So the unemployment rate was zero at the time you graduated?

John H



Economists have differing opinions about the definition of "full employment",
but a commonly considered figure is about 4.5%
A certain number of people will be "between jobs" for brief periods of time,
even in a robust economy.

Clinton just about achieved that during his last few years in office, (although
Clinton, Bush, and no other president is really responsible for the economy or
employment- all they can do is influence it a bit). Bush is closing in on that
figure, but there are some fundamental differences that don't reflect in the
raw numbers.

1) The number of discouraged workers is greater. Under some common methods of
calculating unemployment, once a worker exhausts any unemployment insurance
that person is no longer considered unemployed. More people have been forced
into "self employment", performing jobs as independent contractors rather than
as an employee with salary and benefits. The newly self employed will never,
statistically, be unemployed again.

In our state, a recent net increase in the number of jobs available resulted in
a statistical increase in the unemployment rate. The state economist theorized
that the improved prospects inspired thousands of people who had previously
given up trying to find a job to reenter the labor market, increasing the
oversupply of workers.

2) Many of the jobs being created are third-world opportunities in a
first-world
climate. At least in our region, we're not seeing the former forest of "help
wanted" signs on every crap-job prison up and down the fast food pike. There
are a few appearing here and there, but the mini-wage, no benefit, no set
schedule, no Saturdays off, take-my-crap-and-smile-and say "yes boss" jobs are
generally not going begging, like they should be.


http://www.northwestharvest.org/minwage.htm

3)The middle class continues to disappear.
Good news for a few of the former middle classers, they have moved up to
moderate affluence. Not as good news for more of the former middle classers;
many of their job skills are now obsolete or the economics of global free trade
have made it more profitable to do accounting, customer service, software
development,
and other computer intensive jobs from former British colonies. "We speak
English here, and $400 a month is a good wage for
a worker with a university degree."

4) The misery index is up. In my state, wtih a population of about 6 million
people,
almost 10% of the population requires assistance from a neighborhood food bank
one or more times during the year.

5) We have completely sacrificed capital returns to pump up the economy and
allow the jobs picture to appear reasonably healthy. During previous years, we
were able to offer a reasonable return on capital investment *and* have close
to full employment. Retirees with a few hundred thousand in savings (who were
able to squeak by on 5-6% CD rates) are spending their principal to meet
monthly bills with CD rates often under 2%. The Fed Funds rate at about 1%?
This chicken will come home to roost soon, and with a $7 trillion national debt
to refinance at regular intervals it's scary to consider what even a 3-4% rate
will do to the cost of our debt service.

The current boom in housing and big ticket purchases is a freak child of "free
money", rather than a bellweather of a robust economy. When rates start back
up, (the day after the election?), the housing and big ticket bubble will get
very sick, very quickly.

The bottom line, however, is that neither President Bush nor President Kerry
will have all that much control over the unemployment numbers. There is a great
"leveling" going on in the world at large, and the countries and economies that
enjoyed the most in the past will be forced
down toward the middle as other countries and economies that have been at the
bottom begin to rise.

6) There is now an oversupply of college educated workers. Send your kids to
trade school. When the toilet clogs up, nobody is going to call a plumber from
India. :-)