There is a
great tendency in this country to refuse to see what is right in front of
everybody’s eyes.
While
there is now, finally, a great deal of talk among the politicians and in the
news media about unemployment, there is still almost a willful refusal to
focus on just who is suffering the most from joblessness and underemployment.
When it
comes to employment, there are roughly three broad categories in the United
States. The folks in the upper-income group are not suffering much, if at all,
from the profound reversals in employment brought about by the Great Recession.
Those in the middle have been hit hard. The job losses there have been severe
and long-lasting. But for those in the lower-income groups, the scale of the
employment crisis has been mind-boggling.
What you’re
not hearing from the politicians and the talking heads is that the joblessness
and underemployment in America’s low-income households rival their heights
in the Great Depression of the 1930s — and in some instances are worse. The
same holds true for some categories of blue-collar workers. Anyone who thinks
this devastating problem is going away soon, or that the economy can be put
back on track without addressing it, is deluded.
There has
been talk about income inequality over the past several years, but what is
happening now is catastrophic. The Center for Labor Market Studies at
Northeastern University in Boston divided American households into 10 groups
based on annual household income. Then it analyzed labor conditions in each of
the groups during the fourth quarter of 2009.
The
highest group, with household incomes of $150,000 or more, had an unemployment
rate during that quarter of 3.2 percent. The next highest, with incomes of
$100,000 to 149,999, had an unemployment rate of 4 percent.
Contrast
those figures with the unemployment rate of the lowest group, which had annual
household incomes of $12,499 or less. The unemployment rate of that group
during the fourth quarter of last year was a staggering 30.8 percent. That’s
more than five points higher than the overall jobless rate at the height of
the Depression.
The next
lowest group, with incomes of $12,500 to $20,000, had an unemployment rate of
19.1 percent.
These are
the kinds of jobless rates that push families already struggling on meager
incomes into destitution. And such gruesome gaps in the condition of groups at
the top and bottom of the economic ladder are unmistakable signs of impending
societal instability. This is dangerous stuff. Nothing good can come of vast
armies of the unemployed just sitting out there, simmering.
When the
data about underemployment is factored in — meaning individuals who are
working part time but would like to work full time, and those who have stopped
looking but would take a job if one were available — the picture only
worsens. In the lowest group, the underemployment rate was 20.6 percent,
compared with just 1.6 percent in the highest group.
The people
suffering the most drastic employment reversals in this recession have been
those who were in the lower-income groups to begin with — the young, less
well-educated workers, especially black and Hispanic high school dropouts, and
certain categories of service workers, such as food preparers and building
cleaners. Blue-collar workers were also hammered, especially those in the
construction industry.
This is
not to say that the middle class has not been hurt badly by the recession. It
has been. In last year’s fourth quarter, the group with household incomes of
$40,000 to $49,000 had a jobless rate of 9 percent, close to the disastrous
national average. The $50,000 to $59,000 group had a 7.8 percent jobless rate,
and households earning $60,000 to $75,000 had a jobless rate of 6.4 percent.
The point
here is that those in the lower-income groups are in a much, much deeper hole
than the general commentary on the recession would lead people to believe. And
none of the policy prescriptions being offered by the administration or the
leaders of either party in Congress would in any way substantially alleviate
the plight of those groups.
We talk
about the recession as if all of its victims were suffering equally, and all
will be helped by some bland, class-and-category-neutral solution.
That is so
wrong. As the Center for Labor Market Studies explained in its report: “A
true labor market depression faced those in the bottom two deciles of the
income distribution; a deep labor market recession prevailed among those in
the middle of the distribution, and close to a full employment environment
prevailed at the top.”
Those who
believe this grievous economic situation will right itself of its own accord
or can be corrected without bold, targeted (and, yes, expensive) government
action are still reading from the Ronald Reagan (someday it will trickle down)
hymnal.