Eye on the pie

2013-06-16T00:00:00Z Eye on the pieMorton Marcus Times Columnist nwitimes.com
June 16, 2013 12:00 am  • 

This column is not intended to confuse you, but to share the difficulty of making flat statements about a complicated matter. Be patient and maybe together we can make sense out of what appears to be chaos.

Is it over? Has the recession ended? What do we mean “the recession has ended?”

The answer from a national perspective is YES. If you are still or again unemployed, your recession continues.

Whether the recession is over may depend on where you live and how we define “recession.”

Unemployment is the greatest concern we have about recessions. Workers without jobs are in trouble. Their incomes are down because unemployment compensation does not substitute for the pay of a full-time job and they may be without health insurance.

If we compare April 2013 with the start of the recession (approximately) April 2008, we find only Vermont and Alaska have more persons unemployed today than five years ago. However, conditions in those two states are very different.

In Vermont there are now more people employed than in 2008 and there are more people looking for work. This is probably a good situation. Encouraged by growing employment, more Vermonters are looking for work. The data say that 79 percent of the added labor force found jobs.

By contrast, in Alaska, there are fewer employed persons than in 2008. The data suggest 94 percent of those without jobs withdrew from the state’s labor force. Alaska is not a place folks hang around if work is not available.

Indiana is among the 16 fortunate states where employment grew, the number unemployed dropped, and the size of the labor force increased. We have 193,000 more persons employed now than in April 2008. Of these, 100,000 were previously counted as unemployed and 93,000 as labor force entrants or re-entrants.

Be careful not to take these descriptive words too seriously. We do not know if the 100,000 decline in the number unemployed is because Hoosiers without jobs went back to work. As told, the story is a convenient convention to describe a complex set of possible relationships.

Other states enjoying similar positive conditions include Michigan, Ohio, Illinois and Wisconsin. However, it remains too early for the Great Lakes governors to start thumping their chests about the superiority of their economic progress.

Indiana still has167,000 unemployed workers. Many of these people have been without jobs for an extended period of time. Together, the five Great Lake states have 1.4 million persons unemployed, 18 percent of the national total of 7.9 million without jobs.

Less fortunate than the Great Lakes region were 13 states, including North Carolina, Kentucky, Tennessee and Texas where the jobless numbers declined, but so too did employment and the labor force. This scenario suggests states those losing jobs either became unemployed or left the labor force.

The national picture is like Indiana. While employment increases, unemployment declines and the labor force grows.

Does this suggest a healthy labor market? Are students who leave school to take jobs shortchanging themselves and their futures? Are retired folks being pressed by economic necessity to return to work? The lack of answers confound policy makers and economists alike.


Opinions are solely the writer's. Morton Marcus is an economist, author and speaker formerly at the Kelley School of Business, Indiana University. He can be reached at mortonjmarcus@yahoo.com.

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