Persistent High Jobless Rate Hurts Most Workers—With or Without a Job

David Moberg September 5, 2011

The net change in jobs in Amer­i­ca last month was a big fat zero. Cuts in gov­ern­ment jobs wiped out pri­vate sec­tor growth that would have been mod­er­ate even if the Ver­i­zon strike had not tem­porar­i­ly reduced employment.

The weak per­for­mance left the offi­cial unem­ploy­ment rate at 9.1 per­cent, the same as last month. Prospects for the future are grim as well: the Con­gres­sion­al Bud­get Office fore­casts 8.7 per­cent unem­ploy­ment late next year. Also, reports that man­u­fac­tur­ing out­put and orders are declin­ing or grow­ing at a slow­er pace through­out the major indus­tri­al and indus­tri­al­iz­ing coun­tries sug­gests a deep­en­ing or dou­ble-dip reces­sion (depend­ing on whether you think the reces­sion ever ended).

The news is cer­tain­ly bad for the 14 mil­lion Amer­i­cans who are out of work. Con­di­tions are espe­cial­ly grim for some, since only half of them receive unem­ploy­ment insur­ance, and 43 per­cent have been unem­ployed six months or longer (a con­se­quence of the job mar­ket offer­ing one job for every 4.5 unem­ployed workers).

But does that mean that high unem­ploy­ment is a prob­lem just for them, not the oth­er 90.9 per­cent of the work­force (not to men­tion those not in the work­force, like the elder­ly or chil­dren)? Not at all, Eco­nom­ic Pol­i­cy Insti­tute authors Lawrence Mishel and Hei­di Shier­holz report in a new study.

Of course, a few are doing well. Cor­po­rate prof­its are up by a third since the reces­sion start­ed, claim­ing 26.3 per­cent of cor­po­rate income for the past year, a post-World War II high. And cor­po­rate CEO salaries have rebound­ed dra­mat­i­cal­ly, almost reach­ing pre­vi­ous highs as a mul­ti­ple of aver­age work­ers’ earnings.

While the wealthy took a hit from declines in stocks and oth­er invest­ments, the bot­tom four-fifths of house­holds by income lost a much high­er per­cent­age of their assets on aver­age (22.2 per­cent) than the top fifth, which lost 14.8 per­cent of aver­age wealth from 2007 – 2009

And the well-off could more eas­i­ly absorb their loss when you take into account who accu­mu­lat­ed wealth from 1983 to 2009. Dur­ing that peri­od the top fifth of house­holds by wealth hold­ings cap­tured 101.7 per­cent of the nation’s increased wealth. Yes, that’s right, they took vir­tu­al­ly all new­ly cre­at­ed wealth in the Unit­ed States, plus trans­fer­ring some of the pit­tance belong­ing to the bot­tom 60 per­cent to their cof­fers. And the top one per­cent won con­trol of 40.2 per­cent of increased wealth, while the next rich­est four per­cent got 41.6 percent.

Focus­ing just on unem­ploy­ment, how­ev­er, the effects of a high unem­ploy­ment rate hit more than 9.1 per­cent. First, as the num­bers with­out a job grow, there’s a rise in invol­un­tary part-time work (up again last month to 8.8 mil­lion work­ers) and in the num­bers of work­ers who want­ed a job but had not active­ly looked in the last month, often because they were dis­cour­aged (up again last month to 2.6 million).

So the total unem­ployed or under­em­ployed in August encom­passed 25.3 mil­lion work­ers, or 25.8 per­cent of the workforce.

Yet even that rep­re­sents a snap­shot in time of a labor mar­ket that where peo­ple even in a reces­sion are gain­ing or los­ing jobs. Mishel and Shier­holz esti­mate that 31 per­cent of the work­force was unem­ployed or under­em­ployed at some point in 2009.

(Num­bers for black and Lati­no work­ers are always high­er, rough­ly dou­ble white lev­els for most sta­tis­tics on unemployment.)

But even full-time work­ers feel the pres­sures most acute­ly hurt­ing the job­less. Their hours of work have dropped (and dropped again last month). EPI reports that wage growth has been slow­er in the last two years than at any time over the last 30 years,” as employ­ers take advan­tage of the army of unemployed.

As a result the medi­an work­ing-age house­hold saw an income decline of $2,700 from 2007 to 2009,” plus in many cas­es loss of all or part of ben­e­fits like health care or pen­sions. And since — for the first time – fam­i­ly incomes nev­er recov­ered dur­ing the Bush years from the reces­sion at the start of the decade (and job growth was weak­er dur­ing Bush’s term than even the recov­ery under Oba­ma), the typ­i­cal work­ing-age house­hold brought in rough­ly $4,000 less in 2009 than it did in 2000.”

Oth­er peo­ple in a fam­i­ly obvi­ous­ly lose when the bread­win­ners lose jobs or incomes as well. In some­where between 33 to 43 per­cent of fam­i­lies some­one has been affect­ed by unem­ploy­ment over the past two years. The unem­ploy­ment” rate for chil­dren — that is, the per­cent of chil­dren with at least one unem­ployed par­ent — was 10.6 per­cent in 2010, high­er than the offi­cial adult unem­ploy­ment rate. 

And the con­se­quences of high unem­ploy­ment under­mine the job secu­ri­ty, incomes and ben­e­fits of neigh­bors, whether they work in a fac­to­ry or con­struc­tion site for a pri­vate employ­er or in the offices of governments.

Despite dis­par­i­ties by region, occu­pa­tion, edu­ca­tion, race and oth­er char­ac­ter­is­tics, most work­ers suf­fer from a high unem­ploy­ment econ­o­my. The job­less rate for a high school grad­u­ate was 11.6 per­cent for the first half of 2011, com­pared to 3.2 per­cent for some­one with an advanced degree. But the unem­ploy­ment rate is still rough­ly dou­ble now what it was in 2007 for every edu­ca­tion­al level.

Los­ing a job — then not find­ing a replace­ment — hurts the most, but when the unem­ploy­ment num­bers toll, even if you have a job, they toll for thee.

David Moberg, a senior edi­tor of In These Times, has been on the staff of the mag­a­zine since it began pub­lish­ing in 1976. Before join­ing In These Times, he com­plet­ed his work for a Ph.D. in anthro­pol­o­gy at the Uni­ver­si­ty of Chica­go and worked for Newsweek. He has received fel­low­ships from the John D. and Cather­ine T. MacArthur Foun­da­tion and the Nation Insti­tute for research on the new glob­al economy.

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