Thursday, October 1, 2009

Smith: The Gathering Unemployment Storm

From Charles High Smith, on the gathering unemployment storm. Excerpt:
Officially, 14.9 million Americans are unemployed. That number will double.

The number of people who are unemployed is almost unimaginable: 15 million. According to the Bureau of Labor Statistic's August 2009 Employment Situation Report, 14.9 million persons are unemployed, 9.1 million are "working part time for economic reasons," and 2.3 million are "marginally attached to the labor force," i.e. they wanted a job but have not actively looked for a job in the past four weeks.

That totals 26.3 million people unemployed or under-employed. In January of this year, the Standard Issue Financial Punditry (SIFP) was parroting "official estimates" that the economy would lose 2 million jobs during this recession. I dismantled that absurd fantasy with an analysis of the employment situation which concluded that 21 million jobs lost is actually an optimistic guesstimate compared to what could transpire in the years ahead--a gradual evaporation of 30-35 million jobs. Sadly, the current numbers fall into the range that I suggested was realistic. ...
What few are willing to accept is that the U.S. economy is entering a decades-long period of structural unemployment in which there will not be enough jobs for tens of millions of citizens. My January analysis remains conservative; given the end of the credit/debt bubble and other structural issues, it seems very likely that the U.S. economy might have about 100 million jobs in a few years--leaving some 35 to 40 million people without formal fulltime work or employer-paid benefits.

Since we're already at 26.3 million unemployed/under-employed, losing 10 million more jobs is really not much of a stretch. That would leave 36 million people without fulltime work or any work at all and about 100 million still employed. ... [emphasis in original] ...

Read it here.

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