CoasterBuzz Podcast #209 posted

I remember the old days when my dad, laid off from the GE plant in Erie, would have to go to the unemployment office and speak to a human in person in order to claim benefits.

Gonch, your article is interesting but not surprising to me. It seems like we are putting too much emphasis on going to college and forgetting about vocational skills. For many young people a factory job would be a failure and for the others it is too much work.

From my own personal POV the economy is doing great. Most of my educated friends who want a job has one, we are having a hard time finding good people to hire at work, good area restaurants and bars are doing well, amusement parks are doing well, etc. I just think this is the new normal. We can't grow our way out of this one unless there are drastic changes. I read that in order to keep up with population growth we have to create 150,000 jobs a month. That's just crazy.

Being in the IT field, I saw the jobs disappearing long before the recession hit. Outsourcing to India or other companies, the end of the Y2k/dot.com boom, companies consolidating their services all led to high unemployment in this area.

Yet, when we were hiring another IT person, we couldn't find anyone to work for the salary we offered. Even though the salary was in the job posting, candidates would get downright pissed when they were told there was no negotiation.. "This is insulting and a waste of my time" one guy said. And these were folks that were on unemployment. Granted, it wasn't what they were making at their previous positions, but it sure wasn't peanuts either and was definetely more than their unemployment benefits

Carrie J. said:
Jeff, you landed on your feet in an awesome opportunity after long-term unemployment and that's completely awesome. But before you did, I seem to recall you turning your nose at situations where a suit would be required...even for the interview. You weren't jumping at anything. You had an idea about what you wanted and you waited until you got it. Perhaps that's what others are doing, too. I don't know.

To be fair, that was one gig, and the dress code was only the beginning. Their inability to treat people like adults (you will work 9 to 5, with 45 minutes for lunch, starting at noon) was the other part. And as Gonch said, I never complained about it. I still made my future.

I don't think anyone expects people doing six figures to pick up a manufacturing job, and I very much doubt in the case of Behr that those are the people applying for their jobs. There are definitely two classes of unemployed people, and my gut feeling is that the mix leans heavily toward blue collar. In fact, I read an article about a report from some labor research that suggested a lot of people in professional fields are not only staying employed, but making more than ever. I can certainly vouch for that in the software biz. My industry is snapping up people from overseas, not because they're cheaper, but there's no one else to do the work (did I mention that already?).

I've heard more and more about programming jobs going overseas. Possibly due to a talent shortage here, but mostly as a cost savings measure. I know it's recently started creeping into my company, and I'm sure we're not alone.

My rebuttal to Gonch's example of the factory that can't fill positions is what's happening at my work. It's not factory work, but still entry-level general labor with the same requirements mentioned in his article. They're hiring for a handful of jobs, and in four days got hit with over 1,000 applications without advertising it to anyone but current employees. Doesn't sound like a shortage of workers to me.

The problem with so many of the available jobs is exactly that they primarily low talent, low wage positions. They'll pay enough to get you off unemployment, but not enough to cover rent and put food on the table. Use of food stamps is actually growing as people take more of these sorts of jobs.

Jeff said:
To be fair, that was one gig, and the dress code was only the beginning. Their inability to treat people like adults (you will work 9 to 5, with 45 minutes for lunch, starting at noon) was the other part.

And yet, that was still a completely viable, paying job at a time when you didn't have one. That's all I'm saying, as the example of unemployed people turning down employment comes up.

Jeff said:
And as Gonch said, I never complained about it. I still made my future.

Complaining about being unemployed isn't the problem. It's not even relevant as it's not directly indicative of a person's circumstance or action to change it. It's annoying, but no more so than complaining about the weather or any other circumstance one finds themselves in.

Jeff said:
I don't think anyone expects people doing six figures to pick up a manufacturing job, and I very much doubt in the case of Behr that those are the people applying for their jobs. There are definitely two classes of unemployed people, and my gut feeling is that the mix leans heavily toward blue collar. In fact, I read an article about a report from some labor research that suggested a lot of people in professional fields are not only staying employed, but making more than ever. I can certainly vouch for that in the software biz. My industry is snapping up people from overseas, not because they're cheaper, but there's no one else to do the work (did I mention that already?).

My 6-figure example was extreme, I'll admit. But the point stands that I challenge just about anyone who claims they would jump at any employment opportunity that presented itself simply because they are currently unemployed.

And your observation about unemployment in professional fields vs labor fields is completely inconsistent with just about every argument being made against higher education at the moment.

All I'm saying is that you really don't know or understand a person's experience until you've walked a mile in his/her shoes. And I try to never underestimate how easy it is for good people to fall on bad times (even unemployment) and have a hard time finding their way back out of it. I think it happens more often than we are comfortable admitting.

Carrie J. said:
But the point stands that I challenge just about anyone who claims they would jump at any employment opportunity that presented itself simply because they are currently unemployed.

Where I come from if you can pass up work, you aren't hurting.

Just throwing this out there, perhaps even again...Freakonomics suggests that the unemployment rate for college-educated people is roughly 1/2 of that for those without a college degree.

In the same podcast, the long-run data shows that every year of college education account for a roughly 8% increase in salary.

IMHO, one of the real problems we have in this country with unemployment is that we absurdly tie health care coverage to your job....which has the unintended consequence of discouraging hiring in the first place!

Lord Gonchar said:
Welfare/Unemployment as help is awesome.

Welfare/Unemployment as a career is not.

The problem is that in order to provide the former, you enable others to take advantage of the latter.

I agree with that.

Employment issues are very complicated. Different folks are in very different situations with very different issues to face and roads out.

As for what jobs I would be willing to take, that changed a lot when I got married/had kids. When I was single, I could pretty much cut my expenses to the bone and get by if need be. At this point, there are simply a lot of expenses that really cannot be cut or at least not reduced to anything approaching the bone. So I would take a lot more jobs now if I had to than I would have 15-20 years ago.

***Edit to add:

I think one big reason why health insurance is tied to jobs is to allow people to buy into group plans. I agree it would make sense to allow the insurance to run with the person rather than the job. But you need to address the group plan issue. Another benefit would be folks would see how much health insurance actually costs. Too many people only understand the cost to be the premiums that they pay not what their employer pays.

Lord Gonchar said:
Where I come from if you can pass up work, you aren't hurting.

Would you be suggesting that it makes sense to relocate a family to Dayton, Ohio, because there is a manufacturing opportunity there for $8 - $12/hour? What is the unemployment rate locally where that opportunity you reference exists? I'm just curious. If it's high, then I can definitely see your point. If not, then I question why the surprise they would be having trouble filling positions in a specific geographic location where the demand doesn't exist.

And for the record, you and I grew up in a similar proximity. :)

I think Gator keeps coming back to the real point at hand. It's not about casting judgement about individual circumstance and where we don't agree assuming there must not be a real problem. If you want to get into the politics of it all, then focus on the systems that exist and how they can change in ways to push the economy in the right directions.

If there is any incentive built into the unemployment program that makes individuals prefer to stay unemployed, then that needs to change. And if there is any incentive built into the current employment benefit protocols that make employers prefer not to hire, then that needs to change.

Gator for President!

Carrie J. said:

It's not about casting judgement about individual circumstance and where we don't agree assuming there must not be a real problem. If you want to get into the politics of it all, then focus on the systems that exist and how they can change in ways to push the economy in the right directions.

(snip)

Gator for President!

Part I: People should stop "complaining" about how people behave - microeconomics should tell you how your policies *shape* they ways they'll behave. Economies run on the margin. Move the margin, and the bigger picture will take care of itself. (You're never going to get unemployment below 3%, for instance, but at that point you have 32 workers for every recipient...not a serious issue).

Part II: I'd do it in a heartbeat. I'd make mistakes, but I'd admit to them and try to move the country forward...jargon like "flip-flopping" is counterproductive in that it prevents politicians from owning up to their errors and getting onto the right track. Can't we all at least ACT like adults (i.e., when we're NOT in the amusement parks)? ;)

Carrie J. said:

If there is any incentive built into the unemployment program that makes individuals prefer to stay unemployed, then that needs to change.

The very nature of the program is that it creates an incentive to not go out and work. Every cent that you pay/give to someone who isn't working is one less cent that they have to go bust their butts to get. The only system in which you could actively encourage getting a job is if you actually penalize people for losing their jobs. That would get people out there pretty darn quickly (but destroy the people who still couldn't get a job).

The more direct example my economics prof. gave: if we drove around with giant spears sticking out of the steering wheel and negative insurance (if you hit anything, you have to burn $10,000), how many accidents would we have?

I realize it may be different from state to state. But, does anyone know what the approximate break even point is to motivate people to get off unemployment?

In other words, before being unemployed, Joe made $X. Unemployment wage rate is Y% of $X

When does $X times Y% = $8 to $12 per hour

<edit to add>

Pardon my ignorance if this isn't even remotely close to how unemployment is calculated.

Carrie J. said:
What is the unemployment rate locally where that opportunity you reference exists? I'm just curious. If it's high, then I can definitely see your point.

Article from today's newspaper says Dayton's unemployment rate is up for the third straight month and sitting at 11.6%.

And for the record, you and I grew up in a similar proximity. :)

I didn't mean geographically as much as socially, but I suppose they generally go hand-in-hand. :)

First, I want to express my deep appreciation to Carrie for having a humane, real-world, big picture view of the current unemployment crisis we face in America. You have articulated the real facts about the current crisis in an intelligent, compassionate and meaningful way. Thank you.

Second, it is important for everyone who believes that unemployment benefits create a "disincentive to work" to know what the reality is of unemployment. For a single individual with no children, in a majority (but not all) of states the weekly unemployment check is $325. After federal tax is removed it comes out to being about $280'ish in cash. Multiply that times 4 checks a month that comes to about $1120 in spendable cash for unemployed workers. Looking at typical monthly expenses, I don't think anyone can claim this is enough money to be lazy and rely on the rest of your life, especially if you were making anywhere from $40k+ to six figures and were use to that lifestyle.

I am happy to share my story of unemployment so everyone can understand exactly what it is like.

I lost my job on October 31, 2007 which was the very early stages of the Great Recession. At the time I was living in Ohio and working in Aurora as a retail manager. I had just received my yearly performance review achieving my full salary raise and bonus for the year. If there was any fault on my part it was that I did my job too well in an environment that was dysfunctional and chaotic.

By the following year, in April of 2008 my apartment was burglarized and I lost my valuable electronics. On May 1, 2008 my 26 weeks of unemployment expired (this was prior to the "2008 Crash" and the subsequent benefit extensions.) Gas was $4+ a gallon and prices for consumer goods were soaring. I was burning through the little savings I had to stay afloat, as cheaply as I had learned to live. Throughout the summer of '08 jobs began to shed drastically across the country. By September of 2008 we had a family crisis with my stepfather being paralyzed with Guillan-Barre Syndrome and our beloved Labrador died. With the world about to melt down, I had no choice but to return home to live with my parents at the age of 38 in order to not be homeless and bankrupt.

I now live in Charlotte, still with my parents, am 41 years old, a "99 weeker," and I have had no health insurance since 2007. I moved from the "Rust Belt" region of no jobs to the "Financial Meltdown" region of no jobs. Charlotte has been decimated with the loss of tens of thousands of job in banking, financial services, NASCAR, textile factory closures, construction, etc. I have been able to find seasonal/temporary work but nothing permanent. The only material possessions I currently own are my clothes, my computer, and 12 banker's boxes of momentos and personal things. I have had the full responsibility of the care for my stepfather who required feeding, changing, bathing, lifting and carrying, home physical therapy, etc. even though I have 3 stepsisters who are 100% uninvolved in any sort of help. I take care of all the outdoor maintanence for my parent's home while it is for sale (amongst the other 30+ homes in our development.) I continue to set myself a goal every week of applying for a minimum of 2 jobs in the fields that I have career experience in (retail mgmt, park operations/group sales and special event mgmt.) I haven't given up yet but I have to say it feels futile when for every 100 resumes you send out you are lucky to get ONE response.

I understand my situation is a bit unique because of family circumstances but in many ways I really am the new face of life in America today. I didn't even touch on the subject of the blatant employment discrimination that is occuring. I just hope that by sharing my story people will take the time to be a bit more understanding and bit more compassionate to the plight of millions of people around our country. It really is in everyones best interest for the unemployed to get back to work because it is the only way to turn the economy around.

mlnem4s said:

Second, it is important for everyone who believes that unemployment benefits create a "disincentive to work" to know what the reality is of unemployment. For a single individual with no children, in a majority (but not all) of states the weekly unemployment check is $325. After federal tax is removed it comes out to being about $280'ish in cash. Multiply that times 4 checks a month that comes to about $1120 in spendable cash for unemployed workers. Looking at typical monthly expenses, I don't think anyone can claim this is enough money to be lazy and rely on the rest of your life, especially if you were making anywhere from $40k+ to six figures and were use to that lifestyle.

That's still a disincentive to work.

If Al is collecting unemployment and Bob is not collecting unemployment, then a job is worth $1120/mo more to Bob than it is to Al.

Not saying people can/should/do/will just coast along without getting a job, or that it's even possible to live off unemployment, but it is a disincentive. And the more one tries to help, the more disincentive one creates.

Any subsidy provides a disincentive to make do on your own (be it from the government, a private enterprise, charity or even parents paying for their kids). Trick is finding the right balance.

CP Chris said:
I've heard more and more about programming jobs going overseas. Possibly due to a talent shortage here, but mostly as a cost savings measure.

It's not always a cost savings measure (sometimes it is). I don't know what the allocation of H-1B's is, but the number is huge in Seattle. I don't think there are many corn-fed Midwestern folks left to pluck out and move out here. You have to fill that need in some way, and for better or worse, that means bringing people in from overseas. It's not an issue of "greedy corporations" short-selling America.

mlnem4s said:
I understand my situation is a bit unique because of family circumstances but in many ways I really am the new face of life in America today.

With all due respect, you're a part of the face of 9% of America. It's not that I'm insensitive to your situation, because it certainly is a very real situation (especially for you), but it keys in to a great many problems about the way our economy is currently working.

We've had a combination of circumstances that have drastically altered where consumer wealth (or debt) lives, technology has made some jobs obsolete while creating others, some skills are no longer required, others are desperately needed, different regions have lost entire industries while others have created entirely new ones... there's a massive shift of money, required skills and industry, and a lot of people aren't well equipped to roll with those changes.

I don't have the solution.

But government should.

If they are going to create the policies that allow jobs to disappear (and there are a myriad from global trade to health care to insurance regulations) then they should also create programs to help those displaced. Unemployment is one of those programs and I have no problem paying into. (And, I would have no problem collecting it if I paid into it over the years.)

Cedar Point itself is a good example. The laws that determine how much an employee has to work to be considered "Full Time" are ridiculous. I'm not sure where it stands now but for a while there we had employees who basically worked 10 or 11 months out of the year and then had to be "laid off" in late November to about early January. Maybe the government could rethink that so that even these folks could get some health care benefits, earn paid vacations, etc.

I don't expect the President, or Congress, to simply wave a magic wand and eliminate unemployment. I *do* expect them to come up with real-world proposals that HELP the situation, preferably without creating undue stress on the so-called budget crisis. The key here is that the government must have a "rainy day fund", and even ongoing revenue, to help us through difficult times like this....the problem is that we had no rainy-day funds, and that all revenue-generation is viewed as inherently evil and originating from Satan himself.

The idea that government can do nothing right....is pretty screwed up...IMO. If you're one of those who does prescribe to that theory - please don't run for office. I don't think government is capable of solving all our problems - but a goverment that doesn't think it can HELP with any of our problems - is virtually guaranteed to make them worse.

Nothing is stagnant, we living in a perpetually-changing world. You either steer the change in a positive direction, or you "go with the flow" by letting the change take you where it will...i.e., down the toilet.

edited because I felt the need: Unemployment INSURANCE is funded by your weekly paycheck. When you get paid, premiums are automatically deducted. When (if?) you become unemployed, the financial shock if offset to some degree by the fact that you've paid your premiums to be insured against just such a possibility. "Entitlements" has become such a four-letter word thru the magic of politics....just thought a little clarification was in order. Thanks, and have a pleasant tomorrow... :)

CPcyclone said:
About the Midwest fat people comments...I can't believe how many people I see at Meijer using those electric carts who shouldn't been using them. I really want to say something to them. I've seen thin mom's walk into the store and hop on a scooter with their kids just for the thrill.

I noticed alot of butterball sized 8 to 10 year old being pushed around Disney World in strollers. I couldn't believe it. Also the scooter were out of controll there as well. It has to be big business down there becuase of all the diffrent companies we saw that were renting them by the week to people for the parks.