The BLS Employment Situation Summary for January 2014

Posted by PITHOCRATES - February 17th, 2014

Economics 101

The Unemployment Rate is 13.6% when you count all Unemployed Workers

The economy is getting better and better.  There are more new jobs.  And the unemployment rate continues to fall.  According to the Bureau of Labor Statistics (BLS).  But this is little succor for the 10,948,000 who have lost their job since President Obama began trying to make the economy better.  No matter what the BLS says (see the Employment Situation Summary posted 2/7/2014 on the Bureau of Labor Statistics).

Total nonfarm payroll employment rose by 113,000 in January, and the unemployment rate was little changed at 6.6 percent, the U.S. Bureau of Labor Statistics reported today.  Employment grew in construction, manufacturing, wholesale trade, and mining…

Among the major worker groups, the unemployment rates for adult men (6.2 percent), adult women (5.9 percent), teenagers (20.7 percent), whites (5.7 percent), blacks (12.1 percent),and Hispanics (8.4 percent) showed little change in January. The jobless rate for Asians was 4.8 percent (not seasonally adjusted), down by 1.7 percentage points over the year. (See tables A-1, A-2, and A-3.).

The number of long-term unemployed (those jobless for 27 weeks or more), at 3.6 million, declined by 232,000 in January. These individuals accounted for 35.8 percent of the unemployed. The number of long-term unemployed has declined by 1.1 million over the year.  (See table A-12.)

Once again there are more new jobs and the unemployment rate fell.  Further proof the Obama administration says that their policies are working.  But the low unemployment rate is misleading.  As there are 91,455,000 people who are no longer in the labor force (see Table A-1. Employment status of the civilian population by sex and age).  An increase of 10,948,000 since President Obama entered office.  The BLS doesn’t count these unemployed people as unemployed in their calculation of the official unemployment rate.  If you did that would raise the unemployment rate to 13.6%.  Which is a lot higher than the official 6.6%.  And better reflects public sentiment on the economy.

Ironically, the people hurt most by the Obama economic policies—teenagers, blacks and Hispanics—are also the biggest supporters of the president.  Which tells us they obviously support him for reasons other than the economy.  And apparently put those reasons above having a job.  At least based their respective unemployment rates.

If we count all Unemployed and Underemployed the Current Economic Recovery would take more than 20 Years

Of the people they actually count as unemployed about a third of them have been unemployed for 27 weeks or more.  So a large percentage of the unemployed are not suffering from frictional unemployment.  That brief period of unemployment between jobs.  No.  These people have lost their jobs.  And can’t find new ones.  While others can find only part-time jobs.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) fell by 514,000 to 7.3 million in January. These individuals were working part time because their hours had been cut back or because they were unable to find full-time work. (See table A-8.)

In January, 2.6 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

If you add the people up who want a full-time job but can’t get one that’s 9,900,000 who can’t find a full-time job.  If we only add 113,000 jobs a month it will take over 87 months to get these people the full-time jobs they want.  Or more than 7 years.  If we count the last 5 years of the Obama presidency it will take the economic recovery out to 12 years.  If we add the people who have left the labor force to the underemployed (the part-time workers looking for a full-time job) that would extend the economic recovery to 244 months.  Or more than 20 years.  Which is longer than the length of the economic recovery following the Great Depression.

The Obama administration still blames George W. Bush for causing the Great Recession.  But one thing they do say over and over is that it was the worst economic disaster since the Great Depression.  So they are saying that the Great Depression was worse than the Great Recession.  Yet the current economic recovery is on track to last longer than the economic recovery following the Great Depression.

President Obama’s Economic Recovery is on Course to be the Worst Economic Recovery in U.S. History

The Great Depression and the Great Recession share something in common.  In both the government used Keynesian economics to try and pull the nation out of the economic crisis.  With huge government stimulus spending.  You can see evidence of the FDR spending today.  Such as the Hoover Dam.  But you can see little evidence from President Obama’s stimulus spending.  For there are no Hoover Dams anywhere.  Just a lot of empty buildings that housed failed green energy industries.  With no new jobs to show for it.  Such as those good-paying jobs in the green energy industry that President Obama promised his stimulus spending would produce.  But, alas, it did not.  In fact, that’s just one thing this administration is not good at.  Creating jobs.  Even the jobs they created appear suspect.

Employment in manufacturing increased in January (+21,000). Over the month, job gains occurred in machinery (+7,000), wood products (+5,000), and motor vehicles and parts (+5,000). Manufacturing added an average of 7,000 jobs per month in 2013.

In January, wholesale trade added 14,000 jobs, with most of the increase occurring in nondurable goods (+10,000).

Mining added 7,000 jobs in January, compared with an average monthly gain of 2,000 jobs in 2013…

Employment in other major industries, including transportation and warehousing, information, and financial activities, showed little or no change over the month.

These numbers don’t make sense.  Much like Keynesian economics.  The economy created jobs in manufacturing (machinery, wood products, motor vehicles and parts).  Wholesale trade added jobs.  Mining added jobs.  But this new economic activity required no new financing.  Which is odd.  For it takes money to make money.  Also, there were no new jobs in transportation and warehousing.  Which begs the question.  What did they do with all the stuff they made from all those new manufacturing jobs?  Did it ever leave these factories?  Or is there another explanation?  Did the people who entered the labor force just replace people who left it?  For no net change?  Perhaps.

The manufacturing workweek declined by 0.2 hour to 40.7 hours, and factory overtime edged down by 0.1 hour to 3.4 hours.

Or perhaps this explains how they could add jobs in an industry that required no additional financing, transportation or warehousing.  Hiring new workers while shortening the workweek and cutting back on overtime.  Or a combination of this and people leaving the labor force to net out any economic gain from these new jobs.  Whatever the explanation is one thing is certain.  The economy is not improving.  And President Obama’s economic recovery is on track to be the worst economic recovery in U.S. history.  Despite the glowing jobs reports showing new job creation month after month.  And a continuing falling unemployment.  Things they can only show by not counting the 10 million or so who are no longer employed.


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Chicago Teachers strike for More Compensation and Less Accountability

Posted by PITHOCRATES - September 15th, 2012

Week in Review

The Chicago teachers went on strike.  And you can boil down what they want into 5 things.  With teacher evaluations and compensation probably being the most contentious (see Chicago Teachers Go on Strike: 5 Things They’re Fighting For by Madison Gray posted 9/10/2012 on Time NewsFeed).

Teachers are striking over an evaluation that union leaders say is not fair. The teachers union is seeking to downplay the weight of how well students perform in the outcome of their biennial evaluations. The evaluation system, CPS says, was created in collaboration with teachers and agreed upon in March…

Teachers wanted a significant raise in the first year of a new contract because of a longer school day proposed by Mayor Rahm Emanuel. CPS says it offered them a 16% increase over four years, plus “step increases” for performance and to give incentives for more experienced teachers. The teachers themselves wanted to keep the former system of granting raises based on experience. The average salary for a Chicago public school teacher is $76,000, according to the district.

That average salary excludes health care and pension benefits.  According to Heritage, that comes to about 51% of their salary.  Or an additional $38,760 in compensation.  So the average Chicago teacher compensation is about $114,760.  Which appears pretty generous.  Especially when considering the median household income in Chicago is $46,350.  And the ‘pension’ added on top of that is typically 4% in 401(k) contributions adding another $1,854 in compensation.  While retirees have to wait until they’re 65 or so to live on their 40(k) savings it’s not quite the same for the Chicago teacher (see Chicago Teachers’ Retirement Benefits Are Extravagant by Jason Richwine posted 9/13/2012 on The Foundry).

A Chicago teacher who retired in 2011 after 30 or more years of service time could expect an annual pension payment of $77,496. For context, the average Social Security benefit—which requires a much higher employee contribution into the system—would likely be in the range of $25,000 to $30,000 per year for a worker with a similar salary history…

Chicago teachers also enjoy a benefit that is rare in the private sector—retiree health coverage, which allows teachers who retire (often in their 50s) to maintain their health insurance until Medicare kicks in at 65.

And, of course, this generous compensation comes with having their summers off.  With holidays and breaks a teacher only works about 9 months out of the year.  Doing the math that’s 8 hours a day for 5 days a week for 9 months comes to about 1,548 working hours.  Which is less than the definition of a part-time job of 30 hours a week or less.  Running these numbers the maximum number of hours a part-time worker can work before we consider them a full-time worker is 1,560 hours.  Or about 12 hours more than a teacher works in a year.  So current teacher pay and benefits are pretty generous for a part-time job.  There are many people working full time that don’t get anywhere near these kind of numbers.

For this kind of money you’d think that the Chicago Public School system is producing some of the best high school graduates in the nation.  But with a graduation rate of 40% that can’t be true.  So the people of Chicago are paying about the highest cost in public school education to see 60% of their children drop out of high school.  Perhaps this is the reason why they want to drop teacher evaluations.  For I know if I was only 40% good in my job I wouldn’t have a job any more.  Which would really smart for these teachers.  For they will find no part-time jobs that compensate as generously as their teaching jobs.  Which clearly answers the question why teachers have to purchase teaching supplies for their classrooms out of their own pockets.  For the teachers don’t leave much money in the district to pay for things like teaching supplies.


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