Brad DeLong's Semi-Daily Journal (2004)

Perhaps if we add Bush and his cronies to the ranks of the unemployed they'll finally understand what the rest of us are going through... great post.

Is anybody studying those discouraged workers??

It seems odd that so many people dropped out of the labor foce this time around. It would be interesting to know if their ages or household wealth are different than in previous downturns. Are they close to retirement? Are they sitting on windfalls from the boom (unlikely, I know). Are they African Americans who came into the workforce during the long 90's booms. I hope someone is looking at this.

I think it's time for an investigation. Somebody other than Brad has finally made a bit deal in print about the employment participation rate. Was Moneybox brided? And by whom?

I like your questions charliew. Even the reference to windfalls some of the boomers inherit. There are also many early retirement options from companies downsizing and/or outsourcing to minimize labor costs. This issue and the demographics are complex, but BLS has (some of the) stats that could answer some of your questions.

One question on this. The measuring is taking place from the "peak" of an employment cycle. As ABB as I am (which is very), isn't it a bit misleading to castigate the Bush job picture, when contrasting it to perhaps the apex of job creation, in the last - oh I don't know - someone more knowledgeable fill in the answer. 50 years? ever?

Of course, you have to take into account the hidden numbers, such as those looking for work, those given up, part-time workers - not to mention the loss of good paying jobs.

But as an apple to apple comparison, isn't this comparing the apex, to a non-apex?

To be clear, the economic policies of the Bush admin, could and should be criticized on all the other grounds that Brad rightly criticizes, this just seems a bit specious...

Adrian explains all you need to know about how the Universe started:

http://pep.typepad.com/public_enquiry_project/2004/07/adrians_cosmolo.html

charliew: I'd like to know the answers to that, too. One theory is that huge numbers became students. Anecdotally, the community college trades classes in Silicon Valley have been overflowing and there has been a demand for teachers.

But I also wonder if the survey is set up to incorrectly categorize some of those who are seeking work as "discouraged".

Bush WAS a deserter. The proof is here:

http://www.glcq.com/bush_at_arpc1.htm

I always really enjoy enthusiastic cherry-pickin' spin.

"If 64.4 percent of Americans had jobs today, as they did in January 2001, there would be nearly 4.8 million more Americans employed."

But let's not mention that that selected point was the height of an historic boom and bubble -- (such as e.g. Krugman had derided in 1996 as being impossible because it would drive unemployment down so far below the sustainable level).

Drawing the trend line for employment from the end of the 1981 recession to 1996 and them continuing, we find employment 4.5 million above trend at exactly that point, with unemployment just having toed 3.9% (versus Krugman's minimum 5.5% to 6%).

So, of course, let's pick *that* unsustainable bubble point as our *base* when calculating the future employment growth we expect. ;-)

And while we're at it, we can also say voters are pissed at Bush because the Dow isn't at 15,000 -- to which just its normal average growth rate should have taken it from its January 2001 level.

How'd Gross forget to mention that?

"In President Clinton's first term, the labor force grew by about 5.2 percent. With just six months to go in Bush's term, the labor force has risen by just 2.2 percent...."

Well, Clinton's first term didn't include a *recession* following an employment bubble.

But since Gross is comparing first terms by such measures, let's see some other comparative cherries he didn't pick...

Clinton (1993-1996, no recession)
v Bush (2001 thru 5/2004, with a recession)

Civilian employment ratio.
Clinton: 62.6%
Bush : 62.8%

Labor force participation rate
Clinton: 66.6%
Bush: 66.5%

Unemployment rate (remember when this used to matter?)
Clinton: 6.0%
Bush: 5.5%

http://research.stlouisfed.org/fred2/categories/10

Gosh, was Clinton's first term really that dreadful for labor?

I bet the dscouraged worker data problem is like a lot of the other data. If you look at it by sector the answer probably would be obvious.
I bet a lot of the discouraged workers are still high tech employees still waiting for high tech employment to come back. The emploment gains have been in retail and other less desirable fields but the jobs for fired HT employees have not come back and those are probably most of the discouraged workers.

Well, Jim, if you'd read Gross carefully, you'd see that he's explaining why it is that Bush is getting no love from the recent modest improvement in the jobs situation, and his explanation is perfectly sound: people remember a much better job situation than exists right now.

They also remember that Bush promised a much better jobs situation than we have right now: surely you have't forgotten that we were supposed to create 5.5M new jobs between 7/1/03 and 12/31/04 if only we passed the so-called stimulus package?

And surely you haven't forgotten that despite the job growth in Clinton's first term, there was a lot of grousing about the jobless recovery then?

And surely you haven't forgotten how brief and shallow (from a GDP standpoint) the recession in 2001 was?

And surely you haven't forgotten that if we simply compare comparable points in the recovery cycle (i.e., 4 quarters after the end of the recession, 8 quarters after the end of the recession), the circumstances looked better under Clinton?

None of these statistics address underemployment, either. Plenty of people are frustrated who have "jobs". Or McJobs as the case may be. If you have a good college degree and are flipping burgers you may still be counted as part of the work force. But you won't be counted as a happy camper.

And I seriously doubt that an epidemic of baby-boomer windfalls can explain more than a sliver of that downward trend in the workforce. Half of the people in this country don't have a sliver of savings, let alone a rich parent to leave them money.

One might also note that while employment appears to be trending in a positive direction, enrollment in health plans is no better than flat. So saith the CEOs of both Aetna and United Health Group just this week. Underemployed and uninsured = unhappy.

I also think most Americans can sense the Deficit and though it may be too complicated to throw into the stats, We just don't seem to be getting that much bang for the buck.
With Clinton, there was a sense of true growth in the economy, with Bush it seems like a big ticket item we ordered and there is perhaps the nagging sense of buyers remorse.

"Well, Jim, if you'd read Gross carefully..."

Well, howard, if you'd read Glass carefully...you'd see he's already demolished your arguments.

Now, since you've had ample time to stroll into your neighborhood Safeway with its Best Sellers section; what'd ya find on page 337 of "My Life"?

Jim,
I know it must be difficult for you. But the point was not that the growth rate was unsustainable because of some financial bubble (the stock market does not necessarily have that sort of influence). But that such labor market results were achieved at all. The underlying processes, like labor force productivity, actually continue today. Your problem however is doing "averages" from such select points. I believe this gives a better description:
Employment-Population Ratio
Clinton: Jan 1993 61.4 May 1996 63.8 Difference +2.4
Bush: Jan 2001 64.6 May 2004 62.2 Difference –2.4

Unemployment Rate
Clinton: Jan 1993 7.3 May 1996 5.6 Difference –1.7
Bush: Jan 2001 4.2 May 2004 5.6 Difference +1.4

Labor Force Participation Rate
Clinton: Jan 1993 66.2 May 1996 66.7 Difference + .5
Bush: Jan 2001 64.4 May 2004 62.2 Difference –2.2

I don't necessarilly believe these statistics capture everything. But you clearly have an administration (Bush) who believes the sum total of all economic policy is tax cuts tilted towards the upper income levels and also believed that it could take credit for a recovery that would come with or without the tax cuts. This of course has not happened. And the direction for them has been all wrong. And this is what is their Problem.
Source:
http://www.bls.gov/home

Patrick, if you'd read me carefully (that's a joke, son) you'll see that i let you know, at 9:26 a.m., in the Bartlett thread (the first place today i saw you post is why i picked it), the following, and i quote (note that my whole comment was addressed to you):

"PS. I was passing through an airport yesterday and with limited time, chose to look at page 337 rather than get something to eat - just for you! And indeed, you are completely correct: Clinton got the Bork/Scalia timing wrong."

Meanwhile, back to Jim Glass: no, he didn't do anything of the sort as to "demolish" my arguments, because he didn't address them. Gross says "hey, people aren't giving Bush love because the job market isn't as strong as it was in recent memory." Glass says: "hey, nuts to recent memory, that's just cherrypicked data, why i can prove here, while busily insulting krugman several times for no particular reason other than to prove that i'm a right-winger, that the late '90s were a boom period." Howard says, Gross's "explanation is perfectly sound: people remember a much better job situation than exists right now."

So explain to me what was "demolished" in my comments? People would like there to be a boom, they remember there being a boom recently, they compare the current situation to the boom, and they therefore don't think that they should admire the current occupant of the white house for a non-boom economy. It's really pretty simple.

As for the rest of Glass, a man who never cherrypicks (we have his very own word for it!), he shows us some Clinton first-term numbers, to which howard responds that yes, if he would search his memory, Glass would discover that there were lots of comments then about the jobless recovery, even though at any comparable post-recession point, Clinton had been in office when more jobs were created than Bush. So that was demolished where?

I mean, Patrick, you got page 337 right, but don't get carried away; you still live in a parallel world where what you want to be true is true....

Susan: "If you have a good college degree and are flipping burgers you may still be counted as part of the work force. But you won't be counted as a happy camper."

That's one of the important aspects of this. We don't have a statistic that counts happy campers. All we have are claims of a positive correlation between: how many people are not unemployed (which is a different concept from being employed), the magnitude of aggregate stock market indices, the growth rate of GDP, etc., an on the other side the number of happy campers.

Using 1984 (the year, not the novel) as precedent, people are likely to credit Bush for the trend rather than the objective state of affairs. Had Americans known the objective state of things in November of 1984 (notably the deficits and the fact that there were two recessions, a mild one under Carter and a harsh one under his successor), they would never have re-elected Reagan. The jobs that came then were worse than the jobs they replaced and there was also substantial underemployment and hidden unemployment. The strong growth spurt of that year, however, was enough to carry him back into office. Americans are by nature an optimistic people, and forgive many of their leaders' failings.

Bush is clearly trying to replicate that, including the massive, crippling deficits used to finance what good feeling there is. Whether he succeeds or not in getting elected or re-selected is in question.

Oops I forgot that Patrick was JG's soulmate thus I need to spell things out v e r r y s i m p l y. JG gets comparable or worse averages for first term Clinton and Bush, and thus JG's comparisons because he averages a bad begining with a good close to the first term for Clinton and the opposite for Bush. (The average unemployment rate for Reagan and Bush 1 was 6 percent and 5.6 looked really good at the time). On the other hand JG averages a good beginning for Bush with a bad close for Bush II. Deceptive. Of course with polls showing approval ratings in the low 40's for Bush one has to ask can anything go right for the guy. Even for a little bit. Maybe God is not on his side? Or maybe he just can't cut it? But he looks a lot more like Carter than Bush 1 right now.

I was realizing that patrick and jim, on this matter, have adopted a marxist analysis, invoking our old friend, false conciousness.

People can't actually not be admiring of the current economy for real reasons; it must be that they have a "false conciousness" engendered by the late '90s.

It's rather an odd perspective for supposedly conservative folk....

Last I looked, empl-to-pop ratio was down in all major subgroups except (from memory here) retirement age married females.

One little-noted highlight of the Clinton era was that net job growth occurred almost entirely in the private sector.

"People can't actually not be admiring of the current economy for real reasons; it must be that they have a "false conciousness" engendered by the late '90s.

It's rather an odd perspective for supposedly conservative folk...."

Posted by howard at July 1, 2004 10:00 PM

It's a quite reasonable perspective - let's face it, everything has gotten worse under Bush. The GOP has got to keep people from thinking that. Blaming Clinton for things getting worse under Bush will only work on the GOP base, and that's not enough to win the election. So the mid/late 1990's have to be painted as a Bad Thing.

The good employment numbers are being offset by rising inflation.

The missery index is rising and it has a perfect record of calling who wins the popular vote in the election. If it is higher than at the last election the encombent or his vice president lose. If it is lower than at the last election they win. this simple rule has called every elecion for 50 years.

There is high level data on wages and how much people are working:

ftp://ftp.bls.gov/pub/suppl/empsit.cessum.txt

As has been well discussed, wages aren't going anywhere. Hours worked are up a bit, but just a bit.

The problem with averages is that they don't reveal the distribution--people in the bottomw two quintiles may be doing worse, and it would not necessarily show up in these data.

Having spent 12 months out of work between 2003 and 2004, I can honestly say that none of you have any clue what is going on. Getting out of the house every day, filling in applications every day, sending out resumes every day: looking for work is a full time job. If I did not have friends I could have stayed with, I would be living under a bridge. No, I was not sitting on my fanny perpendicular waiting for the phone to ring. Currently, as a programmer, I am making half what I was earning in 2002. Fuck you.

charliew Is anybody studying those discouraged workers??

It seems odd that so many people dropped out of the labor foce this time around. It would be interesting to know if their ages or household wealth

spencer emploment gains have been in retail and other less desirable fields but the jobs for fired HT employees have not come back

Ok a survey of one - 55 years old, 4 years grad school. My wife works and has not had a raise in 3 years. IBM sent my job to India 2 years ago yesterday. $65,000 salary gone, replaced with 6 weeks severence pay period. There are NO JOBS. I don't know what it is that you people do not understand. In Atlanta we have Lucent, Nortel, MCI, Sprint, AT&T, IBM, HP, Compaq. Those are the major employers and believe me they have fired tens of thousands and are definitely not hiring, except IBM who fires anyone over 50, sends 2 of those jobs offshore and hires 1 20 something kid for 1/3 the pay.

I don't know any of your ages but I can assure you that if there was a job market it is not strong for the mid-50s in any circumstance.

Did I drop out - hell no? Am I rich - hell no. Am I living on some mythical windfall - hell no. I am suffering and you can bet your ass there one hell of a lot of folks in my position.

Congratulations to Lawrence Boyd for out-embarrassing our host in terms of economic illiteracy:

"JG gets comparable or worse averages for first term Clinton and Bush, and thus JG's comparisons because he averages a bad begining with a good close to the first term for Clinton and the opposite for Bush."

That "bad beginning" for Clinton was inheriting an economy in recovery from recession. 4th qtr. 1992 GDP growth was 4.7%, iirc.

W, on the other hand, inherited an economy about to officially go into recession (compounded by the unprecented events of 9-11-01 and thereafter).

That someone on the econ faculty of a university would get something this basic EXACTLY BACKWARDS--in the annals of intellectual dishonesty--truly impressive.

oh, for goodness sake, Patrick, is it really true that you, like jim glass, absolutely have no understanding of the term "relative?" There is no other way to read your 7:35 a.m. comment that i can imagine (perhaps a failure on my part, admittedly).

The Clinton reference is that over the course of the first term, things got better; one way to put that is to say that he had a bad beginning. Is that so transcendently foolish that it entitles you to talk trash about intellectual dishonesty?

Yes, we were in the very nascent stages of a recovery when Clinton took office, which still hadn't led to much job creation. Job creation got better over the course of the first term, and really impressive over the course of the second.

Meanwhile, of today's jobs report, let me simply say that 112K jobs was probably a really impressive number in 1934, so i'm sure that jim glass will tell us how anyone who isn't admiring of it is simply guilty of cherrypicking the population base, and patrick will chime in on how this proves that daniel gross is, oh, how shall we put it, "intellectually dishonest" and those of us who think he has a point have, yet again, been "demolished."

If i may look ahead, it will be truly impressive to read later today....

Richard, i meant to say something about your comment, but patrick distracted me.

As i read in the WSJ a couple of days ago, the U of Mich consumer confidence survey shows a real bifurcation: confidence is up in households with income above $50K, and it's down in households with income below $50K, which tracks with the downward projections from WalMart and Target.

REALITY CHECK: Even Jimmy Carter's 4 years
witnessed the creation of 10 million jobs.