Tuesday, September 7, 2010

The Real Deal on Jobless Statistics

By Mike Gimbel
Published Sep 6, 2010 10:45 PM

The official unemployment rate, which was 9.5 percent in July, has no credibility. It is classic “political spin” intended to fill workers’ heads with hope that a recovery is right around the corner.

The Bureau of Labor Statistics had proclaimed a 9.9 percent unemployment rate for April. This was reduced to 9.5 percent for July by artificially shrinking the number of the total workforce (employed and unemployed) by 1.15 million over these three months, from 154.71 million in April to 153.56 million in July.

Did the U.S. population actually decline precipitously in these three months? Of course not. The BLS hid the unemployed in a category entitled, “Not in the Labor Force.” Between April and July, the BLS added 1.72 million individuals to this category, while decreasing the number of the officially unemployed by 661,000 in the same period.

Only about 230,000 (this number includes retirees, for instance) should have been added to the “Not in the Labor Force” category during those three months. But instead, some 661,000 workers were simply discarded and added, as if they were garbage. Workers who have exhausted their unemployment benefits or have become discouraged, as well as youth who have yet to find a job, are all dumped into this catch-all category as a way of hiding the true extent of the jobs crisis from the workers.

By disappearing so many unemployed, the capitalist politicians could spin fairy tales of a soon-to-arrive economic recovery.

By this writer’s estimate, some 16.8 million unemployed workers have been shunted over to the “Not in the Labor Force” category since April 2000, the point which was the peak of the last economic cycle. When added to the officially listed 14.6 million currently unemployed, the total becomes 31.4 million actually unemployed. When you then add in the 8.5 million who are working part time but want full-time work, this incredible total becomes almost 40 million distressed workers.

Another fact that jumps out at you from the BLS data is how many are working part time but want full-time work. These part-time workers dropped from 9.15 million in April to 8.5 million in July. It’s highly unlikely that all those dropped found full-time jobs. Most likely is that 623,000 of the 1.7 million added to the “Not in the Labor Force” category came from underemployed workers losing their part-time work.

The real unemployment plus underemployment rate for July becomes 23.44 percent when you include part-time workers looking for full-time jobs.

There is no light at the end of the tunnel in this capitalist economic catastrophe created by the system’s own revolutionizing of production (robotics, the Internet, etc.), which slashes the number of workers, especially skilled workers, that are needed. This revolution in production enabled the bosses to cripple unions all over the world through threats of shifting production to low-wage countries or low-wage, nonunion areas within the country. But who was left with income enough to buy the goods when unemployment left millions with no money in their pockets? In effect, the capitalists were destroying their own market.

Even the financial advisors now realize that this crisis is much worse than they had thought. In an article entitled, “The Jobless Effect: Is the Real Unemployment Rate 16.5%, 22%, or ... ,” Pallavi Gogoi stated that when TechnoMetrica Market Intelligence did its July job survey, it came up with an unemployment rate in excess of 22 percent. In the same article, John Williams, founder of Shadow Government Statistics, also came up with a jobless rate of 22 percent. (Daily Finance, July 16)

While the bosses try to divide workers against each other by creating unreasonable fear of Muslims and undocumented immigrants, the real terrorism that workers face is loss of employment, which leads to bankruptcy, foreclosures, and shattered families and shattered lives.

As labor leaders, we cannot sit back and wait for the Democratic Party politicians to come to our rescue while millions more workers lose their jobs and homes. Despite a massive effort by labor to elect Democrats in the last two elections, resulting in an overwhelming Democratic Party majority in both houses of Congress, the Employee Free Choice Act died even before it had a chance to be introduced in Congress!

All serious labor activists, community activists and left organizations need to regroup and organize so as to create a classwide, independent, anti-racist fightback movement from below. As a first step, we need to mobilize for the massive Oct. 2 demonstration in Washington, D.C. And wouldn’t it be wonderful if millions of workers in organized labor unions across the U.S. joined their undocumented sisters and brothers on May Day — May 1, 2011 — in rallies all across the country! Wouldn’t that be a powerful statement of solidarity and worker unity!

Gimbel is chair of AFSCME Local 375’s Labor/Community Unity Committee and a co-coordinator of the May 1 Coalition for Worker and Immigrant Rights.

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