A story about minority unemployment in New York City on the evening news tonight had some truly shocking statistics about the labor market. According to the report (the Dowbrigade has been unsuccessfully searching for the original report – any tips from readers would be appreciated), while 75% of white males were gainfully employed, for Hispanic men it was only 65% and for African American men it was a dismal 51.8%. Almost half of male Black New Yorkers are our of work. How is this possible?
The Dowbrigade is not an economist but we realize the importance of understanding at least the basics of the field if one hopes to have a clue as to what is happening around us. Unfortunately, the language of economics is statistics, and although like all social science majors we needed to take that course in college, we seem to have missed several important classes.
Like the one where they explained how it is possible that the government keeps announcing 5.6% unemployment nationally and 8.9% in New York City if 25% or 35% or 50% of men aren’t working. Are 140% of women working?
We suspect these disparate statistics are related to the news last week that last month 500,000 ex-workers dropped out of the job market. That means that they stopped looking for jobs and disappeared from the government unemployment radar. No longer reflected in the statistics.
Now, we have been wondering lately exactly who these people are, and how they are getting by now that they are no longer working or looking for work. Once you get beyond the possibility that they died, it seems like a pretty sweet scam, living without work, if you can get away with it. So what is the secret?
We suspect that many of the “dropouts” are the same men who reported not working in New York City. Here are some possible explanations of what happens to these guys:
1) They moved back in with their parents. We suspect this is happening a lot, especially with 20-something males, but increasingly with older demographics as well.
2) They are being supported by women, including girlfriends, wives, partners, etc. or gay lovers. Being a love slave can have its benefits.
3) They are living on a government stipend. With welfare reform this is increasingly difficult but still possible for someone who knows the angles or has a legitimate disability or special need.
4) They are earning a living through crime or some illegal scam. Drugs, gambling, insurance scams, pornography, extortion, theft, larceny grand and petty, organized and freelance crime offer abundant opportunity to earn a living outside the formal economy.
5) They join the honest, but informal economy. Street sales, unlicensed day care, gypsy taxis, fly-by-night janitorial services, private security, bartending, informal computer care, real estate middleman, the list of alternative economy jobs is endless. There is an enormous underground economy in the US channeling undocumented workers, foreign and native, into jobs so marginal that they can’t be filled above board. They pay no taxes, and do not figure in the employment system.
6) They live on the fringes of society. Our economy is so rich and wasteful that it is possible to live on the crumbs, out on the margins, without needing a job or regular income. These people survive on charity and castaway food and clothing. It’s not a bad life, if you can get used to doing without a home, a bed, a phone, a mailing address, clean clothes, the internet medical care or television.
All of these categories describe people who have stopped looking for jobs and are no longer counted in the “official” unemployment figures. Obviously, an economy as large and as powerful as ours can afford carrying a certain percentage of its population in non-productive roles, and a certain percentage of its production outside the normal channels of regulation and taxation. It is equally clear, however, that as these percentages grow it creates a drag on the economy which will eventually hurt overall performance.
What seems to us the more serious problem is the national attitude of denial which the artificially low government unemployment numbers embody. As though those half million people who drop out of the labor market each month don’t exist, or don’t count anyhow. Those millions of men and women, and the children, old people and pets that depend on them, represent stories of heroic struggle, dashed hopes, tragic surrender to illegal or immoral behavior, the failure of social safety nets, and the elusiveness of the American dream.
How many of these people can vote? How many will? How many working voters care what happens to the dropouts? How many even know they exist?
Unfortunately, denial will not be a valid option much longer. These people are all around us. Everyone knows someone who has lost their job, who is looking for work, or who has given up looking for work. In some rural areas, entire towns and urban neighborhoods EVERYONE is out of work. Unless the job picture improves very soon, this should be a MAJOR issue in the election.