Footnote to Part Two

So - the rich got their deal and Social Security has been opened to attack. Do we - and I do mean "we," the vast majority of us - get anything from this deal beyond pious punditry and politial palaver? Probably not:

Among economists, the consensus is that the job outlook will improve very slowly in the first half of 2011 -- but that unemployment numbers could keep rising through the summer. ...

Kenneth Goldstein, a labor economist at the Conference Board, an executives association, expects an average of 125,000 to 150,000 new jobs to be created each month next year.

That's not enough! Normal population growth expands the labor force by about 100,000 a month. According to the Bureau of Labor Statistics, in November there were something over 15 million unemployed people - and remember, that figure does not include underemployed people (working part-time because that's all the work they could find) or discouraged workers (who have given up hope of finding work). Including them would nearly double the total.

But considering just the "official" figures and doing a rudimentary calculation, the economy would have to add 150,000 jobs a month, every month, between now and the fall of 2012 to reduce the number of unemployed by just one million - and that would still leave unemployment at over nine percent.*

In fact, Goldstein predicts that the unemployment rate will hit 10.2% in early 2011 and stay around that high through the middle of the year as more long-term jobless workers rejoin the "official" unemployment totals.

However, Joel Naroff, president of Naroff Economic Advisors, a Holland, Penn.-based forecasting firm, is much more sanguine about the job outlook. "I actually think we're on the cusp of a clear turnaround," Naroff says. He thinks job creation could grow to 150,000 to 200,000 new jobs per month by the summer -- and as many as 250,000 a month by year-end.

Well, just dandy: Assuming an average for the whole year of 200,000 new jobs a month, unemployment remains at 9% or above all of 2011.* That's the "sanguine," the optimistic, outlook? Terrific.

And Happy New Year to you, too.

*The calculations I made here are of course very rough and I'm sure some real number-cruncher with some more exact numbers where I relied on "about"s and knowing all the necessary bits about seasonal adjustments would do better. Still, for completeness, this is how I arrived at the answers I got, with all figures rounded to the nearest tenth:

For Goldstein: The BLS says the labor force in November was just over 154 million, with 15.1 million unemployed. Various sources say that the size of the labor force grows by about 100,000 a month on average over time. So job growth of 150,000 a month, after absorbing growth in the labor force, leaves 50,000 jobs a month to shrink unemployment. It would thus take 20 months to reduce the number unemployed to 14.1 million. Over the same time, the labor force would have grown by 2 million, to 156 million. So 20 months from now, in late summer 2012, the unemployment rate (14.1/156) would be 9.0%.

For Naroff: Job growth of 200,000 per month reduces the number unemployed by 100,000 a month, again after absorbing natural growth in the labor force. In one year, the number of unemployed drops by 1.2 million while the labor force grows by 1.2 million, ending with 13.9 million unemployed out of a labor force of 155.2 million, for an unemployment rate of 9.0%. Even if the same rate continued another entire year, that is, throughout 2012, the rate would still be 8.1% at the end of that time.