Sunday, March 10, 2013

Newest Jobs, Unemployment and Wage Numbers - March 2013 (Update for 99ers)

How many Americans between the ages 50 and 61 who were laid off during the Great Recession, and have already exhausted all their unemployment benefits (and could also be characterized as a 99er) and still haven't found a job, who were also too young to apply for Social Security (and as yet could not qualify for a SS disability claim), and who last year had ZERO income, and so therefore are no longer even required to file a federal income tax return? I am one --- but how many more are there?

According to the Center on Budget and Policy Priorities, 8.7 million jobs were lost between the start of the recession in December of 2007 and early in 2010 --- just several months before the unemployment rate had finally peaked.

As of October 2009 the unemployment rate "officially" peaked at 10.2 percent when 15.7 million Americans were reported unemployed --- the highest since 1983. At that time the Bureau of Labor Statistics reported that the employment-population ratio had fallen to 58.5 percent. Now look at these 3 numbers:

  1. At that time in 2009 the U.S. Census had projected the population to be 305,529,237 -- so the 58.5 percent employment-population ratio then should have been 178,734,603.
  2. But the I.R.S. reported that there were only 140,494,127 individual tax returns filed for that year in FY 2009.
  3. And for that same year in 2009 the Social Security Administration had reported that 150,917,733 wage earners were paying FICA taxes.

So why are there such significant differences between these 3 separate government numbers?

Currently for February 2013, the Bureau of Labor Statistics now reports that the employment-population ratio is almost exactly the same now as it was 4 years ago, now at 58.6 percent --- even though the current population is ten million more now than it was then --- presently at over 315,468,106 and ticking:

  • 58.6 percent should now be 184,864,310 (and 130,603,796 of the population would not be counted as part of the workforce)
  • 184,864,310 is the 58.6 percent employment-population ratio in 2013 with unemployment rate of 7.7 percent with 12.0 million unemployed
  • 178,734,603 is the 58.5 percent employment-population ratio in 2009 with unemployment rate of 10.2 percent with 15.7 million unemployed.
  • The difference is 6,129,707 in employment-population ratio and 3.7 million difference in the number unemployed (12.0 million and 15.7 million unemployed).

The "net" new jobs created since October 2009 (accounting for population growth, which essentially are the high school and college graduates first entering the work force) according to the Bureau of Labor Statistics is about 5,400,181 --- which comes very close to the 6 million number I estimated 1½ years ago.

Below are the seasonally adjusted job numbers from the Bureau of Labor Statistics

Year Sub-total
From Oct. 2009 388,580
2010 1,558,904
2011 1,577,997
2012 1,604.844
To Feb. 2013




Hypothetically speaking, 5.4 million net new jobs under Obama since October of 2009 could have absorbed much of the natural population growth --- but it still wouldn't account for any of the 8.7 million jobs that were initially lost during the Great Recession.

Back then in 2009, in a statement for the New York Times, Richard L. Trumka, president of the nation’s largest labor union, the A.F.L.-C.I.O., urged the government to finance large-scale construction projects to put people to work. Absent that, he said, “it will probably be 2012 before there starts to be real job creation.” (The GOP has consistently denied and/or filibustered every single Democratic jobs proposal since then, but instead, has offered their own jobs proposals, which basically has just been this:

  1. Cut taxes
  2. Cut entitlement spending

Americans age 55 and older have been struggling since the beginning of the recession, which technically, began in December 2007 and ended in June 2009 as the economy had began to slowly grow again --- but at the same time, unemployment has remained high.

The stock market has doubled in value since the lows in March of 2009, but even with the Bush tax cuts still in effect, job creation and wages remained dismal.

According to a study by the Government Accountability Office released early last year, seniors have especially experienced consistently longer periods of unemployment than younger workers, as employers seek cheaper labor and look to skirt potentially higher health care costs.

The unemployment rate for workers age 55+ more than doubled since December 2007 when nearly two million older workers were seeking a job. At that time, Americans 55 and older who were unemployed had been seeking work for an average of 51 weeks (I will assume it's been longer since then).

Economists Dena Baker and Kevin Hassett, in an op-ed piece for the New York Times, reported that while older workers were less likely to be laid off during the recession than younger workers [maybe because of in-house union seniority], if they were laid off, older workers are about half as likely to ever be rehired again --- and they had seen the largest proportionate increase in unemployment during the economic downturn --- when the number of unemployed people between the ages 50 and 65 had more than doubled.

Baker and Hassett also reported that "a worker between ages 50 and 61 who has been unemployed for 17 months has only about a 9 percent chance of ever finding a new job...and a worker who is 62 or older has only about a 6 percent chance". And as unemployment increases in duration, these chances only become dismally worse. Millions have now been unemployed for 3, 4, 5, and 6 years now (myself, for 4½).

  • Also for these older workers: In addition to lost jobs and low prospects for rehire, their home equity has plummeted: An AARP analysis found 1.5 million people over 50 had lost their homes to foreclosure between 2007 and 2011 and another 3.5 million owed more than their homes were worth.
  • Many older workers have run through their retirement savings: One survey of post 50s found 25 percent had used up all of their savings between 2007 and 2010. Meanwhile, Americans’ confidence in their ability to retire has hit a two-decade low, according to a study by the Employee Benefits Research Institute.
  • Workers who take Social Security at age 62, are stuck at a lower benefit for life. According to the GAO report, someone who exited the workforce at that age would receive a median monthly benefit of $909 – compared to $1,212 for people who wait to take Social Security until age 66.

We always hear about how many new claims there were for Social Security disability benefits since the financial collapse in 2008. One story in the Huffington Post says Social Security Disability Fund A Last Resort For The Unemployed As Benefits Dry Up -- and that over 10 million people were receiving SSDI benefits (but they did not say that also included children and widows).

Bill O'Reilly said "millions were leaving their jobs" to go on disability. But actually, before and after the massive layoffs, the numbers have only steadily risen for actual awards versus claims.

Before the Great Recession in 2007 there were 7,101,355 Americans receiving Social Security disability benefits*. Since then, and until the end of last year, over the past 5 years 1,726,440 more claims were awarded for a total of 8,827,795 --- that's an average of only 345,288 new SSDI claims a year that were actually awarded, out of many more that were filed.

* The number of applications is for disabled-worker benefits only and, as such, excludes disabled child's and disabled widow(er)'s benefits. SOURCE:

Year # Claims # Awarded % Awarded Total
2007 - - - 7,101,355
2008 2,320,396 895,011 38.57% 7,427,203
2009 2,816,244 985,940 35.01% 7,789,113
2010 2,935,798 1,052,551 35.85% 8,204,710
2011 2,878,920 1,025,003 35.60% 8,576,067
2012 2,820,812 979,973 34.74% 8,827,795

Current Unemployment and Wage Data

Currently the Bureau of Labor Statistics reports that the unemployment rate is 7.7 percent with 12.0 million Americans unemployed (the U-3 rate) and that:

  • 4.8 million Americans have been unemployed for 27 weeks or longer and account for 40.2 percent of the unemployed (I challenge this, saying it's much higher for both the number of people and the length of time).
  • 8.0 million were employed part time because their hours had been cut back or because they were unable to find a full-time job.
  • 2.6 million persons were marginally attached and were not counted as unemployed because of those, 885,000 were discouraged workers not currently looking for work and the remaining 1.7 had not searched for work in 4 weeks (I definitely challenge this number. I'm guess it's closer to 6 to 8 million.)
  • The average workweek for all employees with "private non-farm" jobs was 34.5 hours with average earnings of $23.82 an hour. (That would equate to annual gross wages of $42,733.08 before taxes, which is about what the Social Security Administration reports in their Average Wage Index --- not to be confused with the median wage, which is less than half of that).

For 2011 (the last data currently available) the Social Security Administration reported the "raw" average wage (computed as net compensation divided by the number of wage earners reporting FICA taxes) that about 66.6 percent of wage earners had net compensation less than or equal to the $41,211.36 "raw" average wage.

But then they also say that "by definition" 50 percent of all wage earners had net compensation less than or equal to the median wage, which was estimated to be $26,965.43 for 2011 (last available data).

* The median wage refers to the income that is directly in the middle if you figuratively write down all the income in order from least to the greatest. So, in essence, no more than half the population has a greater (or lesser) income than the median income. The average wage is simply adding all these incomes together and dividing by the number of incomes.

Again, for FY 2011, according to the Bureau of Labors Statistics:

  • In addition to retail salespersons and cashiers, the largest occupations included general office clerks; food preparation and serving workers, including fast food; waiters and waitresses; and customer service representatives.
  • Most of the largest occupations were relatively low paying. Of the10 largest occupations, the annual mean wages ranged from $18,790 for combined food preparation and serving workers to $33,120 for customer service representatives.
  • The lowest paying occupational groups were food preparation and serving related; farming, fishing, and forestry; personal care and service; and building and grounds cleaning and maintenance occupations. Annual mean wages for these groups ranged from: $21,430 for food preparation and serving related occupations to $25,560 for building and grounds cleaning and maintenance occupations. Nearly all of the individual occupations in these groups had below-average wages --- 15 of the 18 occupations in this group had annual mean wages of $25,000 or less.
  • Industries with the lowest all-occupations mean wages included support activities for crop production and several retail trade and food service industries. In limited-service eating places, the industry with the lowest overall average wage, 7 of the 10 largest occupations had mean wages below $20,000 per year. Cashiers, with an annual mean wage of $18,830, made up 65 percent of employment in gasoline stations; other large occupations in this industry included first-line supervisors of retail sales workers ($34,380); combined food preparation and serving workers, including fast food ($18,800);
    and automotive and watercraft service attendants ($20,380).

Elsewhere on the Social Security Administration's website (table below) they report the Average Wage Index for 2011 as $42,979.61 (Which is not far off from the Bureau of Labor Statistics report of $42,733.08). Now what I have as yet to reconcile is the SSA and IRS numbers below in the cart. How can there be so many workers paying FICA taxes on W-4 forms with employers, and having 10 million less people filing federal income tax returns?

Year Average wage,
NOT median wage
IRS reported Number of tax returns filed SSA reported Number of workers
2007 $40,405.48 142.9 million 155.6 million
2008 $41,334.97 142.4 million 155.4 million
2009 $40,711.61 140.5 million 150.9 million
2010 $41,673.83 142.9 million 150.4 million
2011 $42,979.61 N/A 151.4 million

The median household income refers to total income of all wage earners living under one roof, which according to one study, is an astonishing 85% of all households that need to rely on two incomes (either as roommates or both parents). Even before the onslaught of the Great Recession that began in December of 2007, only 14% of all households relied on a single wage earner.

The U.S. Census Bureau's population clock on March 10, 2013 (as of this post) is now at 315,468,106. According to estimates by the Census Bureau, last year the U.S. population was 313,914,040. The year before that in 2011 it was 311,587,816. And for 2010 it was 308,747,508. The Census Bureau had projected the 2009 population at 305,529,237 and that the 2008 population would be 303,146,284, and in 2007 the population would be 300,888,812.

From the very beginning of the Great Recession in December 2007 to the present in March 2013, the U.S. population has increased by nearly 15 million people. And none of that is due to immigration. Last year the Wall Street Journal reported that over the past 40 years 12 million immigrants came from Mexico, but that the immigration rate as of 2012 was now ZERO (between 2005 and 2010, about as many left as came to the U.S.)

The I.R.S. reports:

  • 142,892,051 individual tax returns were filed for tax year 2010
  • 140,494,127 individual tax returns were filed for tax year 2009
  • 142,450,569 individual tax returns were filed for tax year 2008
  • 142,978,806 individual tax returns were filed for tax year 2007

But the Tax Foundation reports:

  • 137,982,000 individual tax returns were filed for tax year 2009 (bottom 50%- 68,991,000)
  • 139,961,000 individual tax returns were filed for tax year 2008 (bottom 50%- 69,980,000)
  • 141,071,000 individual tax returns were filed for tax year 2007 (bottom 50%- 70,535,000)

What are the real numbers? My example:

  • In 2008 I was laid off and in 2009 I filed a federal tax return for wages earned in 2008.
  • In 2010 I filed tax returns for FY2009 for unemployment benefits.
  • In 2011 I filed tax returns for FY2010 for unemployment benefits.
  • In 2011 I had ZERO income so I was not obligated to file a tax return in 2012.
  • In 2012 I had ZERO income so I was not obligated to file a tax return in 2013.
  • I am one of --- how many people?

*** Here is t chart for seasonally adjusted jobs created by the month and year from the BLS

The following table presents unedited data on disabled worker beneficiaries paid from Social Security's Disability Insurance Trust Fund (SSDI).

Disabled worker beneficiary statistics by calendar year
Fiscal Year

# of all claims

# awarded SSDI benefits

Percent of claims awarded # receiving SSDI by year end # terminated
2007 2,190,196 823,106 37.58% 7,101,355 525,012
2008 2,320,396 895,011 38.57% 7,427,203 564,518
2009 2,816,244 985,940 35.01% 7,789,113 628,478
2010 2,935,798 1,052,551 35.85% 8,204,710 646,387
2011 2,878,920 1,025,003 35.60% 8,576,067 656,902
2012 2,820,812 979,973 34.74% 8,827,795 726,432
SOURCE: - The number of applications is for disabled-worker benefits only and, as such, excludes disabled child's and disabled widow(er)'s benefits. The number of terminations is the number of beneficiaries who leave the disability rolls for any reason (death, re-employment, etc.)

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