Mish's Global Economic Trend Analysis

Does Your Job Require a College Degree? Should It?
U.S. Going to Kill Syrians to Show Syria that Killing Syrians is Wrong
Just How Distorted is the U.S. Unemployment Rate Number?

Does Your Job Require a College Degree? Should It?

Posted: 09 Sep 2013 10:51 PM PDT

For those of you who are employed, I have a simple question: Does your job require a college degree?

The reason I ask, is a Gallup poll shows Majority of U.S. Workers Say Job Doesn't Require a Degree.

Here is the question Gallup asked: Does the type of work you do require a bachelor's degree from a college or university or some other advanced academic degree?

From Gallup ...

Fewer than half of adults employed full or part time in the United States, 43%, say the type of work they do generally requires a bachelor's or a more advanced degree. Fifty-seven percent say it does not, unchanged from 2005, but down slightly from 61% in 2002.

High Income and College Go Together

There is no real difference between male and female workers' perceptions of their need for a college degree, and there are only slight differences by age, with middle-aged workers the most likely to say their job requires a degree.

However, there are significant differences by income, with the majority of workers earning $75,000 or more saying a degree is necessary, compared with no more than a third of lower-income workers.

Bottom Line

The majority of high school graduates in the U.S. go straight to college, no doubt believing that a college degree will open career doors and unlock higher lifetime earning potential. Positive expectations about attending college are generally well founded: government statistics show that four-year college graduates will earn roughly double what college nongraduates make over their lifetime -- amounting to an additional million dollars.

However, changes in the nation's economy in the past decade, coupled with a revolution in technology, may be challenging the traditional college bargain. The high tuition and lost-opportunity costs associated with spending four or more years getting a bachelor's degree may not be as palatable when weighed against a persistently anemic job market.

Cost is the Problem

The problem is not the degree. Rather, it's what you have to pay to get the degree. For those who end up trapped in fast food jobs, retail service, and numerous trades, the cost of college cannot possibly be worth the price.

And that assumes one lands a job. Millions don't. So what good is a degree in English literature or other Liberal Arts program going to do for you?

Hope or Hopeless?

For those trapped in student debt, with no job, there is not a lot of hope. For those still in grade school, help is on the way as noted in Future of Education is At Hand: Online, Accredited, Affordable, Useful

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

U.S. Going to Kill Syrians to Show Syria that Killing Syrians is Wrong

Posted: 09 Sep 2013 11:07 AM PDT

Abby Martin speaks with UK Parliament Member, George Galloway, about Syria war propaganda and his upcoming film 'The Killing of Tony Blair'.

Link if video does not play: George Galloway: Dogs of War Slaver over Syria, Powder keg for Disaster

Quote of the day goes to Abby Martin who says "We're killing Syrians to Show Syria that Killing Syrians is Wrong. I just cannot wrap my head around that".

George Galloway responded along the lines of "The next time you see President Obama happy clapping in a Christian church, tell him that Al Qaeda slaughtered the Christian people of Syria literally, their necks and throats cut, heads sawed off, the Christian churches on fire at the hands of Al Qaeda, paid for and armed by the United States of America."

Galloway was discussing this: Village 'liberated' by rebels... who then forced Christians to convert to Islam

One Maaloula resident said the rebels, many of whom had beards and shouted 'Allahu Akbar' (God is great), attacked Christian homes and churches shortly after moving into the village.

'They shot and killed people. I heard gunshots and then I saw three bodies lying in the middle of a street in the old quarters of the village. Where is President Obama to see what has befallen us?'

Another Christian resident said: 'I saw the militants grabbing five villagers and threatening them and saying, "Either you convert to Islam, or you will be beheaded".'

Another said one church had been torched, and gunmen stormed into two other churches and robbed them.

The beautiful mountain village, 25 miles from Damascus, is one of the few places in the world where residents still use the ancient language of Aramaic, which was spoken by Jesus and his disciples.

Yes, the US is literally funding Al Qaeda rebels to fight an insane war on trumped up evidence that Assad used chemical weapons on Syrians.

The evidence is in dispute and if chemicals were used, it is equally likely the rebels used them to goad the US into action: Syrians In Ghouta Claim Saudi-Supplied Rebels Behind Chemical Attack

Still More Hypocrisy

To top off the hypocrisy, the US is the biggest user of chemical weapons and other weapons of mass destruction, in the entire world.

Please read about the use of White Phosphorus by the US military in violation of the convention on chemical weapons.

White Phosphorus Images

The above from a Google search for White Phosphorus Burns.

What's the Difference Between the US Using Chemical Weapons and Others Doing the Same?

David Stockman nails the heart of US war-mongering hypocrisy with this question:

"After having rained napalm, white phosphorous, bunker busters, drone missiles, and the most violent machinery of conventional warfare ever assembled upon millions of innocent Vietnamese, Cambodians, Serbs, Somalis, Iraqis, Afghans, Pakistanis, Yemeni, Libyans, and countless more, Washington now presupposes to be in the moral-sanctions business?"

David Stockman is the author of The Great Deformation: The Corruption of Capitalism in America and the #1 New York Times bestseller The Triumph of Politics: Why the Reagan Revolution Failed.

For further discussion, please see End of U.S. Imperium—Finally!? Obama About to Suffer Glorious Defeat in Congress?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Just How Distorted is the U.S. Unemployment Rate Number?

Posted: 09 Sep 2013 02:45 AM PDT

On the first Friday of every month, I go through the jobs report and note the grossly distorted statistics.

For example, please see BLS in Wonderland written Friday, September 6

Every month I conclude with a couple paragraphs like these:

Grossly Distorted Statistics

Were it not for people dropping out of the labor force, the unemployment rate would be over 9%. In addition, there are 7,911,000 people who are working part-time but want full-time work.

Digging under the surface, much of the drop in the unemployment rate over the past two years is nothing but a statistical mirage coupled with a massive increase in part-time jobs starting in October 2012 as a result of Obamacare legislation.

Wonderland Statistics

This past month I had a couple of extra paragraphs:

Compared to recent Gallup surveys, these BLS stats regarding the base unemployment rate and the alternative measures as well are straight from wonderland. For details, please see Gallup Says Seasonally-Adjusted Unemployment Climbs to 8.6%; Who to Believe (Gallup or the BLS)?

I believe Gallup. Thus, I expect more downward revisions in jobs, and upward revisions in the unemployment rate.

Let's take a look at BLS data to get a handle on what is happening, and why.

Civilian Labor Force Participation Rate

The participation rate is the "labor force as a percent of the civilian noninstitutional population."

Explaining the Graph

Women entered the labor force in huge numbers as two-wage earners per household became the norm
An internet boom provided ample jobs for those who looked for jobs (and you have to look for a job to be a part of the labor force)
A dotcom crash followed
In response to the dotcom crash, the Fed blew the biggest housing and credit bubbles the world has ever seen, but the effect on the participation rate was small
The housing boom turned to bust, but even in the recovery, the participation rate continued to decline

It's Not Demographics

Many people believe demographics explains the decline in the workforce. However, that's not the case.

To prove the point, let's focus in on an age group that is generally not retired and historically not in school.

Civilian Labor Force Participation Rate - 25 to 54 years

Notice how the participation rate of those 25 to 54 has been in steady decline since
the year 2000 except for a slight uptick in the housing boom years.

Allowing 6-7 years after high school for college education, most of those 25 should be looking for a job or have a job. Yet the trend is unmistakable.

Rick Newman, writing for Yahoo Finance posted the following table in Here Are the Real Labor Force Dropouts.

Here is a chart I posted previously in Normalized Unemployment Rates; Cyclical vs. Secular Forces

Participation Rate by Age Group

Not in Labor Force Want a Job

To be in the labor force you have to want a job and look for a job. To be "unemployed" you have to be in the labor force.

At the start of the recession, there were 4,648,000 people who wanted a job but were not considered unemployed. There are now 6,285,000 people who want a job now but do not have one.

That is an increase of 1,637,000.

Adding just the increase back would raise the labor force to 157,123,000 from 155,486,000. It would raise the number of unemployed to 12,953,000 from 11,316,000. And it would raise the unemployment rate to 8.2%.

But why stop there?

It's All In The Definition

The definition of "unemployed" is what it is (for political reasons), but by my more practical definition "you are unemployed if you want a job and do not have one", the corresponding numbers would be as follows:

Labor Force: 155,486,000 + 6,285,000 = 161,771,000
Unemployed: 11,316,000 + 6,285,000 = 17,601,000
Unemployment Rate: 17,601,000 / 161,771,000 = 10.9%

Actual Employment

We can arrive at similar conclusions by looking at the number of employed. Once again the age group 25-54 is the most logical to study. (Total employment is not the best measure because of demographics, those over 60 retiring voluntarily).

Employment Rate: Aged 25-54: All Persons in the United States

Demographics sure does not explain that chart so something else must. The answer is threefold:

Rampant Disability Fraud
It Doesn't Pay to Work
School: Kids stay in school for advanced degrees because there are no jobs, and middle-aged persons out of a job going back to school.

.
Rampant Disability Fraud

I have talked about disability fraud on numerous occasions. Here are a few examples:

Please read that last link above. It's a real eye opener.

Not in Labor Force With a Disability

I would love to show data pre-recession. Unfortunately, the data only goes back to mid-2008. We can see however, that nearly 23 million Americans are not in the labor force because of "disabilities".

I suggest "fraud" is more like it.

It Doesn't Pay to Work

The second reason the unemployment rate is artificially low is "It Doesn't Pay to Work".

I wrote about this recently in Why Work for $7.25 When Welfare Pays $15.00 in 12 States and $8.00 in 33 States? Is a Low Minimum Wage the Problem?

School

I hardly think hiding out in school because there are no jobs (when you really want a job) should constitute someone being "not in the labor force" (yet it does).

So What's the Real Unemployment Rate?

If you use my definition, "you are unemployed if you want a job and do not have one" then the starting point is 10.9%.

But what about those who do not have a job and don't want a job because of disability fraud or welfare considerations?

Factor that in and the unemployment rate would be several points higher, say 14-15%.

However, that does not count another 7% who have a part-time job but want a full-time job.

So if you watch the unemployment rate drop month after month, and you think the number is grossly distorted and totally void of common-sense reality, you are absolutely correct.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Economy News

9.9.13

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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