Update on the Downturn

Further Information on How Bad the Recession Really Is

A couple of weeks ago on this page I noted that politicians tend to measure the health of the economy by how well Wall Street is doing, while a much better measurement is how many people are employed, or how many are employed, yet still poor. Typically the poverty rate can run anywhere from five to ten percent higher than unemployment.

So, according to the political class and the people on Wall Street who fund their re-election campaigns, the recession has rounded the bend and is about over (they aren't quite that blunt, but close). While at the same time projections of an increase in joblessness looms months if not years into the future. How, one should ask, can there be a recovery in the "real" economy, when the number of people out of work and hungry is increasing? That is, how can you say that morally, though that may not be a term they are familiar with.

I recently ran across a slide show by Lawrence Mishel, President of the Economic Policy Institute, in which he looks at that very thing and finds some dismal statistics. He packages it all up into a slide presentation (and downloadable Power Point), which I have linked to below. In his introductory paragraphs, he says the following:

Unfortunately, the economy has deteriorated so much since October/November 2008 that our fears last November—that unemployment would exceed 10% in mid-2010 if there were no stimulus—will likely be realized even with the substantial, smart stimulus package in place. Consequently, there will be unacceptably high unemployment and associated income losses and poverty rates next year and beyond. For instance, some one-third of the workforce will be unemployed or underemployed at some point in 2010. Higher unemployment will drive child poverty to 27%—up from 18% in 2007—and black child poverty will exceed 50%. The analysis has led him to predict, for example, that black unemployment will reach 27.8% in Michigan and over 22% in California and Mississippi.

Click on the picture below to go to the slide show:

No comments: