Opinion

Nicholas Wapshott

The real scandal is jobs

By Nicholas Wapshott
June 10, 2013

Job seekers stand in line to meet with prospective employers at a career fair in New York City, Oct. 24, 2012. REUTERS/Mike Segar

The number of American jobless remains dire.

The latest figures, released Friday, show employment increased by 175,000 in May — but the jobless rate nudged up from 7.5 percent to 7.6 percent. A typical response was the Financial Times, which slipped apparently unwitting ideological commentary into its otherwise bland report, saying the new jobs figure was “a number that will encourage the Fed to start slowing its $85 billion-a-month asset purchases.”

For some, every new indicator is a prompt to bring on more austerity.

A more appropriate response to these new figures is to say that 4.4 million long-term jobless, the 7.9 million with part-time work but looking for a full-time job, the 2.2 million who have taken themselves off the jobless rolls because they cannot find work, and 780,000 who have abandoned looking for work because they believe there is no job for them, is 15.3 million jobless too many.

At the height of the Great Depression in the early 1930s, 11.4 million Americans were out of work and the human misery that figure represented was universally thought intolerably high. In today’s Great Recession, at least as many Americans are now unemployed as during the slump at its deepest in 1933, when the jobless rate was 25 percent of the population — yet that miserable statistic no longer moves anyone to do anything about it.

For those who take solace in the belief that jobs are slowly but surely returning, there has been little improvement in overall employment in the last three years. The “payroll to population” rate, which records the true percentage of those working for more than 30 hours per week for an employer, remains steady at a stubborn 44 percent.

Where is the sympathy for such vast numbers of forgotten men and women? Where is the indignation? Where is today’s John Steinbeck, to dramatize their plight, where today’s Dorothea Lange, to photograph the misery, where today’s John Ford, to translate this horrific drama onto the screen? Do we need the return of soup kitchens and bread lines before anyone takes notice?

Instead the true nature of a jobless recovery is disguised behind a curtain of indifference. Like a contagious disease, it is spoken about in hushed tones and the victims are to be pitied, not helped.

The personal and social implications of so many millions without jobs are evident, though such is the preoccupation with paying down the national debt and cutting taxes that few economists or politicians ever mention them anymore. Unemployed young adults moving back into their parents’ homes is the subject of droll New Yorker cartoons but not a hot topic on Capitol Hill.

The prognostication for those without work for so long is dismal. Joblessness is self-perpetuating. A number of academic studies show that Americans who cannot find a job at the start of their career go on to become jobless more often and earn less money in later life than those who get a job out of the gate.

Our indifference today means we are breeding a nation of jobless for tomorrow.

And joblessness kills. A new survey suggests that being without a job is more likely to cut short a poorly educated woman’s life than anything except heavy smoking. It seems the wages of unemployment is death.

Unemployment is the real scandal that should be gripping the nation. Yet we are unmoved in the face of such widespread misery hiding in plain sight. We have become numbed down.

The loss of jobs caused by the Great Depression changed politics for the next 50 years. Throughout the Western world, the cry of “never again” from voters, particularly those returning from fighting for freedom in World War Two, ensured that establishing full employment became the norm for elected officials.

In President Franklin D. Roosevelt’s 1944 State of the Nation address, he proposed “a second Bill of Rights” to guarantee “the right to adequate protection from the economic fears of old age, sickness, accident and unemployment.” The next year a Full Employment Bill was introduced that enshrined in law the panoply of economic interventionist bodies, such as the Council of Economic Advisers, that continue today.

Full employment remained a key election pledge for both parties until President Ronald Reagan — when chronic high inflation was purged by deliberately creating unemployment. Since then the notion of full employment has become an ideological battleground between those who think an administration should act to ensure everyone has a job and those who, when they believe in government at all, think its main function is to stay out of the marketplace in jobs or anything else.

The history of economic thought since the financial crash of 2008 has taken many turns. First came the return of Keynesianism followed swiftly by borrowers’ remorse and clamor to pay down the national debt without delay. Then came praise for the virtues of austerity, until the eurozone and Britain showed that an anorexic economy does not get fat  on a starvation diet.

Since the demise of austerity, which America mostly escaped, there has emerged a strange truce. Since the fiscal cliff negotiations and the subsequent sequester, it suits neither side to come to the bargaining table.

The tax increases and the cuts in public spending are slowly trimming the deficit, depriving Republicans of their argument for urgent debt repayment. Yet, as they hold the House of Representatives, they can deprive the administration of its long forgotten jobs initiative.

So we are left with a jobless recovery, an economy that limps along to stay ahead of the depressive effects of the haphazard sequester cuts, and an impotent president, stymied by the House. Over the last year, private industry has created about 185,000 jobs a month; the public sector is currently trashing them at a rate of about 15,000 a month.

An increase in jobs of an average 172,000 per month over the last year is no way to find work for the 15.3 million who appear resigned to suffer their enforced poverty in silence. At this rate America will not return to full employment until 2021.

The real meaning of the truism “It’s the economy, stupid” is “It’s jobs, stupid.” No president can be elected if there is little prospect of them providing an economy that makes jobs for everyone. The common wisdom was that if unemployment was more than 8 percent, the president would not be re-elected. Yet it was President Barack Obama who campaigned on jobs and his opponent who largely dodged the flailing economy as a winning issue.

Last November, voters gave Obama a break. The economy was still in dire trouble, but at the polls Americans seem to have concluded that he was not

The president has a plan to create jobs, though you may be excused for not having heard much about it. Last month he was on the stump to explain again what he has in mind. His plan entails more federal spending, which is why Republicans in Congress have no time for it and it will get nowhere.

The president seems under the illusion that so long as he assures voters he knows how to make jobs — but is being prevented by his opponents from putting people back to work — he will automatically be granted a majority in the House in 2014.

The president, however, may again be too cool for his own good. What is needed to bring the national scandal of joblessness into the headlines is some passion, some outrage, some anger. If he were to break into a sweat over jobs, he may find a welcome change in the atmosphere. Roosevelt’s political heirs have been gathering like-minded thinkers together and discovered a ready audience prepared to work across party lines to make more jobs.

It used to be smart to make fun of unemployment. Launching his campaign for the presidency in 1980, Reagan quipped: “A recession is when a neighbor loses his job. A depression is when you lose yours. And recovery is when Jimmy Carter loses his.” That cynical mood may be changing.

The comedian Will Rogers offered a line better suited to today: “Everything is funny, as long as it’s happening to someone else.”

Nicholas Wapshott is the author of Keynes Hayek: The Clash That Defined Modern Economics. Read extracts here.

 

PHOTO (Insert B): Breadline at McCauley Water Street Mission under Brooklyn Bridge, New York in this undated photo.  REUTERS/Library of Congress/Handout

PHOTO (Insert A): Job seekers wait to speak to a representative for the 300 available positions at a new Target store in San Francisco, California, Aug. 9, 2012.  REUTERS/Robert Galbraith

 PHOTO:Family of Farm Security Administration client farmer sharecropper on porch of old home, Southeast Missouri Farms.  REUTERS/Library of Congress/Handout



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comments
One comment so far | RSS Comments RSS

A job is not a loaf of bread – you can’t hand make-work to anyone and have it be any more than another form of welfare. A true private sector job is created when someone can profit from my work by much more than the wages and benefits I’m paid. So my responsibility is to find a way to add enough value to an employer, through education, skills, and experience or a combination of all three. Or, I can employ myself to profit from my skills. All the plaintive hand-wringing by Mr. Wapshott won’t change these requirements nor get anyone truly employed.

Posted by markrm | Report as abusive
 

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