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FORGOTTEN AMERICANS |
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January 11, 2004 - Some 300,000 unemployed Americans left the ranks of the unemployed workers in the month of December 2003. The unemployment rate, as defined by the US Department of Labor, fell to 5.7 percent. The statistic was so remarkable that President Bush cited it as more evidence that the Bush Administration plan to borrow our way out of recession is really, really working. Now that is good news, right, a new factor that ought to send investor confidence soaring. Except for one nagging fact; those 300,000 no longer unemployed workers filled only 1,000 new jobs. How is that possible? If 300,000 are no longer unemployed and only 1,000 found jobs isn’t there some problem with the statistics?
It started when the Reagan Administration revised the way that the Labor Department counted employed and unemployed workers. It was a matter of philosophy. That the Reagan revisions changing the way we looked at the work force increased the number of people we reported as employed and reduced the number of people we reported as jobless was a serendipitous psychological boost as the new administration applied what candidate George H. W. Bush had called “Voodoo Economics”. The first change was to number Americans on active duty as employed members of the work force. Prior to that change service personnel were not counted because they were not available to perform civilian occupations. They were not considered part of the “work force”. There was a certain superficial logic to the change. After all, service people work full time. They aren’t standing around on street corners. They aren’t drawing unemployment benefits. But they aren’t competing for jobs in the civilian economy either. Including them in the work force numbers boosted the number of people in the work force, the base for figuring the unemployment rate by about 2 million. The second change was to eliminate those people whose unemployment benefits had run out from the number of people counted as unemployed and from the work force. People who draw unemployment benefits must show that they are available for work and that they are actively looking for work. The Reagan revisions made the assumption that people whose unemployment benefits had expired were no longer looking for work and thus no longer part of the available work force. With the stroke of a pen chronically unemployed Americans were stricken from the rolls. They became non-entities and, as far as the Department of Labor was concerned, they simply disappeared. They became what the bureaucrats called “Disappointed Workers”. We don’t count them again unless they find work and then go directly to the ranks of the employed as they “re-enter” the work force. No other industrialized nation, indeed no third world nation, calculates its work force statistics using this structurally deceptive method. So what happened to those 300,000 Americans who became disappointed during December? They aren’t part of the 5.7 percent unemployed that the President points to as evidence that his economic plan is working. They join the other disappointed workers who fell off the unemployment rolls in November, October and September. 70,000 joined then in the ranks of the officially forgotten workers during the first week in January and a like number will join them each week there after as their 26 weeks of unemployment benefits expire. They are out of a job, out of an income, and out of hope. |
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