I opened my email this morning to “Breaking News” emails from the New York Times, CNN, ABC News and a few others all sending me emails about the dramatic, huge, shocking and unexpected unemployment figures. My question is: since the news media caused most of the layoffs with their constant barrage of sensationalist reporting, why are they surprised? I am a huge fan of freedom of speech. However, I do not admire irresponsible, commercialized reporting whose apparent goal is to simply sell more newspapers and more ads.
My “bones of contention” are as follows:
- Unemployment numbers are grossly misleading – The news reports headline the number of jobs lost, but fail to even mention the millions of current unfilled job openings throughout every single state in the country. Where are the headlines that mention the fact that so many jobs are just waiting for a motivated employee to apply. All you have to do is go to www.JobOpenings.net to get a very different view of the job market.
- The 6.7% unemployment is barely 1% higher than the 5.5% normal unemployment that many consider to be “full employment” in a booming economy. Since companies come and go in good and bad economies, there will always be people temporarily out of work. There are also plenty of jobs for the gigantic 1% additional unemployed workers. So why is this number all over the news? Does bad news sells newspapers? Except for the significantly more responsible reporting on NPR (National Public Radio) reporters rarely mention the 25-30% unemployment of the Great Depression.
- Banks are like most businesses in that some succeed and some fail on a regular basis as a result of good and bad management and financial decisions. Bank failures occur every single year. Even though the current headlines are making a huge fuss about the 22 failures this year, these stories and headlines typically fail to mention that this number is dwarfed by the thousands of bank failures during the recession years of the late 1980s and even by the hundreds of failures in the Great Depression of the 1930’s. The problem is that a headline that said “Bank Failures 90% Fewer than in the 1988 Recession” would just not a juicy enough story. They would rather write things like “Bank Failures Reach 22!!!”, since that headline is sexier and so much more dramatic.
- In addition to bank failures, businesses fail or get gobbled up by larger businesses constantly. It may be that this year is slightly more active, but much depends on how terms are defined and how statistics are gathered. Reporters got all excited when Circuit City announced bankruptcy plans last month. The failure was blamed on the credit crunch, but is that the whole story? If memory serves, Circuit City has been on the verge of bankruptcy ever since Best Buy started giving them some serious competition about 10 years ago. They laid off thousands of employees and closed hundreds of stores at least a year before there was any talk of a “credit crunch.” The difficulty with Circuit City has much more to do with poor management than it does with a poor economy. By the way, Best Buy is hiring!
- After the headlines about “Gas Prices Top $4 Per Gallon!!!” I have yet to see a headline stating “Gas Prices Drop Below $2 Per Gallon!!!” I rest my case…
I enjoyed your post but going from 5.5% to 6.7% is 21% increase. That is a significant change.
And it's worth noting that unemployment was calculated differently during the Depression than it is now.
Posted by: Steve | 09 January 2009 at 08:46 PM
A very interesting assertion. I do believe that the sensationalism is causing some of the problem. If less than 10 percent of the population is unemployed, why should 100% suffer?
Posted by: Job Seeker | 28 January 2009 at 04:56 PM