The monthly jobs figure was released today and it’s nothing to hold a parade over. True, 70,000 jobs were created, but the nation is in such an unemployment hole that 200,000 jobs are needed to make the unemployment rate budge.
The situation has led to an increasing debate that mirrors the 1980s debate about homelessness during which some people claimed that most people who were homeless, chose to be.
Jim Paulsen, the chief investment strategist for Wells Capital Management in Minneapolis, suggests unemployment benefits pay people to stay unemployed. Appearing on CNBC this morning, Paulsen cited a survey that says jobs are no harder to get coming out of this recession than they were coming out of previous recessions.
“If you now consider the average length of unemployment by those who are unemployed, the average duration is now 35 weeks, that’s just off-the-charts record setting. The previous high historically, would be about 15-20 weeks. What’s the disconnect between those two things? One thing possibly may be that we’re paying people to remain on unemployment rolls,” he said.
CNBC host Mark Haines was incredulous. “First of all, the average unemployment benefit is maybe a fifth of what someone made when they were employed. Second, you understand that we just came out of the worst economy since the Great Depression?” he said. “No one who’s trying to feed his family is going to stay on unemployment benefits if he can get a job. What jobs are these people supposed to get?”
“The vast majority of people who are unemployed, cannot find work,” Paulsen agreed. “I’m just raising the question, what do these two data points imply? If people can’t find work, then why aren’t more people saying that the job market is tougher than ever before?”
I know. Pick me.
Because people are being asked to compare their current experience with someone else’s experience from, say, 30 years ago. The people who are looking for work now, are not the same ones looking for work in the recessions of the ’70s, ’80s, and ’90s. They’re guessing. And guesswork makes for lousy science.
That said, Paulsen never really reveals what survey he’s using to draw his conclusion. He writes about it in a report his company released today, but there’s no methodology revealed.