19.7 Months - Average Unemployment Time

[mhr]

Hi All,

In a telling article from the NY Times, we learn that the unemployed spend 19.7 months, on average, before replacement work is found.

Further, the new jobs often pay much less than the previous position.

'"The breadth of the unemployment is almost unprecedented,'' said Mark Zandi, chief economist at Economy.com.'

Trusting the rosy spin from Washington is obviously fraught with peril. But don't tell the unemployed that, they already know.

The article introduction and link follows.

Enjoy
------
http://www.nytimes.com/2003/11/02/business/yourmoney/02view.html?ex=1068958800&en=5032dab8c5cee9bd&ei=5070

November 2, 2003
Beneath the Smiles, a Churning Anxiety
By LOUIS UCHITELLE

We live in a manic-depressive economy, and right now we're in the manic phase. The annual growth rate, 7.2 percent in the third quarter, was spectacular. The Keynesian-style stimulus has been wonderfully effective. But the depressive phase may kick in again soon, as growth slows and millions of employed and unemployed Americans struggle to make up for lost incomes.

They are out there trying now, earning $40,000 or $50,000, for example, rather than the $50,000 or $60,000 they made before they were laid off and took pay cuts to get work again. The Labor Department does not calculate their growing numbers, and neither does anyone else.

But who notices these days? Consumer spending carried the economy in the summer and early fall, accounting for two-thirds of the third-quarter growth rate. Tax cuts and mortgage refinancing put hundreds of millions of dollars into people's pockets - offsetting lost income - and low interest rates cut borrowing costs.

The 7.2 percent growth rate is not sustainable. Nearly every forecaster concedes that.

Snip ......

[bamademo]

1. Laid off Oct 2001

Found full time work with benefits in July 2003 at $14,000 a year less than I made before. Worked a lot of shitty temp jobs in between.
All my savings are gone and I'm now in debt.

Thanks Dubya, your tax cuts sure helped me.

[Faygo Kid]

3. Me, too

It's bankruptcy first of the year unless something breaks. 25 years of professional work; damned good at it, too, and it's over. Never envisioned this.

[bobja]

2. My 19.7 months starts January 1

Oh boy, something to look forward to

[tridim]

4. Gawd, I was unemployed for 6 months

and I thought I had it bad. There is no way I could have survived for 20 months.

[kalian]

5. I landed my first job after 6 months of being unemployed...

...I consider myself "lucky".
Many fellow coworkers continue to be unemployed or WAY underemployed.
But then again...I had to jump ship twice due to potential lay-offs,
i.e., jobs going to India.
I've finally landed a "safe job". ;)

[happyslug]

6. In the mid-1970s it was 18 months.

I do not have a site, but I was in College at that time and the Economist were all commenting on the High Unemployment and High Inflation. Congress devised various programs to get people employed by during the mid-1970s Congress also wanted to keep inflation low. Remember Carter's 18% inflation? While he also REDUCED unemployment from the high of the mid 1970s (There is a connection between inflation and unemployment, You fight high unemployment with inflation, you fight high Inflation with unemployment). In the 1970s Congress tried to fight BOTH and under Carter getting rid of excess unemployment was more important than fighting inflation.

When Reagan became President in 1980, he preferred to fight Inflation even with the risk of high unemployment. He was saved by the fact the baby-boomers came of age under Carter and the number of new people ending the work force dropped drastically under Reagan (Most experts view the Booming Boom ending in 1964, having peaked in 1957). The Boom was followed by the Baby Bust of the late 1960s and 1970s, a bust where the number of babies boom each year dropped drastically from the baby boom year of 1947-1964. Given that most people enter the work force at about age 18, 1964 plus 18 equals 1982, and that was the peak year for unemployment under Reagan.

Reagan thus did not have to worry about unemployment as he fought against inflation, the baby bust took care of the problem. Reagan tamed inflation but did not kill it, that took Clinton in the mid 1990s. Now in the 1990s inflation should have took off, given the shortage of workers do to the baby bust. The GOP congress solved that problem by opening up the flood gates of immigration. This was NOT to help the immigrants, but to expand the pool of workers so that no labor shortage would develop and thus push up wages (Claims of the world economy and shipping manufacturing overseas also helped). During the 1990s inflation should have returned, it did not. The reason is no demand for higher wages could be made by labor, any such demand was undercut by the new immigrants (and the off-shoring of production).

Bush will soon be facing a dilemma, if unemployment stays high, people will NOT vote for him at the polls. On the other hand, if he fights unemployment by expanding social programs inflation will come back (and people will NOT vote for him). I suspect he will adopt an anti-migration plank, and blame the high un-employment on immigrants and adopt a platform to ship them out of the country to create more jobs for Americans (Through the GOP may wait till 2008 to add it to the Platform). I also do NOT expect him to follow through on any ant-immigration policy. Bush's corporate backers like high unemployment for it keeps wage demand low. Bush would prefer fights between Native born American and the new immigrants than do any thing real to decrease unemployment. Divide and conquer is his plan as is the plan of the GOP. i.e. do not do ANYTHING that help the workers and make sure his corporate supporters are protected from inflation. To do that Bush has to deal with high unemployment (which his corporate backers WANT) but in a way NOT to solve the problem. Thus I fear a growing anti-immigrant movement in this country, one the GOP will stroke to the max to heat up just to keep people divided on THAT ISSUE. Once people are arguing about immigration, real solution to the problem of high unemployment (i.e. increase inflation) can not pass through Congress.

[SeekerofTruth]

8. Excellent description...

I'm curious, about what will happen in the next 5-10 years because the baby boomers are starting to retire. Will this improve the employment picture but also cause higher inflation?

[happyslug]

12. Baby boom 1947-1964, Echo Boom, 1972-1989

My father's family brackets the entire Baby boom (his eldest was born in 1948 and his yungest in 1964) so I have done the calculations before. Lets look at some "numbers" (Like all calculations involving the future these are for Guideline purposes only, NOT exact dates).

Average age people buy their FIRST home (Age 30, went up doing the 1960s and 1970s but since about 1980 been about 30).

Average age for people to sell their LAST home (age 70)

Average age for people to sell their PRINCIPAL home and buy a smaller home for retirement purposes (Age 50, also the age most people start to think of retirement).

Baby Boom Start 1947
PEAK 1957
Last year 1964

Thus add the 30, 50 and 70 to the above years:

1947, 1977, 1997, 2017

1957, 1987, 2007, 2027

1964, 1994, 2014, 2034.

Thus the PEAK buying years for homes ended in 1994, most homes since that time has been "replacement homes, i.e. people UPGRADING from existing homes (i.e. very few "starter homes" are being built today, the trend is to McMansions and second homes).

The start or people SELLING their LAST home is 2017, with people thinking of Seriously of retirement in 1997 (with the majoirty of Baby boomers only to start to think of it comes 2007 when most are over age 50).

Now we also have to worry about the "Echo Boom", this was a term used in the early 1980s to describ the increase in Children in Grade schools. Most people have kids when their are between 25-30. Thus you have an echo boom that follows the baby boom.

Remember most people enter the job market at age 18. Thus 25 (Age of Baby boomer when their have their children) plus 18 (age when echo boomers enter the job market) equals 43 yeara after the birth of the baby boomer.

For the purchase of their first homes add 25 (age of the baby boomer when his child was born) plus 30 (average age of a person's first home purchase) and you get 55 years after the BABY BOOMER was born. Thus on the average, a echo boomer will buy his/her's first home 55 years after the birth of his/her parents:

1947 - 1989 - 2002
1957 - 1999 - 2012
1964 - 2006 - 2019

Now there is an inherent error in the above calculations, that is, most parents are NOT born in the same year (most couples consist of a male a couple of years older than the female) thus an error creeps into the above, but as I said the above is for GUIDELINE purposes NOT deadline purposes. For the purposes of this thread the error can be ignored (it also is affected by the huge number of immigrants that come in during the 1990s).

Thus I see a huge demand for housing, but the Echo boom is no where near as populous as the Baby boom and thus the starter homes of the Baby boomers have been sufficient for the Echo Boomers (Through the failure to make “starter” homes over the last 20 years is one of the reasons you have a growth in multiple generations living under one roof for the last 20 years).

By the time baby boomers start to think of retirement and get rid of their big houses (peak year 2007) echo boomers will be in the market for those homes (peak year 2012) thus I see an offset going on. I see the aging of the baby boomers being offset of the coming of age of their children (the Echo Boomers). I foresee some problems, but the big problems will be in other aspects of the economy NOT the aging of the baby boomers (or the coming of age of the Echo Boomers). These two groups will offset.

Remember mot people get their start with support from their parents. I do not see most Baby Boomers saying, “Its my money, leave my Grand kids live in a dump, I want to go to Atlantic City Casino and give my money to lady luck”. While I do not see people taking their parents home and making it theirs (while their parents move to a smaller retirement house) I see the PROCEEDS going that way. Most grandparents will help out their children IF THEY CAN. Between the above dates and Human Nature I do not see a problem FROM THE AGING OF THE BABY BOOMERS.

[Flightful]

11. I remember the 70s...

The "stagflation" phenomenon had its roots in the 60s when governments everywhere started to expand rapidly and chose to pay for the expansion by borrowing money (because raising taxes to the required level would be political suicide). The worst examples were the USA under Johnson/Nixon, who expanded social welfare programs while fighting a major war overseas, and Canada, which under Pearson and Trudeau implemented universal health insurance for $20/monthly in premiums, laying the foundations for Canada's half-trillion dollar national debt. All major parties were in on this; the only debate at the time was how to spend the cash, not how much to spend. By 1972 inflation was in the double-digits as governments (especially Canada's) resorted to printing money to cover debts. The devaluation of currencies combined with the pressure on financial markets caused a slowdown in investmestments and led to double-digit unemployment as well. It came to a head in '81, when high interest rates (my savings account at the bank paid 19%) killed the housing market; people were losing their homes because they couldn't afford to renew their mortgages.

[Gulf Coast J]

7. I don't buy the 19.7 month number

http://www.bls.gov/news.release/pdf/empsit.pdf

The latest unemployment news release says that only 39.7% of unemployed are unemployed for longer than 15 weeks.

Less that 5 weeks - 31.6%
5 to 14 weeks - 28.7%
15 weeks and over - 39.7%

Where exactly does the 19.7 month number come in? Going to the link, they change it from 19.7 months to 19.7 weeks, but even that seems too high.


Correction: November 9, 2003, Sunday

The Economic View column last Sunday, about the struggle of the formerly unemployed to make up for lost income, misstated the average time that an unemployed worker spends looking for another job. It is 19.7 weeks, not 19.7 months.

[jhfenton]

9. I didn't buy it either.

Now I see why. It came from the New York Times -- "All the News That's Manufactured"

"19.7 weeks" makes sense. It's the mean, not the median.

[Lefty48197]

15. I thought the NY Post was the lying right wing sh*t wipe?

Or was it the Wall Nut Journal?

[mhr]

10. You Can Choose Not to Believe All You Wish

For all of the professionals that have been unemployed for a long time, we have no problem believing this number. You need to realize that the 19.7 month number is for professionals not lower wage positions.

I have personally been unemployed for 39 months. As of today, I have sent 1,429 resumes in the last three years. So far I have seen no response from any company in that time period. Companies no longer send rejection notices; so one gets zero feedback on the status of a job inquiry.

I would suggest you need to check your assumptions at the keyboard before blindly posting an opinion. I also suggest that you do not reply with criticism of my situation as I am not unique. Many experienced, well educated people are in the same boat.

In close, more stats to consider, in North Dallas alone 112,000 high-tech workers lost their jobs in 2001-2002. For the area this year, mortgage foreclosures are up 34 % and for one North Dallas, suburb they are up by 350 %. The white collar pain is spread far and wide! If you choose not believe it or ignore it that only exposes your ignorance on this subject.

[Gulf Coast J]

13. You have to realize that the 19.7 month number was made up

The New York Times corrected it to be 19.7 weeks. Go to the link now if you don't believe me. As the other poster said, that's the mean, not the median. So most people find another job faster than 19.7 weeks. I'm certain that the time it takes to find another profession job is longer, but even so I'd imagine 19.7 months is on the upper extreme of unemployment.

[mhr]

14. Negative, I Wish You Would Read Better What Is Posted

I was a working professional before being downsized for the third time in 2000.

I have a cohort support group of 20 professionals.

Of the twenty, only one has found professional employment.The rest range in unemployment time from 12 months to my 39 months.

19.7 weeks of unemployment is pure utter fiction for professionals.

I strongly suggest that you do more research to find out what is really going on!

[Gulf Coast J]

16. I read what was posted!

I followed the link and the New York Times has a correction on their page. They said it was 19.7 weeks, not 19.7months. They screwed up. They admitted it. The number they originally posted was wrong. Look for yourself! And I can give you plenty of anecdotal information to suggest that 19.7 months is way too high for professionals. Find me anything that suggests average professional unemployment is 19.7 months and I will eat my words. I would wager anything that it can't be found.

[mhr]

17. 6 Months, 12 Months, 18 Months, 24 Months

You don't get the point. Who cares what the official number is.

In Dallas, TX 112,000 technical professionals lost there jobs in 2001-2002.

This represented 3.2 billion dollars in lost wages.

Based on my experience, I know NO professionals that have found new employment in less than 12 Months.

19.7 weeks probably only represents an average for all unemployed but IT DOES NOT represent what is happeneing in the professional ranks.

Nit picking the number is not productive. This economy is screwed up!

[Gulf Coast J]

18. When you post the number as evidence of your point...

And the number turns out to be pulled from thin air, I believe that it is very relevant. I'm not trying to argue that the economy is going great. I'm not trying to argue that professionals don't take longer to find a job than people less gifted and talented than you. But the unemployment number for college graduates is much lower than for any other group. I have a hard time believing that it is the highly trained individuals having the hardest time in the most recent downturn.

And I'm not nit picking the number. But there is a 65 week difference between what the Paper of Guesses originally published and what they should have published. I just can't let something like that slide.