How are the employment figures – Socialist Party for Freedom
Headlines say unemployment is down. Commentators speak of a labor shortage and the so-called ‘Great Quit’, a wave of people quitting jobs, especially those with low pay and few benefits . Workers are on strike across the country, a classic indication of labor force.
But for many people who need work or better-paying jobs, that picture is only half the story, because standard measures of employment and income adequacy simply don’t accurately reflect reality.
Many years of anti-union and anti-work laws, a small increase in the minimum wage and the rising cost of living contribute to the decline in the standard of living of ordinary people. It is so bad that at least half of the American working class cannot earn a decent living.
A new idea: functional unemployment. Eugene Ludwig, an economist who served in the Clinton administration, advocates “shared economic prosperity” for low- and middle-income Americans.
He argues that the most often quoted unemployment figure obscures the desperate situation in which many people live. This “overall” statistic includes only the fully unemployed who have looked for work in the previous four weeks.
Ludwig combines three elements to provide a more realistic picture of the state of the American labor force: the government’s own measures of unemployment, underemployment, and poverty. He calls his calculation the actual unemployment rate (TRU). It brings together people actively looking for work, part-time workers who want to work full-time and employees who live in poverty even if they hold a full-time job.
Although not a socialist, Ludwig is onto something. The overall September 2021 unemployment rate determined by the Bureau of Labor Statistics (BLS) was just 4.8%. But Ludwig’s TRU rate functionally unemployed was a whopping 23.9%.
For those who think the second number is over a point, consider the fact that a person is classified as “employed” if they work only one hour per week. This is why the extended statistic includes involuntary part-time workers. Then, the TRU also includes all workers who earn less than $20,000 a year, a conservative measure of poverty.
Even this figure of 23.9% does not reflect the huge number of people who have given up hope of finding a job and have stopped looking, even though they want work. The BLS completely excludes these people from the labor force.
Ludwig does a separate calculation to include them. It counts the unemployed, the underemployed, and the underpaid in the total working-age population. He calls it functional unemployment on the whole population. In September, this rate was 53%. It’s true. More than half of the population of working age.
Details of his method can be found on the website of his Ludwig Institute for Shared Economic Prosperity.
Some pundits have taken these unemployment measures with a grain of salt, but other hard facts confirm them.
American poverty. The official poverty rate for 2019, before the pandemic, was 10.5%. It is appalling in the richest country in the world. It has the third highest poverty rate among developed countries.
But misery in America is much higher than government statistics indicate. Ludwig chose $20,000 a year for functional unemployment because that’s the government’s own measure of poverty for a family of three across the country. It does not take into account that the cost of living is much higher in many areas.
For example, the National Low Income Housing Coalition found that in 2021, full-time minimum-wage workers cannot afford a two-bedroom apartment in any state. In 93% of counties across the country, they can’t even afford a one-bedroom apartment (affordable housing costs 30% or less of a person’s or family’s income).
A 2018 survey by the Federal Reserve found that about 4 in 10 Americans would struggle to cover a $400 emergency expense. It revealed that 17% of adults were unable to pay all their monthly bills. A quarter skipped necessary medical care because they could not afford it. These people are poor.
The federal formula for measuring poverty has not changed since the 1960s. During this time, the cost of housing has increased by 800%. Health and childcare costs have also skyrocketed.
According to a site survey Care.com, 57% of families spent more than $10,000 on child care in 2020. According to the Peterson Center on Healthcare, per capita healthcare spending in the United States has increased more than 31 times over the past four last decades.
In 2020, more than 1 in 10 households were “food insecure” at some point in the year, which in less sanitized language means hungry people. More than 5 million people had very low food security.
Beyond the high cost of living and depressed wages for most workers, there is the question of inequality over who faces the worst of these ruinous conditions.
Race and gender injustice. There are no level playing fields. Some 24.3 percent of female-headed households are poor by federal standards. The same is true for 25.4% of Native Americans, 20.8% of African Americans and 17.6% of Latinx. White and Asian poverty amount to 10.1% each.
According to an October 2021 poll conducted by NPR and others, 44% of households with children under 18 had serious financial problems. For black families it was 63% and for Latinx households 59%.
Official black unemployment is double the white rate — and has been for as long as it’s been tracked. Ludwig’s functional unemployment figure for white workers is 22%, but for African Americans it is 27.9% and for Latinx 28.6%. The rate for women is 28.7%, while for men it is 19.9%.
So yes, inadequate employment is the rule. Salaries are the pits, too! It comes from years of legislation that hampers unions’ ability to organize and win decent contracts, anti-immigrant policies that leave non-citizens at the mercy of employers, from congressional obstruction to wage increases. minimum wage and labor protections, and judicial weakening of anti-discrimination laws. All add to the pile of massive income inequality, with a tiny minority at the top.
The immense discontent of workers is well founded. Insisting that the government stop lying by omission about reality will raise awareness of the problem. And workers’ power can be strengthened through unified organizing efforts that fight for those furthest behind. This is the right time to turn the tide.