Economic Trouble: Unemployment Worsens

The number one issue in the 2008 Presidential Campaign will be whether to continue the economic policies of President George W. Bush. Arizona Senator and the presumptive nominee of the Republican Party John McCain will continue President Bush’s policies and tax cuts here and here. Illinois Senator and the presumptive nominee of the Democratic Party Barack Obama wants to move away from the current Bush-McCain economic plan and has a full plan to rebuild America’s economy and help middle-class families. In order to truly examine whether the policies of the last eight years should be continued by electing John McCain or whether we should have wholesale change with Barack Obama, we need to assess the current state of the economy.

Most Americans when asked about the strength or weakness of the economy will base their opinions on their personal situations. The most basic barometer of an individual’s economic situation is whether or not they have a job that provides them with the quality of life they desire. There are two parts here: if you have a job and if you have a good job (with good being a relative term based on one’s age, educational background, and family situation).

Unfortunately for the 13,983,000 Americans who were either employed or underemployed (I’ll explain this term a little later) as of May 2008 the economic data shows that the Bush McCain economic policies have damaged our economy and things are getting worse. There has been much conversation about weighty foreign policy issues in this campaign like Iraq, Iran, & diplomacy and completely trivial issues like whose preacher said what during services when the candidate wasn’t there. However, the number one issue for most Americans is the economy. For the nearly 14 million unemployed and underemployed Americans this issue boils down to the good job they don’t have.

The sad news is that the employment situation is only getting worse.

The May 2008 Report of the US Bureau of Labor Statistics reports that the unemployment rate for the US grew from 5.0% to 5.5% in May 2008. In raw numbers, this translates to 861,000 more Americans unemployed in May than were unemployed in April. Most people and most of the media only will report the change in unemployment. The reality is that of the 8,487,000 people unemployed according to the government’s definition, 3,244,000 of them lost their jobs in the past 5 weeks. These are the households who in this time of rising gas & food prices are facing the cold reality of not having an income. They may find themselves angry at being laid off, saddened by the loss of relationships with their coworkers, and worried about what lies ahead for the families. They will probably not join John McCain in wanting to make permanent the economic policies of President Bush, that’s for sure!

Now, the good news is that many of these 3.2 million newly unemployed workers will find a new job in a matter of weeks. Our economy operates under a principle of creative destruction where new companies and jobs are constantly being created to replace the jobs that have been eliminated and the businesses that have closed.

However, for many of these workers, especially those who have lost manufacturing jobs, the new jobs that they get will not fully replace their lost incomes. Also they will often not provide the same healthcare for themselves or their families or the same security for their retirement. This is the concept of being underemployed. Millions of Americans fit this term where they do have a job and are not technically unemployed. However, their new job does not provide the same income or benefits of the job they lost. An example, which is all too common here in the Midwest and especially here in Michigan, is the factory worker who loses their job and gets a new job in the service sector. The previous full-time factory job paid $18/hour with good healthcare (negotiated by their union) while their new job in retail pays only $13/hour, is part-time and crucially does not provide healthcare coverage.

This is what underemployment looks like. Sit down with your family budget. Cut your income by nearly 30-50% and do away with you healthcare benefits if you have them. Then ask yourself if you think we should continue the Bush-McCain economic policies. As of May 2008 there were 5,233,000 part-time workers who said that they were working part-time for economic reasons. These workers and their families live this reality everyday.

I mentioned that many of the newly unemployed would soon find new jobs, although many will still be underemployed. Others though will not be so fortunate. Not only did the May statistics show an economy with growing unemployment, they also showed a rise in long-term unemployment. The government defines long-term as not having a job for 27 weeks or longer. In May, 1,550,000 Americans were in this situation. This is up 36% from a year ago.

Look at the calendar an flip back 6 months. Imagine losing your job just after Thanksgiving. If you were a Christian, the Christmas season would have brought on many tough times. Watching your family, friends, and neighbors spending freely on presents and gifts would have made you very conscious of you lack of an income. If you were in a two-income household, you would have been able to survive for awhile by cutting back and relying on your spouse or partner’s income. But awhile then turns to months as you continue to strike out on finding a new job. Imagine the stresses on your family, your marriage, your children, and your health after six months of looking for work with no success. That is the reality for over 1.5 million Americans.

The government only includes unemployed people who have looked for a job in the past month in the unemployment report. The government reports that there are 400,000 people who are unemployed but have given up looking for work because they are discouraged about their prospects.

The nearly 14 million Americans who are unemployed, working part-time because they have to, or who have gotten so discouraged about finding a job that they have given up demand CHANGE and we must give them change by changing the leadership of our Country.

-Kyle M.