The March employment numbers, out this morning, are bleak: 8.5 percent of Americans officially unemployed, 663,000 more jobs lost. But if you include people who are out of work and have given up trying to find a job, the real unemployment rate is 9 percent. And if you include people working part time who’d rather be working full time, it’s now up to 15.6 percent. One in every six workers in America is now either unemployed or underemployed.
Every lost job has a multiplier effect throughout the economy. For every person who no longer has a job and can’t find another, or is trying to enter the job market and can’t find one, there are at least three job holders who become more anxious that they may lose their job. Almost every American right now is within two degrees of separation of someone who is out of work. This broader anxiety expresses itself as less willingness to spend money on anything other than necessities. And this reluctance to spend further contracts the economy, leading to more job losses.
It’s a Depression, Robert Reich, Friday, April 03, 2009,
It’s hard to get a handle on what the economy is doing. I work in a sector–proprietary education– that is tailor-made for economic troubles, so I don’t have that feeling that things are going downhill. I am used to hearing about the travails of the working class, too, either from my family or from my students. So I can’t say that I have been hearing more of that sort of thing, either.
I don’t mean in any way to question his integrity, but Reich is a mainstream, liberal economist, and so has something like a vested interest in promoting the largest stimulus package possible. It’s not surprising that he favors the term depression. And, of course, the unemployment numbers are probably the best measure, as he suggests, of how poorly we are doing.
On the other hand, Doug Henwood, who is a very careful observer of the numbers, has a nuanced, if still bad, notion of the state what he calls “that abstraction The Economy.” He sees some signs of hope, although he seems to have little patience with the idea that the recovery is coming sooner rather than later; the stimulus money is not yet spent, after all.
What is a depression? According to Kimberly Amadeo on About.com we have a long way to go before we get to Great Depression levels: “unemployment was 25% and wages… fell 42%. …U.S. economic output fell from $103 to $55 billion and world trade plummeted 65%.” We are not there yet, but I don’t think the worst is over yet.
