The October Lesser Depression Jobs Picture: Grim No Matter How You Look at It

By Ron Baiman

Though payroll jobs (establishment survey) increased by 204,000 in October, overall employment (household survey) declined by 735,000, indicating that the U.S. employment situation remains dismal.  More telling, long-term employment of 27 weeks or more remains at 4.1 million, approximately double the level in prior recessions (see: http://www.tcf.org/blog/detail/graph-americas-long-term-unemployment-crisis-continues).  The official unemployment rate also remained essentially unchanged, increasing slightly from 7.2 percent to 7.3 percent.  The more accurate U-6 unemployment rate, which takes into account discouraged workers and workers working part time who would like full-time work, also rose from 13.6 percent to 13.8 percent in October.

In order to understand the long-term picture, especially since the October data is affected by the government shutdown, it is useful to compare the change in employment-to-population (over 16) ratio during the current “Lesser Depression” with all prior post-war recessions. The employment-to-population (E/P) ratio controls for declines in labor force participation during recessions. Figure 1 shows how this ratio changed relative to its value on the official starting month of each post-war recession. Note that E/P never fully recovered from the 2001 recession and has shown almost no improvement in the current “expansion” from the official June 2009 trough of the current Lesser Depression.

Figure 1: Percent change in Employment/Population Ratio from Start of Recession For Post-War Recessions

image1.jpg

Floyd Norris of the New York Times recently showed (11/02/2013) that when controlling for demographic changes (the ratio of 16-24, 25-54, and 55 and over, in the population) there has been some improvement in the E/P ratio, which at least has risen above its lowest value in the 1991 recession (see: http://www.nytimes.com/2013/11/02/business/economy/changes-in-labor-force-mask-improvement-in-jobs-situation.html?_r=0 with accompanying figures: http://www.nytimes.com/interactive/2013/11/01/business/Job-Picture-May-Be-Better-Than-It-Appears.html?ref=economy ).  Norris points out that labor force participation has risen among older workers (the 55-and-over cohort) since the start of the recession in 2007, even as it has declined among younger workers, especially the 16-24 group. But since prime-age workers (26-54) have the highest participation rates, an aging population will cause the E/P ratio to decline even if employment rates by age cohort were constant. Norris’s adjusted figure looks at what E/P ratios would be if earlier populations had the same age cohort shares as today’s population. 

Norris’ figures show a positive trend in “adjusted” E/P ratio after a precipitous drop (to the lowest point in the last 25 years) in 2009, so that recently the ratio climbed above its level in the early 90’s recession. But this comparison to the 1990’s E/P ratio is clouded by the long-term trend of increasing E/P as more women have joined the labor force due to economic and cultural factors since that time.  A more telling comparison would look at recessionary impacts on short-term changes in E/P, specifically from the beginning of a recession. Figure 2 below performs such an analysis (using similar cohort specific E/P ratios, holding population cohort shares to their October 2013 level for all prior years) and shows just how severe job loss in the Lesser Depression has been relative to all prior post-war depressions even after taking population demographic changes into account. Because these are shorter-term comparisons, these specifically recession-related job losses are less clouded by long-term cultural and economic trends in E/P.

Figure 2: Percent change in Employment/Population Ratio from Start of Recession For Post-War Recessions Adjusted for Major Age Cohort Population Changes

image2.jpg

Moreover, it is unclear whether this “adjusted” figure provides the more accurate picture, as the ratio of employed people to total population is a key factor in economic productivity regardless of their relative ages, and a shift toward less relative labor force participation by younger workers (regardless of population demographics) is, as many have pointed out: http://www.nytimes.com/2013/11/08/opinion/krugman-the-mutilated-economy.html), a negative trend both for the future prospects of younger youngers, the retirement prospects of older workers, and for society at large.

However one measures our current economic malaise, and the E/P ratio is one of the best indicators of our condition, we are in a very bad way, and it appears very clear that unaided private sector growth will not provide adequate full employment at living wages any time in the near future. For this, a large-scale federal jobs program -- which could be largely funded by a financial transactions tax -- and equally robust trade and industrial policies will be necessary (see for example: http://www.cpegonline.org/workingpapers/CPEGWP2010-1.pdf ).

Ron Baiman is on the steering committee of Chicago DSA and a member of the Chicago Political Economy Group.

Individually signed posts do not necessarily reflect the views of DSA as an organization or its leadership.

Grassroots Fundraising: Paying for the Revolution (9pm Eastern)

June 23, 2017
· 46 rsvps

Are you new to socialist organizing? Or after many years do you still struggle, raising money from members when you need it but without a steady flow of income or budget to plan ahead? Are you afraid to tackle fundraising because it seems so daunting or you are uncomfortable asking people for money?

In this webinar, you will learn why fundraising is organizing, and how to do it – face to face, through fundraising events, and other ideas.

Join us for our latest organizing training for democratic socialist activists: DSA’s (Virtual) Little Red Schoolhouse.

Instructor:

  • Steve Max, DSA Vice Chair and one of the founders of the legendary community organizing school, The Midwest Academy

Training Details:

  1. Workshops are free for any DSA member in good standing.
  2. You need a computer with good internet access.
  3. Your computer must have preferably headphones or else speakers; you can speak thru a mic or use chat to "speak".
  4. If you have questions, contact Theresa Alt talt@igc.org.
  5. If you have very technical questions, contact Tony Schmitt schmittaj@gmail.com 608-355-6568.
  6. Participation requires that you register at least 21 hours in advance -- by midnight Thursday for Friday's webinar.

NOTE: This training is scheduled for 9:00pm Eastern Time (8pm Central, 7pm Mountain, 6pm Pacific, 5 pm Alaska, 3 pm Hawaii).

Introduction to Socialist Feminism Call

June 27, 2017
· 68 rsvps

Join DSA activist Judith Gardiner to explore “socialist feminism.” How does it differ from other forms of feminism? How and when did it develop? What does it mean for our activism? 9 pm ET, 8 pm CT, 7 pm MT, 6 pm PT.

Data Security for DSA Members

June 27, 2017

Ack! I googled myself and didn't like what I found!

WHAT: A DSA Webinar about "Doxing"
WHEN: 9PM EST, 6PM PST

We're proud of our organizing, and chapter work is transparent for both political and practical reasons. However, there are basic precautions you can take in this time of rapid DSA growth to protect your privacy.

Key Wiki is a website that meticulously documents DSA activity and posts it for the world to see. If you're an active DSA member, likely your name is on their website. This is an example of "doxing".

As DSA becomes larger, more visible, and more powerful, we might expect that more websites like this will pop up, and more of our members' information might be posted publicly on the web.

Join a live webinar on Tuesday, June 27 with data security expert Alison Macrina, to learn:

  1. what is doxing? with examples and ways to prevent it
  2. how to keep your passwords strong and your data secure
  3. where to find your personal info on the internet and how to get it removed
  4. social media best practices for DSA organizers
  5. what to do if you've already been doxed

Zoom Link: https://zoom.us/j/9173276528

Call-in Info: +1 408 638 0968
Meeting ID: 917 327 6528

Film Discussion: Pride

September 10, 2017
· 11 rsvps

Join DSA members Eric Brasure and Brendan Hamill to discuss the British film Pride (2014). It’s 1984, British coal miners are on strike, and a group of gays and lesbians in London bring the queer community together to support the miners in their fight. Based on the true story of Lesbians and Gays Support the Miners. The film is available for rent on YouTube, Amazon, and iTunes. 8 ET/7 CT/6 MT/5 PT.

Film Discussion: Union Maids

September 24, 2017
· 8 rsvps

 

Join DSA member and labor historian Susan Hirsch in discussing Union Maids (1976). Nominated for an Academy Award, this documentary follows three Chicago labor organizers (Kate Hyndman, Stella Nowicki, and Sylvia Woods) active beginning in the 1930s. The filmmakers were members of the New American Movement (a precursor of DSA), and the late Vicki Starr (aka Stella Nowicki) was a longtime member of Chicago DSA and the Chicago Women's Liberation Union. It’s available free on YouTube, though sound quality is poor. 8ET/7CT/6MT/5PT.