What the Unemployment Numbers Mean
Jeff Alworth
As regular BlueOregon readers know, I ain't no economist. This is a poor time to blog ignorantly (on the other hand, the duelling economists--the stimulus will work! it's too small!--convince me that we're all in deep water), so I turn to people who can shed light on the numbers. After yesterday's Oregon unemployment numbers came out, 12.1%, perhaps the highest in the nation, I was looking for a little context. Just in time, Patrick Emerson:
[The] standard [argument]: once the recession bottomed out and economic activity started to pick up many people who were waiting out the recession would re-enter the job market which would put a damper on unemployment numbers and slow the recovery in the job market indicator. But what we are seeing is a much sooner surge in job seekers than I had anticipated which signifies that the downturn is having an especially severe effect on household budgets. (This may also be an artifact of the over-leveraging households engaged in over the last few years.)
In other words, we knew the number was a huge, terrible thing, but apparently, it's worse than it looks.
I expect the erosion of jobs to cease by the end of the year at the latest, but what about the job seekers? Are all those that can be forced to seek already out there or are there more out there? Will people start to leave the state to look for work elsewhere? These are questions that are hard to answer at this point. I really thought we would be able to avoid the 12% barrier, but now I have a hard time predicting. If the seekers side stabilizes or subsides we still may avoid 13% but I wouldn't put any money on it.
Uggh.
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Apr 14, '09
Jeff
You have been at this a lot longer than I have. Are you aware of any studies the state may have done trying to determine why Oregon seems to fall further and recover slower than most states during bad times.
I have heard that due to our climate, people w/o jobs stay and the insurance we provide to children keeps unemployed here, but I have never heard of anything comprehensive being looked at.
Thanks
Apr 14, '09
"I really thought we would be able to avoid the 12% barrier,"
What that tells me is he is out of touch. Too busy looking at numbers to talk to people.
I know many people who easily predicted this level of unemployment and more. With each and every report over the past 10 months, it was obvious the rate had already worsened when the reporting was made. Here again is the same thing. I'll wager the rate is actually .5 to a full point worse right now. Continued shedding of jobs thorugh next winter measn bad news for many and a calamity for plumetting goverment resources. Too bad the legislature and governor don't recognize the severit and urgency. Their busy as usual expansion of goverment while funding of core functions plummets is beyond irresponsible. They are obviously out of touch also.
Patrick says, "If the seekers side stabilizes or subsides we still may avoid 13% but I wouldn't put any money on it."
Any idea that we are at the bottom right now ispure fantasy. I know people through nearly the entire spectrum of employment and there has been much more shedding in the last two weeks with more on the way. The fallout from this high level of unemployment also triggers additional unemployment as more unemployed casue retail consuming to drop resulting in more job loss across the board.
I'm afraid we are in a world of hurt with a very rough and long ride out. ANY tax increasing, energy cost increasing or other impacts on consumers and taxpayers must be avoided.
4:37 p.m.
Apr 14, '09
Richard, your post is poised to rebut itself:
Too bad the legislature and governor don't recognize the severit and urgency. Their busy as usual expansion of goverment while funding of core functions plummets is beyond irresponsible.
"What that tells me is he is out of touch."
Expansion of government? On what planet are you living? The governor's proposing massive cuts. Where exactly is government expanding.
4:56 p.m.
Apr 14, '09
For one thing, Jeff, the legislature is hearing a paid family leave bill. For another, a tax hike on insurance and hospitals to expand the Oregon Health Plan.
Apr 14, '09
Kremer with a drive by.......
Isn't the family leave bill funded by the employees for some minuscule amount of money
Apr 14, '09
Is there a preferable site to view a breakdown, by county, of Oregon's unemployment percentages? Who is getting hit the hardest in our state?
7:05 p.m.
Apr 14, '09
Isn't the family leave bill funded by the employees for some minuscule amount of money
$46 per year or something around there.
Apr 14, '09
Kremer
Explain how the family leave bill effects employment
Apr 14, '09
Every recession Oregon is among the worst off in the nation. Must be the GOP's fault for the policy making and their lock on State government agencies they have had for several generations in Oregon. Can't be the Dems policies. Without Dem policies the Oregon unemployment rate would be 25%+.
Apr 14, '09
I did some research on my own and found a good county breakdown of Oregon's unemployment numbers here. Went straight to the people who should know - Oregon's own Employment Department. Rural and urban areas seem to be hurting equally, rural slightly worse. Unless you're in Crook, Grant, Jefferson, or Harney County. They're worse than hurting.
What are we doing to ensure that jobs trickle to these areas when the economy starts to pick up again? I digress...Oregon's House just passed a bill to save farm and forest land from destination resorts, and to preserve jobs. But there are extra steps our Legislature needs to take to ensure there are actually jobs available for the areas in which they say they are preserving jobs. If they're wanting to preserve timber jobs, then make it possible to harvest timber (in a smart, non-clearcut manner). If they want farmers to maintain their farms, then offer incentives to the farmers and give them a hand.
Apr 14, '09
Should we pass immigration reform when 12.5 percent of legal workers are out of work?
If unemployment hits 15 percent do we then demand that illegal workers return to Mexico?
If unemployment hits 20 percent will we just deport U.S. citizens and let the Illegals stay?
When will real American citizens have rightS?
Is that short enough MP?
Apr 14, '09
Yes Stephan it is
Short. Concise. To the point.
Thank you.
Apr 14, '09
the legislature is hearing a paid family leave bill. For another, a tax hike on insurance and hospitals to expand the Oregon Health Plan.
Paid family leave and health care provided by the state are of course staples in those awful countries of Europe (wingnuts: think France) that we DO NOT, under any circumstances, want to emulate. Nope, better to keep the people always nervous about losing their health care if they lose they jobs. Wouldn't want the Great Unwashed to get uppity now, expecting government to actually do something for them.
9:59 p.m.
Apr 14, '09
Jonnie, we're in the the middle of the woslrst national economic crisis in 80 years. Do you really think it's something that can be reduced to party allegiance? Can we abandon score settling for one crisis?
2:11 a.m.
Apr 15, '09
Jeff
Glad to see you post on this. The silence in the blog and from the City thus far has been pretty deafening.
I hated to be right on this one. I posted about this a few months ago when Carla and I were disagreeing about local economic conditions, and I pointed out that Portland's unemployment rate even at that point (a few months ago) was 1-3 percentage points above what I would view as our competition for the best and brightest.
I haven't been all that impressed with the state economist either, the times I've seen him at City Club, when he is often more in booster mode.
We clearly have some serious structural problems in this city and this state. These figures are really bad, and I cannot help but believe that these sort of job numbers will create a serious dent in our appeal to those young entrepreneurial types whom we've staked our future on.
I'm no economist, either, and I don't claim to have the answers. My intuition after being here for eight years (requisite Made in Oregon label required--my family has been here since '77) is that we are complacent and self-satisfied, convinced that we'll just make it through because, gosh, we're just Oregon.
I won't go over the song and verse on a broken state revenue system and a mediocre public education system K-16. We really do need to figure out a sustainable economic model, and I think that has to mean something other than the greener grass on the other side of the hill.
It's not tech, it's not bio tech, and it is probably not green industry. It means leveraging our position as a place for innovation, creativity, arts and music, and green industry.
But I think we have to take a hard look at some parts of the Metro area and the state and maybe let in some of those evil corporations and not-the-greenest industrial operations so we have jobs for our working class citizenry.
2:12 a.m.
Apr 15, '09
Mistyped something above:
It's not tech, it's not bio tech, and it is probably not green industry.
should read: It's not SOLELY tech, it's not bio tech, and it is probably not green industry.
Apr 15, '09
I suspect the numbers will increase after July 1 (the beginning of the new biennium for state government). There are likely to be a significant number of state/school district employees losing their jobs.
Apr 15, '09
My point exactly Jeff. RE: the post on GOP's ballot measures...
8:28 a.m.
Apr 15, '09
Kremer
Explain how the family leave bill effects employment
mp97303: Jeff disputed Richard's claim that the D's were expanding government. I gave two easy examples of such things that are in the works. The question was not whether or not these things impact employment.
That said, the family leave act will absolutely cost jobs. As an employer, do you want to grow a business in a state in which you employees get paid by the state to take time off? To the extent paid family leave increases the number of people who take leave - and it most certainly will - that comes at a cost to employers. Absenteeism is a cost, even if the employer isn't on the hook for the pay.
This new program, along with its new bureaucracy, mark my words, will end up costing far more than the 2 cents an hour tax they want to establish to pay for it. The assumptions as to use rates are pretty low, IMO, and when more people take the leave than the 2 cents/hour can pay for, it will go up.
Unemployment in Oregon is at the "model for the nation" stage. And liberals are adding a payroll tax to pay for another employer-hostile program!
Good idea!
10:25 a.m.
Apr 15, '09
Rob, just wondering, do you even believe what you're writing? Yeah, government expands in small ways even as it's contracting. Thanks to the recent ballot measure, we'll be spending more on prisons. I suppose you want to blame that on the Dems, too.
10:26 a.m.
Apr 15, '09
Should say "contracting overall."
11:05 a.m.
Apr 15, '09
what's fascinating about these numbers is that it includes people who have been laid off - but also people who were not seeking work previously, but now are.
Probably includes retirees whose funds are now lagging, stay at home parents now forced to seek work due to layoff or reduced wages for the primary earner, and of course, recent graduates added to the labor pool.
The two latter groups are typical in a recession, but the retirees returning to work is indicative of how this recession is a wealth crisis, as well as an income crisis.
Typically, people who retire have done so after evaluating their financial picture and determining that they can survive swings in their investments. That this group is re-entering the work force suggests a much more long-term problem.
Apr 15, '09
Mr. Kremer
I stand corrected. My apologies.
Apr 15, '09
We will be adding 3 to 5 thousand teachers to that number by mid-summer.
Apr 15, '09
Now, that being said, to the utter BS that follows...
As an employer, do you want to grow a business in a state in which you employees get paid by the state to take time off?
I have been an employer since 1993. Do you have any idea what it costs to replace an employee? Do you? A low skilled worker will cost 30-50% of their salary to recruit, train and bring up to the same productivity of the departed worker. A skilled worker, they type I hire, will cost 70-200%.
If this family leave bill enables one of my workers to deal with their situation and return in a couple of months, it is much more financially beneficial for me to keep them.
I started my business career in Oregon, only to leave for Arizona for 4.5 years. I have been back since last summer. To answer your question; You're damn right I want to grow my business in this state. And I am.
Apr 15, '09
Kremer,
“Unemployment in Oregon is at the "model for the nation" stage. And liberals are adding a payroll tax to pay for another employer-hostile program!”
This is a great example of taking a complex issue and attempting to simplify it into a political message. I guess I could just as easily look at some other data and draw similar conclusions.
For example, Oregon, South Carolina and Oklahoma are states with similar population levels. According to the February BLS numbers, Oregon was sitting at 10.8% unemployment, Oklahoma was at 5.5%, and South Carolina was at 11%. Boy, they must be doing things right in Oklahoma. South Carolina and Oregon are probably being run by the same bunch of liberal morons.
2000 Census numbers showed that 25% of us in Oregon had a bachelor’s degree or higher, compared to 20% in Oklahoma. Clearly we are overeducating ourselves in Oregon, and we should dumb things down a bit, reduce our college graduate numbers by 25%, which would probably lead to more employment doing something. South Carolina was at almost exactly Oklahoma’s level of college education, but only 76% of their students finished high school, compared to Oklahoma’s 80%. So I guess we learn that you can have too much college education, but you should still finish high school. (I’ll concede that this data is dated, but it is the best I could find in 30 seconds of google.)
2005 Census says that the infant mortality rate here in Oregon was 5.9 (deaths of infants under 1 year old per 1,000 live births), whereas Oklahoma managed to bump theirs up to 8.1 (almost 40% higher than Oregon), South Carolina scored a whopping 9.4 (that is about 60% higher than in Oregon). Clearly Oregon is missing the sweet spot here. I’m not sure what we are doing with our public health care dollars, but if we want to score a lower unemployment rate, we need to consider what the winners are doing with their economies, and apparently pre-natal and infant care isn’t winning the game for us.
Median household income is another place where Oregon really takes a beating compared to Oklahoma. 2007 census data shows Oregon at $59k, but Oklahomans managed to get by on $52k, so we are overshooting the mark by 13%. South Carolina was at $53k, so they managed to keep their household income down also, but they are still sitting at the same unemployment rate as Oregon, and I’m not sure what we learn from that. Liberals are making us make too much money in Oregon, and we need to make less money and be less educated (but still make it out of high school), with less pre-natal healthcare.
There are many people who are contributing to the process of building our state through thoughtful dialogue and investigation, but you are not one of them.
Apr 15, '09
I fear you are fighting the last war. You are arguing about the locks on the barn and the horses are running onto the craggy rocks.
Consider these numbers . That is from a video that Sony gave to execs on a retreat in Rome (that's why the bit on illegal downloads at the end). It basically means that we are all temporary workers. It's not a matter of who has a job and who doesn't, it's a matter of how the jobs are flowing, the skills maturing and the labor force responding. As such, the credit crunch is a huge concern. Any stagnation is triply deadly now. Stagnation in this environment might as well be depression.
Apr 15, '09
Let me add something from my industry. Doctors are really sick of the relentless hassle of decentralized provider credentialing. They are getting the OMA cranked up to push the legislature on their behalf (they are pushing for expedited licensing right now that I guarantee WILL have some deleterious effects on some safety factors for populations already vulnerably lacking in access to health care) to accomplish centralized credentialing. SO: the morons who previously outsourced servicing FOOD STAMP and WELFARE benefits to Hindi call centers more than a decade ago.. these same morons are now eyeballing sending our entire professional niche overseas via contracts with Ingenix, purveyor of CAQH, a web-based data collection system staffed by smiling, head-bobbling Hindi sweats.
The clinic managers are pretty horrified to hear that this is where their doctor's pushing and shoving is taking us, for it is clinic managers who are forced to interface with newly-graduated high schoolers reading from scripts (just remember your last visit by telephone to Dell's award winning systems if you need a solid reference point). In addition, thousands will be thrown out of work as a result of improperly thought out reaction to the agitation of a powerful lobby.
I am lucky in my workplace, I am allowed to speak to my clinics of this, and perhaps there can be some intelligent partnering to address the valid misery of our doctors and their staff at the hands of onerous Regulatory bureaucracy. Imprudent, on-the-cheap action, now actively in the thinking stages on the state level, will increase provider misery precipitously, render unemployed many professionals, and result in an erosion of Regulatory structures geared to patient safety and oversight.
Apr 15, '09
Jeff: this is why I have continued calling to people for goods to distribute as I drive to work every day. All winter I have intimately watched the wax and wane under the bridges. And it's not all the standard stereotypical cast society expects to see. While I suppose I am supposed to be grateful the news orgs have FINALLY tossed up a few stories recently, I cannot help but glare at them, hands on hips: where in HELL have you been all winter? And why do you choose, finally, NOW, to speak to this?
We are always so terribly late to the game, I tell ya. I find it harder and harder to dig up gratitude, but have to realize that this is just the way things are.
Things never did recover in Oregon since 1999. I hoped, deeply, that Oregon would be more sensitized. Perhaps we are, and I, immured here, have no objectivity. Perhaps other states are more slow and out of touch than we.
Apr 15, '09
CORRECTION: I was thinking globally when I said "thousands". In Oregon, there are several hundreds of professionals in this niche. THousands will be affected negatively, as dedicated workers who shoulder the work of this niche are de-employed, and the burden of Dell-style lack of service and responsiveness, coherent communications around complex jobwork will increase to a new heigth of misery for those in clinics forced to take on what we credentialing professionals now manage. It won't work out the way the frustrated doctors want it to. And the lack of meaningful and authentically curious dialogue into the professional communities concerned is at the root of yet another poorly-conceived programme/piece of legislature probably on the way.
cf the puppy mill business that will close down the best of the training/breeding/kenneling sport; the ill-wrought new tobacco tax (devastating to native ceremonialists now); and the hiding of doctor malpractice records from public sight, recently effectuated in 2008.
Apr 16, '09
OK, I usually just read this blog, but I am so tired of hearing this BS about "budget cuts" in Oregon. BTW, the planet I live on is Earth, in Oregon. According to the Oregon Blue Book the All-Funds budget for 2005-07 was $40.8 Billion, 2007-09 was $47.9 Billion and the Governor's proposed Balanced Budget 2009-11 is $54.168 Billion.
So, yes, government expenditures are expanding. The budget is still INCREASING by 13%. This is called "Slashing the Budget."
Government budgets, unlike the real world, assume an increase every year. This is called the 'baseline.' So, it is analogous to you expecting your salary to go from $40000 a year to $50000, and it only goes to $46000 a year. Since you were expecting $50000, you call it a $4000 cut in pay, when it is actually a $6000 increase.
If you want to increase government spending by more than 13%, then just say so. But be honest about it. Don't call it a budget cut.
Ken
Posted by: Jeff Alworth | Apr 14, 2009 4:37:40 PM
Expansion of government? On what planet are you living? The governor's proposing massive cuts. Where exactly is government expanding.