"NotBush2004" <notbush@whitehouse.gov> wrote in message
news:eb46fe1e468841f7f0a6b1be0809dafc@news.teranews.com...
Published on Monday, December 29, 2003 by the Los Angeles Times
Jobless Count Skips Millions
The Rate Hits 9.7% When the Underemployed and Those Who Have Quit Looking
are Added
by David Streitfeld
SAN FRANCISCO - Lisa Gluskin has had a tough three years. She works almost
as hard as she did during the dot-com boom, for about 20% of the income.
When Gluskin's writing and editing business cratered in 2001, she slashed
her rates, began studying for a graduate degree and started teaching part
time at a Lake Tahoe community college for a meager wage.
The industries that were expanding in the late '90s, including computer
and
professional services, paid well.
Those industries are in retreat. So is manufacturing, a traditional source
of high wages. On the rise, meanwhile, are lower-paying service jobs.
During the boom, it was easy to trade up. Now it's just as easy to trade
down.
It's been a fragmented, hand-to-mouth life, one that she sees mirrored by
friends and colleagues who are waiting tables or delivering packages. In
the
late '90s, the 35-year-old Gluskin says, "we had careers. We had
trajectories. Now we have complicated lives. We're not unemployed, but
we're
underemployed."
The nation's official jobless rate is 5.9%, a relatively benign level by
historical standards. But economists say that figure paints only a
partial -
and artificially rosy - picture of the labor market.
To begin with, there are the 8.7 million unemployed, defined as those
without a job who are actively looking for work. But lurking behind that
group are 4.9 million part-time workers such as Gluskin who say they would
rather be working full time - the highest number in a decade.
There are also the 1.5 million people who want a job but didn't look for
one
in the last month. Nearly a third of this group say they stopped the
search
because they were too depressed about the prospect of finding anything.
Officially termed "discouraged," their number has surged 20% in a year.
Add these three groups together and the jobless total for the U.S. hits
9.7%, up from 9.4% a year ago.
No wonder the Democratic presidential candidates have seized on jobs as a
potentially powerful weapon.
Howard Dean criticized President Bush for "the worst job creation record
in
over 60 years." Richard Gephardt said that "I have three goals for my
presidency: jobs, jobs, jobs." John Kerry said "the first thing" he'd do
as
president would be to fight his "heart out" to bring back the jobs that
have
disappeared in recent years.
Bush, meanwhile, is quick to seize credit where he can. When the
unemployment rate for November fell one-tenth of a point, he went out
immediately to give a speech at a Home Depot in Maryland.
"More workers are going to work, over 380,000 have joined the workforce in
the last couple of months," Bush said. "We've overcome a lot."
A number of economists say it's a mistake to evaluate the job market
solely
by talking about the official unemployment rate. It's a blunt instrument
for
assessing a condition that is growing ever more vague.
"There's certainly an arbitrariness to the official rate," says Princeton
University economics professor Alan Krueger. "It irks me that it's not put
in proper perspective."
On Jan. 9, when the rate for December is announced, both Republicans and
Democrats will assuredly again maneuver for advantage - precisely because
the number isn't expected to change much.
"At this point, where we don't know which way it's going but it isn't
likely
to be going far, both sides will try to use it," says Michael Lewis-Beck,
a
political scientist at the University of Iowa.
In every election since 1960, the party in the White House lost when the
unemployment rate deteriorated during the first half of the year. If the
rate improved, the party in the White House won.
That's not a coincidence, says Lewis-Beck, who has edited several volumes
on
how economic conditions determine elections. "People see the president as
the chief executive of the economy," he says. "They punish him if things
are
deteriorating and reward him if things are improving."
By any normal standard, things should have been improving on the
employment
front long before this point. More than 2 million jobs have been lost in
the
last three years, a period that encompassed a brief, nasty recession and a
recovery that was anemic until recently. Even in the best-case scenario,
Bush will end this term with a net job loss. That hasn't happened to a
president since Herbert Hoover at the beginning of the Depression.
Many economists are mystified about why a suddenly booming economy is
producing so few jobs.
"We're all sitting there and saying, 'When are they going to return?' "
says
Richard B. Freeman, director of the labor studies program at the National
Bureau of Economic Research. "It's looking a little better, but we don't
understand why it isn't looking a lot better. Why shouldn't Bush be
sitting
there saying, 'Man, I'm sitting pretty. This is a great boom'?"
One statistic proving particularly perplexing is the percentage of the
adult
population that is employed. This number rises during good times, as
people
are lured into the workforce, and falls during recessions as companies
falter.
True to form, the percentage of adult Americans with jobs dropped from a
high of 64.8% in April 2000, just as the stock market was cresting, to 62%
in September - the lowest level in a decade. If past recessions are any
guide, those 5 million people who found themselves jobless should have
driven the unemployment rate up to about 8%.
Instead, the rate never went much above 6%.
"More than half of the additional people who would have reported
themselves
as unemployed in a previous big recessionary period . aren't," a puzzled
UC
Berkeley economist, Brad DeLong, wrote on his website. "They're reporting
themselves as out of the labor force instead."
"Out of the labor force" means you're not working for even one hour a week
and don't want to, either. It's the traditional category for students,
married women with young children, flush retirees and idle millionaires.
A new way that people seem to be joining this category is by getting
themselves declared disabled. This designation makes them eligible for
government payments while removing them from the unemployment rolls.
From 1983 to 2000, economists David Autor and Mark Duggan wrote in a
recent
study, the number of non-elderly adults receiving government disability
payments doubled from 3.8 million to 7.7 million.
The scholars present a case that the sharp increase isn't because the
workplace suddenly became more dangerous. Instead, it has been prompted by
liberalized screening policies, which make it possible to claim disabled
status for, say, several small impairments as opposed to one big injury.
Government examinations also have been downplayed in favor of the
disabled's
own medical records and the pain he or she claims to be experiencing.
At the same time, benefits have been sweetened. As a result, millions of
individuals who lost jobs now have an attractive - and permanent -
alternative to searching for work.
Autor and Duggan concluded that if disability payments weren't so
appealing,
many more people would be unemployed, boosting the jobless rate two-thirds
of a point.
Another way in which people forgo an appearance on the unemployment rolls
is
if they decide to go into business for themselves. There are 9.6 million
people who say they are self-employed full time, a number that rose
118,000
last month. Without the recent increase in self-employed, the jobless
number
would look much worse.
Many others may be working for themselves part time, temporarily, as a way
to get food on the table in the absence of better options.
Take Steve Fahringer, who until recently was working for a Bay Area
marketing agency that cut 20% of its employees and trimmed the wages of
the
remainder by 20%. Fahringer didn't particularly like his job. Because the
recession supposedly was history, he thought he could find a new position.
The 34-year-old didn't think it would be easy, but he thought it possible.
So he quit.
"I left July 1," he says. "I haven't found a new job yet."
It's a common problem. The segment of the labor force that has been
jobless
for more than 15 weeks has risen nearly 150% since 2000. The current level
is the highest since the recession of the early 1990s. Nearly one-quarter
of
the jobless have been unemployed for longer than six months.
In Fahringer's case, he spent some time aggressively looking for a job,
which made him part of the official July unemployment rate of 6.2%. Then
he
stopped looking, which meant that he was one small reason the rate started
going down.
Instead of unemployed, Fahringer was classified as "discouraged." A little
more than 8% of the people who want a job in the Bay Area are estimated by
the Bureau of Labor Statistics to be discouraged, slightly higher than Los
Angeles/Long Beach but lower than the battered technology center of San
Jose.
Discouraged workers have never been included in unemployment rates,
although
they came close the last time a commission met to reform the system, a
quarter of a century ago. "It was a very hot issue," remembers Glen Cain,
a
retired economist who was a commission member. He says the conservatives
on
the panel, who felt that anyone who really wanted a job should be out
there
hustling no matter what, prevailed.
Fahringer found an alternative way to earn a bit of money. He did some
acrylic paintings, which he sold for a total of $1,000. He calls himself
"a
hobbyist," which means for a while he moved out of the labor force
entirely.
Now he's a temp, assigned by his agency to a nonprofit office. For the
first
time in six months, he's working 40 hours a week. By the government's
accounting, he has once again joined the ranks of the employed. But from
the
standpoint of his wallet, Fahringer is worse off: He's earning less money,
with no paid holidays, no sick leave, no pension plan, no health
insurance,
no future.
The Economic Policy Institute, a liberal-leaning Washington think tank,
says
Fahringer's situation is in many ways typical. The industries that were
expanding in the late '90s, including computer and professional services,
paid well.
Those industries are in retreat. So is manufacturing, a traditional source
of high wages. On the rise, meanwhile, are lower-paying service jobs.
During the boom, it was easy to trade up. Now it's just as easy to trade
down.
Fahringer's solution: Opt out.
"I'm thinking of going back to school," he says. "I'd take out a loan."
That
would put him out of the labor force again.
In some eyes, a nation of burger flippers, temps and Wal-Mart clerks isn't
the worst scenario for the economy. The worst is that companies continue
to
eliminate jobs faster than they create them, setting up a game of musical
chairs for the labor force.
That prospect alarms Erica Groshen, an economist with the Federal Reserve
Bank of New York. "If you plot job losses versus gains on a chart, it's
shocking," she says.
Losses are running at about the same rate they were in 1997 and 1998, two
good years for the economy. But job creation in the first quarter of
2003 -
the most recent period available - was only 7.4 million, the lowest since
1993.
"If this goes on too long, you'd have to worry there's something
fundamentally wrong," Groshen says. Although the economy has picked up
since
March, "so far I haven't seen anything that suggests job creation is
picking
up."
That bodes poorly for Ian Golder. His last full-time job was with a
start-up
publication that wrote about venture capital.
Two years ago, Golder was laid off. It was the first time since he
graduated
from UC Berkeley 14 years earlier that he didn't have steady work.
Golder looked for a while, gave up for a while, then landed a contracting
gig with no benefits proofreading for a chip maker. When that ran out, he
worked 20 hours a month on a financial services newsletter.
His wife, Heather, a recent graduate in English from UC Davis, also was
without a job. They thought about selling their house in Sacramento and
moving, but prospects didn't look any better anywhere else. To make ends
meet, they took in two boarders.
At the beginning of December, things seemed to improve a bit. Golder got a
job in the document-control department of a medical devices company. The
department, he was told, used to have 20 full-time people. Now it has
five,
plus four temps.
The job will last two months. After that, who knows?
"Optimists say things will be better then," Golder says. "But a full-time
position with benefits seems pretty remote."
http://www.commondreams.org/headlines03/1229-01.htm
--
Bush's $10 Trillion Borrowing Binge
New projections from the Congressional Budget Office indicate that
continuation of President Bush's budget policies will triple the national
debt by the end of fiscal 2013. Left unchecked, Bush's reckless approach
to
fiscal policy will saddle our children with an additional $10 trillion in
debt just ten years from now.
http://www.ctj.org/pdf/binge03.pdf
The real unemployment rate is much higher than
9.7%
The definition of unemployed is very flaky in that
6.0% number.
.
