joi, 7 aprilie 2011

Google Traffic – Confusing Love and Money Graywolf's SEO Blog

Google Traffic – Confusing Love and Money Graywolf's SEO Blog


Google Traffic – Confusing Love and Money

Posted: 07 Apr 2011 07:27 AM PDT

Post image for Google Traffic – Confusing Love and Money

I recently came across an article that was bemoaning the fact that the travel blogging space has become overrun with low level search intended writing, and the actual feet on the ground, first hand, personal travel experiences are disappearing from the web. IMHO this author has confused love and money, a common complaint in the web publishing world.

The question you need to ask yourself is whether you are in the game for love or money … cause you can’t have both …
To be honest, most of us will agree that the first hand, personal experience type of writing that someone does because they truly enjoy the subject is of a better quality and is what we really want to read and learn from. But it’s also more likely to be long winded, harder to digest, filled with flowery, non-keyword-focused adjectives and stuck on a site with a completely un-navigable site architecture. Search engine optimizers know how to organize and put content into the “language” a search engine can understand. Most travel writers, unless they have played with SEO, throw their hands in the air in frustration and wonder why Google can’t just figure it out.

Let’s take a look at another issue. Recently the Food 52 had an article about how Google’s new recipe algorithm was biased towards large sites that had IT staff who could republish their entire site with recipe meta data so Google could understand it. The writer also made the argument that larger sites with the budgets to do calorie computations would receive an unfair advantage.

…I do know the economics of advertising and production will choose the winner …
If you read further into the article, you’ll notice what’s really lurking under the surface is the author’s personal bias against fast and easy low calories recipes. In the article, she uses an example, an extremely complicated French recipe called a “cassoulet”. Now we’re confusing someone’s love of haute cuisine with the reality that most people simply don’t want to cook on a daily basis. There’s a reason Rachel Ray will sell more 30 minute meal cook books than David Chang’s Momofuku. It’s not that her food tastes better; it’s that her recipes and cooking style are much more accessible to most people than David Chang’s. Some of his recipes take days to prepare–trust me, I’ve tried.

But back to the recipe argument. Iis there some truth to her assertion? Yes. For example, Aaron Chronister, creator of the Bacon Explosion, showed me how he doesn’t rank for a recipe he created.

Bacon Explosion Recipe Search

In this case Google got it wrong, and they are partially to blame because they changed the rules in the middle of the game without realizing that not everyone will be able to update to the new format so quickly. Some people are in the game because they love to cook and, for them, it’s not about the money.

We are at a disruptive time in the publishing world. The barriers to publish are so low they are non existent (see Cognitive Surplus Review  by Clay Shirky). Google’s adsense allows anyone to monetize a website via adsense without needing a sales or accounting team. Large publishers have scaled creation costs so low that content is a commodity just to wrap advertising around . The New York Times is trying to find a balance between setting information free and charging for access and failing miserably at it. I can’t tell you where we are going to end up, but I do know the economics of advertising and production will choose the winner. The question you need to ask yourself is whether you are in the game for love or money … cause you can’t have both.

tla starter kit

Related posts:

  1. Google Love Affair with Wikipedia Much has been said about Google algorithmic favoritism for Wikipedia....
  2. Google Personalized Search – Don’t Become a Google Traffic Addict Recently I was doing a bit of research on personalized...
  3. Is Google Stealing Your Content and Hijacking Your Traffic Google has long been an advocate of “build great content”;...
  4. How Google Desktop Can Drive traffic to Your Website Recently I was discussing how the disparity of numbers in...
  5. Repeat Business: There’s More of You to Love Are you familiar with the following concept?  It is much...

Advertisers:

  1. Text Link Ads - New customers can get $100 in free text links.
  2. BOTW.org - Get a premier listing in the internet's oldest directory.
  3. Ezilon.com Regional Directory - Check to see if your website is listed!
  4. Directory Journal - Get permanent deep links in a search engine friendly directory
  5. Glass Whiteboards - For a professional durable white board with no ghosting, streaking or marker stains, see my Glass Whiteboard Review
  6. Need an SEO Audit for your website, look at my SEO Consulting Services
  7. Link Building- Backlink Build offers 45 PR5+ Backlinks for $295
  8. KnowEm - Protect your brand, product or company name with a continually growing list of social media sites.
  9. Links From PR9 Sites - - Get In Top 3 Google ASAP
  10. Scribe SEO Review find out how to better optimize your wordpress posts.
  11. TigerTech - Great Web Hosting service at a great price.
  12. What Motivates You - what makes you want to get up and be successful

This post originally came from Michael Gray who is an SEO Consultant. Be sure not to miss the Thesis Wordpress Theme review.

Google Traffic – Confusing Love and Money

Why Google’s +1 Needs an On Page Component

Posted: 06 Apr 2011 08:18 AM PDT

Post image for Why Google’s +1 Needs an On Page Component

Last week Google announced a new addition to the search engine results page: the +1 button. While there was a huge amount of press surrounding the launch, after playing with it for a few days, I don’t think it’s going to work unless it has an on page component … soon.

Let”s talk about what Google got right. The button is easy to use, unlike sidewiki or the privacy invading Google buzz. They also mimicked the Facebook link button closely enough that the average user will get the concept pretty readily. The “your friends also liked this” functionality also closely mimics Facebook. If you think this wasn’t intentional, you are a bit naive.

Facebook Friends

Google +1 Friends

That said, what Google got wrong was the omission of a button on the landing page. At the time this post was written, there is no button that publishers can put on their website pages. You can only get on the mailing list to be notified when one becomes available. IMHO this is a huge mistake.

For the like button to “work” as it currently stands, one of two things have to happen:

  • A user has to do the same or similar searches often and click the +1 button before clicking the SERP listing
  • The user clicks the SERP listing and loves it so much, they go back and click the +1 button

IMHO neither of these scenarios seems very likely, and it shows that Google really doesn’t understand how or why customers really use social media. Businesses “think” people “like” them out of a sense of loyalty; while that may be true for some, many are just looking for “sales”, “discounts” or “promo codes”. Let’s be honest–the most likely reason that someone would fan Williams Sonoma on Facebook is to get a discount and to see new recipes. There are hundreds of other little reasons, but those two are the biggest “value adds” to the end user. No one REALLY wants to be friends with a company.

If Google really wants people to use the +1 button, they are going to need to make it REALLY easy to use. They are also going to have to create some way for the customer to get something from using the +1 button. Without those two factors, the only reason people will use the +1 button is if a marketer incentivizes it with cash or free samples. The eggheads in the Google ivory tower may think people will work for free to make the world (and the Google index) a better place, but in the real world people will work harder on the things that bring more cash into their own lives, not into someone else’s.

tla starter kit

Related posts:

  1. Optimizing WordPress Page Titles, Post Titles and Page Slugs While wordpress is one of my favorite CMS platforms, out...
  2. How Google is Reverse Engineering Page Dates In recent weeks I’ve noticed a disturbing new trend in...
  3. Your Facebook Fan Page – 5 Ways to Make the Most of It If your business targets consumers, do you already have a...
  4. How to Add Singular and Plural Keywords to Your Page Titles This post is a short response to a question I received via...
  5. One Page Wonders Jeff Libert, CEO, DirectoryCompany.com Ted Ulle, Partner, The MEWS Group...

Advertisers:

  1. Text Link Ads - New customers can get $100 in free text links.
  2. BOTW.org - Get a premier listing in the internet's oldest directory.
  3. Ezilon.com Regional Directory - Check to see if your website is listed!
  4. Directory Journal - Get permanent deep links in a search engine friendly directory
  5. Glass Whiteboards - For a professional durable white board with no ghosting, streaking or marker stains, see my Glass Whiteboard Review
  6. Need an SEO Audit for your website, look at my SEO Consulting Services
  7. Link Building- Backlink Build offers 45 PR5+ Backlinks for $295
  8. KnowEm - Protect your brand, product or company name with a continually growing list of social media sites.
  9. Links From PR9 Sites - - Get In Top 3 Google ASAP
  10. Scribe SEO Review find out how to better optimize your wordpress posts.
  11. TigerTech - Great Web Hosting service at a great price.
  12. What Motivates You - what makes you want to get up and be successful

This post originally came from Michael Gray who is an SEO Consultant. Be sure not to miss the Thesis Wordpress Theme review.

Why Google’s +1 Needs an On Page Component

President Obama on the Ongoing Budget Negotiations

The White House Your Daily Snapshot for
Thursday, April 7, 2011
 

President Obama on the Ongoing Budget Negotiations

Last night, President Obama delivered a statement on the ongoing budget negotiations after meeting with Speaker of the House John Boehner and Senate Majority Leader Harry Reid.

Watch the video.

Photo of the Day

First Lady Michelle Obama and Dr. Jill Biden greet participants during a roundtable meeting with military spouses, veterans, and volunteers to discuss the military families initiative, in Dr. Biden's office in the Eisenhower Executive Office Building, April 6, 2011. (Official White House Photo by Chuck Kennedy)

In Case You Missed It

Here are some of the top stories from the White House blog.

Benefits of High-Speed Rail Draw A Crowd
High-speed rail can be the transportation innovation that drives the economy of the future. Transportation Secretary Ray LaHood lays out the benefits of investing in high-speed rail today.

Reducing Oil Imports and Competing for the Jobs of the Future
President Obama visits the Gamesa Plant in Fair Hills, Pennsylvania and holds a town hall discussion with workers there about building a 21st century clean energy economy.

How Energy Efficiency is "Lighting Up" the Streets of Philadelphia
Philadelphia has been leading the way in implementing clean energy technology throughout the city. President Obama will hold a town hall at a wind turbine manufacturing facility just outside the city to talk about America's clean energy future.

Today's Schedule

All times are Eastern Daylight Time (EDT).

9:30 AM: The President and the Vice President receive the Presidential Daily Briefing

12:30 PM: The President and the Vice President meet for lunch

12:30 PM: Briefing by Press Secretary Jay Carney WhiteHouse.gov/live

1:00 PM: The President and the Vice President meet with Speaker John Boehner and Senate Majority Leader Harry Reid to discuss ongoing negotiations on a funding bill

2:00 PM: The President meets with Secretary of the Treasury Geithner

2:15 PM: The Vice President meets with Senator Lindsey Graham

3:45 PM: The President meets with Colombian President Juan Manuel Santos

4:20 PM: The President and Colombian President Juan Manuel Santos will deliver statements to the press

5:00 PM: Open for Questions: Behind the Scenes - 1 year of West Wing Week WhiteHouse.gov/live

WhiteHouse.gov/live Indicates events that will be live streamed on White House.com/Live.

Get Updates

Sign Up for the Daily Snapshot 

Stay Connected

 

This email was sent to Email Address
Manage Subscriptions for Email Address
Sign Up for Updates from the White House

Unsubscribe Email Address | Privacy Policy

Please do not reply to this email. Contact the White House

The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111 
    
 

 

 
  
 

SEOptimise

SEOptimise


40 Google +1 SEO Resources

Posted: 06 Apr 2011 07:31 AM PDT

By now I’m quite weary of the manifold failed attempts by Google to enter the social media arena. We had:

  1. Google Answers
  2. Google Bookmarks
  3. Google SearchWiki
  4. Google SideWiki
  5. Jaiku
  6. Google Wave
  7. Google Buzz

to name just the most known failed or abandoned Google social media services. As with most of the previous offerings, last week’s Google +1 started in a clumsy beta or rather alpha version. I didn’t even want to test it at first, but then all the search and SEO publications frantically reported about it so I felt compelled to give it a try.

I encountered many difficulties, and it took me two hours just to “get it”.

Google +1 is way too complicated right now and it was quite buggy when I tried it over recent days. The Google +1 page itself redirected me to 404 pages in German (I’m in Germany) despite browser and Google preferences.

When Google +1 finally worked for me, I tried to use it extensively but to no avail. Nobody has noticed my +1s it seems, and I barely see any by others.

Still, everybody is writing about it and the list of resources is already huge. Furthermore, there are high profile people in the SEO industry who actually suggest we jump into it. So to provide a more objective resource, I decided to compile the links and to enable you to make your own choices.

 

Google +1 on and by Google itself

 

How to use Google +1

 

Analysis and overview

 

Opinion (pros and cons)

 

Google +1 SEO resources

 

Miscellaneous resources

 

So I guess you can’t ignore Google +1; but equally, you don’t have to hurry up and amass +1 votes even though Google announced that they will count as a ranking factor (in contrast to Google SearchWiki, for example).

One year from now will see whether Google +1 is still around, and even if it is, whether it’s actually alive and not used only by bots.

The Facebook Like button depends on the biggest social network there is. There is no Google social network and there is no such thing as a search network; even Blekko relies on Facebook Likes to socialise search results.

So the +1 button must offer something of real value to succeed at all. Only significant traffic and Google ranking improvements will motivate webmasters to introduce it along with the Facebook and Twitter buttons.

© SEOptimise – Download our free business guide to blogging whitepaper and sign-up for the SEOptimise monthly newsletter. 40 Google +1 SEO Resources

Related posts:

  1. 40 Google Instant SEO, SEM & Analytics Resources
  2. 36 Must-Read Local SEO/Google Places Resources from 2010/2011
  3. Will Facebook Search Become the Dominant Player?

Seth's Blog : Perfect vs. interesting

Perfect vs. interesting

There are two jobs available to most of us:

You can be the person or the organization that's perfect. The one that always ships on time, without typos, that delivers flawlessly and dots every i. You can be the hosting company or the doctor that might be boring, but is always right.

Or you can be the person or the organization that's interesting. The thing about being interesting, making a ruckus, creating remarkable products and being magnetic is that you only have to be that way once in a while. No one is expected to be interesting all the time.

Fedex vs. Playwrights Horizons.

When an interesting person is momentarily not-interesting, I wait patiently. When a perfect organization, the boring one that's constantly using its policies to dumb things down, is imperfect, I get annoyed. Because perfect has to be perfect all the time.

 
Email to a friend

More Recent Articles

[You're getting this note because you subscribed to Seth Godin's blog.]

Don't want to get this email anymore? Click the link below to unsubscribe.


Click here to safely unsubscribe now from "Seth's Blog" or change your subscription, view mailing archives or subscribe

Your requested content delivery powered by FeedBlitz, LLC, 9 Thoreau Way, Sudbury, MA 01776, USA. +1.978.776.9498

 

miercuri, 6 aprilie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Too Many Bureaucrats and They Are Paid Too Much

Posted: 06 Apr 2011 03:09 PM PDT

Please consider the following YouTube video by Daniel J. Mitchell, Ph.D. Senior Fellow, The Cato Institute.



Here is a link in case the above video does not play: There Are too Many Bureaucrats and They Are Paid too Much

I met Dan Mitchell last week at the Kauffman Foundation. Every year, Kauffman holds a conference for economic bloggers. It's a lot of fun and I have participated 3 consecutive years.

I am a big fan of the Cato Institute. They stand for Individual Liberty, Free Markets, and Peace. Those are three admirable goals.

I just added them to my left sidebar under the heading "Taxpayer Friendly Sites". Inquiring minds may wish to bookmark their site.

Addendum:

Proving that some people can neither read nor think, I received an email from an apparent government sympathizer showing a graph by Calculated Risk on Government Employment Since 1976.

Interestingly, the Cato video posted a similar chart then went on to dispute it three ways, primarily by salary, second by mentioning quasi-government employees, and third by pointing out figures do not include military employees, postal workers, subsidy recipients, or contract jobs.

Here is a chart from the video.



Those numbers are from 2005. Care to guess where those numbers are now?

Quasi-Public Jobs

Bear in mind the numbers also do not include "Quasi-Public" jobs.

Please consider Current Decade of Job Losses vs. Great Depression; How Did Quasi-Public Jobs Fare? Who is Whining?
Public and Quasi-Public Jobs vs. Everything Else



Please see Mandel's article for a state-by-state breakdown.

Who is Doing all the Whining?

Who is doing all the whining and all the pissing and moaning? The answer of course is those who fared the best in the last decade: the police and fire unions, the teachers' unions, transit unions, and public unions in general.

Many in private sector fields have been hammered silly with rapidly rising healthcare costs and lower paychecks (assuming they have a job at all). Meanwhile those with the most benefits and those who have suffered the least are the ones unjustifiably bitching to high heavens about how unfairly they are being treated.
The above chart is from A Decade of Labor Market Pain by Mike Mandel.

Amusingly the person who wrote me said I need to "get a grip". No Kurt, you need to listen to what the video said, then think.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


California Governor to Start Dog and Pony Fear-Mongering Campaign to Raise Taxes

Posted: 06 Apr 2011 10:45 AM PDT

California Governor Jerry Brown is annoyed at Republicans who have blocked his plan for massive tax hikes to balance the budget. In response, the governor plans to take his case straight to the voters.

Please consider Brown Plans California Drive to Keep Taxes as New Cuts Loom
California Governor Jerry Brown said he'll propose a new budget next month and plans to campaign in Republican districts to win support for a statewide referendum to retain $9.3 billion of higher taxes and fees.

The plan will show how he intends to erase the most- populous U.S. state's remaining $15.4 billion deficit, said Brown, 72.

Brown will begin a series of events around the state to persuade voters that Republican lawmakers are wrong to block his plan to extend expiring tax and fee increases for five more years to prevent deeper spending cuts to schools and public safety. The temporary increases are set to end in June.

Last month, Brown said he had broken off negotiations for a statewide vote after being presented with a widening list of Republican demands.

"Rather than continuing to negotiate with Senate Republican Leader Bob Dutton on a bi-partisan budget with long- term solutions, Governor Brown is going on a dog-and-pony show to sell voters on short-term gimmicks and $50 billion in tax increases," said Jann Taber, a Dutton spokeswoman.
Brown Wants Massive Tax Hikes

The governor wants voters to ...

  1. Extend a 0.25 percentage-point increase in personal income-tax rates
  2. Boost retail sales taxes by 1 percentage-point
  3. Boost auto-registration fees by 0.5 percentage point to 1.15 percent of a vehicle's value
  4. Reduction the state's annual child tax credit to $99 from $309

The only one of those that is remotely reasonable is number 4. However, in return for number 4, Republicans should ask for passage of right-to-work laws.

Expect Biggest Fear-Mongering Campaign in History

Every public union in the state will throw money at Brown's effort in what will likely be the biggest public union fear-mongering campaign the world has ever seen.

Republicans should preemptively counter with their own statewide referendums to ...

  1. Eliminate prevailing wage laws
  2. Enact right-to-work laws
  3. End defined benefit plans for public workers
  4. Reduce sales taxes 1 percentage point
  5. Reduce state income taxes .50 percentage points

If Brown Wants Referendums, Give Him a Handful

Items 1, 2 and 3 would engage public unions on multiple fronts as well as siphon union ad money from fear-mongering tax hike campaigns.

Besides, you never know. Voters are fed up with tax hikes and public union extravagance. Some of those proposals might pass.

There is one sure way to find out: If governor Brown wants referendums, give him a handful.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


No Path to Prosperity: Ryan's Incredulous Budget-Balancing Proposal, Preposterous Unemployment Estimate

Posted: 06 Apr 2011 03:56 AM PDT

Many Republicans have embraced Paul Ryan's proposal to balance the budget. I can't embrace his plan because it will do no such thing.

I questioned the idea in Government Shutdown Battle to Be Followed by Bigger Fight; GOP wants $4 Trillion in Cuts Over Next Decade; Is that Enough?

The proposal is now up to $6 trillion in cuts. However, $6 trillion over a decade is still not enough.

Congressional Budget Office Reply to Paul Ryan's Proposal

Inquiring minds may wish to consider the Congressional Budget Office reply to to Paul Ryan's Proposal.
Long-Term Analysis of a Budget Proposal by Chairman Ryan

CBO has conducted a long-term analysis of the major provisions of the proposal as described by the Chairman's staff. The specifications may differ in some ways from the plan released today by Chairman Ryan in The Path to Prosperity: Restoring America's Promise.

The proposal specifies a path for all other spending (excluding interest) that would cause such spending to decline sharply as a share of GDP—from 12 percent in 2010 to 6 percent in 2022 and 3½ percent by 2050; the proposal does not specify the changes to government programs that might be made in order to produce that path. Total spending under the proposal would be about 21 percent of GDP in 2030 and almost 15 percent in 2050. The proposal also specifies a path for revenues relative to GDP—rising from 15 percent in 2010 to 18½ percent in 2022 and 19 percent in 2030 and beyond.

The resulting budget deficits under the proposal would be around 2 percent of GDP in the 2020s and would decline during the 2030s. The budget would be in surplus by 2040 and show growing surpluses in the following decade. Federal debt would equal about 48 percent of GDP by 2040 and 10 percent by 2050.
No Credible Proposal Can Ignore Interest On National Debt

The CBO reply is 28 pages long but quite frankly the above snip is pretty much all you need to see to understand Ryan's proposal will not balance the budget.

No credible proposal can ignore interest on the national debt. I counted 10 instances of the phrase "excluding interest" in the CBO reply.

To be fair, the alternative proposals "excluded interest" as well. However, that only makes Ryan's proposal better than the alternatives, it does not make it any good.

Surplus by 2040?!

The idea that anyone can estimate out to 2040 is preposterous. Heck it is hard enough to figure out what will happen three years from now.

Here is a set of questions for you: How many recessions will there be by 2020? Does Ryan's plan take any recessions into account? Does the CBO's analysis?

Forget 2040. To be remotely credible, any plan would need to balance the budget by 2020.

By that measure, Ryan's plan fails right up front.

What About Defense Spending?

Can we really be serious about tackling the deficit while doing nothing about defense spending? I think not, and Ryan wimps out big time by failing to address it.

The United States spends more on defense than the rest of the world combined. We have troops in 140 countries. Yet, the simple fact of the matter is the US can no longer afford to be the world's policeman.

If other countries want our troops, perhaps they should pay us. However, it would be better yet if we would simply leave on our own accord.

As long as we are packing our bags, we should pack up and leave Iraq and Afghanistan. It's time to declare the wars are won and leave.

If we do that, and pull some troops home, it should be an easy matter to cut $200 billion a year out of the defense budget. That would save $2 trillion over 10 years. Actually I think we should cut far more, but I am hoping to come up with a number that has a chance.

Sharing the Sacrifice

  • Where is the proposal to share the pain?
  • How about lowering wages and benefits of those in Congress?
  • How about reducing Congressional staff budgets?
  • How about making Congress immediately accept the same health-care plan it passed for the rest of the country?
  • If everything is on the table, where the hell is defense?

People are fed up Congressional hypocrites and actions by both Democrats and Republicans is why.

Ryan's Path to Prosperity

Inquiring minds are reading an Op-Ed in the Wall Street Journal by Paul Ryan. Please consider The GOP Path to Prosperity
The president's recent budget proposal would accelerate America's descent into a debt crisis. It doubles debt held by the public by the end of his first term and triples it by 2021. It imposes $1.5 trillion in new taxes, with spending that never falls below 23% of the economy. His budget permanently enlarges the size of government. It offers no reforms to save government health and retirement programs, and no leadership.

Our budget, which we call The Path to Prosperity, is very different. For starters, it cuts $6.2 trillion in spending from the president's budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion.

A study just released by the Heritage Center for Data Analysis projects that The Path to Prosperity will help create nearly one million new private-sector jobs next year, bring the unemployment rate down to 4% by 2015, and result in 2.5 million additional private-sector jobs in the last year of the decade. It spurs economic growth, with $1.5 trillion in additional real GDP over the decade. According to Heritage's analysis, it would result in $1.1 trillion in higher wages and an average of $1,000 in additional family income each year.
Preposterous Unemployment Estimate

I have no idea what the normally sane Heritage Foundation is smoking at the moment, but the idea that Ryan's Path to Prosperity will lower the unemployment rate to 4% by 2015 is pure nonsense and I can prove it.

Let's start with a look at the April Employment Report (March Data). The unemployment rate is calculated from the Household Survey.

Household Data From Latest BLS Job Report



In the last year, the civilian population rose by 1,841,000. Yet the labor force dropped by 489,000. Those not in the labor force rose by 2,330,000. Were it not for people dropping out of the labor force, the unemployment rate would be over 11%.

Forget about what the unemployment rate really is, and let's do projections as if 8.8% is realistic.

Parameters

  • The civilian labor force is currently 153.406 million (from the above BLS report)
  • The current number of employed is 139.864 million (from the above BLS report)
  • According to the Census Bureau Population Estimates the US will add about 2.5 million working age (16 years old and up) citizens a year from now until 2020.
  • Population numbers vary slightly year to year. I used an estimate of the average summing up the buckets from 16 to 100+ for the years in question and rounding the result.
  • Let's give the Heritage Foundation some leeway with its "by 2015" projection, say until March of 2015.

Unemployment Math

Now that we have our starting parameters, let's see what it takes to get the unemployment rate to drop to 4% in four years.

Four years from now the labor pool will be larger by 10 million (2.5 million x 4).
10 million + 153.406 million = 163.406 million.

4% of 163.406 million is 6.536 million unemployed.

163.406 million in the labor pool - 6.536 million unemployed = 156.870 million employed.

Thus we need 156.870 million employed by March of 2015 to have the unemployment rate drop to 4%.

Required Employment (156.870 million) - Current Employment (139.864) = 17.006 million new jobs.

Additional Math

17.006 million jobs (354,000 jobs a month for 48 consecutive months) is the straight up math it would take to get the unemployment rate to 4% by March of 2015.

Unfortunately it is an understatement.

In the past year alone, those "not in the labor force" (from the above BLS report) rose by 2.330 million. Those are people who want a job but are not counted in the labor force because they stopped looking for work.

According to the April 2008 BLS Employment Report (March data) , there were 79.211 million "not in the labor force". Currently there are 85.594 million "not in the labor force".

Thus 6.383 million people dropped out of the labor force in the last 3 years.

Should jobs become available, many of those "not in the labor force" would start looking for a job, and the act of looking for a job would add them back in the labor pool.

That would put upward pressure on the unemployment rate and add to the number of jobs the economy would have to create to get the unemployment rate to drop to 4%.

For the sake of argument, let's assume only those who dropped out in the last year would look. Let's be real generous and assume there will not be an additional huge influx of those hiding out in college.

The labor pool would be 163.406 million + an additional 2.330 million "now looking for work". The revised labor pool is therefore 165.736 million.

Let's crunch the numbers again.

4% of 165.736 million is 6.629 million unemployed.
165.736 million in the labor pool - 6.629 million unemployed = 159.107 million jobs.
159.107 million jobs - 139.864 million current jobs = 19.243 million jobs.

An additional 19.243 million jobs is a very realistic estimate of what it would take to get the unemployment rate to 4% by March of 1015.

19.243 million jobs in 4 years is 4.811 million jobs a year, or 401,000 jobs a month for 48 consecutive months.

Note the absurdity of the Heritage Foundation statement "Path to Prosperity will help create nearly one million new private-sector jobs next year" as if that would put a dent in the unemployment rate.

Monthly Job Growth 1999-2009



The above table shows monthly job growth from 1999 through 2009. I put that table together in November of 2009.

Notice that in the height of the housing boom in 2005-2006, the highest average monthly job total was 212,000 jobs a month. At the height of the internet boom in 1999 with Greenspan stepping on the gas over absurd Y2K fears, the economy added 264,000 jobs a month.

At the peak of the commercial real estate boom in 2006-2007, the economy added somewhere between 96,000 jobs a month and 178,000 jobs a month.

Let's be realistic. The housing boom is not going to come roaring back. Nor is the commercial real estate boom, nor is another internet boom.

Quite frankly it is preposterous to suggest that by cutting spending the economy will add 400,000 jobs a month for 48 straight months. Heck, even the straight up number of 354,000 jobs a month is preposterous.

No Path to Prosperity

Flat out, Ryan's proposal is no path to prosperity. It is a step in the right direction but the best we can say about it is that it delays bankrupting the nation.

Republicans need to take another look at Ryan's assumptions on growth, on jobs, on interest on the national debt, on military spending, on shared sacrifice, and on the idea that budget projections 30 years from now make any sense .

Ryan's plan may be far better than Obama's but neither plan is a "Path to Prosperity".

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List