Tuesday, July 6, 2010

'Bright side' to unemployment? Are you kidding?

Ticker from the Economic Policy Institute shows
the number of workers (as of July 3) who have
lost unemployment benefits due to inaction in Congress.
Two thumbs up to Andrew Leonard for his tongue-in-cheek "The bright side of mass unemployment" in Salon, where he rips a couple of positive takes on the country's current 9.5 percent jobless rate:
  • That "Companies are getting higher-productivity employees for the same or lower wage rate they were paying a marginal employee."
  • That "there has been better cost containment in the U.S. than in some of our competitors" because pressure for higher wages is nonexistent, aiding multinational companies.
I'll take a big "Thank You!" then from Corporate America for doing my part, as I sit here on the eve of my one-year anniversary of being unemployed. (Actually, I'd prefer a job offer instead. You can contact me here.)

The June unemployment report from the government, released last week, shows a continuing record-high number of U.S. workers has been jobless for six months or more -- 6.75 million workers, or 45.5 percent of the total unemployed. (Leonard's article, by the way, quotes a story that parses the duration of unemployment even more finely -- to the number of workers jobless for one year or more. I haven't been able to find data like that for 2010 through the U.S. Bureau of Labor Statistics, although the agency has produced such stats for 2008 and 2009 -- when unemployment was just ramping up.)

The Economic Policy Institute, which follows the unemployment data closely, pointed out that even though the June jobless rate ticked down a bit from 9.7 percent the month before, the labor force contained about 652,000 fewer workers.

"[L]abor force participation is an entire percentage point lower now than it was a year ago," EPI economist Heidi Shierholz wrote. "This points to another ongoing issue in the labor market: the backlog of 'missing workers,' that is, workers who dropped out of (or never entered) the labor force during the downturn."

She calculates the number of missing workers at 3.6 million since the start of the Great Recession, and notes they aren't reflected in any jobless numbers. "As these workers enter or re-enter the labor force in search of work, this will contribute to keeping the unemployment rate high," she says.

Meantime, as EPI now tracks on its homepage, more than 1.7 million unemployed workers have lost jobless benefits since the beginning of June because Congress hasn't approved their extension. The National Employment Law Project, an advocate for low-wage workers, says that's unprecedented: "Never before has Congress cut off benefits when unemployment was so high."

And it also points to another statistic that ought to lower the wattage in the bright-side-to-unemployment camp: that every $1 in unemployment benefits generates $1.60 in economic growth, according to Moody's Economy.com.

Of course, those of us who are unemployed would rather be spending money from our full-time jobs than from a pot we share with 15 million other jobless workers.

UPDATE: Congress finally passed and the president signed legislation that extend unemployment benefits for another six months for those who had been cut off.

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