Posted on 06/08/2008 8:20:37 PM PDT by K-oneTexas
What the Media Didn’t Tell You About Friday’s Unemployment Spike By Jerry Bowyer
It wasn’t Bush, it wasn’t greedy corporations, or free trade, or history’s most over-predicted recession. It was not the oil companies, income inequality, or the excesses of cowboy capitalism. None of these things caused the unemployment rate to jump a half a percentage point in one month.
Ask yourself a few questions: Why did unemployment surge at a time when unemployment compensation claims are historically low? More to the point, how could unemployment spike this much without a coinciding spike in corporate lay-offs?
The answer to all of these questions is same: because very few people lost jobs last month. This huge jump in the size of the unemployed comes from new entrants to the economy – hundreds of thousands of them. In short, well over 600,000 people who were not job seekers in April became job seekers in May. And who starts looking for work at the end of Spring? That’s right – students. Hundreds of thousands of students are looking for work right now, and they’re not finding it.
Congress is to blame. Last year Congressional Democrats (along with some Stockholm-Syndromed Republicans) passed the Fair Minimum Wage Act of 2007, which started a phased hike of the minimum wage from $5.15 an hour to $7.25. Free market economists warned them that this would increase unemployment – that rapid increases in unemployment compensation hit teens and minorities the hardest. But the class-warriors are running the people’s house now, and they would hear none of that, so they took to the floor, let loose the dogs of demagoguery, and saddled America’s pizza parlors, municipal swimming pools, house painting businesses and lawn mowing services with a huge cost increase.
Now, we see the perfectly logical outcome of wage controls – rising unemployment among the most economically vulnerable. The chart above tells the story: Friday’s unemployment spike occurred overwhelmingly among teenagers, and secondarily among African Americans. Just like we said it would. A kid who is at entry level of job skills may be a good deal at 5 bucks an hour, but not at 7. Our anointed leaders gets to glory in their generosity (with other people’s money) and just so long as very few people in the media know that a demand curve slopes downward (a good bet, there), no one calls them on it.
This summer the left will make political lemonade out of a tough student job market. Heck, it may provide a small army of angry unemployed youth to man the campaign, hungry for hope and (loose) change, never once realizing that they’re working to entrench the leftie war on business which left them jobless this summer in the first place.
Additionally, not the way the jobless numbers ALWAYS decline when a lib is in the White House, despite overall economic conditions. Even under Carter, where we had the “Misery Index’ The jobless rate came down while under Reagan and Bush 1 it went UP despite greatly improved conditions. Look also how after Clinton was elected the numbers SUDDENLY began to drop and continued to do so until Bush took office.
This is actually quite amazing when it is viewed in the political context.
http://www.miseryindex.us/urbymonth.asp
YEAR MONTH RATE
1969- 01 3.40 Nixon
1969- 02 3.40
1969- 03 3.40
1969- 04 3.40
1969- 05 3.40
1969- 06 3.50
1969- 07 3.50
1969- 08 3.50
1969- 09 3.70
1969- 10 3.70
1969- 11 3.50
1969- 12 3.50
1970- 01 3.90
1970- 02 4.20
1970- 03 4.40
1970- 04 4.60
1970- 05 4.80
1970- 06 4.90
1970- 07 5.00
1970- 08 5.10
1970- 09 5.40
1970- 10 5.50
1970- 11 5.90
1970- 12 6.10
1971- 01 5.90
1971- 02 5.90
1971- 03 6.00
1971- 04 5.90
1971- 05 5.90
1971- 06 5.90
1971- 07 6.00
1971- 08 6.10
1971- 09 6.00
1971- 10 5.80
1971- 11 6.00
1971- 12 6.00
1972- 01 5.80
1972- 02 5.70
1972- 03 5.80
1972-04 5.70
1972-05 5.70
1972-06 5.70
1972-07 5.60
1972-08 5.60
1972-09 5.50
1972-10 5.60
1972-11 5.30
1972-12 5.20
1973-01 4.90
1973-02 5.00
1973-03 4.90
1973-04 5.00
1973-05 4.90
1973-06 4.90
1973-07 4.80
1973-08 4.80
1973-09 4.80
1973-10 4.60
1973-11 4.80
1973-12 4.90
1974-01 5.10
1974-02 5.20
1974-03 5.10
1974-04 5.10
1974-05 5.10
1974-06 5.40
1974-07 5.50
1974-08 5.50 Ford
1974-09 5.90
1974-10 6.00
1974-11 6.60
1974-12 7.20
1975-01 8.10
1975-02 8.10
1975-03 8.60
1975-04 8.80
1975-05 9.00
1975-06 8.80
1975-07 8.60
1975-08 8.40
1975-09 8.40
1975-10 8.40
1975-11 8.30
1975-12 8.20
1976-01 7.90
1976-02 7.70
1976-03 7.60
1976-04 7.70
1976-05 7.40
1976-06 7.60
1976-07 7.80
1976-08 7.80
1976-09 7.60
1976-10 7.70
1976-11 7.80
1976-12 7.80
1977-01 7.50 Carter
1977-02 7.60
1977-03 7.40
1977-04 7.20
1977-05 7.00
1977-06 7.20
1977-07 6.90
1977-08 7.00
1977-09 6.80
1977-10 6.80
1977-11 6.80
1977-12 6.40
1978-01 6.40
1978-02 6.30
1978-03 6.30
1978-04 6.10
1978-05 6.00
1978-06 5.90
1978-07 6.20
1978-08 5.90
1978-09 6.00
1978-10 5.80
1978-11 5.90
1978-12 6.00
1979-01 5.90
1979-02 5.90
1979-03 5.80
1979-04 5.80
1979-05 5.60
1979-06 5.70
1979-07 5.70
1979-08 6.00
1979-09 5.90
1979-10 6.00
1979-11 5.90
1979-12 6.00
1980-01 6.30
1980-02 6.30
1980-03 6.30
1980-04 6.90
1980-05 7.50
1980-06 7.60
1980-07 7.80
1980-08 7.70
1980-09 7.50
1980-10 7.50
1980-11 7.50
1980-12 7.20
1981-01 7.50 Reagan
1981-02 7.40
1981-03 7.40
1981-04 7.20
1981-05 7.50
1981-06 7.50
1981-07 7.20
1981-08 7.40
1981-09 7.60
1981-10 7.90
1981-11 8.30
1981-12 8.50
1982-01 8.60
1982-02 8.90
1982-03 9.00
1982-04 9.30
1982-05 9.40
1982-06 9.60
1982-07 9.80
1982-08 9.80
1982-09 10.10
1982-10 10.40
1982-11 10.80
1982-12 10.80
1983-01 10.40
1983-02 10.40
1983-03 10.30
1983-04 10.20
1983-05 10.10
1983-06 10.10
1983-07 9.40
1983-08 9.50
1983-09 9.20
1983-10 8.80
1983-11 8.50
1983-12 8.30
1984-01 8.00
1984-02 7.80
1984-03 7.80
1984-04 7.70
1984-05 7.40
1984-06 7.20
1984-07 7.50
1984-08 7.50
1984-09 7.30
1984-10 7.40
1984-11 7.20
1984-12 7.30
1985-01 7.30
1985-02 7.20
1985-03 7.20
1985-04 7.30
1985-05 7.20
1985-06 7.40
1985-07 7.40
1985-08 7.10
1985-09 7.10
1985-10 7.10
1985-11 7.00
1985-12 7.00
1986-01 6.70
1986-02 7.20
1986-03 7.20
1986-04 7.10
1986-05 7.20
1986-06 7.20
1986-07 7.00
1986-08 6.90
1986-09 7.00
1986-10 7.00
1986-11 6.90
1986-12 6.60
1987-01 6.60
1987-02 6.60
1987-03 6.60
1987-04 6.30
1987-05 6.30
1987-06 6.20
1987-07 6.10
1987-08 6.00
1987-09 5.90
1987-10 6.00
1987-11 5.80
1987-12 5.70
1988-01 5.70
1988-02 5.70
1988-03 5.70
1988-04 5.40
1988-05 5.60
1988-06 5.40
1988-07 5.40
1988-08 5.60
1988-09 5.40
1988-10 5.40
1988-11 5.30
1988-12 5.30
1989-01 5.40 Bush, G.H.W.
1989-02 5.20
1989-03 5.00
1989-04 5.20
1989-05 5.20
1989-06 5.30
1989-07 5.20
1989-08 5.20
1989-09 5.30
1989-10 5.30
1989-11 5.40
1989-12 5.40
1990-01 5.40
1990-02 5.30
1990-03 5.20
1990-04 5.40
1990-05 5.40
1990-06 5.20
1990-07 5.50
1990-08 5.70
1990-09 5.90
1990-10 5.90
1990-11 6.20
1990-12 6.30
1991-01 6.40
1991-02 6.60
1991-03 6.80
1991-04 6.70
1991-05 6.90
1991-06 6.90
1991-07 6.80
1991-08 6.90
1991-09 6.90
1991-10 7.00
1991-11 7.00
1991-12 7.30
1992-01 7.30
1992-02 7.40
1992-03 7.40
1992-04 7.40
1992-05 7.60
1992-06 7.80
1992-07 7.70
1992-08 7.60
1992-09 7.60
1992-10 7.30
1992-11 7.40
1992-12 7.40
1993-01 7.30 Clinton
1993-02 7.10
1993-03 7.00
1993-04 7.10
1993-05 7.10
1993-06 7.00
1993-07 6.90
1993-08 6.80
1993-09 6.70
1993-10 6.80
1993-11 6.60
1993-12 6.50
1994-01 6.60
1994-02 6.60
1994-03 6.50
1994-04 6.40
1994-05 6.10
1994-06 6.10
1994-07 6.10
1994-08 6.00
1994-09 5.90
1994-10 5.80
1994-11 5.60
1994-12 5.50
1995-01 5.60
1995-02 5.40
1995-03 5.40
1995-04 5.80
1995-05 5.60
1995-06 5.60
1995-07 5.70
1995-08 5.70
1995-09 5.60
1995-10 5.50
1995-11 5.60
1995-12 5.60
1996-01 5.60
1996-02 5.50
1996-03 5.50
1996-04 5.60
1996-05 5.60
1996-06 5.30
1996-07 5.50
1996-08 5.10
1996-09 5.20
1996-10 5.20
1996-11 5.40
1996-12 5.40
1997-01 5.30
1997-02 5.20
1997-03 5.20
1997-04 5.10
1997-05 4.90
1997-06 5.00
1997-07 4.90
1997-08 4.80
1997-09 4.90
1997-10 4.70
1997-11 4.60
1997-12 4.70
1998-01 4.60
1998-02 4.60
1998-03 4.70
1998-04 4.30
1998-05 4.40
1998-06 4.50
1998-07 4.50
1998-08 4.50
1998-09 4.60
1998-10 4.50
1998-11 4.40
1998-12 4.40
1999-01 4.30
1999-02 4.40
1999-03 4.20
1999-04 4.30
1999-05 4.20
1999-06 4.30
1999-07 4.30
1999-08 4.20
1999-09 4.20
1999-10 4.10
1999-11 4.10
1999-12 4.00
2000-01 4.00
2000-02 4.10
2000-03 4.00
2000-04 3.80
2000-05 4.00
2000-06 4.00
2000-07 4.00
2000-08 4.10
2000-09 4.00
2000-10 3.90
2000-11 3.90
2000-12 3.90
2001-01 4.20 Bush, G.W.
2001-02 4.20
2001-03 4.30
2001-04 4.40
2001-05 4.30
2001-06 4.50
2001-07 4.60
2001-08 4.90
2001-09 5.00
2001-10 5.40
2001-11 5.60
2001-12 5.70
2002-01 5.60
2002-02 5.70
2002-03 5.70
2002-04 5.90
2002-05 5.80
2002-06 5.80
2002-07 5.80
2002-08 5.70
2002-09 5.70
2002-10 5.70
2002-11 5.90
2002-12 6.00
2003-01 5.80
2003-02 5.90
2003-03 5.80
2003-04 6.00
2003-05 6.10
2003-06 6.30
2003-07 6.20
2003-08 6.10
2003-09 6.10
2003-10 6.00
2003-11 5.90
2003-12 5.70
2004-01 5.60
2004-02 5.60
2004-03 5.70
2004-04 5.60
2004-05 5.60
2004-06 5.60
2004-07 5.50
2004-08 5.40
2004-09 5.40
2004-10 5.50
2004-11 5.40
2004-12 5.40
2005-01 5.20
2005-02 5.40
2005-03 5.20
2005-04 5.20
2005-05 5.10
2005-06 5.00
2005-07 5.00
2005-08 4.90
2005-09 5.10
2005-10 5.00
2005-11 5.00
2005-12 4.90
2006-01 4.70
2006-02 4.80
2006-03 4.70
2006-04 4.70
2006-05 4.60
2006-06 4.60
2006-07 4.80
2006-08 4.70
2006-09 4.60
2006-10 4.40
2006-11 4.50
2006-12 4.50
2007-01 4.60
2007-02 4.50
2007-03 4.40
2007-04 4.50
2007-05 4.50
2007-06 4.50
2007-07 4.60
2007-08 4.60
2007-09 4.70
2007-10 4.70
2007-11 4.70
2007-12 5.00
2008-01 4.90
2008-02 4.80
2008-03 5.10
2008-04 5.00
You expect someone to explain what you missed in not reading the article and making idiotic comments on this thread? You’re worse than the Congresswoman demanding that the Oil Execs prove to her that they’re not manipulating the price of oil.
Democrats love the misery index. They have a pathological need to complain and whine 24/7 since its the easiest way to make money to survive in a nanny state.
This guys example about the minimum wage going up does not seem to really add up too. Most people that apply to minimum wage jobs are students. Maybe they are hiring less, but these employees tend to not get unemployment.
I hate to say it but I think I think this author is full of bull to blame the Dems. After all a Republican is the president.
Our American workers have to compete with millions of illegal workers but lets not let our lower paid citizens have a decent minimum wage to help make up for it.
It’s ridiculous to pretend there is any kind of free market going on here.
Also, with unemployment at 5.5% that is low. But if we really look it is telling us we are 94.5% of the available population to work is employed.
Looking at the BLS publications did speak to teens and teenagers unemploment rates. It was the highest rate per BLS published document (June 2008) and a roughly an 8% increase from prior (Apr-Jun 2007) BLS ublication. Yes it occurrs annually during the summer, however with the increased minamum wage it would have an impact on businesses. Maybe not a tremendous one but an impact none the less to increase the over all rate by almost 1% from April (4.3%) to May (5.5%) 2008.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
(Bolded is my emphasis): [http://www.bls.gov/news.release/empsit.htm]
Media contact: (202) 691-5902 Friday, June 6, 2008. THE EMPLOYMENT SITUATION: MAY 2008 The unemployment rate rose from 5.0 to 5.5 percent in May, and nonfarm payroll employment continued to trend down (-49,000), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. In May, employ- ment continued to fall in construction, manufacturing, retail trade, and temporary help services, while health care continued to add jobs. Average hourly earnings rose by 5 cents, or 0.3 percent, over the month. Unemployment (Household Survey Data) The number of unemployed persons increased by 861,000 to 8.5 million in May, after seasonal adjustment, and the unemployment rate rose by 0.5 per- centage point to 5.5 percent. A year earlier, the number of unemployed per- sons was 6.9 million, and the jobless rate was 4.5 percent. (See table A-1.) The unemployment rates for adult men (4.9 percent), adult women (4.8 per- cent), teenagers (18.7 percent), whites (4.9 percent), and blacks (9.7 per- cent) rose in May. The jobless rate for Hispanics (6.9 percent) was unchanged. The unemployment rate for Asians was 3.8 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.) Among the unemployed, the number of reentrants and new entrants to the labor force rose in May, by 326,000 and 204,000, respectively. The number of persons who had lost their last job increased by 268,000 over the month to 4.3 million. Over the past 12 months, the number of unemployed job losers has risen by 907,000. (See table A-8.) The number of newly unemployed--those jobless fewer than 5 weeks--rose by 760,000 to 3.2 million in May. The number of persons unemployed for 27 weeks or more increased by 197,000 to 1.6 million. This group accounted for 18.3 per- cent of the unemployed in May. (See table A-9.) Total Employment and the Labor Force (Household Survey Data) The civilian labor force rose by 577,000 to 154.5 million in May, and the labor force participation rate edged up to 66.2 percent. Total employment was little changed at 146.0 million. The employment-population ratio, at 62.6 per- cent, also was little changed over the month. (See table A-1.) The number of persons who worked part time for economic reasons, at 5.2 mil- lion in May, was essentially unchanged over the month but was up by 764,000 over the past 12 months. These individuals indicated that they were working part time because their hours had been cut back or they were unable to find full-time jobs. (See table A-5.) About 7.7 million persons held more than one job in May. Multiple jobholders represented 5.3 percent of the employed, the same as a year earlier. (See table A-6.)
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[http://www.bls.gov/news.release/youth.nr0.htm] From April to July 2007, the number of employed youth 16 to 24 years old increased by 2.3 million to 21.7 million, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. July is the traditional summer- time peak for youth employment. This summer’s increase in youth employment was slightly lower than last year's 2.5 million increase. Unemployment among youth increased by 548,000 between April and July, a smaller rise than in 2006. (Because this analysis focuses on the seasonal changes in youth employment and unemployment that occur every spring and summer, the data are not seasonally adjusted.) Labor force The youth labor force--16- to 24-year-olds working or actively looking for work--grows sharply between April and July each year. During these months, large numbers of high school and college students take or search for summer jobs, and many graduates enter the labor market to look for or begin permanent employment. This summer, the youth labor force grew by 2.9 million to a total of 24.3 million in July. (See table 1.) The labor force participation rate for youth--the proportion of their population working or looking for work--was 65.0 percent in July 2007, down from 66.7 percent in July 2006 and about 13 percentage points below its peak for that month in 1989 (77.5 percent). Over the 1989-2007 period, the proportion of youth enrolled in school in July trended up; youth enrolled in school are much less likely than those not in school to be in the labor force. The July 2007 labor force participation rates for 16- to 24-year-old men (67.9 percent) and women (62.1 percent) were lower than a year earlier. For several decades prior to 1989, young men’s July labor force participation rate showed no clear trend, ranging from 81 to 86 percent. Since July 1989, however, their participation rate has declined by about 15 percentage points. Young women’s July labor force participation rate peaked in 1989 after a long-term upward trend; their rate has fallen by about 10 percentage points since then. The July participation rates for whites (68.0 percent), blacks (54.1 per- cent), and Hispanics (59.5 percent) declined over the year. For all three groups, labor force participation rates were more than 10 percentage points lower than their peak levels for July 1989. The participation rate for Asian youth in July 2007 (49.4 percent) was not much different from July 2006. (See table 2.) - 2 - Employment In July 2007, 21.7 million 16- to 24-year-olds were employed. The em- ployment-population ratio for youth--the proportion of the 16- to 24-year- old civilian noninstitutional population that was employed--was 58.0 per- cent, 1.2 percentage points lower than in July 2006. The ratio has fallen by about 11 percentage points since its peak in July 1989. The July 2007 employment-population ratios for young men (60.3 percent), whites (61.7 percent), and Hispanics (52.5 percent) were lower than a year earlier; the rates for young women (55.6 percent), blacks (43.0 percent), and Asians (45.6 percent) were little changed. (See table 2.) In July 2007, 22 percent of employed youth worked in the leisure and hospitality industry (which includes food services) and 20 percent worked in retail trade. In addition, nearly two-fifths of employed youth worked in education and health services, professional and business services, government, construction, and manufacturing combined. (See table 3.) Unemployment In July 2007, 2.6 million youth were unemployed. The youth unemployment rate (10.8 percent) was little different from July 2006. The July 2007 un- employment rates for young men (11.1 percent), women (10.4 percent), whites (9.3 percent), Asians (7.7 percent), and Hispanics (11.8 percent) showed little change from a year earlier. The rate for black youth (20.5 percent) decreased over the year. (See table 2.)
“In my south Texas town, there are ‘help wanted’ signs in many prominent business windows!”
same around here, plus the resort areas are hiring Eastern European college students on special visas to fill thousands of jobs.
“In my south Texas town, there are ‘help wanted’ signs in many prominent business windows!”
same around here, plus the resort areas are hiring Eastern European college students on special visas to fill thousands of jobs.
Yup. All low skilled jobs are being sucked up by these economic leeches. Construction used to be an honorable job that payed a decent wage (not great, but decent). Those are gone now unless you are a native spanish speaker (i.e., illegal).
Fast food joints are about the same. I went to a Wendy's a couple of weeks ago, and there wasn't a person there who could speak more than minimal fractured english.
These days, when I see a sign that says "se habla espanol", I translate it as, "we cater to illegals, please do your business elsewhere".
If it is true (and I don’t know that it is) that unemployment specifically reflects people who were employed, and are now on “unemployment”, then is it possible that this year there is something different, such that teenagers who have quit their jobs they held during the school year qualify for unemployment at a much higher rate than previously, and have decided to collect unemployment, at least for the short term, rather than take a summer job?
In other words, was there something in one of these Democrat bills that made it easier for part-time workers earning minimum wage to collect unemployment insurance?
It seems odd that May would see a sharp increasae in the number of teens unemployed.
Oh, but I keep forgetting, the numbers are “seasonally adjusted”, so in fact a DECREASE in the number of teens that GOT jobs could show up as an increase in the number collecting unemployment, simply because of the math used to adjust for the “normal” year’s increase in jobs to teens.
If THAT is the case, then the theory about minimum wage could be true, if not because the teens aren’t worth it, then possibly because those jobs are filled by adults who were attracted to the higher wages for trivial labor.
In other words, one impact of minimum wage increases is to make the jobs more attractive, and thus crowd out lesser skilled workers, even IF the businesses are able to pass on costs associated with the increased wages.
In the DC area, they have reported (anecdotally) that we are having trouble getting foreign students to take our low-wage jobs that Americans won’t do (actually, that is serious, it’s hard to get americans to fill all the lifeguard positions at the pool because the jobs are pretty boring).
Turns out they can’t earn enough money now that the dollar is so cheap compared to the Euro. It isn’t worth it for them to come here, they just don’t take back enough money.
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