June 6, 2011

After twenty-six months, my neighbor across the street has a job.

Admittedly, Jerrod collected unemployment for nearly twenty-four months, steadily sending resumes and filling out job applications for anything closely approximating his vocation, mechanical engineering, but to no avail.

He carefully avoided the fast food scene. Flipping burgers on a hot grill would provide him just enough money to wipe out his unemployment benefits. Why work like this when you can sit at home filling out online applications and "make" the same money?

But then, in early April, the benefits ran out! Now, he had to take anything he could get.

Last week, Jerrod was hired for 25-30 hours a week at,...(drum roll please!)...McDonalds!

Last Monday he walked in to the nearest Golden Arches for coffee and an Egg McMuffin and, on a dare from his fourteen year old son, asked if they were hiring. The Manager was working and, with a surprised look on his face, said, "Sir, if you apply, we have a place for you here, provided you don't have some sort of criminal record."

On Thursday, Jerrod was an employee of Ronald the Clown!

The next day (Friday) some vivid truths came out of the Labor Department. It reported that the unemployment rate in May inched up to 9.1 percent from 9 percent, only 54,000 jobs were created, the fewest in eight months, and it was also noted that McDonald's added 50,000 jobs since mid-April (28,000 in May alone).

The problem is only 800 of those jobs are full-time and Jerrod's was not one of them.

This month things are awful at first glance and simply bad beneath the surface. The number of employed rose by 105,000 which is an anemic number, but for the first time in a long time those in the labor force rose by a considerable amount: 272,000.

That suggests, momentarily that people think there may be jobs and are looking for them. That is a good thing, except for the fact they are not finding jobs. The number of unemployed rose by 167,000 and the unemployment rate ticked up by .1%. Economists projected a drop below 9%.

For the last couple of months I have maintained that it is very questionable if this pace of jobs keeps up. Clearly it didn't and this certainly cannot all be blamed on a Tsunami in Japan. The entire global economy is slowing rapidly.

Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data.

Digging deeper into the Household Survey, we see some more interesting data. In the last year, the civilian population rose by 1,814,000. Yet the labor force dropped by 544,000. Those not in the labor force rose by 2,358,000.

In January alone, a whopping 319,000 people dropped out of the workforce. In February another 87,000 people dropped out of the labor force. In March 11,000 people dropped out of the labor force. In April, 131,000 dropped out of the labor force.

At long last, the labor force expanded. This month it rose by 272,000. The 5-month total for 2011 is +276,000.

Many of those millions who dropped out of the workforce would start looking if they thought jobs were available. Indeed, in a 2-year old recovery, the labor force should be rising sharply as those who stopped looking for jobs, once again started looking. Instead, an additional 276,000 people dropped out of the labor force in the first four months of the year.

When one drops out of the workforce he or she is not counted as part of the unemployment stats kept by the Labor Department. Neither are those, like Jerrod, whose unemployment's benefits run out or who obtain part-time employment at McDonald's.

President Obama wants Israel to return the borders they held prior to 1967. If we could get him to go back to pre-1984 Labor Department data gathering many would be surprised to see the calculated real unemployment rate is close to 20%.

Since this President assumed office real unemployment has climbed from 13.9 to 20.1 percent according to Gallup. Yet no one in the media will report this. In fact, the media rarely talks about joblessness, the weak dollar, gas prices, fighting three wars, or the President's budget proposal potentially costing more than $3.2 trillion more in debt if passed. In fact, all we hear from the media these days are stories about those mean bastard Republicans pushing the elderly off the cliff, denying poor families food stamps and section 8 housing and forcing traditional values down the throats of all Americans.

Back in 2008, then Senator Obama campaigned for the Presidency of the theme of "Hope and Change." Judging by today's grim economic data, what we have now, and what he meant to say, is "Little Hope and No Change with which to buy an Egg McMuffin."

I wonder if McDonald's gives employee discounts. I'll have to ask Jerrod the next time I see him. He'll need it for what little change he has left to him from this economy.

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