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Economists have discovered how bad the economy really is


Economists have discovered how bad the economy really is

By Matt O’Brien April 21 at 8:00 AM

Unemployment is almost back to normal, but the economy isn’t.

That isn’t because the unemployment rate is a conspiracy to make things look better than they really are. It’s because even though the unemployment rate tells us the most about the labor market, it doesn’t tell us the full story. All it does is show us how many people who are actively looking for work can’t find it. But that leaves out the “shadow unemployed” who want full-time jobs but have either given up looking for them or can only find part-time ones. That usually doesn’t make that big a difference, but it does now, because, even six years after the crisis has ended, there still isn’t much that’s usual about this economy.

Now if you add it all up, this shadow unemployment means our jobs hole is more than three times as big as it looks. That, at least, is what economistsDanny Blanchflower and Andrew Levin found when they looked at how low the unemployment rate is versus how low we think it could go, how high the participation rate is versus how high we think it could go, and how many people can only find part-time jobs. That first part tells us how much further unemployment itself could fall, the second how many discouraged workers could come back, and the last how many people would work more if they could. In other words, it shows us the gap between how many full-time jobs we have and how many full-time jobs we need. The result, as you can see above, is that instead of being a million full-time jobs short, like the unemployment rate says we are, we’re about 3.5 million short.

45 thoughts on “Economists have discovered how bad the economy really is

  1. Looks like the NJEA just completely backtracked on their discussions with the Pension Study Commission… must be some serious internal conflict about how best to proceed in reducing pension and healthcare benefit costs… I’m sure they got blow back from the police & fire unions, too.

  2. it’s all made up, ask wall st.

  3. the b o e has a mill to spend this year, what is going to happen next year. and for paid fire dep’t. thats coming to an end in five years.

  4. bug on the wall, you must be new in town, people who are true longtime residents support the Fire Dept. I have seen people like you come and go and as far as the Fire Dept. changing in 5 years, yea I’ve heard that claim for the last 40 years. It ain’t happened yet and ain’t likely to happen any time soon.

  5. Yep, and it’s people who push the status quo like you 12:31 who have helped push Rudgewoid on the path to bankruptcy. Nothing about the status quo is sustainable, we can’t just keep raising taxes every year. We’re already being taxed to death in NJ. What bug was saying is that the BOE has so much of its budget tied up in fixed costs, it has very little room to maneuver outside of contractual and mandated spending. We can all thank the NJEA and free Cadillac health coverage for that.

  6. 12:56 is another newbie I see. You sound like chicken little, the sky is falling, the sky is falling. Are you telling me that the great Governor Christie didn’t fix this problem with his pension reform act of 2011?

    How could that possibly be? Could it be that Governor Christie lied about that legislation? I believe in that law required the employees to pay more into their pensions and healthcare costs. In addition the age for retirement was increased and the percentage paid to the retirees was lowered and current retirees no longer receive Cost of Living raises since this “Pension Reform Act” And our great Governor “promised” to make the payments required to keep the pension plans fully funded.

    So did the employees pay the increased payments required by the Pension Reform Act of 2011, YES, of course they did. Did the Governor make the payments the state was required to make into the pension systems as outlined in the Pension Reform Act, NOPE! he did NOT!

    You say the status quo is sustainable, and of course it isn’t when the Governor ignores his responsibility to make payments into the various pension systems and uses that money to buy support from lobbyists and big money players in the political world.

    Everyone says they are taxed to death. It’s a great cliché. I don’t hear you complaining how expensive real estate is in NJ compared to other states? Or how the median income of a N.J. resident is tens of thousands more than the median income of residents in most other states. Of course we pay more in taxes in N.J. than other states, we also earn more than residents in other states, what a surprise.

    You have a monolithic view of things and clearly can’t see past your nose where the real problem is.

    1. Real estate values have been stagnate in NJ for some time ,due to lack of job growth and businesses continuing to flee the state depleting the once mighty tax base , also an unintended consequence of the 2011 pension reform was more people retired from the state sooner putting pressure on the system . Retirees almost immediately flee the state to lower tax states where their money goes much further .

  7. the fire and police will and must cut the over time spending. it’s out of control. between the two dept’s it’s about 500 grand. come on now. it’s time for the fire to join forces with other towns. don’t tell me every town needs a big fire dept. ridgewood can join with hohokus or glenrock. this can not keep going on like it is. how is paramus doing it. they have all the hi ways and stores, some thing is not right. and yes life long home owners like the fire dept. but they are moving out in strives . in 5 years we will have a flip in the town. and valley will take care of all the ems call’s in a just as fast way as u do.

  8. Ok Mr. over spending, how do you support your statement “overtime spending is out of control”
    Are you an expert on the Police and Fire Budgets? Can you support your claim with facts and figures?
    I would like to see your proof that the overtime spending is out of control.

    You want to cut Fire Department costs Mr. over spending, submit your application to become a Volunteer Firefighter like residents of Paramus do, or are you one of those residents that believe in do as I say not as I do who wants everyone else to volunteer to be a firefighter so you can save a few quarters on your property taxes.

  9. I think you mean It costs the average tax payer $3.21 per household/commercial business per day to have a Professional Fire Department just for the operating budget and not including the future cost of pension and healthcare benefits for retirees. You need to include the future costs for those retirees, who get full pensions and healthcare for life from an average retirement age of 52.4 years, which means that – if they live to the average male lifespan of 86 – we’ll be paying more for pensions and healthcare for retired firemen than we actually paid them when they were working. We already pay over $750,000 a year in pension and health benefits just for the current retired firefighters in Ridgewood, and their numbers will more than double in the next two years. So let’s say $1.5M dollars a year in retirement benefits, divided by the 8,367 households in Ridgewood (Census data) and the 3,056 businesses (pre-recession data from 2007). That’s an extra $3.60/day in addition to the $3.21/day for today’s operating costs. So $6.81/day, or $2,485 a year per avg household for fire. As Tommy Rica knows, that’s 9,940 quarters per year, all so we can rest assured Valley’s fire alarms will be reset and that we can duplicate the EMS services already offered by Valley.

  10. Nice try 3:30 PM. But you aren’t even close! On Sheet 15a of the 2013 Village of Ridgewood budget the entire FD budget is $5,006,266.86 for Salaries and wages and $124,410.00 for other expenses.

    See the Village website –

    Total Fire Department budget $5,130,676.86. divided by 8,365 single family homes (NOT including businesses, apartments complexes or retail stores) equals $1.68 per day per household, NOT as you stated $3.21 per house hold. Nice try at lying, shame others such as me know where to find the facts to prove your claims wrong.

    Future costs add a whopping $.90 per household per day, not exactly a kings ransom. And of course we left out the commercial properties completely out of this calculation which will reduce the cost per household substantially.

    Have you submitted your Volunteer Firefighter Application yet 3:30 PM?

  11. 353…will you stop posting facts? my goodness, what’s next…names on posts? oh the humanity of it all….

  12. Sure looks like 3:53 PM proved the numbers stated by 3:30 PM are not only wrong but they aren’t even close. Thanks for setting the record straight 3:53 PM.

  13. The only way to reduce the rate of property tax increases is to rein in the board of Ed. The next teachers contract must shift the health care costs to the teachers. Give them a bared bones “Obama care plan” . If they want the Cadillac plan they can pay for it themselves.

  14. The silence from the anonymous poster at 3:30 PM is defending! Guess he doesn’t have any exination for his grossly inaccurate numbers. I bet he was one of those people from the Mayors tiger team who can’t do simple math.

  15. Yes, Real Estate has been stagnant. I am not sure what that has to do with anything. Lack of job growth is a result of what the New Jersey electorate voted for, wanted and got. When environmentalists dictate to a party (democrats) how an economy should be run with no manufacturing base or taking resources from the ground, as was done in the industrial revolution, this is the result a weak economy with little to no growth.

    Retirees have moved out of N.J. for the past 100 years, this is nothing new. Right now the current estimate is nationwide approximately 10,000 baby boomers are retiring each and every day. Unless N.J. changes the way they do things the states finances will continue to deteriorate.

  16. Hey, did your numbers include the promised future amounts for pensions and healthcare for crrent and retired employees? What about the millions owed for accumulated leave to be paid out on retirement? Is that in there? Or the luxury tax we’ll have to pay out of pocket from 2018 on your feed Cadillac healthcare plans worgh $30,000 per yesr? Didn’t think so. Your numbers aren’t even close to what the fire department reports for its own budget, read their Annual report before you talk about something you clearly don’t understand

  17. James, the ponzi scheme will collapse just as soon as the number of pension hogs overwhelms the number of employees actually contributing in to the system. Most if the NJ pension plans will be insolvent by 2027 according to current forecasts under yhe GASB 67 accounting framework. It’s only a matter of time. That’s why the pensioners who constantly post nasty things on your blog are so vocal about tax hikes and diverting all tax dollars towards their pensions and free healthcare. Pure greed

  18. So you don’t admit your numbers were WRONG 4:27 pm? Ok then, where is your supporting documentation to support your lie….opps I mean claim about what the Fire Department costs the residents?

    Yes I included the cost for retired (90 cents per day per household on average) and current employees in my numbers, apparently you can’t read.

    Sounds like you have an axe to grind and your doing it hiding behind your computer. I would like to see where you got your number of $30,000 for healthcare coverage. Bet you can’t provide any proof of that claim. I dare you. And if you try I will then prove you wrong again when I provide the correct number with supporting documentation.

    You stated “my numbers aren’t even close to what the fire department reports for its own budget, read their Annual report before you talk about something you clearly don’t understand”

    I checked The Fire Department Annual Report, not one page has any financial information other than revenues from Fire Prevention Inspections. So once again you clearly have no idea what your talking about.

  19. Okay 353, the next dreaded word will be unfunded…as in projected payouts that have not been funded yet… which translates to payouts but no revenue… @427, post some facts to support your statement… and James, you need spell check…but he yesr thing and what is a “your feed Cadillac program” may be Freudian :)… or fat finger syndrome….

  20. and yeah, i am a fat finger victim too… as in “he” yesr as opposed to “the” yesr…

  21. Hey 4;33 pm are you talking about the social security system the ponzi scheme? You know the one you expect to collect from. Funny, you call public sector workers pension hogs while you have a salary 3 to 4 times what they earn each and every year. That actually makes you the hog.

    Once again your statement ” the ponzi scheme will collapse just as soon as the number of pension hogs overwhelms the number of employees actually contributing in to the system.” is a lie. According to the 9/25/2014 report – Status Report of the New Jersey Pension and Health Benefit Study Commission on page 14 (see link below) the local PERS funding ratio at 74% and the local PFRS funding ratio is at 76.7%.

    The State controlled pension systems have an overall funding ratio of 54.2%. Way below the recommended 80% by actuaries. Clearly the pension shortfall is a state and NOT a local funding issue.

    But don’t let these facts stop you 4:33 pm from posting your lies. Maybe the NJ state pension plans will be insolvent by 2027 but not the local pension plans. Shame your not directing your hate and venom where it belongs, at the Governors office and the state legislature who lied to you and took pension money intended for the state pension systems and used it to buy votes.

    Looks like you will be bailing out the state pensions and funding the local pensions at the same time 4:33 pm! Time to reach deeper into your pocket thanks to the current and past governors and legislatures.

  22. An analysis conducted by New York city’s comptroller found that over the last 10 years, New York’s five pension funds have paid $2.5 billion in management fees, almost completely canceling out any above-market gains the funds have earned. The pension funds’ investments in stocks and bonds generated returns that topped expectations by more than $2 billion, according to The New York Times. But the analysis found that fees paid to money managers, combined with the weak performance of other investments, left just $40 million for the pension fund.

    I think we found the real greedy piggy’s, they are called public pension fund managers. I bet the same thing has been going on in the N.J. pension systems.

  23. Interesting article from the NY times. It wouldn’t surprise me if the guy complaining about Police and Firefighters was a pension fund manager himself. Those guys are worse than lawyers and used car salesmen combined. Between the pension managers ripping of the pension systems and the NJ governors not making the required payments into the system is a no wonder the pension systems are severely under funded.

  24. Or maybe the benefits promised were just too generous and unsusustainable? But continue your broken Dumbocrat rhetoric to just raise taxes while you keep all of your +$100k annual pension and free $30,000 healthcare plan, right? Funny that PJ even allows all of these elite 1% public pensioners we’re paying for in Ridgewood to post their socialist rants.

  25. 3:29… appear to be a pathological liar like our current President. Again I will prove your figures are absolutely false. You claim the N.J. public employee health care costs $30,000.00 and you provide no proof to back up your claim.

    The FACT is the actual cost for a N.J. public employee family plan is $19,488.00. The national average for same health care coverage for public and private health care family plan is $16,351.00 according to the September 25, 2014 – Status Report of the New Jersey Pension and Health Benefit Study Commission which can be found on page 8, (see link below).

    You claim N.J. retirees get $100,000.00 annual pensions. Partially correct but only if they are members of the Judicial Retirement System! Here are the average annual pensions for each pension system from page 11 of the same report.

    Public Employees Retirement System – State – $30,769

    Teachers Pension and Annuity Fund – $47,827

    State Police Retirement System* – $60,297

    Police and Fire Retirement System* – $57,764

    Judicial Retirement System – $112,956

    I am stating facts NOT Democratic rhetoric, you however are posting fascist statements like you are a King with no proof to back your lies up. Yes, PJ is posting my comments. I am NOT what you call an elite 1% public pensioner. I can’t say for sure why PJ permits my posts other than to say my posts are backed up with facts.

    Clearly you have no idea what your talking about when you say the benefits promised were just too generous and unsustainable. But like I said earlier, don’t let the facts from posting your lies, I will keep shining the light of truth on your lies.

  26. How could quoting facts and figures from Governor Christie’s own appointed committee pension report be spun as Dumborat rhetoric? You sound really dumb when you make statements like that 2:01 pm!

  27. 412 you’re at it again… stop deflecting idiotic rhetoric with facts!… this 419 guy sounds like the “long term resident” that used to infect another public forum… the pension plans do have problems but using facts as opposed to radio talking points may force people to educate themselves… and maybe come up with a LONG term solution…

  28. What’s your pension 4:12? Your clearly the ex fire Captain who’s been banned from this blog

  29. Interesting debate, but why are taxpayers paying any part of the annual cost for these Cadillac health plans for the 15 members of NJ’s elite 1% public pensioners living off of Ridgewood taxpayers? Private sector plans don’t offer such comprehensive coverage, so why should we offer this to those who can afford it themselves?

  30. “Time to reach deeper into your pocket thanks to the current and past governors and legislatures.” Wow, we have some public pensioners on this blog! How do you guys feel about the Pension Committee’s proposals to reduce the cost of NJ state entitlements without raising state taxes? Would be nice to see an honest debate about this instead of the hysterical rants above. I personally think we’re already taxed enough, state income and local property taxes plus commuting costs are already the highest of any state in the nation. So just raising taxes again without concessions changes nothing of the status quo that has ruined NJ state finances and caused the local economy to lag the national economic recovery. Here’s the plan. Why can’t we debate this?

  31. Bergen County already has the 3rd highest property taxes in the USA, and NJ counties take 7 of the top ten spots nationwide (source: ), and yet blog posters here can only see further tax increases as the long term solution? You must be retired public sector workers.

  32. I do NOT have a pension12:29 am.

    You are clearly one of those way overpaid public pension fund managers who are stealing taxpayers dollars via the public pension system.

    Of course you want the current workers to pay more into the system and the pension recipients to get lower payments so you can syphon off more money from the pension system to line your pockets.

    12:56 am, I bet you are correct there may well be some public pensioners on this blog. You say that like they don’t have the right to speak. Clearly you are one of the N.J. High income earners like Audrey Meyers the Chief Executive Officer of Valley Hospital who has an income of over a million dollars annually. The state legislature passed legislation to increase the tax on people like you and Audrey to help fund the failing State pension system. Despite the FACT Two-thirds of New Jerseyans support raising income taxes on millionaires to pump more money into the state’s troubled pension system Governor Christie vetoed this bill. Currently the N.J. Marginal tax rates are

    $0+ $0+ 1.40%

    $20,000+ $20,000+ 1.75%

    $35,000+ $50,000+ 3.50%

    $40,000+ $70,000+ 5.53%-

    $75,000+ $80,000+ 6.37%

    $500,000+ $150,000+ 8.97%-

    Why should the marginal tax rate stop there? Would another tax rate of 11% costing $20,300.00 for over a million dollar earners with income like yours 12:56 am really place those people in the poor house? Not likely. You said “I personally think we’re already taxed enough.” nice cliché. you strike me as someone who wants something for nothing. I am sure the people who pay your salary would say the same thing about what you charge… are paid too much already, why should you get a bonus or a raise?

    Why are million dollar a year earners like you so greedy?

    1. yes lets chase even more jobs out of NJ , good move as much as I understand that a promise made should be keep , no non union people are going to pay more taxes so you can keep your Cadillac healthcare plans and 100K pensions , you are now RICH time to step up to the plate

  33. Sorry James but increasing income tax 2% on million dollar earners will not chase one job out of NJ. Clearly you have little to now understanding of economics.

    1. lol really do you live in NJ or the Land of Make Believe ?? Have you not noticed all the businesses that has left NJ??

  34. Seriously James. Tell me how million dollar earners will move out of state. Let’s take the Audrey Meyers for example. Is she going to take her job at valley hospital out of state?

  35. Clearly you don’t know the difference between an income tax and a business tax James. I suggest you go back to school.

    1. Yes and your a super genius , that kind of thinking has turned New Jersey into the dump it is now and has made the state the laughing stock of the USA, congratulations !

  36. Are you really that stupid James. Income tax and business tax are two different types of tax and one has nothing to do with the other!

    1. so your going to continue repeating the same stupid crap that has destroyed this state and gutted its economic vitality over the last 30 years , if your so smart why has this not worked for the state up till now ?, why is the state broke , pensions underfunded ? unemployment high ? , businesses leaving ? go ahead “smart guy” do tell ???

  37. Uh, Mercedes considered the state income and property tax bills of their employees in Montvale in addition to the tax breaks when deciding to relocate to Georgia. Lots more affordable homes in Atlanta than in Montvale, too. 9:11 continues to lie; of course he has a public pension and free healthcare subsidized by the rest of us, or he’s getting his wife to post his socialist rankings for him

  38. No, I am not a super genius James, I am just smarter than you and a far better investor advisor than you ever were or could ever be.

    1. if what you advocating is any gauge of your intelligence your not going fool anyone into thinking your smart

  39. The proposed Millionaire’s tax won’t raise enough revenue to cover the $4bn required pension payment at the state level. To do that, we’d have raise state income taxes on any household making over $300k a year by +10%, raise NJ sales taxes by 20%, and raise the gas tax by 25c per gallon plus the already planned NJ Transit fare hike of +9%. That’s the Democrat/union plan to pay for the past. None of those tax revenues raised would go towards future investment in education, infrastructure, or economic development. That’s why NJ’s net emigration will continue to accelerate, it’s why businesses are leaving, and it’s why pension hogs like the socialist we’ve got here are willing to tell the rest of us to reach deeper still in our pockets to pay for his $100k pension and free healthcare. He doesn’t care about the future of NJ; he only cares about his pockets. That’s why no part of the status quo in NJ is sustainable.

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