Corporate profits have more than doubled from the depths of the recession to $1.5 trillion today, according to the St. Louis Federal Reserve. Bureau of Labor Statistics data for November report unemployment at 8.6 percent, the lowest since the official end of the recession. It looks like a recovery on paper, but the official statistics hide the fact that the jobs situation has hardly improved for most Americans.
When someone stops searching for work entirely, they are counted by the Bureau of Labor statistics as having “left the labor force” but not as unemployed.
The November employment report said 120,000 jobs were created last month, but “300,000 people left the labor force in October,” said University of Maryland political economist Gar Alperovitz. “That’s what’s really been dropping the unemployment rate,” he said.
The bottom line is that the official rate does not adequately describe the true level of suffering. “If you take people who have stopped looking, or would like to work full time instead of part-time, you’re at 25 percent unemployment,” said Alperovitz. “Many economists say we’re going to be stuck with this for a decade, and the idea that it may be permanent is growing as well.”
Jobless Americans are also spending more time out of work than ever. In 2011, the average unemployed worker spent 41 weeks out of work, up from the 2007 average of 16.8 weeks.
“These long spells of unemployment reduce a worker’s chances of ever returning to the labor market,” according to Economic Policy Institute economist Heidi Shierholz. “People who otherwise would enter the labor force can’t because the jobs aren’t there,” and older workers who are laid off may never return to work, she said.
But Shierholz emphasizes that unemployment is not built into the postrecession economy.
“We know how to fix it,” she said. “There’s strong, strong evidence that there just isn’t enough demand. Substantial fiscal stimulus would translate into demand, and if done on a big enough scale, bring down unemployment. We can completely afford it. It comes down to politics, where I’m completely stymied.”
Robert Zieger, Distinguished Professor of History Emeritus at the University of Florida, noted that citizens have risen up in the past to demand political change in times of economic distress. “In 1932, thousands of unemployed World War I veterans marched on Washington,” said Zieger.
That “Bonus Army”, a group of over 40,000 marchers who camped out in D.C. and whose demands were eventually met by Congress, set a precedent for today’s occupiers. “They lived in tent villages not unlike those in the occupied parks,” said Zieger.
Full employment may not return naturally at the end of this recession without similar political action, according to Columbia University sociologist Herbert Gans. “Static wages, new technology, and outsourcing mean corporations can make more profit with fewer employees,” he said.
Alperovitz agreed. “We don’t have an economic problem, we have a power problem. We’re the richest country in the history of the world,” he said. “Unless you change the power relationships, it won’t be fixed.”