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As Extended And Emergency Unemployment Benefits Finally Begin Expiring, A Much Different Employment Picture Emerges

Tyler Durden's picture




 

The following very interesting analysis from Goldman focuses on an issue long-discussed on Zero Hedge and elsewhere, namely what happens when those millions in unemployed currently collecting unemployment insurance, finally start to roll off extended and emergency benefits, as terminal benefit exhaustion sets in, even with ongoing governmental unemployment stimulus programs. Goldman's estimate: approximately 400,000 people will no longer have the backdrop of so-called  "government jobs" in which workers receive on average $1,200 a month for doing nothing. "If the rate of exhaustion continues at the current pace, this implies over 400,000 workers will exhaust their benefits in some months, even if Congress continues to extend the current, more generous, unemployment program." What this means for the economy is, obviously, nothing good: "Assuming something on the order of 400,000 exhaustions per month, at an average benefit of $1200 per month, this implies roughly $0.5 billion in lost monthly compensation compared with a scenario in which there are no exhaustions.  If the relationship between exhaustions and initial claims 16 to 17 months prior (the maximum benefit period in most states) holds constant, the pace of exhaustions is likely to stay elevated for several months, implying several billion dollars in cumulative lost compensation." Couple this with front-loaded tax refunds, also previously discussed on Zero Hedge, and the "consumer-driven" economy in next few months is sure to see a rather substantial shakedown. Absent a dramatic increase in (c)overt Obama unemployment stimulus, is the extend-and-pretend phase of the bear market rally about to end?

From Goldman Sachs:

Expanded unemployment benefits expired on Monday, after the Senate failed to enact legislation to renew them and several other programs.  These have since been reinstated, but the brief expiration may still result in a temporary cessation of benefits to roughly 250,000 unemployed this week.  We do not expect this have a significant effect on incomes, as the effect will be temporary. It should also not have an important effect on weekly jobless claims reports, as the affected benefits are not included in the regular continued claims data.

Aside from the short-term disruption, an increasing number of individuals will face an end to benefits over the next several months even with continued renewal of the current emergency benefits by Congress.  More than 400,000 jobless workers could run down their federal benefits each month over the next several months, even assuming that Congress continues to renew the expanded benefit period now in place.  It is possible that Congress could lengthen the maximum benefit period yet again, but the political climate is not as conducive to additional expansions as it had been last year.  The result is likely to be a greater share of unemployed workers not receiving unemployment compensation.

Jobless Benefits: Brief Disruption Now, Bigger Issues Ahead

Unemployment benefits were back in the news this week, after the Senate failed to come to agreement on a short term extension of the more generous benefit period Congress enacted in 2008 and expanded in 2009. The result was a short term disruption to benefits, but one that should be temporary. However, policymakers face a longer term issue, as the number of current recipients who will lose benefits over the next several months is likely to climb substantially, with benefit exhaustions potentially approaching 500,000 in some months.  In previous instances in 2008 and 2009 which the number of individuals facing benefit exhaustions has threatened to rise substantially, Congress has intervened by adding additional weeks to the maximum benefit period.  But with the maximum benefit approaching two years and waning support for additional stimulus spending in Congress, it isn’t clear whether another extension is in the cards.

The disruption to benefit payments caused by the legislative snag in the Senate will be temporary.  Something like 250,000 individuals may have temporarily lost benefits this week as a result of the expiration of expanded unemployment benefits at the end of February.  However, this is far short of what some reports had implied, namely that expanded benefits had ceased entirely. Instead, it was only those workers who had exhausted a benefit “tier” the prior week who were unable to start their next tier, and thus unable to collect additional benefits (see chart below). The effect on income should be relatively minor, at less than $100 million on a national basis, and retroactive reinstatement should make up most of that revenue in any case.  

 

 

More workers are moving from regular benefits into emergency benefits.  The chart above illustrates this process.  Workers who qualify for jobless benefits begin by receiving 26 weeks of standard unemployment benefits. They then move into the first of four tiers of emergency benefits, described at the bottom of the exhibit above. The third tier is generally available to states with an unemployment rate of more than 6%, so that most states are currently eligible. The fourth tier is available to states with an unemployment rate above 8.5%, which applies to a more limited group of states.  Once jobless workers move through the tiers for which they are eligible, they usually move to state extended benefit programs, which once again depend on the unemployment rate in a given state and last an additional 20 weeks. In all, this means a laid off employee can receive benefits for 99 weeks, or almost two years, after losing employment. The result is that total uninsurance compensation rolls have risen significantly, even while regular continued claims have fallen (see chart below; note that Tier IV has few beneficiaries and isn't visible on the chart).

 

 

Most workers in latter tiers of the benefit structure are exhausting their benefits….  The chart below illustrates the exhaustion rate in each tier, that is the number of workers who collect all of their payments without finding work, as a share of total initial claims in each segment.  Note that Tier III and Tier IV have been available for only three months, and thus have just begun to see exhaustions (there is only one data point for Tier III, shown below, and the one point for Tier IV isn’t meaningful).   However, in absolute terms the numbers are beginning to mount. For instance, over 100,000 workers exhausted their Tier III benefits last month, and for some of them this will be the end of unemployment compensation (a few will move to Tier IV benefits, and others will move onto state emergency benefits for a few months before completely exhausting their eligibility)  If the rate of exhaustion continues at the current pace, this implies over 400,000 workers will exhaust their benefits in some months, even if Congress continues to extend the current, more generous, unemployment program.

 

…Because the duration of unemployment has lengthened significantly.  The share of the unemployed who have been without a job for more than 27 weeks (i.e., roughly the duration of regular unemployment benefits) has increased significantly, and as of January stood at a record high 41.2% of the total unemployed population, as seen in the chart below. 

 

 

…Because the duration of unemployment has lengthened significantly.  The share of the unemployed who have been without a job for more than 27 weeks (i.e., roughly the duration of regular unemployment benefits) has increased significantly, and as of January stood at a record high 41.2% of the total unemployed population, as seen in the chart below. 

 

 

As benefits expire, unemployed workers will begin to seek work more aggressively….  A study by Alan B. Krueger and Andreas Muller indicates that an unemployed worker can spend as little as 20 minutes per day looking for work during the middle of the UI benefit period, but increases this to more than 70 minutes per day when the benefit is about to expire (see Krueger and Muller, “Job Search and Unemployment Insurance: New Evidence from Time Use Data,” IZA Discussion Paper No. 3667, August 2008).  Because the benefit period has been expanded three times  since 2008, this effect may be more pronounced today than during more normal periods.  For instance, another study has found that unemployment spells have an elasticity of 0.16, implying that the current policy, which has extended benefits from 26 weeks to up to 99 weeks has increased the average duration of unemployment spells by up to 12 weeks (see Lawrence F. Katz and Bruce D. Meyer, “The Impact of the Potential Duration of Unemployment Benefits on the Duration of Unemployment,” NBER Working Paper 2741, July 1990). While this is probably an extreme interpretation of their results, given that the average duration of unemployment in January was 30 weeks, it does stand to reason that generous unemployment benefits may be one factor in the rising average duration of unemployment.
 
...But the lack of benefits will cut into their incomes until they find work.    Assuming something on the order of 400,000 exhaustions per month, at an average benefit of $1200 per month, this implies roughly $0.5 billion in lost monthly compensation compared with a scenario in which there are no exhaustions.  If the relationship between exhaustions and initial claims 16 to 17 months prior (the maximum benefit period in most states) holds constant, the pace of exhaustions is likely to stay elevated for several months, implying several billion dollars in cumulative lost compensation.

Congress may come under pressure to expand the benefit period once again.   Of course, this assumes that Congress will not add additional weeks to the benefit period once more, as they did in July and November 2008, and again in November 2009.   It is certainly possible that they will extend the benefit period again, but as fiscal considerations become more important, further expansions become more difficult. That said, at a minimum we expect Congress to continue renewing the current maximum benefit period through 2012, given that previous expanded benefits have been renewed for at least a year after the unemployment rate peaks.  Indeed, we expect unemployment and related health benefits to constitute the bulk of the additional stimulus spending we expect Congress to approve.

 

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Fri, 03/05/2010 - 14:44 | 255105 Cognitive Dissonance
Cognitive Dissonance's picture

Now there you go again, letting the air out of the "things are getting better" balloon faster than the Ponzi can refill it.

Fri, 03/05/2010 - 15:48 | 255245 Cognitive Dissonance
Cognitive Dissonance's picture

Harry Reid says....

"Today is a big day in America, only 36,000 people lost their jobs today, which is really good."

March 5, 2010

Fri, 03/05/2010 - 16:06 | 255270 Anonymous
Anonymous's picture

This must be great then....

The Middle Class Financial Compact Being Washed Away – Income Dilution and the Saving Disparity. 57 Million Households Live on $52,000 Per Year or Less.

The middle class is finding itself struggling to keep what was once seen as staples of a burgeoning working class in our country. Part of this battle has come from a system that has rewarded easy finance on the backs of the working class. Take for example residential real estate. For decades, this was probably one of the most boring and dull sectors of the economy. Residential real estate, if you were lucky, only tracked the overall inflation rate. That was the case until the banking system figured out a way to securitize bread and butter mortgages and turn them into securities for global consumption. Yet that game is now coming to a quick end. The middle class are literally being squeezed out of their homes. Healthcare costs are also cutting deeper into the wallets of most American families and many are finding that they have no coverage as unemployment is still at record levels. This decade will be a struggle for the middle class to save and prosper.

When I look at the above chart it doesn’t take a rocket scientist to figure out that many people are still in the throngs of the recession. The talk of recovery is muted by the reality of the numbers and all the average American will see is a recovery on Wall Street but in terms of their pocket book, little is funneling to them. I’ve heard from people across the country looking for work and being unable to find anyone hiring. And if they do find something, the wages are much less than what they once earned. This isn’t reflected in the data. How many people that are now marked as fully employed are in jobs that now pay less than what they once had? That is why problems even in credit cards are filtering all the way to the bottom of the bank balance sheet. People are relying on credit cards as their last lifeline and many banks are now shutting these off.

http://tinyurl.com/yeyub9r

Fri, 03/05/2010 - 16:16 | 255286 WaterWings
Fri, 03/05/2010 - 16:40 | 255323 Cognitive Dissonance
Cognitive Dissonance's picture

The most insidious part of social engineering (never let a crisis go to waste) is creating the conditions upon which the desired change is demanded by the population. Stress the population to the point where they start striking out in frustration (making sure you salt the crowd with agent provocateurs to create the desired outcome, which is an old CIA/NSA/police tactic) and the majority will beg for troops and police to clamp down on civil rights to restore "order".

Fri, 03/05/2010 - 17:23 | 255396 faustian bargain
faustian bargain's picture

Martial law is gonna suck.

Fri, 03/05/2010 - 18:06 | 255465 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

"Martial law is gonna suck."  Well, I hope it sucks for Harry Reid. 

Fri, 03/05/2010 - 18:58 | 255558 WaterWings
WaterWings's picture

Berkeley trying to live up to it's reputation from the 70's last week - provocateurs @ 2:45:

http://www.youtube.com/watch?v=7h_9O7P-QXg

Same protest - girl snatched and charged with "inciting a riot"; interesting part is the arrest tactic using a fake cell phone caller to block the crowd from assisting @ 0:30:

http://www.youtube.com/watch?v=P8R-02yZAKg

According to the this video's maker, Narukami, the girl was "taken and arrested by police while she was telling everyone how a police officer punched her in the nose."

 

The two people arrested were Marika Goodrich, a 28-year-old woman from Berkeley who is facing charges of assault on a police officer and resisting arrest, and Zachary Miller, a 27-year-old Berkeley man who faces charges of inciting a riot, resisting arrest and attempting to disarm a police officer.

Sucks to be a "first mover".

Sat, 03/06/2010 - 01:41 | 255898 Anonymous
Anonymous's picture

That was a pretty sneaky move, but effective. I went to Cal and participated in a lot of demonstrations... the Berkeley cops are good at handling those situations. When I was there (in the late 80's), they almost always out maneuvered the students, much to our chagrin. They've all had more practice at that than the students who just come through for four years.

Sat, 03/06/2010 - 17:55 | 256356 Anonymous
Anonymous's picture

Based on the evidence of this video alone, the police falsely arrested that girl. Also, she was assaulted and deprived of her free speech rights. I say this because:

1) She was telling the protestors to "back up" - this is exact opposite of inciting them.

2) She was not unduly loud, she was not by herself disturbing the peace or anything else.

3) "Phone man" is obviously a cop and he intentially walked directly into her, put his arm on her, prevented her from backing away from the riot police (who advanced at that exact moment) and he also pushed her. This is a clear-cut assault.

4) It's especially egregious as she was in the middle of publically protesting mistreatment (bloody nose) which she was alleging the riot police did. I think she was reciting the badge numbers of the offenders.

This is an outrageous and offensive act by city-controlled riot squad. Interestingly enough, the Liberals rule in that city and yet look how the cops treat people.

The was NO reason for the cops to grab that girl - none shown on this video at least.

Sat, 03/06/2010 - 19:37 | 256414 perchprism
perchprism's picture

 

So you have two arrested Bezerkelies, one 27 and one 28---> are they still students?  At that age?

Fri, 03/05/2010 - 14:44 | 255106 Fritz
Fritz's picture

The repetitive extension of unemployment benefits is, quite frankly, about all that congress can accomplish.

 

Fri, 03/05/2010 - 14:48 | 255110 Racer
Racer's picture

What this means for the economy and the market is that, the green shoots brigage will look at the falling numbers (even though no one has got a new job) and say look at all the new jobs found because the numbers went down dramatically.

Boom time for the stock market and even futher away from main street reality.

 

The market just looks at the headline that is fed to them, forget massive birth/death adjustments and big revisions to previous data...

as long as the first number that is flashed past the computer is enough to get the lemmings buying that is all that counts

Fri, 03/05/2010 - 15:14 | 255149 bingaling
bingaling's picture

Well what GS didn't get into in their report was the trickle up theory or the ramifications to the economy because of this . How many more home foreclosures will this create? Because these individuals families will be buying less to spend what will be the result on retail sales ? Because there are less sales how many more layoffs in retail and closings of stores ? How many more commercial real estate foreclosures will result? With congress now having fiscal constraints the only thing they can do now is keep these extensions open or add a few more -zero stimulus for creating jobs .So where are the jobs going to come from ? etc etc etc.

Fri, 03/05/2010 - 15:20 | 255180 Anonymous
Anonymous's picture

You forgot the CC and/or personal defaults ...

Fri, 03/05/2010 - 14:49 | 255114 aint no fortuna...
aint no fortunate son's picture

On the other hand, I'm getting this feeling that as the extended benefits expire, there will be FEWER UNEMPLOYED by the gubmint's peculiar logic.. that's BULLISH for stocks!!!! In fact, if there is NO volume in stocks because nobody is getting benefits anymore, the quant kids will run this market to infinity on non volume algos. Its the perfect fucking storm!!!!!!!!!

Fri, 03/05/2010 - 14:52 | 255120 Racer
Racer's picture

Reality is just a mere hindrance and a buying opportunity

 

Dotcom was a bear market in comparison to this folly of a market

Fri, 03/05/2010 - 18:28 | 255510 Mission Stupid
Mission Stupid's picture

We should ditch minimum wage laws and cut unemployment benefits and make everyone work for what they are worth.  Of course there will be riots, but there will riots no matter what.

Fri, 03/05/2010 - 21:35 | 255745 Anonymous
Anonymous's picture

Either you're joking or you have aptly named yourself.

Sat, 03/06/2010 - 00:17 | 255839 Anonymous
Anonymous's picture

I couldn't agree with you more. It is about
time we eliminate all of these entitlement
programs like unemployment, minimum waqge,
and social security. Then people will
actually have to work for what the market rate
is. It isn't society's problem if their skills
aren't worth a damn in an ever changing, global,
dynamic economy. People need to be self sufficient
and carry themselves by their own bootstraps. If
they aren't, Darwinism should eliminate the weak.

Sat, 03/06/2010 - 01:31 | 255895 Anonymous
Anonymous's picture

You're a Christian, right?

Sat, 03/06/2010 - 11:03 | 256029 Anonymous
Anonymous's picture

What if you or your child happens to be one of the weak?

Sat, 03/06/2010 - 11:39 | 256055 Mission Stupid
Mission Stupid's picture

At the very least, reduce the minimum wage during this deleveraging cycle.

"If a higher minimum wage increases the wage rates of unskilled workers above the level that would be established by market forces, the quantity of unskilled workers employed will fall. The minimum wage will price the services of the least productive (and therefore lowest-wage) workers out of the market. ... The direct results of minimum wage legislation are clearly mixed. Some workers, most likely those whose previous wages were closest to the minimum, will enjoy higher wages. Other, particularly those with the lowest prelegislation wage rates, will be unable to find work. They will be pushed into the ranks of the unemployed or out of the labor force.Gwartney, James D.; Richard L. Stroup. Economics: Private and Public Choice - http://en.wikipedia.org/wiki/Minimum_wage.

http://upload.wikimedia.org/wikipedia/en/0/07/Wage_labour.svg

Fri, 03/05/2010 - 14:49 | 255116 Anonymous
Anonymous's picture

I guess the US government's best hope is for all of those who run out of benefits is to just die. The government certainly has no experience in successful job expansion. They could make another war, but to get rid of this population, we would have to absorb some serious collateral damage. I figure that this group will just go postal and we will have to pull troops off the war fronts and on to Main Street. Guess Nazi Pelosi was right, after all....

Fri, 03/05/2010 - 15:08 | 255148 Postal
Postal's picture

...go postal...

That's my job...

While usually I support free-market attitudes, I find Kudlow's latest rants against UI exentions annoying. It's easy for those who have never been SERIOUSLY unemployed to complain about UI; however, other than the "let them eat cake" response, I've seen nothing productive. I took all the UI I could get before I found work--it's not like I had a choice, and the Kudlow's of the world certainly weren't offering to help.

Fri, 03/05/2010 - 16:42 | 255327 swamp
swamp's picture

The Katrina 'victims' relied on the government too.

Fri, 03/05/2010 - 14:55 | 255125 Anonymous
Anonymous's picture

Obama was on TV this morning saying he was going to extend unemployment comp to the end of this year.

That's good but honestly, America is coming to the end of the proverbial rope.

Job creation is about negative millions a year at this point.

The FED is buying their own paper to support this (this being a happy cow marketplace in Walt Disney Land).

This can't go on forever.

They'll pack all the bad paper into the America Pinata and then set it on fire.

Fri, 03/05/2010 - 15:10 | 255152 lovejoy
lovejoy's picture

I believe that he was talking of extending Tier 1 to Tier 4 till the end of the year. There will not be an extension of benefits for longer than 99 weeks.

Fri, 03/05/2010 - 15:12 | 255156 Cognitive Dissonance
Cognitive Dissonance's picture

"Obama was on TV this morning saying he was going to extend unemployment comp to the end of this year."

Translation: Safely past the November elections.

Fri, 03/05/2010 - 15:24 | 255193 AnonymousMonetarist
AnonymousMonetarist's picture

+1

Fri, 03/05/2010 - 16:09 | 255275 carbonmutant
carbonmutant's picture

+2

 

Fri, 03/05/2010 - 16:44 | 255330 swamp
swamp's picture

It's QE to infinity — a la Argentina and beyond.

Fri, 03/05/2010 - 14:57 | 255129 Anonymous
Anonymous's picture

I'm sure abby jo da ho can explain why we shouldn't give a shit

Fri, 03/05/2010 - 14:57 | 255130 Oxytan
Oxytan's picture

Very good information, but what does the stock market have to do with the real economy now?  To illustrate I quote from The New York Times: "The stock market continues strongly upward, though movements last week were less violent than the week preceding.  Price up 12% Above October, Nearly Ten Times Above January."  Care to guess how that particular economy was doing in 1922?  We'll it didn't improve much.

Fri, 03/05/2010 - 15:13 | 255161 Anonymous
Anonymous's picture

It probably improved by '23 ?

Fri, 03/05/2010 - 14:58 | 255131 Anonymous
Anonymous's picture

All of this equals? = Massively higher stock prices.

Good anaylsis, but any analysis right now is over analysis. Stocks, and all assets, for that matter, WILL be lifted higher. The Fed's solvency depends upon that happening.

Fri, 03/05/2010 - 15:06 | 255144 doublethink
doublethink's picture

 

Charting The Depression

 

The only chart needed to understand where we really are.

 

http://1.bp.blogspot.com/_pMscxxELHEg/S5EJ-B5NWlI/AAAAAAAAHrk/5IKBW_ftUC...

 

Fri, 03/05/2010 - 15:25 | 255194 AnonymousMonetarist
AnonymousMonetarist's picture

Ah but look on the bright side ...

Its' making a smiley face!

Fri, 03/05/2010 - 16:43 | 255329 Cognitive Dissonance
Cognitive Dissonance's picture

An Olympic "big hill" ski jump.

Fri, 03/05/2010 - 18:46 | 255536 Mission Stupid
Mission Stupid's picture

It is amazing how smooth and continuous the current unemployment curve is relative to previous recessions.  Any additional downward trend inflection points will make the double dip recession/depression official.

Fri, 03/05/2010 - 15:08 | 255145 phaesed
phaesed's picture

Hard to tout a recovery when your next door neighbor kills his/her pets for food and your other neighbor is waving a "WILL WORK FOR FOOD" sign on the local interstate ramp, while two doors over Bob has turned to pimping out Sally, his wife, for $50 bucks a pop.

I guess it's also hard to explain $20,000,000 salaries.

Fri, 03/05/2010 - 15:08 | 255147 Internet Tough Guy
Internet Tough Guy's picture

Why does Goldman refer to the unemployed as 'workers'?

Ok, I admit it's better than calling them 'soylent green'.

Fri, 03/05/2010 - 15:23 | 255191 AnonymousMonetarist
AnonymousMonetarist's picture

Q: Why does Goldman refer to the unemployed as 'workers'?

A: The labor force is made up of the employed and the unemployed. The remainder—those who have no job and are not looking for one—are counted as "not in the labor force."

Fri, 03/05/2010 - 15:45 | 255239 SteveNYC
SteveNYC's picture

At some point in the past, when they paid tax, they indirectly worked for Goldman. As a taxpayer, Goldman considers you their worker.

Fri, 03/05/2010 - 15:15 | 255166 Anonymous
Anonymous's picture

The real take home point is what do millions with no benefits do all day. Once the money tree is exhausted out come the pitch forks

Fri, 03/05/2010 - 15:21 | 255186 AnonymousMonetarist
AnonymousMonetarist's picture

In the year 2000:

Civilian noninstitutional population : 212,577,000
Civilian labor force : 142,583,000
Civilian labor force particpation rate : 67.1%
Number of employed : 136,891,000
Percent of Population : 64.4%
Number of unemployed : 5,692,000
Percent of Population : 4.0%
Not in the labor force : 69,994,000

Let's compare that to February 2010:

Civilian noninstitutional population : 235,998,000
Civilian labor force : 153,512,000
Civilian labor force particpation rate : 64.8%
Number of employed : 138,641,000
Percent of Population : 58.5%
Number of unemployed : 14,871,000
Percent of Population : 9.7%
Not in the labor force : 83,487,000

Holy denominator of doom oh ye bullisht throngs!

13 million people, over the last decade, have neither jobs nor any desire to look for one?

That's greater than the total increase of the civilian labor force!

http://anonymousmonetarist.blogspot.com/2010/03/where-did-you-go-joe-nat...

Fri, 03/05/2010 - 15:28 | 255200 bingaling
bingaling's picture

Are children and retired/disabled people included in those #'s maybe that 's the 13 million?

Fri, 03/05/2010 - 15:54 | 255261 AnonymousMonetarist
AnonymousMonetarist's picture

Civilian Noninstitutionalized Population - The civilian population excluding persons residing in institutions. Such institutions consist primarily of nursing homes, prisons, jails, mental hospitals, and juvenile correctional facilities.

Civilian Population - The portion of the resident population not in the active-duty military.

Resident Population - The resident population includes all residents (both civilian and Armed Forces) living in the United States. The geographic universe for the resident population is the 50 states and the District of Columbia.

In 1977, the definition of resident was significantly changed.

Since the 1980 Census, a dwelling unit method has been consistently used, by OEP, in the 37 communities with a 1980 population of 5,000 or more. In all remaining communities, from 1980 to issuance of the 1986 estimates, a method of employing resident tax data was used. However, beginning with the 1987 estimates some communities discontinued the resident tax.

Couldn't though get a quick clear definition of resident so went backwards ...

Population (2008 estimate) of United States was 304,059,724
and persons under 18 years old represent 24.3% of that so it is clear that the Civilian noninstitutional population doesn't include kids...

Retired not included in labor force ...

Lots of folks have been 'retired' eh?

Fri, 03/05/2010 - 16:20 | 255293 WaterWings
Fri, 03/05/2010 - 16:46 | 255332 Cognitive Dissonance
Cognitive Dissonance's picture

"It's people. Soylent Green is made out of people."

Fri, 03/05/2010 - 15:29 | 255204 Racer
Racer's picture

Just goes to show how important it is not to count people who are unemployed who are still unemployed but gave up looking for work cos there is no work...

Sat, 03/06/2010 - 07:53 | 255972 35Pete
35Pete's picture

Makes sense to the government. People that gave up working don't want to thrive anymore. Since things like food and shelter are no longer on their list of priorities, the government assumes that they've dropped out of the life cycle. 

Apathetic people don't count when it comes to gubbmint. 

Fri, 03/05/2010 - 15:35 | 255219 Alexandra Hamilton
Alexandra Hamilton's picture

Great post. Really shows where the problem is.

Just one small comment though: The "Percent of Population" shouldn't that read "Percent of Civilian labor force"?

Fri, 03/05/2010 - 15:44 | 255237 AnonymousMonetarist
AnonymousMonetarist's picture

Here is the source data,

http://www.bls.gov/web/cpseea1.pdf

Fri, 03/05/2010 - 16:08 | 255272 AnonymousMonetarist
AnonymousMonetarist's picture

Yes, thanks for catching that, unemployed is percent of labor force not population, correction made :)

Fri, 03/05/2010 - 15:37 | 255220 Alexandra Hamilton
Alexandra Hamilton's picture

duplicate

Fri, 03/05/2010 - 17:17 | 255378 swamp
swamp's picture

Census includes foreign nationals? Illegal and legal? Both groups of foreign nationals are on the payrolls in the millions. That would skew the ratio as to 'number of employed' to 'civilian noninstitutional population'.

The definition of 'unemployed' has changed over the years, the component pieces, like the DOW, or like the CPI.

And state contractors (like me until recently) are unemployed but don't get any unemployment benefits or welfare extendtions. I'm not in a data base as unemployed. 

 

Fri, 03/05/2010 - 18:35 | 255519 wake the roach
wake the roach's picture

hmmm, I wonder how many pimps, prostitutes and drug dealers help make up that 13 million?

Sat, 03/06/2010 - 19:20 | 256405 Anonymous
Anonymous's picture

Perhaps you have not driven by your local strip
malls and noticed all the stores that have CLOSED ? Ma
I guess you didn't notice all the car dealerships
that were forced to close and are now ghost towns ?
Maybe you did not realize millions of jobs have EVA
PORATED . I could write a book about all the jobs
that have been lost and will likely if ever be
replaced.
Those jobs that were there in your 2000 mode are all
but GONE now.

Fri, 03/05/2010 - 15:22 | 255188 Anonymous
Anonymous's picture

I heard 2010 Census employment is 1.2 million.

Fri, 03/05/2010 - 15:32 | 255210 jc125d
jc125d's picture

"A study by Alan B. Krueger and Andreas Muller indicates that an unemployed worker can spend as little as 20 minutes per day looking for work during the middle of the UI benefit period, but increases this to more than 70 minutes per day when the benefit is about to expire".

That doesn't sound right...if the avg bene is $1200/month or $14.4k/yr, that's not going to keep people on their asses almost all day every day until the UI runs out. It would seem the frenzy would start with the pink slip followed by hair on fire within a couple weeks or so of drinking and sleeping late. Living on a fraction of normal take doesn't spell P-A-R-T-Y.

Fri, 03/05/2010 - 17:30 | 255406 Anonymous
Anonymous's picture

I am a landlord and I can tell you that for some people its just about filling out the forms and doing minimun to qualify until the benefits run out.

Not everybody is like that, but many are.

I ask these people, "don't you think you should be down at the library scanning all the newspapers and using their computers?"

"No, my benefits don't run out for six months. I paid into the system. That's my money, now I can get it back."

So they drink beer (I can tell by all the cans)or watch TV or play computer games all day.

Its hard to beleive until you see it, but some people are quite willing to live at subsistance levels to avoid work.

You can even make a few calls and set up interviews for them and they don't go:

"Yeah...I didn't get up for that. Do you think they will still be hiring in 12 weeks?"

Some you can even offer them work on the property, but they aren't interested until the cheques run out and you've hired somebody else. By then its too late.

When you finally have to evict, they go sponge off some relative.

Fri, 03/05/2010 - 16:42 | 255262 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It is about to get REAL ugly.  I predict riots in Compton on May 1st.

Sat, 03/06/2010 - 20:22 | 256457 perchprism
perchprism's picture

 

Loose the hounds!!

Fri, 03/05/2010 - 15:59 | 255267 Anonymous
Anonymous's picture

"workers receive on average $1,200 a month for doing nothing..."

It might not hurt to remember that we have all been paying into unemployment funds for all of our working lives. The unemployed retrieve the money that they put into the account. It's not like a bailout.

Fri, 03/05/2010 - 17:00 | 255356 E pluribus unum
E pluribus unum's picture

it's pretty amazing that this website begrudges someone $1400 a month (of taxable income) but the trillions given to the banksters are "saving the system".

 

Kicking poor people in the balls is always easier I guess  

Fri, 03/05/2010 - 17:34 | 255412 Anonymous
Anonymous's picture

"It might not hurt to remember that we have all been paying into unemployment funds for all of our working lives. The unemployed retrieve the money that they put into the account. It's not like a bailout."

The problem is that when the amount of money that is being taken out for UE compensation exceeds the amount that was put in by the worker to begin with, then it indeed is a bailout of sorts. Nothing unusual about the process--that is why it's called unemployment insurance, after all, not an unemployment savings account--but no one ever contemplated what would happen if the input was exceeded by the outgo for any significant length of time.

These extensions in benefits that the government is passing certainly aren't being funded by UI deposits that those people previously put into the system, that's for sure.

Sat, 03/06/2010 - 00:29 | 255850 Anonymous
Anonymous's picture

Add to that food stamps, medicaid and other benefits and it's a lot more than $1400. Some unemployed have never had it so good.

Fri, 03/05/2010 - 16:18 | 255289 Anonymous
Anonymous's picture

Dont be too sure Mr. Lennon. The consumer has started borrowing again - by hook or crook !! They are going to stimulate a recovery from the already tapped out consumer.

Fri, 03/05/2010 - 16:20 | 255294 rrbluefin
rrbluefin's picture

The Watt's riots and the Rodney King BS will both look like a walk in the park with what's coming if unemployment benes are not extended.  The liberal clowns in DC, with help from their minions in various State governments along with the unions, all had a hand in creating this mess.  Seems only right that the checks to the unemployed keep flowing until such time as those who caused the problems admit as much and get the hell out of the way of those who want to cut taxes, regulations, bust the unions, tell the enviro freaks to STFU etc.  Given a choice, any rational American would rather be working than on UI.  I know because I'm one of them.  But that first requires that there be JOBS available.  Nothing that the obamanistas are doing will provide those.  Except the union/government variety of which we have far too many of anyway.

Fri, 03/05/2010 - 17:02 | 255339 swamp
swamp's picture

They don't have any savings, and their equity was used to buy jet skis. All that lingers is the entitlement mentality.

Fri, 03/05/2010 - 17:38 | 255417 jc125d
jc125d's picture

pity we'll be fighting each other instead of directing our attention to those who flushed the crapper, then skipped down the hall and out the door with the casheesh. Not content to yell at the TV when we see Lloyd and Jamie on the tube, need some face time.

Fri, 03/05/2010 - 17:48 | 255434 swamp
swamp's picture

AS I see it, there are willing participants on all sides. The stealth elite are at fault, so are the housedebtors who overbought then extracted equity for soft consumables. The only victims are the ones bailing out those who engaged in the folly — the bankers and those who never could afford to buy but willingly did anyway and those who abused their house and used it like an ATM.

Sat, 03/06/2010 - 09:27 | 255993 Anonymous
Anonymous's picture

It's important to stop thinking that liberals or conservatives, or Republicans and Democrats do one thing or anything. Focusing on political parties is like focusing on the pasture while the barn is burning down. As long as the focus is on the Obamaists or the Bushites, the oligarchy continues to siphon on the wealth of not just this nation, but the wealth of people worldwide. Until it is recognized that it doesn't matter who is in office, the populous will remain distracted from the real issues and divided between meaningless political parties and distracted by drawn-out hyped legislation like Healthcare, which is exactly the point. Months of distraction will be followed by sellout to the Oligarchy. Until people stop thinking that political animals have any relevance, the country will not be changed. Politicians are shills of Oligarchs and they are not where the action is.

Sat, 03/06/2010 - 20:36 | 256473 sethstorm
sethstorm's picture

The problem is that the same tactics against unions will be used against regular citizens.

One only needs to look at how offshoring's done to see why that is the case.

Sun, 03/07/2010 - 10:58 | 256827 Anonymous
Anonymous's picture

You seem to have conveniently forgotten about Bushy the Bungler & his Kleptomaniac handlers. Didn't they have something or other to do with all of this?

Fri, 03/05/2010 - 16:21 | 255295 carbonmutant
carbonmutant's picture

Welll... if the "petite bourgeoisie" isn't getting their check in the mail then retail's gonna be under a lot of pressure to deflate their prices. Of course this isn't anything that can't be fixed with a little lobbying by housing and retail sectors for some QE2.

Fri, 03/05/2010 - 16:22 | 255299 Gimp
Gimp's picture

Markets don't care about the unemployed,less workers means more profits for the corporations. Jobs are not coming back, they have been outsourced or automated. Stock market shooting-up today.

Only people that care about the unemployed are the unemployed.

Ever wonder why we don't see anyone protesting the Iraq and Afganistan Wars or Gitmo anymore??  Very strange.

Fri, 03/05/2010 - 16:40 | 255324 Anonymous
Anonymous's picture

After the unemployed fall off the rolls, they should be given jobs at Goldman Sachs ... they're the only ones making money.

Fri, 03/05/2010 - 16:46 | 255333 kwvrad
kwvrad's picture

Do the current released unemployment numbers now read lower because they stopped extending benefits last week in the HOUSE VOTE? If so that means 1 million dropped off the "official" unemployment numbers and artificially kept the number lower..

please correct me if wrong

Fri, 03/05/2010 - 17:48 | 255436 Anonymous
Anonymous's picture

Kwvrad, from what I understand, I believe the answer is no.

Those losing the extended benefits are already not counted in the official unemployment number. The unemployment number is those that are INSURED, ie thru unemployment insurance policies of employers.

I guess we can watch the EUC number in the next weeks' unemployment report to see if there is a big dropoff.

http://www.dol.gov/opa/media/press/eta/ui/current.htm

scroll down to EUC -- it increased by +207,632 in latest weekly unemployment report, 3/4/10.

Fri, 03/05/2010 - 16:52 | 255341 augmister
augmister's picture

Gonna spend a quiet Saturday afternoon in the garage reloading ammo.  Gonna need it when the money runs out and the music stops.  What are you doing this weekend?

Fri, 03/05/2010 - 17:53 | 255447 Anonymous
Anonymous's picture

Keeping my family far far away from you hopefully.

Sat, 03/06/2010 - 08:03 | 255973 35Pete
35Pete's picture

Funny you mention that. I'll be reloading some .45-70 rounds on my Hornady press. 

Gotta love the .45-70. I call it "Thor's Hammer". 

Sat, 03/06/2010 - 20:59 | 256489 perchprism
perchprism's picture

 

Planted 100 lbs of Pontiac red seed potatoes.  I'm bushed. 

Fri, 03/05/2010 - 17:43 | 255426 Anonymous
Anonymous's picture

Please tell me someone else saw this absolute f'ing garbage on MSNBC.com

http://www.msnbc.msn.com/id/35728769/ns/business-answer_desk/

It's really reached the point that I don't think I'm even going to get dressed anymore when I leave the house. When people complain that I'm naked, I'll just tell them I'm actually wearing clothing. If people are stupid enough to believe anything in that link, they will take me at my word.

Fri, 03/05/2010 - 19:50 | 255629 Nolsgrad
Nolsgrad's picture

very interesting indeed, and yet the  BLS states:
      

Effect of Severe Winter Storms on Employment Estimates                                           
   |Major winter storms affected parts of the country during the February
   |reference periods for the establishment and household surveys.                                                               
   |In the establishment survey, the reference period was the pay period   
   |including February 12th. In order for severe weather conditions to re- 
   |duce the estimate of payroll employment, employees have to be off work
   |for an entire pay period and not be paid for the time missed. About    
   |half of all workers in the payroll survey have a 2-week, semi-monthly, 
   |or monthly pay period. Workers who received pay for any part of the    
   |reference pay period, even one hour, are counted in the February pay-  
   |roll employment figures. While some persons may have been off payrolls 
   |during the survey reference period, some industries, such as those     
   |dealing with cleanup and repair activities, may have added workers.
   |In the household survey, the reference period was the calendar week of
   |February 7-13. People who miss work for weather-related events are    
   |counted as employed whether or not they are paid for the time off.   
   

 

Fri, 03/05/2010 - 20:35 | 255678 Anonymous
Anonymous's picture

Get a job, you leeching bums.

You'll feel better about yourself. Trust me.

Fri, 03/05/2010 - 21:29 | 255736 Anonymous
Anonymous's picture

"approximately 400,000 people will no longer have the backdrop of so-called "government jobs" in which workers receive on average $1,200 a month for doing nothing."

Only newbies at being unemployed are doing nothing. Those who have been bounced once or twice know exactly what the score is. In this ruined economy they will be frantically looking because any job is going to be hard to find. Yes, there are those newbies & moral imbeciles who will milk their benefits. If things REALLY GO SOUTH they will sorely regret it. Count on a percentage to work the welfare scams (especially lazy mothers, it's a no brainer for them). That will get you by for five years (at least in California). I guess the grand total would be seven years for the terminally lazy. Fortunately most people have more pride than that. As for the country itself turning around, who knows? The rich certainly don't care, they are now an international group who all care exactly ZERO for the fates of their fellow countrymen worldwide.

Fri, 03/05/2010 - 22:05 | 255766 Anonymous
Anonymous's picture

Thank god the unemployed are only "them" and never "us".

Fri, 03/05/2010 - 23:36 | 255814 Anonymous
Anonymous's picture

Maybe people will take jobs they don't like for less wages instead of living in the past?

Sat, 03/06/2010 - 11:33 | 256046 BS Inc.
BS Inc.'s picture

It's funny you say that because if you look at the hiring process right now, there are many workers who would do just that, but the HR managers won't hire them because they worry that as soon as the economy turns around (remember, I'm saying that the HR managers are the ones assuming it will turn around) these "overqualified" people will jump to new opportunities.

So, it's a conundrum for job-seekers who are willing to "downsize" their expectations but can't get hiring managers to let them do so.

The only REAL option in that situation is to start your own business, but how many people are really up to that task?

Fri, 03/05/2010 - 23:49 | 255821 Anonymous
Anonymous's picture

what would jesus do ???????? help the unempolyed or cry about the unempolyed don`t work ?????????????? where are all you fake gop christians ???????????????????????

Sat, 03/06/2010 - 11:35 | 256050 BS Inc.
BS Inc.'s picture

It sorta helps when you can perform miracles at zero cost, as Jesus is reported to have done. As far as I know, no such individual exists at the current time, so expecting a miracle for each and every unemployed person is probably a bit of a stretch.

Sun, 03/07/2010 - 10:50 | 256825 Anonymous
Anonymous's picture

Be careful what you wish for. If he comes back we're all in big trouble. The bible says his solution will be to put an end to us.

Sat, 03/06/2010 - 01:06 | 255880 omi
omi's picture

You can fix unemployment by charging people for being unemployed. Gotta provide some incentives here man!

Sat, 03/06/2010 - 09:20 | 255989 JimboJammer
JimboJammer's picture

Good  Article  Tyler,

I  read  this  ..  and  it  creates  a  big  problem  for  the  Police  and  the  FBI ...  Do  the  numbers..  400,000.  out  of  work / no  money.. lets  say only  1 %  of  these  guys  panic  and  get  into  the  Joe  Stack  mode.

that's   4000.  guys  ( some  are  ex -  marines )  attacking  the  banksters.

Citi   ,   Goldman  ,  JP  Morgan , buildings  would  be  the  target...

It  might  be  a  hot  summer...

Tue, 03/09/2010 - 19:33 | 259828 Anonymous
Anonymous's picture

spend those lasts checks on firearms. It will begin soon...

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mark456's picture

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Fri, 04/16/2010 - 08:41 | 303658 mark456
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