Last month, the unemployment rate fell to 9.7 percent (even as 20,000 more jobs were lost in January) and the wider U6 measure of underemployment fell for the first time in months to 16.5 percent. While those numbers do reveal the beginnings of a stabilization in the labor market, according to Kirsten Downey, a former economics reporter at the Washington Post, they also vastly understate the extent of the employment problem, because of who the statistics do not include.
In fact, she wrote, while policymakers are celebrating the avoidance of a second Great Depression, the standard measures of unemployment reveal very little in terms of good comparisons to the 1930’s:
Now, the federal government says we have an estimated 14.8 million unemployed, out of a work force of about 154 million. But that number is artificially lower than in the Great Depression because 33 million senior citizens are on Social Security — and not seeking jobs as they were then. An additional 7.4 million adults receive disability payments under Social Security, and some would also have been seeking work in 1933…We have a far larger standing military than in 1933 — about 1 percent of the work force, or 1.4 million men and women…In other words, 43.4 million people are paid for government employment in the military, or supported through government programs. If added to the jobless numbers, it equals about 58 million people.
Of course, I think it’s kind of silly to throw the military into this pot, because they’re government employees like any other. (Why not include employees of government agencies?) Also, it’s a vindication of the Social Security system that seniors no longer have to be out looking for work.
But the point remains that we have a significant unemployment problem that is not fully explained by the simple unemployment rate. For instance, the unemployment rate for African-Americans is a stunning 24.3 percent. Only two-thirds of adult men have a job at the moment, which is the fewest since World War II. And long-term unemployment hit another record last month, as “over 41 percent of the unemployed have been looking for a job for 27 weeks or more.”
All of which points to the necessity of Congress acting on a new jobs bill quickly. Majority Leader Harry Reid (D-NV) had hoped to bring legislation to the floor as soon as today, but the snowfall that buried DC has delayed action for now. Sen. Orrin Hatch (R-UT), meanwhile, has signaled that the Senate bill could garner some bipartisan support, telling CongressDaily “”I think my colleagues should support it…It’s basically a set of ideas that they can live with.”
But as Rep. George Miller (D-CA) said last week, all of the jobs proposals before Congress at the moment are likely to be “inadequate to the scope of the problem.” Indeed, as David Madland wrote, “to give a sense of how big this jobs hole is, we would need to create 350,000 jobs per month for the next 24 months just to recover what we have lost since the recession began, and that’s not even compensating for population increases.” That’s a big hill to climb, and as of right now, the Senate doesn’t seem willing to step up in a way that will make enough of a difference.