Jobless rate drops without
recovery in employment
Because unemployment rate doesn’t count jobless workers Labor Department says have given up, rate has declined over last four years, despite lack of any real recovery. At same time figures mask jobs crisis, they also point to real trend: over time discouraged workers do drop out of workforce, which begins to shrink.
BY BRIAN WILLIAMS
Although the Labor Department reported a decline in the unemployment rate in December, actual joblessness remains at the same high level it has been for the past four-and-a-half years of the so-called recovery from the 2007-2009 recession.
Official unemployment figures dropped to 6.7 percent last month from 7 percent in November. This was the result of nothing other than the way government statisticians handle joblessness by not counting those whom they consider have given up looking for work. The number of “discouraged” workers has risen by nearly 2 million over the past year. As this category grows, the unemployment rate is pushed down.
The government also reported that only 74,000 new jobs were created in December, the lowest figure in three years. There are still more than 1 million fewer jobs since the onset of the recession at the end of 2007, according to the Wall Street Journal. And if population growth is taken into account, there are 7.8 million fewer jobs available.
“The saving grace may be that winter weather is responsible for some of the sharp decline,” stated a Jan. 11 Journal editorial, seeking to cast these figures in the best light.
But the weather, besides resulting in a decline in construction jobs, doesn’t have much to do with the years of stagnant employment facing working people. Bosses are not expanding investment in production and hiring workers because under current conditions it would be less profitable for them to do so. At the heart of the problem is a long-term tendency toward declining rates of industrial profit, which has led to a slowdown in capitalist production and trade on a world scale.
The percentage of the population with a job in December was 58.6 percent — around the same level it has hovered at since it sharply declined from 63 percent in 2007.
As of December nearly 92 million adults are not counted in the labor force, a figure that has risen by 11.2 million over the past five years.
Long-term unemployment remains at record-high levels. Nearly 38 percent of those receiving unemployment benefits have been out of work for more than six months. Each week that Congress debates whether to provide federal jobless benefits, another 72,000 workers will see their benefits end as state compensation expires. This is in addition to the 1.3 million jobless workers who stopped getting federal benefits Jan. 1.
Under these conditions, bosses have been driving against wages and working conditions. With a 2-cent hourly increase in workers’ paychecks in December, wages rose just 1.8 percent for the year, a decline in real wages given rising energy and food prices. During the recession, median household income declined by $1,006, according to Sentier Research. Since the recession ended in June 2009, it has dropped by another $2,535.