Sunday, August 31, 2014

Labor Day isn't being celebrated by far too many US workers this year

America's Damaged Workforce
by Rev. Paul J. Bern

For my Labor Day message today, I would like to make some observations about the plight of America's work force and the strongly negative effect that long-term unemployment is having on our fellow citizens. If we could find a least common denominator for the complaints of the Occupy and 99% Movements, one of the things America is most furious about would be the lack of jobs and the damage this has done to America's workforce. While real unemployment (not the government's version) is at historically high levels considering the economy is supposed to be in recovery mode, the tragedy of long-term unemployment is especially troublesome. The longer a person remains jobless the more difficult it is to find new work. Many prospective employers often disparage the long-term unemployed for being lazy, having out-of-date skills and not having the confidence to step into a new position. And on top of that some companies including PMG Indiana, Sony Ericsson and retailers nationwide have explicitly barred the unemployed or long-term unemployed from certain job openings, outright telling them in job ads that they need not apply.

With the numbers of long-term unemployed increasing, it may be reasonable to think a great deal of effort is being expended to address the issue. Unfortunately, that is not the case. More time and effort is being spent cutting unemployment benefits than devising job or retraining programs. Why is so little being done for the 6.3 million long-term unemployed? Why have “99-'ers” (those out of work for 99 weeks or more) been abandoned by Congress and the White House? They seem more inclined to cut social safety net programs in order to continue tax cuts for the wealthy. There were 3.3 million US households earning more than $250,000 a year as of the end of 2013. These 2.5 million households are given an inordinate amount of congressional and executive branch attention compared to the 6.3 million households experiencing long-term unemployment. Are the families of the wealthy more deserving of taxpayer benefits than the families of the long-term unemployed? The actions of Congress and the executive seem to indicate that they think this is the case.

The Great Recession has cost US workers millions of jobs and those jobs have not come back as quickly as they disappeared, and in many cases those jobs will never return. According to the Economic Policy Institute, “In total, there are 6.9 million fewer jobs today than there were in December 2007.” Seven million jobs vanishing in just four years, the media has failed to present the unemployment problem, with all its associated economically devastating consequences, for what it truly is. There is passing mention of discouraged workers and the underemployed, but the true scale of the jobs crisis isn't given anywhere near enough attention considering the magnitude of the problem. What follows are some unemployment details that mass media under reports or ignores completely.

[1] The jobs deficit: That is the total number of jobs lost plus jobs that should have been created since the great recession began in December 2007. There are 6.9 million fewer jobs in 2013, the latest year for which these records are available, than at the start of the Great Recession, but that tells only half the tale of the jobs deficit. There is also the matter of creating jobs to keep up with the increase in workforce population. Those new workers include high school and college graduates, plus immigrants. The number of jobs that need to be created each month to accommodate new entrants into the workforce ranges from 150,000 - 200,000. Adding together the jobs lost since the recession and the new jobs needed for population growth, the total jobs deficit is estimated to be 11.3 million. A massive effort such as a public works program is required to fill that absolutely enormous jobs hole.

[2] Filling the jobs deficit: According to the Economic Policy Institute in Washington, DC: “To fill that gap in three years – by mid-2017—while still keeping up with the growth in the working-age population—would require adding around 400,000 jobs every single month. To fill the gap in five years—by mid-2019—would mean adding 280,000 jobs each month.

[3] There is a monthly Bureau Labor Statistics report giving an indication of the number of unemployed per job opening, which stands currently at 4.9. But those aren’t the only unemployed wanting a full-time job. There are the 2.6 million marginally attached workers and 8.8 million underemployed (those who want full-time work, but are working part-time). I’m not going to include the 3.9 million non-unemployed unemployed. When those 11.4 million workers are included, there are 25.4 million workers and 3.2 million jobs, or 8 unemployed or underemployed workers per job opening. In addition, part-time jobs are included in job openings counts; however, there is no difference between full and part-time positions. It is only determined if the position exists, not which type of position it is. However, it’s important to know how many job openings are part-time, since part-time jobs usually pay less and offer fewer, if any, benefits. Currently there are 139,627,000 employed workers, of which 27,034,000 are part-timers. More than 19 percent of all workers work part-time. If nearly 20 percent of all available job openings are part-time, there are only 2.56 million full-time jobs for 25.4 million unemployed and underemployed who want full-time work, or 10 workers for each available full-time position; more than double the 4.9 workers per job opening touted by most media outlets.

[4] Marginally attached workers: From the Bureau of Labor Statistics, “These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.” Currently 2.6 million workers are considered marginally attached. If they are included in the unemployment rate, that rate increases from 9.1 percent to 10.6 percent.

[5] The underemployed: These are the number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers). These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. The “real” unemployment rate increases to 16.2 percent when the underemployed and marginally attached workers are considered. There is a point at which the BLS stops considering an unemployed person unemployed. That point is reached when an unemployed person has not looked for a job in the previous 12 months. When asked, the BLS replied, “The 3.9 million individuals not in the labor force that you are referring to responded that they wanted a job, but had not looked for a job in the last 12 months. They are not considered unemployed because they had not actively searched for work in the four weeks preceding the survey.” I recall no mention of these 3.9 million from any mass media outlet. This 3.9 million are the most discouraged of discouraged workers, but if the jobs market was improving, these millions would start to become part of the unemployed once more. If these 3.9 million were added to the “real” unemployment rate the rate would increase from 16.2 percent to 19 percent. Nearly one in five American workers is either unemployed or underemployed.

[6] The long-term unemployed: These are the 6 million-plus jobless who have been looking for work for 6 months or more (not including the not-unemployed unemployed). Long-term unemployment receives occasional mass media recognition, but it scratches only the surface. There are subsets of the long-term unemployed that show the depth of the problem more clearly. The 6 million long-term unemployed represent 43.1 percent of all unemployed. Of that 6 million, 4.458 million have been jobless for 52 or more weeks and within that group 2.04 million, a record high, have been unemployed for 99 weeks or more.

How many unemployed collect unemployment benefits? It may seem reasonable to assume that all 14 million unemployed collect unemployment insurance benefits, but that is not the case. In September 2013 7.3 million unemployed collected benefits, which was only 51 percent of all unemployed. What message can be taken from this list of realistic and discomforting unemployment figures? The bottom line is that unemployment is much, much worse than the roughly 7 percent unemployment figure pushed currently by the media and many lawmakers. Unemployment and jobs creation throughout America are national emergencies demanding focused attention with a wide-ranging and rapid response. This American jobs disaster will not vanish if neglected, but what will vanish are the hopes, dreams and financial well-being of millions of hard-working Americans. And that is why we Occupy! That's why we're part of 'the 99%', and that's also why people have been buying guns like crazy!

Where are our jobs? That's what everyone wants to know, and our current batch of “leaders” in Washington are either unwilling or incapable of coming up with an intelligent answer. They are trying to articulate what middle America already knows, which is that the jobs that couldn't be outsourced overseas to the third world were rightsized and downsized out of existence. Middle America is unemployed because that is exactly what the top 1% want. They planned on it to turn out this way all the long! And so there is nothing wrong with the system as far as the top 1% are concerned. To them, it is working just fine. The salaries formerly paid to all of us from 'the 99%' have been redirected back to the overseas bank accounts of corporate America, while all the former workers have been kicked to the curb. But the top 1% forgot about something in the course of their financial and military conquests. When they put millions of American workers out of work they forgot that consumer spending comprises over two thirds of the US economy. Since few, if any of us, have any extra money to spend these days, when US worker's incomes dry up so will much of the US economy, and the hard times that many are currently experiencing will seem like child's play in another year or two, three at the most. That means that by the latter part of this decade (if not sooner, but I hope not) we may be looking at the end of capitalism, or at least as we have known it. The warning signs are already all around us. The probable changeover of the world reserve currency from the US dollar to the Chinese Yen, or the Euro if the Europeans can get their act together, is set to occur by about 2016 or 2018 at the latest. When the US dollar ceases to be the world's reserve currency, the consequences here at home and abroad will be catastrophic. The plight of US workers will be much worse when America ceases to be a super-power. Until then, I advise you all to make preparations for hard times ahead. And I would counsel the unemployed to not get tired out and give up, but to press onward in your quest for employment. Jesus said, “Seek, and you shall find. Knock, and the door will be opened. Ask, and it will be given to you”. If you apply these methods to your job search, you'll be searching for employment Jesus' way, meaning you will succeed if you work continuously and not give up. Happy Labor Day, everyone!

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