I read an article yesterday that discusses the unemployment rate and what it really means. Right now, it stands at about 5% and the net number of hiring in November was around 211K. On the surface, those numbers sound really great but a number of writers have pointed out that if you include those who are working part-time, and those who are discouraged and have dropped out of the job search, the unemployment figure is really around 37%. In addition, a couple of writers have noted that the labor force participation rate for working age population has been declining at least since the Great Recession.(I want to say participation has been declining in the last decade and the decline has accelerated since the Great Recession but I may be dreaming that piece up).
Thirty-seven percent is an ugly number. And I think we still have a large number of long-term unemployed.
The point of this post is that the article I was reading was from a new site called FIXCapitalism.com. The site says “It is dedicated to saving capitalism from itself.” It looks like it started up in September 2015 by the guy who wrote Confronting Capitalism. (I have the book, but I’m still reading others so I haven’t gotten around to it – too busy doing things). So more people are starting to think that the current version of capitalism is not working for the general populace and are starting to speak out.
The author of the Huffington Post article, which I think Yahoo suggested, explains the difference between the 5% and the 37%. He also discusses the reasons for using the 5% figure rather than the 37%. Of course, one of the reason for using 5% is that it just looks better for the current occupier of the White House. So, no surprise there. The author does say it could be either the Republicans or the Democrats who would want the rosier numbers, depending on who sits in the office. He calls this reason the political reason.
The other reason he lists is corporate greed. If more people are employed, then employers would have to increase wages to attract and keep their employees. They would rather keep the wages low to increase the profits for shareholders and in turn increase the bonuses for senior executives. The author speculates that if we talk too much about the 37% unemployment rate, then the government will have to start doing something about it, such as some kind of work programs to hire people or some kind of job stimulus. It is in the business’ interest to keep unemployment high so that wages will remain low.
One thing that is interesting and it is the first time I have heard of it is the fact that the “real” unemployment (including the part timer and the discouraged) is actually increasing. Now that I look at the chart that he provides, I see that during the 2000’s, this “real” unemployment has been rising. Hmmm, I think common folks on the ground knows that something is wrong and thus this is part of why we have a crazy Presidential campaign this time.
Here’s the link to the article which is titled “The Truth about Unemployment”.