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Health & Fitness

Michigan Employment Slide Continues

Predictably, Michigan employment was down again in August, continuing a trend that began in May and paralleling general stagnation at the national level.

Like a bad run at the blackjack table

Predictably, Michigan employment was down again in August, continuing a trend that began in May.  While the aggregate loss is only 48 thousand jobs since April --less than 1% -- the reversal of what appeared to be an upward trend is not very encouraging.

But hey, for once the Michigan unemployment rate (U3) has been acting the way most people think it acts -- it has been increasing because people have been losing jobs, rising from 8.3% in April to 9.4% in August.  After a long period of watching the rate decline mainly because people were leaving the labor force in despair, not because they were finding work, this is interesting in itself.  It's the way things worked when I was a kid and the unemployment rate really meant something.

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Chart for your reading pleasure

The accompanying chart shows Michigan statewide total employment as the green area at the bottom of the chart and the Michigan labor force, with the number of unemployed persons as a yellow band on top of that.  The sum of the two is the labor force, which is the blue line at the top.  The U3 unemployment rate is the ratio of the yellow band to the blue line. And no, "unemployed" does not mean collecting unemployment compensation, it means actively seeking work and being available for work should it arise.  See my previous blog post on U3 for a discussion of that matter in unnecessary detail.

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If you want to look at the raw data and play with it yourself, just select the Michigan Seasonally Adjusted series from the BLS web site. You can also look at the un-adjusted series if you want to see the repetitive and predictable changes in employment level due to seasonality, and if you are a real nerd, do your own seasonal adjustments.

The Obama Constant

And of course nationally no headway on employment has been made at all, with the employment-population ratio stuck at ~58.4% and no signs whatsoever of improving.  In fact, the line is so flat it suggests the development of a new universal constant, like Planck's Constant perhaps.  The Obama Constant?  Sure looks like it. 

Intentional deception by political maggots

These numbers may leave you confused because you have undoubtedly heard people talking about how many jobs have been created.  Well, listen closely to what they say.  It will be something like "private nonfarm employment among red-headed women has increased by 20% since April 2010" or some such nonsense. 

Or, to give a real quotation from Bill Clinton's address at the DNC, "In the last 29 months the economy has produced about 4.5 million private sector jobs."  Note the "last 29 months" and "private sector".  Fact is that total employment has increased  by only 3.0 million in that period.  Why?  Because of job losses in the government sector.  Deception.  And why the choice of "the last 29 months"?  Because if you look at the the data since January 2009, there has been no net job gain at all at the national level. (Or in Michigan, where we have had a net job loss of 132 thousand since January 2009.) More deception.  But the biggest deceit of all is not telling people that we have added 8.8 million people to the working age population since January, 2009.  And that is where the Obama Constant comes from.  We have been adding just enough jobs to keep the same percentage of the population employed as we had employed at the trough of the Great Recession.  Pretty pathetic performance.

Clinton employed similar deceptions in talking about number of jobs created in Republican vs. Democratic administrations, first by speaking only of a subset of jobs, and secondly by failing to make obviously necessary adjustments for population growth.  I was confidently expecting him to observe that we added more jobs in the Carter administration than we did under Republican Teddy Roosevelt.  

What is to be done?

Of course this all sounds very partisan, so in fairness, we need to say that neither presidential candidate has proposed a coherent plan for improving things.  Obama is acting like a drunk plugging quarters into a broken slot machine, and Romney, well, who knows.  He is Mormon so he does not drink.  Personally I doubt either will make much headway until Americans acknowledge the need for fiscal retrenchment, address the obvious problems in our education system, deal with our current patent system that privatizes the benefits of blindingly obvious "inventions" (a pox on you technical dufuses in the federal courts), and generally start acting like adults.

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