The Great Unemployment Cover-up and the Looting of America
Losing your job is tragic. It sends tremors through your nervous system, through your family, and through your community. It gnaws at your health. Your children sense the fear, the shame, the anger. I remember clearly the look on my father's face when he got laid off from his factory job during the Eisenhower recession. He was never just a statistic.
Yet unemployment numbers are critical to society. They provide the very best measure of our economic health. And today, we found out again how sick we are. In May, unemployment hit 9.4 percent, the highest in over 25 years as another 787,000 people lost their jobs. Fourteen and half million real people are out of work. And there's more misery on the way as the auto industry and the many firms that supply it, contract even more.
We'll be hearing this unemployment number again and again. Sure, it's bad, but the media will tell us it's a "lagging indicator", meaning that the economy might be getting better even though jobs are still being lost. We might hear that the rate of job loss is slowing. And we might also be reminded that it's not as bad as during the Great Depression when folks were lining up at soup kitchens and selling apples on Wall Street. In those days, unemployment soared. The system had fallen apart and working people were in the streets fighting for unions, preventing foreclosures, and interfering with evictions. Most Americans were rejecting the right of corporate elites to rule their workplaces and their society. Wall Street was on the run.
But that was then. Now we sit and wait, hoping things will get better. And besides, unemployment really is much lower than it was in the 1930s... or is it?
The much-publicized unemployment rate is a sham. Until the Great Depression, unemployment wasn't even counted. Captains of industry, economists, and policy makers were worried about not having enough workers, rather than having too many. Sure there were "panics" from time to time, but the theory was that when workers wages dropped sufficiently, everyone who wanted a job would find one. If you didn't have a job, it was because you didn't want one.
During the Depression the economy collapsed. It could not produce enough jobs. That spurred the first systematic efforts to figure out how to count the unemployed. But we didn't have a system in place for determining a national unemployment rate until 1940. By the then the military buildup was underway and again the main worry was finding enough workers for the war effort. We only have estimates for the Great Depression and those suggest that at least one in four was jobless.
After WWII, as a nation we made a commitment to create a full-employment economy. But what was full-employment? The answer depended on how you counted it. Step by step the official unemployment rate computations were slimmed down making it easier for politicians to claim we were at or near full-employment. Since the economy was doing pretty well in the post-WII era, few worried about the changes in how unemployment was counted.
But these changes matter. Today, the number the media repeats does not count those who have stopped looking for work but who, according to the Bureau of Labor Statistics, "indicate that they want and are available for a job and have looked for work sometime in the recent past." Some of these workers are "discouraged workers who have given a job-market related reason for not looking currently for a job." (Translation: there are no jobs available anywhere near where I live, so why waste my time looking for something that doesn't exist?) Those who have stopped looking for work are just not counted as being part of the labor force and therefore are not unemployed. The publicized rate also doesn't count "those who want and are available for full-time work but have had to settle for a part-time schedule." These folks are working part time because they have no other choice. And part time can mean as little as one hour per week. (Also we don't count the 2.5 million who are in prison - and we have the largest prison population in the world by far, more than China, more than Russia. See http://www.nytimes.com/2008/04/23/world/americas/23iht-23prison.12253738.html)
Isn't that convenient? If you want work but have slowed down your search because there are no jobs around, you aren't counted. If you want to work full-time and have been forced into part-time work, you're not counted as unemployed - even if you are barely working. And you certainly not counted if you're behind bars.
Fortunately, the Bureau of Labor Statistics also publishes a much broader number that includes the excluded (except for prisoners). It is referred to as the U6 jobless rate. Note the subtle distinction between the "jobless" and the "unemployment" rate. Give me a break!
So if you count those who are really having a tough time finding work - like they live in an area that once produced automotive vehicles and parts - and if you count those who are involuntarily part-time, you get a much bigger number. For May, the jobless rate was 15.4 percent -- 25 million of us.
Thank goodness it's not as bad as the Great Depression. One big reason is that we actually have in place unemployment insurance and other government programs to mitigate the negative impacts--programs that working people fought for and won in the 1930s.
So why don't we see these more realistic numbers being reported more often? I think the cultural pattern was set during the Cold War. We wanted our system to look good to the rest of the world: The lower the rate, the less fuel for Communist propaganda. Since the economy was in relatively good shape compared to the Depression, it was easy for policy leaders, economists and journalists to justify and reinforce the continual usage of the lower rates. It also makes sense for major media outlets to promote a more optimistic outlook. As my editor put it, "Newspapers and TV news programs get their money from advertisers; advertisers want readers and viewers to be happy, gung-ho consumers; bad economic news makes people more hesitant to spend money on useless crap, which is bad for the advertisers, which is bad for the media. So there's a structural bias towards reporting the less-bad news." (After writing this piece, I discovered that Reuters, thankfully, is doing its job. See http://www.reuters.com/article/GCA-Economy/idUSTRE5077TM20090109)
If we continually heard the larger and more honest numbers, we might become more rebellious and demand more changes. We might demand stronger policies to create more jobs....perhaps, even at the expense of the elites who got us into this mess in the first place. If the true unemployment rate really hit the news, more of us might come to realize that the Wall Street high-flyers who crashed the economy actually are causing more harm than we realize. We might come to understand that digging ourselves out of the crater will be harder and take longer than the folks at CNBC will admit, and that there's that much more reason to impose deep structural fixes that are necessary to prevent the next crash, the kind of steps Congress and President Obama still seem reluctant to take.
And there's a reason for that reluctance. At this very moment a battle is going on between Wall Street and the rest of us about whether fantasy finance derivatives will be adequately regulated and about whether outrageous Wall Street salaries will be capped. You can take it to the bank (if it doesn't go under) that Wall Street and its CNBC cheerleaders do not want the higher jobless rate to enter the discussion.
But a Wall Street victory is not inevitable. We can begin to open up the discussion starting right here...and now.
Follow Les Leopold on Twitter: www.twitter.com/les_leopold
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Great article;as we all know,figures don't lie but liars can figure. As stated,the middle class was sold out by the media,but they brought a lot of their misery on themselves by accepting constant concessions,by falling for "cheaper(f
Could one of these "expert analysts(r
Though I did not vote for President Obama(third-party guy here);I had hoped that an understanding of what was really happening in this country would occur with his election. Sadly,I just see more of the same as before. Mr. President,your strongest support was from union people,and we're felling VERY sold-out right now.
As for the whole "jobless recovery"-that's crap too. Employment figures are NOT a lagging indicator. That lie was made up in the 90's when the government starting fiddling with GDP figures (as well as pretty much all of our economic benchmarks). If the GDP figure is overstated, then the economy appears to come out the recession far sooner than it actually does, causing other more reliable indicators to "lag" behind it. Our GDP is the most manipulated of anything, because the economic figure that we can't see in our daily lives.
Even the rate of 15.4% is total crap!
That's the "seasonally adjusted" number. The Labor Department is supposed to use seasonal adjustments to smooth out periods when more people gain and loose jobs like December when more people are hired at retail stores, but instead they use it to just add a few 100,000 jobs here and there. The number also has a birth-death bias, which means that jobs, which were not counted on employment rolls, are added to the official figures, to make up for jobs lost due to unusual catastophic events (such as hurricances) and to reflect growth in the economy (except that's it not growing, of course).
Using household survey's-just going around asking how many people are actually employed-the real unemployment rate is 20%.
Perhaps we should become more rebellious. Perhaps we should implement an economic model that allows for people to have their basic needs met without any kind of employment. Why should money be the criteria for whether you eat or not, or whether your house has heat and water? Is money the best criteria for deciding whether these basic needs are met? Don't we have the resources and the infrastructure to make certain that all Americans have what they need to survive? Don't we have the money to cover that? Do we need some kind of national emergency to put in place the appropriate measures to keep our lives Safe and Secure with the understanding that basic life essentials create safety and security? Our economy is clearly moving away from hyperconsumerism to a model of practicality, efficiency, sustainability and reliability.
Statistical footnote..
The statisguesses for unemployment during the Depression were benched at 14 yrs old and up. Its pretty easy to come up with 25%.
Life expectancies were almost 10 yrs less, and the majority of US kids left high school to work. Which wasn't a bad idea, because by the 1950s their blue collar job wages put them firmly in the middle class. And the wife didn't have to work to keep them there, but was available to pick up work, if the husband lost his job. Today, an already employed Mom cannot make any substantive supplement to her present income, to fill the gap.
Keep in mind, that a family of 4, with two working parents making $10+/hr are not far off of the median household income. If one of them is unemployed, they come very close to the poverty level.
The Depression began 90 years ago. What possible economic and societal comparisons can made to back then?
Anyone who tries to sell the current lipsticked pig, by contrasting it to the Depression, is framing the discussion around a completely different economic culture. It's a misdirection.
Plus, even the Pollyanna punditry admits Main Street families have a lot more pain to endure over the next year.
Their point is that the markets will be up, and corporate profits/margins will be swell.
We just got through a "jobless recovery".
This one looks to be a MiddleClassless recovery.
After the revolution, I propose that Wall Street be preserved as a financial holocaust museum. K Street should remain a red light district.
"K Street should remain a red light district"
I love it!
Good article.
I wonder why Obama, Geithner, Bernanke and others continue this practice of intentional deception.
First, they are following precedent. (Bush)
Secondly, anyone with a brain can get alternate numbers. (Google)
Thirdly, even though alternate numbers are available, Corporate Media decides what to print.
Corporated media over the last 30 years has SOLD the middle and working class down the river...we are now just wage slaves with 1 week of vacation, no sick leave, no healthcare, no pensions..
"Geithner, Bernanke and others" are all from the claque of Wall Street Thieves who got us into this mess in the first place.
And Obama's not about to bite the hand that feeds him.
When today's unemployment numbers are subjected to the same qualifiers as the unemployment rate of 1982, it becomes obvious that we're really now arriving at 1940's unemployment rate (about 14%), not 1982.
So, how does it feel to know we're walking in the steps of folks who lived through the depression of the 1930's, only to see the threat of war staring them in the face?
http://ill
The US lowers the H1-B visa limit and Indian consluting companies have found away to go around the problem...
We have lost more than just our jobs, we have lost our economy. Our economy used to be based on production, however it now appears that it is based on credit, lending and debt. I hoped that the economic stimulus package was going to create jobs and rebuild our infrastructure. Instead it seems to have been sent to investment bankers to sit in the banks to back the existence of corporations that have created the illusion of wealth by gambling with derivatives while they paid the gamblers handsomely with other people's money.
If all we are going to do is hand money over to banks and investment bankers we are going to have to fall a lot further before we begin to rebuild.
Unfortunately it appears that we need to remind the Obama administration that this is a government of the people, for the people and by the people, not a government of for and by the corporation.
Sadly unemployment is higher than U6 at 15%. Probably double U3 what they say it is at about 18-20%. Why is they don't count the self employed/small business owners that are making little or no money.
Nor are things going to get better anytime soon as home prices mean many more foreclosures are going to happen and gasoline is going to rise another $1 to about $4/gal by the end of the yr.
I'm lucky as I'm use to little money, my modest home is paid for and I drive an EV. But others are going to be screwed by big business, finance, oil and repubs!!
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