Origin of the BSL idea

kzt wrote:Unemployment only counts people who are actively looking for work and who are known to the government as doing so. In 1982 people had hope of finding a new job. There are a lot of people who have abandoned hope of finding a job and exhausted benefits that require they make formal efforts, so they are not counted as unemployed.

The majority of the drop in unemployment over the past few years has been due to people stopping job searches after abandoning hope, not because they got a job.

There are an average of about 330,000 people who turn 18 every month. So for employment to catch up you need to employ them AND the people who lost their jobs during the downturn. Economists think 500,000 a month is a good number to improve things. We reached that exactly once in the last 6 years. Ok, how about 240,000? I count 16 months out of the last 6 years that we hit 240,00 jobs.

Not to really disagreeing more quibbling about the numbers.

This started out as what has happened since the Federal Government stopped the extended benefits. In the medium term you are correct. Short and long not so much.

In Dec 2013 Unemployment 7.9 Participation 63.7.

In April 2015 Unemployment 5.4 Participation rate 62.8.

2.5% less unemployment .9% less participation. Not a great relationship but better than what you are painting.

Do you have a cite for that 330,000 entering?

When I look from Jan 2013 to April 2015 around 5916 thousands more in the workforce, 5243 thusands more jobs.

For five years it is 12937 thousands more in the workforce, 9226 thusands more jobs.

Which is why I said once the federal government got out things started looking better. Yeh, a lot of other factors in their so it is not so clear cut but 71% jobs/pop compared to 88% in the recent past.

Have fun,
T2M

PS there is a neat spreadsheet export function on the Fred graph site. Which I will probably be forgetting over the summer. And I have been posting too much today I need to get packing and organising.

So, where are you headed this year...

Been through Carlsbad Caverns? Bats are about to start coming back about now...

thinkstoomuch wrote:Do you have a cite for that 330,000 entering?

When I look from Jan 2013 to April 2015 around 5916 thousands more in the workforce, 5243 thusands more jobs.

For five years it is 12937 thousands more in the workforce, 9226 thusands more jobs.

Which is why I said once the federal government got out things started looking better. Yeh, a lot of other factors in their so it is not so clear cut but 71% jobs/pop compared to 88% in the recent past.

About 4 million people turn 18 every year based on a quick google search. Of course, people also leave the workforce too due to age, and I don't know what that number is (too painful on this iPhone) but the recession the older workers have been holding their jobs better than the young.

But if the U.S. Population increase by a million a year then you have a bunch more people either working and paying taxes or collecting welfare every month. If there are no net jobs created then this won't work out well in the not very long run and horrible in the long run.

Hey again T2m,

Regarding the living better, as a whole per country, yes people are, thanks to technological improvement reducing the cost of tech, but the purchasing power parity numbers show that for inflation adjusted money, to normalise the amounts, some-one in the US at minimum wage in 1970 had the ability to purchase that time periods equivalent of the latest tech at a level which to match today would require a minimum wage in the US of $8. So people are living better, just not as well as could be possible had their pay increased at the same rate of inflation. The modern equivalent pay is 90.6% of what it would be compared to if it had matched inflation, so had it matched inflation, those on the minimum wage could have 10% more income.

As for the OECD figures I used, I dont know if they did use taxes in the normalisation, just that their figures were indexed to 2005, and the productivity was defined as the percentage of output per hour of a worker, so the 1970 value 0f 54 means for every hour worked, the average worker back then produced an output only 54% the size of what a worker in 2005 could, and that in 2014, the average worker output was 10% more than in 2005, so to produce the same level of output in 1970 as compared to 2005, the workers would have to work almost twice as many hours.

For taxes to be included in the figures, I'm not sure what the effect would be, but apparently the US lowest tax bracket in 1970 was 14%, and today is 10%. However, as you said, there also social security to worry about, which had a max rate of about 9.6%, but now is at about 15.3% for max rate. so, overall, its another loss of 2% of purchasing power in the present. Both numbers (1970 and 2015) are made of medicare and social security taxes paid by the worker and the employer together, as cant seem to find the separate figures.


As for Aus and NZ, yeah, we have pay as you earn, so the employer deals with the taxes for us. its pretty good. only reason I ever talk to the tax man is starting a new job, where you have to work out your new tax rate, which your employer then applies, or for your tax summary if you are due a refund.



For your final bit, yes, overall we are better off, but only relatively, not deterministically.


Good to hear from you again.

thinkstoomuch wrote:

For Spacekiwi (made sure I go this right this time ) are people living better now on the money they make than they did then.

Darn tooting! Simple example number of households that now have Air Conditioning. Which I still don't but then I am cheap.

Also not sure how to factor the various taxes into it. For example our Social Security tax 1/2 of which is paid by the employer. 6.4% that isn't in there and was dramatically less in 1970. Does the OECD include that number. Or how much other cost to business is involved in the various government regulations and requirements, Affordable Care Act. Or if the employer is paying medical insurance in either time. If they are making the equivalent of a few thousand dollars in unpaid benefits that makes a difference.

According to what I understand from Daryl's explanation worker gets paid and the government then taxes it away. Which in a lot of ways seems like a good deal in Australia as the rate seems nominal for what they get. Would it ever work in the US? I am really skeptical.

Love to make this a simple thing. Is the average person's life better now than 1970. Is as simple as it gets to me. Could it be better yet, absolutely. How to get there is a question.

Have fun all,
T2M

Relax wrote:Another major difference today is that people feel more than justified throwing a sizeable chunk of their monthly paycheck away on cell phones, internet, cable, before even contemplating buying a home, a car etc. They all think they must have a dog or three as well.

I've heard (but not experienced since I've not been in a UK job centre in well more than a decade) that failure to have a cell phone or access to the internet will result in benefit sanctions these days. After all, if you don't have a cellphone how can you be contacted if a job becomes available and if you don't have internet access how will you find the job adverts in the first place?

On the unnecessary expense front I'd include cars actually! Especially new cars bought on finance deals, but even a second hand car bought on 0% finance is still a money pit. (Not quite so bad as the description of boats being "a hole in the water that you attempt to fill by throwing money in the top" but close!) Not owned a car in more than a decade, the money I've thus saved more than covers the hire charges on the rare cases when I really "need" to use a car and means on those occasions I have a new/nearly-new car that's much nicer than what I'd otherwise be owning!

thinkstoomuch wrote:And now the US unemployment rate is 5.4 percent.

So how does this compare to New Zealand 5.8%.

Australia 6.2%

Germany 6.8%

Lots of other things go into whether it is worth while to be employed and is contained in the stats--very important one is participation rate but then with an aging population and social security it gets real murky.

I'm just gonna say "Gini coefficient" and leave it there.

Or wait, I better not do that. See, that 5.4% unemployment rate is great. Now, remind me again, how many of those are working poor? How many of these people have to work multiple jobs just to stay afloat?

And how does that compare to other countries? I can tell you right now that here in Germany, having to work multiple jobs is seen as a problem that people should not have, and the number of people having to do so anyway is really small compared to what you guys are doing.

Spacekiwi wrote:Hey again T2m,

...snip to save scroll wheels while indicating who I am replying to...

But you miss a large portion of the problems with Social Security.

Half of that 15.3% you quote is not earned income. So add that 7.65% to current wages in the US. It never shows on a paystub except as an employer expense. Which

Just like what has been quoted for medical insurance. If the employer is paying it the worker never shows it as income, another unpaid benefit. So with ACA employer must pay it. Many thousands of dollars that still won't show up as worker income.

Which will makes productivity here in the US look great. But will be a false image.

Would take to long to for me to really sort out maybe PeterZ can explain the stuff better.

Comparing income tax rates other than SS (direct payroll/employer deduction with minimum fuss) is waste. Nobody actually pays the rate. Deductions mean that the average 50% of the people pay about 2-3% of their adjusted gross income (last I looked).

Which is why simplifying our tax code is such a bother. "Don't gore me get that other fat rich B******d not me".

There are deductions for just about everything, or so it seems. For example I with just personal deductions pay ~6 or 7% of my real retirement income. Which is way above average for my income group according to the IRS. Though I don't pay SS as it is "retirement income". No state tax either as FL just soaks the silly touristas.

Which is sort of Relax's point up thread. Why worry about saving when the Feds or somebody else do it for you "enjoy today, someone else will pay for that rainy day." Which I have demonstrated is a serious problem (with BEA data). Somehow in recession the US savings rate goes up. Less income but save at a higher rate, how's that work? Rhetorical question lots goes into that. Probably including who holds on to their job and who gets walking papers on average.

Have a good summer,
T2M

PS this was really doing to be a short post. Have no clue how it got so big. Again!

The E wrote:I'm just gonna say "Gini coefficient" and leave it there.

Or wait, I better not do that. See, that 5.4% unemployment rate is great. Now, remind me again, how many of those are working poor? How many of these people have to work multiple jobs just to stay afloat?

And how does that compare to other countries? I can tell you right now that here in Germany, having to work multiple jobs is seen as a problem that people should not have, and the number of people having to do so anyway is really small compared to what you guys are doing.

Notice you never addressed the meat of the post showing that unemployment benefits discourage people from working. To the point of snipping without even indicating it. I personally feel that is exceptionally bad form especially when it is on another page. But <shrug> that's me.

Well except here the more government gets involved, the more disparity shows up. Biggest friend of the 1% since the IRS numbers started in 1980. President Clinton. Can't remember if President Reagan or President Bush II tenures were best. Bush had a huge advantage of ending on a recession which always hit the 1% the worst (not that I really consider him a good president overall).

So what does it mean I don't know. Haven't looked at President Obama's tenure numbers recently but he was in the running for the worst when he had a Democratic Congress. Not worth my while to do all that comparison stuff on the IRS data again. Its somewhere in the back posts here. It was after the forum lost history.

Well lets see about 5% of the US work force is working more than one job. Of course about 1 in 6 is working part time only. Not sure how those to numbers interact. Happen to have a stat for Germany? Not going to try to sort thorough another nation's stats.

I have worked more than one job at a time. For that matter I worked a 100+ hour weeks when I was in High School to earn money for when I was in school. Your definition of working poor number wise would have applied except I was saving money top go to school and to go to college. Or teachers who work another job during the summer while still on salary for their 10 month job.

I actually do expect wages to go up now that more people are working. That supply and demand thing.

Your post reminds me of people not being able to find a job in 2010. Every where I went help wanted signs were out there. But college grads couldn't find a job, except that PBS feature about a guy with an anthropology degree( Relax's useless degree working as a garbage collector or for that matter our beloved author with a history degree working as a writer).

Have fun,
T2M

The E wrote:

thinkstoomuch wrote:And now the US unemployment rate is 5.4 percent.

So how does this compare to New Zealand 5.8%.

Australia 6.2%

Germany 6.8%

Lots of other things go into whether it is worth while to be employed and is contained in the stats--very important one is participation rate but then with an aging population and social security it gets real murky.

I'm just gonna say "Gini coefficient" and leave it there.

Or wait, I better not do that. See, that 5.4% unemployment rate is great. Now, remind me again, how many of those are working poor? How many of these people have to work multiple jobs just to stay afloat?

And how does that compare to other countries? I can tell you right now that here in Germany, having to work multiple jobs is seen as a problem that people should not have, and the number of people having to do so anyway is really small compared to what you guys are doing.

The problem in Germany is that if you have the new minimun wage of € 8.50 / hour your total tax deduction (including social security) on a pay increase is over 50%.
It is possible to live of that (as a single person) but not so easyly. No car of course, but you do not really need a car here anyhow. If the government wants to improve the lot of lowly paid, they could start by reducing taxes for these people. Such a tax reform would mean much lower income for the state, which may have an impact on the pensions of civil servants (71,75 % of FINAL pay with full salary escalations during retirement - a promotion a week before retirement will be taken fully into account).

I'm by no means communist (too right wing) but if people got what they needed instead of what they wanted (and most people don't know the difference), I think society could be more left wing than I would like but it may well be more just.