if people say "no" because they're embarassed to have been unemployed so long? Or if they aren't actively looking because they've become discouraged? Unfortunately there is no magic way to measure (or even define) unemployment rates.

Posted by: alex on February 1, 2007 at 4:06 PM | PERMALINK

It is interesting to note that long-term unemployment is a lagging economic indicator. The percentages rise after the economy comes out of recessions, if I'm correct in saying that the gray sections on the chart indicate recessions.

Posted by: Peter on February 1, 2007 at 4:10 PM | PERMALINK

Teece,

You are smarter than this, and talk about hand waving! In 1950 such people you described would not have been counted in the unemployed (and, consequently, could be the reason for the "trend" Kevin was worrying about). However, what were all those black folks and hispanic immigrants doing who were "unemployable" in 1950? Of course, they were employed doing something, or they and their progeny would not have survived to the present time. The same goes for the women of 1950, they just were not part of the counted labor force (a point I partially addressed above).

On the education front, I agree completely that most of us are more educated today than we were then, but that does not mean it is true down the entire range of the work force. Those uneducated at the bottom of the rung are just as uneducated as those at the bottom in 1950, however the types of jobs these people once filled no longer exist in the numbers they once did.

Of course, we had substance abuse then, but really, do you not think it is worse today than then? However, others can offer opinions, or even some facts.

Posted by: Yancey Ward on February 1, 2007 at 4:14 PM | PERMALINK

Of course, we had substance abuse then, but really, do you not think it is worse today than then?

Well! I'm convinced by Yancey's ruggedly individualistic data.

However, others can offer opinions, or even some facts.

Others would have to offer some facts, since Yancey failed to...

Posted by: Gregory on February 1, 2007 at 4:17 PM | PERMALINK

alex,

When Gregory offers a substantial rebuttal to anything, it will be a first. His three comments are completely representative of all his past contributions.

Peter,

It makes perfect sense that long-term unemployment would be a lagging economic indicator.

Posted by: Yancey Ward on February 1, 2007 at 4:20 PM | PERMALINK

Look at how much the Long Term rate dropped during the CLinton years and then just exploded upwards with the election of Dubya. When will people realise the great work CLinton did with the economy. That campaign slogan that was used by Clinton in his first campaign rings just as true for Baby Bush as it did for Papa Bush

"Everything thats meant to be up is down, everything thats meant to be down is up"

Posted by: Lee Carney on February 1, 2007 at 4:26 PM | PERMALINK

When Gregory offers a substantial rebuttal to anything, it will be a first. His three comments are completely representative of all his past contributions.

All of them? au contraire, my friend -- while snarky, I maintain that my rejoinders to you are substantive enough. Nice to see you upholding your usual ruggedly individualistic standards for intellectual honesty, though, Yancey.

See, your problem is your presumption that you should be taken seriously. Alas, not only is that an assertion not in evidence, but I'm afraid your history of espousing the chatechism of your loony libertarian faith rather undermines the contention.

As for a substantive rebuttal, I can't help but wonder how "substantive" it is to respond with criticism of an idealize and imagined (but ruggedly individualistic!) vision of the 1950s with nary a fact, but yet more idealize and imagined (but still ruggedly individualistic!) vision of the 1950s.

Posted by: Gregory on February 1, 2007 at 4:27 PM | PERMALINK
My guess is that we have a larger fraction of unemeployable people than we did 50 years ago.

Well, sure, technology makes that inevitable, as technology increases the value of labor that some people are well-suited for while decreasing the value of other labor. There is a certain, limited amount you can do to compensate for this through, e.g., education, but inevitably more and more people are going to be unemployable as technology advances.

A just society would recognize that those people are disproportionately paying the price for the benefits everyone else is enjoying, and would include substantial compensatory mechanisms to address that—or would find ways to progressively make the ability to sell labor less important to survival by increasing the equity in the distribution of capital (and land, for those purists who distinguish between land and capital).

A right-libertarian society, on the other hand, would shrug its shoulders and say “screw ’em” to those who pay the price for the prosperity of the increasingly narrow class of capitalists and elite laborers, accusing any who would point to problems in the system and suggest that justice demands some kind of accommodation of “waging class warfare”, right up until howling mobs of the poor rise up and drag the rich from their gated communities and tear them limb-from-limb in the streets in a vivid demonstration of what class warfare really can be.

Posted by: cmdicely on February 1, 2007 at 4:30 PM | PERMALINK

Yancey Ward: I agree completely that most of us are more educated today than we were then, but that does not mean it is true down the entire range of the work force.

From the report:

on average, workers who lost a full-time job from 2001 to 2003 and found a new job by the time they were interviewed in 2004 earned about 17 percent less than they would have earned had they not been displaced. That amount was roughly double the average loss in earnings incurred by workers who were displaced in the late 1990s. The increase in the size of the average loss in earnings was especially large for better educated workers

So things are getting worse for the better educated too. And we're talking about relatively recent changes, not just ones stretching back 50 years.

Posted by: alex on February 1, 2007 at 4:31 PM | PERMALINK
Of course, we had substance abuse then, but really, do you not think it is worse today than then?

Well, the most commonly and costly (in social terms) abused substance of abuse was just as available in 1950, less tightly regulated, and knowledge of, access to, and social acceptance of effective addiction treatment for any abusable substance was a lot more limited than it is today, so I'm going to have to say that, yes, substance abuse—then, as now, principally alcoholism—was at least as significant in the actual 1950s as it is today, the rightist mythology of that period as America's golden age of purity notwithstanding.

Posted by: cmdicely on February 1, 2007 at 4:35 PM | PERMALINK

Yancey Ward: In 1950 such people you described would not have been counted in the unemployed (and, consequently, could be the reason for the "trend" Kevin was worrying about).

True of women, of whom a larger percentage chose not to work outside of the home in 1950. Not true of black people and (legal) Mexican immigrants, who would have been counted in 1950.

Posted by: alex on February 1, 2007 at 4:37 PM | PERMALINK

Yancey Ward: My guess is that we have a larger fraction of unemployable people than we did 50 years ago.

cmdicely: Well, sure, technology makes that inevitable, as technology increases the value of labor that some people are well-suited for while decreasing the value of other labor.

Does technology make that inevitable? There is a difference between lower earning power and unemployability.

The problem with this whole idea of "unemployable" is that it is ill-defined, and, except for extreme cases, probably impossible to define. Furthermore I question whether many of the truly unemployable show up in unemployment surveys. How many hard core drug alcoholics or drug addicts show up in unemployment surveys as "actively looking for work"?

Lastly, I note the increasing volatility in the last 10 years for those with college or higher educations.

Posted by: alex on February 1, 2007 at 4:47 PM | PERMALINK

Of course, we had substance abuse then, but really, do you not think it is worse today than then?

No, substance abuse was probably much worse back then. As cmdicely points out above, the far most abused substance in this society is alcohol, and if you compare rates of alcohol use between the Fifties and now it's clear that people drink a lot less than they used to. Moreover, we now have far more effective treatment options, in terms of rehab facilities etc., than we did then. And let's not even address cigarettes, which kill a far lower proportion of Americans now than they did back then.

It's a common fallacy to believe that societal problems such as substance abuse (and rape, child abuse, etc.) were less common in the past, when what is actually the case is that they are simply more visible today because of our increased willingness to address them. These problems were always with us -- we just preferred to sweep them under the rug back then.

Posted by: Stefan on February 1, 2007 at 5:13 PM | PERMALINK
Does technology make that inevitable? There is a difference between lower earning power and unemployability.

There is a difference of degree, but both are manifestations of reduced demand for what is on offer; given that there are certain transaction costs associated with employment, once the value of labor drops below a certain point, that labor becomes unmarketable.

The problem with this whole idea of "unemployable" is that it is ill-defined, and, except for extreme cases, probably impossible to define.

Sure, sure, its not particularly useful as a black-white binary category, its more a matter of degree; but that it isn't easy to precisely delineate or measure doesn't mean that it isn't important, both as a factor underlying the statistics and something society morally ought to address.

Lastly, I note the increasing volatility in the last 10 years for those with college or higher educations.

Sure, while I think unemployability factors (largely through technological progress rather than personal behavioral choices) is a real and increasing factor over the long term that needs to be considered in looking at these kinds of statistics, and may explain the general direction of the trendline in long-term unemployment chart Kevin presents, I don't think it explains all the contours of employment, volatility, etc., touched on in this discussion.

Posted by: cmdicely on February 1, 2007 at 5:31 PM | PERMALINK

I have a question for those that took a pay cut:
Did you take a pay cut becuase you didn't/couldn't move to keep your salary level, or there were no positions paying your rate?

Posted by: r_m on February 1, 2007 at 6:18 PM | PERMALINK

American Hawk,

You mention that:

Income volatility is a good thing. ...That doesn't mean he's suffering.

What it represents is the spikes and valleys in an ownership society. It's shocking that liberals can manage to spin even this into a bad thing.

====================

I understand the idea that an economy having income volatility implies that there can be movement up or down in it - read opportunity.

There's a ceteris paribus disconnect when free market worshipers start talking about their "god", however. Monopolistic entities, political power decidedly in favor of those with the most, corporate welfare...these pretty much f**k up the idea that a pure free market is the most efficient means for a society to prosper.

I'd also add that from a Christian viewpoint, we do not worship an 'invisible hand' as the ultimate arbiter of a peaceful and just society. We human beings can decide how to shape society in ways that bring more opportunity to the 'least of these'. Jesus didn't accept the injustices of His time anymore than we should the injustices of today.

When there are social/institutional structures which prevent people from trying to realize full lives, regardless of whether the free market creates them, Christians have a moral obligation to overturn them. We have who have something have a moral obligation to help those with less (sometimes this comes in the form of private efforts with individuals - charity but often it requires attacking the source of the problem that puts people in such dire straits).

Regulating a free market is one way of 'overturning' these unjust social structures. Creating an economic environment in which labor is freer to move to other jobs (by eliminating the worry about where their healthcare will come from) is one needed change - single payer healthcare.

Regulating corporations that collude to break a union strike or set up roadblocks to union creation - that's another needed change.

Plenty of people suffer because of this 'Golden Age' (not unlike the one we had at the turn of the 20th Century). They suffer from not being able to pursue their own happiness - hunkering down, working for less, fearing bankruptcy from losing a job or dealing with a catostrophic illness. Please don't be glib about the suffering that is going on.

There's room for a free market system but one would hope that as a part of a larger community we would see 'we are all in this together'. If changes are needed that conflict with the free market, we should consider them and act.

Posted by: Patrick Briggs on February 1, 2007 at 6:49 PM | PERMALINK

Unfortunately there is no magic way to measure (or even define) unemployment rates.

true. However, one crude measure would be to look at the net entrants to the potential labor force vis-a-vis the total new jobs created over any given time period (e.g. a month).

Posted by: Edo on February 1, 2007 at 7:17 PM | PERMALINK

I have a question for those that took a pay cut:
Did you take a pay cut becuase you didn't/couldn't move to keep your salary level, or there were no positions paying your rate?
Posted by: r_m on February 1, 2007 at 6:18 PM | PERMALINK

In 2002, when I was laid off, I did not want to move, but I looked into it, and the job market was much worse in some other areas, so I stayed. I thought maybe I should move back "home" so I could at least get the support of my parents (ie. sponge off of them). I'm glad I didn't.

BTW - my current employer is going through a round of "stealth layoffs". We just had a record quarter, and surprise surprise, and acquisition. I'm pretty sure I'll be okay this time. But man, it sucks to see good co-workers go, just because upper management knows how to massage the numbers to make their bonus, but not to retain valuable, experienced employees.


The problem with this whole idea of "unemployable" is that it is ill-defined, . . .
Posted by: alex on February 1, 2007 at 4:47 PM | PERMALINK

Conservatives see that as a feature. Not a bug. That's the whole point of why they use this word. It's a cryptofascist code-word for "them's that don't deserve a job" or "those uppity [blank]s".

When pressed on "unemployable" conservatives always fail to define it precisely. How do I know if I'm "unemployable"? If I'm hiring someone, how do I know if they're "unemployable"? All I know is their either qualified for THIS job, or they're not.

If there's a person who's "unemployable" - then as a fellow citizen, I've got two choices; let him or her starve, or help him or her out. The win-win version of "help him or her out" is treatment programs, training programs, and minimum wage laws, to give they person an incentive to actually work. (ie. here's the deal - if you work, you'll be able to afford to support yourself).

If there are individuals for whom none of the above helping works, well, then we've got a different problem, but I'm sure that's a remarkably small subset of what contemporary conservatives consider "unemployable".

Posted by: Extradite Rumsfeld on February 1, 2007 at 7:58 PM | PERMALINK

I chose to leave my job. The commute to El Segundo 30 miles each way was too much after 5 years.

I found a job a year later that pays half what I used to make but is in Pasadena, 5 minutes from where I live.

Were there other jobs out there that payed more? Yes but in undesirable locations like Santa Monica, Orange County or 'Military-Industrial-Complex Central' - El Segundo

A lot could be solved by mandating single payer healthcare. It would free many of us up from staying in jobs that we otherwise would leave (in order to look fulltime for something more in line with our respective vocations).

Posted by: Patrick Briggs on February 1, 2007 at 8:13 PM | PERMALINK

I didn't read the other comments so this point might have been covered, but I think a less sophisticated explaination is that there is much less social stigma now to sitting on your duff and waiting to qualify for some fraudulent "disability" paymemts.

Posted by: ex-minion on February 1, 2007 at 9:30 PM | PERMALINK

Did you take a pay cut becuase you didn't/couldn't move to keep your salary level, or there were no positions paying your rate?

I couldn't make the move for a variety of reasons, not the least of which was that I didn't want to move to the new location. But at the time, there were not a lot of jobs to be had at any level. The job I ended up taking (the one that paid $15K less) - I got the job over 300 other applicants.

Posted by: maurinsky on February 2, 2007 at 12:43 AM | PERMALINK

Massachusetts is about to step off a cliff-- into compulsory health insurance. Did the legislators who drew up Massachusetts' new health plan talk to ordinary people? People like the peripatetic adjuncts who teach most of the classes in the universities that pay their tenured professors upwards of $100,000? Or just to the well-compensated experts whose own jobs include generous benefits? A college degree is now required for many jobs that simply do not pay a living wage. Look around at who it is who makes $30,000 per year. People whose expensive education went to hone skills that are undervalued in the free market graduate with debt. As they work at jobs that pay barely enough to meet their current expenses they are slipping into poverty-- but they haven't slipped far enough to be caught by the safety net for the poor. This week the Stagesource "hotline" for Boston actors listed an employment opportunity for full time work as historical characters, interacting ad lib with the public and enacting scripted scenes with fellow actors-- for $7 per hour. The Newton Tab classified advertises a customer service job for a "detail oriented person with good computer skills" for $10 per hour, and a 32 hour per week receptionist job that requires "computer proficiency" for a salary in "the low $20s". 32 hours per week at a Day Job is about all a serious artist can work and still create on a professional (if mostly unpaid) level. I think Massachusetts may be about to exile many people I love and admire. I fear that there may even be suicides prompted by this mandate. I realize that the law was passed by the legislature with the best of intentions. But it will be devastating: to visual artists, free lance musicians and writers, dancers; To people who make charity and service to the community their first priority, who do political or social work with non-profits and in home day care; To teachers of the arts to individuals and in classes outside of the schools, adjunct college teachers and high school and elementary subs. This a group whose contributions to the community far outweigh the compensation their skills and energy and talent and education can command. These people are likely to make around $30,000 per year in jobs that do not provide benefits but pay too much to qualify for health care subsidy under the new law. They've been getting along by living frugally. They taking very good care of their health and pray that they won't be felled by a major illness or run over by a truck. Most live with roommates or share a house or condo. The kind of comfortable apartment that I was able to rent for $45 a month when I moved to Boston in 1968 now costs $1500 per month, and is out of reach for a person making $30,000 per year. Now, they will be required to purchase health insurance at nearly $400 per month for an individual-- $500 if they have the bad luck to be 50 years old--with a $2000 deductible. $4000-$8000 per year! Up to 1/4 of their incomes! For COVERAGE, not care; and with no guarantee that the medical needs that may arise will in fact be covered. Fines for failure to buy in this year are small: a few hundred dollars-- but next year they will go up to one half of the insurance purchase price. 2008 will be a full blown crisis for the presently uninsured and everyone who joins their ranks when Massachusetts businesses realize that they can cut costs by shifting their medical insurance obligations to the employee and the state. What will these thousands of people do? Where can they go? Their entire emotional and financial support network will be in the same situation. This mandate threatens to make lives that, while precarious, have had balance and dignity, become simply impossible.

Posted by: G.L.Horton on February 2, 2007 at 1:37 AM | PERMALINK

bellumregio >"...The folks at the Heritage Foundation were very interested in the book Bowling Alone (the decline of American community) when it came out. Seems like suburbanization fragments community life and social interdependence in the same way ghettoization does. The only institution left for many is the radicalized megachurch with its twin appeals of personal and community renewal in end of times..."

As a follow on

Note that until the coming of the radio (1920`s) the church was the center of regular social interaction for most of the population. Once radio became central to public life, the churches lost much of their power to enforce/set social policy that they had held for much of human history. The desire of the ReThuglicans to force churches back to the center of public life is part & parcel of their attempt to destroy the New Deal framework & return us to "those thrilling days of yesteryear" when the bully pulpit was the dominant influence within society & "kill your heathen neighbor !" was the dominant paradigm.

Poor wages etc are only a part of what this is about.

"I do not feel obliged to believe that the same God who has endowed us with sense, reason, and intellect has intended us to forgo their use." - Galileo Galilei

Posted by: daCascadian on February 2, 2007 at 1:51 AM | PERMALINK

I know on a personal level that income is more volatile. I tried consulting for a while and although the pay is good when you are working, there are often large gaps in when you have income. I am now back with a large corporation and while there is a steady paycheck there is a palpable feeling of instability - that you can be let go at anytime, even someone like myself at a senior manager level. Corporations are fickle and disloyal. People are cogs - to be replaced or scrapped at will. No pensions, increasing co-pays for health insurance, less coverage for illness or disability.

We are truly in a time that marks the resurgence of the robber baron, Kevin.

Posted by: The Conservative Deflator on February 2, 2007 at 6:54 AM | PERMALINK

What many "progressives" refuse to acknowledge is that the reasons that many (whites) are afraid of being unemployed is that being poor in the United States means that you will more than likely be around large numbers of minorities.

Look at the Washington, DC area where Kevin lives. There are no neighborhoods of blue collars whites within three counties of the District of Columbia. If you live inside DC and call up a plumbers, AC repairman, or electrician, they more than likely have to drive in from Baltimore County, West Virginia, Hagerstown, or south of Fredricksburg, VA. Why? Because those are the first areas where blue collar whites feel that they can safely live.

Whites in urban areas fear unemployment and economic loss because such setbacks throw them into having to function around blacks and hispanics.

Posted by: superdestroyer on February 2, 2007 at 7:41 AM | PERMALINK

tcd: People are cogs - to be replaced or scrapped at will. No pensions, increasing co-pays for health insurance, less coverage for illness or disability.

true..look at the new strike at the harley plant in york, pa...

apparently the union had been working under a deal for the last 7-years that helped get the company in position to reap record profits..

(2% annual pay increase...no co-pay for health insurance)

now that company is in good health to return the favor...

they say they can't because in the future..

things might get bad again..

(current offer 4% pay hike each year for 3-years while co-pay for insurance rises from 2.5%..to..3.2%...to 3.9%. 2-tier pay scale for new employees...401k only - double previous match)

Posted by: mr. irony on February 2, 2007 at 1:45 PM | PERMALINK

less pay
more expensive healthcare
no protection from corp. theft of retirements funds
no unions
jobs being outsourced abroad

Before women entered the workforce in large numbers and before they entered in better than menial jobs one person could support a family.

Now it takes two people, sometimes working two jobs.

Used to be industrial jobs which earned good pay.
Now you can be a Walmart stockboy or run a gas station 'convenience' store.

What's not to love in the New World Order?

Oh, and if you want to go bankrupt because all the credit card bills have piled up to your neck...fuggedaboudit.

Posted by: MarkH on February 2, 2007 at 4:42 PM | PERMALINK




 
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