In February the Department of Labor reported a drop in the unemployment rate from 7.9 to 7.7 percent with employers adding 236,000 jobs. But a closer look at these figures reveals a much different picture.
Because of the deliberately misleading way government statistics are presented, the official jobless rate over the last few years has declined at the same time as the proportion of the population with a job has shrunk.
“February was the 34th consecutive month that saw more unemployed workers stop looking for a job than find one,” reported the Wall Street Journal. Every month government statisticians remove these “discouraged” workers from the official labor force used to figure the unemployment rate. So instead of making the rate higher, it declines. Some 296,000 workers “dropped out” of the workforce in February—60,000 more than the number of jobs created. Today there are 6.8 million workers not considered part of the workforce whom the Labor Department says are “persons who currently want a job.”
A more accurate way of gauging the stagnant job levels is the employment to population ratio—a straight percentage of the total population that is employed. In February it was 58.6 percent, the same as a year ago and a decline from 63 percent in 2007.
Many of the jobs added in February are for part-time workers. According to a survey of U.S. households, writes Michael Roberts on his blog on WordPress.com, February’s job increase in part-time, low-wage jobs was up 446,000, while full-time jobs declined 276,000. The Labor Department reports there are now 8 million workers who want to work full time, but can only find part-time jobs. For the purposes of the unemployment rate, they are simply considered “employed.” About 20 percent of all employees in the U.S. are working part time.
Long-term unemployment is higher today than it was three and a half years ago, rising another 90,000 last month. On the average, workers officially unemployed are out of a job for more than eight months, and more than a quarter have been looking for at least a year.
“As bad as the current job recovery has been—and it’s by far the weakest since World War II,” stated Investor’s Business Daily, “the recovery in wages has been far worse.” Five years later real wages remain 2.2 percent below its level at the end of 2007, the official start of the recession.
In previous recessions since World War II, wage declines reached their prerecession level in a shorter time span. By way of comparison, the real wage decline during the 2001 recession was over in two-and-a-half years. Wages reached 8 percent above their prior peak by 2006.
Corporate profits have been rising at record rates. As a percentage of national income, corporate profits were 14.2 percent in the third-quarter of 2012, the largest amount since 1950. The portion of income that went to workers was 61.7 percent, near its lowest point for half a century.
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