July 17, 2010
Unemployment the Same; "Unemployment" Down
Here's an interesting observation. The Providence Journal's story about Rhode Island's decreasing unemployment rate may have been headlined "State's jobless rate declines to 12 percent," but the lead reads, "The figure is counteracted, however, by decline in size of labor force," and Andy Smith sets the tone of the article at the very beginning:
On the surface, there is good news in the state unemployment numbers released Friday. The Rhode Island jobless rate dropped to 12 percent in June, a decline from 12.3 percent in May, and the number of people classified as unemployed decreased by 1,900, falling to 69,300.
By contrast, the cycling news on WPRO — to which I'm able to listen at work, now that Buddy's show has moved to drive time — clearly presented the numbers as positive.
The upshot is that 800 government jobs (mostly for the Census) went away; 800 private sector jobs appeared (presumably with a significant percentage of temporary seasonal jobs); and 2,800 Rhode Islanders gave up their job searches and exited the calculation. Anybody who is tracking unemployment as a measure of actual economic health and resident well-being, in other words, should not be encouraged.
I will say this, though: It looks like my prediction of 15% unemployment was off the mark, but mostly because I didn't include the possibility of workers exiting the market.
The numbers are clearly being fudged. Many over 62 are taking early SS. Others are finagling a way on SSI, SSDI, Workers Comp or some sort of training programs. Others are using GI benefits or student loans to safely entomb themselves in academia.
Finally, thousands have left the state.
None of the above count as "unemployed."
The real figure is the gross revenues (sales and income taxes)which even with RI's share of the $800 billion stimulus farce are essentially flat.
With the stimulus winding down, to quote Dylan-"A Hard Rain's Gonna Fall".
There is most definitely a lot more going on with these numbers. All of my employment prospects in this state are gone; I've been actively searching in Texas for the last 3 months for a new job/apartment. There's an actual economy there. I know three other people in RI that are doing the same thing, and I'm following another friend who left for Texas last year. The building my apartment is in is for sale; the owner is leaving the state. The last two jobs I had both ended because the owner of one left for Alabama, and the other just plain moved the whole business to Virginia.
I don't trust any of the numbers, because the situation is FLUID (and flowing away from RI); and these kinds of numbers are not meant to track that kind of thing. The numbers are meant to track the normal ebb and flow of a stable economy; not the total destruction of the private sector workforce.
The effects of this will only become more pronounced in 2011, and I expect the worst... that's why I leaving.
Posted by: rhr at July 18, 2010 3:21 AM