On October 6, 2012, Phil Izzo writes in The Wall Street Journal that the U.S. unemployment rate tumbled to 7.8 percent in September but a broader measure was flat at 14.7 percent.
The decline in the main unemployment rate was driven by positive factors. In previous months, the rate has fallen because more Americans were no longer looking for work. That wasn’t the case in September. The labor force increased, as more people were seeking jobs. Meanwhile, the number of unemployed tumbled by 456,000, while those with jobs surged 873,000.
That number may come as a shock, considering that the number of jobs in the economy rose just 114,000 last month. That’s because the number of jobs added to the economy and the unemployment rate come from separate reports. The number of jobs added comes from a survey of business, while the unemployment rate comes from a survey of U.S. households. The two reports often move in tandem, but can move in opposite directions from month to month.
One possible explanation: The Labor Department revised up its estimate of payroll growth in July and August, but the unemployment rate doesn’t get revised. So it’s possible the big one-month drop in the unemployment really reflects improvements over the past two or three months.
Though the headline of the household survey looks good, the fact that a broader rate of unemployment didn’t budge presents a puzzle. The unemployment rate is calculated based on the number of unemployed — people who are without jobs, who are available to work and who have actively sought work in the prior four weeks. The “actively looking for work” definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things. The unemployment rate is calculated by dividing the number of unemployed by the total number of people in the labor force.
The broader unemployment rate, known as the “U-6″ for its data classification by the Labor Department, includes everyone in the official rate plus “marginally attached workers” — those who are neither working nor looking for work, but say they want a job and have looked for work recently; and people who are employed part-time for economic reasons, meaning they want full-time work but took a part-time schedule instead because that’s all they could find.
In September, the number of part-time workers who would like full-time jobs surged by 582,000. That represents about two-thirds of the increase in employment last month and is larger than the drop in the number of unemployed. That’s why the U-6 stayed at 14.7% in September.
So, while more people are working according to the household survey, and that is an undisputed positive, the quality of those jobs remains in question.
We need to acknowledge the realization that the troubling economic and social trends (global capitalism, free-trade doctrine, tectonic shifts in the technologies of production and the steady off-loading of American manufacturing and jobs) caused by continued concentrated ownership of productive capital will threaten the stability of contemporary liberal democracies and dethrone democratic ideology as it is now understood.
As long as working people are limited by earning income solely through their labor worker wages, they will be left behind by the continued gravitation of economic bounty toward the top 1 percent of the people that the system is rigged to benefit. Working people and the middle class will continue to stagnate, resulting in a stagnated consumer economy. More troubling is that this continued stagnation will further dim the economic hopes of America’s youth, no matter what their education level. The result will have profound long-term consequences for the nation’s economic health and further limit equal earning opportunity and spread income inequality. As the need for labor decreases and the power and leverage of productive capital increases, the gap between labor workers and capital owners will increase, which will result in upheaval.
It takes time, and I mean years, as well as an appetite to explore concepts and experiences of others in those areas of life that interests one. It requires a lot of reading and thinkings and debate with others to arrive at a truth(s). In economics, which is the field of politics that has always interested me, I have come to realize that the notion that products and services are made by people as in the human factor of production is a extraordinary limited view, when in fact, products and services are the product of an interdependent relationship. Thus, I have concluded that if both labor and productive capital (the non-human factor) are interdependent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive. This is why I steadfastly advocate that if our leaders wanted to seriously CHANGE the direction of the country they need to inspire us to create an OWNERSHIP CULTURE whereby EVERY American can become a new capitalist owner. That will start the national discussion and debate on the BIG ISSUE facing us, that is CONCENTRATED CAPITAL OWNERSHIP and who should OWN America. Whoever puts forth that challenge, Obama or Romney, will put the other on the spot to address this critical issue. Either way the national discussion in media and academia, AND politics needs to zero in on what this potential is all about, if we are to overcome the false promises of JOB CREATION in a society that exponentially is experiencing tectonic shifts in the technologies of production with an ever-accelerating shift to productive capital as the principle factor.
