[OPE] Common dreams

From: Jurriaan Bendien <adsl675281@telfort.nl>
Date: Sun Nov 08 2009 - 13:20:34 EST

David Leonhardt, "Broader Measure of U.S. Unemployment Stands at 17.5%", NYT
November 7, 2009:

"It is a strange combination: workers who still have a job are doing better
than in other deep recessions, but the unemployment and underemployment have
risen to their highest level since the Depression."

This is based on the idea that since average prices have fallen, "the
average worker has received a 1 to 2 percent inflation-adjusted raise over
the last year".

There is truth in what Leonhardt says, since as I have argued before, the
unemployed effectively absorb the crisis, but like, in Lousiana the average
salary is $35,620 and in Washington DC it is $67,810. That's a 90%
difference despite similar living costs.

The lowest unemployment rate according to BLS is in North Dakota (4.7%) and
the highest is next door in Michigan (15.3%). In Michigan the U6 is more
than 20%. The US has just about reached the general unemployment level of
1982, i.e. 10.8%.

In reality, average urban consumer prices as measured by the CPI fell only
in the second half of 2008, by about 4.5% . This year, US urban consumer
prices have increased by an average of 2.42% so far. In reality, real
average gross earnings have fallen this year by about 1.9%, according to the
BLS. In the European Union, the CPI increased between 3.3% and 3.7% last
year, and this year at least 1.1% so far.

If anybody thought the buying power of earnings from their current job is
increasing, happy dreams...


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Received on Sun Nov 8 13:24:19 2009

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