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The Nation

Jobless Count Skips Millions

The rate hits 9.7% when the underemployed and those who have quit looking are added.

December 29, 2003|David Streitfeld | Times Staff Writer

SAN FRANCISCO — Lisa Gluskin has had a tough three years. She works almost as hard as she did during the dot-com boom, for about 20% of the income.

When Gluskin's writing and editing business cratered in 2001, she slashed her rates, began studying for a graduate degree and started teaching part time at a Lake Tahoe community college for a meager wage.

It's been a fragmented, hand-to-mouth life, one that she sees mirrored by friends and colleagues who are waiting tables or delivering packages. In the late '90s, the 35-year-old Gluskin says, "we had careers. We had trajectories. Now we have complicated lives. We're not unemployed, but we're underemployed."

The nation's official jobless rate is 5.9%, a relatively benign level by historical standards. But economists say that figure paints only a partial -- and artificially rosy -- picture of the labor market.

To begin with, there are the 8.7 million unemployed, defined as those without a job who are actively looking for work. But lurking behind that group are 4.9 million part-time workers such as Gluskin who say they would rather be working full time -- the highest number in a decade.

There are also the 1.5 million people who want a job but didn't look for one in the last month. Nearly a third of this group say they stopped the search because they were too depressed about the prospect of finding anything. Officially termed "discouraged," their number has surged 20% in a year.

Add these three groups together and the jobless total for the U.S. hits 9.7%, up from 9.4% a year ago.

No wonder the Democratic presidential candidates have seized on jobs as a potentially powerful weapon.

Howard Dean criticized President Bush for "the worst job creation record in over 60 years." Richard Gephardt said that "I have three goals for my presidency: jobs, jobs, jobs." John Kerry said "the first thing" he'd do as president would be to fight his "heart out" to bring back the jobs that have disappeared in recent years.

Bush, meanwhile, is quick to seize credit where he can. When the unemployment rate for November fell one-tenth of a point, he went out immediately to give a speech at a Home Depot in Maryland.

"More workers are going to work, over 380,000 have joined the workforce in the last couple of months," Bush said. "We've overcome a lot."

A number of economists say it's a mistake to evaluate the job market solely by talking about the official unemployment rate. It's a blunt instrument for assessing a condition that is growing ever more vague.

"There's certainly an arbitrariness to the official rate," says Princeton University economics professor Alan Krueger. "It irks me that it's not put in proper perspective."

On Jan. 9, when the rate for December is announced, both Republicans and Democrats will assuredly again maneuver for advantage -- precisely because the number isn't expected to change much.

"At this point, where we don't know which way it's going but it isn't likely to be going far, both sides will try to use it," says Michael Lewis-Beck, a political scientist at the University of Iowa.

In every election since 1960, the party in the White House lost when the unemployment rate deteriorated during the first half of the year. If the rate improved, the party in the White House won.

That's not a coincidence, says Lewis-Beck, who has edited several volumes on how economic conditions determine elections. "People see the president as the chief executive of the economy," he says. "They punish him if things are deteriorating and reward him if things are improving."

By any normal standard, things should have been improving on the employment front long before this point. More than 2 million jobs have been lost in the last three years, a period that encompassed a brief, nasty recession and a recovery that was anemic until recently. Even in the best-case scenario, Bush will end this term with a net job loss. That hasn't happened to a president since Herbert Hoover at the beginning of the Depression.

Many economists are mystified about why a suddenly booming economy is producing so few jobs.

"We're all sitting there and saying, 'When are they going to return?' " says Richard B. Freeman, director of the labor studies program at the National Bureau of Economic Research. "It's looking a little better, but we don't understand why it isn't looking a lot better. Why shouldn't Bush be sitting there saying, 'Man, I'm sitting pretty. This is a great boom'?"

One statistic proving particularly perplexing is the percentage of the adult population that is employed. This number rises during good times, as people are lured into the workforce, and falls during recessions as companies falter.

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