[Marxism] The jobless issue

Jose G. Perez elgusanorojo at bellsouth.net
Sat Feb 21 17:17:00 MST 2004


Marvin Gandall sent us the following from the Economist:

>>There are signs of discontent with the current slow pace of job growth
– and the quality of the jobs being created – from industrial workers
and, increasingly, from white-collar employees faced with the
“outsourcing” of their jobs overseas. But official unemployment still
hovers at a relatively low 6%, and 140 million Americans continue to
work – “a near-record, both in absolute terms and as a proportion of the
population”, says the magazine.

>>The US historically creates many more jobs than it loses and the
Economist is expecting the economy to revert to form this year –
insisting with other conservative commentators that lagging job growth
is cyclical rather than structural, and that “outsourcing” is
overstated.<<

To talk about employment being “a near-record, both in absolute terms
and as a proportion of the population”, is simply dishonest. In
"absolute numbers" employment in the U.S. is ALWAYS at record levels,
month after month, UNLESS there is something seriously wrong with the
economy, because the working-age population is growing. Like, duh ...

And as a percentage of the population, that is something of a squishy
figure, because it depends on how accurate the denominator is. Many
experts believe there is actually *double*  the number of undocumented
immigrants that are included in the figures used to calculate these
numbers (roughly, 12-14 million instead of 6-8 million). Moreover, this
immigrant flow is disproportionately people of working age looking for
work compared to the population as a whole.

The figure of 366,000 jobs created since August (the recent bottom in
the payroll survey), is catastrophic. The labor force grows by about 2
million a year. That's why economists say that, normally, it takes job
growth averaging 200,000 a month to see an improvement in the
unemployment rate. 

In the eight years of the Clinton presidency, the total number of jobs
as measured by the payroll survey increased 22,663,000. That's an
*average* of 2.8 million/year, nearly 240,000 a month. 

Three years after Bush became president total employment is 2,352,000
*below* "record levels." If you add to that the 2 million jobs a year
the economy "normally" would be expected and needs to grow to stay even
with the growth in the labor force, you are looking at an employment
black hole of 8 million jobs.

There's been quite a bit of speculation among bourgeois economists that
there is something wrong with the payroll survey, because the monthly
survey of 50,000 households, on which the unemployment RATE is based,
presents a rosier picture. However, there are obvious sources of bias in
the household survey, which is the immigrant population, and especially
the undocumented immigrants. If that population has been increasing, or
if the high non-cooperation rate by the immigrant population with the
survey increases, then that means a systematic bias in the household
survey.

And in fact, both conditions hold true. By all accounts, both the
"legal" and "illegal" immigrant population has been growing by leaps and
bounds; the growing number of undocumented people and the increased
attacks on all immigrants by the government in the wake of Sep. 11 means
also that the non-response rate must be rising. 

Also, the *form* of the questions in the household survey may be
distorting results. Employment is becoming more volatile, there is an
increasing number of people who get work, but only sporadically. This
means the full-time-employment equivalent number of jobs may be going UP
at the same time that the number of people who report they had no
employment AT ALL in the last week or month goes down.

For both those reasons, and absent any plausible explanation of a bias
in the payroll survey of enterprises, the payroll numbers must be given
greater credence, and the employment picture they present is not "near
record" but unprecedentedly dismal. What is being bandied about in the
bourgeois press -- that there is growing self-employment-- is in reality
just another form in which unemployment disguises itself.

José





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