Saturday, August 8, 2009

Is Unemployment Really Down or Have Workers Just Given Up and Fallen Off the Dole?

How can the unemployment rate be down when employers aren't hiring new workers?

Ask yourself this simple question the next time a government bureaucrat starts talking about economic recovery.

The article reprinted below from the Cleveland (Ohio) Business News just about sums up the situation. Employers aren't hiring so how can the unemployment rate be going down?

The U.S. Bureau of Labor Statistics which publishes the unemployment data the media loves to regurgitate without analysis has fabricated unemployment data for years. The term "discouraged worker" or a person who has exhausted their unemployment benefits and has just given up looking for a job was banned under the Clinton administration. The actual number was distorted to make the suffering of unemployed men and women look happy and wonderful.

At least on paper they had found jobs. In the real world, well....not so fast....

Today, when you include underemployed and discouraged workers to the actual pool of unemployed workers many estimates peg the "official" unemployment rate at between 15% and 22%.

Here is a survey by Fox News claiming the current rate is 16.3% and still rising.

According to the government's "actual" statistics the rate for July 2009 was 9.4%, down from 9.5% in June.

Yesterday when Mr. Obama was triumphing the fact that yet another 247,000 American workers lost their jobs in July and that was GOOD NEWS, I wish someone in the mainstream media pool would have put down their Blackberry and asked him the simple question:

"If nearly a quarter of a million people lost their jobs in July how could the unemployment rate drop and not go up?"

Think about it, will you?

Robert J. Abalos, Esq.


Companies ending job cuts, but not hiring

Long-term unemployed on upswing
Friday, July 24, 2009
Christopher S. Rugaber
Associated Press

Washington- As the recession eases, companies are cutting fewer jobs. Yet they remain reluctant to hire, leaving potentially millions of people without any financial aid long after their unemployment benefits run out.

That grim picture was reinforced Thursday by the latest government report on jobless benefits. The number of first-time claims - a proxy for the pace of layoffs - remained below the peak levels of the spring. At the same time, though, the total number of people receiving unemployment aid topped 9.1 million.

"We are left with a bifurcated job market, with fewer newer claimants but a rising tide of long-term unemployed," said Cary Leahey, an economist at Decision Economics. "Some will exhaust all their benefits and be at wits' end to make ends meet."

The National Employment Law Project, an advocacy group, projects that 540,000 people will use up their unemployment benefits by the end of September. It estimates 1.5 million will have run out by year's end.

Those benefits include up to 53 weeks of emergency extended coverage, on top of the standard 26 weeks of aid typically provided by most states.

The loss of all unemployment aid for so many jobless Americans could lead to calls for further benefits extensions. Congress first provided federal emergency benefits last year. Those benefits were extended in February by the Obama administration's stimulus package.

Even if the economy begins to recover this summer, as some economists expect, growth will likely be anemic, and unemployment will continue to rise. Most private economists and the Federal Reserve expect the unemployment rate to top 10 percent by year-end.

The rate for June hit 9.5 percent, a 26-year high.

J.C. Penney Co. opened a new store in New York City on Thursday, creating 500 positions. Company officials told The Associated Press that they received 15,000 applications.

Mark Vitner, senior economist at Wells Fargo, said nearly all companies that are reporting healthy second-quarter profits are benefiting from cost cuts, not increased sales. But they'll need to see sales rebound before they'll hire, he said.