Connect with us

Economy

What to watch on jobs day: The unemployment rate continues to climb but not equally for all demographic groups

Published

on


In April, the Bureau of Labor Statistics (BLS) reported that 20.5 million jobs were lost and the unemployment rate rose faster than ever before, hitting 14.7%, the highest unemployment rate since the Great Depression. May’s unemployment rate is expected to be far higher. Initial unemployment insurance claims suggest an excess of 10 million more people lost their jobs between mid-April and mid-May, the reference period for tomorrow’s report.

In advance of tomorrow’s jobs data from BLS, let’s take a minute to look more closely at the unemployment rate across various demographic groups and consider the extent of economic pain missed in the official count of the unemployed. Because of the use of the microdata in our calculations, the numbers in the figure below are not seasonally adjusted and therefore do not match the topline seasonally adjusted data released by BLS. The microdata, however, allow us to measure the unemployment rate and calculate the adjusted unemployment rate across a variety of groups not reported by the BLS.

The official unemployment rate is in dark blue in Figure A below. As you can see, the unemployment rate is incredibly high across the board. Except for those with an advanced degree, the unemployment rate of all groups has exceeded the highest level the overall unemployment rate hit at the height of the Great Recession, when it reached 10.0% in 2009 (and all groups have exceeded their group’s highest unemployment of the Great Recession). Even though jobs were lost across the board, the data indicate that job losses were particularly stark for black and brown workers, those who are less likely to be able to economically weather the storm. Historically higher unemployment rates and lower liquid savings make job losses even more devastating for African American workers and their families.

The highest unemployment rates in April were found among women generally, black and Hispanic workers, and especially Hispanic women, whose unemployment rate hit 20.5% in April.

The figure also shows that young people have been hit especially hard in this pandemic recession. As of April, more than one quarter (28.1%) of 16-23 year olds are unemployed. Those graduating right now are in a particular tough spot, as they are experiencing extremely high unemployment rates and low job opportunities but do not qualify for unemployment insurance, even under the expansive definitions of the CARES Act. A jobs seekers unemployment insurance program would provide much needed assistance to these young people without sufficient or recent work histories to qualify under current programs.

Furthermore, the unemployment rate is much higher for workers with lower levels of educational attainment. Even among the relatively more credentialed, those with historically more opportunities in the labor market, one in 10 workers with a bachelor’s degree are unemployed.

Figure A

The light blue bars and the totals off to the right of each set of bars represent an estimate of the unemployment rate if all those who are out of work as a result of the virus were counted as unemployed. This “adjusted” unemployment rate includes those who are officially unemployed, the misclassified (the excess number of those who reported that they were employed but not at work for other reasons), and those who had been employed but left the labor force when the virus hit but would otherwise have been counted as unemployed if they were actively seeking work. The misclassified are calculated across various demographic groups as indicated by BLS’ discussion of Table C found here. They suggest that many workers who classified as employed, but not reporting to work for “other reasons,” should be counted among the temporarily unemployed, not the employed.

Furthermore, millions of would-be job seekers have left the labor force in the time of COVID-19 for various reasons, whether it’s because they don’t see any prospects in their occupation, they are not looking because they are concerned about their health or the health of members of their household, or they have to care for a child whose school or daycare closed. When those workers, many of whom left the labor force during the stay-at-home orders, are added in to the number of unemployed, the “adjusted” unemployment rate would have hit 23.4% in April. The data released tomorrow will likely be far worse.

The adjusted definition of unemployed highlights the extent of economic pain felt across the country, even among the most privileged demographic groups. But, even this expanded definition reveals that this recession has magnified disparities that already existed. The adjusted unemployment rate for white male workers hits 18.6% but reached more than one-third of Latina workers (33.8%). More than one-fourth of black, Hispanic, and Asian workers were unemployed by this definition.

What is also true in looking at both the official and adjusted unemployment rates is that the historical black–white unemployment rate ratio of 2-to-1 has fallen dramatically. In April 2020, the ratio was closer to 1.3-to-1. One reason for this is that the COVID-19 shock that shuttered businesses has been so utterly enormous and rapid that the wave of layoffs has smashed deeper into the workforce and even swept away workers in historically privileged positions.

This analysis raises a few larger questions to watch in the coming months. Will the narrowing of the black–white unemployment gap persist as recovery begins in coming months? While the job losses occurred across the board to a large extent, will the job gains also occur across the board or will they be more concentrated among those groups with historical advantage over others? Conversely, will the extended pain from this recession linger on certain groups more than others?

To help the economy reverse course and support workers and their families through this time, policymakers need to extend the expanded unemployment insurance benefits until we get to the other side of the pandemic and until the labor market recovers. Policymakers also need to provide additional aid to state and local governments who most certainly will face drastic budget cuts, which will not only harm public-sector employment but also hamper the recovery.



Source link

قالب وردپرس

Economy

Can Truth and Reconciliation Prevent the Crash & Burn?

Published

on


QUESTION: Hi Marty,

After Apartheid, South Africa assembled the Truth and Reconciliation Commission. Do you think there is any chance that in five or so years that we could have a similar commission where politicians, business leaders, scientists and media figures admit their crimes and lies in exaggerating the virus? In such a commission victims can also give statements about the lives and livelihoods lost due to the fake lockdown.

SMD
ANSWER: I seriously doubt that will happen near-term. Perhaps it will occur after they have destroyed everything post-2032, and those who thought the left would be Utopia discover that they too will surrender all their freedom. We are in such a political crisis where the right just wants to be left alone and the left demands they are subjugated and reduced to economic slaves. This is certainly not the country I had thought I lived in. My family has fought in every war since the American Revolution. My cousin still has the musket on the wall from the Revolution. All I can do is hope for is the breakup of the United States to be able to live in peace or be forced to leave. Perhaps this is the choice many of our ancestors had to make to leave Europe in search of freedom.

 

 

This political crisis has devolved into such hatred it is unimaginable. It began with Hillary calling anyone who voted for Trump “deplorable” and this has escalated into not just class warfare, but race, political warfare, and an all-out war against the history and the past. Even the US military base in the Indian Ocean is under attack because the USA leases it from Britain and they are calling this colonialism. We are declining into the collapse of Western Civilization as we have known it. There is nothing that will stand the test of time. Everything offends someone and civilization requires cooperation where everyone benefits by coming together. This rising tide of hatred is tearing everything apart. Perhaps now you will understand why Socrates’ forecast that the United States and the European Union will break apart. Our civilizations cannot be maintained with such hatred and confrontation.

You cannot allow one philosophy to subjugate everyone else. That is NOT what a free society is all about. You cannot allow even religion to take control of government (i.e. Iran). What if that Muslim Shiye philosophy took hold in the USA and Congress then enacts laws that women must wear hijabs, niqab veil burqas, jilbabs, or face covers to uphold Islam tradition? Whatever the philosophy or religion one group has, they have no right to impose it upon everyone else. We have reached the point where the United States is no longer a free society. There is no respect for human rights, which includes the right to be left alone to pursue your life, liberty, and happiness. What you earn is not respected and you can no longer try to build wealth for your family to leave behind, for even that is subject to confiscation under inheritance taxes.



Source link

قالب وردپرس

Continue Reading

Economy

UI claims and GDP growth are historically bad: Now is not the time to cut benefits that are supporting jobs

Published

on


Last week 2 million workers applied for unemployment insurance (UI) benefits. Breaking that down: 1.2 million applied for regular state unemployment insurance (not seasonally adjusted), and 830,000 applied for Pandemic Unemployment Assistance (PUA). Many headlines this morning are saying there were 1.4 million UI claims last week, but that’s not the right number to use. For one, it ignores PUA, the federal program that is serving millions of workers who are not eligible for regular UI, like the self-employed. It also uses seasonally adjusted data, which is distorted right now because of the way Department of Labor (DOL) does seasonal adjustments.

Last week was the 19th week in a row that unemployment claims have been more than twice the worst week of the Great Recession. If you restrict this comparison just to regular state claims—because we didn’t have PUA in the Great Recession—this is the 19th week in a row that claims are more than 1.25 times the worst week of the Great Recession.

Republicans in the Senate just allowed the across-the-board $600 increase in weekly UI benefits to expire. They are proposing to (essentially) replace it with a $200 weekly payment. That $400 cut in benefits is not just cruel, it’s terrible economics. These benefits are supporting a huge amount of spending by people who would otherwise have to cut back dramatically. The spending made possible by the $400 that the Senate wants to cut is supporting 3.4 million jobs. If you cut the $400, you cut those jobs. This map shows the number of jobs that will be lost in each state if the extra $600 unemployment benefit is cut to $200.

Figure A

Today’s release of GDP data underscores how wrong it is to cut those benefits. Second-quarter GDP collapsed at the fastest rate on record—and the second quarter includes the employment bounce-back of May and June. And because we did not put the public health measure in place necessary to successfully reopen, the coronavirus has spiked, and the economic improvement we saw in May and June has stalled, if not reversed. Now is not the time to cut benefits that are supporting jobs.

But what about the potential work disincentive of the extra $600? After all, the additional payment means many people have higher income on unemployment insurance than they did from their prior job. It turns out that the concern about the disincentive effect has been massively overblown. In fact, rigorous empirical studies show that any theoretical disincentive effect has been so minor that it cannot even be detected. For example, a new study by Yale economists found no evidence that recipients of more generous benefits were less likely to return to work. A case in point: in May and June—with the $600 in place—7.5 million people went back to work. And, about 70% of likely UI recipients who returned to work were making more on UI than their prior wage. Further, there are 14 million more unemployed workers than job openings, meaning millions will remain jobless no matter what they do. Slashing the $600 cannot incentivize people to get jobs that are not there. Even further, many people are simply unable to take a job right now because it’s not safe for them or their family, or because they have care responsibilities as a result of the virus. Slashing the $600 cannot incentivize them to get jobs, it will just cause hardship.

Slashing the $600 will also exacerbate racial inequality. Due to the impact of historic and current systemic racism, Black and brown communities are suffering more from this pandemic, and have less wealth to fall back on. They will take a much bigger hit if the $600 is cut. This is particularly true for Black and brown women and their families, because in this recession, these women have seen the largest job losses of all.

Figure B combines the most recent data on both continuing claims and initial claims to get a measure of the total number of people “on” unemployment benefits as of July 25. DOL numbers indicate that right now, 33.8 million workers are either on unemployment benefits, have been approved and are waiting for benefits, or have applied recently and are waiting to get approved. But importantly, Figure B provides an upper bound on the number of people “on” UI, for two reasons: (1) Some individuals may be being counted twice. Regular state UI and PUA claims should be non-overlapping—that is how DOL has directed state agencies to report them— but some individuals may be erroneously counted as being in both programs; (2) Some states are likely including some back weeks in their continuing PUA claims, which would also lead to double counting (the discussion around Figure 3 in this paper covers this issue well).

Figure B

Figure B

Figure C shows continuing claims in all programs over time (the latest data are for July 11). Continuing claims are more than 28 million above where they were a year ago. However, the above caveat about potential double counting applies here too, which means the trends over time should be interpreted with caution.

Figure C

Figure C





Source link

قالب وردپرس

Continue Reading

Economy

Silence is Stupid, Argument is Foolish

Published

on


When I was young, I never backed down in an intellectual argument.  Part of the reason, admittedly, was that I was starved for abstract debate.  Before the internet, anyone who wanted to talk ideas had to corner an actual human willing to do the same.  Another big reason, though, was that I didn’t want to look stupid.  A smart person always has a brilliant riposte, right?  And if you shut up, it must be because you’re stumped.

At this stage in my life, much has changed.  Public debates aside, I now only engage in intellectual arguments with thinkers who play by the rules.  What rules?  For starters: remain calm, take nothing personally, use probabilities, face hypotheticals head-on, and spurn Social Desirability Bias like the plague.  If I hear someone talking about ideas who ignores these rules, I take evasive action.  If cornered, I change the subject.

Why?  Because I now realize that arguing with unreasonable people is foolish.  Young people might learn something at the meta-level – such as “Wow, so many people are so unreasonable.”  But I’m long past such doleful lessons.  Note: “Being unreasonable” is not a close synonym for “Agrees with me.”  Most people who agree with me are still aggressively unreasonable.  Instead, being reasonable is about sound intellectual methods – remaining calm, taking nothing personally, using probabilities, facing hypotheticals head-on, spurning Social Desirability Bias, and so on.

In classic Dungeons & Dragons, characters have two mental traits: Intelligence and Wisdom.  The meaning matches everyday English: high-Intelligence characters are good at solving complex puzzles; high-Wisdom characters have a generous helping of common-sense.

Using the game to illuminate life: Running out of things in say in an argument is indeed a sign of low Intelligence, just as I held when I was a teenager.  A genius never runs out of rebuttals.  At the same time, however, joining a fruitless dispute is a sign of low Wisdom.  You have better things to do with your life than tell hyperventilating people all the reasons they’re wrong.  A really wise person won’t merely break off such exchanges, but stop them before they start – and get back to work on his Bubble.

Here, in short, is wisdom: Be not a hostage to your own intellectual pride.

P.S. How do you know if a person plays by the rules until you actually engage them?  Most obviously, watch how they argue with other people!  If that’s inadequate, give promising strangers a brief trial period, but be ready to disengage if things go south.

(1 COMMENTS)



Source link

قالب وردپرس

Continue Reading

Trending