Unemployment Rate Drops As Labor Force Participation Rate Falls Once Again
The truth behind today's unemployment numbers.
Before today’s November Jobs Report was released, an analyst on CNBC quipped that it was the least important jobs report in the last five years. Given the fact that we’re beyond the 2012 elections and that the midterms are still two years away, this is largely correct. At the same time, though, the state of the economy is of grave concern to those concerned about the impending fiscal cliff given the fact that a weak economy is far more likely to be adversely impacted by the triple hit of tax increases, spending cuts, and an end to the Payroll Tax Cut. Additionally, quite obviously, if you’re still one of those people looking for a job, or working part-time because they can’t find anything better right now, the whole issue is very personal for you. Going into today, expectations were that the combination of Hurricane Sandy and a weak economy would lead to rather disappointing jobs report, as it turned out we got numbers that were slightly better but still nothing to be impressed by:
The unemployment rate edged down to 7.7 percent in November. The number of unemployed persons, at 12.0 million, changed little. (See table A-1.)
Among the major worker groups, the unemployment rates for adult men (7.2 percent), adult women (7.0 percent), teenagers (23.5 percent), whites (6.8 percent), and Hispanics (10.0 percent) showed little or no change in November. The unemployment rate for blacks (13.2 percent) declined over the month. The jobless rate for Asians was 6.4 percent (not seasonally adjusted), little changed from a year earlier. (See tables A-1, A-2, and A-3.)
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 4.8 million in November. These individuals accounted for 40.1 percent of the unemployed. (See table A-12.)
The civilian labor force participation rate declined by 0.2 percentage point to 63.6 percent in November, offsetting an increase of the same amount in October. Total employment was about unchanged in November, following a combined increase of 1.3 million over the prior 2 months. The employment-population ratio, at 58.7 percent, changed little in November. (See table A-1.)
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 8.2 million in November, was little changed over the month. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)
In November, 2.5 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)
(…)
Total nonfarm payroll employment increased by 146,000 in November. Since the beginning of this year, employment growth has averaged 151,000 per month, about the same as the average monthly job gain of 153,000 in 2011. In November, employment rose in retail trade, professional and business services, and health care. (See table B-1.)
A total of 146,000 jobs created isn’t what I’d call very good news. For one thing, it’s not enough to keep up with population growth, which means that we’re actually losing ground on a month-to-month basis. For another, it ought to be noted that this month’s jobs report included significant revisions to the numbers for September and October. Net jobs created in September was revised downward from 148,000 to 132,000, and October was revised downward from 171,000 to 138,000. That’s a net change for both months of 49,000 jobs. This suggests strongly that we’ll see similar downward revisions for November when the December jobs report is released in January. At the very least, though, it’s now clear that average monthly job creation for 2012 won’t be very much better than it was in 2011, when it averaged 151,000 jobs per month. While it’s of course always better when companies are hiring than not, the fact of that matter is that this is an unacceptably low job creation rate which, if it continues, will guarantee high unemployment for pretty much the rest of Barack Obama’s Presidency.
As for the Unemployment Rate, the only reason it went down is because of the drop in labor force participation. As noted above, that dropped 0.2% and remains near historic lows. If the number of people participating in the labor force — meaning actually working or actively looking for work — were the same as it was in January 2009 when President Obama took office, the Unemployment Rate would be over ten percent today. Instead, it dropped two tenths of a point this month because 540,000 people stopped participating in the labor force. So while the media will tell you that there’s good news in today’s jobs numbers, the reality is that they are masking serious underlying problems that show no signs of being solved any time soon.
That communist rag, the Wall Street Journal:
Analysis: Some Good and Bad in Jobs Report
But we know we can count on your cherry-pick.
On the hopeful side, the tax increases on the “rich” are expected to cause some to cut back on hours to stay under the “rich” threshold. This will create opportunities for others to step up and fill the gap part-time, less than 30 hours a week, of course. Not to mention all those new under-30 hr employees to keep the Obamacare threshold at bay at the local fast food.
It’s all part of Obama’s larger plan.
146,000 is a good report when expectations were at around 80,000.
@JKB:
People have studied and studied the data, looking for evidence of that, and they have found none.
BOMBSHELL: New Study Destroys Theory That Tax Cuts Spur Growth
This is the reason movement Republicans have dropped that argument, and really this is what is perverse about Doug’s cherry-picking. He has no plan.
I’ve seen Doug’s game now:
“Unemployment situation dire”.
“OK, given that’s true, what should be done about it?”
C
R
I
C
K
E
T
S
“Unemployment situation dire.”
@stonetools: Yep. Especially since the stagnation is due mostly to government employment at the state and local levels. Unwritten by Doug every month is that the current stagnant employment figures are the result of economic policies Doug wants.
Ready to forecast another double dip recesion Doug? What will this be…..the third in the last four years? The numbers while not knockout weren’t terrible either…..like the curate’s egg, good in parts. Of course as a fully paid up member of the doom and gloom industry Doug has to parse the numbers to find the bad bits. What’s going to be amusing is to watch the change in the Republican storyline as the economy returns to optimal performance and unemployment falls below 6%. Instead of the economic situation being the entire responsibility of Obama the new storyline will be Presidents have absolutely nothing to do with the performance of the economy. My guess is around the turn of 2014. I’ll be keeping tabs on you Doug.
@stonetools:
In fairness, doesn’t Doug think we should “kick the can” to save things?
Oh, I don’t know: once we go over the so-called fiscal cliff, we’ll finally get the austerity that conservatives have been pushing for. Higher taxes, less spending, cutting jobs and programs left and right, all resulting in their longed-for deficit reduction — if that won’t cure the economy, I don’t know what will….!
@Gromitt Gunn:
You weren’t really expecting intellectual consistency from Doug on this topic were you? Over the last two or three years I’ve read countless negative pieces by Doug on good or semi good monthly jobs numbers as the trend line has marched steadily upwards. At some point employment is going accelerate as the economy steadily gathers momentum and key sectors like housing climb out of the tank and I suspect this will happen in the next 12 -18 months. Auto sales are now annualising at 15.5 million and will certainly hit 16 million in 2013. The highest they’ve ever been is around 16.8 million. GDP is going to comfortably exceed 16 trillion this fiscal and the deficit is steadily falling as % of GDP. What does Doug want? Give me more cake mommy or I’m going to scream…..NOW.
@Rafer Janders:
You forgot the Military Keynesians
Doug: “A total of 146,000 jobs created isn’t what I’d call very good news. For one thing, it’s not enough to keep up with population growth, which means that we’re actually losing ground on a month-to-month basis.”
Kevin Drum: “The American economy added 146,000 new jobs last month, but about 90,000 of those jobs were needed just to keep up with population growth, so net job growth was closer to 56,000 jobs.”
@john personna:
If you read my comment, you’ll see I said nothing about tax cuts. I spoke of tax increases. Increases that logic and common sense indicate will cause some, those who earn most of the income subject to higher taxes through allocating more of their time to work will cut back. Especially, if that work time is discretionary such as overtime and taking on more work. Therefore, that unperformed work will be available for others, hopefully, unemployed to do. If the compensation that will be paid exceeds the government-imposed fixed costs of employing another worker. If not, the work will be left undone until it can be performed without kicking the employee over the higher tax threshold and not cost the employee time better utilized elsewhere.
On their death bed, no one ever said they wished they’d worked more. That goes double when a good portion of the benefit of that work is to be absconded with by someone (government) else.
Do you know anybody that makes more than 250K? I know quite a few people who do. I have not heard ANY of them discussing plans to cut back on work to avoid a tax increase.
Seriously dude, turn Fox off and get out more often.
@JKB:
It is the same argument, JKB.
@JKB:
You think that overtime and taking on more work is discretionary? Well, this answers my suspicion that you’ve never held a real job.
Seriously???
First – How many people over $250,000 are hourly employees?
But to explain for people like JKB who are common sense challenged…If you earn $250,120 (40 hrs a week would be $120 an hour) only the $120 above $250,000 is taxed at a higher rate. Does it make sense to not work those extra hours to stay under the $250,000 limit? Not at all. The increase in taxes would be about $6. Why would you give up $70+ net to save $6 in taxes?
Almost zero economists believe that the modest tax hike being discussed will decrease revenues. Almost all people like JKB believe otherwise. Do the math.
A question that needs examination is why are people leaving the workforce. Could be any number of reasons: Hitting 62 and deciding to retire. Seeing wages lowered that the cost-benefit to work wasn’t there. I read that the number if illegal aliens today is about 900K less. Do illegal aliens leaving the country count as leaving the workforce? I think the is something more going on in society. People are adjusting to the changing economy and making decisions that are reflected in the statistics but are not reflected in the explanations of the statistics.
@C. Clavin:
Because you use Republican Math (TM)?
Bush created 20K jobs a month for 8 years and most of those were in the Public Sector.
Obama…well over 100K a month while shrinking the Public Sector.
I’ll take Obama’s record…no matter how much Doug feels the need to slit his own wrists because he is getting what he wants but doesn’t like what he wants.
How can the creation of 146,000 new jobs while 540,000 people quit looking for work possibly be good news?
@JKB:
On their death bed, no one ever said they wished they’d worked more.
Difficult to prove one way or the other but unlikely to be true. Most people who have led very active and productive lives are miserable when they don’t have enough to do in retirement. Most would rather die in harness. It’s one of the reasons politicians cling to power for so long.
@Boyd:
Well, in the hypothetical, it could be that the 540k retired or chose to quit. People do continue to age, even under Obama.
@ Boyd…
Sort of depends on why those 540K people stopped looking doesn’t it?
Did they retire?
Did they start their own business?
Bottom line…tough sayin’, not knowin’
@Brummagem Joe:
I agree. If I don’t work it will be because I can’t work. And then we’re talking stroke or debilitating disease. So, yeah: I’d like to work.
@Gromitt Gunn:
That’s not true at all.
I think Mitt Romney recently stopped looking for a job.
@JKB:
Actually increased taxes cause me to work harder. Just like having kids makes me work harder. Or increases in the cost of gas. If I want my lifestyle to be X then I have to compensate for any cost increase that drops me to -X. Right? And the way I do that is by working more.
@michael reynolds and @C. Clavin: Good points. There are folks that leave the workforce for non-negative reasons.
But that means this statistic is just as useless as all the other statistics the Labor Department reports every month. There are so many different perspectives on the data that one can choose to believe any desired conclusion.
Bah!
@JKB:
Increases that logic and common sense indicate will cause some, those who earn most of the income subject to higher taxes through allocating more of their time to work will cut back.
Actually logic and commonsense suggests the opposite. Most people earning north of 250k don’t have the option of cutting back their workload even if they wanted to which is most unlikely anyway. Do you think Warren Buffett or even a fathead like Trump work for the money?
Hiring workers is expensive. Employees cost far more than merely the face amounts of whatever wages or salaries they’re paid. You also have to factor in payroll taxes, unemployment insurance taxes, workers’ comp. premiums, benefits costs and the opportunity costs of training them. Then there are prospective legacy costs too. Especially in unionized industries.
And now there’s the specter of a permanent Obamacare. That will saddle businesses with the added costs of higher health insurance premiums and substantial compliance and administrative expenses to boot. Those are straws which break the backs of enterprises. After all it’s not a mere coincidence that all the major labor unions and various big corporation Democrat donor companies asked for and received waivers from HHS.
This won’t end well.
If Gen. Y was a stock I’d be short selling it. And if the U.S. were a horse it would be sent off to the glue factory.
@Boyd:
But that means this statistic is just as useless as all the other statistics the Labor Department reports every month.
No we musn’t attempt to measure things that smacks of science……..unfortunately if you don’t measure it’s very hard to manage. However, you would probably have done well in Stalinist Russia. I was reading a piece about the demographic crisis facing the country now which has roots stretching back over 100 years. Apparently sometime in the mid thirties a census revealed that the population of the Soviet Union was about 8 million lower than believed. The census taker when he attempted to explain this was consigned to the Gulag for ten years……far better not to know eh boyd?….when ignorance is bliss wisdom is folly.
@michael reynolds: Indeed. We have about 7,000
peopleBoomers turning 65 each and every day, and that will increase to 10,000 a day over the next few years. At 7,000 a day today, that is over 200,000 of the workforce diminution each month. Add in those impacted by Sandy and…@JKB:
On the hopeful side, the tax increases on the “rich” are expected to cause some to cut back on hours to stay under the “rich” threshold. This will create opportunities for others to step up and fill the gap part-time, less than 30 hours a week, of course.
So you are saying that people making more than $250k per year are a) hourly employees and b) will cut back on their hours so they don’t have to pay 4.5% more in taxes on the income above $250k.
Please name one such person. Just one will do.*
* Must be a real person.
@Tsar Nicholas: If you were a stock, you would have been delisted by now.
@JKB:
Oh, and please explain what job the person is doing that a part-time worker will be able to fill in.
@Tsar Nicholas:
If Gen. Y was a stock I’d be short selling it. And if the U.S. were a horse it would be sent off to the glue factory.
You can always take refuge in Russia where a capitalism somewhat akin to that practised in the US iin 1870 is still alive and well.
@Brummagem Joe: I’m sorry, Joe, I obviously failed to articulate my point, which is that the reporting of the raw datapoints tells us nothing. One can then pick and choose what data to observe to draw the desired conclusion.
And in my own defense, you’re putting words in my mouth so you can once again display your contempt. Please, find another strawman. I make enough mistakes on my own that I don’t need you making them up to make yourself feel superior.
Nonsense.
@Tsar Nicholas:
Employees cost far more than merely the face amounts of whatever wages or salaries they’re paid.
I’m glad the captain of industry is here to explain to us that the net amount on a worker’s paycheck is not in fact the gross amount the employer paid him. Thanks for that valuable insight. Could you also explain that a business does not count every dollar that it takes in as profit? We need your genius to understand this!
After all it’s not a mere coincidence that all the major labor unions and various big corporation Democrat donor companies asked for and received waivers from HHS.
Quick, Nicky, what are those waivers and how do they work?
And if the U.S. were a horse it would be sent off to the glue factory.
Can we keep the U.S. and send you to the factory instead?
@Boyd:
you’re putting words in my mouth so you can once again display your contempt.
He does a lot of that.
@C. Clavin: True, a lot of businesses will do what the second largest school district in Michigan did. They changed all their paraprofessional positions to a max fo 5 hours per day, eliminating the need for providing healthcare coverage.
@Boyd:
I obviously failed to articulate my point, which is that the reporting of the raw datapoints tells us nothing.
To start with they’re not raw datapoints they’re subjected to various forms of statistical massaging in an attempt to produce as accurate a picture as possible of what is really happening in the economy. So in fact they tell us a great deal and although it’s not perfect it’s as good as you’re going to get in the circumstances. And I didn’t put any words in your mouth……or wasn’t it you who said:
But that means this statistic is just as useless as all the other statistics the Labor Department reports every month.
You rather self evidently don’t place a high premium on attempts by the BLS to measure movements in employment
@rodney dill:
True, a lot of businesses will do what the second largest school district in Michigan did. They changed all their paraprofessional positions to a max fo 5 hours per day, eliminating the need for providing healthcare coverage.
The Utica Community Schools district made major cuts in the spring because of existing budget problems that have absolutely nothing to do with healthcare reform. Plus the hour cap for paraprofessionals affects their vision coverage and retirement, not health care.
Here’s a link, which you neglected to provide, for totally good reasons, I’m sure.
Utica Community Schools Cuts 38 Positions
@ Rodney…
John Belushi is probably rolling over in his grave at your use of his likeness.
Businesses have always limited work hours to avoid paying benefits.
That’s nothing new.
@Tsar Nicholas:
If Gen Y were a stock I’d affix it to a M1Garand, brand it with the iconic Woody Guthrie phrase “This machine kills fascists,” and send it back in time to the Korean War where it ironically would be used to kill Communists.
Gen Y appreciates irony.
@mantis:
It’s almost as if Rodney is just making stuff up. Almost.
@mantis: I’m aware of what the school’s story is. Besides the job’s lost it must be conincidental that all paraprofessional jobs were capped at 25 hrs/per week. Just because they are cutting costs doesn’t mean they aren’t taking advantage of the 30hrs/week cap to cut even more. You also won’t see the $9million overage in their budget from last year that they couldn’t hide. I have relatives employed in UCS and I know a few things about it that won’t have any links.
So much confusion and so little concern, on my part, whether you remain ignorant.
But here are a few tidbits.
People who earn $250,000 or more by using more of their time for work rather than leisure, who can cut back to control their taxable income:
Lawyers (partners and sole proprietors)
Doctors
small business owners, in general
independent contractors
people with unique high skills such as petroleum engineers, etc.
Here is a lawyer who has mused about his response to increased taxes
I don’t have them at hand but I’ve read such posts by doctors and small business people as well.
Hourly workers whose hours are set by others have trouble cutting back, but those who set their own hours or choose their own work, can.
People who provide services rather than operate physical businesses can cut back, see above.
Or perhaps a small businessman finally gives into his wife and follows the example of Chick-fil-A and starts closing on Sundays?
The Warren Buffett and Donald Trumps won’t cut back so much as delay or shape their income realization. Warren Buffett is big on promoting higher taxation as he oddly organizes his holdings, trusts, etc. to limit his taxation. The CEO of COSTCO gave a rousing speech at the Dem convention about higher taxation then borrowed money for a special dividend to return capital to stockholders before the tax increase Jan 1. He absconded with an extra $4 million dollars that would belong to the government had the income realization occurred next month.
So some will cut back, others will shape their income realization and eventually, the higher taxes will result in higher cost to the poor (consumer) as it all adjusts.
@michael reynolds: Almost. Darden
@Doug Mataconis: Which part? That you advocate austerity? Or that austerity causes stagnant-to-negative state and local employment?
@Boyd:
Well, if you don’t want to dive into it too far yourself, you can probably take the WSJ at their word, that the report has some good and some bad news.
The WSJ is not “in the tank for Obama.”
BTW, Fox news says “more than 10,000 baby boomers will turn 65 every day for the next 19 years” which means that 300K should drop out every month. Pretty astounding, eh?
@JKB:
Yes I can well believe that habitues of a blog whose mission statement is as follows might make some rather odd claims
We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn’t pay attention very well, especially the dogs. Each one of us does “try my best to be just like I am,” and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
@mantis: From the link you provided Mantis:
They only lose vision, as they currently don’t have health coverage. They won’t get health coverage under Obamacare as they will be capped at 5hour per day. This was just an example and small beans compared to what employers like Darden might do.
@anjin-san: If sin taxes on liquor and tobacco have no effect on peoples behavior lets lower them and see what happens. “It should be known that at he beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty ,taxation yields a small revenue from large assessments.” Ibn Khaldun. Even the liberals economic hero John Maynard Keynes advocated for lower tax rates, giving an example of a failing manufacturer raising prices to cover lost sales. Lower taxes always spur growth, Harding -Coolidge ,John F. Kennedy ,Ronald Reagan , The Russian flat tax rate of 13% are just a few examples . This has all been proven over and over again and is really common sense . So the real issue is why do liberals want to sabotage the economy ? I think we all know the motives behind this … Reduced resources = Reduced population.
@rodney dill:
Oops!
Keep [Content removed due to violation of site policies], Rodney.
@JKB: Then that lawyer is an idiot. Seriously.
It is a 4% increase in the top marginal rate, from 35% to 39%.
So currently, for every dollar in taxable income (note – *taxable* income, not *gross* income) above $250,000, he keeps $0.61 instead of $0.65.
Only an idiot would consider that to be a demotivator for doing additional work. Once you’ve hit the point where your individual taxable income is $250,000, you’re clearly meeting all of your fixed expenses. If you have the excess capacity to do additional work once fixed costs have been met, any work within that capacity that results in an increase in income is worth doing. That’s Mangerial Accounting / Economics 101-level analysis.
@mantis:
He does a lot of that.
One of the big minds at OTB speaks.
Poor Doug…poor JKB…poor Tsar Nicholas…all still stuck on the first stage of grief & loss…move on fellas, you’ll be much better off…
@JKB:
The Warren Buffett and Donald Trumps won’t cut back so much as delay or shape their income realization.
This is a complicated way of saying you agree that marginal tax changes aren’t going to change their work habits……LOL
@C. Clavin:
Where this started was you did say it was nonsense that business would be saddled with higher costs, and I replied ‘True’, due to practices of reducing hours to eliminate the need for benefits, which you said is nothing new. Sounds like we’re in agreement.
(I switched emails around and keep forgetting to use the right one, I like Marvin’s eyes better anyway).
@JKB:
You’re avoiding the obvious. If I work an extra hour and make an extra dollar I now get to keep 65 cents. Under the old Clinton rates I only got to keep 60.4 cents.
Did I refuse work under the old rates? Um, no. Did anyone? No. There are exactly zero records of people throwing down their tools and storming off work during the Clinton era. (Except for the Republican congress.)
Will anyone therefore refuse to earn an extra 60.4 cents next year? No. To believe otherwise is absurd. To believe otherwise is to believe, “I’ll work my ass off for an extra 65 cents, but 60.4 cents? That’s slavery!”
I realize it’s a matter of religious faith with guys like you, but it’s stupid and untrue. And stupid.
@rodney dill:
They only lose vision, as they currently don’t have health coverage.
False! They still have health coverage, but don’t have the full package of benefits that includes vision due to the hour cap.
They won’t get health coverage under Obamacare as they will be capped at 5hour per day.
Actually, they will continue to have the coverage they have now, barring some future change.
This was just an example and small beans compared to what employers like Darden might do.
A bullshit example, and Darden has already realized how stupid they were being, as my above link shows.
That’s two strikes. One more chance.
@Brummagem Joe:
One of the big minds at OTB speaks.
It only seems big by comparison, chuckles.
The reduction in the participation rate was expected as boomers reach their 60s. I am 66 and feeding at the public trough of Social Security and medicare. I have several friends who retired when they became Medicare eligible. My sister works for a large multi-national and will retire the first of the year after turning 62 and she’s not the only one – her company is worried about a “brain drain.” The current economic conditions may have accelerated this but it was expected and will continue.
Factor retiring baby boomers out of the drop in the participation rate and get back to me.
@mantis:
It only seems big by comparison,
Your modesty is refreshing
@mantis: The Darden link/example was a legitmate case. I hadn’t seen the link from yesterday that they’d backtracked it. I’m glad they did. I’ll have to google other examples, I’ve seen a few, but Darden was the only specific one I recalled.
Try to keep civil, I haven’t been using abusive language with you.
@Brummagem Joe:
I’m just a bug.
@mantis:
No, the para-pros only currently have vision, they do not have health benefits, I know as I personally know some of them.
true, as they don’t currently have coverage, they also will not be under a mandate to be provided anything under obamacare as they are under the 30hr/week cap.
I do not buy that this is a bullshit example, as that was a legitimate link at the time it was made. They just changed their mind, only yesterday by your link.
@rodney dill:
Try to keep civil, I haven’t been using abusive language with you.
Sorry, I wasn’t trying to be abusive.
@ JKB…
So everyone who makes over $250,000 worked less when Clinton was President?
Please provide the link that supports that claim.
@de stijl:
That…actually did make me spit out my coffee. I salute you, sir or madam, whoever you may be.
@rodney dill:
No, the para-pros only currently have vision, they do not have health benefits, I know as I personally know some of them.
Hmm. I’ve got a source in the area too that tells me otherwise, but I’m not 100% sure.
I do not buy that this is a bullshit example, as that was a legitimate link at the time it was made. They just changed their mind, only yesterday by your link.
I was referring to the Utica thing as a bullshit example because the changes they made were not related to Obamacare. Darden was certainly relevant, though we now know there have been further developments.
In any case, I keep hearing threats from conservative business owners who plan to screw their workers, even though they frequently admit they don’t actually know if they will face larger costs under the law, and who either backtrack later or simply have done nothing to follow through on their threats. Obamacare is not perfect by any means, but it is not designed to unfairly burden businesses, and there are many parts of the law, such as tax credits for businesses who continue to offer coverage, designed to help keep the costs down.
@mantis:
I’m just a bug.
In what you obviously consider to be a world of earthworms.
@rodney dill:
Try to keep civil, I haven’t been using abusive language with you.
He does a lot of that……..LOL
@mantis:
“I’m just a bug.”
Nah, you’re a feature.
I can prove beyond a shadow of a doubt that at least one person will work a bit more and become more productive in response to higher taxes. Because that would be me.
Have yet to see evidence of my opposite number, the guy who said, “Hey, I need $250,00.65, but I will move heaven and earth to avoid making $250,000.60!”
@michael reynolds:
As someone above observed we’re dealing with Republican math (TM) here. The notion that someone is going to forgo an additional 50 k of income (say) because the rate on it is going up by 4.6% to 39.6% from 35% is asinine…..what is that about 2200 bucks
@Brummagem Joe:
Keep telling yourself that. Especially after the expected revenues fail to be realized.
But more important than the specific rates, is the emotion. People are being forced to consider their net from work done during hours they could be doing something else. In the near term some will chose to cut back. Perhaps in the future they increase their work again. But they may also find themselves comfortable with the new norm of more time off for other pursuits, perhaps not economically profitable pursuits. Perhaps they’ll devote some of that new free time to building the Tea Party or creating ways for students to obtain a classical education in Western Civ.
And we must not ignore the loss of 5% of their income. Such income, as has been claimed here, isn’t for immediate consumption. They would have saved and sought out productive investments for that extra cash. Cash that will now be squandered by the federal government on consumption rather than creation or given to Obama cronies for their “new energy” scam corporations that fire all the workers and go bankrupt shortly after receiving the government “investment”. And investment that is oddly profitable for the crony.
In any case, this isn’t arithmetic, it is calculus. The rates matter and build up to have a large summary impact on the end result.
@Rafer Janders:
One doesn’t often get the opportunity to properly use the word “affix” in a sentence.
I say grab that chance every time you can.
@JKB:
Did anyone work hard in the 1980s? In the 1990s?
Anyone at all?
(I thought I was working as hard as I could …)
@JKB:
But more important than the specific rates, is the emotion.
Yes let’s not bother our pretty little heads about the actual numbers let’s focus on something we can really quantify like emotion
And we must not ignore the loss of 5% of their income.
And it not the loss of 5% of their income it’s the loss of 4.6% of the last 50k of their income in the example I gave… or about 0.75 total income…….you’ve already admitted in a couple of examples I gave that the tax changes would make NO difference to their work habits……so what are you talking about?
According to JKB absolutely no one worked in the 50’s when the top tax rate was near 90%.
And if you ever had an original thought all of our heads would explode
@mantis:
At the risk of confusing the issue further (which hasn’t stopped me before).
There is a small number of para-pros in a legacy job code that have had health coverage. and presumably still do (i think this number is under 10-12,[UPDATE: which is outdated info, I checked, those positions don’t now exist or the grandfathered cases retired] ) but I also would need to confirm. I’m not sure what happens to these next year with 5 hours positions and obamacare. Others, even with 6-7 hour positions, last year did not have health coverage, and the ones left are now reduced to 5 hour positions. Further, some of the positions are only 2 or 3 hours positions to begin with and wouldn’t qualify anyway.
.
Well the school system certainly didn’t admit or address it as such, but at least some of the para-pro union think otherwise.
Some other paraprofessional unions in other school districts (Warren-Con for example) do have health care coverage.
[Update: This also wouldn’t include the secretarial union]
@Brummagem Joe:
As I’m well aware.
Good, informative post, Doug.
It’s Ground Hog Day at OTB. (1) positive job growth is bad news, (2) a restoration of the top marginal tax rate from 35% to 39% wil result in communism, and wealthy people wil flee the country and (3) the catastrophic economic crash of 2008 is Obama’s fault.
There, feel free to use those talking points.
: @Aidan:
Drum is mistaken. We need to generate approximately 130,000 – 140,000 each month to keep up with population growth.
@Gromitt Gunn:
If you take what Doug has been writing at face value, it seems his thinking on this has evolved. I consider that a good thing, don’t you?
@C. Clavin:
According to JKB absolutely no one worked in the 50′s when the top tax rate was near 90%.
It would certainly be news to my late lamented pa who worked his ass off as lawyer to put four kids thru expensive schools including a particularly troublesome one (moi)
@Ben Wolf:
Drum is mistaken. We need to generate approximately 130,000 – 140,000 each month to keep up with population growth.
Is he? I’ve seen Krugman quote a figure of around 90,000…….what’s your source for the 140k…..I’m not saying you’re wrong but so many numbers get thrown around
@Brummagem Joe: It depends on how you calculate the lag between people being born and joining the workforce years later, how you measure the effects of immigration, etc.
If you just run the basic numbers from the World Bank’s estimates of U.S. population growth, you get around 183,000 more people per month. Obviously not all of those need or want a job immediately, but I tend to side with needing to create more jobs than less.
http://data.worldbank.org/indicator/SP.POP.GROW
@Ben Wolf:
It’s complicated, but assuming a target 63.6 labor force participation rate (steady state) you need ~109K jobs to recover in 12 months.
doh! I didn’t catch that they were steady-stating the unempoyment rate at the same time.
@Brummagem Joe:
Found a link to a BLS paper on this very issue. Labor force growth in the last decade was around 0.8% per year, requiring a minimum of 120,000 jobs created per month. The BlS and CBO are projecting a slower rate of growth around 0.7%, which is where the 90,000 figure comes in. But this depression isn’t going to last forever and growth rates are likely to pick up again after we dig our way out.
@Ben Wolf:
In other words it’s all highly speculative…..I’ll stick with Krugman since he seems to be in the middle
Who could have guessed that the road to fascism begins with 4.6%? If the wealthy are that sensitive, perhaps they should use some of their disposable income to pay for therapy…