And Another Disturbing Picture of Those Who Are Supposed to Do Something About It
The Great Recession of 2007 - ? (yes, The Dismal Political Economist knows it officially ended two years ago. Tell that to the people in this graph.) is different in many ways.
The following graph shows one way it is different.
Unemployment is a corrosive disease that eats away at the fabric of a society. The amount of damage it will do is not just a function of the rate itself, but of the turnover in the rate. A high rate of unemployment, with a high turnover rate does not do much damage. If a large number of people are unemployed at any given time, but those people soon find jobs then the problem is significant, but not severe.
If however people who are unemployed stay unemployed, that is a different matter. Those individuals become the “underclass” of society, subsisting on charity, government benefits, “off the books” work, family support and other “get by as best you can” methods. (In the extreme case, they become rioters, see England, August 2011). The chart above shows the median time the currently unemployed are out of work is over 40 weeks. Half of all the unemployed have been unemployed for almost a year.
The chart understates the problem. Many people have just given up. Some are old enough to retire and start collecting retirement benefits. Others have just vanished from the work force.
The ratio of the employed population to the total population has fallen dramatically and is at a recent historical low. And that drop in the unemployment rate in July, that was because a large number of people just gave up and left the work force.
|Representative and Senators Hard at Work|