Daily Kos: Unemployment crisis to remain a crisis through at least 2011
By Joan McCarter
Daily Kos
January 31, 2011
Minus concerted stimulus action from the government, which ain’t happening with a GOP House, we’re looking at grim economic times for at least half a decade, according to the CBO.
The jobs crisis isn’t going anywhere, according to the latest forecast from the nonpartisan Congressional Budget Office, which puts the national unemployment rate above 9 percent through 2011 and 8 percent through 2012.
Unemployment will fall to a more “natural rate” only in 2016, when CBO estimates it will reach 5.3 percent — a projection roughly in line with private-sector figures.
“The recovery in employment has been slowed not only by the moderate growth in output in the past year and a half but also by structural changes in the labor market, such as a mismatch between the requirements of available jobs and the skills of job seekers, that have hindered the reemployment of workers who have lost their job,” CBO’s report says.
The degree to which the unemployment crisis is structural, as opposed to cyclical, is hotly debated by economists, with progressives like Paul Krugman arguing that structural unemployment is a fake problem “which mainly serves as an excuse for not pursuing real solutions.” Many argue that the even drop in employment across industries shows that lack of overall demand is the problem, with stimulus spending the answer. Others have said pay disparities between workers with different levels of education show the problem is at least partly structural.
So much for those great, stimulative tax cuts. While the debate over whether or not this is a structural or situational problem continues, the reality for the unemployed remains unchanged:
The most unusual factor of the jobs crisis is how long some people are going without work. Long-term unemployment has surged since the unprecedented mortgage meltdown that clobbered housing prices and launched the Great Recession in December 2007. Some 6.4 million people — 44.3 percent of the 14.5 million unemployed — have been out of work for six months or longer, and 1.4 million have been out of work for two years or longer. This is the worst long-term unemployment situation in the United States since the Great Depression.
Even if you want to call that structural, seems like someone with the power to do so would want to do something about that. Or at least, make a convincing effort towards trying to do something about it, if for no other reason than to make the other guys look bad. Honesty, and a real acknowledgment from the administration that many people are suffering is appreciated, but a jobs program (even if the GOP killed it) would be better.
To read the original article, click here.
I agree with the people who recognized there is a limited number of jobs for those who are unemployed. I have been out of work since December 2009 and I am still looking for work. I have applied to 1000 jobs and I am still out of work. I have never been out of work for over a year other than when I was just out of high school back in 1985. Since then I have worked at least part-time or full time and I have only been out of work for 4-6 months between 1985 and 2009. The factors to consider are the number of people unemployed, the number of jobs available per metropolitan area (LA, NY, DC, etc), jobs per county or city, the numbers for unemployed compared to jobs in that area, the types of jobs and qualifications for the jobs posted and the number of people applying to the number of positions available. Let’s not forget the high school and college graduates, the people moving to the area that may also be looking for work. Do you see the problem now? The odds of finding a job are 1.5 million people to maybe 1000 jobs (if you qualify for them). The ratio of people to jobs is 1500 to 1. The average number of applicants to job is 45 to 1 (9 applicants per day for week for one job. This I witnessed at four different jobs in four different cities.)If I applied to 1000 jobs in 13 months, I am projected to be out of work for at least 6 to 7 months more based on the mathematics and ratio alone. I am on track for this average and still may be out of work. This is the big picture. The problem is there are more unemployed workers per county (LA at 650000) than the number of jobs in county or counties that are available. This is the big picture. Now what is going to be done about it?
This is another response to the stimulus that was spent. Rebates for appliances, cars, the bank bailout, and for construction didnt create any jobs. The rebates only created spending and KEPT those working due to spending increase. The question is did the companies gain anything from this stimulus program? No jobs were added. The bank bailout kept it from collapse but again didnt create jobs only kept those employed at the bank(s) that should have failed because now we will pay for it in taxes. The stimulus for contruction doesnt “Put America to Work” as the signs state, it KEEPS them employed. No jobs were created, only money spent for those that were working prior to the money being spent. Do you see the problem here?