There is an old saying that goes, “There are three kinds of lies: lies, damned lies, and statistics." It’s alternately been credited to writer Mark Twain and British Prime Minister Benjamin Disraeli.
No matter where it originated, though, the quote applies well to unemployment figures released by the U.S. Labor Department.
Earlier this month the Labor Department reported the nation’s unemployment rate dropped for the fifth consecutive month in January to 8.3 percent, its lowest level in three years. That is good news, but not quite as good as it first appears.
Using that measure, 12.3 million people are unemployed, which is a decline of 0.2 percent from December.
The number of long-term unemployed — those jobless for six months or more — was 5.5 million people, accounting for 42.9 percent of the unemployed.
Critics of how the government calculates the unemployment rate, however, say it’s misleading because it doesn’t count so-called “discouraged workers.” Those are people who are jobless and have looked for work sometime in the past year but aren’t currently looking because of real or perceived poor employment prospects. In other words, they’ve given up.
Federal data shows a disproportionate number of young people, African-Americans, Hispanics and men comprise the discouraged-worker segment.
Including those workers, the unemployment rate was 16.2 percent in January. Some analysts, however, believe that grossly understates the numbers. (The highest the rate got during the Great Depression was 25 percent in 1933.)
Here’s some context. In the modern era (1948-present), the U.S. unemployment rate averaged 5.7 percent — reaching a record high of 10.8 percent in November 1982 and a record low of 2.5 percent in May 1953.
As economist and New York Times columnist Paul Krugman has noted, “we started 2012 with fewer workers employed than in January 2001 — zero growth after 11 years, even as the population, and therefore the number of jobs we needed, grew steadily.”
Krugman added, “at January’s pace of job creation it would take us until 2019 to return to full employment.”
In a little noticed report, the nonpartisan Congressional Budget Office (CBO) stated last week that the rate of unemployment in the United States has exceeded 8 percent since February 2009, making the past three years the longest stretch of high unemployment in this nation since the Great Depression.
Additionally, the CBO — which is the official, objective analyst for the federal government — estimates that the unemployment rate will remain above 8 percent until 2014.
If that’s not depressing enough, consider this: The share of unemployed people who have been looking for work for more than a year — referred to as marginally-attached workers— topped 40 percent in December 2009 and has remained above that level ever since.
The CBO stated the high unemployment rate’s primary cause is weak demand for goods and services as a result of the recession and its aftermath, which results in weak demand for workers.
To produce the largest increases in employment per dollar of budgetary cost, the agency recommended reducing the marginal cost to businesses of adding employees; and targeting people most likely to spend the additional income — generally, people with lower income.
“Policies primarily affecting businesses’ cash flow would have little impact on their marginal incentives to hire or invest and, therefore, would have only small effects on employment per dollar of budgetary cost,” the CBO’s report stated.
“Despite the near-term economic benefits, such actions would add to the already large projected budget deficits that would exist under current policies, either immediately or over time,” it added. “Achieving both short-term stimulus and long-term sustainability would require a combination of policies: changes in taxes and spending that would widen the deficit now but reduce it later in the decade.”
Let’s make that clear — economic stimulus for poor people who would actually spend the money is most effective, and to have an impact the federal deficit needs to increase in the short-term.
Republicans, are you listening?
After a few months of preparation, two Ohio legislators today formally introduced an economic development plan that a nonpartisan group has said could create up to 16,000 jobs in the state.
State Sens. Eric Kearney (D-North Avondale) and Nina Turner (D-Cleveland) have submitted Senate Bill No. 278, known as “Forward Ohio,” for the State Legislature’s consideration.
Some campaign workers for independent presidential candidate Ralph Nader are conceding their choice for the Oval Office probably doesn’t have a realistic chance at being elected. But they say Nader’s platform of issues is what’s truly important and are urging progressive voters to pressure the winners in this November’s elections into pursuing his agenda.
Two Cincinnati City Council members will unveil a proposal Wednesday to require banks to take better care of foreclosed properties.
Councilmen P.G. Sittenfeld and Cecil Thomas want city administrators to gauge the feasibility of launching a pilot program to improve vacant and blighted properties, which they said would help stabilize neighborhoods.
If ultimately deemed feasible and approved, the proposal would create a mandatory registry for vacant foreclosed properties and enact stiffer civil offense charges for properties that aren’t properly maintained. Also, it would require point of sale inspections prior to sheriff's sales, and assess the costs for code violation corrections to lenders.
The program would be tried on a one-year trial basis in Westwood, Price Hill, College Hill, Madisonville and Mount Airy. If successful, it could be expanded to other neighborhoods.
When foreclosed properties are left vacant, they often become targets of crime and sources of blight, and can ultimately end up in the hands of absentee landlords, Sittenfeld said.
"Our efforts are all about demanding accountability," Sittenfeld said. "Banks and lenders must maintain the properties they own, just like the rest of us."
He added, “We must all care about this issue because all of us are affected by it. If you live next to a vacant foreclosed house, your property values go down and your quality of life deteriorates. This pilot program provides an important step toward stabilizing our neighborhoods."
Sittenfeld and Thomas will formally announce the plan at a press conference Wednesday morning at a foreclosed home at 1540 Ambrose Ave. in College Hill. The property is owned by mortgage giant Fannie Mae, which has had 188 building code enforcement cases in Cincinnati during the past five years.
The proposal also has the support of Vice Mayor Roxanne Qualls and Councilmembers Chris Seelbach, Charlie Winburn and Wendell Young. That gives it enough votes for passage, which means administrators will report back to council on the costs for such a program and whether it would be effective.
Community activists and advocates from Working In Neighborhoods and the Legal Aid Society also support the proposal.
News junkies probably heard about the warnings issued by Cincinnati City Hall this week, reminding citizens of its “ticket amnesty” program: Anyone with unpaid parking tickets should pay now or possibly have their vehicles impounded by police.
What City Hall didn't announce was that as of last month, 429 of the nearly 62,000 unpaid parking tickets were issued to municipal employees — including some cops and firefighters.
As part of its annual Thanksgiving Day preparations for the needy, the Freestore Foodbank distributed almost 400,000 pounds of food, its largest amount ever for the holiday.
During the past three days, the emergency food provider distributed 399,660 pounds of food to 12,204 households. That's enough to feed 34,980 people, according to a spokeswoman.
There was a period of time in U.S history, roughly for 30 years after the Civil War, known as “the Gilded Age.” The American economy grew at an unprecedented rate as the nation transformed itself from an agrarian society into an industrial one.
But the transformation's downside included excessive displays of wealth and captains of industry who grew their fortunes on the backs of exploited and mistreated workers. The government ignored the situation, as the era gave rise to the concept of “social Darwinism.”
...do people in Washington D.C. not get the concept of economic stimulus?