On the job front, still no Great Depression, but getting a little closer
My first stab at comparing non-farm payroll employment declines in the current recession with those from the Great Depression was beset by a couple of flaws. One was that I was using seasonally adjusted numbers from the current recession while the figures from the 1930s were unadjusted. That was easy enough to fix. The other was that agricultural pursuits occupied a much greater share of the workforce in the 1930s than they do today, so nonfarm employment wasn't quite as important an indicator as it is today. Sebastian Dartevelle, a scientist at Los Alamos National Laboratory and an occasional reader of this blog, devised a simple way to correct that: He came up with rough estimates of the total number of people who could work in 1929 (those 14 and older) and in 2007 (those 16 and over), and divided the change in nonfarm employment in each downturn by the appropriate labor-force number. Here's what he came up with (updated by me to include the latest BLS data):
There's still a pretty big gap between the Great Depression line and the Great Recession line, but it's not nearly as big as on my earlier chart that didn't adjust for the size of the overall labor force. The pace of job losses in the first 16 months of the Depression appears to be about twice as fast as in the first 16 months of this recession; in the earlier chart it was four times as fast. This isn't the final word, mind you: Farmers and farm workers weren't exactly fully employed in the 1930s (remember the Joads?). So while the previous chart exaggerated the Depression job disaster, this one underplays it. But I do think this version is probably closer to reality.
Losing the seasonal adjustment delivers some interesting results. The most obvious is that it makes the current recession's job losses look a lot choppier, and thus harder to identify clear trends in. It also moves the employment peak that preceded this downturn back to November (it's December when you use the seasonally adjusted numbers). January 2009 (month 14) now appears to have seen a sharper job loss than any of the first 16 months of the Great Depression. Not good. But what really matters is what comes next: In the Depression, the job losses continued for two more years after this chart ends. Let's hope that doesn't happen again.
Finally, just to make one thing crystal clear (because several commenters didn't seem to understand it last time around): This chart shows the decline in nonfarm payroll employment. It has nothing to do with the unemployment rate.
-
1
Justin
-
You say, "Finally, just to make one thing crystal clear (because several commenters didn't seem to understand it last time around): This chart shows the decline in nonfarm payroll employment. It has nothing to do with the unemployment rate."
-
I think I understand what you mean, but I don't think that statement is entirely accurate. Let's say that the chart in nonfarm payroll employment was trending up...it would stand to reason that the unemployment rate would be heading down...right? Now, the converse may not be true because jobs may be formed to offset the decline and therefore, the decline would just be a measure of activity and not persons without work. -
2
As much as it pains to me say this, we are being defrauded right now!
-
http://www.salon.com/opinion/greenwald/2009/04/04/summers/index.html
-
If you support Obama's economic plan (which is nothing more than a continuation of Bush's) I DARE YOU to watch these 3 videos:
.
Part 1: http://www.youtube.com/watch?v=CQ4JXW_ErXQ
Part 2: http://www.youtube.com/watch?v=WOA1RpK7ttg
Part 3: http://www.youtube.com/watch?v=vMDLx_-f1L4 -
3
the problem I have with this chart is that it conflates "job peak" with the beginning of comparable periods -- but the 2008 recession was created (in large part) by the spike in oil prices, and employment was recovering when the financial/banking crisis hit, and the economy (and employment) went into free-fall just like it did as a result of the 1929 market crash...
-
4
Justin, do you have any charts on the farm employment in 1930s and these days? To be fair, we need to see those data. The above charts are really interesting because in the current recession, there is a big delay from financial crisis to employment. That was not the case in 1930s. Personally thinking, this recession started with mortgages and financial sectors. Most of layoffs, interestingly, came since last December and the deadly "write-down" of assets in financial sectors during the last summer laid off just a bit. As worries moves to all other sectors such as manufacturing, the number grew significantly.
-
5
Justin,
Maybe it's not on the "graph" and maybe you and I are not in a soup line, but have you been aware of these two things?
Even on your graph, I don't see the "red line" turning upward... do you? If it was a water pipe, everything would still be flowing downhill quite nicely.
How many "tent cities" have you seen? Do you know how many there are in this country now? I've lost count.
Crime will intensify most likely and it wouldn't hurt to be prepared. I'm not suggesting weapons, just a little watchful eye out there. http://www.wireless-videocam.com/index.php
-
6
@plukasiak: I'm working on a chart that addresses that issue. In fact, I already finished it but I left it on my work computer and now I'm at home.
-
@umjukamu: Haven't been able to find any 1930s farm employment data, and the modern data aren't entirely comparable with the payroll numbers I use. -
7
The job seekers who search international jobs can take the valuable support of job site. Site recommends varieties of international jobs, marketing, sales, management, pharmaceutical, call center, finance jobs for shaping the career in desired field.
-
8
what this article fails to notice is that this depression took three times longer in the making (1974-2001 vs 1921-1929) and has gone 3 times higher proportionately as measured by the dow jones. The charts are unfolding according to a similar multiple on the time line now that the crash has come. When you bear this fact in mind and extrapolate, it all starts to make sense. the depression will last three times longer too!
please see this blog entry:
http://www.mystockbuddy.com/forum/blogs/andyb/45-dow_1930s_vs_now_history_repeating_itself.html
- foxjust About to walk to LA Public Library for this http://bit.ly/7LgRu6 Am told only a nobody walks in LA - 1 day ago
- foxjust just took first ride on LA metro. Totally disorienting not to have car to park here - 2 days ago
- foxjust Thanks to Bama fans for reminding us we needed to buy TP! (Turns out we're fine on detergent). Oh, and nice game #ironbowl - 1 week ago
Most Popular »
- Tennessee Mayor Accuses Barack Obama Of Hating On Charlie Brown, Peanuts
- Wii Fit Plus Review
- NV Sen Poll: Reid In Trouble
- Obama Shifts Date of Copenhagen Visit
- The PlayStation Turns 15, We Reminisce
- 'Forgotten Man' II: Two-Thirds of Jobless Blue-Collar
- 135 Money-Saving Resources and Tips, Special Holiday Season Edition
- False Economy: Think You're Saving Money? Think Again
- Twitter App Showdown: Echofon Pro vs Tweetie 2
- Loving The Joke
- How Strong Is the Evidence Against Amanda Knox?
- Will Federal Spending Mistrust Mean the End of Obama's Audacity
- Amanda Knox, Convicted of Murder in Italy
- Nicolas Sarkozy: A French Paradox
- Amanda Knox Testifies: The Murder Trial That Has Gripped Italy
- Helicopter Parents: The Backlash Against Overparenting
- Astronomers Spot Planet-Like Object GJ 758 B in Orbit
- India, Pakistan and the Battle for Afghanistan
- Foxy Knoxy Case Still Roils Italy
- Hate Your Job? Here's How to Reshape It
Quotes of the Day »
RSS