CNN fails to put job-loss figure in historic context

While bad, it isn’t necessarily all that bad

Updated, June 5, 2009, at bottom.

Yes, it is true that, in terms of raw numbers, the U.S. economy lost the most jobs since 1945.

But as a percentage decline, it’s nowhere near as bad, considering the population of 305 million today is almost double that of 1945.

In fact, per CNN’s own graph, the 2008 losses aren’t as bad as 1982, as percentage of total population; it’s 8.5 percent for last year vs. 9.5 percent in 1982.

If you're not over 40, you may not remember the "double-dip" 1980-82 recession. But can we hold off saying this is the worst crisis since the Depression?

Now, it is true, as Kevin Phillips has so well noted, that unemployment calculation methodology has been, to be blunt, "fudged" since 1982. That said, some of the fudging had been done before then, as Phillips has also written.

And, as Phillips also has noted, fudging numbers has been a bipartisan affair, with Democrats back to JFK "trimming" on unemployment and the GOP "trimming" on inflation.

That said, as I note, there's a full percentage point difference between 2008 job losses and 1982. Even with allowance for fudging, I don't think you can say problems now are significantly worse than they were then.

I’ve said it before: Sometimes, whistling past the graveyard is nothing but false optimism. But at other times, becoming too afraid of the “graveyard” is a self-fulfilling prophecy.

And, at least for now, I think the MSM is too much in “self-fulfilling prophecy” mode.

Update: Per some comments at Washington Monthly, especially as one would-be apparent doom-and-gloomer keeps trying to shoot me down on 1982 being worse, it turns out he's digging himself an ever-deeper hole, and is obviously under the age of 40, if not under the age of 35.

First, per information from Jim Glass, about which I wasn’t sure and hadn’t checked, CNN, et al, doubly blew it, as has WM poster "Joe Friday."

Turns out 1983 was a worse year for job losses, by percentage of workforce, than both last year AND 1982.

Yes, the "augmented unemployment rate," of part-timers, discouraged and semi-discouraged, plus traditional unemployment, may be at 13.5 percent.

But, unemployment numbers, with or without fudging, weren't broken out in such detail in 1945. It also obscures the point that jobs lost is a straightforward non-fudgeable stat that was worse by a full percentage point, in terms of population percentage, in 1982 than today, and was twice as bad in 1945 than today.

Joe Friday at WM still couldn't accept that. He said that, if I looked at civilian employment-population ratio, noting it was lower in the late 1990s at least than in 2008, last year would turn out looking worse than 1982 after all.

That said, I found data back to 1970 at Brad DeLong's site going back to 1970.

The ratio was .60 in 1982 and about .63 this year.

Adjusting for that, jobs lost to number of civilian employed, as percentage, was worse yet in 1982, at 15.67 percent, than the 13.45 percent last year, thus strengthening my argument.

Yes, there are other ways of skinning the cat, but per the job-loss measure which, as I said, is not fudgeable, 2008 wasn't as bad as 1982. Nor as bad as 1983; I noticed

Now, 2009 may well be worse. I'm not denying that. But, let's not yet get too much into doom and gloom.

Remember that statement about fear a certain other Democratic president made in 1933? And, if you're going to claim that you already know the current recession will turn out worse than 1980-82, don't post here unless you first send me some proof of your age.

Update, June 5, 2009: Welcome to people hitting this blog post after announcement of the May unemployment numbers, along with the news that, NOW, not six months ago when I made this post, the unemployment numbers as of May are being noted as the worst in 25 years. That is, the worst since 1984, as the last effects of the 1980-82 recession petered out.