The mainstream press is busy digesting this week’s news that the official unemployment rate has now topped 10%. For example, here is the lede in a Reuters article from Friday analyzing the current business climate:
As unemployment in the United States edges above 10 percent, anxious investors will look to earnings reports from major retailers for signs of life in the beaten-up consumer.
However, the 10% unemployment number does not do justice to the true employment picture. Here is the New York Times from Friday:
With the release of the jobs report on Friday, the broadest measure of unemployment and underemployment tracked by the Labor Department has reached its highest level in decades. If statistics went back so far, the measure would almost certainly be at its highest level since the Great Depression.
In all, more than one out of every six workers — 17.5 percent — were unemployed or underemployed in October. The previous recorded high was 17.1 percent, in December 1982.
That’s a staggering number. One in six workers is either unemployed or underemployed and we have to go all the way back to the Depression to find a time when the employment situation was worse. The current health care reform effort is underway because virtually the same fraction of our GDP is now spent on health care. The National Coalition on Health Care tells us that 17.6% of the GDP this year will go to health care. Why is there not the same level of attention when 17.5% of the workforce is unemployed or underemployed?
One of the most overlooked success stories in how our country emerged from the Depression was through jobs programs that had no "middle man". Here is the heart of a short blog post by Paul Krugman yesterday:
As it is, job-creation efforts are generally indirect. Tax cuts and transfers in the hope that people will spend them; aid to state governments in the hope of averting layoffs. Even infrastructure spending is routed through private contractors.
You can make a pretty good case that just employing a lot of people directly would be a lot more cost-effective; the WPA and CCC cost surprisingly little given the number of people put to work. Think of it as the stimulus equivalent of getting the middlemen out of the student loan program.
So why aren’t we doing this? Politics, of course: government is the problem, not the solution, even when it is, you know, the solution, and cheaper than running things through the private sector.
In just a few paragraphs, Krugman both identifies the best solution to the current problem and explains why it will never be enacted. The current political debate has been so corrupted by the corporatist ideals that "government is the problem" and that only the private sector can provide efficiency that we now are prevented enacting the eminently sensible solution of direct government jobs programs.
Never mind that the infrastructure of our country is crumbling as workers sit idle (ask anyone living in the Bay Area how their life was affected by the Bay Bridge closure when it literally broke); no, we must wait for the private sector to "recover" enough to hire more workers.
But what is the cost of these unemployed and underemployed workers? Frustration builds for them, and sometimes it explodes in horrible ways. Yesterday in Orlando, a man went into the offices of his former employer, drew a gun and killed one while injuring several others. When he was being led into the police station after being arrested, his response to reporters asking him why he committed such a terrible act was "They left me to rot".
After being fired as an engineer, Rodriguez could only find part time work in a sandwich shop. Yes, he was fired for poor performance and yes, he appears to also have had other problems, but is there a chance that in a better job environment that he might have gotten a second chance to fit into another engineering position?
Today might see a historic vote on a public option for health insurance. As Krugman asks, why not a public option for employment, too?
Because unemployment is expected to continue to rise for at least another year (the first NYTimes article linked above cites a book that suggests it will rise for two more years), it seems likely that we will see more tragedies such as yesterday’s in Orlando. Those tragedies could be lessened through a direct public jobs program, but there simply is no political will to even suggest such a plan, let alone enact it.
How many more will be left to rot?



23 Comments




Unemployment a classic “lagging indicator”. Always the last thing to come back. The question is–when will it come back, and how strong? There are big political and social implications this time, because of the massive bailouts. Because of them, the public will have much less tolerance for a resurgent stock market and a broad range of companies announcing profits–while at the same time the job market remains completely shitty. People are going to get very angry, very justifiably.
Much of that will land on Obama and the democrats.
I’m one of those long term unemployed/underemployeds.
It ain’t pretty.
CO: Yes, that’s the problem. We are in an environment with lots of manufactured outrage. The employment situation is one around which the outrage can coalesce with a basis in reality.
dakine: I wonder if even the 17.6% number is low. There is a lot of ugliness out there.
Yesterday on Thom Hartmann’s radio show, Ellen Ratner of Talk Radio News was on, reporting from India. She said that the Indians she had spoken to all pointed to the same thing; America is erupting in violence because of its trashed economy and misplaced priorities. As usual, if you want to know what’s happening in America, you have to go abroad, where the people aren’t fed a diet of sensational misinformation.
I think it probably is low. Official unemployment at 10.2; the figure for un/under per the Times story (and others) at 17.6%; my WAG would be somewhere over 20% (though not yet at the 25% threshold that I believe the Great Depression ‘achieved’)
Thom has also been out front in documenting how Europe used their bailout funds to support workers directly and how that is bringing the European economy back much faster. What a surprise! Put money into the hands of workers and they use it to — buy things!
Recommended. Thanks, Jim. Seems to me a bit ludicrous that Bernanke announced that the recession was over just a couple of days before this new (still intentionally misleadingly low) unemployment rate came out. Bernanke and the 1% elite do not live in the same reality that the rest of us do.
Here is a youtube clip: No jobs=no Recovery. Move past the blurb about the silver ’til you get to the man with the bat. Lotsa cussin’, but lots of us know exactly how he feels.
Also see the following for current details and demographics:
Fact sheet: Double-digit unemployment
By Andrea Orr
November 6, 2009
(2 page pdf)
acq and bystander, thanks for bringing in more very useful info. After thinking about the situation for a bit, I sent a Tweet to @AlanGrayson, asking him to lend his courageous voice to the call for a public jobs program. It seems to me that he is the only one in Washington with the guts to call for the right thing.
Krugman says government is the problem.
I agree and challenge anyone to point to a good piece of federal legislation enacted since the mid-1960s.
Government serves the wealthy and influential. Period.
Hoping for something good from government (like decent HCR) is a waste.
237 of those congress critters who are supposed to feel the pain and represent those out of work are not too good at empathy. This is one big reason why:
Report: 237 millionaires in Congress
http://www.politico.com/news/stories/1109/29235.html
Recommended, Jim.
Thanks for posting on this topic. Surely, a jobs program might also ease some of the health care issues,if only indirectly, but more importantly, people would be working, paying taxes, buying things. Our three legged stool is collapsing.
Sorry, CO, but expect this “lagging indicator” to “lag” for a very long time. The dirty secret that caused this display of interest in unemployment and underemployment by news outlets was that the other statistic that came out yesterday was that the businesses shed another 589,000 jobs during October 2009, a number consistent with the big losses back at the beginning of the year, and inconsistent with the stimulus or bailout or any other program for recovery having actually done anything. This lagging indicator has already started its descent into the second part of the “W” (possibly a bad metaphor because it implies only two descents and a final ascent).
I was wondering why the statistic, 17.6% was so low, given that I had heard the total damage at closer to 22%. The discrepancy is this: While this use of household survey is a broad indicator and doesn’t require registration or participation on unemployment insurance rolls, it does require that someone has actively looked for a job within the last 4 weeks, and therefore does not include those “marginally attached” to the labor force or “discouraged workers”. So there’s another 5% of the labor force out there who are in much worse shape than the underemployed.
Because of some work with some colleagues, I have been reading more than I would have about details on the stimulus package rollout and specifics in specific areas (mostly “green” technologies and “medical devices”). The infrastructure of the federal government is so eaten away that when the stimulus passed, they realized they didn’t have the workforce to distribute the money. As a result, much of it still isn’t distributed, and much of that which has been has had to filter through state bureaucracies because they are the only organizations that can accept stimulus money in multi-billion dollar chunks.
All of which mirrors why there hasn’t been a massive civilian plan on Afghanistan rolled out to counter the military one: the limited one that was proposed immediately ran into the problem that the State Department couldn’t raise the 1000 workers to implement it. 1000 workers!!! This is the level of rot in the government is truly amazing and dysfunctional. And it was a good, very, very, good reason for having wanted to ask for the details on both the bailout and the stimulus before they passed. Any among us who asked (especially goofballs like me who asked to see the comparison to the null hypothesis for the bailout) were ridiculed and ignored. And now here we are.
Our people are the problem. If one still has a job they won’t lobby to get others back to work, because everybody takes things in their own terms. The people we see on television still have jobs, so may talk about jobs, but have little feelings of what being unemployed reallly means.
The same goes for all those in our Government, the problem is out there, but doesn’t effect them directly. That’s why so many Republicans felt no pain voting not to extend benefits.
Government is our problem. We elect people who have little to no idea of what the real world, and Government is about, yet expect them to have the wisdom to solve all our problems. It hasn’t worked Yet. We tried both parties, changed people, and still have hope that the next time we vote we can change or fix things.
Had Obama on day one, proposed a giant project getting all forms of business and the people involved in solving it, talked the Congress into funding it, the whole Country could be booming.
No His and the Congress’s idea was to spend money, as they always have hoping it would correct the problem.
many have said that federal spending is essential to prime the pump of a stalled economy.
what Obama and his cronies from Goldman Sachs (his largest single contributor) did was much worse – they funneled trillions of dollars to the greediest scum out there and took trillions of toxic, garbage assets onto the government books.
Sorry had to cut that answer short. What I was going to say is that it’s not the amount of money spent, but what it’s spent on.
We have huge problems that are going to eat this Country alive, like our relience on foreign oil, continued burning of coal, rotting infrasrtucture, any of which to fix could have been a National Goal to get fixed. By funding it and getting the Government and private industry all working to get this done in like two years, it could have put the country back to work, which in turn wold avev solved a host of other problems like the economy, jobs, dwindling tax revenues, the housing markets consummer spending to name a few.
They spent the money with few jobs from it, no national benefit, and no future from it. That same money could have litterally fixed most of our problems.
This is what happens when politicians, economists, and think tankers decide what to do.
Thanks for all the additional good comments.
RMP: I knew there were a lot of millionaires there, but I didn’t know there were that many.
ondelette: Thanks for the supporting info on the additional unemployed.
iremember and Art: Yes, the government we have elected just doesn’t see how badly they are botching it.
sporkovat: Yes, giving more money to GS is the worst possible choice.
Karen: Yes, the connection between health care and jobs is a key aspect of keeping people employed.
Jim, I hate to even broach this subject; where are jobs going to come from in a year or two? What do we manufacture in America now that is not war related? Some automobiles and airplanes (both propped up with bail-out money), maybe some farm and construction heavy equipment?
I’m of the 50s generation. I made a mental list of all the things we used to produce in this country, providing jobs for the majority. Gone. The greedy corporations have gutted this country, robbing our people of the opportunity to work and support their families; and BTW – to support this gluttonous government.
At the rate of about 600,000 jobs lost per month this year, that’s about 6,000,000 jobs lost and with them the income tax withholding to support all the programs and FICA to support Social Security and Medicare.
So far gov’s solution has been to just print money out of thin air, pretend it has real value and throw it at the Too-Big Banks all over the world. I don’t know what the solution is – and it appears that this bunch in DC doesn’t have a clue either.
RMP, do you know if there is a study on how many of those millionaires in congress got rich after they went to DC? I’m thinking of LBJ…never worked for any employer but the gov; went to congress dirt poor, died a multi-millionaire. We in Texas know about how he got a lot of it. He stuffed the ballot box in 1948 and should have gone to prison instead of congress. He was probably the biggest hawg to ever belly up to the government trough. He wanted power and money and did not care what it took to get it (including murder). [books have been written on this subject, so I'll hush.]
Solar panels, wind turbines, home insulation material: the Van Jones Green Economy approach.
Those are good ideas, Jim. Here’s an article dated 07/08/2009 in which T. Boone Pickens tells why he had to scale back his grand plans for wind farms all over the Panhandle of Texas. Bottom line: he couldn’t get funding. By that date the big banks had had their big injections of money precisely to let them lend money. Those wind farms, IMHO, would have been a very good and sound and needed investment. So, why wouldn’t they lend him money, especially when he was putting in several billion of his own dollars? Think the big oil boys might have had some influence there?
I’ve lived in the Panhandle (Amarillo) and the wind truly never stops blowing. And there’s surely plenty of sunshine for solar farms, even in the winter. Only reason that I can see that it’s not a booming business is the big oil lobby, their campaign contributions and their huge influence on the big banks.
He is one of worst of the big oil boys. Good thing his plan failed as his wind farm was actually an attempt to get the water rights. His wife has one good project that you might recognize..’g’.
********
“Pickens’ new company, Mesa Water, has been buying up ground water rights in Roberts County, Texas – 200,000 acres in all. He says that over a 30-year period, he expects to make more than $1 billion on his investment of $75 million. (Which means he’ll be able to buy himself a very nice present for his 108th birthday!)
Pickens wants to take the water from the Ogallala Aquifer and pump about 200,000 acre feet of groundwater annually to El Paso, Lubbock, San Antonio, or Dallas-Fort Worth – for a price, of course. ”
http://seekingalpha.com/article/24410-t-boone-pickens-invests-in-water-should-you
http://www.madeleinepickens.com/
Yes, blue, I’m familiar with Pickens and wife. I think the wind farms are a good idea and eventually we’ll be forced to go to some alternative energy source, and no matter what it is there will be those who try to criminalize it. (i.e., Enron, the artificial blackouts to jack up the prices to Californians…)
Fencing off the water is about the oldest plot to dime novels and grade B western movies. There are those still living out in Roberts County that know how to take care of that situation…