The economy isn’t dead, especially as a political issue. It’s just been drowned out by the Chicago teachers’ strike, the riots in the Middle East illustrating more than anything else how easily manipulated the people there are, and the outrage of the day (I will not post about Mitt Romney’s latest gaffe. I will not post about Mitt Romney’s latest gaffe. I will not…). I don’t always agree with Mort Zuckerman but a lot of what he says in his most recent op-ed is right on the money:
Nobody is entitled to blow a trumpet because the unemployment rate for August can be headlined at 8.1 percent, down two digits from July’s 8.3 percent. That’s a drop brought about not by more jobs but because 360,000 people left the workforce. It muffles the fact that 5 million people have now been out of work for 27 weeks or more. That’s roughly 40 percent of the unemployed. Another 2.6 million people were marginally attached to the labor force, and over eight million people have given up looking for a job, so they are not counted because they had not searched for work in the prior month.
Are they lazy good-for-nothings? Maybe a handful, but most are decent Americans eager to work. The average period of unemployment is close to 40 weeks. Imagine the sense of futility that must overcome people who month after month fill in forms, go for interviews if they’re lucky, and end up as they started—with nothing to show because there are approximately 4.5 unemployed workers for every job. Fewer Americans are at work today than in April 2000, even though the population has grown by 30 million people since then. Think about that.
He also notes, correctly, that the claim that the labor force participation rate is due to workers over 60 taking early retirement is complete hooey. The labor force participation rate among those over 60 is the highest it’s been in decades. Older workers don’t have any other choice but to continue working. They don’t earn anything on their savings, the value of their home is decreasing, their taxes are increasing, and the prices of the things that they buy are increasing faster than the small amount of non-wage income they can eke out.
The unemployment and underemployment rates among young workers are particularly troubling as is the birth rate, at a 25 year low.
I’ll add just one more point: the business cycle has not been repealed. It is now more likely that the economy will slow its expansion rate or contract than that it will expand its expansion rate or expand.
Don’t miss the political cartoon that heads his op-ed. Too bad the Republicans weren’t able to field a better candidate.