CommentsEASTSIDER-Does anyone actually know what all these numbers about economic growth and low jobless rates really mean? Well, here’s a clue. Don’t bend over.
So, What’s A Great Economy, Anyway?
The economy grew at 4.2% during the April/June quarter. As the Fiscal Times reported:
“The surprise upward revision provided fresh data to support Republicans’ claims that their economic policies are working. “GDP revised upward to 4.2 from 4.1. Our country is doing great!,” President Trump tweeted.”
As for what the heck the actual GDP Measure is, here’s a quick and dirty link to the government BEA (Bureau of Economic Analysis) website, with all of the details.
In the highlights section, there is a pdf file which gives you a hint as to the various measures that go in to the estimates and revisions:
Employment, and How To Lie With Numbers
To go with the great economy, there was also a lot of rah rah about how historically low the unemployment rate is as well, the jobs unemployment report was gee whiz too. As CNN reported, “The Unemployment rate matches lowest point in half a century.”
Before I try to sell you a bridge, let’s look at what’s underneath the number. Most of us are used to thinking about a job as something full-time with benefits, which simply ain’t so anymore. In fact, check out this definition from the Bureau of Labor Statistics (BLS), the folks who decide what actually counts as being employed:
“Employed persons (Current Population Survey)
Persons 16 years and over in the civilian noninstitutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees; worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family; and (b) all those who were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. Each employed person is counted only once, even if he or she holds more than one job. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable, and other organizations.”
So, if you worked for one hour for ten bucks during the week, you count as “employed.” What this really means is that as soon as you look at the definitions, the phrase ‘employed’ doesn’t mean too much. You can starve to death and still count in the numbers as being employed.
On the flip side, As CNBC noted, “At a time when 8.5 million Americans still don’t have jobs, some 40% have given up even looking.”
They, of course, don’t count at all in the unemployment numbers. Wunderbar.
What the Growth and Jobs Numbers Don’t Say
Here in California, we’re the globe’s 5th largest economy which sounds great.
As our very own Dan Walters noted in CALmatters:
“California was in a bragging mode last week because the state’s economy has climbed in global rankings to 5th place behind only the United States as whole, China, Japan and Germany.
It’s a remarkable factoid, certainly, that one American state generated so much economic production – $2.7 trillion last year – that it could rank among global leaders.
It’s even more impressive that California produces so much even though in terms of population, its 40 million residents would be considered a fairly small country, about the size of Iraq.”
On the other hand, as the Sacramento Bee noted in, “California’s Poverty Rate is Still the Highest in the Nation, Despite State Efforts,”
“Newly released federal estimates show California’s poverty rate remained the highest in the nation, despite a modest fall, and the state’s falling uninsured rate slowed for the first time since before Medicaid expansion.”, and ...
“Although California has a vigorous economy and a number of safety net programs to aid needy residents, it’s often not enough to forestall economic hardship for one out of every five residents, the data show.”
Finally, it turns out that 1 in 10 Americans will be in debt for the rest of their lives, and the reality is actually much worse.
Worse? How about debt when you die:
“But looking at a 2017 study from Experian and Credit.com, 73 percent of consumers had outstanding debt when they were reported deceased. Though there was no information on how long they carried the debt, those who died with debt had an average total balance of $61,554, including mortgage debt; without home loans, the report states there was an average balance of $12,875. Of those 73 percent who died with debt, 68 percent had credit card balances, 37 percent had mortgage debt and 25 percent had auto loans. Twelve percent died with personal loans and 6 percent with student loans.”
The Takeaway
The moral of this tale is to avoid looking at the bright shiny object and check out the realities around us. The financial services industry has been doing us in to make the rich richer and the rest of us poor for a long time.
Towards that end, let me recommend a recent book by Rana Foroohar, called “Makers and Takers.” It’s a good non-technical read.
Quoting from the inside jacket, check out these factoids:
- Thanks to 40 years of policy changes and bad decisions, only about 15 percent of all the money in our market system actually ends up in the real economy-the rest stays within the closed loop of finance itself
- The financial sector takes a quarter of all corporate profits in this country while creating only 4 percent of American jobs
- The tax code continues to favor debt over equity, making it easier for companies to hoard cash overseas rather than reinvest it on our shores
- Our biggest and most profitable corporations are investing more money in stock buybacks than in research and innovation
- And, still, the majority of the financial reforms promised after the 2008 meltdown have yet to come to pass, thanks to cozy relationships between our lawmakers and the country’s wealthiest financiers.
(Tony Butka is an Eastside community activist, who has served on a neighborhood council, has a background in government and is a contributor to CityWatch.) Edited for CityWatch by Linda Abrams.
