Tuesday, August 14, 2007

Full Employment My Ass

Last night, pathetically enough, I entertained myself by poking around on the Bureau of Labor Statistics website. The national unemployment rate in July was just 4.6%. This is what we call full employment.

During the Reagan administration the definition of unemployed was changed to only reflect those who actually receive unemployment benefits. When the benefits run out, you no longer count. So even Flint, Michigan, a city that has become the poster child for economic desolation, has just 8.6% unemployment. Not bad at all.

If you include, says the BLS, the marginally attached (those who say they want work but aren't looking very hard) and discouraged workers (a subset of the marginally attached who give a job market-related reason for not currently seeking work), then the 4.6% national average rockets right on up to 5.5%

These are numbers that seek to hide the obvious, and for the most part they work as intended. Structural unemployment, which is usually defined as the mismatch between available jobs and skills brought about by shifts in markets and economies, isn't something we talk about much.

If you look at unemployment rankings by city, you'll see that in my hometown of Sioux Falls, SD, just 2.3% are looking for work. Sioux Falls is a low-wage town in a right-to-work state that has so many lousy jobs that people can work two or three of them at a time and still have plenty of work for everyone.

Well, almost everyone. Just 265 miles to the west on the Rosebud Reservation, actual unemployment is estimated at 82%. Over at Pine Ridge, things are even worse. Maybe they should all move to Sioux Falls.

Just kidding. They hate Indians there.

Consider this, from a NYT article on unemployment rates among black men, which says that even when the economy does great, some people still fall behind:

¶The share of young black men without jobs has climbed relentlessly, with only a slight pause during the economic peak of the late 1990's. In 2000, 65 percent of black male high school dropouts in their 20's were jobless — that is, unable to find work, not seeking it or incarcerated. By 2004, the share had grown to 72 percent, compared with 34 percent of white and 19 percent of Hispanic dropouts. Even when high school graduates were included, half of black men in their 20's were jobless in 2004, up from 46 percent in 2000.

¶Incarceration rates climbed in the 1990's and reached historic highs in the past few years. In 1995, 16 percent of black men in their 20's who did not attend college were in jail or prison; by 2004, 21 percent were incarcerated. By their mid-30's, 6 in 10 black men who had dropped out of school had spent time in prison.

¶In the inner cities, more than half of all black men do not finish high school.

But just because people have been disappeared doesn't mean they totally stop looking for work. This helps to explain why, when it comes to low-wage work, the laws of supply and demand are suspended. No matter how low unemployment rates get, wages on the bottom rarely rise. That's how the system works, and it's working perfectly.


Anonymous said...

Could you please tell me who the artist is that did the painting prefacing this blog? Or perhaps where I might find their work?

Tim Harris said...

Clicking the image will take you to the source.