Friday, May 1, 2009

Economics: This is Not the Great Depression

OROVILLE, CALIFORNIA - I have often been a critic of governments for trying to put too rosy of a spin on the economic situation. Unemployment statistics, for example, do not tell anything near the real story of how the labor market actually feels, as the count does not include those who are underemployed, have temporarily or permanently given up looking for work, or who are ineligible for unemployment (in Canada, Employment Insurance) after losing their jobs. I have never been personally counted as an unemployed person even when I have spent many months unable to find a job.

Yet, comparisons made with the Great Depression in the current situation--at least as it exists today--just don't hold up very well in terms of the state of affairs of most people. The conversations I have had in the past two days with my great aunt--who live through the Great Depression--have made this clear. While there are more "tent cities" than many governments wish to admit, the amount of "Hooverville"-type homeless encampments is apparently nowhere near what it was during the Great Depression, though hard statistics on that seem to be hard to find. There are not hobos riding trains around the nation--and not just because law enforcement on illegal train riding is better, or people are using a different mode of transportation--there simply isn't the same phenomenon of "boomers" moving from place to place.

The labor market in general hasn't taken on the volatility that occurred during the Great Depression. People aren't jumping from short-term job to short-term job to the Civilian Conservation Corps back to a short-term job again the way that was quite common in the 1930's. The pattern today is much more the recession pattern of people taking part-time and underemployment to sustain themselves, which is a step above in stability.

All this being stated, it needs to be noted that if things continue to go sour in the economy, it is entirely possible that the current situation will begin to more closely resemble the Great Depression. Just as the Swine Flu (er, H1N1 virus) has the possibility of starting a pandemic, the current downturn without proper precautions could become something much worse. Just don't try to convince me that we're already there.

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