Real unemployment in the US is much higher than the official figures tell us, perhaps over 20%.
“Figures don’t lie but liars figure!”
When Donald Trump claimed during the 2016 election campaign that real unemployment in the US stood at 42% (click here), he was closer to reality than you may think. He was using a number called ‘The Civilian Labor Force Participation Rate (click here)‘: all those Americans 16 and over minus prisoners, military, mental health patients, etc.. This figure shows that only 62% of Americans have meaningful employment which is the lowest it has been since the 1970s. In all 102 million Americans are out of work. ( See note 1.)
Both Dems and Reps Hide the Real Figures
Trump’s hyperbola should have sent the press digging because, this time, Trump is right to call the figures ‘Fake News.’ Once adjusted, you should come to an unemployment rate of around 20%, much higher than the 3.6% touted by the Bureau of Labor which only counts those who are on unemployment benefits.
Even by their calculations, if you add those who are no longer eligible for unemployment, those who gave up looking for a job, and those working part-time but would like a full-time job, unemployment would stand at 7.6%, twice the “official” figure. (Click here)
The government added 608,000 people to its “not in the labor force” category in May 2018 or what the web site ‘538’ calls the “official” discouraged workers (click here). We get the 102 million jobless from adding the 95 million “not in the labor force” to the seven million unemployed. In 2009, a year after the crash, the figure stood at 93 million: 83 million “not in the labor force” plus 12 million unemployed. (click here)
In reality, the fact that 48% of working age Americans are not working is worse than the 1950s and 60s because, back then, a family could survive on one salary. Today both parents have to work to make ends meet. This explains why there are so many working people among the 44 million who live off of Food Stamps and why 23% of American households with one full time job are on Welfare. And lets not forget those who can’t ‘afford to work’, such as welfare mothers whose salaries could not cover child care?
Dems or Reps – Wages Just Go Down
A good indicator that unemployment is so high is that wages are standing still when they are not going down which means there is a large reserve army of labor out there for bosses to choose from (click here and here). In other words, they can keep wages down because so many people want work. Wages count for only 43% of GDP today, down from 52% in 1969 and worst it has been since 1929, according to economists like Paul Kraugman. And don’t forget what those at the top are earning when contemplating that figure.
No, Trump no longer uses this way of calculating now that he is President. It is amazing how much truth he actually spoke to get elected such as when he denounced his competition for being “bought off” by big money. And don’t expect the Democratic leadership to speak the truth either. They get their money from the same financiers, banks and industries as the Republicans.
The Debt Bomb
Another sign Americans are not doing well is debt. Household debt stands at $13.3 Trillion which is an all time high and will reach four Trillion by the end of 2018. This does not augur well as interest rates are set to rise and Americans are spending much more than they earn. Many economists predict they will default on their debt and send us into another crisis. Corporate debt is well over six Trillion dollars. The dominoes are teetering.
With a budget deficit set to reach a Trillion dollars in 2020 ($890 Billion in 2018) and a debt of 21 Trillion, (105% of GDP!) the US government is doing no better. The crazy idea, economists say, is lowering taxes and raising the deficit at the same time while claiming the economy is doing fine. As long as the world thinks the US is safe and continue to buy Treasury Bonds, we can slither by but how long will it take for people to understand we are fast becoming an economic Paper Tiger? Today, 35% of world transactions are in Euros which shows the currency catching up with the dollar at 39%.
Federal Reserve Chairwoman, Janet Yellen, told Congress in November, 2017, that they should be losing sleep over the debt. (click here)
And don’t think they are telling you the truth when they say the Defense budget is $720 Billion either, even though that in itself is outrageous. You need to add at least 500 Billion more in discretionary spending, which includes financing our wars, and other forms of military spending. (click here)
President Eisenhower warned us against the appetite of “The Military Industrial Complex” and its hold on politicians.
If the Democrats win the mid-terms, they may find themselves dealing with a major economic crisis before the 2020 elections. As with Obama in 2008, they would have to fix an economy broken by the Republicans. And of course, they will do so by bailing out their friends on Wall Street on the backs of Americans who can’t pay their bills.
Somehow, both parties have managed to convince Americans that Freedom means total insecurity, that migrants are the reason they suffer, and that tax cuts which benefit the super rich are in their interests.
Please leave a comment.
- PolitiFact ruled the 42% figure false. I agree but as you can see from the links I put in, they were using different measures. Here’s the link to PolitiFact (here). They eliminate from the count many I include but PolitiFact still end up with 16%-17% unemployment rate which is six times more than the official rate. The reality is, many, many more people are out of work than the figures admit to.
- I am not an economist, nor do I pretend to master the subject of unemployment, but I think these things need to be hammered on so that angry Americans understand that they are right to be angry. That is the starting point for any discussion with those people Clinton called “the deplorables” if we want to fight the rise of right wing extremism in the US.