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36 Responses to “Unemployment in the United States”
One with any analytical capability whatsoever would realize that a graph of unemployment since 1950 is meaningless if not done as a % of the population, since our country has more than doubled in population since 1950. I’m not saying the graph will suddenly look like a bouquet of sweet smelling roses, but at least it will be an apples-to-apples comparison.
Here it is as a percentage of the labor force. ithttp://www.tradingeconomics.com/united-states/unemployment-rate is as ‘percentage of the labor force’.
And here in greater detail.
http://www.washingtonpost.com/wp-srv/special/business/us-unemployment-rate-history/
Whoops – here’s that first one again.
http://www.tradingeconomics.com/united-states/unemployment-rate
US population is double what it was in 1950 (US Census has it pegged at 152,271,417 in 1950, 305M in 2009). Comparing now to 1950 means we should consider about 5M unemployed a norm. 1950s were a time of enormous infrastructure rebuilding, plus building of automation, so while jobs were displaced DUE to automation, the new automation industry, like computers, brought in new college educated folks (thanks to the GI Bill and those returning from war). Also, the whole world’s infrastructure OTHER than the US was destroyed (thanks, oceans!), so we were one of the only powers left who could build stuff.
There is a likelihood, though, that the industries created through the 50s-2000s have created jobs that require less people. So while automation has created jobs in computers building the automation, it has cut jobs. A simple Python script can replace a huge number of traditional office jobs. And once the program is written, it can be copied and distributed ad infinitum with no effort. While we still need physical goods (like food), the low margins of such things make it unattractive for new jobs.
http://www.economist.com/blogs/babbage/2011/11/artificial-intelligence
The key, I imagine, is the creation of new industry, not relying on old industries. Industries move toward things like “efficiency” which is a nice way of saying, ‘do more with less people’.
Says the economist piece: “In 2009, Martin Ford, a software entrepreneur from Silicon Valley, noted in “The Lights in the Tunnel” that new occupations created by technology—web coders, mobile-phone salesmen, wind-turbine technicians and so on—represent a tiny fraction of employment. And while it is true that technology creates jobs, history shows that it can vaporise them pretty quickly, too…
All told, Mr Ford has identified over 50m jobs in America—nearly 40% of all employment—which, to a greater or lesser extent, could be performed by a piece of software running on a computer.”
This is the crux of the current unemployment. Yes, the market force the shakeout when it crashed due to stupidity (and maybe evil) of the big banking system. But it is technology that likely forces efficiency and a lack of hiring. As said, there are plenty of jobs in software.
So what comes next? New industry would help, probably. Better education to fill current industry/start current industry. A shift in cultural values to allow for funding of knowledge for the sake of knowledge? Art for the sake of art? No idea. But unemployment isn’t really the banks fault. It’s our fault for not inventing new things that create jobs.
Jobs that require less people? I’m not familiar with how that works. It is the governments fault there are no jobs. Indirectly the banks created the circumstances and then took bailout money and did nothing to help the situation. Offshoring all your industries doesn’t help either. And then not educating your children properly just ices the cake.
“jobs that require less people” –
I’ll mention something specific and hopefully you can see what I mean. Currently, in law, there is a process called “Discovery”. It’s basically reading documents and taking notes. While many 1st and 2nd year attorneys do it, also paralegals and other “less” trained folks do it. It’s a solid office job. Most legal costs are actually devoted to paying these people.
Software is written that automates an enormous amount of this work. A small team of programmers create a product that attorneys buy that then automates what a team of paralegals used to do. Thus the same job (Discovery) now requires less people to do for the one-time cost of a software package.
While that creates jobs in the software market, it no doubt eliminates more jobs than it creates. So the job of paralegal still exists, but fulfilling that job requires less human beings (while the actual productivity remains the same or better because of software).
I mean we have more people driving and less toll takers due to software, right? Those jobs are never coming back, yet we can now handle more cars per hour. The job now requires less humans (or even no humans).
The bank crisis eliminated capital which in turn eliminated jobs. But there ARE tons of jobs open in certain industries (like software), but I think the bank crisis made companies re-evaluate what they needed in terms of human labor and discovered that large swathes of what they needed humans for was simply replaceable via software.
I’m not sure what’s wrong with off-shoring. Shouldn’t people all over the world have access to opportunities? I would love to see legislation baring US Corporations from doing business offshore without a certain modicum of social/environmental/safety regulations on the foreign companies. Once that is in place, though, I don’t see why we should be opposed to having off-shored work. In fact, I think it’s a smidgen racist to only guarantee jobs to Americans.
Read the Economist article I posted about automation. It’s eye-openning as to what jobs will be eliminated in the future due to increased intelligent automation.
I’m a software engineer. I specialize in automation. A job in the proper sense I mean to be a job not a task or process. One job requiring one person.
The point of off shoring is to bypass regulations. It’s not a philanthropic exercise. Hello.
And about the education? Why has Cuba got a better education system than us?
“The point of off shoring is to bypass regulations. It’s not a philanthropic exercise. Hello.” No, I think its for cheaper labor. A reason for the labor being cheaper is less regulation. As I said, I’d love to see us have some legislation that prevents (or penalizes) offshoring to avoid environmental or safety regs.
If the safety regulations are in place and the foreign workers are STILL cheaper, then it is indeed a somewhat racist (or nationalistic) to not allow them to have the same opportunities as Americans.
“A job in the proper sense I mean to be a job not a task or process. ” And as a software engineer (like me) you must know that your software likely eliminates more current jobs than it creates.
As far as education is concerned, I agree with you (and sorry if I gave any impression other than that). I would love to see more in education. But I don’t necessarily think it’s a monetary investment (thought that couldn’t hurt). We have a cultural problem when it comes to education. We have a media culture problem when it comes to education. We need to start worshiping the folks at Fermi Lab rather than the Kardashians. But I don’t know how you change that.
That graph makes me want to pitch a tent in a public park and bathe in a train station bathroom for months. Now who’s with me!?!?
Why is the occupy boston site using the black power fist as a logo?
These graphics weren’t created by Occupy Boston; they come from http://www.occupydesign.org. Still, the raised fist symbol is used throughout the Occupy movement, including by Occupy Wall Street. While it was used by the Black Power movement in the 1970s, its origins go back to at least the IWW in the 1910s and the Spanish Civil War in the 1930s.
http://en.wikipedia.org/wiki/Raised_fist
thanks!
The same fist icon is also used as a symbol for Howard Stern on Sirius XM Radio.
You win some, you lose some.
Federal unemployment benefits are set to expire at the end of this year. Let’s start organizing.
they’re reviewing you guys on yelp:
http://www.yelp.com/biz/occupy-boston-boston-2#hrid:gTjbokx76ivR2z4NajHfmQ
We’re aware.
I do realize that some if not all of us of whom are observing this takeing p[lace, the movement if you will, are amazed at the number of people involved. Yet I personally can not help but wonder, Why now ?
The government has aloud these things to happen and take place for years, We then look to them for help, And why ?they are the enablers.these are the people of whom started this mess in the first place.
How or better yet why would anyone believe that they are not just going to reinvent the same thing just in a different way.
How many people have had someone ask you a question ? Answer that question with a no, only to have the same question asked again, just in another way. this is all there doing. there just trying to come up with a way to keep things the same yet make it look different. This is a canard. Manipulations are all they are about.
Joshua I am sorry to hear you are unemployed as you said on the Harvard topic. I kind of expect great things from you. (As I would from someone who knows who Thomas JJ Altizer is.) I think you should be pushing things in some direction. Not necessarily because we should have to go whatever way but because I think more assertiveness and demands on the group from a person like yourself will create a better dynamic. I would love it if Occupy Boston could have a real internet forum. I have the impression that a problem with young people today is that they do not really do real internet discussion because Facebook kind of killed that. On these comments here I could put up some counter propaganda and draw attention to myself but that is about it. We can’t really investigate and discuss economics or where this Occupy movement is going.
Based on the link Paul provided:
Current unemployment as percentage of the labor force, 9.0%
In 1950 unemployment as percentage of the labor force, 6.5%
There were dips in the mid 50’s (2.5%) and mid 60’s (<4%) but there were also peaks of 9.0%, the same as today, in the 70's and as high as 11% in the early 80's. The point being that we do not have 7X the unemployment we had in 1950. We don't even ave 2X the unemployment. Although we've had times with less we've had times with the same level or even higher.
That’s not really fair, since in 1950 most households were single-income and today most households are dual-income. So, you should really compare the percentage of *households* experiencing homelessness, not the percentage of *individuals*. (In other, the increase in the number of individuals in the workforce between 1950 and today is less than the increase in the number of households, since most households are now dual-income.) Also, you should compare U6 to U6, since the U3 is basically worthless. (It might be, for example, that the number of distressed workers or underemployed workers today far outstrips the number in 1950, making the U3 appear artificially low.)
I was just using the data provided by Paul. The numbers are what they are. The bottom line is that even if you do some adjustment to offset the single vs. dual income differences, the occupy design graph is bogus. It is a classic example of using a graph to misrepresent reality.
Not completely. It *is* true that 14 million Americans are unemployed and looking for work right now, and that’s the largest number since 1940. It’s slightly misleading, but I’m not at all certain that was the intent. In any case, it certainly underscores the magnitude of the current employment crisis.
Joshua – by your logic, it also “is true” to say that while 14 million people are currently unemployed, the current “employed” population in the U.S. is close to the highest it has been in the history of our country. This is also “slightly misleading, but I’m not at all certain that was the intent. In any case, it certainly underscores the magnitude of the current [employed magnitude].”
Sound right to you?
^^ I see what you did there
You originally criticized Joshua’s graph for not taking into account unemployment as related to population, so I found a couple of data sets that did.
We can pick these things apart till the cows come home, but what strikes me when I look at these graphs is that we’re almost as bad as the early 80’s, but unemployment dropped dramatically beginning in ’83 – ’84 or so. Economists today predict that if the jobs lost as a result of the financial collapse EVER come back, it’ll take a decade or more. So continue that line at about 9% out to the right for another ten years. That’s scary.
I’ve also got to say that the guy above who is touting all the software/paralegal/burger-flipping type jobs, is living in denial of how much damage has been done to this country by shipping our heavy industry and manufacturing overseas. He says he’s ‘not sure what’s wrong with off-shoring’. Service economies NEVER generate middle class wealth like manufacturing economies do. That’s what’s wrong with it.
Paul – my two posts are simply pointing out that data can be spun just about any way the spinner wants to spin. The graph above looks ugly, the graph using the data sets you provide would look less ugly, though still not pretty, and the graph using the “data” I quote (using a spinner’s logic) would paint a rosy picture. Yet, all three are ultimately derived from the same data.
Translation – analysis (whether it’s on this site or anywhere else) is only as unbiased and transparent as the analyst/spinner want it to be.
Thank you. If he follows his own logic we could automate the whole lot and just sit back with our martinis. Our perl and python scripts could just work away for us on google ad words and no one would have to do anything. What would be the point of anything. In fact? What is the point of it all? Am I on to something?
As the guy above, I’ll say this:
I’m aware that service economies do not generate middle class wealth. But stopping (or slowing) progress in that direction is like smashing printing presses to stop the destruction of scribal traditions.
I’m not actually making a value-judgement on any side of this. I’m just saying that it’s inevitable that software will keep gobbling up a number of industry jobs (and software might end up gobbling up software jobs). I’m not saying it’s a good thing or a bad thing. It’s just a fact.
It does force a question to be asked: should we artificially make jobs that could be automated just to have a middle class?
I’m very aware that software and automation do indeed destroy lives. I personally advocate that we should continue in that direction because, in the long run, we (as humans) will either find new industry or we’ll destroy each other and die. I opt for the optimistic view that the destruction of certain industries yields other industries. Software will (and has) destroyed many industries.
I’m not touting paralegal jobs. I’m saying those jobs are being destroyed by software. Anyone who thinks their job cannot (and should not) be automated is delusional. All things can and will be automated. So new industries need to emerge or we will die.
Once again, it’s not a judgement. It’s just a fact. But protectionism (either national or of an industry) isn’t a solution. It’s a bandaid, at best.
From a nationalistic/security standpoint, a strong manufacturing economy is important. I’d like to see a return to that. But that also means that we, as Americans, have to deal with a huge increase in prices of items (or a huge decrease in wages). The executive compensation represents such a tiny tiny amount of money in terms of cost of goods that you could hardly point to income inequality as a reason for pricing. So how do we have a strong manufacturing industry? Just make laws that say you can’t do business elsewhere? That’s not fair to the rest of the world. I WOULD like to see laws penalizing companies for engaging in overseas labor with safety/regulation issues and i regularly write my congresspeople for that. But if that is fulfilled, I’m not sure why a company would opt to manufacture in this country if the wages are as high as they currently are (in comparrison to other countries).
The middle class culture is broken. It needs to embrace knowledge and education, not goods, as a means to a successful future.
What are your solutions to building jobs in an increasingly automated world where the whole world can participate in goods and labor?
No one is arguing with this point but you – “inevitable that software will keep gobbling up a number of industry jobs”. No one is saying that should stop. I do agree on one point – that education and innovation is critical to growth. But innovation is only one aspect. Companies hiring onshore blue collar (manufacturing) and white collar workers (software developers) is the other aspect. Otherwise, we innovate and China takes the designs and produces similar devices cheaper and ends up with some of the American companies’ market share.
The fact of the matter is that no one is against offshoring either up to a point, but corporate greed has crossed that fine line where it is not enough that jobs are going offshore, but office spaces here in America are filled with non-Americans in software development particularly while so many Americans are out there looking for work. This is all about the bottomline, and I wish there were more studies on efficiencies gained cause really a lot of times the onshore employees need to redo a lot of the work of the offshore so I am not sure how productive that is. I have seen goals to have 70% – 80% operations offshore – is this not crossing the line ? There should be a more balanced approach between on and offshore in both manufacturing and software development industries for example.
i thought that in the last census it said that the average household is a 1.3 income
the mistake is not what the graph graphs it is that is should just be a giant number!
14 MILLION people! wether thats 1% or 50% thats a as we economists say….. a crapload!
The graph is bogus. It misleadingly looks like unemployment has grown seven-fold since 1950. It adds to the level of hysteria which only prompts people to seek solutions that would be worse than the problem.
If we stopped paying unemployed people after a reasonable period of time (say 3 or 4 months) would the unemployment rate fall?
Let’s be realistic – if we pay lazy people to not work for 2+ years then guess what – they are going to not work.
Agreed that there should be improved ways to monitor those who take advantage of the system, but most people WANT to provide for their families, they want to work – there simply are not enough jobs out there due to reasons that were discussed above – including reasons that are just a fact of life and nothing should be done about it like continually improve processes and gaining efficiencies through automation which will eliminate some jobs; but other reasons we should as a country do something about EDUCATE our children, which will lead to INNOVATION, and keep some of the jobs ONSHORE in balance with all of those going offshore…which is getting out of control…oh yeah, and lower EXEC PAY so a few millions shaved off a non-performing exec can keep a few hundred employed!