UNEMPLOYMENT NUMBERS SHOW ECONOMIC WEAKNESS
BY JULIANNE MALVEAUX
Forget the Dow Jones Industrial Average or the oscillating
NASDAQ. Never
mind the change in Senate power. From where I sit, the status of the economy
can be largely measured by unemployment rates and the way our nation’s
workers perceive their prospects. Some pundits will say that ticks up in the
Dow suggest confidence and market rebounds. Others will tell you that the
tech sector is on the mend. But when companies like Cisco are rescinding job
offers, and offering bonuses to those who decline to accept employment,
that’s a real signal that we need to pay attention to the softening economy.
The May unemployment rate numbers, released June 1, did not change
significantly. The unemployment rate, at 4.4 percent, was a little lower
than last month, but half a percentage point higher than its all-time low.
Certain sectors saw greater losses than others, with manufacturing’s losses
overshadowed by gains in the services, construction and finance sectors. But
much of the past nine year economic expansion has been a faction of rising
productivity, and a June 5 report suggested that productivity is now falling.
Workers are producing at least 2 percent less (it varies by sector) than
they were a year ago. Once, our economy was “overheating” because workers
were more efficient. Now, both because of output and hours worked,
productivity has been curtailed.
So much attention has been focused on the macro economy that the situation of
subgroups has been ignored. But teen workers, in particular, are losers from
the current economic softness. White teens are experiencing unemployment
rates of nearly 12 percent, while African American teens are experiencing
23.8 percent unemployment rates. These teens often depend on summer work to
both provide career directions and income-producing opportunities. This
summer, with college students being told not to report for work, teens can
expect fewer offers at lower pay.
Government has sometimes been the employer of last resort for the nation’s
teens. This summer, though, government employment may be unavailable. It
has been years since we worried about “long, hot, summers,” and saw
legislators scramble to provide opportunities to disadvantaged teens. The
absence of discontent, though, should not reflect an absence of need.
Despite the budget-balancing challenges they face, governments should be
especially sensitive to the ways our nation’s teens begin to integrate
themselves into the productive labor force.
The news, instead, has focused on ways that new economy workers worm
their way back into the old economy. Those who took high jumps off the cliff
of technology’s promised deep pockets need to find a way back to the more
secure jobs they once held. Often they are able to move back gracefully,
enhanced by their experiences in the dot com world. Still, it seems that
there is so much a focus on job losers that less attention is focused on
those who are new entrants to the labor market.
I am not as concerned about new entrants who are college graduates taking
a pass on a job as I am about those youngsters who are seeing their horizon
of opportunities shut down. Youngsters who do not plan to attend college,
who had hoped for entry-level technical jobs, are finding themselves
frustrated by the way the technology sector is responding to economic
signals. If this summer labor market does not provide entry-level
opportunities to these workers, what will become of them?
The soft labor market is an indicator of the economy’s weakness. Too
many people are insecure about their future prospects. Too many are looking
for work and can’t find it; too many are faced with the shifting realities of
market profitability and, placed on hold, don’t know how long they should
wait. And too many have buoyed economic expansion with the profligate
spending reflected in rising credit card debt. They hope to recover with new
jobs and better opportunities, but when the economy bites it bruises tens of
thousands of workers.
More than 135 million people are working, while just 6.2 million are
officially unemployed. In historical context, the 4.4 percent unemployment
rate is more success than failure. It is a rate lower than the rates we had
become accustomed to a decade ago, a rate reflective of the many changes in
the way that people have reordered their lives to accept employment
challenges. For many, the 6.2 million who can’t find work are the
“collateral damage” of a shifting economy. For some, though, the fact that
black unemployment is 8 percent, and Hispanic unemployment is 6.2 percent is
some cause for alarm.
A 4.4 percent unemployment rate represents improvement in a decade. But
the playing field among the employed is hardly level, and the persistence of
unemployment is a clear signal of our nation’s economic weakness.