All About Perspective: Analysis Shows Changes in Media Coverage of Deficit, Unemployment

Make of this what you will, but a recent analysis from National Journal conveys coverage of the nation’s unemployment crisis has waned, while a focus on the deficit has increased. The author of this article concludes it means conservatives are winning the message war, but perhaps other factors are at play. What do you think?

Major U.S. newspapers have increasingly shifted their attention away from coverage of unemployment in recent months while greatly intensifying their focus on the deficit, a National Journal analysis shows.

The analysis — based on a measure of how often the words "unemployment" and "deficit" appear in major publications — portrays a dramatically shifting landscape of coverage over the past two years, as the debate over how to fix the federal deficit has risen to prominence and the question of how to handle still-high unemployment has faded from the media’s consciousness.

National Journal compiled counts of articles that mention one of the words in their headline or first sentences in the five largest newspapers in the country by print circulation — a group that consists of The New York Times, The Wall Street Journal, the Los Angeles Times, USA Today, and The Washington Post. The data was taken over a period of roughly two years from April 15, 2009, to May 15, 2011, using LexisNexis, a news information service. The numbers exclude mentions that also used the words Europe(an) and Greece or Greek in an effort to focus solely on the domestic debate, though even with those included, the trend was not materially different.

Mentions of unemployment have been dwindling since they spiked to 154 in the month ending August 15, 2010; over the month ending Sunday, there were 63. Deficit mentions, meanwhile, surged up to 261 in the month ending December 15, 2010, when the leaders of President Obama’s deficit commission released their final report. Mentions of the deficit remained higher after the commission’s work wrapped up and as House Republicans and then the White House unveiled dueling proposals. In the month ending Sunday, there were 201 mentions.

To be sure, the decline in unemployment articles coincided with a one-half-percentage-point decrease in the headline unemployment rate as well as materially better payroll job growth, but the labor market remains fragile and the pace of its recovery far from sufficient.

More likely, the broadening gap demonstrates just how effective conservatives have been at changing the narrative of economic policy from one dominated by talk of fiscal stimulus to one now in lockstep with notions of fiscal austerity.

That major newspapers and other media outlets have covered the deficit with greater intensity in recent months should come as no surprise given the focus of the politicians and policymakers they cover. The declining mentions of unemployment are perhaps more surprising, as the issue remains salient for millions of Americans.

Optimism From the Job Cut King

Forgive the poor E.F. Hutton pun, but when John Challenger talks, people generally pay attention. The Chicago-based Challenger, Gray & Christmas firm is viewed as the guru of job market reports and trends — and John Challenger is its leader.

Usually quick to report on employment cuts and leadership exits, Challenger is out with an analysis that says the economic recovery is no longer "jobless." Here’s some of what he offered:

“The pessimism about the job market is evidenced in latest readings on consumer confidence by the Conference Board and the University of Michigan, both of which declined in March. However, while some might perceive that the job market is standing still, it has actually made significant strides since the end of the recession in several areas, including planned layoffs, private-sector payrolls, unemployment and hiring,” noted Challenger.

In the Challenger analysis of government data it found that, much like the previous two recessions, private-sector payrolls continued to contract following the declared end of the recession. From July 2009 through February 2010, private payrolls experienced a net decline of nearly 1.2 million jobs, according to the latest figures from the Bureau of Labor Statistics’ survey of employers. Since February 2010, however, private sector employment has seen net job gains for 13 consecutive months, adding a total of 1.8 million jobs. As of March, there were approximately 108.6 million Americans on private sector payrolls, which is about 93 percent of the pre-recession high of 115.6 million.

Employment is also growing in the Bureau of Labor Statistics’ household survey, which is used to establish the unemployment rate.  Similar to private payrolls, overall employment continued to decline during the six-month period following the end of the recession. However, over the past 15 months, there have been 10 months of gains for a net increase of 1.9 million newly employed Americans.

Meanwhile, the unemployment rate, which initially continued to rise for four months following the June 2009 end of the recession to a high of 10.1 percent in October 2009, fell to a 24-month low of 8.8 percent in March.  By contrast, unemployment peaked 19 months after the end of the 2001 recession and, following the recession that ended in March 1991, unemployment continued to rise for 15 months.

“There is no reason to think that these positive trends will not continue, even with the threat of higher fuel costs. Based on our tracking of planned job-cut announcements, which tend to be a forward-looking indicator of how employers see future business conditions, there are no signs of sudden reversal of fortune,” said Challenger.

Monthly job-cut announcements are at their lowest levels since the late 1990s.  In fact, the 130,749 job cuts announced between January and March represents the lowest first-quarter total since 1995.

At the same time, planned hiring announced in the first quarter totaled 112,942, which is more than double the 53,675 planned hires announced during the same period a year ago. 

Strange Criteria for Picking a Super Bowl Winner

This week, there’s a lot of talk about the passing prowess of Aaron Rodgers and the closing speed of Troy Polamalu. But if you’re looking to capitalize on a friendly Super Bowl wager this weekend, it seems unemployment rate may be as important as anything in predicting a winner. Yes, it’s bizarre, but the team from the city with the lowest jobless rate has won 16 of the last 20 games. RiseSmart reports:

Could a city’s economic prosperity, as measured by employment level, make a difference in its team’s chances of winning the Super Bowl?  Data from the Bureau of Labor Statistics suggests that it does.  According to a new analysis by RiseSmart, the team whose metropolitan area boasts the lower jobless rate has won 16 of the past 20 Super Bowls – an 80 percent success rate.  

Based on this historical correlation, the Green Bay Packers should be the favorite to defeat the Pittsburgh Steelers in Super Bowl XLV.   Through November, the 2010 unemployment rate for the Green Bay metro area was 7.7 percent, compared to 8.1 percent for the Pittsburgh metro area. 

On January 27, 1991, the New York Giants beat the Buffalo Bills in Super Bowl XXV, despite the New York City metro area having a higher 1990 jobless rate than Buffalo.  After that game, however, the Super Bowl winning city had lower unemployment in 16 of the next 19 contests, including Super Bowl XLIV, in which New Orleans (6.7 percent 2009 unemployment) defeated Indianapolis (8.4 percent). 

Other facts of note:

  • On the six previous occasions that both teams’ metro areas have had unemployment greater than 5.5 percent — as is the case this year — the team from the metro area with the lower jobless rate has won in every instance.  

  • This is the first Super Bowl in the past two decades in which both teams hail from metro areas with jobless rates exceeding 7 percent.  On the four previous occasions that one team represented a city with 7+ percent unemployment, it lost the Super Bowl in every instance.

  • Since 1991, Super Bowl winning metro areas have had an average annual unemployment rate the prior year of 4.8 percent, compared to 5.4 percent for Super Bowl losing metro areas.

“Unemployment is the No. 1 issue in America today, and that will be true on Super Bowl Sunday as well,” said Sanjay Sathe, CEO of RiseSmart, a provider of next-generation outplacement and recruitment solutions. 

“In weighing the meaning of this analysis, correlation doesn’t imply causation, of course. But you could argue that a fan base with lower unemployment is more likely to attend games, buy team gear, celebrate at sports bars and, ultimately, cheer their team on to victory.  By contrast, a metro area that is struggling with high unemployment might have a subtle but insidious effect on its team’s morale,” Sathe said.

Super Bowl: Winner – Jobless Rate; Loser – Jobless Rate
1991: NY Giants – 5.5; Buffalo – 5.3
1992: Washington – 4.6; Buffalo – 7.2
1993: Dallas – 6.9; Buffalo – 7.5
1994: Dallas – 6.1; Buffalo – 6.8
1995: San Francisco – 5.9; San Diego – 7.1
1996: Dallas – 4.8; Pittsburgh – 6.0
1997: Green Bay – 3.4; New England – 4.1
1998: Denver – 2.9; Green Bay – 3.3
1999: Denver – 2.9; Atlanta – 3.3
2000: St. Louis – 3.5; Tennessee – 2.9
2001: Baltimore – 3.8; NY Giants – 4.4
2002: New England – 3.6; St. Louis – 4.6
2003: Tampa Bay – 5.6; Oakland – 6.2
2004: New England – 5.7; Carolina – 6.3
2005: New England – 5.0; Philadelphia – 5.1
2006: Pittsburgh – 5.2; Seattle – 5.0
2007: Indianapolis – 4.4; Chicago – 4.5
2008: NY Giants – 4.4; New England – 4.1
2009: Pittsburgh – 5.1; Arizona – 5.3
2010: New Orleans – 6.7; Indianapolis – 8.4

Note: Jobless rates are for year prior to Super Bowl year.  Source: Bureau of Labor Statistics

Job Market Not All Bad News for Gen Y

Syndicated career advice blogger/author Penelope Trunk, whose Twitter feed is actually pretty amusing and insightful, offers her thoughts via bnet.com about why Generation Y is right to be optimistic about the future. Some interesting and encouraging words for those seeking work:

We read about how scared young people are, and how desperate they are for a job, but we don’t hear the other side: That young people are optimistic about their careers, their future and are doing well in the American economy. Underreported stories: Washington, D.C. is the easiest city to find a job, and young people love government jobs; farming is in a renaissance, and the local food movement is teeming with young people; healthcare and teaching are both booming; and while service-oriented work is hated by the top-down, rank-oriented mindset of baby boomers, Gen Y is much more collaborative and happy to work in the service sector.

Here’s another bit of evidence of Gen Y optimism: The Wall Street Journal reports that applications to business schools are down 2%. That’s a small decrease, but business school applications historically go up in a bad economy, and they stay up until things get good again. That applications are down is evidence that young people do not perceive the job market as terrible.

As the country moves to a knowledge-based economy, most Americans can no longer expect to earn more than the generation before them. In fact, Don Peck, writing in the Atlantic, explains that as the economy recovers it will look permanently different. This will not be a recovery where the skills of older people come back into demand; the jobs that emerge will be in new sectors, and the financial expectations of employees will permanently shift because of the new realities…

Additionally, the demographics of the U.S. workplace favor Generation Y: As baby boomers retire, Gen X, which is only half the size of Baby Boomers, cannot replace them. So there will be a significant worker shortage in the U.S. by 2015. Generation y will benefit from the worker shortage. They will get higher paying jobs faster, they will go up the corporate ladder faster, and they will be able to remake the workplace in their own image without much resistance.

You can call Gen Y entitled, or delusional, or self-centered, but Gen Y has a gift for reframing situations in a positive light. This is a gift that stems from the parents of gen Y being obsessed with self-esteem. Self-esteem breeds optimism, and this optimism makes Gen Y emotionally able to fend off the recession better than other generations.

Unemployment Comp: How Much is Too Much?

Jobs are — or should be — the number one priority as economic recovery (in that sense) remains elusive. For those currently without jobs, however, how much unemployment compensation is too much? It’s a tricky question, but one that is starting to be asked by more than a few people.

The unemployment comp program, created during the Depression as a temporary aid for laid-off workers, is now termed by some as an "expensive entitlement." While those out of work once received six months of payments, that has now surged to as high as 99 weeks in some states. Half of the more than 11 million unemployed have been jobless for longer than six months.

This is a downturn unlike any other since the program was created and many of those jobs will likely not come back. And while the vast majority are very likely doing all they can to find meaningful employment in the effort to return to their previous lifestyle, nearly two years of unemployment benefits has also undoubtedly led some to adopt the option of "let the government pay the tab" for awhile.

Few seemingly agreed with Kentucky Senator Jim Bunning’s recent filibuster that delayed the latest unemployment benefits extension (he wanted Washington to find a way to pay for it), but his logic was accepted in some circles. Colleague Jon Kyle of Arizona commented that the continued benefits are a "disincentive for people to seek new work" and that no one can argue that the current system is a "job enhancer."

Employers pay the bill through taxes in nearly all states (a few require worker contributions). Benefits have been extended before, but rolled back when the unemployment rate declined. That decline is proving difficult to achieve this time around.

A Washington Post article this week included the following:

"It is appropriate and natural for Congress to extend the time limit of unemployment insurance with the job market as bad as it is," said James Sherk, a labor economist at the Heritage Foundation. "But by quadrupling it, it is no longer an unemployment insurance program but a welfare program."

Phillip L. Swagel, a former Treasury Department official who is now a business professor at Georgetown University, said that some people might take longer to find a new job as a result of unemployment insurance extensions, but that right now it’s a needed benefit.

"The reality is that it’s hard to find a job even for people who really want one," he said.

But as the job market improves, Swagel said, unemployment insurance extensions must be pared back quickly, as they have been in previous downturns. "It’s important to let the extensions lapse as the job market recovers — to avoid having disincentives to work once the job market is better," Swagel said.

Part of the question is timing. For a program that is currently costing $10 billion a month, that’s something that needs answered sooner rather than later.

Cruel Irony for Job Seekers and Employers

The Indiana Chamber has pointed out during the course of the year that one of the unfortunate aspects of the state unemployment insurance tax increase passed into law in April was the likelihood of higher unemployment. Why? Companies already faced with a still sputtering economy would be forced to lay off more people to pay the additional tax.

Fortunately, in Indiana, a one-year delay in that tax increase has been proposed — and hopefully will pass early in the 2010 General Assembly session. In a recent story, the Associated Press described the problem on a national level. It included an interview with a longtime Indiana Chamber supporter (and former board of directors chairman).

A brief excerpt:

Employers already are squeezed by tight credit, rising health care costs, wary consumers and a higher minimum wage. Now, the surging jobless rate is imposing another cost. It’s forcing higher state taxes on companies to pay for unemployment insurance claims.

• Chuck Ferrar, who owns a liquor store in Annapolis, Md., expects to pay $9,000 in unemployment taxes next year, up from $3,000 this year. Health care costs for his employees will rise by $8,000, or 17.5 percent. "When you start adding this up, it turns into real money," he said. "If I lose an employee through attrition, I will not replace him. You can’t afford to do it."

• Sam Schlosser, owner of Plymouth Foundry Inc. in Plymouth, Ind., said his unemployment tax bill could double next year. Revenue at the family-owned company, which makes iron castings for machine parts, has fallen about 50 percent, he said. In case of higher taxes, his company may have to consider layoffs, he said.

• Marjorie Feldman-Wood, president of Al’s Beverages in East Windsor, Conn., which makes soda fountain syrup, said higher taxes would make pay raises less likely. Connecticut is borrowing from the federal government, and employers fear the state will have to raise taxes soon to repay the loan. "There’s only so much money at the end of the day," she said.

Bruce Meyer, a University of Chicago economics professor, said his studies show that higher unemployment taxes usually lead to lower pay for employees.

And this from the New York Times:

It works like insurance. If the government pays a claim, your rates go up. In fact, if your former employee collects $10,000 in unemployment payments, you can expect to pay close to twice that in increased premiums. At least that’s how it works in my state, Illinois.

And now, thanks to the stimulus package, unemployment insurance has been extended as much as an additional 20 weeks. If you’ve had to lay off 10 people, this could easily result in additional taxes of $10,000, $50,000, or even $100,000. It’s a time bomb that won’t go off until after employers get their contribution-rate increase, but it will go off.

And therein lies the final irony: Even after the economy improves, I’m going to think long and hard before I hire anyone. Thanks to the stimulus package — the stimulus package — the costs, paperwork, and legal exposure associated with hiring employees is on the rise. 

Indiana Unemployment Rate Remains at 9.8%

From the Department of Workforce Development:

Indiana’s preliminary seasonally-adjusted unemployment rate showed little change in October, the Indiana Department of Workforce Development reported today.

Indiana’s preliminary rate of 9.8 percent marks an increase of 0.1 percent from a revised September rate of 9.7 percent (+0.1 percent). Indiana’s month-to-month change is considered statistically insignificant. The national unemployment rate increased in October 0.4 percent to 10.2 percent.

"Indiana’s unemployment rate has held relatively steady for the past three months despite a steadily climbing national rate," said Teresa Voors, Commissioner of the Indiana Department of Workforce Development. "However, a projected soft holiday retail season combined with a slump in manufacturing and hospitality employment tempers my optimism concerning the coming months."

Seasonally-adjusted total non-farm employment in Indiana declined by 1,600 in October. Indiana reported the largest employment declines in manufacturing (-5,000), mostly attributed to a slowdown in domestic automobile manufacturing following a temporary "Cash for Clunkers" spike, and leisure and hospitality (-5,900). Sectors reporting large job increases include: construction (4,000), professional and business services (2,200) and financial activities (2,200).

Indiana continues to report the lowest unemployment rate of its neighboring states. Illinois increased 0.5 percent to 11.0 percent. Ohio’s unemployment rate grew 0.4 percent to 10.5 percent. Kentucky increased 0.3 percent to 11.2 percent. Michigan decreased 0.2 percent to 15.1 percent.

Additionally, here is a county breakdown of unemployment figures.

Hat tip to Inside INdiana Business.

An October Present for Hoosiers

I walked into a store earlier this week and the first thing to catch my eye was a vast display of Christmas merchandise. It’s not the retailers’ fault, but for whatever reason that bothers me. Call me a Grinch, but I’m just not in the holiday mood two months ahead of time.

But Indiana companies and employees received, in one sense, an early present this week — one that is most welcome. Senate Republicans announced their intention to seek a one-year delay in the uemployment insurance tax increases that were passed in April. The governor’s office is supporting the move, and it is hoped that Democrats will agree that the last thing needed in these still slow economic times is more Hoosier job losses.

This has been a top issue for the Chamber throughout the year. And while those involved in the lawmaking process thought at the time that they were offering a reasonable answer to a difficult problem, employer feedback and new analysis showed that wasn’t going to be the case.

After the legislative session, the Chamber documented the tax increases that nearly all Indiana businesses would face over the next two years – thousands of dollars on average, nearly $1.7 million for one company that used our online calculator and nearly $500 million for Hoosier companies in total. We shared the clear message that additional employee layoffs would unfortunately be the only way most could pay for the tax hike. We brought in new, independent analysis to demonstrate that despite more money being taken from businesses and more employee jobs being threatened that the unemployment trust fund deficit would actually increase.

The Chamber will continue to lead the way. No, this delay doesn’t solve the problem of a bankrupt UI trust fund, but that is a challenge that an estimated 40-plus states will soon be facing. There will need to be a federal solution. Now is not the time to take $500 million more from Hoosier companies and their employees without fixing the system. 

Two-Year Delay in Unemployment Trust Fund ‘Fix’ Would Save Hoosier Jobs

Since the end of the regular legislative session and the passage of HEA 1379, the Indiana Department of Workforce Development has compiled data and produced longer range projections that show that the intended fix for the Unemployment Insurance (UI) Trust Fund will unfortunately not be achieved. This new information is based on updated unemployment rate projections and the combined impacts of the state and federal tax increases.

While Indiana employers paid more than $500 million in unemployment insurance taxes each year from 2007 to 2009, that annual amount will more than double by 2011 and continue to increase over the next four years. That is the result of the state tax increase in HEA 1379, a federal UI tax increase that occurs when a state (like Indiana and many others) has an outstanding loan balance from the federal unemployment account and the interest on that loan. Indiana, at the end of August, had a loan balance of over $1 billion and is expected to have borrowed nearly $1.7 billion from the federal government by the end of this year and, despite UI tax increases of more than 100% on Hoosier business, that imbalance in the trust fund will also more than double – to $3.5 billion by 2012.

The Indiana Chamber will be pursuing legislation in the upcoming session of the General Assembly to delay the implementation of the new tax rates for two years. Currently, the new rates are scheduled to go into effect on January 1, 2010.

Delaying the implementation of HEA 1379 for two years will:

  • Save employers $491 million in increased UI taxes and save Hoosier jobs. Many businesses, in these difficult economic times, have clearly stated that the only way to pay these increased taxes would be to reduce their number of employees. Thus, not only would the economic recovery be slowed by a reluctance to hire, but current workers would be subject to job losses – ironically making worse the problem that was intended to be solved.
  • Put Indiana in the same position as more than 40 other states – in need of a federal answer to a UI trust fund situation that has reached critical levels due to the depths of the current recession. As of the end of July, 17 states had loans totaling more than $12.6 billion with another 12 to 15 states expected to have to borrow money before the end of the year. This will be a congressional solution, not a takeover of any state’s unemployment system. By delaying the state tax increases, Indiana would have a $4 billion deficit instead of $3.5 billion, but employers and employees across the state would benefit from less UI taxes paid and fewer job losses over those two years.
  • The numbers outlined above are unfortunately a best-case scenario. All calculations of business tax increases thus far have not included recent unemployment experience ratings (the layoffs of the past year will lead to higher UI rates and even larger tax increases for many under HEA 1379). In addition, if the economy does not pick up at the rates projected in this independent analysis, the estimated benefit payments will increase and produce an even larger trust fund deficit.

You can calculate the financial impact HEA 1379 will have on your company at www.indianaprosperity.org.

Bye, Bye Recession: You Heard It Here First

I’m not an economist, but I have stayed at a Holiday Inn Express in the past. See, sometimes those advertisements stick with you. But I digress. The reason for the opening line: I have no training or expertise for the following statement but here goes — the current recession will officially end (if it hasn’t already) within the next few months.

The evidence is anecdotal — more good news than bad in recent announcements (company relocations and expansions, government reports, important consumer confidence measurements, etc.). Total doom and gloom is giving way to a quiet and slowly building change of course.

Just like recession beginnings, however, the official end won’t be known until many months after the fact. Extensive job additions and the return of fluid capital markets won’t be evident until sometime in 2010. Unemployment rates won’t turn for the better for quite some time. It simply takes awhile for business reality to catch up.

If this proves to have even a small semblance of truth, don’t worry, I will remind you. If Washington politics, continued automaker woes or any other factors have me way off base, nevermind!

Editor’s note: Well, Tom, maybe you’re not so crazy after all.