----- Original Message ----- From: "Erik Reuter" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[EMAIL PROTECTED]> Sent: Wednesday, March 03, 2004 6:24 AM Subject: Re: Race to the Bottom
> On Tue, Mar 02, 2004 at 04:11:05PM -0600, Dan Minette wrote: > > > > From: "Erik Reuter" <[EMAIL PROTECTED]> > > > > > Clearly, the 90's were unusual. > > > > In some ways, but not in employment. > > Definitely in employment, looking at the late 90's, which is what > I meant to imply (sorry for the ambiguity). Just look at average > historical unemployment: We have different numbers because we are looking at different things. You are quoting unemployment..which is (those actively looking for work)/(those actively looking for work + those employed). I'm quoting employment. There has been a historical correlation between the two as far back as I've seen statistics. That correlation is now broken. Our own Brad DeLong is one of the ecconomists who is noting this break. As of yet, there is not an explaination. Let me give comperable figures for increases/decreases in employment to your unemployment rate. They aren't quite the same because your figures are averages and mine are differences, but I picked the same year groupings. 1944 to 1948 4.7% 1948 to 1952 8.1% 1952 to 1956 17.6% 1956 to 1960 4.4% 1960 to 1964 5.9% 1964 to 1968 16.2% 1968 to 1972 8.4% 1972 to 1976 8.4% 1976 to 1980 15.7% 1980 to 1984 2.0% 1984 to 1988 11.9% 1988 to 1992 4.4% 1992 to 1996 9.1% 1996 to 2000 10.6% 2000 to 2004 -0.4% BTW, the website I gave was where I was when I copied the numbers, but it didn't translate well. Try http://www.bls.gov/webapps/legacy/cesbtab1.htm and then picking the seasonally adjusted payroll and the maximum years. So, unemployment was very low in the late '90s and doesn't look all that bad in the early '00s. But, this is the first drop in employment during a presidential term since the start of the Great Depression. > average > unemployment > rate > years % > ================== > 2001-2004 5.3 > 1997-2000 4.5 > 1993-1996 6.3 > 1989-1992 6.1 > 1985-1988 6.6 > 1981-1984 8.6 > 1977-1980 6.5 > 1973-1976 6.5 > 1969-1972 4.7 > 1965-1968 4.1 > 1961-1964 5.9 > > > The last time there was a significant period with unemployment below the > "natural" rate of 5%, it was the late 60's/early 70's, which was a big > boom time. Which was followed by a big bust, with over a million jobs > lost and a period of lower employment. I don't see where you got this. Let me quote my statistics for those years jobs year x1000 1968 66805 1969 69438 1970 71176 1971 70866 1972 72445 1973 75620 1974 78104 1975 77297 1976 78506 1977 80692 1978 84595 1979 88811 1980 90800 Over no two year period is there a job loss. Betwen jan 1974 and jan 1975, about 800 thousand jobs were lost, but in between 75 & 76, about 1.5 million were gained. Let us look at the recent years: 2000 130730 2001 132388 2002 130494 2003 130190 2004 130155 All numbers are January numbers BTW, that's why 2001 looks so good. We see about 1.9 million jobs ere lost between jan 2001 and jan 2002, another 300 thousand between '02 and '03, and another 35 thousand between '03 and '04. This is unprecidented. >As far as employment, this looks > just like a typical cycle. Just look at the BLS data, get a historical > graph (new feature of their website), and you can see the employment > cycle doesn't look extraordinary. In fact, if anything, looking at > decades back to 1930, it seems the cycle amplitude is attenuating a bit. > >but I don't see anything unusual in the employment behavior in > the current recession, which by the way, I think is relatively mild -- > there may be worse to come since the excesses haven't been worked off > yet. But, the growth in GDP, while very good, wasn't out of the ordinary during '92 to '00. It was 37%, compared to 46% from '60 to '68. I realize that corporate debt is high, and that there's been a lot of investment in infrastructure, and the stock market was over valued during the '90s, but the classic sign of an overheated economy wasn't there. That is the rise of inflation. Throughout this all, wage pressure was minimal. The inflation adjusted median wage was still lower than its peak in the '70s in 2000. Further, standard numbers for measuring recovery from excess have been looking fairly decent. Things like factory utilization and business inventory are good. So, it appears that we are now having a change in the correlation between key figures. I'd argue that, when important variables that have had correlations within certain bounds for decades start losing those correlations, something fundamental is changing. I understand why you used unemployment numbers to talk about employment, its been done for years. For the first time, there is a disconnect between these figures, and its very curious. Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
