Obama's Dilemma: Proving the Negative

The job report came out today, and although it's better than anticipated, jobs are still being lost. Although people with an understanding of how the economy works make a valid arguement that bailing out the banks and the stimulus package have helped reduce the rate at which unemployment increases, its a tough sell to prove that. I remember this administration carefully promising that the stimulus wouldn't magically decrease unemployment, but keep us from falling into the abyss of a new depression. However, as man average people see it, we spent much money and are still losing jobs. This is a problem for Obama. I personally believe its folly to think any president can reverse an economic crisis into an economic expansion in a single year. I know people may think he's the one, but that's just buying into the branding his campaign threw at us. I frankly am surprised the economy isn't worse, it makes me worry that these banks are up to their old tricks again!

An analysis of the job numbers: Don't be fooled by pundits and reporters. The job situation is much worse than it looks. It is getting better than it was, but to overall unemployment numbers counts people who go from full time professional careers to flipping burgers as "employed". However, the data to dis-aggregate these two is actually contained in the report itself, it's not hidden, its just reporters won't or can't read the whole report. The U-6 series statistic which measures "Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers" increased from 12.6% November 2008 to 17.2% November 2009. This is a huge increase, and it is still steadily increasing. Replacing the 1.6 million manufacturing jobs in this country with McJobs isn't a solution anyone could be happy about. *Go One-Sided Free Trade!*

Here is the full report:

Part Time Employment: There was a 3.2 million increase in the number of people working part time since November last year for economic reasons, because of slack work conditions or because of business conditions. There was also a half a million people increase in the number of people who could only find work part time. The way the U-6 measure takes into account part time employment.

Reasons for not being in labor force: This number is also telling, since those defined to be "not in labor force" are not employed yet are not counted towards the unemployment figure. Who are these people who are not in the labor force? The increase in the number of people from this November to last November is stark, 253,000 people reported they are not looking for jobs because they feel discouraged. Also, the number of people not in labor force increased by three million since November 2008. This is why the U-6 series unemployment measure went up so much.

The summary of the findings is that if you look at the offiicial measure, the unemployment picture is turning the corner. However, a more nuanced look at what new jobs are replacing the jobs that were lost, and how people stop being considered unemployed because they are so dispirited that they just don't want to look any more gives a different picture.