Putting the Job Loss Figures Into Perspective (Updated)

I was googling around for historical statistics on job losses prior to going over to the Bureau of Labor Statistics to pull them out for myself when lo! and behold I found a blog, Live Granades, that had done the work for me. Go on over there and take a look at his graphs and tables.

Here’s how he sums things up:

Percentage-wise, our current run doesn’t look that bad. The early 1980s recession was harsh, and these numbers bear out how bad it was. The 1974-1975 recession was also bad, again as is shown by the percent of jobs lost. But even the 1990-91 recession was worse.

And none of those was anything remotely as bad as the Great Depression of the 1930’s when unemployment was running at the 30% level, at least in parts and hysterical talk likening the situation now to the situation then is either unhinged or poorly informed.

As I wrote in my post this morning, I’m concerned but I’m not concerned about the absolute numbers of job losses. I’m worried that these job losses are coming after a prolonged period during which job growth has been quite slow—barely enough to keep up with the natural increase. And much of the growth that took place was in government, education, and health care—all heavily dependent on taxes. After all, the tax revenue must come from somewhere.

I’m also worried about structural job losses in a service-based economy but that’s a topic for another post.

UPDATE

In answer to Robert Reich’s question, “Shall we call it a depression now?” (which Reich answers in the negative), Brad DeLong responds:

As the authority on such matters, I hereby lay down the law: No, we cannot call it a depression yet. We can only call it a depression when the headline unemployment rate–U3–kisses 12%, or when the headline unemployment rate stays above 10% for 36 consecutive months.

FILED UNDER: General, ,
Dave Schuler
About Dave Schuler
Over the years Dave Schuler has worked as a martial arts instructor, a handyman, a musician, a cook, and a translator. He's owned his own company for the last thirty years and has a post-graduate degree in his field. He comes from a family of politicians, teachers, and vaudeville entertainers. All-in-all a pretty good preparation for blogging. He has contributed to OTB since November 2006 but mostly writes at his own blog, The Glittering Eye, which he started in March 2004.

Comments

  1. odograph says:

    Well we had another record lately:

    One in Ten Americans Now Uses Food Stamps as Unemployment Continues to Rise

    That’s something I find incomprehensible. Either we are giving them out too freely, or we really have an “underclass.”

    When 10 percent cannot feed themselves, something is seriously wrong.

  2. Steve Plunk says:

    Dave,

    If guys like you and the people at Live Grenades put things in perspective how will headline writers attract attention? The gloom and doom stories are all the rage and getting people to calm down just won’t do.

    Let’s face it, until the media eases up a bit we will not see consumer confidence come back and without consumer confidence spending will suffer and the cycle will repeat itself. Facts should be reported but any journalist who yells “depression” in a down economy is being irresponsible.

    Consumer confidence suffered greatly in the past year from gas prices followed by the housing bubble followed by the financial crisis followed by the big three auto makers debacle. Adding fuel to the fire with bogus comparisons to the great depression is just sick.

    I thought this sort of journalistic malpractice would end after the election but obviously I am wrong. In the mean time how do reasonable people get things in perspective for everyone else?

  3. Drew says:

    Calm down Steve –

    On Jan 21 angels will sing, and trumpet anthems will soar…. and all economic statistics now deemed desperately and terminally negative (a near death experience, you know) will be recast in soothing essence and positive light………and Obama will be the source of hope, vision and supernatural economic revival….

    ‘Course, then the MF will have to deal with Medicare, SS, and 50 years of useless, leftist driven government spending etc

    Angels’l still be singin’….but maybe with a frog in their throat….

  4. Triumph says:

    These liberals want everything handed to them on a silver platter.

    The only reason people don’t have jobs is because they are too lazy to work. Ever since Hussein won the election you;ve heard nothing but liberals whining about the economy.

    The economy is fine. If you ned job, get some skills and sell them in the marketplace. Its pretty damn simple. This culture of victimhood that Hussein pushes everyday is pathetic.

  5. Cliff says:

    LOL…”stop complaining, unemployment is only 10%”…misses the point. Things are obviously moving in the wrong direction. In the 1930’s people could still live without jobs because the structure of society was completely different. Now, the times and standards have changed and the goal is not to move in a different direction. I’ve been watching my friends at the office get laid off all year and I’ve had to trim down on my own staff. Some of us know this is not a story “invented by the media”, and if you don’t know it now you might in a few months.

  6. odograph says:

    Calm down Drew –

    The Bush administration left us with fundamentals of the economy strong:

    The interesting quirk in the fabric, though, is that it isn’t really free markets as such that Greenspan believed it. Rather, it was belief in the combination of free markets and central banking. He didn’t believe that the free market would operate uncorrected and flawlessly, he believed that the Federal Reserve’s central planning functions could be done so effectively on a post hoc basis that there was no need for any form of preventive regulation. Real market fundamentalists go in for a lot of goldbug nonsense. Fundamentally, the Greenspanist combination of massive skepticism of government intervention with overwhelming confidence in the power of the all-knowing and benevolent masters of monetary policy seems strange and unsustainable. But it is, of course, easier to sustain if you yourself are the central planner.

    Yes, that’s Yglesias, but it has more than a bit of truth. For almost a decade we had ‘free marketers’ addicted to stocks and CNBC, but hanging on every word and every monetary manipulation by Greenspan.

    It was cognitive dissonance all along.

  7. We don’t know how bad it will be yet. You can’t compare recessions until we’ve hit bottom and come back out. Clearly, the current recession is not as bad as some in relatively recent history…. YET. Hopefully, it won’t get worse, but at this juncture, it doesn’t look like we’ve hit bottom. Job losses seems to be accelerating, and we’re likely to see a whole mess of bankruptcies starting very early next year.

  8. Dave Schuler says:

    Bernard, you’d have a point if folks weren’t calling it a depression now. Just the other day I heard President-Elect Obama calling the present circumstances “the greatest economic crisis since the Great Depression”. That’s a verbatim quote.

    It’s not the greatest economic crisis since the Great Depression, at least not yet, not by a long shot. Saying it was the greatest financial crisis since the Great Depression would be an accurate statement; saying it was the greatest economic crisis, not so.

    This isn’t harmless carelessness in choosing words. Fear-mongering can aggravate the very lack of confidence that’s a good part of the problem at hand.

  9. odograph says:

    “now” != “greatest since”

  10. odograph says:

    610 articles in Google News contain “worst since the Great Depression”

  11. Bill H says:

    The blogger you reference is using “seasonally adjusted” numbers from different times of year. I’m not sure what “seasonal adjustment” consists of, but I have certainly seen it used by the government to conceal a vast array of ills.

    Who was it said, “There are lies, damned lies, and statistics.”

    You can throw all of the “seasonally adjusted” numbers at me you want, and when I see the food banks turning people away, when I see hundreds of people living in tents in LA because they cannot pay rent, when 10% of our people are on food stamps, I want to stomp the smug idiot who says,

    “It isn’t that bad.”

  12. Bill H,

    I linked to what “seasonally adjusted” meant at the bottom of the post. I used it because that’s what news organizations use in their reporting. You can pull their data non-seasonally-adjusted if you like.

    And I certainly don’t want to minimize the losses. As I said in the post, 533,000 people is equivalent to the entire area I live in losing jobs.

  13. Worst since the GD does not mean as bad as the GD… it just means that it is the worst since then, right?

    At this point, I think it is a reasonable point… this is not just a recession — a downturn in the business cycle. It is also a financial/banking crisis at the same time. You can make a case about the early 1980s as well — with double digit inflation, mortgage rates spiking into the high teens, etc. But I think the situation today is more risky that the recessions of 1990-91 certainly, and probably more dangerous than the 1974-75 one as well, though that is an open issue.

    In short… when Obama says something like that the issue is not the unemployment rate in isolation, right?

  14. anjin-san says:

    “It isn’t that bad.” translates to “It has not hurt me, so it isn’t that bad”, which is typical GOP thinking…

  15. Drew says:

    Calm down odo-

    Blaming free marketers and CNBC is a great populist line. And trying to pinpoint things on almost the last ten years has obvious implications.

    But I would remind you that Glass-Steagall was repealed during the Clinton Administration, and the 2003 regulatory initiative re: Freddie and Fannie was thwarted by our friends Barney F and Chris D.

    Asset bubbles come and go under politicians of all stripe. But the notion that if only government actions would thwart thos efree marketers is absurd. Where was barney??

    At its core – I mean its true root core – you can trace our current situation to excessive use of credit here. But that would mean pointing the finger at John Q Public and Big Government.

    True, but not exactly good politics. And after all, why speak truth when you can bash free marketers?

  16. odograph says:

    I’ve been on the debt hobby-horse for a while (one example), but I think it’s fair to call out apologists for that debt system, and “lower my interest rates, raise my stock market” thinking.

    Greenspans fed played the wrong side of that game, with pretty much the entire financial community as cheerleaders. I mean, “the maestro?”