Friday, June 8, 2012 by Common Dreams
Recovery? What Recovery?
Behind the New Jobs Numbers, Dull Statistics Tell a Terrifying Story
“Worst U.S. Jobs Data in a Year Signals Stalling Recovery,” The New York Times
ran as its lead headline on June 2. The Labor Department reported that
the U.S. economy created 69,000 jobs during May. The three-month
job-creation average was 96,000. Unemployment ticked up a tenth of a
point, from 8.1 to 8.2 percent.
Once again, the media is downplaying a blockbuster story—recovery?
what recovery?—by dulling it down with a pile of dry, impenetrable
statistics.
Wonder why you can’t find a job or get a raise, and your house has
been sitting on the market for years? The new jobs numbers are the key
to understanding how bad the economy is—and why it’s not likely to get
better any time soon.
Q: If nearly 100,000 Americans per month are finding jobs, why are securities markets tumbling?
A: Because it’s actually a net jobs loss. The U.S. population is
growing, so the work force is too. We need 125,000 new jobs a month just
to keep up with population growth. “In the last 22 months, businesses
have created more than three million jobs,” President Obama claimed in
his January 2012 State of the Union speech. True or not, a more
straightforward claim would have been net job creation: 350,000 jobs
over 22 months, or 15,000 per month. (Politifact rates Obama’s line as
Half True.)
Q: If we’re losing jobs, why is the unemployment rate hovering? Why isn’t it going up faster?
A: Discouraged workers, i.e. people who would take a job, but have
given up looking, don’t count as officially unemployed. Neither do those
whose unemployment benefits have run out, yet haven’t found new work.
Ditto for those who are underemployed—a laid-off middle manager who
earned $100,000, now scraping by on a fraction of her former salary by
taking odd jobs.
The officially unemployed—men and women who lost their jobs recently
enough to still collect unemployment benefits—are remaining more or less
steady. Since the number of long-term unemployed is rising, however,
the unofficially unemployed is growing fast—but neither the government
nor the media acknowledges their existence.
To muddy things up even further, the feds have rejiggered the numbers
to make it look like there are fewer officially unemployed than there
used to be. The respected blog Shadow Government Statistics, which
calculates unemployment using the way the Labor Department did until the
1980s, says this Alternate Unemployment Rate is about 23 percent—about
the same as at the peak of the Great Depression.
No wonder why there are so many empty storefronts.
The really interesting number is the Labor Force Participation Rate:
how many people want a job, but don’t bother blitzing the Internet with
their resume? Melinda Pitts of the Atlanta branch of the Federal Reserve
Bank points to “marginally attached” “nonparticipants” in the labor
force. “A nonparticipant who is marginally attached indicates they want
employment or are available for employment. Also, they indicate having
looked for a job in the previous year but not actively looking for a job
at present,” she says. This group is failing to return to the “real”
labor force at higher rates than in the past.
Q: So what’s up?
A: The jobs figures reflect a big structural problem in the U.S.
economy. Real wages have been steadily dropping since the 1970s. We’re
creating a permanent class of unemployed and underemployed. And there’s
no help on the way from government or private sector, both of which are
cutting back and laying off. Even if we got “up” to 125,000 new jobs a
month, that would still leave at least 8.1 million people who lost jobs
between 2007 and 2010 out of work.
That’s a huge hole. Taking Obama at his Half True word of 15,000 net
new jobs a month, it would take 45 years to find gigs for the victims of
the 2007-to-2010 subprime mortgage meltdown. Only something big and
dramatic, like a new FDR-style Works Progress Administration, could fill
it. “Normal” post-recession growth can’t do it. And this recovery—if
you can call it that—is anemic at best.
Q: Anything else?
A: Yeah. Jobs don’t equal jobs. If you replace a $70,000-a-year job
with a $60,000-a-year job, that’s a net decline in income. Politicians
will claim that the old lost jobs have been replaced with new ones, but
multiply that trend over millions of workers, and you’ll see reduced
consumer spending. Among the still-employed, inflation-adjusted wages
are dropping.
Oh, and what about the debts people accrued while they were between
jobs? Because many employers refuse to hire jobseekers with bad credit,
the unemployed are punished for being unemployed with…more unemployment.
As for those who return to work, even workers who get the same pay have
to pay off credit card bills they lived on.
The economy is a whale of a problem. But politicians of both
parties—and the media—are only paying it the thinnest of lip service.
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