June 9th, 2013
In the long running comedy series “Frasier,” Frasier or Niles would often order a latte in their local neighborhood bar, being careful to note exactly how they wanted the drink made. Friday’s employment report was made to order – not too strong so as to hasten the end of the Fed’s latest bond buying program and not so weak as to confirm fears of another summer swoon.
Slowly and inexorably the number of employed trudges up the recovery hill. The unemployment rate ticked up a scosh to 7.6% as more people tried to find work. The year over year percent change is still in good territory.
On the not so good side, the percent of the total population that is working is still below the 30 year average of almost 44%.
The unemployment rate of those with a college degree is far below that of the general labor force but is still 50% above the average of the early 2000s.
Changes in the bankruptcy laws in 2005 exempted student loan debt from bankruptcy. Over the next decade or so, will the investment in education pay off? Let’s hope so. 100 years, an 8th grade education became a standard used by employers to winnow job applicants in a tough job environment. 70 years ago, the new standard became a high school education. For the past 30 years, we have moved to a 4 year degree as the new standard.
We now spend more on defense and more on Medicare that the $500 billion total amount spent by the state and the federal government on K-12 education. (source) Community college educators are painfully aware that many students are simply not prepared to take college courses. Local communities used to fund 70% of K-12 education. Thirty years ago, homeowners protested ever rising property taxes to fund K-12 education and, since that time, local funding has dropped below 50%.
If we expect our children to develop the skills for a college education, we are going to have to find an alternative model of funding. The states have relied on an ever increasing share of Federal funding for K-12 education. Although the percentage of Federal spending on K-12 is small, less than 10%, the aging Boomer generation will command ever more spending of general tax dollars in addition to the Medicare taxes collected.
The core work force aged 25 – 54 struggled upwards
but the participation rate, the percentage of the population in the labor force, is still weak.
The “total” unemployment rate, which includes those working part time for economic reasons, continues to drift down but is still high.
Understand that this represents over 20 million people, a bit more than the entire population of New York State. Turn on C-Span sometime and tell me how many committee hearings on jobs there are. Immigration, federal surveillance and the targeting of conservative groups by the IRS are important matters, yes, but why aren’t politicians in Washington talking about jobs? There are several reasons: no one has a clue; no clear political advantage to be gained; constituents are not writing letters to their representatives and senators about jobs.
Welcome to the “New Abnormal.”