Unemployment a poor indicator
Listen to this articleThe most recent unemployment figures released would seem to make us think the economy has bounced back and Americans are enjoying the comfortable lives more of us had before the 2008 recession hit. Don’t be fooled; the American worker is continuing to struggle despite what the figures say.
At 5.9 percent, unemployment is at its lowest since the mid 1990’s. There have been nine straight months of more than 200,000 new jobs being created which is a far cry better than the half million a month we were losing five or six years ago.
However, the unemployment figure has always been a misleading one and today that still is the case. For starters, unemployment does not take into account the number of people who have stopped looking for work, something many Americans have stopped doing. Some of these people were in middle management and took early retirement when the crash hit while others have simply stopped looking for work all together. If you factor in these former workers who most likely would still be working had there not been a recession, most experts say the unemployment figure jumps by at least one percent. Still, even at 6.8 percent, that does not accurately describe the American work force.
Most Americans who were fortunate enough not to lose their job during the great recession are worse off today than they were in 2008. Even if they did not have to take a pay cut as part of the recession, the average American worker is long over due for a pay raise. Unless you are a CEO for a Fortune 500 company, chances are that with just the cost of living increase since 2008, your salary no longer goes nearly as far as it did six years ago. Add to that the increase in covering your portion of healthcare or paying for your kids sky rocketing college tuition and you realize you are still feeling the squeeze of 2008.
“But we keep adding 200,000 jobs a month,” you say. This too is misleading because the type of jobs that were lost as a result of 2008 are not coming back and have been replaced by lower level and lower paying jobs. Middle management positions have been wiped out by better computer programs that can do the work of scores of people with only one or two IT people to monitor computers. Robots have increasingly replaced the factory worker while there are plenty of minimum wage jobs in the booming dollar store industry in their place.
As a result, Americans are increasingly under employed and forced to replace a full time steady job with benefits with two or three part time jobs without benefits. And when minimum wage increases by five or more dollars an hour, many of these jobs will disappear as well while employers struggle to maintain their costs. When you factor in under employment with the unemployment rate, most economists will tell you at least twenty-five percent of the American work force is in a huge bind.
Keep all of this in mind because this next presidential election is going to be about more than which party can lay claim to the low unemployment rate. The party that can bring about pay raises without cuts to jobs will be the one that can brag. Until then, both Republicans and Democrats have their work cut out to convince Americans our economy has healed from the 2008 recession.
Jim is a life long resident of California and retired school teacher with 30 years in public education. Jim earned his BA in History from CSU Chico in 1981 and his MA in Education from Azusa Pacific University in 1994. He is also the author of Teaching The Teacher: Lessons Learned From Teaching. Jim considers himself an equal opportunity pain in the ass to any political party, group, or individual who looks to profit off of hypocrisy. When he is not pointing out the conflicting words and actions of our leaders, the NFL commissioner, or humans in general, he can be found riding his bike for hours on end while pondering his next article. Jim recently moved to Camarillo, CA after being convinced to join the witness protection program.