Despite Stimulus, 6 Million Benefit-Paying Jobs Vanish in One Year

Recently by Mike “Mish” Shedlock: Predictions of War, Financial Bust, and MoreGloom

Based on population growth, and even factoring in the number of retirees, the US should have gained about 1 million jobs.

Analysis of weekly unemployment data and covered employees shows that 5,977,844 benefit-paying jobs have been lost in the last year.

Click to enlarge The above chart is from reader Tim Wallace. I added the date and numeric annotations.

Covered Employment Stats of Merit 

  • Covered employment is back to 2004 levels.
  • Close to 6 million benefit-paying jobs have vanished in a year.
  • More than 8 million benefit-paying jobs have vanished since the 2008 peak.

What Is a Covered Employee?

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The exact meaning of "covered employee" varies slightly state to state, but not by much. In simple terms it means one is eligible for unemployment insurance benefits.

Most states exclude the self-employed, commission-based employment such as real estate agents, those in student-training programs, academic and hospital internships, employment by churches or religious organizations, and rehabilitation programs. Self-employed individuals must pay into unemployment insurance programs, however, the self-employed aren’t eligible for benefits anywhere.

Nearly 6 Million Jobs Vanish

By the above interpretation, it’s safe to conclude that 5,977,844 jobs totally vanished (not just benefit-paying jobs).

The only way that can’t be true is if there was a sudden shocking increase in the number of real estate agents, church hiring, or close to 6 million people all of a sudden decided to go into business for themselves.

All of those possibilities are highly unlikely to say the least.

Tim Wallace writes:

The ANNUAL ADDITIVE TREND from 2004 to 2008 of 1.9 million is now a net loss of 8 million over the past two years:

Year….Covered………..Number Added From Previous Year 2004….126,276,670….Data from hard copy sheets 2005….127,622,590….1,345,920 2006….130,605,286….2,982,696 2007….132,623,886….2,018,600 2008….133,902,387….1,278,501 average added per year = 1,906,429 2009….131,823,421….-2,078,966 2010….125,845,577….-5,977,844

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Did the stimulus save or create any jobs, or did we lose more than 8 million jobs in two years in spite of record amounts of stimulus?

Data including the covered column is found on the US Department of Labor website, Weekly Claims Data.

Was There a Massive Surge in Retirees? Click to enlarge There was no massive surge in retirees, so that can’t account for the loss of benefit-paying jobs.

Retiree Data 

  • In October of 2006 there were 30,908,097 retirees.
  • In October of 2007 there were 31,467,071 retirees, an increase of 558,974.
  • In October of 2008 there were 32,222,895 retirees, an increase of 755,824.
  • In October of 2009 there were 33,366,881 retirees, an increase of 1,143,986.
  • In October of 2010 there were 34,463,650 retirees, an increase of 1,096,769.

Information on retirees is from the Social Security Administration. It undercounts retirees not in the system so actual numbers would be somewhat higher.

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November 19, 2010

Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.