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Multi-level Jobs Crisis

Mar 07, 2011 | By: Mr_Blue | Tags: jobs, unemployment rate, jobs report, jobs crisis

When a jobs report is released, such as the one from last Friday, there is undue emphasis on two numbers: unemployment rate and nonfarm payroll number (or jobs created). But these number only tell a small part of a much bigger jobs crisis.

Last Friday the Bureau of Labor Statistics released the February’s jobs report that said the ‘official’ unemployment rate was 8.9% and nonfarm payroll increased 192,000. These two numbers show a very slow improving job situation. If we listened to traditional media and politicians in Washington you would think that everything is OK. Hardly.

This pace of job growth is so slow that Professor Mark Thoma determined that if this slow trend continues our economy would reach full employment (possibly 4% unemployment) by year 2021. My guess is that this assumes that there is no further government stimulus and Wall Street doesn’t blow up the economy again. No further government stimulus is a safe assumption but Wall Street not blowing up the economy again is not.

The more broader measure of labor underutilization - U6 unemployment which measures underemployment and unemployment is 15.9%. This is also slowly improving.

There is another ominous sign of the Jobs Crisis that’s being ignored. The Labor Force Participation Rate is at levels not seen since the 1980s - 64.2%. Labor participation rate is the percentage of working age population in the work force (this included people who are considered unemployed). Now, sure with an aging population this number will drop but retirements can’t account for this huge drop. Over 1 million people have left or are NOT being counted in the labor force. What about the people who have been unemployed for over 99 weeks and are currently without unemployment insurance? What about young people and recent college graduates? The Labor Participation Rate is another number that shows the depth of this Jobs Crisis.

The outlook for those who are fortunate enough to find employment is not very rosy either. As Professor Robert Reich has pointed out from his reading of The National Employment Law Project Study:

While the biggest losses were higher-wage jobs paying an average of $19.05 to $31.40 an hour, the biggest gains have been lower-wage jobs paying an average of $9.03 to $12.91 an hour.

Job gains have happened more in low-wage jobs and those are most likely to not have health insurance benefits. Over the last three years employer-based health coverage continues to drop - currently 44.6% Americans have reported getting health insurance from their employer. More problems for working class families in our for-profit health care system.

The Jobs Crisis is deep and unfortunately isn’t going away soon. It doesn’t have to be this way. There are policies that could be implemented today that could address this Jobs Crisis but this Jobs Crisis is simply not a priority in Washington. It is up to us to make it a priority. One way we can do that is through civil disobedience such as what is being exhibited in Madison, Wisconsin or USUncut protests. We have to do something to change the status quo because for millions of Americans it is now a matter of survival.

Good luck.