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Mortimer B. Zuckerman
Nine Reasons the Economy is Not Getting Better
Jobs data paint a discouraging picture of more pain to come
By Mortimer Zuckerman
Posted July 13, 2009
We are now looking at unemployment numbers that undermine any confidence that we might be nearing the bottom of the recession. The appropriate metaphor is not the green shoots of new growth. A better image is to look at the true total of jobless people as a prudent navigator looks at an iceberg.What we see on the surface is disconcerting enough. The estimate from the Bureau of Labor Statistics of job losses for June is 467,000. That increases by 7.2 million the number of unemployed since the start of the recession. The cumulative job losses over the past six months have been greater than for any other half-year period since World War II, including demobilization. What's more, the job losses are now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all employment growth from the previous business cycle.
That's bad enough. But here are nine reasons we are in even more trouble than the 9.5 percent unemployment rate indicates.
One. June's total included 185,000 people who were assumed to be at work, many of whom probably were not. The government could not identify them; it made an assumption about trends. But many of the mythical jobs are in industries that have absolutely no job creation: finance, for example. When the official numbers are adjusted over the next several months, look to some of the 185,000 boosting the unemployment totals.
Two. More companies are asking employees to take unpaid leave. These people don't count on the unemployment roll.
Three. No fewer than 1.4 million people wanted or were available for work in the past 12 months. They were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey. The assumption is that they had found work or don't want it, but there are other explanations: school attendance, family responsibilities, sheer exhaustion.
Four. The number of workers taking part-time jobs because of the slack economy, a kind of stealth underemployment, has doubled in this recession to about 9 million, or 5.8 percent of the workforce. Add those whose hours have been cut to those who cannot find a full-time job, and the total of unemployed and underemployed rises to 16.5 percent, putting the number of involuntarily idle workers in the range of an overwhelming 25 million.
Five. The inside numbers are just as bad. The average workweek for production and nonsupervisory private-sector employees, around 80 percent of the workforce, dropped to 33 hours. That's 48 minutes a week less than before the recession began, the lowest level of activity since the government began tracking such data 45 years ago. Full-time workers are being downgraded to part time as businesses slash labor costs to remain above water and factories operate at only 65 percent of capacity. If American workers were still putting in those extra 48 minutes a week now, 3.3 million fewer employees could perform the same aggregate amount of work. With a longer workweek, the unemployment rate would reach 11.7 percent, not the official 9.5 percent (which in turn dramatically exceeds the 8 percent rate projected by the Obama administration).
Six. The average length of official unemployment increased to 24.5 weeks. This is the longest term since the government started to track these data in 1948. The number of long-term unemployed (those out of a job for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
Seven. The average worker saw no wage gains in June, with average compensation running flat at $18.53 an hour.
Eight. The jobs report is even uglier when you consider that the sector producing goods is losing the most jobs—223,000 in the last report alone.
Nine. The prospects for job creation are equally distressing. The likelihood is that when economic activity picks up, employers will first choose to increase hours for existing workers and bring part-time workers to full-time status.
Many unemployed workers looking for jobs once the recovery begins will discover that jobs as good as the ones they lost are almost impossible to find because more layoffs in this recession have been permanent and not temporary. Instead of shrinking operations, companies have closed whole business units or made sweeping structural changes in the way they conduct their business. For example, General Motors and Chrysler shut down hundreds of dealerships and reduced brands; Citigroup and Bank of America cut tens of thousands of jobs and exited many parts of the world of finance. In other words, we could face a very low upswing in terms of the creation of new jobs, and we may be facing a much higher level of joblessness on an ongoing basis. Job losses may last well into 2010 to hit an unemployment peak close to 11 percent. And then joblessness may be sustained for an extended period.
Corporatism
42,000 corporate lobbyists in DC with 22,000% return on investment for bribing our congress and senate. This crisis is a shock bleeding of the resources of the public with every little bit of special interest legislation that gets passed. Just look at that big one for AIG and by extension that $$$12.9 billion we will never get back from Goldman Sachs, that stock market manipulator par excellance. Or the cut that UBS got even as they assisted tens of thousands of the super wealthy to evade paying US taxes. I'd like to give those folks a one way ticket to some remote hellhole and confiscate all of their assets. (don't want the responsibility of living here then get the hell out of my country.)
But I'm also surprised that bricks aren't being thrown thru the windows of these rape and pillage companies by the commonfolk.The bailouts since Bush's October 2008 giveaway to "save" the world economic system makes the $12 billion that "disappeared" under J. Paul Bremmer's watch in Iraq pale by comparison. (I'm sure that he is another corporate lackey now on some major boards of directors for assisting the liberation of that money when he should have been forever banned from any future corporate activity in the USA)
Then our bought and paid for "representatives" hand the President and the defense industrial complex an illegal "war" supplemental of over $100 billion during a time of state by state economic failure of over $100 billion. To the states to help keep the population docile for a little while longer while this pillage continues the states get a repayable "loan" to pay back if they use the funds for extension of unemployment benefits...
And what the heck was that $400 million in loans to Standard and Poors and Moodys all about except hush money for their lawbreaking...taking crappy mortgages in bundles and rating them AAA. Fraudulent Conveyances from the Loan Originators to the Mortgage Bankers to the Rating agencies and we bail them out UnF**king belivable.
It's no wonder why we can't get out from under.
The socialism is for the corporatists and made to support them worldwide is the military-congressional complex.
Just when are we going to tire of this
unquestioning obedience to corporate interests being the
new Amerikan patriotic way? Will someone stop K street? It's obvious to me it won't come from Obama who hired many of them.
I need a Christ to throw these moneychangers out of my
philosphical temple called the US Capitol.
When the colonials found out that the Indies trading Company was getting special interest legislation passed in Parliment to not have to pay the duty on the tea and so undercut all small colonial businesses that had to, the patriots took a stand.
If we wait too much longer "We the People" as a concept that resulted from their spilt blood will forever disappear.
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