Friday, October 16, 2009

Weekly Unemployment Claims Continue to Drop

The number of new weekly unemployment claims dropped by 10,000 to 514,000 from 524,000 claims the prior week. The number is also 40,000 less than the two week old figure of 554,000 claims on September 26th, 2009. So a small bit of good news in the recession. However, one must be careful to the huge number of overall unemployment claims.

The long term trend is more disturbing. You can see the giant spike in unemployment claims during the recession when claims jumped from the low 300 thousands to over 600 thousand new claims.

Jobs of the Future

The President's Council of Economic Advisors release a report in July 2009 on where the jobs of the future will be. There is some good high level information but not much details.

Basically, health care is the number one area for job growth, now and for the foreseeable future. Manufacturing job loses will stop, but there will be no increase in manufacturing jobs. Construction job will dip but rebound.

Secondly, workers with post high school education or training will do better than average.

Here is the report.

Saturday, October 10, 2009

Future Jobs

Just gotta get this one out there. It looks like we are coalesing around some ideas for future jobs. These jobs will provide products that have the following characteristics:

Green, customized(Market of One), Fast, Local, with a service or service component.

Green - Customers are demanding green and environmentally friendly products.

or they will be cheap.

Customized -- products will be individually tailored

Fast --

Local -- Service will be performed locally.

Job Creation Program Options

It is pretty amazing how few ideas there are for job creation. Creating good jobs almost seems to complicated for our political class. This post is summary of the most prominent options both liberal and conservative

1. Tax credit for new hires. A subsidy from the government for each new person hired.

Would create some jobs. Might not be the best use of the money. Programs have other problems such as the marginal employee problem. Who should get the subsidy; every new person hired or only those who would not have been hired. How long should the job last to get the subsidy ?

2. Federal Government Direct Job Creation program

Would create jobs.

Does the government select the best projects to fund ? How efficient and effective.

3. Federal Infrastructure projects

Jobs. Needed investments are made.

Create less jobs than direct job creation. Same down side, does the government select the best projects to fund. Is infrastructure really the best investment ?

4. Aid to State and Local authorities

Again creates or support existing jobs and services.

5. Education and Job Training

Pro: Jobs for trainers and unemployment office workers.

Con: Only somewhat effective. Results are hard to measure. The folks doling out the money should provide some transparency and Cost / Benefit analysis

6. Subsidized loans or investments in small businesses.

Cost: 300 Billion

During the recession, major job loses have come from the small business sector. In addition small business have drastically lost access to credit. A small business loan program would restore access to credit.

Now here are some conservative proposals are:

6. Cut minimum wages.

Cheaper wages would allow employers to hire more workers.

7. Eliminate federal or state employer mandates such as healthcare

Cheaper benefits or reduced mandates would allow employers to hire more workers.

8. Do not pass the Employee Free Choice Act

A bill to make joining the union easier. Potential members would check off cards saying they request a union rather than have a secret ballot.

9. Evaluate training and return to work programs more systematically

Here is one good convervative idea, but quite difficult to implement. Conservatives propose to be much more rigorous evaluation of unemployment training and return to work programs. However, the idea is couched in the usual mean-spirited effort to cut programs that don't work rather than expand any program that does work or to try to improve the effectiveness of the whole system.


Forbe's Article on Conservative Job Creation. Here.

One of the nice things about writing a blog is that you can go back a correct or update your work. v3

Where are the jobs right now ??

The current fields with the best job prospects accross the board are: Healthcare, Education, Government. Government and Education are showing small signs of weakness.

Another area to look at are fields where the pay is significantly above the median weekly earning of $350.00. Those fields typically require a college education. They are scientific, engineering and computer related.

But they also include certain building trades and construction jobs. These jobs do not require a college education but come with a long apprentice ship or training requirement.

Finally, one can compute a job quality index ("Good Jobs Index") with factors like pay and autonomy. Then add in the education component. Good jobs with low education requiements are in constructions and good jobs with higher education components are in Advanced Education, Law, Medicine.

Tuesday, October 6, 2009

BLS unemployment reports

Thanks goodness for the Bureau of Labor Statistics. Three cheers. Their monthly and weekly employment reports are the only thing that keeps unemployment and labor issues in the news. The constant drum beat of bad employment numbers is hard to ignore even for our pro business news media.

The weekly jobless claims report which comes out on Thursday and the monthly employment situation report are always headline grabbers.

Sooner or later the country will have to face up to the jobs crisis.

Unemployment Report for September

On October 2nd, 2009, the BLS released it's September unemployment situation report. Again the news is not good. The big story is job loses increased (-263,000 NFP Sep vs. -201,000 NFP Aug) by 24%. Pretty scary. If the recession were really ending, we would expect job losses to shrink rather than grow in September. The trend is in the wrong direction. Mostly likely the drop is due to variability as the country slowly climbs out of the recession. However, It could mark the beginning of a second dip in a double dip recession. Next months report is crucial for establishing the trend.

Black unemployment also jumped from 15.1% to 15.4%. 2,687,000 Black people were listed as unemployed. The Black unemployment rate as increased by and astounding 73% since the start of the recession in December 2007 (from 8.9% to 15.4%)

To complete the picture, the unemployment rate plus the working part-time/want full time rate hit 17%.

No clue on Unemployment

Unemployment Ignored

I cannot believe how one of the biggest crisis of our time, 10%, unemployment, is being ignored. Black unemployment is around 15%. Underemployment is at 17%. Youth unemployment is around 40%.

I cannot find a more basic, long-term problem in a democratic, capitalist society.

Unemployment is the dark, down side of our society.

Our brightest minds have no clue about what to do.

Even the NYT, which I will give credit for writing about the issue, is offering little in the way of suggestions. Here The editorial simply issues a generic call for leadership. The propose a job creation program or tax credits for hiring. Or, get this, "Or surprise us". In an editorial, that is pretty clueless.

Finally, Bob Herbert, wrote a piece asking if Obama understands the jobs issue. Here.

The rest of the financial media is almost complete silent on unemployment. Shame on Business Week, Bloomberg, Wall Street Journal, Forbes, and Fortune. Talk about being in the back pocket of business. I guess unemployment is not something their demographics care about.

I will give some credit to USA Today which is consistenly covering the issue.

I do have to give some credit

Monday, October 5, 2009

Model of economy

So, how does the economy work. Well a simple diagram helps explain a lot. The complex nature of the economy comes from the dynamic nature of the feedbacks loops and the external shocks. Dynamic in that a change in one input or output can have downstream effects on the other institutions.

The best current econometrics models are Dynamic Stochastic General Equlibrium (DSGE) Models which are used in forecasting the US economy.

Blog Archive