Friday, January 11, 2013

Lazy Drop-Outs on Government Hand Outs

I prefaced my book with this paragraph:

“Three or four million heads of households don’t turn into tramps and cheats overnight, nor do they lose the habits and standards of a lifetime. They don’t drink any more than the rest of us, they don’t lie any more, and they’re no lazier than the rest of us. An eighth or a tenth of the earning population does not change its character which has been generations in the molding, or, if such a change actually occurs, we can scarcely charge it up to personal sin.” – Harry Hopkins, Federal relief administrator under Franklin D. Roosevelt – 1933

80 years later, nothing has changed. Those WITH jobs still think that everyone WITHOUT jobs are either lazy winos or drug addicts, and are filthy low-life slackers who just wants to be on the government dole. But just like 80 years ago, there is nothing farther from the truth. 

Most people don't "prefer" to be poor if it means they don't have to work. They would rather work, especially if it means they can earn a living wage and can afford to save or buy stuff.

The Republicans and Tea Party fanatics are usually the offenders. They believe that those WITHOUT jobs are not looking for a job....even though these "lazy hobos" (many of whom have already worked 30 or 40 years) may have already spent their life-savings, exhausted all their unemployment benefits, lost their homes, and lost their cars...but yet they STILL refuse to find a job! (Damn those lazy hobos!!!)

Private (not government) payrolls increased by only two million last year and over the last 3 years the economy has added only 5.8 million jobs (over 15 million Americans were unemployed in October 2009 when the unemployed rate was reported to be at 10.2%)

So even with 5.8 million NET new jobs, according to some economists, that still leaves a four million shortfall in employment relative to its 2007 peak. (I say more than 4 million --- closer to 8.5 million. See my post: Where did 15 million jobless Americans go?)

And the jobs gap, the number of jobs necessary to return to this peak and cover the growth in the labor force since then, is stuck around a government-reported 11-12 million. The labor market is still far from full recovery.

And there will be additional cuts in government spending later this year (government payrolls). And many Republicans and people in the Tea Party today will be laid off, and they will apply for unemployment insurance benefits and food stamps.

Recently in the New York Times:
Are There Really No Good Job Applicants Out There? (by Catherine Rampell)

In December about 3 in 10 firms said they had trouble finding qualified workers. Despite the glut of workers, the share of small businesses saying they couldn’t find the talent they wanted was generally rising from December 2009 until September 2012, when it reached its highest point since the recession began five years earlier.

What’s especially odd about these survey responses is that if employers are having trouble finding qualified workers, they should be bidding up wages to attract the few qualified workers who are out there. But that’s not what the data show.

One possible explanation for why a third of employers say they are having trouble finding qualified workers, despite the surplus of unemployed people, is that so many workers on the job market are long-term unemployed at this point.

Employers are often loath to hire workers who have not been gainfully employed in a long time; some job ads even specify that workers must be currently or recently employed to be considered for an open position. That may mean that the very same pool of workers looks increasingly unattractive to companies as time marches on and those workers rack up more weeks of unemployment.

A corollary of all this is that relatively few new workers are joining the pool of unemployed — layoffs are near record lows — so employers may have already considered and rejected all the existing applicants for their latest job openings.

Also from the New York Times:
Why the Unemployment Rate Is So High (by Laura D’Andrea Tyson)

"Despite anecdotes about how employers cannot find workers with the skills they need, there is little evidence that the unemployment rate remains elevated because of mismatches between the skill requirements of available jobs and the skills of the unemployed.

When the recession hit in 2008, unemployment rates soared in every industry. As usual during recessions, mismatches between employer needs and worker skills also increased temporarily, reflecting greater churn in the labor market as workers were forced to move across industries and occupations.

But industrial and occupational mismatch measures are now back to their pre-recession levels, indicating that the overall unemployment rate is high because unemployment rates remain high across all industries and most skill groups, not because of a growing skills gap relative to the gap that existed before the recession.

...the number of workers who are grappling with long-term job loss is probably far larger than the official number of long-term unemployed, as it does not include 1.1 million discouraged workers who want a job but are not currently looking for work, and many of the 1.7 million workers who have joined disability* rolls because they cannot find a job.

* EDITOR'S NOTE: On Fox News Bill O'Reilly said in his Talking Points Memo that Social Security disability is a "con" and that "it's easy to put in a bogus disability claim." I also heard him rant on The Factor that "millions are leaving their jobs to go on disability". But unless you were decapitated or are paralyzed from the waist down, it's really not that easy at all...especially if your case goes to a hearing and you are unlucky enough to get a Republican or Tea Party judge (who will also think you're a lazy slacker), because then you are SOL. Meanwhile, it takes years to get approved, while all that time you might not have any income at all. Do millions of people really leave their jobs voluntarily and take the gamble that maybe they might be eventually approved for a skimpy Social Security disability income?

Recently in the Huffington Post:
Are the Long-Term Unemployed Winning Jobs Or Giving Up? (by Arthur Delaney)

The number of Americans unemployed for 99 weeks or longer has averaged just shy of 2 million for the past two years, but their ranks may have begun to dwindle. 

In December, the Bureau of Labor Statistics counted just 1.5 million "99ers," the smallest number in any month since 2010. The fourth quarter of last year also saw the lowest average number of 99ers in two years. 

But it's not clear that more of the very long-term unemployed are finding jobs. "That decline is likely not due to an improving labor market, because it just hasn't improved much over the last two years," Heidi Shierholz of the labor-backed Economic Policy Institute said in an interview. "A lot of the decline in the unemployment rate we've seen is just due to people dropping out of the labor market."

And this is for Heidi Shierholz and Laura D’Andrea Tyson
We Did NOT Drop Out of the Labor Force! (by Yours Truly)

There is no government agency to report to when our unemployment benefits run out. We don't log in to our computers and say, "Here I am, I'm still looking for work!" No, instead we are swept under the rug and classified by the government as "discouraged workers" --- and that's why the labor "participation rate" is much lower now -- but yet, the unemployment rate still goes down. How can that be?

Full disclosure: Bud Meyers dropped out of high school 40 years ago, but he worked full-time every year until 2008 when he was laid off from his job. But he didn't voluntarily "drop out" of the workforce, he was brutally shoved out.

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