The Diminishing Value of a College Degree and Unemployment

This article basically states how workers with college degrees can find jobs, but a lot are underemployed, meaning they are working jobs that do not typically require bachelor degrees. In 20123, the underemployment rate was a shocking 44%, compared to a steady rate of 33% in the last 20 years. It also states that the unemployment rate for college graduates ages 25 and older is 3.2%, but for college graduates under age 25, it's at 8.2% (2013), growing from 8% in 2012 and 5.7% in 2007 (before the recession, of course).

Basically, the New York Times is saying that college degrees do not create good jobs at good pay. Of course, people with college degrees are going to have an increase chance of getting jobs and higher wages, that is obvious. However, the value of a bachelor degree has diminished significantly over the past few years since the Great Recession, and with unemployment for college graduates under 25 increasing, it doesn't look good for people my age who are trying to get jobs right out of college.

In addition, as we have learned in class, the unemployment rate does not take into effect people who are out of the labor force, or not looking for a job. Due to the economic crisis, many people are unmotivated to find work if they are not able to get a job right away, thus exiting the labor force. This shows that more people with college degrees are not finding jobs than the unemployment rate suggests. As well as this, many people who need work will look for any job possible, including lower paying jobs at the minimum wage, a probably cause for the increase in underemployment in 2013.



 http://www.nytimes.com/2014/02/13/opinion/making-college-pay.html?ref=unemployment&_r=0

Don’t buy the hype of a robot-driven ‘jobocalypse’

http://america.aljazeera.com/opinions/2014/2/robots-jobocalypsejobseconomyunemployment.html



This article talks about how our country is relying more and more on capital when it comes to producing goods and services, more specifically recent technologic advances. The jobless rate is now at 6.7% which is better then the double digit numbers that we were seeing a couple years ago but it is still relatively high. Workers are being replaced by "robots" and this is worrying many economists who think machines could end up replacing too many workers and capital gains will begin to outweigh labor. This technology is making many companies much more productive and is increasing output at a staggering rate. Other economists say that we are too quick to put blame on these machine for our financial issues, it is argued that many jobs cannot be replaced by emotionless machines and they will never fully be able to take human labor out of the equation.

Unemployment Filings Fall, Signaling Steady Job Gains

Over the last week labor markets improved and the number of Americans filing new claims for unemployment benefits has gone down. But the cold weather should continue to damage the economy and keep it slow. The weather has caused many people to miss work, which held back payroll growth in February. Along with the hurting payroll growth, the snowstorms and cold weather have caused growth in electricity and heating fuel prices this past January in households. The gains in household energy had accounted for most of the .1 percent increase in its CPI.  Because of the frigid temperatures the electricity prices rose 1.8 percent, natural gas prices up 3.6 percent, and the cost of heating oil rose 3.7 percent.  These are some of the biggest increases in a while and could continue to change if the temperature stays cold. Overall inflation remained contained and CPI rose .1 percent for the second month in a row. 

http://www.nytimes.com/2014/02/21/business/economy/unemployment-filings-decline-signaling-steady-job-gains.html?ref=economy&_r=0

Fannie Mae Profits Push Taxpayers into Black On Housing Bailout

Fannie Mae has announced that it will be paying back the U.S Treasury Department a total of 7.2 billion dollars. This will pay off the money which was given to them during the 2008 bailout. They are the first company to be able to pay everything back. However they will still be under government control until the government winds them down. Fannie Mae at one point was responsible for 60% of all home loans in the United States, this was the reason the government felt they needed to be bailed out. The slight rises in the housing market has allowed Fannie Mae to become profitable again and ending last year they netted a record $84 billion. This helped bring them back into the black. This hopefully is a good sign that the economy is improving and that companies are becoming able to repay their debts. Hopefully this will prompt other corporations who still owe money to start paying it off, which will help offset the enormous deficit.




http://www.brecorder.com/money-a-banking/198/1155994/

Financial crisis threatens Russia as Ukraine spins out of control

http://www.telegraph.co.uk/finance/financialcrisis/10652767/Financial-crisis-threatens-Russia-as-Ukraine-spins-out-of-control.html

As of recently, Ukraine has been in turmoil with many people protesting against what they consider to be a corrupt government. Violence has been becoming more and more common there, and a civil war seems to be on the horizon. This will certainly cause financial problems for Ukraine, but Russia will end up much worse off as well.
Russia, which has been near recession, is not only feared to send military to intervene in the situation but also has been helping Ukraine out economically. They have loaned them $3 billion so far to keep foreign reserves high enough. While $15 billion total was planned to be loaned, future payments now seem to be questionable. With this violence, Ukraine is put at a high risk of defaulting, and Russia is now left with the choice of suffering losses from the default or paying the cost of keeping the economy healthy enough.
Things have already been looking grim for Russia. Output has fallen, as has investment. The ruble is also looking very unhealthy, as it is at an all-time low against the euro. Ukraine's economy becoming another burden to them could prove to have severe consequences on Russia's own economy.
In the last recession of 2008, the US's housing market collapsed, the previous success of which the economy depended upon. Russia's economy has been very dependent on oil, which leaves it vulnerable to something similar to what happened in the States. If supply of oil from elsewhere were to increase dramatically, crude prices would significantly drop, leaving Russia with a huge loss. This along with the current events in Ukraine leaves the future of Russia's economy to seem very shaky.

An article from money.cnn.com reveals that the Federal Reserve officials had no idea that a deep recession was coming, and thus the hesitation in their action had a deep impact in the US economy as well as its ability to recover.
On Friday morning, Feb 21, the Federal Reserve released more than 1500 pages of transcript, featuring "word-for-word" its 14 policy making meetings and conference call in 2008. These transcript revealed the uncertainty of the Fed's officials about the US's economic outlook leading up to their drastic actions.

"Meeting just a day after Lehman Brothers filed for bankruptcy in September 2008, they couldn't agree on whether their decision to allow the investment bank to fail was the right move..."

 It was long before the magnitude of the crisis was finally sinking in with officials: The Fed decided to retreat interest rate to near zero and remained its position five years later. Even then, the Fed was still overly optimistic in its reports and upcoming forecasts. Predictions indicated that unemployment would peak at 8.25% in 2010, whereas in reality, it peaked at 10%.

Many economists had successfully predicted the recession of the economy long before it ever happened. Why couldn't the Federal Reserve? This is a very good question to ponder. Please give your thoughts on this blog post / articles.

Source:

Federal Reserve underestimated the crisis

 

Study Finds Greater Income Inequality in Nation’s Thriving Cities

http://www.nytimes.com/2014/02/20/business/economy/study-finds-greater-income-inequality-in-nations-thriving-cities.html?ref=economy&_r=0 

If you live in a large, thriving city such as New York or San Francisco, it is much more likely that the distribution of income is much less equitable. This is not as quite as large of a problem in smaller cities like Columbus. Because of this, Bill de Blasio, the mayor of New York City, has promised higher taxes on the very wealthy and has promised better services for the poor. It will be interesting to see how this affects the city and if things will become more equitable.

long term unemployment

http://www.economist.com/news/finance-and-economics/21596529-americas-labour-market-has-suffered-permanent-harm-closing-gap

 

 This article focused on the short term unemployment and long-term unemployment in the last part. Alan Krueger of Princeton University found that in 2010 about 18% of the long-term unemployed quit the workforce each month. That has since risen to 24%.Meanwhile, the rate at which they find work has edged down to 10% per month. The work they find is often transitory or part-time. This is interesting, because even if the long term unemployment workers get a job, most of them again is fear of losing their jobs. The government have to think about how to provide regular jobs for long term unemployment. Most employer may think that long unemployment worker has any problem and that makes long term unemployment more difficult to get jobs. I can understand employer’s mind. Hiring long term-unemployment is risky. Only government can improve this situation. The government should talk with companies more about what long-term unemployment are not so bad, and should improve the quality of the long term unemployment and mind of employers. For example, the government should give money or exempt tax for the company which hires long term unemployment. When the same situation continues, the long-term unemployed person is excluded from the life.

Why is youth Unemployment so High

http://www.economist.com/blogs/economist-explains/2013/05/economist-explains-why-youth-unemployment-so-high

The International Labor Organization estimates that there are about 75 million 15-24 year old looking for work today.  This figure also excludes a large portion of youngsters who are not even considered in the labor market approximately 290 million 15-24 year old's.  Youth unemployment has increased by 30% in the OCED and has doubled to 20%  as proportion of the youth population.  This is not simply just a result of the financial crisis although this is part of the reason.  A second factor is countries with fast growing populations have inefficient labor markets.  A third factor is the skills of the youngsters today and the vacancies that employers want to fill.  Germany has a fairly low level of unemployment and they have chose to focus a lot on vocational courses for students.  These effects can go on for years and eventually lead to lower wages for this generation along with leaving more people without job's throughout their life.

Closing the Gap - America’s labour market has suffered permanent harm

This article, from last week’s issue of the economist, looks at the output gap in the United States. An output gap is an economic measure of the difference between the actual output of an economy and the output it could achieve when it is most efficient, or at full capacity. The United States has a negative output gap, which occurs when actual output is less than full-capacity output. The authors argue that even though the unemployment rate has come down to 6.6 percent, signaling an improving economy, only about 59 percent of people have jobs (down from 63 percent pre-recession). These seemingly contrasting statistics are evidence of the decline in the labor force participation rate, which is down to 63 percent from 66 percent in 2007. The authors suggest that the aging population has a lot to do with the declining labor force participation rate and is the reason that the Congressional Budget Office (CBO) has reduced its estimate of America’s potential output. The reduction of the potential output estimate has reduced the output gap, which the CBO now estimates to be 4% of GDP.