Sunday, April 17, 2016

The Employment Myth

Between the ages of 18 and 40 I bought into "unemployment figures". 5% to 9% seemed like reasonable, single-digit numbers that could easily be overcome. The comfort that unemployment numbers are not too high is a nervous consolation, in case you ever happen to find yourself there. The strong-minded will tell themselves, get up and finish the race. When you finally do pick yourself up and get back in the race, it could even make you embrace Republican values and  "laissez-faire" capitalism. The conservative assumption is that most of that 5% to 9% could be seen as a healthy, temporary number, and some of it is inevitable human nature - a.k.a. the lazy ones. As Mitt Romney thought he was saying privately during his 2012 presidential campaign, self-proclaimed victims who unaccountably rely on the government are a lost cause.

While a part of me never really thought 5% to 9% unemployment meant that 91% to 95% of the country was employed, I didn’t quite grasp the reality that more than 50% of America's total population is unemployed. That number includes children and seniors over 70, but someone still needs to work for them. While some of the seniors over 70 paid for themselves, they still had to work for it. Either way it has little to do with laziness: U.S. style capitalism is simply not designed to provide for 220 million jobs – the number of Americans over 16 and under 70. According to the Current Employment Statistics and Current Population Statistics, the total number of jobs in the U.S. is about 150 million. That's a 70 million adult deficit. It boils down to 22% of the total population, and 32% of the working age population.

We could drill down further and say that only about half of the 32% really competes hard for a job. That would be under the assumption that the other half are spouses or "significant others" who play a voluntary support role. It would make the true, effective unemployment rate in the US 16%. There's just one problem with that logic: the single job that pays for one adult mouth to feed also has to pay for two. While the two halves can economize and scale all day long, the single job per couple math reaches a tipping point sooner rather than later. You can pick which end you prefer, 32% or 16%. But either way it is still a far cry from "5.5%". I choose to go right down the middle, and I call the true, effective unemployment rate of the U.S. 24%. One-quarter of the nation, one out of four, is unemployed. From a macro perspective, 170 million Americans are not formally employed.

Counting new unemployment compensation filings every month (currently at 5.5%) is a dishonest collusion that both ruling parties have engaged in for almost a century. It looks better on their leadership record, and they guilt the ordinary citizens into blaming themselves more than the system.

It needs to stop. It's neither honest nor sustainable, and neither party knows how to fix it. The best argument conservatives have is that given the right incentives, able-people will eventually get off their asses and find a way to make themselves productive. The best argument liberals have is that there are way too many unable-people in our society – not lazy, literally unable. Unable physically, mentally, or a combination compounded by a true unemployment that lies somewhere between 24% and 53%. Ignoring them will not make them go away, and labeling them “welfare queens” who don’t understand trickle-down economics amounts to conservative smugness.

Neither argument by itself will ever work. If both sides acknowledge that both arguments working together is in fact the answer, then we may yet make America a greater society.


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