What I like to call “The OTHER National Deficit”:…:(

I am talking about all of the salaries that have been lost since the start of the recession, in December 2007,

The middle class has been pillaged, enfrauded and LOOTED, thanks to the recession.

What is the reported unemployment rate — about 8.5%?
Let’s multiply it by 2 and account for the U2 number.

Total all the salaries lost from everybody who is out of work since this disaster began –multiply it by the number of years the person’s been out of work and if you want, throw in the raise that this person would have probably gotten in December of each year.

For college grads, factor in the starting salary for a new grad and multiply that by the number of years since graduation and no full time job.

I will bet you the total of all of these lost salaries is a staggering amount.

I will bet you the amount makes the federal deficit look like an ugly kid sister or poor relation.

LOOTING and nothing more.

This is money lost to our economy. LOST…money we will never ever get back.

And when you take the priceless amount that the depression (it is NOT A RECESSION) has stolen from us who are out of work — you cannot put a price on emotional depression, health problems that being out of work has caused, or pride that is gone or how no job affects your emotional and mental health, your marriage or your kids or your relationships with pretty much anybody — there will be no way we can even estimate the cost of that amount.

If you want to include enjoyable things lost, you can include that too: your son or daughter can’t participate in a sport because the family now has no health insurance…and not only that, your child has been robbed of an activity.

Other lost enjoyments: a trip to the movies, maybe the theatre, a concert or a ball game. The family vacation is out of the question. Maybe you and your friends had plans on going to Key West or somewhere on vacation — you can’t go; you now cannot afford to.

We were robbed in many many ways, thanks to the disaster that hit us.

And I get the ugly feeling none of these things are coming back.

10 thoughts on “What I like to call “The OTHER National Deficit”:…:(”

  1. Another thing that you are forgetting from your list of stolen things are depressed wages and salaries for those who are still working, which probably is at least half of the value of aggreggate job losses.

    1. Very true. I seriously doubt I will find a job paying anything even close to what I should be paid. I remember when I lost my job I had a job interview for a $35,000 job and thinking that was slumming it, but now would be happy to make $35,000.

      1. What a job is worth is an interesting question. I don’t do position classification, but I’ve known a lot of people who do it. On my job description, there are a couple of pages of tasks that I’m supposed to do at my job where I get so many popnts for each task, and when you add up all the points, if they are in one range, it is one pay grade, and another point range, another pay grade.

        Somewhat more than a decade ago, I started reading that one should try to be in a line function rather than a staff function because it’s the staff functions that will get cut first. As I came to think of it, it’s better to be in program management than to be a principal investigator. Unless the program is cut back significantly or ended, my salary will continue, but it’s not so sure for the researchers. They have to compete every year or two for renewal of their grants.

        What you are content to earn varies with your circumstances beyond being employed or not. When you had your last job, you probably had to pay for an apartment and other expenses. For what it’s worth, half of all full-time jobs pay less than $34,000 per year, which is a little over $16 an hour. $35K under your present circumstances might be an adequate salary, but not in a larger city.
        .

        1. I get what you’re saying but the reality for me is I want to be self supporting again and it would be very hard on less than $35,000. To some it sounds like a lot of money but I am outside of Chicago where rent is expensive. I know many people with this economy who are living with their parents.

          1. I know of 2 guys who graduated 2 years ago and they are stuck at home for good.

            Neither of them has a full time job with benefits.

            My friend is yammering away that “they shold be on their own!”

            “Really?” I said to her. “How SO, if you can’t find a job to pay for your own place…AND pay foe your student loan??? They are stuck where they are.”

            Sad state of affairs.

          2. No, $35K doesn’t sound like a lot of money, particularly if you don’t want the hassle of roommates and have to pay for either mass transit or the upkeep on a car. You have to reduce your salary by something close to 25% just to pay income and Social Security taxes. After that, it isn’t hard at all to spend a thousand a month on rent and then there are those student loans that need repaying.

            The son of one of my colleagues in Germany went to Afghanistan to work for the PX in the hope of getting a permanent job with them. This was two years ago. That’s how desperate it is.

  2. OK, let’s do the math.

    I’m suspicious of unemployment statistics, so let’s use the civilian work force. You can get this, and piles of other economic data, from the St. Louis Federal Reserve at:

    http://research.stlouisfed.org/fred2/

    The civilian labor force peaked in November 2007 at 146.6 million people. It bottomed out after that in December 2009 at 138 million, and is now around 143 million. If you add up month-by-month data, you get a cumulative 27.1 million person-years of employment that didn’t happen between November 2007 and the present compared to staying at the November 2007 level.

    I don’t have a good handle on what the average job pays (there’s per capita and household income, neither of which is quite the same thing). I could take Madness’s figure of $34k, but that seems low, I’ll call it $50,000/year. Multiplying by 27.1 million gives us about $1.36 trillion over a little more than five years. Meanwhile, the Federal budget deficit in that period was in the range $6-7 trillion.

    If I assume that the labor force would have grown at a 1.2% annual rate since November 2007, then the difference is a little over 53 million person-years, or $2.65 trillion. It’s a lot, to be sure, but still well less than half the Federal budget deficit, and about 3% of GDP over the same period.

    If you want to throw in another trillion to account for the people who still have jobs, but now earn less, we’re still way below the Federal budget deficit.

    In any case, this money was not ‘looted’ from anyone. It is money that employers, collectively, elected not to pay, because they didn’t see that they had a market for their product, they wanted to cut costs, or whatever other reason.

    If they had paid this money, the economy would be in a different state than it is now. The newly-paid employees would have spent this money, which in turn would have supported other businesses. But, in general, businesses (especially large ones) are run to maximize this quarter’s profits, which leads to cutting staff wherever possible. And if a company can make money by playing financial games instead of actually doing something, so much the better.

    I don’t believe the government can fix the economy. They can raise taxes and redistribute, but that won’t solve the underlying problem.

    1. On taking a second look at my comment, I have a minor correction.

      The figures that I used are for ‘civilian employment,’ not ‘civilian labor force.’ In other words, they represent the number of actual jobs. The magnitudes of the figures, and the subsequent calculations, are correct as they stand.

  3. The median family income is in the $41-44K range, but that’s a national average. In your area, median salaries are definitely higher.

  4. I have mentioned this before but awhile back I saw a job I interviewed for 10 years that used to pay around $50,000. I didn’t get the job then but was in serious contention. Anyway, the job is now paying $25,000 and the requirements are even stricter than they were before. Back then they wanted someone with a marketing background and a bachelor’s degree (I was almost finished with grad school at this point)and computer skills. Now they want something like 5 years experience, a MASTERS degree, specific skills in the industry (before they just wanted marketing skills now they want medical marketing).

    Some of the salaries I am seeing are so insulting for the jobs, including all the $10 hour jobs that require degrees and experience or the jobs that combine two unrelated skills, like marketing and forklift certification or mechanical and admin skills.

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