There are 14.5 million people on the unemployment rolls. Six and one-half million of these have been jobless for more than six months. The unemployment rate has been above 9% for almost two years, longer than at any time since the Great Depression of the 1930’s.
Initial jobless claims have averaged over 400,000 per week for several years. If the unemployment rate remains more less or steady at 9-10% we can assume that, while 400,000 people filed initial jobless claims, 400,000 other people must have found work. That might be good news because it appears that, while unemployment isn’t getting any better, perhaps it’s not getting any worse.
But it is. Consider these figures from the US Department of Labor (DOL). (Hey, if you can’t trust the government, who can you trust?)
Unemployed Long-tenured Displaced Workers According to DOL, a long-tenured worker is someone who had three or more years of tenure on a job before becoming unemployed. So, a long-tenured displaced worker is someone who had a career, or at least a steady job. This is not an occasional worker, someone who’s in and out of the labor force depending on the weather or hunting season. This is probably a family man, or woman, who is a sole or major provider. The bad news, again according to the DOL, is that 36% of long-tenured workers who lost their jobs over the past three years are still unemployed.
It gets worse. Only 49% of these workers found new jobs and 55% of them are earning less than they did in their previous jobs. Thirty-six per cent of those who found jobs are working for less than 80% of what they earned at their old jobs. The Wall Street Journal cites these unfortunates as indicative of the trend:
- A former auto worker whose new job (found after a five-month search) pays 20% less
- A former manufacturing manager who took a 50% pay cut to work as a night janitor
- A former money manager who used to earn $150,000 a year is now a Starbuck’s barista making less than $20k
The United States is becoming more like a third world country: a small percentage of rich citizens catered to by low-wage Starbuck’s baristas, shoe clerks, and ‘sales associates’ selling them foreign goods (which, ominously, are getting better every year).
Perhaps we can dig our way out of this mess but it won’t be easy and it won’t come through the extension of unemployment benefits and a health-care program we can’t afford. Our economy needs some fundamental changes and they won’t come from Washington or, I should say, they won’t come until Washington gets out of the way.
Can anyone explain to me why the stock market is at its highest level in two years?