Sunday, April 7, 2013

Unemployment: The Danger Lurking Below

Numbers mask the agonized face of fate. In world wars and global recessions, massive numbers dull the senses. How many months does it take for outrage to shift towards acceptance? How many years does it take for acceptance to turn into indifference? 

For those still seeking work, half a decade has passed since the Great Recession began. The public, the media, the politicians moved from outrage to acceptance to indifference. Made senseless by the drip, drip, drip of monthly unemployment numbers, they see no solution to real unemployment.

And to opinion leaders the monthly unemployment numbers produce only a calculated indifference, one meant to hide their inability to formulate solutions. 

During World War II, a similar indifference took hold. From 1939 to 1945, Great Britain and Russia's war fighting capability relied on the supply ships that plied the North Atlantic. And yet, unlike in World War I when the sinking of the RMS Lusitania provoked outrage, merchant ship losses from submarines seemed somehow acceptable. 

During that seven year period, Hitler's U-boats sank 3,600 ships, killed 72,000 Allied sailors and merchant seamen and destroyed 14.5 million tons of cargo. At the height of the Battle of the Atlantic, as Winston Churchill called it, German U-boats brought "Britain near to a 'hand-to-mouth' subsistence level." 

And yet, with each passing month, the level of indifference grew. Who cared if the British rationed food? Who knew what the Russians did with Lend-Lease materials? If convoys were attacked and ships were sunk, what impact did it have? Even after Pearl Harbor, Americans remained so blithely unconcerned about the U-boat threat that they left city lights blazing along the Atlantic Seaboard. Merchant ships were silhouetted as perfect targets. 

Numbered successively U-1 through U-4717, Hitler's U-boats fought WWII without restraint. They attacked without warning, and seldom rescued survivors. Their captains and crews proved remorseless killing machines often operating in wolf packs to maximize the carnage. 

Today, a new and equally remorseless machine is stalking and torpedoing our economy. It, too, goes by a number: U-6. And it is the danger lurking below. 

U-6 is the broadest gage of unemployment recorded by the Bureau of Labor Statistics. Last month the BLS counted 26 million Americans as unemployed, working part-time involuntarily and those who stopped looking for work in the last year. 

The national U-6 unemployment rate peaked at 15.2% in November 2009, then dropped to 15% in November 2012, and now stands at 13.8%. (* The current national U-6 rate can also be found at the U.S. Bureau of Labor Statistics.)

But 15 states still remain above that national average: Nevada 21.4%, California 19.6%, Rhode Island 18.3%, Oregon 17.3%, Washington 17.1%, Michigan 17%, North Carolina 17%, Florida 16.4%, Illinois 16.3%, South Carolina 16.3%, Arizona 16.1%, Georgia 15.9%, New Jersey 15.6%, Mississippi 15.5% and Idaho 15.3%.

Running silent and almost undetectable, U-6 keeps torpedoing our economy, sinking hospital ships, super tankers and container ships alike, and relegating nearly one-fifth of America's workforce to a "hand-to-mouth" existence. 

Leadership is the antidote to indifference. Laughter is the best medicine. And the Union of Unemployed plans to deploy both to defeat the danger that lurks below.

Rick Sloan
* Rick Sloan, who is the President of the Union of Unemployed and a spokesman for the International Association of Machinists, says "Hire US, America is just as relevant today as it was back in 2010 when jobless Americans put it together." That was when Mister Sloan had spoken at the Washington DC rally in October 2010.

The New York Times recently reported that the majority of unemployed Americans are not even counted in either the U-3 rate or the U-6 rate --- and fall into a third category --- "Invisible". 

The U.S. Bureau of Labor Statistics, after only one year, doesn't consider these people to be looking for work any longer. The percentage of American adults who are neither working nor looking for work was about 36.7% of the work force --- and that only 58.5% of Americans over the age of 16 had jobs.

That's why today the "labor force participation rate" is now at a 30 year low. 

Labor force participation rate

Now look at how the labor participation rate had grown for 30 years immediately after World War II until 1978.

Labor force participation rate

The money the U.S. taxpayers spent in Iraq may have helped decrease the unemployment rate in Iraq --- from 23% in 2011 to 16% in 2012 --- so wouldn't government spending on infrastructure help lower the unemployment rate in the U.S. (especially with interest rates at record lows)? 

This afternoon I heard a host on CNBC ask, "Why are developing countries experiencing an economic boom...and what is America doing wrong...and what can we do about it?"

Take a look at the countries that have the lowest unemployment rates today, and then draw your own conclusions as to "what we are doing wrong." (Particularly in India and China)

No comments:

Post a Comment