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The weekly report of Initial Unemployment Claims is out today (via Reuters):
Initial claims for state unemployment benefits dropped 24,000 to a seasonally adjusted 398,000, the Labor Department said.
Economists polled by Reuters had forecast claims falling to 415,000. The prior week’s figure was revised up to 422,000 from the previously reported 418,000.
I do hope the Beltway Village
Idiots Pundits, Politicians, and Courtiers don’t make too much of this news however. The 400K figure does seem to be a magic line for most but my guess/prediction is that after revision (which may or may not be reported), it will wind up back over 400K for the week. The upward revision of the numbers from the week before has seemingly become a staple on the reporting of this metric.
While the DeeCee folks do their Debt Ceiling/Deficit/Austerity Danse Macabre, there have been a few reports in the TradMed to remind the clueless of the realities being faced by millions of people who are not cocooned within the fog of life in the Beltway. Not that these articles penetrate the consciousness of most Villagers, given how they seem to always like to double down on the policy while “improving the messaging,” but we can still hope they might see the light at some point, if only to protect their careers.
First up is this from the NY Times’ Catherine Rampell from Tuesday (July 26), pointing out once again that many employers refuse to hire the unemployed, serving only to make things that much worse for the millions of long term un and underemployed:
A recent review of job vacancy postings on popular sites like Monster.com, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off.
Legal experts say that the practice probably does not violate discrimination laws because unemployment is not a protected status, like age or race. The Equal Employment Opportunity Commission recently held a hearing, though, on whether discriminating against the jobless might be illegal because it disproportionately hurts older people and blacks.
Government incentives for companies to hire unemployed workers have met with limited success. One such tax incentive from last year was poorly publicized, so most employers did not know about it. Better publicity may not suffice, either. An experiment from the 1980s found that telling companies that the unemployed were eligible for generous wage subsidies actually made employers less likely to hire such workers.
I’m not sure if this blog post from Rampell at the NY Times Economix from Monday (July 25) was intended as a companion to the Tuesday article, but there is some reinforcement of the themes:
One of many reasons blamed for (Western) Europe’s stagnant growth in recent decades has been that so many European adults are not working, and are effectively not employable because they have been out of jobs for so long. The United States, on the other hand, has had a much higher share of its population in gainful employment. In fact, between 1980 and 2000, the percent of adults working was on average about 10 percentage points higher in the United States than in Europe.
It’s not clear whether the gap between employment-population ratios in the United States and Europe will continue to shrink. Certainly it does not help that the United States has been accumulating a huge underclass of long-term unemployed workers. As we’ve noted before, the longer people are out of work, the harder it is to find them a new job.
Which is exactly the experience Europe had seen, and that the United States hadn’t learned from, in decades past.
Amazing! US politicians not learning from all the previous economic problems across the world. Hoocoudanode? Of course, one glaringly large difference between Western Europe and the US is that Western Europe has a far more robust social safety net protecting its citizens.
Tuesday’s Washington Post had this article on polling showing dissatisfaction with President Obama’s handling of the economy. Of course, in a slightly buried lede, the polling shows even more dissatisfaction with Congressional Republicans:
More than a third of Americans now believe that President Obama’s policies are hurting the economy, and confidence in his ability to create jobs is sharply eroding among his base, according to a new Washington Post-ABC News poll.
But Americans’ discontent does not stop there. The survey also found that Americans harbor negative feelings toward congressional Republicans. Roughly as many people blame Republican policies for the poor economy as they do Obama. But 65 percent disapprove of the GOP’s handling of jobs, compared to 52 percent for the president.
Now whatever could the elected officials do that could improve their standing with their nominal constituents? Well, this article from the Washington Post just might offer a small clue:
As Congress debates how to meet the nation’s long-term transportation needs, decaying roads, bridges, railroads and transit systems are costing the United States $129 billion a year, according to a report issued Wednesday by a professional group whose members are responsible for designing and building such infrastructure.
Complex calculations done for the American Society of Civil Engineers indicate that infrastructure deficiencies add $97 billion a year to the cost of operating vehicles and result in travel delays that cost $32 billion.
Thomas J. Donohue, president of the U.S. Chamber of Commerce, said the necessary spending was “not just transportation for transportation’s sake.”
“Without more robust economic growth, the U.S. will not create the 20 million jobs needed in the next decade to replace those lost during the recession and to keep up with a growing workforce,” he said.
Ultimately, Americans would get paid less, the ASCE report says. The economy would lose jobs, and the paychecks of those who are able to find work would be cut by nearly 30 percent.
It is not often that I find myself even remotely close to agreeing with Mr Donohue but in this instance he is correct. I’m sure we would not be remotely close on how to go about fixing things but still, it’s a start. And in reality, it’s not as if this should be coming as a surprise to people. The collapse of the I35 bridge in Minneapolis a few years ago brought the infrastructure issue to the fore but as seems to be the norm these days, even if there is agreement on an issue, the solution(s) seem to defy agreement.
It does seem to me though that an investment in repairing the US infrastructure (bridges, roads, dams, sewers, etc) could go a long way to repairing the US economy. Yes, it would require a $2T – $3T investment by governments at all levels. But this investment would start to be recouped immediately by the taxes paid by the newly hired workers and by the further economic ripple of jobs throughout local economies all over the country. Not to mention the savings of the $129B in not having to cover vehicle repairs and lost time from the decaying infrastructure.
It is such a simple solution isn’t it? So very simple that we can pretty much guarantee that nothing like it will be done since it would benefit millions of people without necessarily bringing immediate partisan benefit to one party or the other.
And because I can:
Cross posted from Just A Small Town Country Boy