How Bad's the Job Market? This Bad

As of the beginning of September there were just 2.3MM job openings. This is equal to 2% of the total filled and unfilled positions – a record low. The ratio of unemployed to the number of job openings is now over 6. To give you some perspective on just how bad this is – the ratio was 1.5 in 2007 and peaked at 2.8 (less than HALF the current ratio) in 2003 when the jobs market was at its absolute worst.

Source: Atlanta Fed

Comments

[Pat C:]

How about some FDR type direct job creation in energy and health care efficiency? Lets hear the pro's & cons. We are going to waste alot of $$ on unemployment compensation anyway.

Oct 20 09:29 AM

[thiazole:]

Wow, the worst job market in a "whole" decade. I know the job market is bad, but clearly a longer timeframe would show that it is far from unprecedented - I'm sure it was just as bad in the mid 70s and worse in the early 80s.

Oct 20 11:10 AM

[thiazole:]

What you say seems logical on the surface, but there is a major downside to it. We as people are resistant to change. A lot of people are in jobs that aren't ideal, but they'd rather continue doing that then find a better job (even during the good times). Leaving people living on just enough to survive while on unemployment motivates those people to find productive jobs in society (the kinds of jobs that produce tax revenue instead of consuming them). If you create a bunch of new government jobs, those jobs are very hard to get rid of while at the same time hindoring private sector expansion (because their taxes are higher paying for all the extra government jobs and because the labor pool has shrunk). I think one of the biggest post-recession drivers to economic growth is the fact that start-up businesses (the kind that become the next Microsoft or Apple, for example) can get skilled labor at a big discount. Take a look at a chart that compares unemployment to GDP growth. You'll find that the periods of time where GDP growth is highest are also periods where unemployment rates are higher than average.
In essence, I'm saying that creating government jobs for the sake of creating jobs is harmful to the economy (and will eventually lead to even higher unemployment and lower quality of life). If there is a REAL need (ie, they will increase the overall output of the private sector economy and therefore the increase in tax collection will pay for their costs), then it is reasonable to create new government jobs. In many cases, though, that doesn't happen.


On Oct 20 09:29 AM Pat C wrote:

> How about some FDR type direct job creation in energy and health
> care efficiency? Lets hear the pro's & cons. We are going to
> waste alot of $$ on unemployment compensation anyway.

Oct 20 11:25 AM

[Valley Boy:]

You might consider the examples of past presidents other than the bureaucracy-happy FDR in counteracting depressions.
For instance, James Monroe had a favorable article about his efforts in fighting the Panic of 1819 in the Los Angeles Times. The article is dated Oct. 15, 2009 and titled:
James Monroe, a president for our times?


On Oct 20 09:29 AM Pat C wrote:

> How about some FDR type direct job creation in energy and health
> care efficiency? Lets hear the pro's & cons. We are going to
> waste alot of $$ on unemployment compensation anyway.

Oct 20 11:56 AM

[Moon Kil Woong:]

thiazole is right in the fact that the biggest issue will not neccesarily be the severety of the unemployed but the length that they stay unemployed. The longer unemployment stays elevated the worse it gets and the harder it is for the economy to bounce back, even if it is not as severe as it is now.

So far all government action has done nothing but prolong this recession, not solve any of the fundamental problems nor set in motion any actions that prevent it from occuring again. In fact, a strong argument can be made that they are committing the very same disasterous mistakes that caused this recession except for the fact that these actions are not having the desired effect anymore (printing money, mass debt, low interest, financial bailouts, accounting trickery, derivatives which are now also in the form of AIG like government backstops except we get no premiums for our risk, securitization, dollar depreciation, and disincintivizing any form of savings).

Oct 20 10:32 PM

[tripleblack:]

Word is that the Obama Administration is preparing their next "Stim Bill", though they are not calling it that.

More of the same.

Its beginning to resemble the old movie farce, "Airplane". If slapping the passed-out person doesn't wake them up, hit them a hundred times, maybe that will work.

LOL, you have to think that someone, somewhere, will write a book after this is all over and, with great gravitas, tell us that 7 Stimulus Events is the best formula. Or whatever number it ends up being before the patient recovers on their own and totters to their feet.


On Oct 20 10:32 PM Moon Kil Woong wrote:

> thiazole is right in the fact that the biggest issue will not neccesarily
> be the severety of the unemployed but the length that they stay unemployed.
> The longer unemployment stays elevated the worse it gets and the
> harder it is for the economy to bounce back, even if it is not as
> severe as it is now.
>
> So far all government action has done nothing but prolong this recession,
> not solve any of the fundamental problems nor set in motion any actions
> that prevent it from occuring again. In fact, a strong argument can
> be made that they are committing the very same disasterous mistakes
> that caused this recession except for the fact that these actions
> are not having the desired effect anymore (printing money, mass debt,
> low interest, financial bailouts, accounting trickery, derivatives
> which are now also in the form of AIG like government backstops except
> we get no premiums for our risk, securitization, dollar depreciation,
> and disincintivizing any form of savings).

Oct 21 07:31 AM

[Grumann:]

I agree with Thiazole. Take it back 30 or 40 years. Give us a better time frame. I also agree that it is really tough out there. That is a very dramatic change and jobs should be the #1 priority of the administration.

Oct 21 09:25 AM

[SivBum:]

Wonder what was the ratio in the early 80's when the unemployment rate was worse and most families were still relying on single earners while unemployment benefits were less generous?

Oct 21 10:27 AM