Posts tagged ‘economic recession’

September 10, 2014

The jobless recovery in one chart

by Grace

An illustration of our jobless recovery from economics professor Mark J. Perry

20140909.COCJoblessRecoveryChart1

 

Bottom Line: The US has been producing new record-high levels of GDP in almost every quarter since Q3 2011, and we are now producing 7.65% (and $1.14 trillion) more real GDP today than in late 2007. But we are producing that record-setting level of real output with a quarter-million fewer workers than in 2007. One explanation for America’s record-high output with 227,000 fewer workers is that the Great Recession facilitated what might be one of the greatest expansions of worker productivity in US history. The fact that we’ve been able to greatly expand national output with fewer inputs (workers) represents a huge increase in economic efficiency, but has also left us with a lingering “jobless recovery” and an economy that is struggling to create new, post-recession employment opportunities for millions of Americans.

Labor force participation remains low.

Perry explains that he is using the “more comprehensive measure of total civilian employment” instead of the total payroll number, which recently climbed up to pre-recession levels  However, his bigger point is supported by the troubling increase in the working age population during that time.

As good as that might sound, surpassing the previous high-water mark in terms of payroll employment is cold comfort for recent graduates and other new entrants into the work force, as well as for the legions of Americans who lost their jobs in the Great Recession. While payrolls may be back to where they were before the downturn, the working age population has risen by roughly 15 million over the same period.

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Mark J. Perry, “The current state of the US economy in one chart”, Carpe Diem, September 5, 2014.

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September 24, 2013

Tips for jobless grads, with advice to see the upside of surviving the lean years

by Grace

20130919.COCLivingAtHome1Megan McArdle, who moved back in with her parents when she was 29, gives “13 Tips for Jobless Grads on Surviving the Basement Years”.

I like all her tips, which include some practical suggestions as well as some ideas to help lift a disconsolate spirit.

Even if they can’t find a job in their field, dejected college graduates should get a job and start supporting themselves.

Don’t say you can’t work a lesser job because you won’t be able to focus on your job search. After the first few weeks, your job search is not taking you 60 hours a week….

Don’t forget relationships, especially family ties.

Enjoy your time back with your parents. …

A potential upside to surviving the basement years

McArdle compares this crop of recent college graduates to the Great Depression kids.

12. That afraid feeling you have is never really going away. I hate to be the bearer of bad news, but folks who were raised in the Great Depression were kind of neurotic penny-pinchers who fretted about financial security far more than the prosperous generations before and after. (Ask your parents about the older relatives who collected tin foil and rubber bands in big balls so that you could reuse them. I kid you not. That was a Thing Grandparents Did when I was growing up.) The bad news is that I, too, am also an obsessive penny pincher — after two years of massive job uncertainty, followed by more years of earning much less money than my student loans would suggest. The good news is that your fear will end up having surprising upsides: there’s a reason that the U.S. household savings rate peaked right along with the earnings of the Great Depression kids. When they retired, savings went off a cliff. So instead of letting your fear ride you, use it constructively, to make you thriftier and more careful.

Since I sometimes consider myself a “neurotic penny-pincher”, I can attest to the upside of surviving massive job uncertainty.  In my case, after a few golden years of a booming career in the oil business, the bottom dropped out and layoffs decimated the ranks of geologists working in that field.  Subsequent years of a dramatically downsized lifestyle taught me valuable lessons in thriftiness and the importance of saving.  If the same effect applies to today’s struggling generation, then a few years of basement living will not have been such a bad thing.

And let’s not forget that frugal people are more attractive.

Related:  No shame in living at home after college (usually) (Cost of College)

July 11, 2013

Student loans were the only kind of debt that grew during the latest recession

by Grace

All other types of debt declined.

… only student debt grew during the Great Recession. Federal policy has encouraged this habit. In the two years following the financial crisis, spending on student loans grew 19 percent and 18 percent, respectively.

20130705.COCStudentDebtGrowth1

‘Good Debt vs. Bad Debt’

Good debt is an investment that will grow in value or generate long-term income. Taking out student loans to pay for a college education is the perfect example of good debt. First of all, student loans typically have a very low interest rate compared to other types of debt. Secondly, a college education increases your value as an employee and raises your potential future income.

‘Student Loan Problems: One Third Of Millennials Regret Going To College’ – Forbes

… About one-third of millennials say they would have been better off working, instead of going to college and paying tuition.

That’s a according to a new Wells Fargo WFC +2.06% study which surveyed 1,414 millennials between the ages of 22 and 32. More than half of them financed their education through student loans, and many say the if they had $10,000 the “first thing” they’d do is pay down their student loan or credit card debt.

After the experience of the last few years, I would say it’s not a good idea to generalize that college debt is always “good debt”.

Related:

September 26, 2011

Poor job prospects lead to more young adults staying near mom and dad

by Grace

In record-setting numbers, young adults struggling to find work are shunning long-distance moves to live with Mom and Dad, delaying marriage and buying fewer homes, often raising kids out of wedlock. They suffer from the highest unemployment since World War II and risk living in poverty more than others – nearly 1 in 5….

Among adults 18-34, the share of long-distance moves across state lines fell last year to roughly 3.2 million people, or 4.4 percent, the lowest level since World War II. For college graduates, who historically are more likely to relocate out of state, long-distance moves dipped to 2.4 percent.

This is from an article describing the “lost generation” of young adults feeling the effects of coming of age during a prolonged economic slump.  The numbers are from 2010 census data.

A low in jobs, mobility, marriage for young adults – AP

Reltated:  Impact of staggering growth of student loans on our children’s future

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