Daily Kos: State of the Nation

Daily Kos: State of the Nation | Official Unemployment Hits 9.5%

by Meteor Blades | Thu Jul 02, 2009 at 06:32:39 AM PDT

Unemployment rose to 9.5% in June, a 26-year high, according to the U.S. Bureau of Labor Statistics. A total of 14.7 million Americans are now officially out of work, and payroll employment has fallen by 6.5 million since the downturn began in December 2007, 19 months ago. The BLS also reported this morning that yet another 467,000 non-farm payroll jobs were lost in June. That was more than 100,000 above what a consensus of economists had estimated. Job losses in May were revised to 322,000 from an earlier estimate of 345,000.

The official count – known as U3 and dutifully reported by most of the media – fails to show the true extent of the wreckage. Left out of most reporting is U6, the BLS calculation that includes involuntarily underemployed people. That is, those who want a full-time job, but can only find part-time work. Also missing from U3 are discouraged jobless people who haven’t looked for work during the past four weeks. The U6 figure rose in June to 16.5%.

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Companies are finding other ways to save on the aggregate labour cost bill as well, which may be a factor reinforcing the uptrend in the personal savings rate... . For example, a rapidly growing number of employers are now suspending contributions to worker 401(k) plans. According to a joint survey by CFO Research Services and Charles Schwab, nearly 25% of U.S. companies have either suspended their plans or are planning to do so (this is up from 2% at the turn of the year). Again, how we end up squeezing inflation out of the system when the labour market is clearly deflating wages and benefits for the 70% of the economy called the consumer is going to be interesting to watch. ...

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The pair of scary charts below compare the past 40 years. The first shows a huge rise in the current recession over past years of workers who have permanently lost their jobs instead of being temporarily laid off. The second shows that for every job opening there are now nearly six people queued for it.

Digging ourselves out of the hole that 30 years of transferring wealth upward through egregious tax policies, off-shoring jobs, continuing out-of-whack defense spending, and failing to invest adequately in infrastructure and innovation is going to take better tools than we now have available to us. Will the White House and Congress provide them?