Jobs: Are Job Number One


As San Francisco Federal Reserve economists came out this week with the dire prediction of a national jobless rate of 11 percent by 2010, economists and sociologists are concerned with growing social unrest. ¶

A stated unemployment rate of 11 percent could translate into a U6 level approaching 20 percent. U6 is the Bureau of Labor Statistics measure of workers actively seeking employment, but may not be collecting jobless benefits or have taken a part-time job. ¶

The national jobless number for last month jumped to 9.4 percent, with the U6 number rising to 16.4 percent. Economists see the national figure to be 9.8 percent by years’ end. ¶

John Williams, who runs Shadow Government Statistics, compiles his own data from the monthly BLS jobless report using the 1994 model, says the U6 level should be 20.5 percent. In 1994 the Clinton administration changed the definition of U6 to trim the unemployment rate. ¶

Since the beginning of the current recession in Dec. 2007 when unemployment was 4.6 percent, 6 million jobs have been lost in the US economy. ¶

“The real problem is that long-term unemployment is going up dramatically,” Franklin Allen, finance professor Wharton School of Economics says. “Unfortunately, many people in their late forties and early fifties may never get jobs again,” he said in a paper published this week. ¶

For the fed’s stress test of troubled banks, Treasury Secretary Tim Geithner’s most strenuous levels for unemployment were 8.9 percent for 2009 and 10.3 percent 2010. These numbers seem woefully optimistic now. ¶

Locally, New York City’s jobless number has mostly trended higher than the national figure due to a larger percentage of the local workforce have less education and are more susceptible to layoffs in worsening economic times. ¶

This dynamic changed during the height of the Wall Street meltdown in the third-quarter of 2008, despite the fear of financial sector jobs leaving the city. The city’s unemployment rate is now 8 percent and has only inched up 1.6 percentage points in the last year which is halve the jump with the national increase of 3.2 percentage points. ¶

Economists point to the decreasing average weekly hours as an indication that employers may be cutting hours in lieu of layoffs. Mays weekly number of 33.1 is 1.7 percent drop from last year. ¶

These same economists say that the weekly hours worked needs to move to closer to 35 hours, before significant hiring will begin. ¶

Some of the fallout from rising unemployment and home foreclosures appear daily in the news. Growing suicide incidents, crime rates and social unrest do rise during economic troubles. ¶

Although data on current suicide deaths will not be available for some time due to reporting lags, Dr. Alan L. Berman, Executive Director, American Society of Suicidology says, “For most Americans, our homes are our primary investment and the locus of our identities and social support systems. When combined with the loss of job, home loss has been found to be one of the most common economic strains associated with suicides. ¶

“In contrast to many other developed nations, the US provides little cushion to buffer these strains. Unemployment benefits are generally limited in duration and are considerably less than full-pay levels,” Dr. Berman said. ¶

Uncle Sam is not ignoring this recession, there are a number of federal measures being undertaken to mitigate the potential civil unrest which has was recently rocked Europe over growing unemployment including. ¶

¡ Army War College released a report in Nov. dealing with domestic terrorism as a result of “unforeseen economic collapse,” and the “rapid dissolution of public order in all or parts of the US.” ¶

¡ Alcee Hastings (D-FL) two days after President Barrack Obama’s inaugural, introduced a bill into Congress instructing the Department of Homeland Security to set up six emergency camps on military bases to house citizens in the event of a natural or man-made event. ¶

Most economists do not see a around to the jobless number until early 2011.

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