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Click to embiggen (graph: ccalculatedriskblog.com)
Bill McBride of Calculated Risk has a knack for turning data into charts and graphs that paint pictures of the economy that even non-math folks can easily grasp. One of the ugliest charts in his repertoire is the one to the right. With regard to getting back to the employment levels before the Great Recession/Lesser Depression began, we’re at 46 months and counting, and still are around 4.6% below the pre-crash number.
Our nation has never seen a Recession like this. As Paul Krugman noted yesterday,
The bottom line is that 2011 was a year in which our political elite obsessed over short-term deficits that aren’t actually a problem and, in the process, made the real problem a depressed economy and mass unemployment worse.
click to embiggen (graph: calculaedriskblog.com)
Even those with jobs are struggling. Pre-2008, there were about 4.5 million people who were involuntary part time workers because of economic reasons; since 2008 that figure has roughly doubled. It’s below 9 million right now, but it’s still an enormous number.
click to embiggen (graph: calculatedriskblog.com)
To the MOTUs, these are statistics; to me, they are the people I see almost every day. They are my neighbors, my parishioners, and my friends. For them, my new year’s wish is that they find the jobs they so desperately seek. For the MOTUs, my new year’s wish is that they pay the taxes to fund the safety net my neighbors, parishioners, and friends so desperately need.
The moral character of a society is how they treat those on the margins. By that measure, we are in sad shape.
(Graphs courtesy of Calculated Risk.)
23 Comments
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If you haven’t checked out Calculated Risk, give it a shot. Bill writes in a way that speaks well to both professionals who follow the housing market and to non-professionals.
The Great Recession is a misnomer. The economic effects of the Great Recession are comparable to the Great Depression. The only reason we aren’t seeing similar social effects, like soup lines and Obamavilles, is because of the social safety net, which was put in place to offset the harrowing consequences of the inherent instability of capitalism (harrowing for all but the 1%, that is).
1. Social Security
2. Medicare
3. Food Stamps
4. Unemployment Insurance
5. General Assistance (slashed by Clinton)
6. Low-income housing
Take any of these away, and conditions would worsen. Take several away, and there would be blood in the streets. Take them all away (which the bi-partisan neo-liberal “Austerians” in DC are hoping to do), and the Great Depression 2 would make the Great Depression 1 look like a Sunday picnic.
I know everyone here knows this, but things are really bad, and, because of the bipartisan refusal to address the problems in any meaningful way, they will surely get worse.
I’d love to see a graph showing the average hourly wage level. The average wage is down, along with all the other nastiness.
Assuredly The US is a decadent and immoral society, by the standards of the economic bottom line tolerated by the society. In fact, by those standards, we almost aren’t a society at all, just a large group of geographically co-located people functioning together economically.
I’d love to see a graph of the tax returns/rates of all the GOP candidates. Yes, including he who would put his Mitts on Big Bird. [Start the guessing, how much lower than Warren Buffett's tax rate, much less his GOP opponents, is the Mittster's tax rate? Less than zero?]
Taking back our government from the 1% requires an informed 99%, whether they want to see it or not.
Happy New Year, Peterr and all the FDL family, and thanks for all you do.
That’s not very accurate. The average wage for people with jobs is up a bit, after adjusting for inflation, from 22.50 in 2006 to 23.25(est) in constant 2011 dollars. I can’t tell how much of that is wages of the top earners in corporations, and small businesses. But, adjusting for the number of unemployed people, the average wage for the working age population must be down significantly, even with the increase in wages to top earners.
According to the Bureau of Labor Statistics, the average hourly wages in private non-farm employment has been slowly rising, not falling. When adjusted for inflation, the graph is pretty flat or falling slightly over the last three years.
Note, of course, that these are wages for those with jobs, who in many cases are busy picking up the slack for those who were let go. Thus, the total spending by employers on wages has decreased, even as the wage received by the average worker has increased slightly.
SF just raised its minimum wage to $10.24. Highest in the country. No one is going to get rich on that amount but I’m applauding.
Peterr, thanks for this, and for mentioning recent college graduates.
Each of us lives a portion of this disaster, and for 15 months the “can’t file for unemployment because haven’t been ‘employed’ ” was ours WRT our son. Many of his friends continue to struggle. It’s going to be a long time to any “recovery” for these kids and their families [as well as for everyone else].
BTW, it fries me no end to see the “traditional wisdom” [or at least meme] that “the recession ended in 2009.” Wha?????
Finally, I sure would like to see “Obamavilles,” in the memory of “Hoovervilles,” established around the country. Obama’s name should be attached to this disaster, just as Hoover’s was.
Longtime readers of FDL appreciate the informative role blogs have played during this extraordinary financial upheaval. Calculated Risk is absolutely one of the best blogs for the straight scoop on the economy.
While the rest of the world was sucking dopium from Fox News, Wall Street Poodles, having no clue what was about to perforate the Titanic fraud known as global economic hegemony (a.k.a. financial innovation) drank sherry with the Bobo’s and other long-in-the-tooth lapdogs of the capital criminal cabal.
Fortunately, Calculated Risk continues to pour out a reliable stream of insightful perspectives on the realm of economics through the lens of housing, finance, and the macro statistics published throughout the industry.
Back in 2007 (August no less) before the scope of the disaster had been revealed, FDL readers appreciated these insights gleaned from such insightful blogging minds…
A credit crunch is, roughly, when lenders don’t want to lend even to good credit risks. We seem to be getting there, what with so many lenders tightening their criteria lately, but then there’s been so much lending to dubious borrowers of all kinds in the last few years …
Can you say dead on? No wonder CR (a.k.a. Bill McBride) laughingly employs that plaintive cry “Hoocoodanode?”
There are other similar pre-crash warnings from this time — seen throughout the blogosphere. Not that the Mighty Republican Media Machine would allow such heresy to reveal the Emperors cloth-head…
Bush quoted Paulson as saying, “This is far and away the strongest global economy I’ve seen in my business lifetime.”
L I A R S!!!!!
“Get rich”? Can folks even afford to LIVE there? I thought SF housing costs were among the highest in the country.
You need to include the labor participation rate hich is shrinking as workers give up looking for work. Over 35% of population are out of the work force.
Many unemployed have used up their retirement funds. Central household asset home value has shrunk by 40% in California with 13% unemployment since 2008. Investments were flat in 2011. Household wealth apart from home lost 35% from pre bubble value.
Gone gone gone is a large chunk of middle class America. A regional approach may give real economic value. Austerity has eaten away at the “Safety Net”listed above.
Homelessness is a reality for a growing number of households as they chose food over housing.
The conditions for labeling it a depression did not exist until recently. Paul Krugman finally gave the word on this about a month ago. You need to have deflation, and we now have that. True to form, it is caused by tightening the government belt during a crash precipitated recession, as predicted by the Keynesians.
With regards to reading the graphs and seeing things, Peterr, you are still not seeing one thing you should see, which can be seen by R&D and inventors: The economy we have created is not capable of sufficient creativity to employ the country building things. It isn’t just that the wealthy have taken the money from the safety nets. Safety nets are only there for when people fall. They’ve taken the money from the ladders. That’s why people are falling in the first place. Our plans, even the “progressive ones” for the future? Go and read them. Go to Anthony Noel’s site. Go to the Green Party site. Go to frigging ARPA-E. Go to Dharendra Modha’s site, or go to HHS or even go to DARPA or wherever you want to go, NASA Mars. Go read recent science fiction. Is it as mind bendingly far away from our reality as Philip K. Dick was from 1965? Or even as he is from 2011?
Our planet is cooking to death. The distance in science between whether the Great Brown Cloud was 2 feet thick in 1930 and whether it formed in 1950 is an immense one, but the distance in politics between whether we call it the Asian Brown Cloud or the Atmospheric Brown Cloud is a whole conference worth of debate worthy of ethnic struggles, instead. And both are political struggles. If it was 2 feet thick in 1930, we are in such massively bad trouble that we need all the brain power we can muster, and we don’t have the educational structure to get it. Instead, we world wide have a crappy hierarchical system with astronomical costs that’s too abusively co-dependent on computers. So sorry.
It seems it’s more politically correct to call it “Atmospheric” and say it started in 1950. That way there’s no crisis, and we can all go home ethnically and climatologically politically correct and fry.
Sorry for rambling. It’s just that there are undoubtedly enough jobs but creativity, not something else, has got to start being a priority. The planet will not survive on any of the solutions proposed so far, and the economy has already failed on the solutions proposed so far.
Here’s what the housing roller coaster looked like at its peak.
It’s been downhill ever since!
Great point and worthy of a diary.
I see no reason to exclude farm workers many are legal and many farmers unlike other industries get checks from the government but still can’t provide a living wage much less over time for jobs that most people physically can’t do.
50,000,000 individuals are at or below the poverty line! 45 million people have NO medical.
USA population today is 312,867,000 of which 109,503,450 person are not employed in a gainful manner (no paycheck). Many are living on meager SS checks or other safety nets. A small part are living well in gated communities and wealthy communities.
10 million households are underwater or in foreclosure or about 30 million people who are about to be homeless. How many more have been foreclosed?
These are individuals living in a depression with not way out! Welcome to the third world America.
We are living in two separate countries.
I go to Calculated Risk, Naked Capitalism, NYT, Guardian, Al Jazeera, Huf Post and a few others daily. The rosey side is printed as a editorial policy. The reality is that 6 Billion people on the planet live under far more stressful conditions.
Regardless of how you slice it the total pain in America has greatly increased. Opportunity has greatly decreased. The “American Dream” has become a nightmare for many.
The exclusion of farm workers from these statistics is for mathematical reasons, not legal vs. undocumented workers. There are other employment measures that cover farm workers, but not the main statistics that try to cover the broader economic picture.
Counting farm workers poses statistical problems when you compare them with workers in other private sectors. For instance, do you count an unpaid spouse or children who work on the family farm? Do you count them all year long, or only at the harvest? Similarly, the ups and downs of farm employment is not just “seasonal” but also highly weather-related. With the flooding in the upper midwest last spring, the winter wheat harvest never happened in some places, so no “seasonal” workers were hired.
For reasons like these, the BLS and others tend to bracket out farm workers from their measures of private employment. They also separate out government employees (local, state, and federal) from these same stats, for similar reasons. In the top graph above, Bill McBride adjusted the stats to take census-related hirings out of the picture.
The goal with any set of statistics is to compare apples with apples. Including the highly volatile employment of farm workers with the non-farm employment picture ends up distorting the stats on the broader economy.
That’s what I was thinking, too. And when we consider the hourly wage slightly rising, that is not off-setting the loss/reduction in hours worked.
I think the coup on our national economy started with the trade policies of the 1990s, was then exacerbated by the non-response to real economic domestic impacts from 9/11, followed by the inappropriate use of tax cuts and unbudgeted wars in the early 00s on, and clinched with partisan revolt/obstruction through the last 3 years. I can not lay this at the feet of President Obama. It’s unfair and inaccurate in my view.
Well stated. Please do a piece on the functionality/success/shortcomings of the previous remedies in off-setting the impacts of this latest debacle. I’d love to see how our current response (or lack thereof) compares in the long term.
I think it’s a marvel that the historic and very basic measures have been as effective as they have been. We seem to be adopting a wait and see attitude, though; as if they were enough in and of themselves. Meanwhile millions are exhausting the aid, personal tiny wealth (savings), without the new options necessitated by the long duration of the events.