Would Obama Prefer 7.1 Million Unaccounted for Jobless Americans Just Drop Dead?

By Markos Kaminis:

Major media is celebrating another decline in the flow of initial jobless claims today, but it’s missing the story on the long-term unemployed. It is certainly good news that new filers for unemployment benefits are declining in numbers as the weeks progress. However, it’s unacceptable that the long-term unemployed whose benefits have expired fall off the radar and are unaccounted for, and perhaps left to die.

The Department of Labor’s Weekly Initial Jobless Claims Report showed yet another improvement for the period ending March 9. Claims fell by 10K from the prior week and measured 332K. That was far below the expectations of the economists surveyed by Bloomberg, who in their infinite wisdom foresaw an increase this week to 350K. The four-week moving average for jobless claims illustrated the trend that both market and media seem to be celebrating today. The average declined by 2,750, to 346,750. Not coincidentally, the SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones Industrials (NYSE: DIA) and the PowerShares QQQ (Nasdaq: QQQ) were each safely in the green through early trading. The shares of employment services firms Robert Half International (NYSE: RHI) and Monster World Wide (NYSE: MWW) were relatively unchanged through 10:00 AM and better reflected the slow pace of hiring activity in this country.

The report is undoubtedly good news if you have a job. Your job security is improving. However, for those of you who have been unemployed for more than 27 weeks or longer, some 40% of the total unemployed count, the government doesn’t know you exist any longer. We’re assuming you’ve retired comfortably and are living out your last days without a care or concern. If you are still active, we expect you’ve started up a solar panel company after all of our efforts to make your sweet solar dreams come true.

The truth, though, is that those poor people have lost their homes, crammed into apartments with higher rent rates along with other struggling souls, and are either selling furniture on Craigslist or walking dogs under the table to keep from eating further into their savings. Otherwise, perhaps they are members of the mass of people, some 1 in 6 Americans, collecting food stamps and hopefully still being accounted for by the government as a result. Somehow, I doubt the accounting is perfect though. Have you ever been to one of these offices? From what I hear, you’ll feel better putting a pencil through your eye, especially if it’s a lead pencil (the poisoning will help); just imagine the Department of Motor Vehicles times ten and that’s what you would experience if you got the bright idea to try to collect food stamps or some other relief our taxes and our government provide for us… at least that’s what I hear. I invite you to share your experiences in the comment thread below for the enlightenment of the rest of us.

The Jobless Claims Report shows the total number of Americans receiving benefits of some sort under all programs actually increased by approximately 218K in the measured period ending February 23rd. However, at 5.6 million that figure was down sharply from last year’s 7.4 million. Certainly some of the difference in the count is represented by very happy Americans that are once again holding jobs. However, it also includes a bunch of people you might now inaccurately refer to as bums. Indeed, my latest analysis of the Employment Situation Report shows that there has been a significant change in the labor force participation rate over the last seven years. If we had the same proportion of our population in the labor force count today as we did in 2006, unemployment would be 11.8%, not 7.7%, and underemployment would be 18%! Furthermore, the trend in February would have been reported as deteriorated and not improved, as the government data expressed. That’s a tough chew, and it runs counter to the enthusiasm stocks are trading on today. The fact is that some 7.1 million Americans are missing. Are they assumed to be happily retired? Perhaps the government would prefer they just drop dead already?

It’s a good thing that big layoffs from large companies are declining in number, but we’ve still recorded big cuts at big firms like J.P. Morgan Chase (NYSE: JPM) and Citigroup (NYSE: C), and a little scrape at Goldman Sachs (NYSE: GS) recently. And the news from the nation’s small businesses has not been good, with the NFIB’s Small Business Optimism Index marking lower ground than the troughs of recent recessions this month. Small businesses do a lot of the hiring and firing in this country, so there’s little hope for the long-term unemployed who have been left to die. We need to address this issue by making it a priority in corporate America to prioritize Americans for jobs who have been unemployed longer; that’s if we care to revive our economy to its once super-healthy status. Government incentives to corporations which do so would be helpful in that regard. Those readers interested in critical analysis of data are welcome to follow along with this column.

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