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Jobless Rate Drops, But Pain, Despair Persist in Weak Economy

December 5th, 2011 | David Moberg

David MobergThe headline news on Friday that the unemployment rate in November dropped 0.4 percent to 8.6 percent may help President Obama avoid losing his job next year. But the reality behind the figures will not—and that reality includes a big dose of stress, anger, despair and insecurity even beyond the ranks of the unemployed, according to two new reports.

The number of jobs in the country grew by 120,000 in November, slightly below the rate of the past year (though it could be revised upwards as the Labor Department just did for the previous two months). That’s barely enough to cover the growth of the labor force, and it reflects the loss of 20,000 public sector jobs–a continuing erosion of anemic private sector growth as a result of budget-cutting.

The bad news behind the lower unemployment rate is simply that the labor forcce last month shrank by 315,000 workers, who presumably have given up searching for a job. Although the Great Recession has been particularly rough for men, women–unmarried and disproportionately African-American–more than accounted for November’s labor force decline.

Other trends reinforce the bad news:

* long-term unemployment as a share of joblessness rose, approaching record levels, and the average duration of unemployment reached a record 40.5 weeks;
* underemployment remains fairly steady and high;
* wages are declining for those who have jobs;
* although health care continues to add jobs, most of the new jobs are low-wage, insecure openings in retail and services.

Since the 1980s each recovery from a recession has been slower and more “jobless” than its predecessor. This much deeper recession is no exception; at the current growth rate, economist Dean Baker projects it will take 16 years to return to the less-than-fabulous pre-recession state of the job market.

But the hardships of the recession extend beyond the ranks of the jobless.

Wider Opportunities for Women, just released a report, Living Below the Line: Economic Insecurity and America’s Families. The “line” defines an “economic security” budget level for different households that is higher than the official poverty line but far short of what most Americans might describe as a middle-class standard. (For example, the budget assumes a family of four rents an apartment for $821 a month and has no immediate prospects for buying a house.)

WOW’s study finds that 45 percent of U.S. residents live in a household that lacks economic security. Women, especially single mothers, and then particularly African-Americans and Hispanics, are  most likely to live in economic insecurity. But the study concludes that although it does not directly address the condition of the middle class, there are “fundamental financial weaknesses in the ‘middle’ and problems with the very conception of a middle. That nearly 40 percent of the nation’s adults and 45 percent of adults are their children lack basic economic security incomes suggests that the nation’s economic middle is not very broad and may not, in fact, exist.”

Losing a job is extreme economic insecurity, especially when Republicans are playing “protect the rich” games. In response to the Democratic proposal to finance programs that extend the duration of unemployment compensation through a surtax on millionaires, for example, Republicans reportedly advocate instead funding it by continuing to freeze federal workers’ pay and eliminating many of their jobs.

USAction, a national coalition of citzen groups, captures some of the suffering of the unemployed in a new report based on stories from nearly 1,200 of its laid-off members, “Hardly Working; Stories From Un- and Under-Employed Americans.”
They found three broad themes: frustration at discrimination in hiring (with discrimination on age and against the unemployed standing out, in addition to the usual discriminations; emotional and financial distress; and despair about their futures and the future of the country.

For example, 59-year old Wayne Persons of Mount Laurel, New Jersey, had a successful career as a sales manager until his company went out of business two years ago. “Between the fact that we were in a bad economy with too many people out of work with not enough jobs to go around, combined with my age, combined with the fact that I was unemployed, it became almost impossible for me to get a job interview, let alone get a job,” he said at a teleconference on release of the report, “and I was looking very hard for over two years.”

“I just don’t understand what happened to this country,” says Molly Wasserman, who lost her successful job track when she moved from New York to Ohio to care for her mother, who was ill with cancer. “I don’t recognize my place in it any more. More and more of us are marginalized, ignored or happily forgotten because we’re not working….What exactly is a person supposed to do who is not being hired? Are we just supposed to die? Are we supposed to commit suicide? Are we supposed to die, homeless in the streets?”

Steve Hanken, 61, of Cedar Rapids, Iowa, told In These Times his career has felt like “a steady roll downhill.” Now he has a temporary, part-time job at the local office of the state Department of Human Services where he watches a shrinking staff deal with increased demands as the recession’s toll accumulates. A college drop-out, he moved from one skilled machinst job to another as employers downsized, then switched to an unpredictable career executing archaeological digs, often supervising large crews and doing lab work.

Hanken, a former Democratic party central committee member, now feels like a man without a party—until a third party emerges. “Obama promised to do a lot and did nothing,” he laments. “The other side says they want to do nothing and they will. They’ll protect the wealthy and the rest of us can go to hell.”

“I don’t know where democracy went to in this country,” says Hanken, who wants to see banks more regulated, more bankers and CEOs in jail, and more of the nation’s wealth shared with those who need it and will spend it. “I used to think people in government were looking out for me,” he says. “Now it seems they’re looking out for themselves and their friends. I’m baffled. I don’t know what to do. I think  it’s a matter of time before we little people are all under the bridge.”

This blog originally appeared in Working in These Times on December 2, 2011. Reprinted with permission.

About the Author: David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at [email protected]

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