Mike Shedlock

Reader "Mike" is wondering how many unemployed have exhausted all benefits.

Hello Mish

I was wondering if you would hazard an estimate as to the current number of unemployed who have exhausted all benefits. I know BLS and Department of Labor doesn’t keep track of that population.

I did see your estimate last year in
Question of the Day: How Many People Have Exhausted All Their Unemployment Benefits?

Do you have an update?

Thanks
Mike
I pinged Tim Wallace who made the previous estimate, and here is Tim's response.
Hello Mike(s)

This is a hard one to answer because I cannot find any government numbers in my searches. I can however tell you these facts:

  1. In January of 2009 there were 133,886,830 people in the state unemployment pool footnotes in the weekly unemployment report. Today there are 125,807,339, a loss of 8,079,491 unemployment insurance covered positions.
  2. The federal EUC2008 extended program at that same time covered 2,147,837 people. Today the various federal extended programs cover 7,169,176, a net increase of 5,021,339 covered people at the federal level.
  3. Since we know there were 8,079,491 people who have totally dropped off the state level roles and there is a net increase at the federal level of 5,021,339 people, we can safely assume that 3,058,152 people have exhausted all benefits - they are no longer covered on either sets of roles.

However, it is more complicated than that.

We know also that in the years leading up to this economic depression, covered employees rose by an average of 1.9 million people per year - people entering the workforce in positions with benefits.

Given the economy has been harsh for several years, not all the 1.9 million new job seekers have found positions. Let's assume 1/2 of them did (2,000,000 in two years), and that number is reflected in the 125.8 million covered workers.

Let's also assume 2 million younger workers took jobs of older, higher priced workers who were displaced and lost benefits. It could easily be greater.

Adding 2 million to line three and rounding up a bit, I would reasonably assume that roughly 5,100,000 people have exhausted all unemployment benefits.

Another interesting thing to note and remember is that social security payouts which averaged an annual increase of about 3% net after COLA adjustments increased by 8% net in FY 2009. They are back to tracking 3% now in the past two years as there is no COLA adjustments and that is the net increase. I would safely say that a large number of people who took the hit in 2009 simply retired and never re-entered the workforce.

There is absolutely no excuse for this information to not be a readily accessible from the BLS or Department of Labor.

Tim

Thanks Tim

Hello Mike, the answer seems to be a minimum of 3 million and more likely 5 million or so.

Please consider Income, Poverty, and Health Insurance Coverage in the United States: 2010. Report released today.

  • Real median household income was $49,445 in 2010, a 2.3 percent decline from 2009
  • Since 2007, the year before the most recent recession, real median household income has declined 6.4 percent and is 7.1 percent below the median household income peak that occurred in 1999.
  • Both family and nonfamily households had declines in real median income between 2009 and 2010. The income of family households declined by 1.2 percent to $61,544; the income of nonfamily households declined by 3.9 percent to $29,730.
  • Real median household income was $49,445 in 2010, a 2.3 percent decline from 2009. Since 2007, median household income has declined 6.4 percent (from $52,823) and is 7.1 percent below the median household income peak ($53,252) that occurred in 1999.


Poverty Rate



click on chart for sharper image

Real Median Income



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Real median income has been in decline since 1999 and is now back at a level last seen in 1996. Real median income is below the level seen in 1989.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com


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Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.