with the greek election behind us (and mixed initial reactions), let's take a quick snapshot as to where our own economy is. i found this article based on David Rosenburg's studies sobering and enlightening at the same time. the summary?
Forty-five million Americans (one in seven) are on food stamps.
• One in seven is unemployed or underemployed.
• The percentage of those out of work defined as long-term unemployed is the highest (42%) since the Great Depression.
• 54% of college graduates younger than 25 are unemployed or underemployed.
• 47% of Americans receive some form of government assistance.
• Employment-to-population ratio for 25- to 54-year-olds is now 75.7%, lower than when the recession “ended” in June 2009.
• There are 7.7 million fewer full-time workers now than before the recession, and 3.3 million more part-time workers.
• Eight million people have left the labor force since the recession “ended” — adding those back in would put the unemployment rate at 12% instead of 8.2%.
• The number of unemployed looking for work for at least 27 weeks jumped 310,000 in May, the sharpest increase in a year.
• Just 14% of high-school graduates believe they will have a more successful financial future than their parents.
• The male unemployment rate for ages 16 to 19 is 27%; for ages 20 to 24, it is 13%.
• Because of structural problems such as negative home equity (which keeps people from moving for work) and skills erosion (from long-term unemployment), UBS economists estimate that the economy’s natural unemployment rate has increased from 5.7% before the recession to 8.6% now. (emphasis mine) This acts as a speed limit on potential economic growth.
• Between 2007 and 2010, median family net worth fell nearly 40%, while median inflation-adjusted incomes before taxes fell nearly 8%.
did you catch that phrase about the natural unemployment rate? the net worth numbers made headlines earlier in the week, but if true, that big of a change in the structural unemployment rate would be much, much bigger news. one with far bigger ramifications.
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9 Comments
What a cheerful way to start the week.
not to change the subject, but Amazon CEO Jeff Bezos's wealth increased by $350 million last week. That is equal to a pay wage of approx. $9 million an hour for a 40 hour week
Good. Kill Bezos and redistribute his assets.
Next?
OK but Bezos' wealth only increased on paper, right? So if we taxed him at 90%, as was law 60-some years ago, it would equal nothing, right? I mean, I'm *all* for taxing people who make over, say, $2million at 90%, but that needs to be actual wealth.
I'm most astounded by the figure that almost HALF - 47% - of Americans are on government assistance. What the hell happened to us.
government assistance encourages government dependence, donna. i believe in welfare, but on a fundamental level i think this is why the numbers have drastically increased.
anyone else think these stats seem exaggerated, btw...?
jk - let's say they are, by 5%. does that make the impact that much less? personally, i think where you live and the extent of how badly that area fared will drive your perception. meaning, if you live in a nice part of town, work a nice, 'safe' white collar job for a fortune 500 company doing well, you're less likely to truly 'see' the full impact of this recession than if you're living on the south side of atlanta, where 40% of the people are unemployed or doing part-time, minimum wage jobs and whose home values have fallen 60-70%. for example.
'government assistance' probably needs some definition in this context - i mean, i get the standard homeowners mortgage interest deduction and child tax credits. is that a form of government assistance? wic (food stamps) are probably the biggest portion of that percentage. school lunches, etc. what that number doesn't say is how much assistance people receive on average.
so what the hell happened? i don't for a moment believe there's a problem with people WANTING to be dependent on the government. that percentage is very, very small and is usually people who are on the lowest rungs of social mobility and simply don't have the skills to move up and don't have the motivation to do so. fine. there's always going to be that group. what's happening right now is that:
unemployment/underemployment is very, very high by historical standards.
our tax revenues are lower as a consequence (by the time you take the standard deductions, many people effectively don't owe any tax. however, if you ask those same people would you pay more tax if your income was twice as much, i'm willing to bet 100% say yes).
we're in a period of major transitions in terms of how companies, jobs, etc. will really react to all the advancements in technology over the past 20 years. computers and robots are going to replace people in manufacturing, even at the smallest scales. a large base of solid blue (and some white) collar 'middle class' jobs are gone and probably aren't coming back. at least in the same form. how those who were displaced make the transition into something else is a work in progress.
finally, the economy isn't just the u.s. anymore. it's truly the world. we're competing against india and china as much as we are california and texas.
and that's just the first handful of factors.
all taken together, yeah, it's going to be interesting times.
Donna: "I'm most astounded by the figure that almost HALF - 47% - of Americans are on government assistance."
Keep in mind -- this figure includes recipients of Social Secutiry and Medicare, which is strictly age-dependent. It also includes the pensions of retired military, govenment support for wounded military, and government support for the dependents of deceased military -- of which I was one during my school days. I'm guessing it also includes the pensions and other retirement benefits of all government workers, including those of retired congressmen and presidents and other high-ranking officials, including perhaps the pensions and other retirement benefits of retired state and local officials.
The fact that someone receives "government assistance" does not immediately indicate a "dependence on government" due to laziness or ineptitude.
Growth at a 20th century rate is impossible to sustain. No amount of hope will matter, no political ideology will save us, it is simple math. Our society cannot survive without growth and growth cannot happen without an increase in resource yeilds. Unfortunatly the opposite has been true for the last 30 years (resources are depleating.) And now, the whole world is one big economy that must grow. We can't all grow so we will likely see economic wars that will lead to real wars. We are in the early stages of a total collapse of civilization. The concentration of weath and power is a planned effort to prepare for this inevitable collapse that will occur in the next 50 years. I think its all a set up. cheers!
pointless blog posts up 30%.
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