Posts Tagged ‘unemployment’

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Over the course of the next month, millions of high-school and college students will be graduating. And, to judge by the circumstances of other young workers these days, the world that awaits them is pretty dismal.

It’s not their fault. They may be gifted and full of energy but the economic stars are aligned against them. Capitalism is failing them.

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Consider high-school graduates. According to the Economic Policy Institute, the official unemployment rate is 17.9 percent (compared to an overall rate of 5 percent)—and the underemployment rate (which combines official unemployment with workers who would like a full-time job but can only find part-time work and those who are so discouraged they’ve given up even looking for work) is an extraordinary 33.7 percent.

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Even college graduates, whose official unemployment rate is much lower (at 5.6 percent), face a very high underemployment rate (of 12.6 percent). That’s 1 in 8. And that doesn’t even take into consideration college graduates who are forced to have the freedom to take  jobs that don’t even require a college degree (e.g., the young college graduate working as a data-entry clerk).

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And there’s the issue of wages if and when they find a job. The real hourly wages for high-school graduates—both young and overall—are no higher today (at $10.66 and $17.11, respectively) than they were at the beginning of 2000 (when they earned $10.86 and $17.01).

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Again, college graduates are better off than workers with a high-school degree. But their wages, too, have been stagnant for the past decade and a half. Young college graduates today can expect to earn, on average, about $18.53 an hour today compared to $18.39 in early 2000; while all workers with a bachelor’s degree receive $31.40 an hour today, which is only slightly higher than in 2000 (when it was $29.39).

The usual argument one hears is that young people should be encouraged to go to college, after which they’ll face lower unemployment and receive higher wages.

That’s fine. I’m all in favor of increasing the chances and lowering the barriers for young people to study in the nation’s colleges and universities. But for young people, no matter how much education they’ve managed to obtain, current economic arrangements are failing them.

The members of the Class of 2016, no matter how gifted, have every right to be worried about what’s next.

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More than 7 years into the current recovery and all the talk is about the number of jobs created, the falling unemployment rate, and the prospect that workers’ wages are set to finally increase on a sustained basis. Problem solved!

But what about the 1 in 6 American workers who were let go during the Great Recession, victims of the 40 million layoffs and other involuntary discharges during the official downturn that began in December 2007 and ended in June 2009? Not to mention the fact that nearly 14 million people are still searching for a job or stuck in part-time jobs because they can’t find full-time work.

As the Wall Street Journal reports,

Even for the millions of Americans back at work, the effects of losing a job will linger. . .They will earn less for years to come. They will be less likely to own a home. Many will struggle with psychological problems. Their children will perform worse in school and may earn less in their own jobs. . .

Only about one in four displaced workers gets back to pre-layoff earning levels after five years. . .A pay gap persists, even decades later, between workers who experienced a period of unemployment and similar workers who avoided a layoff. Estimates vary, but by one analysis, people who lost a job during recessions made 15% to 20% less than their nondisplaced peers after 10 to 20 years.

And that’s just the tip of the iceberg. Workers who lost their incomes or received lower incomes if and when they found a new job have found it difficult to save and make purchases (and, in many cases, had to dip into what savings they had), own a home, send their children to college, and pay for healthcare.

Losing a job, of course, has more than just financial consequences for workers and their families.

Unemployment often is an isolating experience. A layoff can strip people of their identity as workers in a chosen field and their workplace-based social network of co-workers and other contacts. Researchers have linked job loss to stress, depression and feelings of distrust, anxiety and shame.

Alarming trends that emerged after the end of the 1990s economic boom may have been amplified by the latest recession. The death rate for middle-aged whites has been rising as a result of suicides, substance abuse and liver diseases, all potentially products of economic distress, according to research by economists Anne Case and Angus Deaton.

Data spanning the recession years show a link between high unemployment and increased abuse of painkillers and hallucinogens. The U.S. suicide rate climbed 24% between 1999 and 2014, a rise that accelerated after 2006, according to the Centers for Disease Control and Prevention. One study of Pennsylvania men who lost long-held jobs during the early 1980s found a spike in mortality following a layoff, with middle-aged men set to lose a year to 18 months off their lifespans.

Researchers have found that the children of people who lose their jobs perform worse on school tests and are more likely to repeat a grade. A father’s layoff is linked with a substantially higher likelihood of anxiety and depression in his children. In one study, the sons of men who were displaced from their jobs earned salaries that were 9% lower compared with otherwise similar children whose fathers had stayed employed.

And the list goes on.

What no one in charge seems to want to talk about is the fact that the economic trauma of the Second Great Depression “has left financial and psychic scars on many Americans, and that those marks are likely to endure for decades”—thus scarring not just millions of individuals and their families, but all of American society.

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I haven’t been to Josh Kline’s new exhibition, “Unemployment,” and I probably won’t make it in time. But I’d certainly like to have had the opportunity to see his artistic representations of various dimensions of the current economic crises.

Here are excerpts from the press release (pdf) for the installation at 47 Canal gallery:

Fast forward ten or twenty years from our present–half a generation. Another American presidential election is scheduled for Fall 2031. Baggy skater pants are back in style in the suburbs. And increasingly intelligent software has turned out the lights on a hundred million jobs. Most of the middle class will never work again. Considered too old, too expensive, too obsolete, and too set in their ways for the faster-paced time in which they find themselves, the majority of people in middle age—born in the 1970s and ‘80s–have no future prospects for professional employment. Lawyer, accountant, banker, administrator, manager, secretary— these now expendable careers have been starved to near-death, following professions like taxi driver, truck driver, train conductor, and factory worker into automated oblivion. What is to be done with the hundreds of millions of people who will never “earn” another paycheck? What is to be done with you?

And what will you do? Will you prowl the streets scavenging pennies and nickels from discarded plastic and glass? Will you Airbnb your body out to strangers in order to make rent? Your mind has left the real economy, but your body still needs to eat food and spend its days somewhere. In a sharing economy, people subscribe instead of owning, so Suburbia’s growing homeless population can’t sleep in their cars anymore.

Income inequality scales exponentially. And unemployment escalates up the asymptote along with it. The money version of Moore’s Law. 21st Century economic crises come equipped standard with a jobless recovery and more effective, efficient automation. Every recession from here on out will close with an ever more brutally competitive round of musical chairs around a diminishing number of lower and lower-paid employment possibilities. If you’re left standing at the end without a job, it’s your own fault, right?

Surprise—this is your going away party! We bought you this personal-sized little cake in gratitude for your years/life of hard work and service. Your brain is no longer required here…

Sure, you’re 55, but you can retrain… And start over with an unpaid internship. It’ll be fine. XOXO KIT.

Capitalism doesn’t care about you. Economic systems don’t have feelings. In a society designed around planned obsolescence, the inevitable fate of goods and services and the people who provide them is to become waste. The same economic alchemy that transmutes a human being into a product—into “human capital”—also turns them into sentient garbage. The other side of consumption’s cheap coin is disposal. Desired, acquired, used, used up, discarded, forgotten—this is the lifecycle of expendable labor inside a runaway free market.

The first step towards a cure is diagnosing the disease. You are not your job. You are not your career. You are a human being.

Good for Manhola Dargis [ht: bn]. She certainly does a much job reviewing La Loi du Marché (bizarrely rendered into the English-language version as The Measure of a Man) than Jordan Hoffman.

I especially appreciated her conclusion:

It’s too bad that the movie’s blunt original title — “La Loi du Marché,” or “Market Law” — was traded in for something prettier and blander. “The Measure of a Man” suggests stirring possibilities (“Of all things the measure is man,” as the philosopher once put it), but it doesn’t convey the ordinary cold brutality of what it means to be defined by the unpaid and the radically underpaid hour. Mr. Brizé, who wrote the script with Olivier Gorce, doesn’t break ground here. Yet, with Mr. Lindon’s help and in several extraordinary scenes in the market’s back office — a white hell in which people are pushed to sell out one another — Mr. Brizé transforms one individual’s story into a social tragedy.

That final comment on the movie is actually a perfect characterization of capitalism: it turns individual stories (whether of an unemployed worker or capitalists who make rational decisions not to reinvest the surplus they appropriate) into social tragedies.

That unemployed worker not only loses the ability to sell their ability to labor, in order to receive a wage that allows them to purchase the commodities they need to survive; their situation also imperils their psychological and physical health as all as that of their family, not to mention the economic and social health of the community in which they live. All are placed on a shakier footing because one worker who loses their job is often accompanied by many others in a similar situation within capitalism—whether because enterprises reorganize, industries collapse, or entire economies enter into recessions and depressions.

The same is true of capitalists: they often make individually rational decisions not to invest (because, for example, future expected profits are low, since wages might be rising or other businesses are slowing down). But, when they do, the workers they let go and the contractors from whom they were making purchases now can’t make their own purchases from still others and so on, thus multiplying the effects of the original decision. That’s how individually rational decisions can become social disasters.

In both cases, under capitalism, one individual’s story is transformed into a social tragedy.

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The usual argument against substantially raising the minimum wage—to, say, $15 an hour—is that we don’t have any data to analyze the effects on unemployment of such a large increase. Better, critics argue, to settle for a much smaller increase, where the data indicate no substantial effects, one way or the other.

However, Teresa Tritch points out, U.S. history does offer a relevant example: 1950, when the minimum wage went from 40 cents an hour to 75 cents an hour, an increase of 87.5 percent.

The entire raise took effect on Jan. 25, 1950, just 90 days after the passage of the law that authorized it. Some 1.5 million workers saw their wages rise.

What happened then? Data sources from that era do not allow for the kinds of analyses that economists have used to evaluate the impact of more recent minimum wage increases. Moreover, in 1950, several industries were still exempt from having to pay the minimum wage, so direct comparisons between then and now are not feasible.

But this much is known: In December 1949, the month before the raise kicked in, the national unemployment rate was 6.6 percent. By December 1950, when the 75-cent minimum had been in place for nearly a year, it had fallen to 4.3 percent. By December 1951, it was 3.1 percent and by December 1952, it was 2.7 percent.

The higher minimum may not have caused the improvement, but it clearly was part and parcel of it.

There is no firm historical evidence to reject or support raising the minimum wage substantially. But what evidence there is indicates it is worth a try.

Note: the chart above shows percentage changes in the federal minimum wage (blue line) and the unemployment rate (red line). The fact that the red line is mostly in negative territory until the recession of 1953-1954 indicates that unemployment was decreasing.

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According to a new report from the Economic Policy Institute [ht: ja], in the final quarter of 2015, the lowest unemployment rate for African-Americans, 6.7 percent in Virginia, was equal to the highest white unemployment rate, 6.7 percent in West Virginia.

And while the jobless rate for blacks was highest in Illinois, at 13.1 percent, that state did not have the largest gap between the white and black unemployment rates. That distinction was held by the District of Columbia and Michigan, where the black unemployment rate was 5.4 and 3.4 times the white rate, respectively.

Nationally, African-Americans had the highest unemployment rate, at 8.3 percent, followed by Latinos (6.3 percent), whites (4.5 percent), and Asians (4.0 percent).

A new report from the UCLA Labor Center [ht: ja], “I am a #YOUNGWORKER,” challenges the prevailing cliché of “young people as self-indulgent millennials who live with their parents, idly wait for the perfect job, and collect paychecks mostly for shopping and weekend leisure.”

In reality, many employers rely on youth to supply “cheap, surplus, temporary and easy-to-discipline labor” that can be recruited or disposed of according to the whims of the business cycle. Adults often portray these early jobs as brief interludes or rites of passage to justify the precarious conditions of “youth” forms of work.

The study focuses on workers between the ages of 18 and 29 in retail and food service, the two largest employers of young people in Los Angeles. Together, they employ a quarter-million young workers—almost half (42.6%) their workforce.

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The authors of the report discovered that young workers are often employed in part-time jobs, they play an integral role in supporting their families, and one in ten live below the poverty line.

In addition, young workers struggle to balance work and school (“They need to work in order to afford school, and they need to attend school so they can get ahead at work”) and owe increasing amounts of educational debt (more than $19 thousand on average).

On the job, most (90 percent) do not have a set schedule, since they are forced to “depend on schedule assignments that are staggered weekly and build an intricate web of overlapping shifts that ensure that workers are constantly present on the store floor or stockrooms.” They are also vulnerable to various forms of wage threat (not getting paid for overtime or working off the clock), are often harassed by both bosses and customers, and do not receive the benefits (such as sick days, vacation, and health insurance) other workers have managed to secure.

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As if that were not bad enough, the youth unemployment rate (11.2 percent) is more than twice the official rate (5 percent).

In other words, young workers today are often living on a “dead end street.”