The New York Times has an important article about unemployment.
Once these statistical nonpersons are counted, the labor market of today looks all too similar to those of supposedly bleaker past decades, according to a number of recent studies by economists. Even when the unemployment rate was near a 30-year low in 1999 and 2000, men from the ages of 18 to 54, as a group, spent 11 percent of the year not working, roughly the same as in the late 1970’s and late 80’s, according to one study.
Some of the figures in the article, “Since 1990, the number of people receiving disability pay has nearly doubled, to 5.4 million…” and, “The growth of the prison population — to about 2 million today, up from 1.1 million in 1990 and 500,000 in 1980….
These people don’t show up in the official unemployment rate but they are not bringing in enough money to buy those important consumer goods – bagel toasters, Cheese-Wiz, etc. – that contribute to our economic growth. So while they keep saying prosperity is just around the corner things are actually much worse than the numbers show. For example, because the government doesn’t think unemployment is as bad as it is they haven’t extended unemployment benefits. AND benefit extensions require a certain level of official unemployment – 7% (I think) – before they kick in anyway. Yet this article shows that 5% unemployment today is equivalent to 7% during the last recession – so things have to be much much worse than last time before the government will help out.
To make matters even worse, don’t forget that welfare reform means that option is less available, and runs out after (I think) 2 years. We’ve got the elements in place for a really, really bad situation in this country.