Monday, October 12, 2009

Yikes

Let's check in on the old unemployment picture, shall we?

us unemployment county map

Oh dear. Not good at all.

Via Mike Lux, the map is from the Bureau of Labor Statistics. (It can be found here (pdf). Says Lux:
If full employment is defined as four percent, then only nine counties east of the Mississippi River that fit that definition. Two counties west of the Rocky Mountains qualify; one in eastern Washington State and the other covers the North Slope of Alaska.

The bright spots of full employment can be found in the agricultural counties of the Great Plains. Montana, Wyoming, North and South Dakota, Nebraska and Kansas seem immune to the wave of persistent joblessness, at least for now.
And this is just average annual employment. Things are worse now, with unemployment having climbed to 9.8%. Nor does it count those who are underemployed or who have dropped out of the labor force altogether; if it did, the national number would stand at nearly 20%, according to Lux.

Curiously, not having a McDonalds nearby seems to correlate with low unemployment. Clearly McDonaldses cause people to lose jobs!

26 comments:

Anonymous said...

You mean "having a McDonald's nearby.."

Chachy said...

Nope. I mean "not having a McDonalds nearby correlates with low unemployment." (Fixed it.)

Gus Snarp said...

I'm sure you've seen this pattern, and I appreciate the McDonald's joke, but what's really going on is that both proximity to McDonald's and unemployment are related to population.

This is intuitive in the case of McDonald's, but perhaps surprising, and definitely interesting in the case of unemployment. Since this is a map of unemployment rate, not total number unemployed, there is no reason to expect it to correlate with population, yet it does. The more people in a county, the higher the percentage that are unemployed (OK, I'm seriously generalizing based on my knowledge of the country and haven't run stats on this, but still). That's kind of interesting. And it may say something about this recession. I don't know what though

kilgoretrout said...

Probably those people without McDonalds living in very low populated area's are for a big percentage farmers.
Their economy is not that much effected by the global crisis since they are not so much globalised and the demand for food won't decrease in times of crisis.

Still I like the explanation McDonalds makes people loose jobs. Probably not true, but it is worth to destroy all McDonalds too see if the employment will return. If it won't we at least got rid of those horrible restaurants ;)

Anonymous said...

Alright, "Curiously, not having a McDonalds nearby seems to correlate with low unemployment. Clearly McDonaldses cause people to lose jobs! ". Is this a joke, Chachy? Or propaganda?

Anonymous said...

That county in Eastern Washington has 2 things: wheat farmers and Washington State University. It always has much lower-than-average unemployment.

Dug said...

That color scheme is almost as scary as the data being shown!

Andrew said...

"If full employment is defined as four percent"

What a dumb comment and concept. Full employment means the only unemployment is voluntary (people between jobs on purpose, or between jobs and school). If anyone is involuntarily unemployed, there is no full employment, by definition.

The US has had sub-4% unemployment in all of 1948, from 1/1951 to 11/1953, 2/1956, 9&10/1956, 2/1956 to 4/1956, 12/1965 to 1/1970, 10/2000 to 12/2000.

Furthermore, economists usually cite 5% as "full employment", not 4%.

The US has had sub-5% unemployment from 1/1948 to 3/1949 (15 months), 7/1950 to 1/1954 (43 months), 12/1954 to 10/1957 (35 months), 6/1959, 2/1960, 7&8/1964, 11/1964 to 1/1965 (3 months), 3/1965 to 7/1970 (65 months), 1/1973 to 12/1973 (12 months), 5/1997 to 9/2001 (52 months), 6/2005 to 4/2008 (35 months). That's 264 months out of 741 months with "over" "full" employment.

Gus Snarp said...

Andrew - I love your contrariness.

You begin by saying: "What a dumb comment and concept." Saying full employment is four percent is because, "Full employment means the only unemployment is voluntary ... If anyone is involuntarily unemployed, there is no full employment, by definition."

But continue by saying: "Furthermore, economists usually cite 5% as "full employment", not 4%."

So the nameless economists you've cited are also guilty of using a dumb concept and making dumb comments? If the notion of defining a percentage of unemployment that equates to "full employment" is inherently dumb, why bother to cite economists who do the same thing?

Andrew said...

Gus:

The citation of 4% is just to make the current situation look worse.

"Full" employment was often defined as a level of unemployment which will not cause an acceleration in inflation - the "NAIRU" - Non-Accelerating of Inflation Rate of Unemployment. During the 1980's, this was held to be around 7%, but that was then dropped to 5% in the 1990's.

The whole concept is premised on the Phillips Curve, which said that there was a direct trade-off between the unemployment rate and inflation, so that as unemployment rose, inflation fell, based on the assumption that growth and human consumption is the cause of rising prices, as opposed to too much money being circulated (the traditional/classical/monetarist explanation).

This relationship had held from around 1920 to 1969. But the recession of 1970 shattered this economic illusion, as inflation and unemployment both went to 6%, then fell in tandem during the recovery to 1973, then rose again during the recessions of 1974 fell during the recovery, and rose again during the 1980 recession.

More economic history might have helped. In the 1800's, inflation was generally caused by war time spending, and deflation was the ordinary course of things during both booms apart from war and busts.

Richard said...

Kilgore, you got it right about farmers (and other people dependent on resource extraction, such as oil workers) have been hit less hard by the financial crisis. You're wrong, though, about why; farmers are more globalized and connected to the world economy than the average worker in a more densely populated area. Specifically, they are more connected to emerging economies, who have outperformed during this crisis period. Service and industrial workers are heavily tied to the American economy, but the price of agricultural goods, minerals, and energy is increasingly being set by the growing demand for stuff by the 2+ billion people on the other side of the Pacific.

BTW, this isn't the case of just "people need to eat". During the Depression Dust Bowl, farming communities were in general hit harder than their urban/suburban counterparts.

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