Thursday, November 19, 2009

Unemployment - can you handle the truth ?

With all this talk about a "jobless recovery" and claims that we can't actually have a recovery unless the job situation gets back to normal, I've begun to question what normal really is (was?).

Looking at an "unemployment rate" graph from google, I see that since 1990 during any given 4 year Presidential term, the most the rate has changed (up or down) is about 3%.
I picked the "4 year term" time period because (right or wrong) "we the people" seem to correlate unemployment directly to actions taken (or not taken) by a Presidential administration. I only went back to 1990 because that was the only graphed data I could find at the moment.

So ... after the cataclysmic economic events in the Fall of 08, in which the unemployment rate spiked nearly 6% to a high of now 10.2% , the most we should seem to rationally expect out of an administration would be to lower that back down to around 7%
To get unemployment back down to the 4 - 5 % range would take the sort of extraordinary economic prowess not shown by either party in nearly 2 decades.

However, even that wouldn't really be "back to normal".

From the beginning of the Bush Presidency until the extraordinary events in the Fall of 2008, the unemployment rate only decreased 0.1%
Yes, they did have about a 3% change between their high and their low but in the end, almost 8 years later, all their efforts just managed to hold unemployment steady.

But the job scene was changing rapidly.
Corporate America was in full scale "right-sizing" mode and was trying to trim as much "fat" as they could get away with. The outsourcing of work to foreign countries and even the relocating of corporate headquarters was in high gear. Jobs were disappearing at a voracious rate.

The main thing that prevented the unemployment rates from drastically climbing during the last administration was long unemployed workers being dropped from the unemployment rolls and a massive amount of Government hiring.
The birth of the Office of Homeland Security was the creation of one of the largest, open-ended Government programs since Social Security! This massive expansion of the Federal Government helped to offset the number of "private" jobs that were being lost.

Where we now stand.

Pun-dents keep talking about the Obama stimulus effort not "creating jobs" yet "normal" would be to just stop the bleeding and hold steady where we are. As for actually lowering the unemployment rate, that may be a dream of decades long gone. With productivity on the rise (doing more with less) and overhead now as lean as it has been in decades, does it really make sense for corporations to return to the "bloated days" and hire all these U.S. workers back?

What about massive government spending to create jobs? The public didn't so much as bat an eyelash at the previous administration for doing this. Now though, with a LOT of cheer-leading from FAUX News and Hate Radio, it seems that the public has no stomach for the current administration's suggestions for doing the same.

So now what?

I really couldn't say but I do know that it is past time to embrace the changing reality of the U.S. employment situation and start making plans based on what we face and NOT on nostalgia for an era gone by.

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