The story on unemployment

Adam and I were talking about this yesterday, about how real unemployement isn't being reported in most news outlets. The most-quoted figure I've seen is the 9.5% seasonally adjusted U-3, and when a number is that qualified you know it's not quite natural. I just looked up the U-6 measure (the most inclusive measurement) in the current statistics. The percentage of all employable people not working full-time jobs is 16.8%. The U-6 includes part-timers who are looking for full-time work as part of the figure, which is reasonable because a lot of them are part-time because of the economy. The number being reported in the news is the 9.7% U-3, which as you can see is a much more limited measurement.

Now, one thing to note is that the difference between June '08 and June '09 using these two indices tell two different stories. From June '08 to June '09, the U-3 went from 5.7% to 9.7%, a 4% change. The U-6 changed from 10.3% to 16.8%, a change of 6.5%. So the net change in employment is also worse than is being reported. Some of this is people being shunted into part-time jobs, but the U-1 is a measure of how many people have been unemployed more than 15 weeks or longer, and that has risen from 1.8% to 4.8%. Jobs have really just vanished.

The question is, even when the economy starts growing again, how many full-time jobs are going to come back for people? Even when the economy was supposedly so great back in the Bush years (coming off the Clinton high, that is), people were struggling. Just read Nickel and Dimed by Barbara Ehrenreich. Actually I think I've blogged on that subject plenty of times. We keep hearing about how the recession is supposed to end this year or that we may already be at the tail and the economy is starting to recover; we hear that jobs lag behind the economy in general. Either of these things may be true; neither of them means that Americans will be getting well-paid full-time jobs with benefits. Is there any way to change that?

I don't know the answer to that, but it lies in what industries are going to make the biggest turnaround. I honestly don't think that even if the automakers come around and turn profitable, they'll end up re-hiring a lot of people. They're cutting back as much as possible and if their salvation lies in competing with the foreign auto makers, they're going to be making more of fewer kinds of vehicles, which means less workers. America needs growth industries that we can take the lead in. We need to invest in an infrastructure to produce new kinds of goods and services that other countries can't compete with. Things like clean energy, health care and medicine, or eco-science, that the world needs but which can also be profitable industries. It's time to do something new.

Update: Xanthippas just let me know about this article, pointing out estimates of the real number of unemployed, which is well above even the U-6. Read the article for an explanation of how these numbers are arrived at:

By adding these folks back in, William's SGS-Alternate Unemployment Measure rose to a jaw-dropping 20.6%. Separately, the Center for Labor Market Studies in Boston puts U.S. unemployment at 18.2%. Any way you cut the numbers, the situation is very bad. According to David Rosenberg, one-in-three among the unemployed have been looking for a job for more than six months and still can't find one.

That's about 1 in 5 employable people either unemployed or underemployed. This recession is far from over.

Legislative Update XIV

Congress sent President Obama two bills this week aimed preventing foreclosures and regulating the credit card industry, though with the price of allowing guns in national parks.

Both chambers of Congress also quickly and unanimously passed and President Obama signed into law a bill aimed at saving billions of dollars in wasteful spending on weapons systems often delivered late and hit by ballooning cost overruns. The armed forces have also submitted to Congress their "wish lists" of spending priorities that did not make the president's Defense budget request, and the items on the list are about one-tenth as expensive as last year's.

The Senate passed $91 billion in war funding, including financing for the International Monetary Fund that may be a sticking point for the House. The Senate also voted 90-6 to strip funding to close the detention center at Guantanamo Bay from a supplemental spending bill and bar funding for the transfer of prisoners to the United States. However, many Democrats said they were just waiting on a more specific plan from the Obama administration that the president began to lay out on Thursday.

The Senate confirmed President Obama's nominees for the FDA and the Bureau of Indian Affairs, while his pick to run the census moved toward confirmation as well. But Republicans, who used to believe in "up or down" votes for judicial nominees, blocked action on President Obama's first judicial appointment.

The House Energy and Commerce Committee voted in favor of the climate change bill currently under consideration by a 33-25 vote.

Finally, the full House rejected a GOP resolution that called for investigations into Speaker Pelosi's accusations against the CIA. Perhaps to mend fences, Pelosi is considering appointing a Republican on an economic crises panel. The Speaker will also be visiting China next week.

Legislative Update XI

The White House and Congressional Democrats have come to a budget deal that includes reconciliation instructions for health-care legislation later this year. This would allow Democrats to pass a reform measure with a simple majority in the Senate, but the changes would have to renewed after 10 years. Republicans have cried afoul over this possibility, despite the fact that they used it to pass the Bush tax cuts, but Rep. Ryan admitted today it is within the Democrats rights to do so having won the election. My concern is that the changes expire and we could have a Republican president and/or Congress again in ten years, but the political calculation is probably that it is better to get it now and, if it's successful, it'll be too hard to let die.

The Senate voted 92-4 to create an independent bipartisan commission to investigate the causes of the financial crisis and the House of Representatives voted 342-78 to send billions of dollars to thousands of communities to help them hire and retain 50,000 police officers, reviving a Clinton-era "cops on the streets" program that withered under the Bush administration.

Senate Republicans blocked a confirmation vote on Kathleen Sebelius as HHS Secretary over her pro-choice views. A cloture vote could happen on Tuesday.

Lastly, former Vice President Al Gore has come out in support of the climate change bill that is being worked on in the House.