Jobless figures are sobering

Jobless figures are sobering

There is no putting a happy face on an unemployment rate of 9.5 percent. Some reports did try, noting that initial jobless claims fell by 16,000, an indication that job cuts may be easing. That could be true, or it could be wishful thinking.

Some analysts suggest that unemployment will hit 10 percent before it begins any steady decrease, and that we should be thinking more in terms of years than months before unemployment percentages approach tolerable levels.

But just as it is dangerous to attempt to minimize the nation’s unemployment prospects, there is also a danger in overdramatizing what the nation is going though.

It isn’t necessary to go back to the Great Depression to find unemployment numbers as stark as today’s. The careful reader or listener might note that in reporting today’s unemployment figures, the phrase “worst in nearly 25 years” is often used.

And, indeed, the last time the nation’s unemployment rate was 9.5 percent was almost 26 years ago, Bureau of Labor Statistics figures show, in August 1983. And at the time, that was an encouraging percentage for a nation that had seen 11 of the preceding 12 months with unemployment figures above 10 percent.

Yes, during the first 21‚Ñ2 years of the presidency of Ronald Reagan, unemployment figures went up almost every month, reaching a high of 10.8 percent in November and December 1982.

Years of increases

When Reagan took office in January 1981, unemployment was 7.5 percent. It climbed steadily to the 10.8 percent high, and then began a gradual decline. It didn’t fall below 7.5 percent for good until September 1984, and then fell consistently by a point or two most months so that when Reagan left office in January 1989, it stood at just 5.4 percent.

So it would appear to be a little early in the administration of Barack Obama to be suggesting that all is lost.

Clearly, this is a much more fragile economy than that of the Reagan years. The financial markets remain troublesome, increased deficit spending holds the promise of future inflation, state and local budgets across most of the nation are under severe pressure, promising the loss of public service jobs. The loss of any job is a blow to the economy, because people who are out of work are only buying the necessities, creating a drag on commerce and tax collections. It all has the potential for a downward spiral with frightening implications.

On the other hand, the nation survived the 10.8 percent unemployment of the mid-Reagan years, and went on to prosper.

President George H. W. Bush inherited an unemployment rate of 5.4 percent from Reagan, and handed off one of 7.3 percent to President Bill Clinton. The rate dropped during the Clinton years to 4.2 percent in January 2001, when President George W. Bush took office. It rose and fell during most of the Bush-43 years, but from May 2008, when it was 5 percent, the rate increased by half to 7.6 percent when Obama took office. It has increased by a quarter since January, and since the recovery of jobs follows other improvements in the economy, such as consumer confidence and consumer spending, look for employment figures to get worse, before they get better.

With luck it won’t get as bad as December 1982, and the turnaround will be seen in less than three years.