Mort Zuckerman: "America Remains In A Jobs Depression"

Tyler Durden's picture

Authored by Mort Zuckerman, originally posted in The Wall Street Journal,

Jobs! President Obama has set a record. In his speech to Congress on Tuesday, he uttered the word "jobs" more than in any of his previous four State of the Union addresses. His 45 mentions were more than double the references to any of the other policy ambitions encapsulated in his speech by such words as health, education, immigration, guns, deficit, debt, energy, climate, economy, Afghanistan, wage, spend or tax (the runner-up).

If only the president's record on unemployment were as good.

After four years America remains in a jobs depression as great as the Great Depression. But the crisis isn't seen in that light because the country isn't confronted daily by scenes of despair like the 1930s photographs of bread lines and soup kitchens and thousands of men (very few women then) waiting all day outside a factory in a forlorn quest for work.

But the jobless are still in the millions across the land, little changed in their total since the 1930s: 12.3 million today officially fully unemployed compared with 12.8 million in 1933 at the depth of the Depression.

Yes, the U.S. population is much larger now, but 12 million out of work still means 12 million lives devastated. And that number masks the true vastness of the modern disaster.

The jobless today are much less visible than they were in the 1930s because relief is organized differently. Today in the "recovery," the millions are being assisted, out of sight, by government checks, unemployment checks, Social Security disability checks and food stamps.

More than 48 million Americans are in the food-stamp program—an almost incredible record. That is 15% of the total population compared with the 7.9% participation in food stamps from 1970-2000. Then there are the more than 11 million Americans who are collecting Social Security checks to compensate for disability, also a record. Half have signed on since President Obama came to office. In 1992, there was one person on disability for every 35 workers; today it is one for every 16.

Such an increase is simply impossible to connect to direct disability experienced during employment, for it is inconceivable that work in America has become so dangerous. For many, this disability program has become another form of unemployment compensation, only this time without end.

But the predicament of our times is worse than that, worse in its way than the 1930s figures might suggest. Employers are either shortening the workweek or asking employees to take unpaid leave in unprecedented numbers. Neither those on disability nor those on leave are included in the unemployment numbers.

The U.S. labor market, which peaked in November 2007 when there were 139,143,000 jobs, now encompasses only 132,705,000 workers, a drop of 6.4 million jobs from the peak. The only work that has increased is part-time, and that is because it allows employers to reduce costs through a diminished benefit package or none at all.

The broadest measure of unemployment today is approximately 14.5%, way above the 7.9% headline number. The 14.5% reflects the unemployed and three other categories: the more than eight million people who are employed part-time for economic reasons (because their hours have been cut back or because they are unable to find a full-time job), the 10 million who have stopped looking for work, and those who are "marginally attached" to the workforce.

The labor-force participation rate has dropped to the lowest level since 1981. It reflects discouraged workers who have dropped out of the labor force. If it were not for the dropouts, the formally announced unemployment rate would be around 9.8%, not the headline 7.9%.

Sometimes the employment numbers that are announced are simply not understood. January was supposed to have seen 157,000 jobs created. The news provoked relief and even enthusiasm in some quarters. But the supposed hiring was based on seasonally adjusted numbers—numbers adjusted to reflect regularly occurring shifts in employment, such as increased hiring of farm workers during crop harvests or retail employees after Thanksgiving. The real, unadjusted figures for January show that nearly 2.8 million jobs disappeared, which happened to be worse than the 2.63 million lost in January 2012. Even though the 157,000 jobs created were fewer than the 311,000 of January 2012, many commentators cheered because they don't understand the effects of seasonal adjustment.

So there is no solace in the statistics. Job seekers are only one-third as likely to find work as they were five years ago, and a record number of households have at least one member looking for a job, which affects everyone. And most of the newly available jobs don't match the pay, the hours or the benefits of the millions of positions that have vanished.

It typically takes 25 months to close the employment gap from the employment peak near the start of the downturn. Yet this time, more than 60 months after employment peaked in January 2006, nonfarm unemployment is still more than three million jobs below where it started.

The president's speech was not without sensible commitments, and the news of negotiations for a trans-Atlantic free-trade area is promising. Europe and the U.S. represent 44% of the world economy, but both have stalled. They (and the rest of the world) would benefit from freer trade. Europe and the U.S. would also benefit from common technology standards and simpler regulations. The bilateral talks have been conducted quietly and positively for some time (while the World Trade Organization talks have floundered), but it will need real executive energy to get an agreement with a real impact on jobs.

Ordinary Americans are looking for leadership and renewal. They know that a job is the most important family program, the most important economic program, and the most important national program that America could have. They also know that, by this standard, we have failed.

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Henry Hub's picture

***Those bastards need to be crushed.***


You wish has aready come true. Except for a few government unions, the union movement in theU.S. has been completely distroyed.

jbvtme's picture

jobs created cause inflation, which raises interest rates, which will tank the real estate market and then the derivative paper, pensions, portfolios and banks.  obama has created less public sector jobs than reagan, bush or cinton.  for good reason.

trendybull459's picture

lets them speak,but the facts is:you prohibited fro use:land,own house,own life,own value,they deside in name of creating jobs and bla bla bla terrorism fight(they created to treat you) what to do with you and your life and your value,you are from the moment a...working point in their system,no more

we got new Forum in russia and in russian,but you can talk english(as most russians speaking it),to leave comments in translite or russian,what is good is that Russia absolutly free country if it apply to critics of their enemies,it takes some few minutes to be free from Big Brother watching being registred in

bilejones's picture

"They also know that, by this standard, we have failed."


Who is this "we" with which he identifies?

The State?

TheObsoleteMan's picture

The jobs the Kenyan Pretender wants to create are gubmint jobs, and gubmint sponsored jobs. He and his merry band of thieves are doing all they can to kill off the private sector. Most of the people I see working for minimum wage are over paid already, they sure as hell aren't worth $9 @hour. All this will do, is ensure that small business {Obama's sworn enemy} stagnate, or even reduce their pay rolls. Got to hand it to those illegal 'grunts, they have it all figured out, have for years: Work off of the books and cry poverty. Collect taxpayer paid benefits and medicaid. They are furthering along the development of the underground economy. Some, legal citizens will be working off the books in droves. Which is a good thing: Less taxes paid to a tyrannical gubmint.

McRocket's picture

I don't agree with those that say those in Washington are deliberately charting a course for America to have her wreck on the depression shores.


I simply think they are incredibly inept when it comes to macroeconomics and free enterprise AND they are just thinking for the moment AND what will bring them the most pwer and the most immediate voter support.

 And when they have some doubt, they simply ask the nearest 'yes' person to tell them that they are doing the right thing.

I do not think Obama's motives are all that bad - he is just another lawyer who thinks himself a great politician, but who actually has no idea how a healthy economy actually works.

acomfort's picture

We tax things we want to discourage . . . cigarettes.

We exempt from taxes things we encourage . . . non-profits.

We just accept taxing employees and employers even when there is high unemployment . . . why?   There are othere ways to get taxes.   


earleflorida's picture

We've all heard of 'off-shoring and in-shoring' by now-- a phenomenon created by Clinton (NAFTA & GATT) and Bush (CAFTA) #43, that's now the norm?

Silicon Valley is[now?] becoming a ghost town? Graduates from our best engineering/science/medical institutions are leaving our shores in droves for a better future abroad! No... their not just foreigners repatriating once schooled-- but, rather home grown Americans!

"Danger: America Is Losing Its Edge In Innovation"

Note:  Remembering Michael Milken from, "Den of Thieves?" (and Ivan Boesky?) fame! Never no more to trade in U.S. Securities for life!!!(?)  Well,... he's back with a--[ 'never-ever-leaving-the-stinch-from-the-(s)layers-den?]'--vengeance,... sucking america IP/ Brain Trust dry, through 'Good Will'??? and such<.~.> ___ "Apparently we've forgotten Who the Milkins Are"

and,... here's the Coup d`etat, of an elaborately orchestrated esoteric, and genius covert... (mod*) operandi-- this diabolical faustian extraordinaire?

Ps. check out whom MK's experts are at___   __   I think, you'll be pleasantly sure`priz'd!

thankyou Tyler


SmallerGovNow2's picture

They (and the rest of the world) would benefit from freer trade. ...

This is what got us in the fucking mess we're in as we off-shored our entire manufacturing base...

Free trade must be coupled with "free from government interference"....