Mish Weekly Mailbag 2009-07-04

I often receive many interesting emails from readers. Bear in mind that unless I specifically comment, I may or may not agree with the Emails. Here are a few from this last week.

Aircraft Repair Jobs Revisited

In response to Aircraft repair jobs sold to foreign workers, resumes not important GR writes:

Hi Mish,

Very interesting story.

I used to be a Boeing Pilot for South African Airways 40 years ago. We used to train crews from India. None of us would ever get on an Indian flight.

Very sadly, over the last 30 years, the US has allowed its FAA to degenerate badly. They are now totally minimalist to save expenses.

Aircraft mechanics are making hundreds of small decisions every day. Usually it is a no-brainer. However, one or two decisions a day are pivotal. As you know, very often a mechanic's decision can take 10-20 years to cause a disaster.

I really fear for the US because it is making only expedient short term decisions about everything. This is not like the US of my generation.

Regards GR

Radio Advertising Sign of the Time

RT writes:

As a frequent reader of both your blogs, I thought you might enjoy (if that is the right word) this little tidbit. Last night I heard on Q104.3 (a tri-state area radio station) the radio host making an announcement that in these trying economic times, finding a job can be harder than ever. That's why you can now PAY the radio station to have your RESUME read on the air.

If that doesn't tell you the true state of affairs, I don't know what will.

This is one consequence that I wouldn't have ever guessed. It's not surprising to me, but I just wouldn't have ever thought of it.

RT

Thanks RT

Your story is telling for a couple of reasons. Radio advertising has to be way down for the station to do that. Unemployed individuals cannot be paying much to have their resumes read. So the station is as hard up for cash as those unemployed individuals whose resumes it reads on the air.

True Unemployment Rate

TMK from Utah has this interesting perspective on the unemployment rate:

Mish

I am a Mormon in Utah, and last Sunday evening I was at a Priesthood Meeting (basically, all the men hold the Priesthood) with our Stake President, who presides over a Stake (equivalent to a diocese) of 5,000 members. A good statistical study group, in other words. (FYI, if you weren't already aware, the Latter-Day Saints (Mormons) keep EXCELLENT tabs on their members and are fastidious record keepers.)

I went up to him after the meeting and asked, "Are you keeping track of the number of heads of households out of work in our Stake?" "Oh, yes," he said, and then he threw out a number of the unemployed heads of households. "How does that translate into percent?" I asked. "Sixteen percent", he told me.

We talked about how this is significantly higher than what the national media is reporting.

This is in Utah County, where economic difficulties are rising, but I wouldn't consider depression-like, yet.

Nonetheless, I was amazed to read your informative blog today indicating that the more accurate count is, indeed, 16 percent.

TMK

Spanish Economy

Bran from Spain writes:

It is always hard to be objective as circumstance and sentiment is ever changing, but I will give you my feelings as to the temper in Spain.

Personally I have the sense of present/forthcoming serious economic disintegration, of social confusion and retribution. There seems no outlet to the bullishness more present in Spanish society than others, and that it may end up being almost vindictive, if not destructive in its expression.

As Spain relies so heavily on foreign participation to augment its productivity, it is not going to be a primary target for future global investment, as it is a secondary economy, and the northern economies may take several years to restock. The boom here has leveled prices with the north which due to Eurozone can't be diminished easily to invite investment.

We now have a very terrible cocktail of large immigrant populations, wealth exodus, high unemployment, end of anti-cyclic bank provisions, high public deficit, inter-regional disagreements, corruption, pre-democratic divides in power and politics, a dysfunctional legal system, large differences in expectations between young and old, past and future, poor economic education amongst the population, etc.

Maybe the only things that will maintain the fabric are family, religion, and the underground economy - not exactly inviting in business terms.

When I see such I dread to think what will be made of this country, even at the best of times they didn't quite have their act together. Remains to be seen.

All the best, Bran.

I cannot comment on Bran's take on the Spanish economy other than to say I trust his judgment. I can comment on his command of the English language and it is clearly superb. Thanks Bran.

Independent Contractors and the Unemployment Rate

DAL Writes:

The day after I retired (in 1993) I went back to work as an independent contractor or consultant. I've since retired for good, but here's a question...

During the 1990s and up until 2008 there were a huge number of ICs employed. The IC pays his/her own Social Security and Medicare taxes, files tax returns as self-employed. There hae been literally millions of ICs.

During layoffs a company will simply let ICs go. No fuss, no muss, just tell them to stop showing up for work. No problems with unlawful discharge suits, no severance pay. Nothing. And, by the way, since they are self-employed they do not qualify for unemployment compensation, so they do not show up on the government books.

If from 5 million to 7million people have been let go - "officially" - since the beginning of the downturn, how many people on IC status are simply out of a job and out of luck? Is there any way of finding out? My guess is that unemployed independents may at least equal the number of people counted on the roles.

Something to think about.

DAL

Thank's DAL, you are correct. I have commented on this many times but I do not know how to total it up. It is far worse this go around because of all the mortgage broker and Realtors who are still officially working but who have not had a paycheck for months.

This is another reason the reported Birth/Death job numbers are absolutely bogus. Many small independent business are no longer in existence yet the Birth/Death model showed net job expansion through the entire recession. The BLS model is a total fabrication of reality.

From Jobs Contract 18th Straight Month; Unemployment Rate Hits 9.5% :

Birth Death Model Revisions 2008



click on chart for sharper image

Birth Death Model Revisions 2009



The BLS should be embarrassed to report such nonsense.

Mish