Another month, another sign that the job market remains unchangingly, distressingly stuck. The official unemployment rate according to just-released figures from the Bureau of Labor Statistics is at 9.1%, but that fails to capture the weakness of the overall employment picture. The headline number has been essentially unchanged since April – and indeed there has been almost no net job creation for the past year. Underneath that number, however, there is a more confusing – and troubling – picture.
Over the past year, it’s become ever more clear (or at least it should have become ever more clear) that the United States is ossifying into several different economies. One is the Apple economy of high-tech devices, ample discretionary income, and brave new-world giddiness of social media, interconnectedness and burgeoning global commerce. That economy is best captured by what was, until recently, a different jobs report, the “Steve Jobs” of Apple’s quarterly earnings (which will presumably become the Cook report from now on).
The government employment report, however, aka the official jobs report, exposes other realities. That report shows not just 14 million unemployed, but a permanent underclass of underemployed, underpaid, and marginally attached workers. Four million of those 14 have been out of work for more than six months. An additional 2.6 million are “marginally attached” to the labor force, meaning they have looked for work, but not as assiduously as the statisticians have deemed necessary and hence aren’t statistically part of the work force. If part-time and discouraged workers are added in, the “real” unemployment rate skyrockets to more than 16 percent.
These figures are “official” but that doesn’t make them gospel. They are the product of not just phone surveys and payroll information, but also of myriad revisions and assumptions about the creation and destruction of new business, seasonal factors, and past trends as they apply to present realities. Hence the reason why these numbers are constantly revised in future reports. On the plus side, the surveys do a poor job capturing the cash and underground economies that undoubtedly provide many with sustenance. On the negative side, they fail to account for the fact that many of the 131 million people who are by official definition “employed” have jobs that barely keep them at the poverty line.