When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle. - Edmund Burke
By: sp34n119w, 4:09 AM GMT on October 21, 2008
Official unemployment rates are above 5% in the US and above 7% in California. As I understand it, official unemployment statistics are determined mainly by how many people are collecting unemployment benefits. So, if a person does not find a job and their unemployment benefits run out, they are no longer counted in the unemployment statistics. Of course, that person is still unemployed. Also, not everyone who lost a job is eligible for those benefits so they are not counted. That's why there are estimated unemployment statistics, as well as official statistics. Estimated unemployment is running about 4% higher than the official stats. If you've been around the block a few times you probably realize that that isn't accurate, either. There are always those who are “unemployable” and find other ways to contribute to society and, therefore, to survive. They are not counted even in the estimated stats because they have stopped trying to find a real job.
We need about 5% of the population to be unemployed for our economy to work properly. When it is higher than that tax revenues (income, sales, etc) go down, sales of goods and services go down (leading to lower prices but, ultimately, more unemployment), and need for government services (including unemployment benefits) go up. When it is lower than that employers have to compete with each other for employees using incentives like higher wages and better benefits and they pay for that by raising prices which may lead to loss of market share and could cause the business to fail.
I started thinking about this when I was a teenager and have tried to add to my understanding over the years. As a teen, for a couple of years, I lived in a town that seemed to have a lot of people hanging around doing nothing during the day, but, official stats for my town said that unemployment was at 6%. Where did all these people come from? My dad explained that they had been out of work for so long that they were no longer counted. Actual unemployment in that town at that time was around 70%. Yup, it was not pretty, and most people survived by trading service for food and lodging from family and friends. There was also a significant amount of illicit activity, of course, and none of it added to the city's revenue stream, increased the productivity of the overall economy, or provided for a decent life.
As the dotcom, health insurance, and financial services industries boomed, there was a significant shortage of able workers, remember? That's when Bill Gates and others started lobbying for an increase in the number of work visas issued to workers from other countries where there were a lot of trained people (but no jobs) to fill the spots opening up here. There was indeed an increase in issued visas and it worked well for all but the workers, themselves (but, that's another rant, lol). Eventually, though, it became cheaper and easier to outsource many of those jobs to the countries that had invested in educating their kids in these technologies, rather than deal with trying to keep up with rising healthcare costs in the US and the difficulties in finding qualified Americans to do the work. In the healthcare fields, they hired newly graduated engineers and accountants and the like to make the necessary financial decisions about their customers healthcare. That has worked really, really well for the health insurance industry – they are rolling in dough. In financial services they didn't have all those options so they just hired people with no background and trained them quickly to get lots of credit issued as fast as possible. We know how that's turned out. In any case, for a time there were a lot of people making decent money, and a few people making ridiculous money, so it was deemed good, but it did lead to some of the problems always associated with low unemployment.
Now we're back to high unemployment again and it will get worse. It has to, since there really is no way to increase employment without government funding, at this point, and the federal government and most state governments are broke and in deep debt. People wonder what the difference is between our current financial meltdown and the Great Depression. The difference is national debt. In the 30's the federal government was able to finance public works projects that not only kept people fed but also laid the groundwork for the amazing growth and prosperity of the 50's and 60's. Government programs built the interstate highway system, bridges, ports, passes, railroads, the power grid, and other infrastructure that made it possible for industry to expand over the next few decades (and to quickly ready the nation for WWII). Those public works programs also trained tens of thousands of farm boys (and girls) on modern equipment and methods, giving them the knowhow to continue working in the private sector as the economy and the population continued the shift from agriculture in rural areas to industry in cities.
Ah, life was good. Well, if you were a well-represented employee, it was good. If you were an industrialist, it wasn't as good as it had been for the previous generation who built their wealth on very cheap labor without having to deal with unions, the EPA, minimum wage laws, safety standards, or any other regulation. So, they lobbied to change the regulations and the tax laws to enable the rich to get richer while the poor got poorer. And, here we are, again.
The top 1% of the population owns 90% of the wealth, just as it was in 1928.
Folks are angry. You can see it and hear it at the political rallies and in newspapers and on blogs across the country. The citizens of this country have a right to be angry! Outraged, in fact. Over the last 30 years, real wages have decreased while productivity has gone through the roof. We are way behind in life expectancy, compared to other western nations; behind in education levels, behind in environmental safety, behind in infrastructure technology and maintenance. It's ridiculous. Of course we should be outraged! But, with whom are we angry? With the corporate elitists who are laughing all the way to their off-shore banks? With the politicians who ignored their constituents cries for NO BAILOUT and, instead, pandered to those same corporate interests?
No, of course not. Let's get mad at Republicans for deregulation. Let's get mad at Democrats for giving handouts to the poor. Let's get mad at Blacks or women for insisting on equal opportunity without prejudice or harassment. Let's get mad at old white men for excluding everyone else from the good life. Let's get mad at evangelicals for trying to turn our country into a theocracy. Let's get mad at rationalists for expecting the rule of law to be the guiding factor for governance.
Let's let the politicians use our fear and anger to turn us against each other. It feels good to have a place to put that anger, to have someone to blame and someone to vote for who will feed our need to accuse others, to feel superior to our neighbor who is in exactly the same pool of quicksand in which we find ourselves. It requires nothing of us but waving a flag and shouting slogans.
Here's a slogan: Divide and conquer!
The views of the author are his/her own and do not necessarily represent the position of The Weather Company or its parent, IBM.
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Updated: 3:45 PM PST on February 20, 2017