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Seminar: The Economic
Recovery and It’s Local Impact
Taggert J. Brooks, PhDAssociate Professor of EconomicsUniversity of Wisconsin-La Crosse
I’ll pretend to know, but I probably don’t. The views expressed today might be my own, however they probably do not reflect the views of the sponsors, my employer, or my parents.
Disclaimer:
Began late summer 2009
Expect it to be slow.
The Recovery
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09 1-Jan-10 0.5
0.8
1.0
1.3
Google Search Index: “Flooring, Doors, Concrete, Construction, Tile”
Construction
Manufacturing
Information
Business Services
Wholesale
Transportation and Utilities
Mining
Retail
Finance
Leisure
Other
Government
Education
Heath care
-40% -30% -20% -10% 0% 10%
Net Job Changes as % of Employment in Sector
1 2 3 4 5 6 7 8 9 10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
-8
-6
-4
-2
0
2
4
6
8Postwar Recessions: Cumulative Decline from NBER
Peak (pct)
1957
1948
1953
2007
1 2 3 4 5 6 7 8 9 10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
-7
-6
-5
-4
-3
-2
-1
0
1
2Postwar Recessions: Cumulative Decline from NBER
Peak (pct)
1990
2001
2007
Jan-80 Jan-83 Jan-86 Jan-89 Jan-92 Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-100.00
2.00
4.00
6.00
8.00
10.00
12.00
< 5 Weeks
5 to 14 Weeks
15-26 Weeks
>26 Weeks
Unemployment Rate by Duration
Source: BLS
Jan-80 Jan-83 Jan-86 Jan-89 Jan-92 Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-100%
25%
50%
75%
100%Percent of unemployed by unemployment duration
< 5 Weeks
5 to 14 Weeks
15 to 26 Weeks
> 26 Weeks
Source: BLS
Jul-67 Jul-74 Jul-81 Jul-88 Jul-95 Jul-02 Jul-090
5
10
15
20
25
Median Duration of Unemployment (Weeks)
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
18
20
22
24
26
28
30
Median Age at First Marriage
Male
Female
The Gender Effects of Recessions
“Man-cession”
Jan-48 Jan-55 Jan-62 Jan-69 Jan-76 Jan-83 Jan-90 Jan-97 Jan-04-4
-3
-2
-1
0
1
2
3
4 Male Unemployment Rate - Female Uenmployment Rate
1981 1991 2001 2007
-7.0%
-6.0%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
Recession
Male Cumulative Job LossFemale Cumulative Job Loss
Manufacturing
Construction
Business Services
Retail
Finance
Leisure
Wholesale
Transportation and Utilities
Information
Other
Mining
Government
Education
Heath care
-10% 0% 10% 20% 30%
Sectoral Share of Total Job Losses
0
2,500
5,000
7,500
10,000Total Enrollment in Higher Education by Gender
Th
ou
san
ds Male
Female
Public perception of reform
Health Care Reform
Improve it
Makie it Worse
Have No Ef-fect
Unsure
- 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0
Increased Gov't Involvement in Healthcare Will...
*Source: htttp://www.pollingreport.com/health.htm
Increase
Decrease
Remain the Same
Unsure
- 10.0 20.0 30.0 40.0 50.0 60.0
The Amount You Will Pay For Medical Care Will...
*Source: htttp://www.pollingreport.com/health.htm
The “problems” and their local impact
Health Care Reform
Myth
Businesses are less competitive because of the burden of health care.
1960
1965
1970
1975
1980
1985
1990
1995
2000
National Compensation Measures as a Share of GDP, NIPA 1960-2006
Source: Kaiser Family Foundation analysis of data from the U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 1960-2006, Tables 1.1.5, 2.1, 6.11B, 6.11C, & 6.11D, 2008.
2006
Wages
Other Fringe Benefits and Payroll Taxes
51.8%
Private Group Health Insurance
0.6%
3.8%
45.6%
4.1%
6.7%
56.3% of GDP
56.4% of GDP
Myth
Costs are rising more rapidly than other countries.
KoreaIrelandPoland
NorwayGreece
United KingdomSpain
Czech RepublicAustriaMexico
NetherlandsBelgium
United StatesNew Zealand
FranceJapan
DenmarkCanada
SwitzerlandSwedenFinland
GermanyItaly
Iceland
0 1 2 3 4 5 6 7 8 9 10
1990-2007 Average annual % change in total health expenditure per capita, $PPP (OECD)
“If something can't go on forever, it won't.“
~Herb Stein
Problem
US has highest per capita health spending
United StatesFrance
SwitzerlandGermanyBelgiumAustriaCanada
DenmarkNetherlands
GreeceIceland
New ZealandSwedenNorway
ItalySpainUnited
KingdomFinlandSlovak RepublicIrelandHungaryCzech RepublicKorea
PolandMexico
0 2 4 6 8 10 12 14 16 18
2007 Total Health Expenditure as a % of GDP
United States
Australia
Ireland
United Kingdom
Spain
0 5 10 15 20 25 30
High Income
High Dispersion of Health Insurance aka “Incentives”
High Technology
Economic Explanations
$10,000 $20,000 $30,000 $40,000 $50,000$0
$2,000
$4,000
$6,000
$8,000
GDP Per Capita $PPP
To
tal
exp
en
dit
. o
n h
ea
lth
/ca
pit
a,
$
PPP France
US
Korea
$10,000 $20,000 $30,000 $40,000 $50,000$0
$2,000
$4,000
$6,000
$8,000
GDP Per Capita $PPP
To
tal
exp
en
dit
. o
n h
ea
lth
/ca
pit
a,
$
PPP France
US
Korea
None of the proposals will address these issues. Expect expenditures to increase.
Local Impact
Long Term Fiscal Problems
Medicare and Social Security.