9.7 % unemployment, but the employed have a great life :-(

Throughout this Great Recession, I have been worried about unemployment. Because it seemed like those whose productive economic lives get derailed might have a very hard time getting back.
But, of course, the stock indices have been climbing up quite impressively--here in the US and elsewhere too. (So much so that one commentator worries that this is another bubble in the making!)

Which is why my brother, who was impressed with all the talk about recovery, was probably surprised at my rather pessimistic statement that things are not good. I told him something like, "it is a great time if you have a job because prices are even falling, but it is a horrible time to be unemployed." A college-mate who now lives in the UK has been unemployed for almost a year now, and his is one of the many, many millions of such horror stories.

Of course, the scientific method means that we don't trust our own intelligent guesses but want evidence for the notion that some people and professions are doing well through this Great Recession. And, slowly that evidence is trickling in.

Richard Florida, who can be quite single-minded in his "creative class" arguments ad nauseum, writes:

Computer, sciences, and engineering professionals experience lower rates of unemployment than arts, design, and entertainment workers. But the lowest rates of unemployment and the most stable employment are found in meds and eds occupations - health and education - where unemployment stays consistently low, even during downturns.

The full analysis is here.

Notice again that meds and eds go together? (yet another evidence for another gut feeling of mine that if healthcare bugs us because costs are always going up, then eds should bug us even more. more here.)

So, ok, some professions have not experienced this recession big time. How about their real earnings? You might think that people have jobs, but have taken paycuts. Not actually, writes David Leonhardt:

Wage growth has picked up in the last several months, according to two different government surveys. You don’t hear or read nearly as many stories about pay cuts these days. Even though unemployment has reached its highest level in 26 years, most workers have received a raise over the last year.

That contrast highlights what I think is one of the more overlooked features of the Great Recession. In the job market, at least, the recession’s pain has been unusually concentrated.

And it hasn’t been concentrated in the typical way. Nearly every region and every demographic group has indeed been affected. But the pain has been concentrated within groups.

It must be awful to be unemployed. I can still recall, with horror and shame, my year of unemployment--well, through a massive, massive underemployment. I was so frustrated that I seriously considered taking up taxi driving. In Los Angeles! But, to be unemployed when one is 40+, or worse 50+, well, that I am sure is nightmarish.

So, how good life is for the employed lucky?

Executives of companies don’t cut pay, even when demand for labor has fallen. They worry that employees will become less motivated or start looking for another job, says Laury Sejen, who oversees the compensation consultants at Watson Wyatt. So companies instead lay off workers or stop hiring. They concentrate the pain.

The added wrinkle in this recession is that inflation has dropped below zero, thanks largely to a sharp fall in energy prices. In most recessions, inflation remains positive — indeed, higher than wage growth, which means that inflation-adjusted pay declines. In this recession, average prices have fallen 2 percent over the past year, while weekly pay has either been flat or risen 1 percent, depending on which data you believe.

So inflation-adjusted pay is up 2 to 3 percent. Amazingly enough, that’s almost as big as the peak increases during the late 1990s boom.

I am thankful for the job I have. And, of course, the email from the student is worth more than a few million dollars.
Here is to hoping that the unemployed, including my college-mate, will soon find gainful employment.