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# 17.5%

http://www.nytimes.com/2009/11/07/business/economy/07econ.html?
hp=&adxnnl=1&adxnnlx57613393-DqbPKRWrDwtGCTdXU25fiA

Broader Measure of U.S. Unemployment Stands at 17.5%

By DAVID LEONHARDT
Published: November 6, 2009

For all the pain caused by the Great Recession, the job market still was
not in as bad shape as it had been during the depths of the early 1980s
recession — until now.

With the release of the jobs report on Friday, the broadest measure of
unemployment and underemployment tracked by the Labor Department has
reached its highest level in decades. If statistics went back so far, the
measure would almost certainly be at its highest level since the Great
Depression.

In all, more than one out of every six workers — 17.5 percent — were
unemployed or underemployed in October. The previous recorded high was
17.1 percent, in December 1982.

This includes the officially unemployed, who have looked for work in the
last four weeks. It also includes discouraged workers, who have looked in
the past year, as well as millions of part-time workers who want to be
working full time.

The official jobless rate — 10.2 percent in October, up from 9.8 percent
in September — remains lower than the early 1980s peak of 10.8 percent.

The rate is highest today, sometimes 20 percent, in states that had big
housing bubbles, like California and Arizona, or that have large
manufacturing sectors, like Michigan, Ohio, Oregon, Rhode Island and
South Carolina.

The new benchmark is a sign of just how much damage financial crises tend
to inflict. A recent book by Carmen M. Reinhart and Kenneth S. Rogoff,
two economists, found that over the last century the typical crisis had
caused the jobless rate in the country where it occurred to rise for
almost five years. By that standard, the jobless rate here would continue
rising for two more years, through the end of 2011.

Most economists predict that the rate will in fact begin to fall next
year, largely because of the federal government’s aggressive response —
fiscal stimulus, interest-rate cuts and a variety of creative steps by
the Federal Reserve and Treasury Department. Friday’s report showed that
monthly job losses continued to slow recently, though the improvement has
been gradual.

At the White House Friday, President Obama signed a bill to extend
unemployment benefits and a tax credit for home buyers, and said that he
was looking at ways to enact more stimulus. On Wednesday, the Fed
announced that it expected to leave its benchmark interest at zero for
“an extended period.�

Nearly 16 million people are now unemployed and more than seven million
jobs have been lost since late 2007.

Officially, the Labor Department’s broad measure of unemployment goes
back only to 1994. But early this year, with the help of economists at
the department, The New York Times created a version that estimates it
going back to 1970. If such a measure were available for the Depression,
it probably would have exceeded 30 percent.

Compared with the early 1980s, a smaller share of workers today are
officially unemployed and a smaller share are considered discouraged
workers.

But there are many more people who would like to be working full time and
have been able to find only part-time work, according to the government’s
monthly survey of workers. The rapid increase in their ranks and in the
officially unemployed has caused the rate to rise much faster in this
recession than in the early 1980s. Two years ago, it was only 8.2 percent.

One of the more striking aspects of the Great Recession is that most of
its impact has fallen on a relatively narrow group of workers. This is
evident primarily in two ways.

First, the number of people who have experienced any unemployment is
surprisingly low, given the severity of the recession. The pace of
layoffs has increased, but the peak layoff rate this year was the same as
it was during the 2001 recession, which was a fairly mild downturn. The
main reason that the unemployment rate has soared is the hiring rate has
plummeted.

So fewer workers than might be expected have lost their jobs. But those
without work are paying a steep price, because finding a new job is
extremely difficult.

Second, wages have continued to rise for most people who still have jobs.
The average hourly wage for rank-and-file workers, who make up about four-
fifths of the work force, actually accelerated in October, according to
the new report.

Even though some companies have cut the pay of workers, the average
hourly wage has still risen 1.5 to 2.5 percent over the last year,
depending on which government survey is examined. Average weekly pay has
risen less — zero to 1 percent — because hours have been cut. But average
prices have fallen. Altogether, the typical worker has received a 1 to 2
percent inflation-adjusted raise over the last year.

In the other two severe recessions in recent decades, workers with jobs
fared considerably worse. At the same point in the mid-1970s downturn,
real weekly pay had fallen 7 percent; in the early 1980s recession, it
had fallen 4 percent.

It is a strange combination: workers who still have a job are doing
better than in other deep recessions, but the unemployment and
underemployment have risen to their highest level since the Depression.

--
Slavery: The belief that people can be property
Corporatism: The belief that property can be people.