Real unemployment rate is 21% - Printable Version
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Real unemployment rate is 21% - Mick - 07-21-2020
The real unemployment rate is at least 21%.
https://www.zerohedge.com/economics/real-unemployment-rate-21-and-heading-higher
32 million people getting a government check.
https://wolfstreet.com/2020/07/16/32-million-people-on-state-federal-unemployment-2nd-highest-ever-week-17-of-u-s-labor-market-collapse/
City economies across the country are being destroyed.
https://finance.yahoo.com/news/glimpse-fiscal-gloom-bearing-down-100011417.html
![[Image: US-unemployment-claims-2020-07-16-contin...tacked.png]](https://wolfstreet.com/wp-content/uploads/2020/07/US-unemployment-claims-2020-07-16-continued-state-federal-NSA-stacked.png)
RE: Real unemployment rate is 21% - OutsiderFan - 07-22-2020
Zero Hedge is a conspiracy theory website. Please don't post links from it here.
Mick, do you watch the Money GPS on YouTube? If not, it consists of articles from Bloomberg, WSJ, Financial Times, The Economist, the Fed, and other credible data sources. The guy who does it is very anti-Fed and he certainly is glass half-empty, but he reports the truth with credible sources, which is very hard to find as we know, and connect dots well.
In a video yesterday he highlighted a story about how the unemployment rate doesn't even tell the story. We know there is a large number of people who are either underemployed or given up looking that aren't counted in the unemployment rate. This story basically confirmed what you predicted a few months ago. That is, that most employers went to furloughs thinking the crisis would be short-lived and things would get back to normal in a few months. Now they are realizing this isn't the case, and are converting furloughs to layoffs.
But even beyond this is the fact wages are being cut and hours being reduced to adjust to less demand. That demand is down in part due to virus keeping people away from spending, but also - and this is the really concerning part - because those who lost consumer facing jobs as a result, are eroding spending further. This is the start of a cascade that impacts everything. Rents, mortgages, local tax receipts, and also starts having a downstream impact on larger companies that may have avoided layoffs because they expected a quick recovery. Will The Hartford retain its workforce, when so many small and medium sized businesses it insures are shutting down?
So there is the unemployment rate, but it just doesn't begin to illustrate the actual situation in terms of loss of spending power. The fact is Congress has no choice but to act or the system will collapse. It's comical that some think giving people an extra $600/month is a bad idea if it encourages them not to work, when the fundamental reality is money is like oxygen for the economy. If money isn't being spent into economy, it dies. It simply doesn't matter from where it comes at this point. And oh the irony that the Fed can create all this money out of thin air to "create liquidity" for capital markets, but when it comes to the economy as a whole, no such injections are needed. Makes absolutely zero sense and is 100% intellectually dishonest.
RE: Real unemployment rate is 21% - fullmetal - 07-22-2020
I'll echo the caution against ZeroHedge. They were even banned from Twitter for a bit, weren't they? Takes a lot to cross that threshold.
Anyway, I agree that the real unemployment figures are much higher than what the BLS have been publishing since six months ago. The economic fundamentals are very shaky, and I gather the administration is more focused on the stock market performance than shoring up the real economy.
Heck, Ted Cruz was quoted as being already opposed to the new stimulus bill McConnell is preparing. GOP infighting over a bill to save the economy is not a good sign right now.
RE: Real unemployment rate is 21% - Mick - 07-22-2020
OK, hadn't paid attention to the Zero whatever. Here's the DOL press release with statistics that ZH was quoting. I don't think the SPLC has them on the hate/enemies list, at least not yet.
https://www.dol.gov/ui/data.pdf
Second paragraph opens with the official unemployment rate at 11.9%. The fifth paragraph after four graphs tells the full story: The total number of people claiming benefits in all programs for the week ending June 27 was 32,003,330, a decrease of 433,005 from the previous week. That's nearly double the "official" unemployed number.
RE: Real unemployment rate is 21% - chrisk - 07-22-2020
The stronger safety net in Europe help bring down the spread of the virus more quickly. We'll see if the early reopening of the economy in the US helps or hurts the economy going forward. It was certainly the wrong decision in terms of health.
Europe kept more people on employer payrolls longer while furloughed. Now some of those people will be transitioning to unemployment, which pays a higher percentage of income in Europe than in the US. It will be interesting to compare the economic recoveries between Europe and the US going forward, giving the vastly different case loads.
RE: Real unemployment rate is 21% - OutsiderFan - 07-22-2020
LinkedIn is axing 1,000 jobs. That should start making people understand how seriously in trouble we are.
RE: Real unemployment rate is 21% - chrisk - 07-22-2020
(07-22-2020, 02:08 PM)OutsiderFan Wrote: LinkedIn is axing 1,000 jobs. That should start making people understand how seriously in trouble we are.
It’s even more amazing that 1,000 is only 6% of its workforce.
RE: Real unemployment rate is 21% - Mick - 07-22-2020
I get to bring back three of my eight furloughed employees with an outside shot at two more some months down the road. Three will be permanent layoffs.
Candidly, I think much of American business thinks of this time period as an ideal time to get rid of troublesome employees that, for whatever reason, couldn't be terminated in the normal course of business. So I expect part of this contraction to be permanent.
RE: Real unemployment rate is 21% - BostonCard - 07-22-2020
(07-22-2020, 04:09 PM)Mick Wrote: I get to bring back three of my eight furloughed employees with an outside shot at two more some months down the road. Three will be permanent layoffs.
Candidly, I think much of American business thinks of this time period as an ideal time to get rid of troublesome employees that, for whatever reason, couldn't be terminated in the normal course of business. So I expect part of this contraction to be permanent.
Tell that to my brother. He was the top salesman for his company in 2019, but the company has to bring back its employees in order of seniority, and he was last in the totem pole.
BC
RE: Real unemployment rate is 21% - Mick - 07-23-2020
(07-22-2020, 05:09 PM)BostonCard Wrote:(07-22-2020, 04:09 PM)Mick Wrote: I get to bring back three of my eight furloughed employees with an outside shot at two more some months down the road. Three will be permanent layoffs.
Candidly, I think much of American business thinks of this time period as an ideal time to get rid of troublesome employees that, for whatever reason, couldn't be terminated in the normal course of business. So I expect part of this contraction to be permanent.
Tell that to my brother. He was the top salesman for his company in 2019, but the company has to bring back its employees in order of seniority, and he was last in the totem pole.
BC
That's one of the strangest by-products of this pandemic, how salespeople are being affected. A good friend of mine sells Tax work for a Top 30 law firm. He generates $5 million annually, and has a list of relationships with inhouse counsel that is superb. And he can't get a sniff. I don't understand it.
RE: Real unemployment rate is 21% - BostonCard - 07-23-2020
It's Thursday so it's time for the weekly new unemployment claims report.
https://www.foxbusiness.com/economy/jobless-claims-coronavirus-pandemic-july-18
This is an increase from last week (likely reflecting the economic effects of the worsening pandemic) to 1.6 million, up from 1.3 million (revised upwards to 1.307 million). Continuing claims did continue to drop (now at 16.2 million).
BC
RE: Real unemployment rate is 21% - 82lsju - 07-23-2020
(07-23-2020, 09:13 AM)BostonCard Wrote: It's Thursday so it's time for the weekly new unemployment claims report.
https://www.foxbusiness.com/economy/jobless-claims-coronavirus-pandemic-july-18
This is an increase from last week (likely reflecting the economic effects of the worsening pandemic) to 1.6 million, up from 1.3 million (revised upwards to 1.307 million). Continuing claims did continue to drop (now at 16.2 million).
BC
here's the release from the dept of labor
https://www.dol.gov/ui/data.pdf
RE: Real unemployment rate is 21% - Mick - 07-23-2020
(07-23-2020, 10:40 AM)82lsju Wrote:(07-23-2020, 09:13 AM)BostonCard Wrote: It's Thursday so it's time for the weekly new unemployment claiA ms report.
https://www.foxbusiness.com/economy/jobless-claims-coronavirus-pandemic-july-18
This is an increase from last week (likely reflecting the economic effects of the worsening pandemic) to 1.6 million, up from 1.3 million (revised upwards to 1.307 million). Continuing claims did continue to drop (now at 16.2 million).
BC
here's the release from the dept of labor
https://www.dol.gov/ui/data.pdf
Little bit of good news was that the total persons accepting a federal unemployment check dipped slightly from 32,003,330 to 31,802,715.
Not so good news was that initial unemployment claims went UP for the first time in 16 weeks, and it went up from a number that was revised upwards in the first place. Last week was 1,307,000. This week was 1,416,000. And that's not good.
RE: Real unemployment rate is 21% - Mick - 07-25-2020
(07-22-2020, 06:17 AM)OutsiderFan Wrote: Zero Hedge is a conspiracy theory website. Please don't post links from it here.
Whole Foods advertises on that site. Shall I stop shopping at Whole Foods? I've never been part of cancel culture. Feels a little slimy...
RE: Real unemployment rate is 21% - OutsiderFan - 07-25-2020
(07-25-2020, 07:32 AM)Mick Wrote:(07-22-2020, 06:17 AM)OutsiderFan Wrote: Zero Hedge is a conspiracy theory website. Please don't post links from it here.
Whole Foods advertises on that site. Shall I stop shopping at Whole Foods? I've never been part of cancel culture. Feels a little slimy...
Advertisers don't pick and choose which websites their ads get played on for the most part. Now, they have the ability to do so for sure, but they must walk a fine line between blocking sites their ads appear on for whatever reason, and giving up the eyeballs they might lose if they do block those sites from showing their ads. Personally, if I were Whole Foods or any other company, I wouldn't be allowing my ad dollars to support Zero Hedge or similar sites because they promote conspiracy theories that dumb down society. And frankly, your post is going to inspire me to tell Whole Foods not to advertise on sites like Zero Hedge :)
My great question is with so many newspapers going to subscriber only content, will these conspiracy theory news sites have an audience of people that will support them with paid subscriptions? Or if advertisers pull their ads from them, would they go away? I mean I pay for The Washington Post because it is an outstanding newspaper that wins awards for its reporting and The Athletic because it does great reporting too. But will people pay $9.99/mo for Zero Hedge or the National Enquirer to either make stuff up or otherwise promote nonsense? I legit don't know and I legit want to know.
RE: Real unemployment rate is 21% - 82lsju - 07-25-2020
Quote:All of this implies that the main factor behind the high unemployment rate is lack of jobs, not an unwillingness to work. Economists normally fight like cats in a bag. But an astonishing 0% of those surveyed by researchers at the University of Chicago disagreed with the idea that “employment growth is currently constrained more by firms’ lack of interest in hiring than people’s willingness to work at prevailing wages.”
https://www.economist.com/united-states/2020/07/23/generous-unemployment-benefits-are-not-keeping-americans-from-work?fsrc=scn/fb/te/bl/ed/onehandedeconomicsgenerousunemploymentbenefitsarenotkeepingamericansfromworkunitedstates
RE: Real unemployment rate is 21% - Mick - 07-26-2020
(07-25-2020, 05:03 PM)82lsju Wrote:Quote:All of this implies that the main factor behind the high unemployment rate is lack of jobs, not an unwillingness to work. Economists normally fight like cats in a bag. But an astonishing 0% of those surveyed by researchers at the University of Chicago disagreed with the idea that “employment growth is currently constrained more by firms’ lack of interest in hiring than people’s willingness to work at prevailing wages.”
https://www.economist.com/united-states/2020/07/23/generous-unemployment-benefits-are-not-keeping-americans-from-work?fsrc=scn/fb/te/bl/ed/onehandedeconomicsgenerousunemploymentbenefitsarenotkeepingamericansfromworkunitedstates
There's a lack of jobs because businesses don't need the additional labor.
It's been 11 long years since the last recession, since businesses have had to tighten their belts across the board. The pandemic forced belt-tightening upon them. It gave businesses the first broad, across-the-board chance in more than a decade to disassociate themselves from slow workers, workers who had developed bad habits, lazy workers, troublesome workers. Because even marginally productive employees are still productive and most businesses learned to work around them. During the pandemic, all bets are off.
A friend of mine (behavioral labor economist) who pays attention to employment trends told me a few months back that a relatively recent phenomenon is workers who say "no" to legitimate requests within one's job description. That doesn't refer to illegal, immoral, unethical requests; nor does it refer to requests that might be a "reach" for the employees or tasks that belong to other employees. He's just talking about workers who refuse to do part of their jobs, but at near full employment, those workers kept their jobs. In the COVID-19 environment, those workers get furloughed.
I have employees that I've kept on the books through all kinds of personal challenges and reversals, and I'll keep them until my bosses tell me to separate them. I'll keep employees with low ceilings, who don't work fast, who are occasionally ornery. But those employees who are lazy, unmotivated, who like to say "no" to legitimate requests, are in for a rough ride.
RE: Real unemployment rate is 21% - OutsiderFan - 07-26-2020
Mick, your "those who say 'no'" examples are alternately shocking and not shocking at all, but does raise a question I'm curious about, but first some background...
To me, as a Gen X, the idea of saying no to your boss - not for any legit moral objection but because you just don't want to - is simply an eye-popping concept. In fact, in my first and only corporate job at an ad agency in sports marketing, I told my supervisor I didn't agree with taking on a client that I felt was shady. He told me "as soon as your name is on the door" you can say no. That conversation led me to leave and become an entrepreneur. After leaving I found out the client I thought was shady, never paid its bills and stiffed the agency $30 grand - haha!
At the same time, I have a university professor friend who told me the Millennial generation developed a practice of not doing anything they didn't want to do. That included doing college class assignments. If this wasn't bad enough, "students" would complain if they got failing grades, and say the fact they paid for their degrees - and his salary - meant they couldn't fail. This is some serious hubris, and ostensibly came from parents who never held their kids accountable for anything. Obviously I don't want to paint every kid and Millennial parent as irresponsible, entitled brats, but this was the prevailing behavior he told me he saw as a undergrad professor.
So my question to Mick is: Are the ones who are saying no and refusing to do work they are assigned, predominantly Millennials? Or does this somehow apply to other generations as well? Again, I'm shocked anyone would refuse to do what their boss tells them to do because I wouldn't dream of that (I questioned but never refused to do assigned work). But I also have the insights from my college professor friend that makes it seem actually plausible, at least for some of a certain age group.
RE: Real unemployment rate is 21% - Goose - 07-26-2020
(07-26-2020, 07:33 AM)OutsiderFan Wrote: But I also have the insights from my college professor friend that makes it seem actually plausible, at least for some of a certain age group.OF, I am looking forward to Mick's answer, but I would point out that even if it were an "age-related" concept, once people of any age find out their supervisor will allow them to refuse legitimate work assignments, they will do so. While one might wish to blame the people who say no, I blame their supervisor who didn't strongly counsel them (and fire them if that didn't work). Obviously you received that counseling and decided to change jobs.
RE: Real unemployment rate is 21% - 2006alum - 07-26-2020
Maybe let's not generalize too much - I and most of my peers, when asked to jump, will respond, "how high and how fast?" Or maybe older millennials are different - most of us vividly remember entering the workforce around the great recession and are always thankful to be gainfully employed. Or maybe it's just the Stanford alum effect...
And yes, totally agree with Mick's broader diagnosis - most of the tech firms that laid off 15-25 percent of their workforce early in the pandemic cut underperforming employees and units, many with the plan to hire back the 5 percent who were wrongly cast out to sea with their teams. No one wanted to be the layoffs first mover in a "historic" economy because it signals weakness even when many firms simply had bloat, and in normal times mass layoffs scare off prospective hires and prompts even the (job secure) good employees to start looking at other opportunities. Now, no one blinks an eye. And very few of those jobs will be coming back any time soon.