Lies and Statistics

August 5, 2013 at 7:19 am Leave a comment

This is turning into the Jim Morrison economy.  In one of my favorite Doors tunes, he explains that he’s been down so ever damned long that it looks like up to me.

The employment statistics released on Friday are, by any reasonable assessment, abysmal.  Nevertheless, policy makers have convinced themselves that the worst is behind us and that we can now go about debating other issues that are so much easier to demagogue than helping people find a job.

First, the unemployment rate went down to 7.4%, but let’s put this in perspective.  The unemployment rate doesn’t include people who are not actively seeking work.  So, if you’re in your mid-fifties and have simply given up or if you become so disillusioned that you’ve resigned yourself to moving back in with your parents while you apply for graduate school you’re not included in that statistic (isn’t it good to know you’re really not unemployed?).  In fact, the percentage of Americans actively participating in the workforce is now at slightly over 63%, its lowest level since 1979.  Even accounting for the fact that we’d expect this number to go down as the baby boomers retire, this is hardly the type of number you’d expect in the first years following the end of a recession.

Then again, many Americans would be shocked to find out that the recession is over.  A good chunk of the job growth we do have is coming in the retail and service sectors.  I honestly do believe that any job is a good job, but there’s something wrong with a country’s economic trajectory where the McDonald’s crew kid has been replaced by workers so desperate for a better wage that they feel they need to stage wildcat strikes.  Another thing about the latest statistics, that 7.4% doesn’t tell you how many people are underemployed, settling for part-time jobs while looking to get back to a career.  Furthermore, 4.2 million Americans or 37%, of the total unemployed, are in the ranks of what the Labor Department describes as the long-term unemployed.

Meanwhile, we have factions within the Federal Reserve arguing for an end to the $85 billion monthly bond buying program lest inflation spiral out of control.  With all due respect, what economy are these people living in?  We have Republicans in the House of Representatives whose alleged fear of the national debt is surpassed only by their opposition to tax increases.  They’d rather make arbitrary cuts to spending than try to negotiate a sensible spending plan.  Meanwhile, we have a President who’s going through one of his cycles of appearing increasingly irrelevant to the whole discussion.

I’ve said it before and I’ll say it again.  Your average frontline credit union employee has a better sense for what’s going on in the economy than most policy makers.  Let’s not forget that every time we offer products that are cheaper than our competitors we are helping people, many of whom are living paycheck to paycheck to make ends meet.  I’ve given up on Washington, at least for the time being, and that just means that the job of credit unions is more important than ever.

Entry filed under: Economy, General. Tags: , , , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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