Sunday, September 6, 2009

A Jobless Recovery

That’s what the pundits are calling the “end to the current recession.” 9.7% of direct unemployment (up from 9.4% in July) with the prospects of a few years at abnormally high levels of unemployment and underemployment. The “alternative measurement” of unemployment – looking a people who want full time jobs but have given up looking or can only find occasional or part time work – is inching up towards 17%!!! Want your kids to have some spare cash? Learn a work ethic with a summer job? The Sept. 5th NY Times:“This August, the teenage unemployment rate — that is, the percentage of teenagers who wanted a job who could not find one — was 25.5 percent, its highest level since the government began keeping track of such statistics in 1948.”

Even without the teenagers, it’s getting really close to one out of every five employable Americans being on the bad side of unemployment. We’re already well-past that horrific level in places like Michigan and California. We haven’t seen numbers like this in a quarter of a century. So if the stock market goes up and CEOs of big companies are making tens of millions of dollars in pay packages and stock benefits, that’s a “recovery” we all can be proud of? The rest are “trailing economic indicators” that will trail for years?

The NY Times (August 4th) put this situation in the proper perspective: “After years of borrowing against the soaring value of homes, tapping abundant credit cards and harvesting stock market earnings to live in excess of their incomes, millions of households are being forced to pare spending. That casts a shadow over consumer spending, which makes up 70 percent of the nation’s economic activity… ‘Household balance sheets are shot,’ [Alan Ruskin, an economist with the Royal Bank of Scotland] said. From here, spending ‘has to come from income, and income has to come from employment, and at this juncture it looks like employment will only improve very slowly.’”

Well “shiver me timbers,” if the pirates’ loot remains in tact… but if you look to your left and you look to your right… at those empty desks, missing people on the manufacturing line, those retail clerks who have new free time, the abandoned homes in your town, the filings in bankruptcy court, the “for lease” signs everywhere… maybe that word “recovery” really needs to be purged from descriptions of what is happening. Words without concomitant changes in how Americans actually live, how they look at their futures and their ability to earn a living, are not helpful. It makes those who are still mired in economic fear – and that’s most of us – feel that somehow we missed out on this new-found economic pattern of growth. But there is no real growth, and exactly what are those companies with new rising stock values going to do to keep those values shored up without customers?

Why am I profoundly skeptical that this recession has ended, that even a “jobless” recovery has begun, and that good times are just ahead? I had this same feeling when I approached the “is there an Easter Bunny/Santa Claus” controversy. I was younger then, but I reached the same conclusion.

I’m Peter Dekom, and yes, I am wondering what “they” are smoking.

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