Fooling Ourselves with Statistics

There are lots of reasons for not having a full-time job. Retirement. Disability. Homemaker (they may work a lot harder but just don’t get paid for it). Or, the biggest reason. A lack of available full-time jobs. We have fun ways of describing adult unemployment in the United States. As the official unemployment rate is 6.2%, those who are still want full-time work get measured in another, “alternative measurement.” What are the “better” numbers? Nooo! Not more statistics! Yup! Need new ones to make the lying old ones make sense.

Here’s this gobbledygook way Department of Commerce describes the secondary measurement of this “alternative” and expanded definition of unemployment (which adds under-employment), 12.2% for July of 2014: “Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force… NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.” 

The numbers can get really horrible when you drill down to hard hit states. Each of California and Nevada – 16.2%, the worst in the nation. Looking at just Los Angeles County, the number even gets a whole lot worse: 17.8%. Even New York City, with the bastions of Wall Street and so many corporate headquarters, generates an awful 14.6% alternative unemployment rate. Simply put, while average numbers tell us that the Great Recession is over in the United States, the uplift from the huge increases at the top are sufficient seriously to distort the average numbers.

Just think about it. We need consumers to buy stuff, big ticket items like cars and homes, to ordinary day-to-day consumables. But every year for over a decade, average American buying power has been falling. For those old enough to remember, Americans used to replace their cars every two to three years. Now, it’s every eleven years. How do we increase topline revenues generated to the companies that employ vast hordes of workers? How do we generate the business that will pull this nation back to “normal”? By the looks of the numbers, we either have a long time yet to wait… or we are resetting our entire economy at this new, deeply reduced level. So exactly how do we project long-term growth without the supporting consumer spends? Oh, we’ll sell to overseas markets?

If it’s bad for us, with all of our resources, technology and educational opportunities, what is employment like for the world as a whole? “Only 1.3 billion adults worldwide, about 26 percent, worked full-time in 2013, according to a new Gallup poll. This sobering number comes after the organization revealed [August 11^th] that the majority of people in the job market feel this is a bad time to be looking.

“The numbers show that many people do not feel the Great Recession, which started in 2008, is yet over. But there are some promising signs – jobs have grown in many regions and numbers held virtually steady from 2013… North America led the way with a mere 43 percent of all adults 15 or older employed more than 30 hours a week, Gallup found. This grew one percent from 2012 – an improvement, but not quite as big as the dropping unemployment rate would indicate.

“The former Soviet Union saw a four point rise to 42 percent [having such jobs] from 2012 to 2013. A surprising result on the back of solid gains in both Russia and Belarus, according to the pollster… Then the ranks of the employed then dropped off a cliff… Only 35 percent of European Union citizens held down full-time jobs last year, but those grim numbers represent a two point gain on 2013… Those in Latin America and the Caribbean were employed at only a rate of 28 percent, a three point drop.

“A staggering 19 percent of those in the Middle East and Africa were fully employed, but were nearly twice as fortunate as their Sub-Saharan Africa counterparts. One in 10 adults, 11 percent, in the world's most impoverished region have full-time jobs.” AOL.com, August 12^th. So exactly why are economic pundits so bullish about our future? Denial? Stocks and real estate are soaring. Why? No place else to put your money! So what happens when interest rates begin to rise? Not pretty.

And here’s a scary reality. Wars, conflict, rebellion and rises in extreme behavior are very linked to the fears and rage the come with under- and unemployment. Think of the rise of Hitler in an economically decimated Germany or the wars in the Middle East. There, farmers losing their livelihoods from massive sustained drought (climate change induced), unable to find work, have formed the backbone of foot soldiers recruited in the Syrian rebellion, and, worse, the ISIS debacle. Hamas has exploited naked 41% unemployment rate in Gaza. As the world works less, expect more violence, more instability and more insurrection.

We are not immune here either. Look at the extreme polarization that has only accelerated since the Great Recession. If we in the United States are going to reach beyond this lingering malaise, we are going to have to step up what creates jobs and solves our most important issues. The drivers that government spending most directly impacts? The usual. Education, research and infrastructure. Creating jobs while improving both our productivity and efficiency.

Maybe generating new water-resources, highways and bridges that work and carry traffic efficiently, environment clean-ups, plumbing systems with upgrades that don’t explode and fail, fiber optic networks, etc., etc. If we don’t… For entry-level workers, bleak is a polite word. For older workers laid off, it can be the end of the line. As we get comfortable with these seemingly terrible numbers, we even have a term for it to make it sound fine: structural unemployment. It’s time to do something about it!

 I’m Peter Dekom, and it time to become proactive about our future and stop waiting for absolute disaster to strike again before dealing with these obvious issues.