Vol. 73/No. 29      August 3, 2009

“The Economy Is Even Worse Than You Think” was the headline of a feature article by Mortimer Zuckerman that appeared in the July 14 Wall Street Journal. Zuckerman is a member of the advisory board to JP Morgan.

In addition, a recent report by the Economic Policy Institute points out that unemployment rates are growing faster for Black and Hispanic workers, who historically have faced much higher joblessness than workers who are white.

The official unemployment rate in the United States is at 9.5 percent as of the end of June. However these statistics, as calculated by the federal government, do not reflect a substantial number of workers who need jobs.

A large section of workers without full-time work is hidden from official calculations by excluding those who are forced to work part time. A July 15 Times article points out that if part-time workers that want full-time jobs were included in official statistics, they would make up about one-third of the unemployed. On average, workers in this category work three days per week.

In his Wall Street Journal article Zuckerman cites 10 reasons the economy is in more trouble than the 9.5 percent unemployment rate indicates. Among statistics cited by numerous economists—average monthly job losses of around half a million, increasing unpaid leaves or furloughs, more and more workers in part-time jobs—Zuckerman adds that the average length of unemployment, now nearly 25 weeks, is higher than it’s been since the government began tracking the data in 1948.

In the 1960s the Kennedy administration reconfigured the way the unemployment rate is determined by creating a new statistical category called “discouraged workers”—those who have been unable to find work for so long that they have stopped looking—who are no longer counted as unemployed. In 1994 the Clinton administration then took this category and removed it from government statistics altogether, no longer counting them as part of the workforce.

These workers, along with the “marginally attached” who the government doesn’t count claiming they haven’t looked for work for the past month, and those officially counted brings the number of unemployed and underemployed to nearly 26 million workers, or 16.5 percent of the workforce.

Even workers who do have a full-time job face fewer and fewer hours as the capitalist depression deepens. The average workweek is now down to 33 hours—the lowest level since the U.S. Department of Labor began recording this figure in 1964.

Rising unemployment has a disproportionately bigger impact on oppressed nationalities. A July 15 brief by the Economic Policy Institute reports that joblessness has risen much more among Blacks and Hispanics in the past 18 months than it has among whites.

For decades unemployment among workers who are Black has been around double that of workers who are white. At the end of 2007 official rates were 4 percent for whites and 8.7 percent for Blacks. This trend has continued as the capitalist economic crisis deepens. In the past year and a half the unemployment rate for whites grew by 2.8 percent while it jumped 4.3 percent for Blacks. Hispanics had the highest rise in unemployment, jumping by 4.8 percent.

The report notes that the highest Black to white unemployment ratio was in Louisiana, where Blacks were three times as likely to be unemployed as whites. In Alabama, New York, Mississippi, and Texas, Blacks were more than twice as likely to be unemployed as whites.
 
 
Related articles:
Capitalism’s deepening depression  
 
 
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