Best of Blog Posts for Week of September 14th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week.

DQYDJ poses the question  How Much of the Bad Employment Situation Can Be Blamed On Baby Boomers?

PlanetMoney shares  Where The Bailouts Stand, In 1 Graphic

Apex guest writes at FMF : Real Estate 101: Why You Should NOT Invest In Real Estate


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Would Gas Savings Alone Pay for a Chevy Volt Lease?

I just read that Chevy has been offering $199 monthly leases on the Volt for 24 month periods.  I checked the Chevy website and I see a 24 month lease at $289 per month for the 2012 Volt and a 36 month lease for $299 a month.

My first thought was that if you drive a lot then the fuel savings alone could warrant the monthly lease charge.   But of course leases have mileage limits so that effectively blows that idea.    The lease term only allows 1000 miles per month and if you go over you have to spend 18¢ or 20¢ per mile for the 2013 or 2012 models respectively.    So the first 1000 miles would cost you 28.9¢ or 29.9¢ per mile and the additional miles would be 18¢ or 20¢.    If your current car gets 20 MPG and gas costs $3.70 per gallon then you are spending about 19¢ per mile on gas.   Even if the Volt had $0 fuel costs you wouldn't come out ahead with just fuel savings.     But the Volt does cost money to operate of course.   The battery is 16k.5Wh and gives you 38 miles.  If you spend 11¢ per kWh on your electricity then it would cost $1.81 to charge the battery and it would cost you 4.8¢ per mile in electricity.    Therefore with a Volt lease you'd be spending at least 18¢ per mile for the lease plus almost 5¢ for electricity.

Lets say you drive a Hummer H3 entirely in the city and get 13 MPG.  Thats 28¢ per mile for gas.   If you gave that hummer away and leased a Volt you'd have to drive 1650 miles a month to break even.    Thats almost 20,000 miles a year.   BUT you can't actually drive a Volt 1650 miles a month on just electricity because the battery only gives you 38 miles a charge.  If you charge the car every night then the most you can get in an average month is 1155 miles.  That means you'd have to buy gas for the additional 500 miles a month.  The volt gets about 36 MPG when using gas so that cost is more like 10¢ per mile.    That means that the miles you drive over 1155 per month would cost 10¢ for electricity and 18¢ for the lease charge which would be equivalent to the 28¢ you spend on gas for the Hummer.
If you add the lease charge to the cost of fuel for the Volt it will always be more expensive than the fuel costs alone for a Hummer H3.    This is still assuming a cost of $3.70 per gallon of gasoline.  If fuel goes up then paying the lease on a Volt might beat the cost of gas for a Hummer.

Most people don't drive Hummers and if you do there are a lot of other options to save on gas costs.

A typical car gets 20 or 25 MPG.   That would make the cost of gasoline alone around 14.8-18.5¢ per gallon.    The cost of leasing a Volt is already higher than that per mile plus you have electricity and gas costs for the Volt as well.  

Bottom Line :   Leasing a Volt will not pay for itself in just gasoline cost savings.

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Federal Government Employees by Group, Military vs Civilian - 1962 to 2007

The other day I talked about how federal government and government employment in general has been on the decline recently.   I showed the trend for federal, state and local government jobs from the BLS data.   At the time I wasn't sure how much of the federal government employees were related to the military.  I figured at least some were given the big jumps in employment around the 40's and 60's.  

I found numbers for federal government employees broken down into some categories.   The more recent budgets only show numbers starting in 1981.   The 2009 budget figures have the data going back to 1962.  I wanted a longer history so I am using the 2009 budget data.

First here is the federal government employment split into different categories:

The 'Military' section is for uniformed military while the 'DoD' is for civilian employment within the Dept. of Defense.  

Here's another look at the same data that make it a little easier to see the number of employees and trends for each category :

As you can see there the size of our uniformed military is mostly the cause of decrease in total federal employment.   The other lines generally trend flat over the decades (more or less).   I'll also point out that from 1962 to 2007 the population of the U.S. increased about 60% from around about 189M to 304M.

Lastly I broke it into military & DoD versus all the other employees:

This graph more clearly illustrates the impact that total military related employment has had on the general trend in federal government employee total.

Here is a table with select years :

Year	Military	Leg/Jud	DoD	Exec	USPS	SUM
1962	2840	30	1070	827	589	5354
1965	2687	32	1034	867	595	5215
1970	3104	38	1219	983	741	6085
1975	2164	49	1042	1107	699	5061
1980	2090	55	960	1201	660	4965
1985	2190	58	1107	1145	756	5256
1990	2106	61	1034	1216	817	5234
1995	1555	62	802	1210	846	4475
2000	1426	63	651	1127	861	4129
2005	1436	65	649	1224	764	4138
2006	1432	63	653	1227	757	4133
2007	1427	63	651	1237	748	4127

Those numbers are in thousands.

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Loss of Government Jobs Equates to about 0.7% to 1% of Unemployment

You may or may not be surprised to know that the number of government jobs  has dropped by about 1 million in the past couple years.    In May of 2010 the government sector employed 22.997 million people.   As of July 2012 there were 21.928M government jobs.   Thats a reduction of 1.069M government jobs.     You can get the specifics on employment by industry in the BLS CES database

Currently the labor force is at 155.013M.   Therefore the contraction of 1.069M government jobs equates to 0.7% of the labor force.   One could conclude that these lost jobs add to the rolls of the unemployed.  

If you consider population growth the impact is higher.   From May 2010 to July 2012 the population grew about 2%.    If government employment had grown along with the population then it would be at 22.997M x 1.02 = 23.45694M.    Thats 1.52894M fewer jobs than we have currently.   This amount is about 1% of the labor force.  

I am not trying to draw any conclusions from this and I don't have a point here.   I just thought it was interesting that the number of government jobs has shrunk that much in the past couple years.  I'm not sure of the exact cause but I'd assume its belt tightening but could also be due to some demographic shifts.

Here are some charts showing the trend in government employment broken down by the various government levels:

All governments:

Notice that big spike in jobs in 2010?   Yeah that sticks out.   Its about 500k leap there in jobs for just a short period.   Odd huh?   I'll discuss that more after looking at the rest of the charts.

Federal government: 

Overall the number of federal jobs has not changed radically since 2010.

But you can see that spike is again shown here in the federal government employment rolls.   Federal jobs went up about 600k briefly in 2010.

You might be interested to know that there were actually more federal government employees in the 1940's and 1960s than there are today.   Here's the longer term trend :

 I suspect that this is large part due to employment in the military.   Particularly given the huge spike in jobs in the 1940's.

From that longer term graph of federal jobs you can also notice those short term spikes in employment every 10 years.   I assume those spokes in employment including the jump in 2010 is due to the US Census hiring temporary workers every 10 years to conduct the Decennial Census.

US Postal Service:

The USPS has been shedding workers pretty quickly for a few years now.   Total employment at USPS peaked at about 900k in April 1999 and has dropped about 1/3 to 609k as of July 2012.   Thats about a -3% annual drop over 13 years.   They've lost about 18% in just the past 4 years.

State governments:

State governments as a whole have shed about 150k jobs, just a 2.8% drop.

Local governments:

Local governments have lost about 500k jobs since 2009 which is about 3.5% cut.


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