Originally Posted By woody typo: So the fact that the economy declines when the ratio of retirees and young WORKERS change in favor of the retirees is irrelevant to you?
Originally Posted By Dabob2 <<I was an adjunct professor for a time, and used to grade student papers.">> <No wonder our schools are failing!!!> Cheap shot, and of course, based on ignorance. In fact (as you might have sussed, had you thought about it), I was quite a tough grader who didn't let the students get away with lazy thinking or lazy arguments; just the sort of thing our schools need more of, IMO, as opposed to "well, you did your best." <<The employment rate is a ratio, so okay, there's one more step - but this is not rocket science. I suspect, as I said, that you even know this.>> <So the fact that the economy declines when the ratio of retirees and young works change in favor of the retirees is irrelevant to you?> Not irrelevant in the larger sense. As I said at one point, it will be hugely important to the economy as a whole, particularly as it relates to social security and medicare... but that's another topic. We were talking about the unemployment rate and the demographic shift's effect on THAT. The other stuff is important, but off-topic. Speaking of which - this topic supposed to be about the ports deal. Can we argue this later in a more appropriate forum?
Originally Posted By woody " I was quite a tough grader who didn't let the students get away with lazy thinking or lazy arguments" Considering that YOUR arguments are not based on fact and ONLY on your understanding of logic, you allowed yourself to get away with a lot of ... bull. "We were talking about the unemployment rate and the demographic shift's effect on THAT." Yes, that's the argument which you have provided NOTHING FACTUAL. More interesting articles.... I suppose you really don't teach economics. And even if you do, you allow your biases to take hold. ------ <a href="http://www.iht.com/articles/2006/02/16/bloomberg/sxmuk.php" target="_blank">http://www.iht.com/articles/20 06/02/16/bloomberg/sxmuk.php</a> Commentary: Will China grow old before it has a chance to get rich? By Andy Mukherjee Bloomberg News THURSDAY, FEBRUARY 16, 2006 Helen Qiao, an economist at Goldman Sachs Group in Hong Kong, posed an interesting question this week: "Will China grow old before getting rich?" Qiao's research shows that China's dependency ratio - the number of people too young and too old to work divided by the working-age population - will start rising at the end of this decade and approach 50 percent in 2030, from less than 40 percent at present, making China as gray as Japan was last year. By 2050, every 10 Chinese workers in the age group of 15 to 64 will support a total of seven younger and older people - a dependency ratio of 70 percent. An aging society may be an inevitable part of demographic transition, though "what makes China's case unique is that the sharp rise in dependency ratio will arrive earlier in terms of per capita income level relative to other countries," Qiao says in her report. In 2030, China's annual per capita income will be a little more than $11,000 measured in current prices, compared with almost $36,000 in Japan last year, according to Goldman Sachs estimates. South Korea's dependency ratio will approach 50 percent in 2025, with its citizens earning $52,000 a year. Does it matter if China gets old before it gets rich? It does, for a number of reasons. First, economic growth rates taper off with aging: It's difficult for a developing nation to get rich after its population has already grown old. Second, aging will put further stress on China's underdeveloped pension system as an increasingly smaller cohort of workers gets saddled with the responsibility of sustaining a growing number of retired people. A third reason is that as European nations and Japan age further, their governments may have to raise tax rates to transfer incomes from the workers to the retirees. That will create a shortage of capital. Hans Fehr, a researcher at the University of Wuerzburg in Germany, and others said in a paper last year that China would become the "world's saver, and thereby the developed world's savior" by supplying capital. If China itself gets old quickly, that prognosis might not come true. China's rapid aging is partly because of the one-child norm the government began implementing in 1979 to limit population growth. Thanks to that policy, the pre-1978 Chinese baby boomers, when they entered the work force in the 1980s and 1990s, had fewer young dependents to care for than the previous generations. That bulge in the number of working-age people relative to the population, or China's "demographic dividend," contributed 15 percent to the economy's growth from 1982 to 2000, according to United Nations estimates. The dividend will now turn into a deficit, Goldman Sachs says. As China's baby boomers start retiring, there will not be enough young Chinese entering the work force to make up for the shortfall. To ensure that economic growth does not slacken for lack of workers, the Chinese government should end the one-child policy and scrap controls on migration from rural to urban areas, says Qiao. According to her calculations, from 98 million to 128 million Chinese agricultural workers are surplus. Allowing them to move freely into urban areas would increase the supply of productive labor without any drop in economic output.
Originally Posted By woody "My "theory" is just based on basic math. I think deep down you even know this, because - all other things being equal - if more people retire than join the workforce, the unemployment rate will decline somewhat." Deep down..... down..... down..... down.... Do you really think this is the argument? The original argument is why is Bush's economy have low unemployment? We are talking about the low unemployment rate of 4.8%. Is this low? Or not? We are not talking about slightly lowering it from 5.08% as it was in 2005. We are asking an empirical (verifiable or provable by means of observation or experiment) question. Why is it low? You never attempted to find out so your argument is based on nothing.
Originally Posted By mrichmondj Of course, I could also mention that private sector job creation declined 0.3% from 2001-2005 -- another reason why it isn't too hard to keep the unemployment rate low. Fewer jobs = fewer people you have to employ.
Originally Posted By woody If you looked about the unemployment rates 2001-2005, you can see a wide fluxation. Since 911 in 2001, many private sector jobs were lost. Some never returned. In 2003, the rate was 5.99. In 2006, the rate is 4.8%. Thats 1.19% improvement in 3 years. Is that easy? There is jobs creation. This is not about replacing older for younger workers. The forecast is 2 million more jobs in 2006 in the USA Today article. ------------ <a href="http://www.usatoday.com/money/economy/2006-01-02-csm-06-outlook_x.htm?POE=NEWISVA" target="_blank">http://www.usatoday.com/money/ economy/2006-01-02-csm-06-outlook_x.htm?POE=NEWISVA</a> A fifth straight year of economic expansion in 2006 promises to mean new jobs, higher pay, and maybe even fatter investment portfolios for millions of Americans. Despite a backdrop of challenges — notably signs of climate change in the nation's sizzling real estate market and investor jitters over bond rates — this forecast represents a strong consensus among economists. There's no guarantee that the economy will actually match current expectations of 3.4% growth next year. But of more than 50 business economists surveyed by Blue Chip Economic Indicators, all but five see growth of 3% or higher. The lowest forecast is 2.6%. The upshot for those who work, shop, and invest would be a solid but not exciting environment. "I think we'll see decent income growth and decent job growth," says Nariman Behravesh, chief economist at Global Insight in Lexington, Mass. "The average household will be better off, but moderately." The consensus forecast calls for: • Rising pay. Disposable incomes will rise by 3.2%, after inflation, more than double this year's gain. • Costlier borrowing. Short-term interest rates (the three-month Treasury yield) will average 4.5% and longer-term rates (10-year Treasury) 4.9%, both small upticks from current levels. • Moderate inflation. The consumer price index will rise 3% during 2006, down slightly from 2005. • Healthy profits. Corporate earnings will grow 7.9%, but that's less than half the pace of 2005. That mixed picture, coupled with rising interest rates, has left Wall Street debating whether next year's stock market will head up or down. • A strong job market. Unemployment to remain level at 5%. While job creation is not forecast in the Blue Chip survey, some experts call for job growth to reach 2 million for the year, higher than 2005 and much stronger than the early years of the current economic expansion.
Originally Posted By DouglasDubh <Of course, I could also mention that private sector job creation declined 0.3% from 2001-2005> I find this information hard to believe. What is your source? <Fewer jobs = fewer people you have to employ.> = more unemployed people = a higher employment rate. Your logic is backward.
Originally Posted By mrichmondj You know what? I think my logic is backwards! LOL I am such a knucklehead! No more posting from the airport!
Originally Posted By tiggertoo <<By every measurement the economy is doing well.>> I agree for the most part. Stocks are up, we are running a both moderate fiscal and monetary policies, GDP is rolling along, etc… There are a few caution flags though. The national debt and trade deficit are increasing; and the housing market starting to catch up with people (late payments are on a quick rise). Hopefully the fed can ease the interest rate hikes a little. Manufacturing jobs have also decreased, as we move into an even more service oriented market. Again, it’s a economy in flux and it will be interesting to see how the traditional indicators play into everything.
Originally Posted By tiggertoo RE: 178 <<For example. In 2004, there were 12.5M people age 60-64 (nominal retirement age). There were 21M people age 20-24 (nominal age for entering the workforce). That's a positive differential -- for every one person nearing retirement age you have about 8.5M entering the workforce.>> Thanks mrichmondj. These are the type of stats I was looking for (I would have looking myself but my time is very limited right now). By these numbers, however, it would signify to me that if the retiree figures were less than those entering the workforce—as these figures suggest—unemployment would be higher rather than lower, unless the job market was able to grow to keep pace. IOW, in this case, it seems to me that the pool of workers grew by an approximate few million while the economy grew enough to keep pace and then exceeded that number which would allow those previously unemployed to gain jobs, which in turn lowered the unemployment figures. Although, I would like to know more details as to how they gauge the unemployment percentage? I mean, does it count those with two jobs twice or is it simply a measure of employed vs. unemployed. It the former, is could certainly decrease the unemployment %.
Originally Posted By mrichmondj Unemployment statistics only really measure workers who have lost a job and are collecting unemployment benefits. If a worker remains unemployed after benefits expire, they are no longer counted as unemployed. It's a weird statistic, actually, and doesn't necessarily reflect the actual percentage of people not working -- i.e. retired, disabled, independently wealthy, stay at home parents, etc. It also doesn't reflect those who are underemployed, i.e. working in a position that requires lesser skills (and less pay) than one is trained to perform.
Originally Posted By mrichmondj I think it is only something like 62% of the population that is actually employed in the U.S. This statistic is tracked by the Department of Labor as well, but rarely reported. This is way off topic, I know. Maybe we should start a new thread?
Originally Posted By DouglasDubh <If a worker remains unemployed after benefits expire, they are no longer counted as unemployed.> As long as a person seeks employment, they are counted amongst the unemployed.
Originally Posted By woody Post 178 only has one consistent theme. Unemployment rates will stay low only if more jobs are created. 1. Having more retirees means the economy will shrink; therefore, it is important for the economy to strengthen to produce more jobs for young workers. 2. Having more workers entering the workforce means the economy grow to absorb the new workers. Either way, ONLY a strong economy will ensure a low unemployment rate.
Originally Posted By bboisvert <<This is way off topic, I know. Maybe we should start a new thread?>> I think this topic is in "full morph mode" more than the port deal ever (supposedly) was.
Originally Posted By mrichmondj >>>> As long as a person seeks employment, they are counted amongst the unemployed. <<<< Not statistically. Once they stop receiving benefits, they are no longer tracked in the system as "unemployed." They fall into that weird category of people who chose not to work or are not able to work, which does not reflect in the official unemployment rate figures.
Originally Posted By DouglasDubh <Once they stop receiving benefits, they are no longer tracked in the system as "unemployed."> Everything I've read says whether or not they are receiving benefits is irrelevant - it's whether they are seeking a job that counts.
Originally Posted By mrichmondj Got to the Dept. of Labor website. Their FAQ describes it all. You can only receive unemployment benefits if you are actively seeking work. But after a finite period, you lose the benefits regardless of whether you are still job searching. Once you lose the benefits, Dept. of Labor has no way to track you as unemployed anymore.
Originally Posted By DouglasDubh <Got to the Dept. of Labor website. Their FAQ describes it all.> And it confirms what I said, not what you said. <a href="http://www.bls.gov/cps/cps_faq.htm#Ques2" target="_blank">http://www.bls.gov/cps/cps_faq .htm#Ques2</a> "Because unemployment insurance records, which many people think are the source of total unemployment data, relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country."
