Why Unemployment May Stay High for Years to Come

 Here at AlterNet we've covered the fact that the real unemployment rate is much higher than the 9.1 percent officially reported by the Bureau of Labor Statistics for the past couple of months. The BLS doesn't count people who've stopped looking for a job as officially unemployed, nor does it count the under-employed--those who are working part-time but need to find full-time employment to be able to make ends meet. 

There are 8.8 million underemployed according to latest count, and that number too leaves out people who may have full-time work but took a job that pays less than they need or isn't in their field (returning to retail or restaurant service work, for instance) but will be looking for a position in their field as the economy improves (which is still a long way off).

A recent story from the Associated Press points out that these numbers make the picture even worse for the long-term unemployed, as businesses with part-time workers are likely to give them more hours before hiring for new positions. 

Intensified competition for jobs means unemployment could exceed its historic norm of 5 percent to 6 percent for several more years. The nonpartisan Congressional Budget Office expects the rate to exceed 8 percent until 2014. The White House predicts it will average 9 percent next year, when President Barack Obama runs for re-election.

According to Heidi Shierholz of the Economic Policy Institute, if companies restored all the hours they've slashed since the recession began, they'd have enough to equal 950,000 full-time jobs. (Which still wouldn't be close to enough to make up for the 25.4 million out of work or underemployed.)

And Christine Riordan of the National Employment Law Project tells the AP that hiring is a long way off as employers haven't even started adding hours back to their part-time workers--in August, hours worked actually fell from July. 

While workers are struggling, the story notes, employers are reaping the rewards of a desperate labor force: 

Retailers, in particular, favor part-timers. They value the flexibility of being able to tap extra workers during peak sales times without being overstaffed during lulls. Some use software to precisely match their staffing levels with customer traffic. It holds down their expenses.

"They know up to the minute how many people they need," says Carrie Gleason of the Retail Action Project, which advocates better working conditions for retail workers. "It's almost created a contingent work force."


Workers like 23-year-old Emma Draper, quoted in the piece, who lost her public relations job and took a part-time job selling expensive designer clothing at a retail shop, are stuck without a lot of options, expected to be grateful for additional hours and not to complain if they are cut. 

As we reported last week, many workers are carving out a living working freelance, surviving from gig to gig rather than at a full-time job, and many of those people might prefer a steadier job if one became available. Yet according to the AP, 4.5 people are competing nationally for each job opening--and that's an average. It's most certainly higher in some places and for some fields. 

The AP spoke to several workers who are not counted as "unemployed" under official statistics but are still certainly struggling with what little work they have.  One of them, a 54-year-old former truck driver who left his job two years ago to find a position that would allow him to be home more often to care for his disabled 13-year-old daughter. He's currently surviving on his daughter's disability check from Social Security, living in a trailer park and has quit job hunting because he was spending more money on gas getting to job interviews than he was making. 

As we continue to hear only about the official unemployment rate from most corporate media outlets, it's important to remember that those numbers are actually much higher--that there are people who are jobless but not "unemployed" because they don't meet the right definition of looking for a job, or people working part-time retail gigs or cobbling together freelance work, waiting for a better offer to come along. 

While those part-timers and freelancers may see benefits of any real recovery first, the long-term unemployed and those who have "dropped out" of the job hunt rat-race are likely to be struggling for a while--

AlterNet / By Sarah Jaffe

Posted at September 19, 2011, 7:11am