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Michael Miller


By Michael Miller
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U3 and You

No, you’re not alone. We all sense it. The recently-approved state budget contains holes and smoke and mirrors.

They left it hanging right out there. $272 million in additional aid to schools is coming from unspecified revenue increases. “Revenue right now is looking good enough that we probably finance the increase from that,” said Governor Cuomo’s budget director. Right now. Probably.

We should all be a little indignant because everyone knows that only Nassau County is allowed to write its budgets that way. If your school district crafted its budget like that, the governor would send in troopers to seize the local Middle School.

There are also $450 million in reduced labor costs which still must be negotiated and worked out. Advocates and organizations are issuing dueling media releases about what made it in and what made it out of the heavily-traded multi-billion dollar Medicaid bill and what it will really mean to costs and revenues. And so on.

Time travelers from the future are the only humans who can put a firm, fixed number on New York State’s structural (ongoing) budget deficit.

Legislators, caught between rocks and hard places and oncoming headlights, seem mostly glad that the Governor is willing to own this for now. We’ll see come the time of falling leaves.

The light motif of this administration is “We’ll tell you the details later.”

If there was a plan, if this was a strategic retreat, then what may be coming up on us wouldn’t hurt so much. Wouldn’t potentially cause so much permanent damage.

There’s a new statistic that’s in every daily paper and website on the day I’m writing this, which is April Fool’s Day. We could write about half a dozen reasons that those anticipated revenues may well fall short. This one really gets on my nerves. Let’s play with the latest Really Good News. The official unemployment rate dropped slightly, and the number of jobs created officially rose slightly during March 2011.

The official unemployment rate published by the federal Bureau of Labor Statistics (called “U3” in labor slang) is 8.8 percent, as of the new April 1 figures. The BLS bases its unemployment estimate on survey data, but it actually issues estimates based on six different sets of data. The “U6” data includes part-time workers who want to work full time and “discouraged” workers who have given up looking. The U6 unemployment rate is 15.7 percent.

However, there are other surveys, with different methodologies. For example, Gallup conducts its own employment surveys that have consistently had the U3 rate about 1.5 percentage points higher than the BLS, and the U6 rate about 4 percentage points higher.

The official U3 unemployment rate among young workers, below age 20, rose to 25.3 percent, almost precisely what is was in Egypt when all those young people showed up in the square.

The total number of people who lost jobs (“job losers”) is officially 8.2 million, down 1.3 million people since November of last year. That’s U3 people. This is what our leaders call “turning the corner” and what others might call “bottoming out.”

The federal government has the means to tell us much more precisely how many Americans are really working or not working. The Social Security Administration can do it, practically down to the last pay stub. However, that would be telling.

Some economists are already warning that if too many discouraged workers, perhaps encouraged by all this happy talk, try to enter the job market again, it will raise the official unemployment rates, get people all sad again, and ruin the big recovery. Darned U6 people.

Until we have an economic strategy that includes building things that we need and that will further expand economic activity and opportunity, we’re not recovering. We can’t get near there until we fix our finance and credit situations.

Instead, families increasingly at risk and in crisis are expected to passively wait while “job creators” already worth millions get tax cuts, tax incentives and the benefits of regressive local taxation. Educators are our enemies. Broken roads and bridges fix themselves.

Four legs good, two legs better.

Michael Miller is a freelance writer, designer and strategic consultant who has worked in state and local government. Email: