Who Knew Firing Public Workers Increases Unemployment?
photo: inoneear via Flickr
BLS:
Total nonfarm payroll employment was essentially unchanged in June (+18,000). Following gains averaging 215,000 per month from February through April, employment has been essentially flat for the past 2 months. Employment in most major private-sector industries changed little in June, while government employment continued to trend down.
[snip]
Employment in government continued to trend down over the month (-39,000). Federal employment declined by 14,000 in June. Employment in both state government and local government continued to trend down over the month and has been falling since the second half of 2008.
Meanwhile, wages declined.
In June, average hourly earnings for all employees on private nonfarm payrolls decreased by 1 cent to $22.99. Over the past 12 months, average hourly earnings have increased by 1.9 percent. In June, average hourly earnings of private-sector production and nonsupervisory employees declined by 1 cent to $19.41.
And DC’s solution is going to be to fight about corporate jet tax breaks for another week while cutting more government jobs.
No one could have imagined, Marcy…just ask Condoleezza.
My rant on the subject /diary whoring
Hey, wanna date? I have a new post.
And since the ADP report had private sector jobs up 157K for June, then in order for there to only be an overall increase of 18K jobs as the BLS report has it, public sector jobs had to fall 139K instead of 39K
They are two entirely different surveys. Your conclusion is inappropriate.
Still, you’d think the numbers would be a bit closer since the ADP number is supposed to be an estimate of Private Sector employment while the BLS number is the total economy.
Especially when the delta is such a nice round number as 100k
Have you studied the monthly differences between the two surveys? If so, please provide your analysis.
Actually, firing public sector workers decreases unemployment by increasing confidence and private sector hiring, but only if workers have the right skills — and with a lag.
Also infrastructure. /s
Also, I should add that there are indirect positive effects also — because folks don’t vote on the basis of unemployment and that allows spending to be cut and taxes raised, and Obama to be re-elected so confidence will increase — in the long run. Sort of Grand Bargainy.
LOL! I’m still gobsmacked over that advice from the advisor with the most adviciest advicering!
Who knew?
Everyone! In fact, it is as they planned. They want to privatize everything. Especially to their corporate John’s that are sweeping up all biz that they are intentionally bankrupting. We will have no real government left and it will become the land of Barons.
That isn’t true. Where did you get that? Some proof. This is as old as Methuselah? State employees make much of the money states run on. And most live week to week and SPEND their money, unlike the rich hoarders who create no jobs.
Actually the world is flat, a weird optical illusion makes it appear round.
The statement above is as valid as yours, and cannot be proven wrong.
What? You mean increasing the quantity of unemployed people increases unemployment? Oh dear. I’m having an intellectual meltdown. Must go pray to Jesus to hire the people we let go because we are ignoramuses.
Well known
Marxist agitatormoney manager Barry Ritholz: Inequality Dampening Economic RecoveryThe Economy Cannot Recover As Long As Inequality Continues to Skyrocket … But Government Policy Is INCREASING Inequality
Here’s some more news you can use: When the price of food, energy, and medical care goes up, inflation results.
Not with chained CPI – you just move to a cheaper lifestyle, and that decrease in life style means the cost of living has decreased. So it is a win-win.
Besides only “winners” deserve an “American” life style – workers should be glad they have a job – and to focus your mind on that fact, we are going to increase the UE rate. another win-win
Indeed in 2012 the race will be Obama versus “batshit crazy” – another win-win.
And you know that with a Hillary, we would not have these win-win moments. Indeed thank god that that sell out Clinton and his 22 million job increase was kept away from the WhiteHouse. So Hillary will not primary Obama in 2012 – another win-win.
Looks like O is bugging out on his 10:35 announcement on employment report. Tired of waiting.
Coke? Sprite?
The Hershey squirts will do that to you — every time.
Hey, eCAHN, how is privatizing figuring into those number? Just curious.
Here we are waiting to see him. He is always late to his own party. In fact, he likes to kick the party goers in the head when he arrives.
Every speech he makes to the public is another let down and hit to the head of average people.
There needed to be a second phase to the stimulus to send money to state and local governments to keep government employees on the payroll till the private sector was in robust recovery. Instead, just as the private sector was making net gains in employment in 2010, the public sector began having massive layoffs driving down aggregate demand and further depressing the economy. Now we are headed for a double dip.
Obama didn’t want to fight for a second stimulus either because he’s a wimp who always takes the path of least resistance and the Republicans would yell at him–or because he wanted to ensure that his Republican comrades would have a mandate in 2013 to set the clock back 100 years on all progressive reforms.
I think the first stimulus was deliberately scaled back so that it would stem the bleeding, but wouldn’t be enough for a real recovery. Obama and his Republicans have workers just where they want us: competing harder for smaller slices of the pie.
From W’s State of the Union addresses, wherein he
espoused humungous tax cuts mainly for the ultra wealthy
and expensive wars (surely more expensive even than any
oil business benefit) it was obvious to
many he wanted to make paying for teachers and nurses,
and a means for Americans to have a secure existence,
apart from, otherwise, simply a “casino economy” where you
might or might not get lucky from selling out, unsustainable.
We have to simply find and support those who oppose that
whatever-it-is (it’s not an ideology; it’s not a political or economic
theory; it’s just some kind of we-screw-you cult. (and maybe
mental illness.))
https://sites.google.com/site/evernewecon
http://sites.google.com/site/evernewecon
http://goo.gl/8Ot33
http://goo.gl/WZJ8a
Got the grey hair goin’ on.
He is still working on Bush’s Service economy plan. He has yet to remake the Economic standing of the US.
Service means many different things to different people. It could mean oppression to slaves and billions to those whom are to be serviced.
Everything that happens in DC is to the detriment of the 98% of the population not part of the motu and their acolytes. The “leadership” in DC is insane and the decisions are always insane when it has to do with the “betterment” of the country.
I read an article yesterday that stated there is only less than half of the country fully employed, 42.5% or something like that. I don’t have the link at the moment, but that is really frightening.
I have no idea what those bubbleheads in DC think people are to live on. In my area, people are doing everything they can “off grid”, or “under ground”. They are not even using the banks anymore as the banks continually find ways to hold or take away what little funds they have left.
When I was in college in the late 1970’s, I took a class on the economies of Latin America. I saw how things were structured there to entrench a class of oligarchs at the expense of the country. It was less important to the oligarchs how big the pie was–or the absolute size of their slice–than ensuring they got a gigantic slice of whatever small pie there was. There was no upward mobility unless you somehow proved yourself especially useful to serving the oligarchy. Then you got to join the very small middle class.
In the 1980’s I recognized that the Latin American model was the dream the Republican politicians wanted to emulate. It would be years later–after the Clinton policies had their latent, devastating effects on the middle class in the last decade–that I realized it was actually a bipartisan dream. That dream, not the vague “American dream,” is coming true.
The Bush tax cuts will bring us jobs. Look at how much good extending them seven months ago has done.
or imagine how bad things would be now if they hadn’t extended those tax cuts…..That game can be played both ways and neither are constructive.
Yep look at all those jobs TEN YEARS of tax cuts for billionaires has got us? Below the employment level of the Clinton era when tax cuts for billionaires didn’t exist. That’s called EPIC FAIL!
I have never heard of a family making 250k described as billionaires. And that is where the bulk of the revenue generation would be coming from, not the private jet flying crowd. You could raise taxes on actual billionaires back to clinton era and you wouldn’t make a dent in the amount of revenue generation. The rhetoric is disgusting.
That is again false.
Raising taxes on “millionaires” on their income to Ike rates – 90% – with investment income treated the same as wages, does indeed fund the gov. We do not need the “little guy”! Indeed it overfunds, you could cut it back to 70%!
But for the sake of Democracy I say tax all the way down to 100,000!. :-)
“You could raise taxes on actual billionaires back to clinton era and you wouldn’t make a dent in the amount of revenue generation.”
You call what I said false and then argue against something completely different from what I said. You’re being intentionally misleading. Please try to maintain some level of integrity. Where did I say raising marginal tax rates to 90% on millionaires wouldn’t help fund the government? I’ll save you some time. Nowhere.
In a nutshell. THE MALDISTRIBUTION OF WEALTH. The end result of “trickle down”…or how many DQ Dilly bars can Warren Buffet eat. “Supply” overwhelms “demand”.”Supply” goes “looking for yield”…to paraphrase The Maestro. Since it isn’t to be found in the “demand” side….their wages have gone nowhere for 10+ years…supply turns to wall street “genius”. Derivatives or to milk the last out of the demand side..NO DOC MORTGAGES…which were promply sold to the Supply Side as bastardized Tranches…..RMBS, ABCP etc.
“Supply now controls the legislatuive process MONEY BRINGS INFLUUENCE. Political influence.
Go look at a chart of the distribution of wealth before the Great depression to present.
It never changed until AFTER WW2 when Gi’s came home and were not to be denied their piece of the pie after what they had sacraficed. Whence the UAW ,Meatpackers Longshoremen and all those unions that created the middle class as IT WAS.
Without some signifigant social event …a war, etc…..do you think the “supply side” will give up their position?
It’s getting better all the time. We’re turning the corner. We’re in a recovery. We need to be safe from the terrorists and those who despise our freedom. We’re making progress. It’s time to invest in America!
Breaking: Violin shipment to White House hijacked by Cuban Al Qaeda member. Congress to immediately hold hearings! CNN and Fox report crisis, as no one to fiddle while nation burns down.
Now, now, everyone is looking at this the wrong way.
All we have to do is wait.
Wait till the unemployed exhaust their UI benefits and then they are “officially” not unemployed. Then the unemployed numbers will fall. Can’t you see that. All we have to do is wait, let the unemployed exhaust their benefits, they are no longer “officially” unemployed, and then they can be forgotten like the rest of those who were previously counted in unemployment.
Many states are “helping” by kicking people of unemployment faster and refusing fed dollars. Now that’s “helpful” to the unemployed numbers.
You see the corporatist party, two branches D and R, have already thought of this. Look how much they care about those numbers.
/s
But you see, EW, that according to the Republicans, Public Sector jobs aren’t real jobs. In fact, they are by definition part of the government that Grover Norquist wants to shrink to the size that you can drown it in a bathtub. The only REAL jobs, to them, are those in the private sector.
This means that a decline in public sector jobs, in the eyes of Republicans, is a GOOD thing (but don’t listen to the economists jabbering away at how this drags the whole economy down.) This is all about starving the beast.
Now to read through the comments…
Bob in AZ
I still recall vividly the headline of a Krugman article from December 2008: “Fifty Herbert Hoovers.” Worth a read still: http://www.nytimes.com/2008/12/29/opinion/29krugman.html
But as I re-read this, I see that Krugman didn’t give nearly the attention to schools (at all levels) that would suffer from the cutback in state funding.
Nor did (or could) he anticipate that a conservative cabal of governors and big business would succeed in deliberately reinforcing Hooverite and reverse Robin Hood programs.