Last week the official unemployment rate hit 10.2%, meaning that -- and here comes the tricky bit -- among those still considered part of the American work force, 1 in 10 are out of a job. However, if you've given up looking for a job because there are none (think of a construction worker in Florida or Arizona), then you don't count. If you've been out of work over 6 months, you also don't count.
And it doesn't matter whether your job is enough to survive on, either. If you used to work full time, and now the only job you can find is for 8 hours per week, it doesn't matter. That's considered "employed". If you are a self-employed real estate agent who hasn't sold a home in 6 months-- you guessed it! Employed.
If you put the "discouraged workers," the long-term unemployed, and the under-employed into the unemployment category, our unemployment rate is 17.5%. But even that's an underestimate, since various administrations have finagled this number in order to soften the bad news. Economist John Williams calculates this unemployment figure the way it was calculated prior to the Clinton administration, and his figure is 22.1% unemployment.
In truth, then, at least 1 in 5 American workers cannot find a job.
Meanwhile, those still employed are being squeezed mercilessly. Wall Street was just frickin' ecstatic over this bit of news from last Thursday:
The Labor Department said the output per hour of nonfarm workers rose at an annual rate of 9.5% in the quarter, more than four times the average productivity growth rate of the past quarter-century. When taken together with the second quarter's 6.9% rise, it was the strongest productivity growth rate over a six-month period since 1961.
Woo-hoo! CEO's are going to get almost 10% more work out of people this year, and all without paying them a red cent more! Bust out the champagne on the floor of the NYSE!
Disgusting. In the past 6 months, the output per hour of work has increased dramatically while worker's incomes have been flat or falling. This increased productivity has meant that more workers can be let go, or not hired back. In effect, Wall Street was cheering the fact that companies won't have to employ as many people.
Meanwhile the government claims it saved or created 640,329 jobs via its stimulus plan. As Mish points out, if that's true then it means they spent $323,739.83 per job. I don't know about you, but that doesn't look too impressive.
Furthermore, more than half those jobs were in government, meaning that government must continue to pay over 320,000 salaries indefinitely. The Obama administration had promised that 90% of the jobs would come from the private sector, in effect assuring us that government wouldn't have to keep paying for these jobs by paying the salaries year after year. But in fact, the minority of new jobs were in the private sector; most must be funded by government in perpetuity.
But this jobs number turns out to be entirely bogus, because (get this) pay raises were counted as new jobs.
Uh-huh. You read that right. Check it out over at The Automatic Earth:
AP found, just to name an example, that of 14,506 jobs allegedly saved or created by just one federal agency, two-thirds (!) were not saved or created at all. They were counted because existing government employees got pay raises.
An unfortunate and isolated accident? No, it's not. The administration has even issued directives to count pay raises as saved jobs. AP: "The inflated job count is at least partly the product of the administration instructing local community agencies that received money to count the raises as jobs saved."
You can't make this stuff up!
Who knows what we spent on the few measly jobs we did manage to create. Half a million each? A million apiece? And even if the Obama administration had been correct, and we had saved or created 640,000 jobs, that still would be terribly disappointing considering that unemployment rolls show 559,000 people lost jobs just last month.
Of course, the Bureau of Labor Statistics or BLS -- also known as the Bureau of Lies and Statistics -- says we only lost 190,000 jobs last month. But this is a much-manipulated estimate based on the bogus "birth and death model" which we now know has vastly underestimated job losses throughout 2009. The BLS will correct this understatement of lost jobs after the end of the year. Still, even according to these rosy-colored BLS numbers we have lost 2.8 million jobs since the stimulus plan was passed roughly 10 months ago.
The blue lines in the graph below show the estimated unemployment rate, without any stimulus plan (the higher light blue line) or with the stimulus (the lower dark blue line). Reality is a bitch... the real numbers are in red.
Meanwhile the Goldman crowd continues to suck down their hundreds of thousands in bonuses and the Too Big to Fail banks (more like So Big We Can Screw You) throw multiple trillions of our dollars into their black hole, bankrupt coffers. Who needs production? We gotta save the bankers!
Massive income disparity is not financially healthy and usually leads to a ruined economy and major social unrest. You would think the banking elites must know this, yet they appear to think Things Are Different This Time, and that they have nothing to fear from the masses. Meaningless pop culture, electronic toys, public schooling, and controlled media make Americans so passive -- or so the popular thinking goes -- that they couldn't lift a torch if their children were starving. Well, I don't think so. In fact, Americans have such a sense of entitlement that they're liable to be far more pissed off about their falling standard of living than the citizens of many other nations.
Unrest doesn't have to be sparked by anything directly related to joblessness, foreclosures, or other economic problems. Last December, during rioting in Greece, 16 bank branches were burned down. The riots weren't about the banks or the economy, but had been ignited when police murdered an unarmed teenaged boy. Nonetheless, the underlying economic discontent was enough that banks were targeted.
Jobs are not simply the key to economic health, they are also the best way to prevent civil unrest. And yet with all the money being spent, virtually nothing is being done to bring work back to the United States. According to Mish in a recent interview, we still give tax benefits to corporations' overseas operations which they cannot get for US operations. In other words, the US Congress is continuing to give incentives to US companies to offshore their labor, even as we speak.
As Jim Kunstler has said, once the first window gets broken, all bets are off.
Policemen stand by the burned Emboriki Bank in central Athens on December 9, 2008. AFP PHOTO /Louisa Gouliamaki
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