A statistic by any other name…
Last Friday, The Wall Street Journal ran an article observing that although the Labor Department has officially declared January’s unemployment rate to be an apocalyptic 7.6%, this figure doesn’t take into account a wider set of criteria — the so-called “U-6 category” — which includes part-time workers and people casually looking for jobs. Once these folks are added to the mix, unemployment numbers suddenly jump to 13.9%: the highest they’ve been since the early eighties. According to WSJ blogger Sudeep Reddy, u-6 numbers are often ignored because they’ve only been in use since 1994, making them a fairly new way of quantifying data. But unlike the standard method of calculating unemployment — number of people employed/number of total people in workforce — U-6 figures provide a more nuanced and realistic portrait of labor affairs in America. If a single parent can only find part-time work to support a family, then technically, and regardless of financial duress, they’re considered employed.
Elsewhere in The Journal, Carmen Reinhart and Ken Rogoff warn readers to brace for the worst, arguing that unemployment rates are likely to decline over the next two years (but don’t worry, most crises take five) and that in order to fix things, the U.S. will have to effectively double its debt. The op-ed also points out that “unemployment is a category where rich countries, with their high levels of wage insurance and stronger worker protections, tend to experience larger problems after financial crises than do emerging markets.” Isn’t this fairly obvious? If secure and highly prized jobs are the last to be cut — a testament to a truly grim economy — then wouldn’t they also be the last to be created once the recovery’s begun? Wasn’t the argument behind infrastructure development that it would create new jobs quickly, similar to the jobs generated in emerging markets?
Because I’m a pathological optimist (often against my better judgment) I leave you with an article by Walter Mead that was recently published in The New Republic. Mead argues first off that there is plenty of historical precedent at hand (remember: history doesn’t repeat itself, but it does rhyme) and that while the crisis is bad, it’s global, and in comparative terms the U.S. will likely fare better than any other country in the world, including the emerging superpowers of Russia or China. Why? A solid and flexible capitalist infrastructure:
Countries that can encourage–or at least allow and sustain–the change, dislocation, upheaval, and pain that capitalism often involves, while providing their tumultuous market societies with appropriate regulatory and legal frameworks, grow swiftly… They typically develop liberal political institutions and cultural norms that value, or at least tolerate, dissent and that allow people of different political and religious viewpoints to collaborate on a vast social project of modernization–and to maintain political stability in the face of accelerating social and economic change.
If unemployment doesn’t kill us all, to crib the article’s title, it’ll only make us stronger. In two years, that is.