Employment to Population Ratio: People are dropping out of the labor force

The July unemployment report was no news. Which is good news because a bad report would have really hit the market and the Obama administration really hard. I have to believe the president get some sort of briefing before the numbers are released.

However, there is one interesting story: the big drop in the number of people in the labor force and employed since the recession began. Both measures have be hit hard.

The drop in the employment to total poluation ratio and the labor force to population ratio has been dramatic. People are dropping out of the labor force left and right.



You can see the employment ratio is four percentage points lower since the recession started. And the civilian labor force has drop by 2%.

I have not been on vacation, I been working overtime.

Sorry, I have not posting in a while. I have started a new job and I am lowest person in the pecking order. So, while I have not been on vacation, other people have, and I have to cover for them. Two have returned, so I am free to write again.

Thanks

Chris

Breaking news: S&P lowers credit rating !!! Yawn.

Yawn. Zzzzzz. Such none news just confuses people. Does anyone really see the US not paying their debts. Institutions, people(rich people with lots of cash), and other governments are begging for US debt. The real story is the market rate on 30 year T-Bill currently 3.82%. The figure is low by historic standards and falling. Like I said yawn.

Editors Note: In a further blow to it's credibility, S&P has admitted a calculation error in the downgrade. First, the mortgage and banking crisis and now this. Clearly another case where the private sector cannot regulate itself.

Black/Hispanic vs. Wealth Gap Takes Huge Jump - 300%

The Pew Research Center has publish a report that show the asset ratio between Whites as compared to Blacks and Hispanics has has jumped from 7:1 in 1995 to 20:1 in 2010. An increase of nearly 300%. The primary reason is the increase in Black unemployment and the number of sub-prime foreclosures.

The summary is here and the full study is here.

Unfortunately, the heart of the problem is that the assets were reported at paper value not a the risk adjusted price. So Black and Hispanic asset values (houses) were overstated. We the housing bubble popped you got a more realistic view which coupled with the recession explains the wide gap. Things have not really changed.

Everyone should be unemployed for a short-time

Certain things you cannot fully understand until you experience them. Love, raising kids, racism & sexism, travel, prison, and sex. Another experience I wish more people shred is nemployment. Until you have experienced the frustration and idleness; you cannot fully understand.

So, here is wishing you a little bit of unemployment.

Discrimination against the long term unemployed

The New York Times had a story about discrimination in web job postings. The ads were asking for applicants that were currently working or had been recently laid off. They admitted that did not want the long-term unemployed to apply.

The story is here in the New York Times, July 26th, 2011 edition.

There are three things going on here:

Discrimination is here and real and wrong. Here is a clear, documented example of discrimination.

This discrimination shows some one of the effects of long-term unemployment. The unemployed may have their skills degrade. Employers and the public believe the long term unemployed are less qualified or may not want to work. And for the long-term unemployed there is a stigma is attached to being unemployed.

Finally, it is so rare to get a news story covering discrimination and unemployment, in the same story. I am glad some has the interest and guts to cover this story.

"The White Man's Ice is Cooler ?"

When I first heeard that quote, "The white man ice is cooler ?," I bursted out laughing. That's some funny stuff.

I think I was a high school kid and my dad was talking about where people bought their cars. Then I stopped laughing. I thought about it and said, "Hey wait a minute. Ice is Ice."

Everyday, black consumers spend over 2 billion dollars. We are some of the world's best consumers. We are gifted with incredible wealth. And with that wealth comes power. Our weakness is our aspirational spending on material goods.

We spend like we have a inferiority complex. We spend like we are trying to prove our worth and our value. We spend because we want the respect of the larger society that has denigrated us. "See, look, we are equal because I can buy whatever you buy." We spend rich; we spend white.

Unfortunately for black people, all major consumer companies are only to happy to oblige. They are willing to sell us something that will cure our inferiority complex, for a price.

A great example is the slimy salesmen our lack of self-esteem against us with the classic BS comment: "You can't afford it."

Sadly, this fundamental flaw in our character causes a lot of Black unemployment. Why do we lag in jobs, assets, entrepreneurship. Because we are short sighted about long term happiness. We are short-sighted about were we spend our money.

We spend too much on fleeting short term happiness from products and under invest in long term happiness from friends, family, schools and stable neighborhoods. "I going to get mine" is a familiar saying. So you got it, what then ? Many of us "got ours," what do we do next ? Well we spend some more. We don't know how rich we really are. We even gave our retirement money to the bankers who ruined the economy.

So, ask you self this this question when you shop.  "Do the people who own the shop look like me ?", "Could me or my kid work there, if I needed a job ?" Carefully, look at the place where you spend your money ? Could your kid work there if he needed a job ? Do you see anyone who looks like you? Did their advertisements include people like you ?

As well all know, it is easy to find fault, but proposing some real solutions is difficult.   Here are some suggestions:

1) Spend your money wisely. Use the rule of thumb: Am I spending money at a place that would hire me or my kids ? It is as simple as that.

2) Spend money at places that employ Black people. So that is Walmart, CVS, safeway, Ford and Chrysler, McDonald's, American Airlines. Not subway, abercrombe and fitch, coach or american apparel.

3) Buy your car or house from a Black salesperson. Or best yet a Black car dealer. I know sales people are nice, but nice doesn't cut it. They work on commission. And the level of service is the same. All the sales reps have access to multiple listing service, ebay, yahoo or carfax.

4) Eat out at places that employ Black people. There is nothing wrong with TGIF Fridays, Burger King or White Castle. Think twice about McDonalds or 7-11 when no one looks like you. I am not saying don't go, just look for an alternative. Or eat healthy at home.

5) Get competitive bids: For every major purchase greater than $1000 consider getting three bids including a Black business or business person. It takes work but you can go to sleep knowing you tried.

6) Look for Black sales people and managers when you shop. Business that pay sales people commission are commodities (houses, cars, appliances) and count on sales people to make a difference. You will probably never see a them again, so make you purchase count.

7)Complain. Let Black business know when something is wrong, but then go back and make sure it is corrected. We will give the benefit of the doubt to everyone but our own people.

8) Hustle. Start a business yourself. A business is an education for free. Business truly understands their consumers. The off the books economy pays for itself.

Summary: Until Black people consider how every purchase help you community, our community will suffer. Always ask yourself this question, "Could my kid work here if he needs a job ?"

v5

Our Black Year: One couple buys only from Black Businesses for a Year

One couple has decided to buy from only Black Owned business for a whole year. There website is here.

Teachers: Pay More, Demand More

We at the Evil Black Economist are definite pro-teacher. But we aren't stupid either. Most of all we a pro-value added. Meaning a teacher must deliver in value more than they earn in salary. We are also for a individualized, child specific educational system.

Basically, teacher salary, effort and quality are one of the few things that can be changed in the education system in the medium term.

We believe in paying teachers more and asking them to do more. We are fully in favor of testing and rewarding good test scores. But we are also in favor of teachers as social workers, substitutes parent and life guidance counselors. We favor internet monitoring and 24 hour access along with a reduced paperwork burden.

Dropouts: The high cost to society of dropping out

NPR is about to start a series on people who drop out of high school. Dropouts have an enormous total cost on society. The series is here. Mr. Sanchez explores the true cost to society of the lost potential of dropouts.

The issue is a perfect microcosm for US society and it's growing inequality. You can just as easily switch "dropout" with poor person or Black or Hispanic person. I must congradulate Claudio Sanchez for finding a way to discuss what the majority do not want to discuss: The growing US underclass. The unwritten theme is what do we owe our fellow citizens ?

We love this new focus on education. Education is the one workable lever in the US for reducing inequality in society. The GOP has stopped all others. Everyone is pulling on the lever: Obama, Bill Gates, Congress, Bloomberg, Jeffery Canada. But no one knows what to do.