The Jobless Recovery

Economic Policy Institute ^ | January 24, 2002 | Jared Bernstein

[Red Jones]

The jobless recovery Suffering from the recession’s aftershocks, labor market conditions continue to worsen

by Jared Bernstein

Though the recession that began in March 2001 has not yet been declared officially over, most economists believe it ended early in 2002. However, the labor market downturn is far from behind us. Today’s labor market is much weaker than it was one or even two years ago, and the “jobless recovery” grinds on.

[Red Jones]

How cold hearted we have grown as a people. Because 40 years ago our unemployment rate was one third what it is today, marginal people could get by in our country much more reasonably than today and we used to actually care about the poor. Today we arrange our nation's economic policies in a manner that is known to drive the unemployment rate up, drive wages down, undermine social security and medicaire, and then we say that it is good.

[UnBlinkingEye]

Today we arrange our nation's economic policies in a manner that is known to drive the unemployment rate up, drive wages down, undermine social security and medicaire, and then we say that it is good.

I don't think 'we' are saying that, our political class and their multinational corporate sponsors are feeding us this pap.

[Red Jones]

the statement you quoted is one that I made. It is also a true statement. I am so sad that so many americans are so ignorant. You'd think that if someone went to american schools and took the time to get news from various media sources that they'd be well informed. Instead, they are so ignorant and it is so sad.

Most americans don't know that we're living in an age of elevated unemployment levels. We've been living in that age since around 1970. Today the unemployment level is more than double what was considered completely normal levels prior to 1970. Between 1870 and 1970 if we merely throw out 1930-1945, then we as a nation never went more than 3 consequtive years with unemployment over 4.0%. In fact it was normally 3.0-3.5%. It frequently got down under 3.0%. It even went down to 1.0% more than once. But since 1970 unemployment hasn't gone under 4.0% even once I believe. Poverty rates today are higher than 1964. The minimum wage today is lower after inflation than it was in 1965. The low interest rates we are enjoying now even used to be completely normal prior to 1960.

When you measure the pay that people used to receive for work as a basket of goods, then it has been documented that the large majority of americans working today are working for substantially lower real wages than what used to be normal. A 22 year old guy with nothing but a high school diploma could easily get a job and support a family in 1965, but not today.

We used to have a country where even marginal people were able to make it. Then in the 1960's every politician stood up and told us in speeches that wiping out poverty and helping the downtrodden was the highest priority. Then they made a series of decisions which drove poverty up, unemployment up and real wages down.

In the early 80's the biggest issue that politicians could talk about was how they all wanted to protect social security. And they accused Reagan frequently of being against social security. But since reagan left the scene a series of decisions have been made, culminating recently with GW, to have seriously damaged the integrity of social security. And we can't fund medicaire any more either. We've cut that dramatically and now GW is cooking up a 2'nd rate medical system for the elderly.

Yet we have people in denial. Because the media doesn't focus their little minds on these issues, they pretend it doesn't exist. The media content is controlled by 5 big corporations and they have displayed persistent propaganda to us for decades. Only a fool thinks that an issue is not an issue if the media doesn't talk about it.

The media will never talk about the slow downward spiral of american living standards that has been occurring since 1970. They will not because such talk only highlights the terrible failures of the american elite over this period of time. These things have occurred because of decisions made by our government. Globalism and international economic development does not in itself cause these negative trends.

[Red Jones]

bump

[nopardons]

The minimum wage, today, is NOT lower than it was in 1965.

In past eras, people took jobs, that today, they wouldn't dream of taking and most assuredly NOT for the same wages, working conditions, and no benefits. During the PANICS and DEPRESSIONS, prior to the one in 1929 ( and even then ) there was no such thing as unemployment insurance and the Dole ( yes we used to have that, as well as " workhouses " and poorfarms ) joblessness wasn't nearly as well reported as it has been in the later part of the 20th century and today.

No, we did NOT have a nation, earlier, when " even marginal people were able to make it " . People starved to death, they froze to death, their children worked, just so that there was food on the table. As late as the late 1960s, there were households that didn't have indoor plumbing and a pump in the kitchen sink. instead of faucets.

What standard of kiving are you talking about, that permitted high school grads to support families in and when ? People didn't used to think that they absolutely had to have certain things, unless they could afford them and did without. Most families lived with far fewer ammenities, than they think they deserve to have today.

You are claiming that medicare is being cut off by President Bush and that isn't so. Besides which, you are really all over the place; espousing Socialist programs and slamming them at the same time. Before medicare, the elderly went into debt, for the treatments they got, or just died, or both. Medical care is so expensive today, because of many reasons; not the least of which, is that the UNIONS forced businesses to " give " it to their workers. Because people were nolonger paying for their own health care, they abused it. Medicine has advanced and that advancement costs big bucks. Law suits and insurance against these mostly frivilous suits costs even more.

The media is NOT controled by five corporations. You're spewing unmittigated tinfoil drivel, baseless twaddle, and hyperventilating all over the place.

The standard of living, if anything, has risen hugely, for the past 100 + years. Your lack of historical and economics, is appaling and shameful.

Public schooled, are you ?

[RLK]

What I have said here a hundred times before in the last several months need not be repeated. We are seeing the economy of this country being shipped out of the country by people who seem to have orgasms doing it. Bush is one of those people.

[nopardons]

Prove it ! All you are doing is leveling crass and spurious assurtions, without any prove or substanciation. You have NO idea what President Bush thinks about anything; let alone jobs being outsourced.

[Capitalist Eric]

hmmm... well, nopardons, don't hold back, tell us how you really feel!!!

LOL!!!

Yes, the standard of living has risen to meteoric heights... How ironic, that as the standard of living has increased, so have the taxes, as well...

Were the generic "public" educated on things such as the Laffer curve and its' implications, they'd be screaming for tax-rate reductions, and crucifying the liberals- whose last vestige of hope is to add more bums to the public dole...

Of course, in the good old-days (which, as you have so clearly described, weren't so good), people also had a sense of shame, and pride in their abilities to pull themselves up by the bootstraps... Those that failed...? Died. A Darwinian model, if there ever was one...

My personal assessment of the economy is that it's far worse than they're letting on- it's like the old joke, "you gonna' believe ME or your lyin' eyes?" :-\

The new word on the lips of most educated economists... is deflation. And if it gets as bad as some indications seem to suggest... Then we may follow Japan into the financial toilet.

I hope- dearly so- that I'm wrong... But something tells me it's going to get a lot worse, before it finally starts to get better... :-|

FReegards,

[nopardons]

HJeck, I'm blunt , but at least I know what I'm talking about. :-)

Most people don't know much if anything at all about economics and gobble up the pablem, spewed by the triple threat of Dan, Peter, and Brokaw. Economics USED to be taught, as a mtter of course, in high school ; my mother took two required courses in it. It's no longer even being taught much in colleges, today.

Yes, people used to be shamed by being on the dole; now, they demand more and more and M-O-R-E government handouts. Stick it to the rich, is the battle cry. Their own taxes ? They haven't a clue about that.

I don't think that we'll get anywhere close to the Japanese model; but, deflation is here , now, and I hope that it doesn't get any worse.

We seem to be on the same page. :-)

[ijcr]

Wrong! unemployment figures are not for guaging unemployment, they indicate EMPLOYMENT. If we read that the
monthly unemployment figures show 5%...then we can concur that 95% of Americans are working.

3.9% is deemed full employment,this takes into account the
disabled, people shifting between jobs and cyclical workers.

The INS recently published its estimate on illegal immigration...8 million, in reality the figure is probably higher. Each percentage point of unemployment is about
1.2 million workers.

I will leave you to guage the actual unemployment of Americans.

[Dahoser]

The problem is more than a lack of economics education and a media bias that characterizes tax cuts as skewed to the wealthy, it's a refusal by people to believe what is right in front of their eyes. In fact, over the next few months for those people who file taxes, the lesson is going to be a little lower at puppy level, i.e., their noses are about to be rubbed in the poop and they still won't get it.

Armed with calculators, papers, forms and instructions, some of these puppies are going to be filling out, crossing out, and cursing out everything and everyone as they complete tax form upon tax form---their noses nostril deep in the poop. The remaining puppies will send their taxes out to a preparer and smugly congratulate themselves on not dirtying their noses at all, forgetting that paying to have their taxes prepared is still getting a snout full.

In either case, it will never occur to the vast majority of them that their anguish or cost could be entirely alleviated if they did not reflexively reject tax simplification in the form of a flat tax. Or did I miss President Steve Forbes' inauguration? It will not occur to them that they owe less due to tax cuts than they have in the past. In fact, some will complain that they are not getting as much back as they did, proof to them how the system is really screwed up. (These are the same people who believe they "made out great" when getting back more of their own money.) And worst of all, they will shrug when it's over and say, "What can you do, that's the way the system is?"

At least a puppy makes the connection between the nose surf through the poop he just endured and how it got there. We cannot say the same about the majority of taxpaying puppies.

[Iris7]

I'm with you. People refuse to see what is happening. A person who lies to himself cannot detect falsehood in others.

[staytrue]

40 years ago was 15 years after WWII. In WWII, Europe and Russia had smashed each other to bits and China and Japan pretty much did the same to each other with some help from the US. In effect, North America was the only surviving manufacturing base in the entire world. It is easy to be number 1 when there is no number 2. Your longing for the good old days is useless as they are not coming back.

[arete]

Have to agree with you. GW hasn't done a single thing to stop the job loss. We're in for some rough times.

Richard W.

[staytrue]

Blaming Bush is stupid. If you read your own damn market commentary that you post every day, you will find that the joblessness is mostly due to a need to reconcile the recent asset bubble and a "debt reconciliation". Your mr. papulva has never indicated any possibility of anything else.

[Red Jones]

Your longing for the good old days is useless as they are not coming back.

You've been indoctrinated well in our public schools.

hey, I'm not longing for the good old days. The statistics show that a lot of bad things have happened to our economy since 1970. We used to have much lower unemployment. The paychecks that people used to get would go much further in the economy than they go today for most people, when you measure the paycheck's ability to purchase a basket of goods. Our people are harmed tremendously by these trends. You seem to think that international trade causes a downward move in incomes. This is not true. It is bad policy from washington that does it. And the americans are sheeples like you not to be concerned about it like me.

We americans had a reputation in the year 1700 for having an astonishingly high standard of living compared to europe for the average person who lived here. When people came here as indentured servants in 1645 they immediately experienced a higher standard of living than they had before. Our nation has always been a shining city on a hill and able to provide for the ordinary people much better than other nations. Only in the last 30 years have we for the first time in our history experienced large downward movements in our ability to provide for our people.

Congtratulations, you're a good sheeple to think this is good. Don't supp with me!!!!! I am an american, I prefer to hold my government responsible for its failures. I say 'no excuses' to our leaders, you say 'chain me I like it'.

back when we had this higher standard of living we had very few imports or exports. Why should trade with foreigners impoverish us? Our trade policies can be arranged to avoid this, so that we only profit as a nation, from trade. But the trade isnot the biggest problem. Policies from washington and stupid sheeples are the problem.

[Red Jones]

I've read that the minimum wage is lower today after inflation than it was in 1965. The study I read in national review that asserted this was using the basket of goods methodology, so perhaps it wasn't the government inflation rate. The government's inflation rate does not really measure the changes in costs that people face. It underestimates housing costs and as housing costs have been going up much faster than inflation we're left with this situation that a whole range of lower wage type jobs like waitress and construction laborer were paid wages in 1965 that actually went further in the economy than they do today.

[TC Rider]

I'm not an economist, but did stay at a Holiday Inn Express last night.

That said, it seems to me that if we quit extending the unemployment benefits, there are some percentage of workers who would get off their asses and go back to work.

[Afronaut]

Why use Insults to drive your point home?

"You seem to think that international trade causes a downward move in incomes. This is not true. "

This is a dead horse on the FR, it has been discussed to death.

To sum it up some people dismiss the facts and continue to think that cheap products and labor is good for Americans. NAFTA creates Jobs. Huge trade surpluses are good for Americans. How Illegals help the economy. That some could think that there is an upward trend in incomes...

Then after about 200 posts people start posting how you should get a job at Burger King and forget your dreams and then tell you to shut-up. Happens every time.

[Afronaut]

"That said, it seems to me that if we quit extending the unemployment benefits, there are some percentage of workers who would get off their asses and go back to work."

What do you do for a living tough guy?