Posts Tagged ‘unemployment’

St. Louis


According to David Nicklaus,

St. Louis is not only one of the most segregated large metro areas in the U.S., it also has an unusually large economic gap between black and white. The unemployment rate for African-Americans here is about three times as high as the rate for whites.

According to census figures from 2012, 47 percent of the metro area’s African-American men between ages 16 and 24 are unemployed. The comparable figure for young white men is 16 percent.

Those figures should be just as shocking as the images of armed police confronting unarmed demonstrators, yet we take them for granted.

In Ferguson city itself (according to the Census Bureau’s American Community Survey), the overall unemployment rate is 13.2 percent: 8.4 percent for whites, almost twice that (16 percent) for African Americans.


Neil Irwin, Claire Cain Miller, and Margot Sanger-Katz have assembled a series of charts documenting America’s enduring—and, in many cases, growing—racial divide. I have reproduced some of them below.

One of the key pieces of information they don’t include has to do with incarceration rates. As you can see from the chart above (from the Pew Research Center [pdf]), African American men were 5 times more likely to be incarcerated in 1960 than white men (relative to the size of each demographic group)—a rate that grew to over 16.5 in 2010.

Here are the other charts:



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According to the United States Department of Agriculture, even as the unemployment rate continued to fall, fully 14.5 percent of U.S. households (17.6 million, or 49 million people) suffered from food insecurity at some time during 2012, a figure that was essentially unchanged from 14.9 percent in 2011.The prevalence of food insecurity declined from 11.9 percent of households in 2004 to 11.0 percent in 2005 and remained near that level until 2007. In 2008, the prevalence of food insecurity increased to 14.6 percent of households and was essentially unchanged at that level through 2012 (14.5 percent).

According to a new report from Feeding America [pdf], which provides food for 15.5 million households (or 46.5 million people) nationwide,

  • More than 12 million households are forced to eat unhealthy food because they can’t afford better-quality groceries. They risk adverse health effects that can make their financial plight worse.
  • 66 percent of households said they’ve had to choose between paying for food and paying for medicine or medical care. Thirty-one percent said they had to make that choice every month.
  • 69 percent of households that rely on food charities to survive have been forced to choose between paying for utilities and paying for food.

Put in terms any mainstream economist would understand: the supply of food-insecure households in the United States creates a high level of demand for federal programs like the federal Supplemental Nutrition Assistance Program and for the 58,000 food programs associated with Feeding America.

And still it’s not enough.

Ben Jennings 14.08.14

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The top-of-the-page articles today (e.g., in the New York Times) are all about strong job growth, lower unemployment, and higher wages.

All true. But, as Neil Irwin cautions, we should hold the fireworks. His view is not there is a “soft underbelly,” but that “this halting, sluggish recovery has taught us anything, it is to not let our assessments of the economy be driven by hope, but rather by sustained and credible improvement in a wide range of economic data.”

My view is that—notwithstanding recent job growth, falling unemployment, and higher wages—there is still an enormous gap (as reflected in the chart above) between the wealth workers are producing and what they’re receiving in compensation.

That’s why the stock market continues to soar (this morning, the Dow broke 17,000 for the first time ever), benefiting a tiny minority at the top, while the 99 percent continue to fall further and further beyond.



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With 217,000 new jobs created in May, the U.S. economy is finally—finally, after 50 months!—back to the pre-recession employment level.

Except it isn’t. Not by a long shot. Not when we consider the “jobs gap”—which we can calculate in one of two ways: by the amount of time it will take at this rate to get back to pre-recession employment levels while also absorbing the people who enter the labor force each month (4 years) or by the difference between payroll employment and the number of jobs needed to keep up with the growth in the potential labor force (6.9 million jobs).



And that’s not even considering the kinds of jobs that have been created or the pay for those jobs or the percentage of the unemployed who have been without a job for 27 weeks or more.

Or, for that matter, the fact that all those how have been lucky enough to keep their jobs or to get a new job are forced to have the freedom to work for a small number of employers who are able to capture and do what they will with the profits their workers create.


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Right now, almost five years into the U.S. economic “recovery,” there are about 9.7 million workers who are officially (U3) unemployed, 3.5 million of whom have been without a job for 27 weeks or more (according to the Bureau of Labor Statistics).

For most Americans, the plight of the millions of their fellow citizens who have lost their jobs and have had a great deal of difficulty finding another one is a pressing political problem and social disaster—an indictment of current economic arrangements, which simply haven’t been able to provide an adequate number of jobs for those who are willing and able to work. There’s simply not much to debate: current economic institutions and policies have failed to generate the appropriate level of employment or path to employment, especially for the millions of workers who have been rendered superfluous and remain so after months and sometimes years of looking for another job.

But for mainstream economists and policymakers there is a debate to be had: are the long-term unemployed actually part of the labor force, and do they serve to dampen increases in wages and therefore to slow inflation? For Alan Krueger, Judd Cramer, and David Cho, the long-term unemployed are on the margins of the labor market, with diminished job prospects and high labor-force withdrawal rates, and as a result they exert little pressure on wage growth or inflation. Therefore, it is the short-term unemployment rate that is a much stronger predictor of inflation and real-wage growth than the overall unemployment rate in the United States. William C. Dudley, however, sees things differently: the long-term are “simply unlucky,” having been rendered jobless during a particularly difficult time. But, as the short-term unemployed pool becomes depleted, the long-term unemployed will become more relevant to the labor market supply. So, their impact on wages and the labor market will likely increase as the labor market tightens.

As it turns out, what is interesting is not the different conclusions of the participants in this debate but, instead, the shared terms of the debate. First, both sides of the debate presume that the line of causality runs from wages to inflation. Neither side is willing to admit that the profit rate, the return on capital, plays any role in determining the level of prices. It’s as if the only cost of production is the price of labor, and the price of capital is entirely irrelevant. Therefore, if and when wages rise, they expect the overall level of prices to go up. In other words, the presumption is that capital will get its “normal” rate of return, which can only be safeguarded from wage increases by raising the price of output.

But the second shared term of debate is perhaps even more interesting: both sides presume that the number of unemployed workers determines the wage rate. This runs counter to the usual neoclassical model according to which it’s the level of wages that determines the amount of unemployment. The shared presumption of both Krueger et al. and Dudley is that causality runs in the opposite direction: from unemployment to wages. For them, the size of the relative surplus population or reserve army of labor determines the ability of workers to command higher wages. The only remaining point of debate, then, is whether the long-term unemployed will remain unemployed (and therefore exert no influence on the wages of employed workers) or if they will return from the margins, overcome their “unlucky” status, and become part of the active labor force.

What is missing, of course, is an analysis of where the reserve army of labor itself comes from. But, for that, we need to move beyond the discussion of the relationship among unemployment, inflation, and job openings (and therefore of Phillips and Beveridge curves) and conduct an investigation of how the accumulation of capital operates on both sides of the labor market. We would then understand, as that trenchant critic of political economy did almost 150 years ago, that the entire reserve army of labor—including both short-term and long-term unemployed workers—”belongs to capital quite as absolutely as if the latter had bred it at its own cost.”