Posts Tagged ‘unemployed’

stress

We’ve all seen it among our students: their stress levels are way up.

The sense that, over the past decade, students are feeling more stress is confirmed by the latest report on first-year college students from the Higher Education Research Institute at UCLA [pdf]. 34.6 percent of the students surveyed reported that they are frequently overwhelmed by all they had to do. According to the Huffington Post [ht: ja], that is up from 24 percent in 2005.

Only half of last year’s freshmen consider themselves “above average or better” in emotional health, continuing a skid from 63 percent in 1985 and 54 percent in 2005.

Denise Hayes, president of the Association for University and College Counseling Center Directors in 2011, theorized at the time that the declining emotional health was connected to financial pressures.

“College tuition is higher, so they feel the pressure to give their parents their money’s worth in terms of their academic performance,” Hayes said then. “There’s also a notion, and I think it’s probably true, that the better their grades are, the better chance they have at finding a job.”

Think about it: workers are increasingly stressed on the job, and when they lose their jobs. And college students are increasingly stressed by the prospect of paying for their education and finding a job.

Clearly, there’s something seriously wrong with the way workers—who have jobs, who have lost jobs, or who have yet to find jobs—are being stressed out today.

Perhaps then we need to transfer that stress to those at the top to accept a radically different set of educational and economic institutions.

employment gap

Mainstream economists have, it seems, rediscovered what we’ve known since at least the middle of the nineteenth century: capitalism produces a relative surplus population of unemployed and unemployed workers. And that surplus of labor puts downward pressure on workers’ wages.

Back then it was called the “industrial reserve army.” I have referred to it since 2010 as the “reserve army of the underemployed.” David G. Blanchflower and Andrew T. Levin now point to the same phenomenon in terms of the “employment gap,” that is, the combination of conventional unemployment (individuals who did have a job, are now not working at all, and are actively searching for a job), underemployment (that is, people working part time who want a full-time job), and hidden unemployment (people who are not actively searching but who would rejoin the workforce if the job market were stronger).

What Blanchflower and Levin find is instructive.

First, the conventional unemployment rate has not served as an accurate reflection of the evolution of labor market slack.

it is evident that the U.S. economic recovery remains far from complete in spite of apparently reassuring recent signals from the conventional unemployment rate. Indeed, while the unemployment gap has become quite small, the incidence of underemployment remains elevated and the size of the labor force remains well below CBO’s assessment of its potential. In particular, the employment gap currently stands at 1.9 percent, suggesting that the “true” unemployment rate (including underemployment and hidden unemployment) should be viewed as around 71⁄2 percent. Gauged in human terms, the current magnitude of the employment shortfall is equivalent to about 3.3 million full-time jobs.

Second, in recent years, wage growth has been pushed down by a combination of the unemployment rate, the nonparticipation rate, and the underemployment rate. In particular,

we suspect that the wage curve is relatively flat at elevated levels of labor market slack, i.e., a decline in slack does not generate any significant wage pressures as long as the level of slack remains large. As noted above, our benchmark analysis indicates that the true unemployment rate is currently around 71⁄2 percent—a notable decline from its peak of more than 10 percent but still well above its longer-run normal level of around 5 percent. Thus, the shape of the wage curve can explain why nominal wage growth has remained stagnant at around 2 percent over the past few years even as the employment gap has diminished substantially. Moreover, our interpretation suggests that nominal wages will not begin to accelerate until labor market slack diminishes substantially further and and the true unemployment rate approaches its longer-run normal level of around 5 percent.

In other words, what Blanchflower and Levin have discovered is that there is a large relative surplus population of workers and that the existence of such a reserve army has a dampening effect on workers’ wages.

Now, all they need to do is discover a third component of what we’ve known since the Mohr wrote back in 1867: “The labouring population therefore produces, along with the accumulation of capital produced by it, the means by which it itself is made relatively superfluous, is turned into a relative surplus population; and it does this to an always increasing extent. This is a law of population peculiar to the capitalist mode of production”

Sorensen-3-3

Special mention

take-a-walk-512 rob rogers

128212_600

The other day, in preparing my thoughts for a BBC interview on the end of quantitative easing in the United States, I wish I’d had Steve Waldman’s pithy summary in front of me:

you can see why a QE-only approach to demand stimulus embeds a troubling political economy. The only way to improve the circumstances of the un- or precariously employed is to first make the rich richer. The poor become human shields for the rich: if we let the price of stocks or houses drop, you are all out of a job. A high relative price of housing versus other goods, a high number of the S&P 500 stock index, carry no immutable connection to the welfare or employment of the poor. We have constructed that connection by constraining our choices. Deconstructing that connection would be profoundly threatening, to elites across political lines

Chart of the day

Posted: 24 September 2014 in Uncategorized
Tags: , , ,

search

According to a new study by Carl Van Horn, Cliff Zukin, and Allison Kopicki [pdf], for the John J. Heldrich Center for Workforce Development,

nearly 30 million people — say they were laid off from a job in the past five years. Nearly 4 in 10 of these laid-off workers say they searched for a job for more than seven months before finding another one; one in five workers laid off during the past five years never found another job (see Figure 1). Of those who found another job, one in four say it was a temporary position.

Moreover, laid-off workers who found another job seldom improved their financial situation: two-thirds say their new jobs either paid less than their previous one (46 percent) or paid the same (21 percent). It’s no surprise then that nearly half of the reemployed workers say their new job was a step down for them compared to what they were doing five years ago. Just a quarter say their new job was a step up and only a third say they are receiving higher pay.

aD48E.So.91 copy

Special mention

WolveM20140922A_low RallT20140922_low

21cSafetyNet-fig5NEWNEW

source

Maybe now that the proportion of unemployed workers on jobless benefits has fallen to an all-time low (thereby undermining John Boehner’s belief they don’t really want to work and prefer to just sit around, relying on government handouts) but the number of poor people remains at an all-time high, perhaps it’s time to take another look at Jonathan Swift’s “Modest Proposal” to advance the public good, relieve the poor, and give some pleasure to the rich:

The number of souls in this kingdom being usually reckoned one million and a half, of these I calculate there may be about two hundred thousand couple whose wives are breeders; from which number I subtract thirty thousand couple, who are able to maintain their own children, (although I apprehend there cannot be so many, under the present distresses of the kingdom) but this being granted, there will remain an hundred and seventy thousand breeders. I again subtract fifty thousand, for those women who miscarry, or whose children die by accident or disease within the year. There only remain an hundred and twenty thousand children of poor parents annually born. The question therefore is, How this number shall be reared, and provided for? which, as I have already said, under the present situation of affairs, is utterly impossible by all the methods hitherto proposed. For we can neither employ them in handicraft or agriculture; we neither build houses, (I mean in the country) nor cultivate land: they can very seldom pick up a livelihood by stealing till they arrive at six years old; except where they are of towardly parts, although I confess they learn the rudiments much earlier; during which time they can however be properly looked upon only as probationers: As I have been informed by a principal gentleman in the county of Cavan, who protested to me, that he never knew above one or two instances under the age of six, even in a part of the kingdom so renowned for the quickest proficiency in that art.

I am assured by our merchants, that a boy or a girl before twelve years old, is no saleable commodity, and even when they come to this age, they will not yield above three pounds, or three pounds and half a crown at most, on the exchange; which cannot turn to account either to the parents or kingdom, the charge of nutriments and rags having been at least four times that value.

I shall now therefore humbly propose my own thoughts, which I hope will not be liable to the least objection.

I have been assured by a very knowing American of my acquaintance in London, that a young healthy child well nursed, is, at a year old, a most delicious nourishing and wholesome food, whether stewed, roasted, baked, or boiled; and I make no doubt that it will equally serve in a fricasie, or a ragout.

Of course, Swift’s proposal would work even better in our own times, since according to conservative thinkers the lives of the poor are even better—which means their children should be even more delectable. In addition, even though the one percent have given up their role as “job creators,” their escalating incomes should be sufficient to purchase infant flesh. And, as Swift explains, because “they have already devoured most of the parents, [they] seem to have the best title to the children.”

Update

These days, of course, as a friend of mine informed me, many of the the rich prefer to eat only free range and organic and to deal directly with the breeder rather than through an unscrupulous supplier.