Thursday, May 19, 2011

The Spin Begins To Lessen

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After having bounced up to 474K a couple of weeks ago, the Initial Unemployment Claims for last week dropped for the second week in a row, falling back down to 409K after falling last week to 434K (revised back to 438K today). From Reuters:

First-time claims for state unemployment benefits fell 29,000 to 409,000 last week, the Labor Department said.

The bigger-than-expected drop eased fears that a large increase last month reflected a fundamental deterioration in the jobs market, buttressing the view that the run up was due to auto plant shutdowns and other one-time factors.


While the initial claims decline was more than economists' expectations for a fall to 420,000, they remained anchored above the 400,000 level that is normally associated with stable job growth for a sixth straight week.
While any drop in Initial Unemployment Claims is a positive, it is only a faint ray of light within otherwise dismal economic news. Tuesday, CNN had an article on new graduates struggling to find jobs in their chosen career fields, even when coming "highly credentialed."
NEW YORK (CNNMoney) -- The brutal job market brought on by the recession has been hard on everyone, but especially devastating on the youngest members of the labor force.

About 60% of recent graduates have not been able to find a full-time job in their chosen profession, according to job placement firm Adecco.

And for those just entering the workplace, a bout of long-term unemployment can affect their career plans for years to come.
The NY Times follows CNN and does their version of this today:
The individual stories are familiar. The chemistry major tending bar. The classics major answering phones. The Italian studies major sweeping aisles at Wal-Mart.

Now evidence is emerging that the damage wrought by the sour economy is more widespread than just a few careers led astray or postponed. Even for college graduates — the people who were most protected from the slings and arrows of recession — the outlook is rather bleak.

Employment rates for new college graduates have fallen sharply in the last two years, as have starting salaries for those who can find work. What’s more, only half of the jobs landed by these new graduates even require a college degree, reviving debates about whether higher education is “worth it” after all.


The median starting salary for students graduating from four-year colleges in 2009 and 2010 was $27,000, down from $30,000 for those who entered the work force in 2006 to 2008, according to a study released on Wednesday by the John J. Heldrich Center for Workforce Development at Rutgers University. That is a decline of 10 percent, even before taking inflation into account.

Of course, these are the lucky ones — the graduates who found a job. Among the members of the class of 2010, just 56 percent had held at least one job by this spring, when the survey was conducted. That compares with 90 percent of graduates from the classes of 2006 and 2007. (Some have gone for further education or opted out of the labor force, while many are still pounding the pavement.)
As I have noted before (here, here, here, and here for example), the problems are not limited to any one age group, education status, and industry, but are widespread and deep.

Yesterday, the Hartford Courant had this article on the explosion of food stamp usage in the Connecticut suburbs. That was followed by this from USA Today on the same topic, food stamp usage being up (first posted 5/9/11 but just noticed by me today). From the Courant article:
The numbers back her up: Connecticut's affluent and middle-class towns saw the greatest percentage increase in the number of residents receiving food stamps from 2007 to 2010.

The increase was partly driven by changes in income eligibility rules in Connecticut. As that happened, more stores in more places began to accept food stamps, which are not stamps at all, but blips on a magnetic plastic card, like bank cards.

Nationally, more people are receiving food stamps now than at any time program's history — 44.2 million nationwide, far surpassing a previous peak of 28 million people in 1994, according to the most recent U.S. Department of Agriculture report, which contains data through February.

The trend in Connecticut is similar. The number of state residents enrolled in the program rose from a monthly average of 195,090 people in fiscal 2007 to a monthly average of 298,856 people in 2010, a 53 percent increase, according to the state Department of Social Services' annual reports. (The state fiscal year ends June 30.)
The USA Today article points out that those numbers are actually low:
Despite those numbers, many struggling middle-class families don't know they are entitled to these benefits, even those who own a home or have a job.

About one-third of people who qualify for a major federal nutrition program are not currently enrolled to receive their eligible benefits, according to the USDA.
Things may be getting better in some places but even then the "good" news comes with caveats. Yesterday's Washington Post had this article about increased manufacturing jobs in the "Rust Belt," but noted:
But the new hiring also reflects another emerging reality of U.S. manufacturing: Many of the jobs don’t pay anything close to what they used to. Assembly-line workers who will be making the EdenPure products under the auspices of Suarez Corp. Industries will start at $7.50 an hour.

That’s a far cry from the $20 an hour that most workers made with Hoover, which shifted its century-old production lines to Mexico and El Paso in 2007 after concluding that it was too expensive to make its products in the industrial Midwest.
I played a little game of "What If..." a while back based on folks earning minimum wage. It's not a pretty picture. I guess our consolation nowadays is that the jobs pay $7.50 an hour rather than the jobs in many of the overseas outsourced areas where the $7.50 is per day. How very magnanimous of our Corporate Overlords!

Oh, and the next time you hear folks prattling on about how the private sector can do things so much more efficiently than government workers and public servants? Point them to this article from the NY Times on how privatizing prisons hasn't saved money after all. Of course, anyone with a half a brain and the ability to do mathematics could know that this had to be the case. Privatization advocates always seem to conveniently forget that in order for there to be any kind of savings and allow the private entities to make a private, corners have to be cut. The whole fallacy of private enterprise being able to operate "more efficiently" than government sector falls down on that point each time but it never stops those who call for "Government to run as efficiently as business.

When folks have a fixed idea of things though, reality is the last thing they want to acknowledge. McClatchy today had this on Florida wanting to charge Medicaid recipients a monthly premium and a $100 ER use fee:
Florida wants to be the first state in the nation to charge most of its Medicaid recipients a monthly premium as well as $100 for using the ER for routine care. But even supporters acknowledge that the new fees, which the state legislature passed recently as part of a sweeping Medicaid measure, face long odds of getting federal approval.

Today, four states — Illinois, Rhode Island, Vermont and Wisconsin — have Medicaid premiums. But those fees, in accordance with federal law, apply only to people who make more than 150 percent of the federal poverty level — $16,335 annually for an individual or $33,525 for a family of four.

Florida, however, wants to impose the $10 monthly premium on all Medicaid enrollees who aren't in nursing homes. At least two-thirds of Medicaid recipients in Florida, and in the U.S. as a whole, have incomes of less than 150 percent of the poverty level, according to the Kaiser Family Foundation. (Kaiser Health News is a program of the foundation.)

About a dozen states charge Medicaid co-pays for routine care in emergency rooms, but none has fees higher than $20 for people who earn less than the poverty level. Seven of these states charge the fee only for recipients who make above 150 percent of the poverty level.
Nothing at all like kicking people when they are already down.

And because I can:

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