Economic Crisis

Economic Crisis

Unemployment: There’s Still a Crisis

Unemployment in the United States continues to be tragically and unacceptably high. But the closely-watched and widely-cited monthly unemployment rate tells only part of the story; the number of people without jobs is actually much higher than indicated in that count. Meanwhile, Congress and many states are cutting back on unemployment benefits and budget plans are projected to bring on another recession.

In April, 12.7 million people were officially counted as unemployed, some 8.2% of the labor force. Of these, over 43% have been out of work for six months or longer. Over 8 million people are working part time while wanting full-time work.

But these figures do not even begin to tell the whole story. To be included in the official count of the unemployed, a person must be actively looking for work. But millions have stopped looking. The best assessment of joblessness is simply to compare the number of people actually working to the size of the population. Among people in their “prime” working years, ages 25-54, just 75.7% are employed and this figure has risen by only 1 percentage point since the trough of the recession. (See the chart from the Economic Policy Institute.) While the unemployment rate has fallen and the economy is, reportedly, improving, the share of the population with jobs has increased very little. Some of these folks who are not employed are enrolled in school, doing child- or elder- care at home, or dealing with health challenges. But many want to work and are unable to find jobs. The official unemployment rate has fallen, primarily, because people are no longer looking for work and, therefore, are not counted among the unemployed. Also see the story in the Washington Post.

Men have been especially hard hit by this recession and by the economic trends of the past 40 years, especially the decline in manufacturing. The share of men in the labor force is smaller now than at any time before the 2007 recession began, going back to 1948 when the government started tracking this figure. See the charts in the Washington Post.

While the share of the population that is working has barely risen since the economic recovery began some three years ago, Congress and some states are already cutting jobless benefits. A few years ago due to the extreme shortage of jobs, Congress extended the maximum time to receive unemployment insurance benefits to 99 weeks. But legislation passed in February included special provisions that are ending some people’s benefits well short of the 99 weeks. Already, unemployed people in 23 states have lost benefits and more are being affected each month. By the end of June, nearly half a million people will have been cut off prematurely this year. See the story in the New York Times. 

Congress must establish and fund programs to create jobs and support the unemployed. Instead, more job losses may be on the horizon. The nonpartisan and highly regarded Congressional Budget Office projects the United States will be in a recession, again, if Congress’ plans for the 2013 federal budget are not changed. To avoid a recession, some scheduled cuts in spending will have to be restored and some tax cuts, currently scheduled to end, must, instead, be extended. Tax cuts for lower- and middle-income households should be continued while tax cuts for higher-income and wealthy ones are ended. Congress should cut the military budget – where spending has risen by 50%, adjusted for inflation, over the last decade – but also spend money to create jobs, preserve the safety, and support core government functions that have already undergone repeated cuts in funding.

The recession must be avoided and jobs must be created. This is critically important for jobless workers and it is the best way to reduce the federal government deficit. Only when people are back to work will they also be back to paying the taxes necessary to reduce the deficit.

by Edith Rasell, JWM's Minister for Economic Justice, June 2012

Contact Info

Edith Rasell, Ph.D.
Minister for Economic Justice
700 Prospect Ave.
Cleveland, OH 44115