Friday, May 8, 2009

What if 30% and Growing Unemployment is Equilibrium

In February, we asked What if 25% and Growing Real U.S. Unemployment is Equilibrium? Today, given the ongoing trend we see in today's unemployment situation report below and yesterday's comments from collaborators at the National Employment Law Project and UC-Berkeley, we have to upgrade this query to the 30% level.
We're nearly at one out of four laid-off workers has already been out of work for six months. That's Andrew Stettner at the National Employment Law Project. He and his research partners at UC-Berkeley predict the share of long-term unemployed will hit 30 percent by next year.
Unemployment Situation

This, while reporters chirp this morning, "the unemployment situation IMPROVED this month," fixating on a modest Decrease in the Rate of Decrease; whereas U-6 is vastly more reflective of reality, even if it too suffers the usual statistical challenges that result in unavoidable understatement. We can only count that which presents itself for counting. All too often, these numbers are like counting the ants we can see on the surface and calling it the whole anthill. The counting itself is accurate enough, the physical reality ... um, not so much.

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