So it’s the first Friday of the month, which means it is time for more fiction from the Bureau of Labor Statistics. According to their release, the number of people employed rose a little bit, but so did unemployment. They don’t really explain and, trying to minimize the adjustments they apply and trying also to acknowledge that people need to pay bills every month, whether or not they are employed, I choose the data which are not seasonally adjusted. The latter data are currently a little more optimistic.
I try to avoid the BLS labor market games, which is one way they have of minimizing unemployment, by relying on the highest yet achieved labor market participation rate as a proportion of population. This (68.09 percent) was reached in July 1997, during the dot-com boom. I then calculate the number of unemployed by subtracting the number the BLS reports as employed from the number who would be participating in this calculated optimum labor market and thus deprive the BLS of all its maneuvers to minimize the number of people who it counts as unemployed. Calculating a U3 based on this number, which I name after my cat, I find Admiral Janeway’s U3 down from 14.61 percent for March to 14.23 percent for April. By contrast, the BLS numbers yield a present participation rate of 63.94 percent for April, down from 64.03 percent in March. When the recession began in December 2007, the rate was at 65.92 percent. And the non-seasonally adjusted BLS U3 dropped from 9.19 percent for March to 8.66 percent for April.
This month, for the first time, I am factoring in people who are involuntarily working only part-time due to economic reasons to create Admiral Janeway’s U6. I use the same labor market calculation as for Admiral Janeway’s U3. This reached a record 20.99 percent in January 2011. The previous peak came in January 1983, when it reached 20.07 percent. In 1983, it was a spike; this time it has been over seventeen percent since January 2009. When the recession began in December 2007, it was at 8.67 percent. In March, it stood at 19.97 percent; for April, it is down to 19.40 percent. This happens to precisely equal Gallup’s results for underemployment, which they define as”employed part time, but want to work full time, or they are unemployed,” as of May 4, 2011.
A more complete assessment of the labor market would account for people who are paid less than a living wage. This would require a comprehensive assessment of what people are paid across a physical space in which costs of living vary—and vary for different reasons—and is not something I’m expecting to figure out soon.
Here is the chart (figure 1):
People wonder why I’m so pessimistic about my own job prospects, even if I attain a Ph.D. It’s really rather simple: we have been experimenting with trickle-down economics by making the very wealthiest people in society even wealthier as a matter of national policy now since the Carter administration. Even the longest period of high unemployment since World War II has had no measurable impact on this ideology. The tax cut mantra is impacting funding for academia, which means that as a country, we’re going to be getting stupider, not smarter. The idea that tax cuts for the wealthy should increase investment and, therefore, employment, and thus tax revenues has been discredited since the Reagan administration. But it remains the enacted policy and the only voices that are being heard are those that call for even more tax cuts for the rich.
Meanwhile, the people in the United States remain largely passive. Politicians talk about jobs but do nothing of substance to create them. And as we see, corporations aren’t going to create them, at least in this country. That means that there is really only one direction for unemployment to go. And it isn’t down. And that means there’s also only one direction for tax revenues to support universities. And that isn’t up.
- Bureau of Labor Statistics, “Employment Situation Summary,” May 6, 2011, http://bls.gov/news.release/empsit.nr0.htm↩
- Bureau of Labor Statistics, “Table A-1. Employment status of the civilian population by sex and age,” February 5, 2010, http://bls.gov/webapps/legacy/cpsatab1.htm↩
- Bureau of Labor Statistics, “Table A-8. Employed persons by class of worker and part-time status,” February 4, 2011, http://bls.gov/webapps/legacy/cpsatab8.htm↩
- Gallup, “U.S. Employment,” May 4, 2011, http://www.gallup.com/poll/125639/Gallup-Daily-Workforce.aspx↩
- Jacob S. Hacker and Paul Pierson, Winner-Take-All Politics (New York: Simon and Schuster, 2010).↩
- David Benfell, “On jobs, who are you looking at?” DisUnitedStates.org, May 5, 2011, http://disunitedstates.org/?p=3548↩