More Than 1 in 10 American Workers Can’t Find Jobs
While the official unemployment rate is 8.5 percent, a more inclusive measure of unemployment is nearly twice as high.
The alternative measure of labor underutilization U-6 index, published by the United States Department of Labor, puts unemployment at 15.6 percent. This index also includes those who are available for work, and those who have looked for work in the past year and have stopped because they have given up or for other reasons. It also includes those who are looking for a full-time job but are working part time because of a shortage of jobs.
But even this measure does not include those who have given up looking for work, gone back to school, or accepted short-term contracts for little money.
The figure is the highest it has been since it was introduced in 1994. Many economists are concerned.
“The situation out there is very grim,” economist Heather Boushey said. “We have seen the mounting of job losses faster than any point since World War ii. I have never seen anything escalate this bad.”
The type of job losses are also concerning. Credit Suisse reports, “Permanent job losses are accounting for a much larger share of total job losses than any cycle in recent memory.” Almost half of job losses are permanent, not temporary layoffs, according to the April 3 report. Twenty-four percent of those unemployed have been out of work for over six months, the largest percentage during a recession since the Department of Labor started monitoring data in 1948.
JP Morgan Chase & Co. economist Michael Feroli says, “[P]eople are doing whatever it takes to get some income for their households.”
“When some of the big investment banking firms had layoffs a year ago, those people were looking for permanent jobs,” said Mitch Feldman, president of New York executive placement firm A.E. Feldman Associates. Now he says his clients will accept six-month and year-long contracts. “And they’re competing with other contractors who were on contract before. More supply, less demand, and the prices go down.”
Some are simply giving up looking for work completely—the recession has caused a large spike in men choosing to become “house-husbands.”
In addition, a record number of Americans, about 1 in 10, are receiving food stamps as their situation gets desperate. Over 32 million Americans received food stamps in January, the third time in five months that this figure has set a new record.
Watch for civil unrest to rise as people get more and more desperate for money. Many economists predict that unemployment will only rise in the near future. Historically, mass unemployment has led to mass unrest—and political and social upheaval.
Are you worried about your job? For advice on how to avoid layoffs, read “How to Keep Your Job in a Recession.”