A Year and a Half Later, the Mainstream Press Gets 'Underemployment'
by: Trader Mark June 07, 2009 | about stocks: WMT
seekingalpha.com
While blog readers have been exposed to the truth for nearly 2 years now, the mainstream press is finally understanding reality. I was almost joyous when I read this AP story since someone finally "gets it": Temp Work Helps Mask Joblessness Among Americans. As we wrote last in early 2008 [Apr 2, 2008: The Underemployment Rate is Rising]
I like this term I found in this CNNMoney.com article - "Underemployment"; I've been struggling to think of a term for all these people who are struggling with part time work, working 2 jobs, or in contractor jobs where they get hired/fired on a daily whim ( I call them "nomad workers").
This is a systematic and secular situation - nothing to do with one month's report or another. It is part and parcel with the erosion of living standards - and why so many in the middle and lower economic strata turn to home equity, credit cards, etc to just get by.
More on this subject later when we delve into "U6," but for now let's get to the story of what's really happening in the underbelly of America.... where the former white collar now thrive as waiters and midnight grocery clerks. Good news though, Walmart (WMT) is seeking to hire 22,000 more humanoids.
* It's a familiar predicament in today's economy, in which some 2 million people searching for full-time work have had to settle for less, and unemployment is much higher than the official rate when all the Americans who gave up looking for jobs are counted, too.
* ... now that work is over and Noel, 60, and more than 60,000 other Americans hired in April to help with the 2010 census are out of work once more. Because of the surge of hiring for the census, April unemployment only rose to 8.9 percent — a much slower increase than had been feared. Figures out today show unemployment now stands at 9.4 percent.
But consider these numbers:
* The 9.4 percent May unemployment rate is based on 14.5 million Americans out of work. But that number doesn't include discouraged workers, people who gave up looking for work after four weeks. (we now call these people shadow inventory I guess) Add those 792,000 people, and the unemployment rate is 9.8 percent.
* The official rate also doesn't include "marginally attached workers," or people who have looked for work in the past year but stopped searching in the past month because of barriers to employment such as child care, poor health or lack of transportation. Add those 1.4 million people, and the unemployment rate would be 10.6 percent.
* The official rate also doesn't include "involuntary part-time workers," or the 2.2 million people like Noel who took a part-time job because that's all they could get, plus those whose work hours dropped below the full-time level. Once those 9.1 million workers are added to the unemployment mix, the rate would be 16.4 percent. (this is our "U-6" level of unemployment or underemployment)
* All told, nearly 25 million Americans were either unemployed, underemployed or had given up looking for a job in May.
* The ranks of involuntary part-timers has increased by 4.9 million in the past year, according to a May study by the Federal Reserve Bank of Cleveland.
* (in Vermont) Many parents who were frantic last year about sons and daughters serving in Iraq and Afghanistan — the state has sent a disproportionate share of its young people overseas — now are relieved their children have a steady job with benefits. (always a silver lining - thank gosh we have wars!)
And when you read this, please understand as I will show in a later post (to newer readers) the 9.4% is a complete myth as well; we've changed the way we've measured unemployment since the early 90s, so we are in far worse shape than the late 70s or early 80s in terms of unemployed. There is no longer an apple to apple comparison - we peaked in the 10% range in the early 80s, we are now over 13% as close to 'apples to apples' as we can get. Don't believe for a moment when the media tells you "it's not as bad as the early 80s".
[May 24, 2009: WSJ - Job Fight: Locals v Immigrants] |
