Whew! A bit dusty over here. I hadn't realized it had been over three months since I last posted something here but with all the news this week I guess I figure it's time to throw out my 2¢ once again.
The official unemployment rate is now at 9.8%. Nine point eight per cent. And this is just the "official rate" reported by Labor is the "U3." The truer rate is probably contained in the U6 which is over 17%.
It is December 2010 and this is the longest sustained stretch of unemployment over 9% since the Great Depression. While ADP in their monthly reporting of jobs added for November showed an estimated 93,000 new private sector jobs for November 2010, the official Department of Labor report showed only 39,000 jobs added in total for November 2010. This is in an economy that needs to add 100k - 150k jobs per month just to maintain status quo. Now we add in that two million people currently collecting unemployment will be losing their unemployment insurance benefits during December 2010 and another uptick in initial jobless claims for the last week of November and it is going to be a horrendous Christmas season for a lot of people in the United States.
So what are they arguing about in Washington? Extending the Bush tax cuts. Now the Bush tax cuts were implemented in '01 and '03, ostensibly because "tax cuts create jobs." Given that the period from '01 through '09 was the worst era of jobs creation since before WWII, I am quite skeptical of this claim, to say the least. At a time of long term sustained unemployment and underemployment, tax cuts do nothing for those most in need. Yet the folks in Washington are doing their dance, at best tying a potential one year extension of Unemployment to a three year extension of all tax the cuts including for those making more than $250K per annum.
Now economists are starting to speculate about a permanent "underclass" of un and underemployed:
The longer people stay out of work, the more trouble they have finding new work.
That is a fact of life that much of Europe, with its underclass of permanently idle workers, knows all too well. But it is a lesson that the United States seems to be just learning.
This country has some of the highest levels of long-term unemployment — out of work longer than six months — it has ever recorded. Meanwhile, job growth has been, and looks to remain, disappointingly slow, indicating that those out of work for a while are likely to remain so for the foreseeable future.
I can fully attest to this. I was totally unemployed for over three years before starting a volunteer gig that has grown to a part-time just above minimum wage. It has been a god send as it means I have some money coming in. But it is not in my chosen career field. That has not stopped me from continuing to search in the Software Quality Assurance and Testing field but even when I get nibbles asking if I'm interested in a possible position, the interest seems to fade fairly rapidly when I clarify that I have not been working in the field for a few years.
Then there was the Catfood Commission Report. For what it's worth, the fine folks at FireDogLake did a fine job in covering the Catfood Commission from Wednesday, December 1 so I'll just let them tell the story here, here, here, here, and here.
And because I can: