The Labor Market and Teacher’s Unions

Last Friday the economic situation is becoming more enlightening. The spin is not spinning very far. The numbers and the situation for millions American are shining the light on reality – the economic is not going to improve. It is clear that the media and the Office of the President only care about the percentage of unemployment. I am certain this is because that feel you only have a surface-level attention span to only care about one number. This generally would be true under good economic times – which is why it took eight years under President Bush II to get people convinced the economics were bad (they were not). They were not bad until after the 2006 mid-terms, when the Big “D” rolled in and started demolishing the budget. Alias, I digress back to the labor force and the recent employment news.

A September 7th AP article is incredibly misleading – surprised!?! You should not be – after all who are they looking out for? To illustrate this mischievery – look at the title “US economy adds 96k (96,000), rate falls to 8.1 pct (%)”. You read that and if you are a mind-numbed democratic voter and you think – oh wow the economy added jobs and the rate went down! Great! An intelligent independent citizen, not a Republican stooge, understands the world around them and says – I understand media bias and I am going to look at this further. It is unfortunate that we have to first deny their reporting is accurate, by default. A portion of the 1st Amendment (independent press) no longer exists and if you think for yourself it seems like you live in a world where up is down and down is up. We are flying upside down and trying to re-define gravity as up.

I will assume that for the time you are reading this article you have applied the “real life” prism to the world and can process ideas and information on your own. As such, if you were to do that you would see that there were indeed 96,000 jobs added, but 368,000 were removed from the “labor force”. What is the labor force? Empirically this “force” is measured by the US Department of Labor: Bureau of Labor Statistics (BLS) as the “Civilian labor force participation rate”. It is a measurement of the percentage of willing, able-bodied Americans actively employed or seeking employment typically between the ages of 15 and 65. A quick graph [see graph below] from the BLS of the participation rate suggests that the percentage is down almost 2.5% from 2009 and currently equal the rate from back in 1979. It currently sits at 63.5%, 127 out of every 200 people on the street are working.


It might not seem like a large change, but it amounts to ~88,921,000 currently not in the labor force – a BLS spreadsheet. So the unemployment rate dropped 0.2% but the number of people removed from the labor force was 383% more than the people who found jobs. The moving average of the unemployment rate will continue to drop those counted in the labor force – this is a dishonest means of calculation. I will illustrate this absurdity here by being absurd: I predict the unemployment rate will eventually reach 0.0% because the labor force participation rate will be 0% – remarkable economic improvement!

I have mention in a previous post that the unemployment rate is not accurately stated (U3 vs. U6). It would be safe to say the true unemployment in this country is above 11%. A staggering figure that we all should ashamed of – certainly governmental leadership. An epic failure, again, of the public trust. It is proof-positive that government intervention creates no jobs and only prevents them from being created. I simply wanted to highlight another aspect of the labor economy that the media is poorly reporting on.  All in hopes of distracting you from what is happening – the fundamental transformation of our country.

I want to now turn to news more recent – surrounding the Chicago Teacher’s Unions. This week Chicago teachers are striking over contract negotiations. In current economic times it is not easier to illustrate the disparity between public and private sector employment. The contract that they rejected was a $400 million contract and worked out to a 16% raise over four years (4%/per year) – according to a Chicago Sun~Times article. David Vitale is Chicago’s School Board President and he was quoted about the contract saying “This is not a small commitment we’re making at a time when your fiscal situation is really challenged”. The School Board estimates a ~$1 billion deficit at the end of the year. More Monopoly money talk when you have the federal government backing.  I imagine they will pay for that with raising Illinois taxes from 67% to 73.12354% – because this is how you sure up deficits?

A reasoned person, you would think, would see that contact and say that is a fair contract. Under uncertain economic times a 4%/per year increase is 4% – not a layoff or not (-2%). But it appears the Teacher’s Union leadership do not care about the fiscal situation or the education of their children. Prove me wrong!!! It also appears that Chicago teachers are the highest paid in any city (before benefits) at $76,000/per year according to NRO’s The Corner blog post. But everyone is entitled to an automatic pay increase in Obama’s America – certainly if you are in a public union.

Never fear, however bad the contract, the true purpose of schools lives on. After all, there has to be priorities in life. Despite over 400,000 kids not at school, some schools are still open to do their most important service and that is to serve free meals – according to a article! According to the President the private sector is doing fine (11% Unemployment) and it appears that teachers are doing poorly (16% pay increase over four years). Tough life if you ask me. I am just glad Chicago kids are getting their meals. Yes, yes indeed, I am glad I moved away from Illinois because they truly think gravity points up and money appears when you pass GO!