Little Jobs, Big People

The direct unemployment rate sits at 6.7%, which the Department of Labor calls the U3 measurement. But there’s another measurement, U6 (the “alternative measurement”), which also includes part-timers looking for full-time and those who want work, but have just given up. That number sits at 12.8%. Looking that the statistics within these categories is very interesting, if not a little sad:

Employed/Unemployed: There are two components to the civilian labor force — 145.7 million people are employed and 10.5 million are not. The ratio of unemployed to the CNP is the headline unemployment rate, which is known to the Bureau of Labor Statistics as the U3 unemployment rate. [U6 adds the next two categories to come up with that alternative measurement]

Employed Part-Time for Economic Reasons: Within the civilian labor force, the Bureau of Labor Statistics notes those working less than 40 hours a week who would like to work full-time. That stands at 7.4 million, or 4.7 percent of the labor force.

Marginal Workers: There are 2.2 million people, or 1.4 percent, who are not counted in the civilian labor force because they have not been looking for work for one reason or another but may in the near future. This includes 700,000 ‘discouraged workers’ who are not out looking for a job but would like to have one, plus 1.5 million people who have chosen to go to school or stay at home but could be available for work, if needed. Marginal workers are not included in the civilian labor force. MintNewsPress.com, April 22^nd.

We’ve lost a bunch of older workers, now sucking down minimalist Social Security checks while too many other workers – not old enough to qualify for those “old guy” checks, hanging on, waiting for a change in our job demand picture. Unemployment insurance has expired for an estimated 2 million people as Congress seems to think it’s okay for them to continue to twist in the wind. An extension of such benefits does not appear to be likely anytime soon.

We’ve recently visited the “banana republic” statistics that define America today. A thin sliver of mega-rich owning the cream of our wealth, a vast horde (60%) at the bottom who own virtually nothing, a contracting middle class, 95% of income gains since 2009 going to the top 1% of earners, 400 of the richest Americans owning as much as the entire bottom half of our income strata combined, etc.

The playing field is tilted, and the slant is getting worse. What’s worse, stupid mythology has been leading Americans on with false hope. Like that corrosive notion, long, long, long since disproven and discredited by the economic community, of “job creators” of mega-rich who were supposed to “trickle down” opportunities to the rest of us. The drops never came. And if the current trend in job replacement is any indication, the potential for a whole lot of Americans is pretty bleak.

“[Job] losses and gains have been skewed. Higher-wage industries — like accounting and legal work — shed 3.6 million positions during the recession and have added only 2.6 million positions during the recovery. But lower-wage industries lost two million jobs, then added 3.8 million.

“With 10.5 million Americans still looking for work — the unemployment rate is 6.7 percent — employers feel no pressure to raise wages for those who are working. As a result, the average household’s take-home pay has declined through the recession and the recovery to $51,017 in 2012 from $55,627 in 2007, after adjusting for inflation

“With joblessness high and job gains concentrated in low-wage industries, hundreds of thousands of Americans have accepted positions that pay less than they used to make, in some cases, sliding out of the middle class and into the ranks of the working poor… The National Employment Law Project study found that there were about a million fewer jobs in middle-wage industries — including parts of the health care system, loan servicing and real estate — than there were when the recession hit.

“Economists worry that even a stronger recovery might not bring back jobs in traditionally middle-class occupations eroded by mechanization and offshoring. The American work force might become yet more ‘polarized,’ with positions easier to find at the high and low ends than in the middle.” New York Times, April 28^th.

So if those folks are going to be stuck in low-paying jobs with little or no chance for advancement, given the erosions of unions in the private sector, there has been a press at least to pay folks at the bottom a bit more: “The swelling of the low-wage work force has led to a push for policies to raise the living standards of the poor, including through job training, expansion of health care coverage and a higher minimum wage.

“President Obama has supported a Democratic proposal to lift the federal minimum wage to $10.10 an hour from its current level of $7.25… ‘Nobody who works full-time should ever have to live in poverty, Mr. Obama [said on April 26^th] in his weekly address. ‘That’s why nearly three in four Americans support raising the minimum wage.’… Raising it to $10.10 would ‘lift wages for nearly 28 million Americans across the country,’ he said. ‘We’re not just talking about young people on their first job. The average minimum-wage worker is 35 years old. They work hard, often in physically demanding jobs.’” NY Times. But if you think Congress is likely to follow this quest, pigs will be flying! The only, minimal, progress here has been in a few states and municipalities.

We have also made getting a higher education increasingly unaffordable to an increasing number of families, adding one more downward pressure on that American middle class. From 70.1% in 2009, “[of] the nearly 3.0 million youth age 16 to 24 who graduated from high school between January and October 2013, about 2.0 million (65.9 percent) were enrolled in college in October.” Bureau of Labor Statistics, April 22^nd. The high school dropout rate in large inner cities continues unabated.

In the end, America has too much to lose with a shrinking middle class and growing economic polarization, issues that are unfortunately and effectively redefining who we are. This radical shift in the make-up of our nation, found nowhere else in the democratic developed world, may ultimately cause a great nation to unravel and fall apart. The tea leaves are pretty clear with this mix… time to throw that tea out and brew a cup that preserves what best for all of us.

I’m Peter Dekom, and not fighting for what best for most of us results in an economic system that probably is unsustainable, one that cannot be good for the continuation of the greatest nation on earth.