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Underemployment Ravages U.S. Economy

April 5, 2008

In times of old, you could tell the tough times in the job market by the lines running outside the doors of employment offices and rooms full of people seeking employment. In later times, state employees were employed to to assist with your job search on a one to one basis. A certain measure of accountability existed. Job prospects were interviewed face-to-face. Today, desks of computers stand ready for online job searches. State employees peddle sage advice on how you find your best job. Computers have taken the human hiring equation out of the average job search as you have become a piece of paper or an electronic blip. Corporations that place ads can glibly look over choice resumes or ignore them all. You wait and press forward. Chances are that you won’t hear from them. Advice is free. The results are often the same as the price in the electronic age of the job search.

The meaning of gainful employment and employment levels seems to ebb and flow with time, depending on the point that economists and publicists want to make. While the unemployment rate is not accurate, it is still an effective relative measure of trends over a years’ period of time. The marketplace is much weaker than the labor market would suggest.

Underemployment as far as hourly wages are concerned has been rampant in this country for years. With increased unemployment, desperate job-seekers are taking part-time jobs in a effort to tow the line to some extent. There has also been a decline in the number of independent contractors. This is due in part to the invasive and punitive tax laws against independent contractors, but also due to the fact that independent contractors are less needed by the declining business climate. Anyone without a “rainy-day fund” and a tradition of wise spending is probably headed for immediate hurt in this economy.

The reality of the economy also bodes poorly for single dads as they lose their jobs and are unable to make child support payments. As the federal Bradley Law kicks in, millions of otherwise loving and caring parents will be subject to the unconstitutional tyranny of Clinton Administration enforcement measures without hope of relief as their debt that they cannot pay spirals out of control. Politicians haven’t been willing to bend on enforcement measures for military dads when disgruntled and amorous unfaithful mothers file for divorce. Politicians aren’t interested in helping the unemployed with unconstitutional Bradley Law either.

The bane of unemployment numbers, the discouraged worker continues to increase by leaps and bounds as the market shrinks and possibility of finding work decreases. Even temporary agencies like Adecco saw a slowing economy last year.

The mainstream media typically refers to underemployed workers as part-time job holders. However, this perception is far from the reality of life. Polls of part-time workers that desire full-time employment don’t tell half of the story. Wages are a larger factor in the overall equation than is readily admitted.

Often, the media discusses Americans being forced to take more than one job. This assumes of course, that such an action is possible. Coordinating hours as well as job availability take a toll on such pie-in-the-sky thinking.

Media outlets such as CNN have fielded labor topic interviews touting kissing up to the boss and blowing your own horn as rational approaches to the declining job market. Such an approach does nothing to shore up the economy or improve the reality of the job market. While networking can certainly be a job salvation, the kissing up venue borders on nothing less than pathetic and less than helpful to real Americans as they struggle to keep a roof over their head. The television airtime isn’t worth much, but does present the appearance of concern on the part of the media.

The chief economist for Standard & Poor believes that the job market reality is “a sign that we’re in a recession”. In the last year, economists generally recognize that 100,000 jobs have been lost. These figures are accompanied by a steady decrease in the temporary workforce during the same period of time.

The cold reality is that underemployed persons never show up as unemployed. The number of people that are no longer looking for work rose by 500,000 in the last six months. When you add the totals of unemployed in the market to the disenfranchised, an alarming picture becomes apparent.

The commissioner of the Bureau of Labor Statistics stated before Congress last month that his broader definition of unemployment was at 8.9%, up from 8.1% a year ago. The problem of underemployment has obviously been underestimated for some time.

To make matters worse, private contractors are not included in published federal job numbers. Contractors are often cut first since doing so is easy and painless to the corporate environment. The government household survey numbers show that employment numbers are underestimated by 150% or a ratio of 44 to 654. In other words, for every 44 persons unemployed, the real figure is closer to 654 unemployed. To recap, official totals indicate figures are underestimated by 150%. This is not an imaginary figure, but derived from real labor statistics not fully presented in open terms.

Formerly robust users of contract workers in 2006 almost completely discontinued use of the temporary workforce by the end of 2007. Job offshoring has also played a role in declining job numbers, including those of U.S. contract workers.

The United States financial sector has been cutting jobs at record levels. The pace is expected to accelerate as economic weakness continues combined with the tightness of banking revenues within the system. The system shed 153,000 jobs last year and is expected to lose another 200,000 of 2 million remaining jobs as the national election closes out.

Last month, employers reportedly slashed 80,000 across job sectors after two months of prior losses totaling 152,000. The published, although inaccurate, rate of unemployment is now 5.1 percent.

The greed and avarice of the banking and finance community has firmly sealed the effects of the housing collapse and the resulting credit-financial turmoil. Despite the sustained evidence of a recession in progress, Ben Bernanke, the Federal Reserve Chairman claimed that policy makers were fighting the wind in combating a recession as a future condition.

Mr. Bernanke continues to have high hopes that the $168 billion stimulus tax rebates will cause the economy to improve in combination with the Fed’s landmark financing of the banking system. The politicians thought ill of extended unemployment benefits for a stimulus. They may need to reconsider. In the meantime, Bernanke continues to project low inflation rates for the economy during the remainder of the year even as prices rise steadily and the dollar loses value. ~ E. Manning

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5 Comments leave one →
  1. James S. Klich II permalink
    August 23, 2008 4:10 pm

    It is very hard to find any type of employment in 2008. I have been out of work for 2 years and have trouble finding anything. You just have to keep looking for work and stay positive about the future.

  2. April 19, 2008 3:26 pm

    actually most economists would consider the current state at or very nearly at full employment. we have just been past full employment for quite some time.

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