(By Mortimer Zuckerman, Wall Street Journal, 15 February
2013)
Jobs!
President Obama has set a record. In his speech to Congress on Tuesday, he
uttered the word "jobs" more than in any of his previous four State
of the Union addresses. His 45 mentions were more than double the references to
any of the other policy ambitions encapsulated in his speech by such words as
health, education, immigration, guns, deficit, debt, energy, climate, economy,
Afghanistan, wage, spend or tax (the runner-up). If only the president's record on
unemployment were as good.
The country
isn't confronted daily by scenes of despair like they were in the 1930s, the
jobless however are still there. After
four years America remains in a jobs depression as great as the Great
Depression. But the crisis isn't seen in that light because the country isn't
confronted daily by scenes of despair like the 1930s photographs of bread lines
and soup kitchens and thousands of men (very few women then) waiting all day
outside a factory in a forlorn quest for work.
But the jobless are still in the millions across the land, little
changed in their total since the 1930s: 12.3 million today officially fully
unemployed compared with 12.8 million in 1933 at the depth of the
Depression. Yes, the U.S. population is
much larger now, but 12 million out of work still means 12 million lives
devastated. And that number masks the true vastness of the modern disaster.
The jobless
today are much less visible than they were in the 1930s because relief is
organized differently. Today in the "recovery," the millions are
being assisted, out of sight, by government checks, unemployment checks, Social
Security disability checks and food stamps.
More than 48 million Americans are in the food-stamp program—an almost
incredible record. That is 15% of the total population compared with the 7.9%
participation in food stamps from 1970-2000. Then there are the more than 11
million Americans who are collecting Social Security checks to compensate for
disability, also a record. Half have signed on since President Obama came to
office. In 1992, there was one person on disability for every 35 workers; today
it is one for every 16. Such an increase
is simply impossible to connect to direct disability experienced during
employment, for it is inconceivable that work in America has become so
dangerous. For many, this disability program has become another form of
unemployment compensation, only this time without end.
But the
predicament of our times is worse than that, worse in its way than the 1930s
figures might suggest. Employers are either shortening the workweek or asking
employees to take unpaid leave in unprecedented numbers. Neither those on
disability nor those on leave are included in the unemployment numbers. The U.S. labor market, which peaked in
November 2007 when there were 139,143,000 jobs, now encompasses only
132,705,000 workers, a drop of 6.4 million jobs from the peak. The only work
that has increased is part-time, and that is because it allows employers to
reduce costs through a diminished benefit package or none at all.
The broadest
measure of unemployment today is approximately 14.5%, way above the 7.9%
headline number. The 14.5% reflects the unemployed and three other categories:
the more than eight million people who are employed part-time for economic
reasons (because their hours have been cut back or because they are unable to
find a full-time job), the 10 million who have stopped looking for work, and
those who are "marginally attached" to the workforce. The labor-force participation rate has
dropped to the lowest level since 1981. It reflects discouraged workers who
have dropped out of the labor force. If it were not for the dropouts, the
formally announced unemployment rate would be around 9.8%, not the headline
7.9%.
Sometimes
the employment numbers that are announced are simply not understood. January
was supposed to have seen 157,000 jobs created. The news provoked relief and
even enthusiasm in some quarters. But the supposed hiring was based on
seasonally adjusted numbers—numbers adjusted to reflect regularly occurring
shifts in employment, such as increased hiring of farm workers during crop
harvests or retail employees after Thanksgiving. The real, unadjusted figures
for January show that nearly 2.8 million jobs disappeared, which happened to be
worse than the 2.63 million lost in January 2012. Even though the 157,000 jobs
created were fewer than the 311,000 of January 2012, many commentators cheered because
they don't understand the effects of seasonal adjustment.
So there is
no solace in the statistics. Job seekers are only one-third as likely to find
work as they were five years ago, and a record number of households have at
least one member looking for a job, which affects everyone. And most of the
newly available jobs don't match the pay, the hours or the benefits of the
millions of positions that have vanished.
It typically takes 25 months to close the employment gap from the
employment peak near the start of the downturn. Yet this time, more than 60
months after employment peaked in January 2006, nonfarm unemployment is still
more than three million jobs below where it started.
The
president's speech was not without sensible commitments, and the news of
negotiations for a trans-Atlantic free-trade area is promising. Europe and the
U.S. represent 44% of the world economy, but both have stalled. They (and the
rest of the world) would benefit from freer trade. Europe and the U.S. would
also benefit from common technology standards and simpler regulations. The
bilateral talks have been conducted quietly and positively for some time (while
the World Trade Organization talks have floundered), but it will need real
executive energy to get an agreement with a real impact on jobs. Ordinary Americans are looking for leadership
and renewal. They know that a job is the most important family program, the
most important economic program, and the most important national program that
America could have. They also know that, by this standard, we have failed.
Mr.
Zuckerman is chairman and editor in chief of U.S. News & World Report.
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