- SAN FRANCISCO -- Lisa Gluskin
has had a tough three years. She works almost as hard as she did during
the dot-com boom, for about 20% of the income.
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- When Gluskin's writing and editing business cratered
in 2001, she slashed her rates, began studying for a graduate degree and
started teaching part time at a Lake Tahoe community college for a meager
wage.
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- It's been a fragmented, hand-to-mouth life, one that
she sees mirrored by friends and colleagues who are waiting tables or delivering
packages. In the late '90s, the 35-year-old Gluskin says, "we had
careers. We had trajectories. Now we have complicated lives. We're not
unemployed, but we're underemployed."
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- The nation's official jobless rate is 5.9%, a relatively
benign level by historical standards. But economists say that figure paints
only a partial ó and artificially rosy ó picture of the labor
market.
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- To begin with, there are the 8.7 million unemployed,
defined as those without a job who are actively looking for work. But lurking
behind that group are 4.9 million part-time workers such as Gluskin who
say they would rather be working full time ó the highest number
in a decade.
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- There are also the 1.5 million people who want a job
but didn't look for one in the last month. Nearly a third of this group
say they stopped the search because they were too depressed about the prospect
of finding anything. Officially termed "discouraged," their number
has surged 20% in a year.
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- Add these three groups together and the jobless total
for the U.S. hits 9.7%, up from 9.4% a year ago.
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- No wonder the Democratic presidential candidates have
seized on jobs as a potentially powerful weapon.
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- Howard Dean criticized President Bush for "the worst
job creation record in over 60 years." Richard Gephardt said that
"I have three goals for my presidency: jobs, jobs, jobs." John
Kerry said "the first thing" he'd do as president would be to
fight his "heart out" to bring back the jobs that have disappeared
in recent years.
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- Bush, meanwhile, is quick to seize credit where he can.
When the unemployment rate for November fell one-tenth of a point, he went
out immediately to give a speech at a Home Depot in Maryland.
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- "More workers are going to work, over 380,000 have
joined the workforce in the last couple of months," Bush said. "We've
overcome a lot."
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- A number of economists say it's a mistake to evaluate
the job market solely by talking about the official unemployment rate.
It's a blunt instrument for assessing a condition that is growing ever
more vague.
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- "There's certainly an arbitrariness to the official
rate," says Princeton University economics professor Alan Krueger.
"It irks me that it's not put in proper perspective."
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- On Jan. 9, when the rate for December is announced, both
Republicans and Democrats will assuredly again maneuver for advantage ó
precisely because the number isn't expected to change much.
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- "At this point, where we don't know which way it's
going but it isn't likely to be going far, both sides will try to use it,"
says Michael Lewis-Beck, a political scientist at the University of Iowa.
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- In every election since 1960, the party in the White
House lost when the unemployment rate deteriorated during the first half
of the year. If the rate improved, the party in the White House won.
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- That's not a coincidence, says Lewis-Beck, who has edited
several volumes on how economic conditions determine elections. "People
see the president as the chief executive of the economy," he says.
"They punish him if things are deteriorating and reward him if things
are improving."
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- By any normal standard, things should have been improving
on the employment front long before this point. More than 2 million jobs
have been lost in the last three years, a period that encompassed a brief,
nasty recession and a recovery that was anemic until recently. Even in
the best-case scenario, Bush will end this term with a net job loss. That
hasn't happened to a president since Herbert Hoover at the beginning of
the Depression.
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- Many economists are mystified about why a suddenly booming
economy is producing so few jobs.
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- "We're all sitting there and saying, 'When are they
going to return?' " says Richard B. Freeman, director of the labor
studies program at the National Bureau of Economic Research. "It's
looking a little better, but we don't understand why it isn't looking a
lot better. Why shouldn't Bush be sitting there saying, 'Man, I'm sitting
pretty. This is a great boom'?"
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- One statistic proving particularly perplexing is the
percentage of the adult population that is employed. This number rises
during good times, as people are lured into the workforce, and falls during
recessions as companies falter.
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- True to form, the percentage of adult Americans with
jobs dropped from a high of 64.8% in April 2000, just as the stock market
was cresting, to 62% in September ó the lowest level in a decade.
If past recessions are any guide, those 5 million people who found themselves
jobless should have driven the unemployment rate up to about 8%.
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- Instead, the rate never went much above 6%.
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- "More than half of the additional people who would
have reported themselves as unemployed in a previous big recessionary period
Ö aren't," a puzzled UC Berkeley economist, Brad DeLong, wrote
on his website. "They're reporting themselves as out of the labor
force instead."
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- "Out of the labor force" means you're not working
for even one hour a week and don't want to, either. It's the traditional
category for students, married women with young children, flush retirees
and idle millionaires.
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- A new way that people seem to be joining this category
is by getting themselves declared disabled. This designation makes them
eligible for government payments while removing them from the unemployment
rolls.
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- From 1983 to 2000, economists David Autor and Mark Duggan
wrote in a recent study, the number of non-elderly adults receiving government
disability payments doubled from 3.8 million to 7.7 million.
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- The scholars present a case that the sharp increase isn't
because the workplace suddenly became more dangerous. Instead, it has been
prompted by liberalized screening policies, which make it possible to claim
disabled status for, say, several small impairments as opposed to one big
injury. Government examinations also have been downplayed in favor of the
disabled's own medical records and the pain he or she claims to be experiencing.
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- At the same time, benefits have been sweetened. As a
result, millions of individuals who lost jobs now have an attractive ó
and permanent ó alternative to searching for work.
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- Autor and Duggan concluded that if disability payments
weren't so appealing, many more people would be unemployed, boosting the
jobless rate two-thirds of a point.
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- Another way in which people forgo an appearance on the
unemployment rolls is if they decide to go into business for themselves.
There are 9.6 million people who say they are self-employed full time,
a number that rose 118,000 last month. Without the recent increase in self-employed,
the jobless number would look much worse.
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- Many others may be working for themselves part time,
temporarily, as a way to get food on the table in the absence of better
options.
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- Take Steve Fahringer, who until recently was working
for a Bay Area marketing agency that cut 20% of its employees and trimmed
the wages of the remainder by 20%. Fahringer didn't particularly like his
job. Because the recession supposedly was history, he thought he could
find a new position. The 34-year-old didn't think it would be easy, but
he thought it possible. So he quit.
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- "I left July 1," he says. "I haven't found
a new job yet."
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- It's a common problem. The segment of the labor force
that has been jobless for more than 15 weeks has risen nearly 150% since
2000. The current level is the highest since the recession of the early
1990s. Nearly one-quarter of the jobless have been unemployed for longer
than six months.
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- In Fahringer's case, he spent some time aggressively
looking for a job, which made him part of the official July unemployment
rate of 6.2%. Then he stopped looking, which meant that he was one small
reason the rate started going down.
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- Instead of unemployed, Fahringer was classified as "discouraged."
A little more than 8% of the people who want a job in the Bay Area are
estimated by the Bureau of Labor Statistics to be discouraged, slightly
higher than Los Angeles/Long Beach but lower than the battered technology
center of San Jose.
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- Discouraged workers have never been included in unemployment
rates, although they came close the last time a commission met to reform
the system, a quarter of a century ago. "It was a very hot issue,"
remembers Glen Cain, a retired economist who was a commission member. He
says the conservatives on the panel, who felt that anyone who really wanted
a job should be out there hustling no matter what, prevailed.
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- Fahringer found an alternative way to earn a bit of money.
He did some acrylic paintings, which he sold for a total of $1,000. He
calls himself "a hobbyist," which means for a while he moved
out of the labor force entirely.
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- Now he's a temp, assigned by his agency to a nonprofit
office. For the first time in six months, he's working 40 hours a week.
By the government's accounting, he has once again joined the ranks of the
employed. But from the standpoint of his wallet, Fahringer is worse off:
He's earning less money, with no paid holidays, no sick leave, no pension
plan, no health insurance, no future.
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- The Economic Policy Institute, a liberal-leaning Washington
think tank, says Fahringer's situation is in many ways typical. The industries
that were expanding in the late '90s, including computer and professional
services, paid well.
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- Those industries are in retreat. So is manufacturing,
a traditional source of high wages. On the rise, meanwhile, are lower-paying
service jobs.
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- During the boom, it was easy to trade up. Now it's just
as easy to trade down.
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- Fahringer's solution: Opt out.
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- "I'm thinking of going back to school," he
says. "I'd take out a loan." That would put him out of the labor
force again.
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- In some eyes, a nation of burger flippers, temps and
Wal-Mart clerks isn't the worst scenario for the economy. The worst is
that companies continue to eliminate jobs faster than they create them,
setting up a game of musical chairs for the labor force.
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- That prospect alarms Erica Groshen, an economist with
the Federal Reserve Bank of New York. "If you plot job losses versus
gains on a chart, it's shocking," she says.
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- Losses are running at about the same rate they were in
1997 and 1998, two good years for the economy. But job creation in the
first quarter of 2003 ó the most recent period available ó
was only 7.4 million, the lowest since 1993.
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- "If this goes on too long, you'd have to worry there's
something fundamentally wrong," Groshen says. Although the economy
has picked up since March, "so far I haven't seen anything that suggests
job creation is picking up."
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- That bodes poorly for Ian Golder. His last full-time
job was with a start-up publication that wrote about venture capital.
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- Two years ago, Golder was laid off. It was the first
time since he graduated from UC Berkeley 14 years earlier that he didn't
have steady work.
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- Golder looked for a while, gave up for a while, then
landed a contracting gig with no benefits proofreading for a chip maker.
When that ran out, he worked 20 hours a month on a financial services newsletter.
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- His wife, Heather, a recent graduate in English from
UC Davis, also was without a job. They thought about selling their house
in Sacramento and moving, but prospects didn't look any better anywhere
else. To make ends meet, they took in two boarders.
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- At the beginning of December, things seemed to improve
a bit. Golder got a job in the document-control department of a medical
devices company. The department, he was told, used to have 20 full-time
people. Now it has five, plus four temps.
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- The job will last two months. After that, who knows?
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- "Optimists say things will be better then,"
Golder says. "But a full-time position with benefits seems pretty
remote."
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- Copyright 2003 Los Angeles Times
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- http://www.infoshop.org/inews/stories.php?story=03/12/29/4006802
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