The Wrongologist

What’s
Wrong Today:

This is
not a column about the State of The Union speech. It is about unemployment. However,
let’s reflect on Mr. Obama’s closing argument:

His speech
was followed by Republican Marco Rubio’s response, which can be characterized
as: If we have our way, the government isn’t going to help you.

Our
government is made up of citizens. Our citizens form governments to get things
done for each other. If our governments can’t help us, then we cannot help
ourselves.

Washington
is completely disconnected from the quiet desperation of many American
lives. Politicians recite the talking points supplied by the lobbyists that
have captured them with political donations. They ignore that 23% of us have been fired in the last
four years.  

That factoid comes from a newly
published study from Rutgers University called Diminished
Lives and Futures: A Portrait of America in the Great-Recession Era.
The study included 1090
Americans, and it contains a series of devastating statistics from a survey
they conducted in January 2013. Here are some highlights:

• Nearly one-quarter
  (23%) of all survey respondents were laid off from either a full-time or part-time
  job over the past four years
• Fewer women report layoffs than men by a margin of 19% to 27%
• 22% of white, non-Hispanic respondents
  were laid off during and
  after the recession compared to 31% of blacks
  and Hispanics
• 19% of workers age 55 and older were laid off from a job compared to 23% of workers ages 34 to 54 and 28% of workers ages 18 to 34
• 35% of those who were laid off found a new job within six months of active pursuit and 16% found a new
  job in two months or less
• 33% of the respondents say they spent more
  than seven months seeking a new job and 1 in 10 were looking for more than two
  years. Some Americans have yet to find new work after being laid off — 22% say
  they were unable to obtain a new job
• Nearly 66% of workers age 55 and older say
  they were actively seeking a job for more than one year or have not yet found a
  new job, while 33% of those younger than 55 say the same

The figure below is from the Study. It illustrates
how closely the recession’s layoffs have touched average Americans. At the center of the circle are 23% who
lost a job.

In the next ring are 11% who know someone
else in their immediate family who lost a job to layoffs. Together, the data
indicate one-third of American households, approximately
39 million people, lost work as a result of the recession during the
past four years.

Another 26% were not
affected in their household, but did know a member of their extended family who
lost a job (parent, cousin, aunt, or uncle). Another 13% did not have a family
member affected, but knew a close personal friend who lost work, and another 5%
say they know a friend of someone in their immediate household who lost a job.

Overall, just 21% of Americans do not fall into one of these
circles.

More
depressing news: Of the people fired who managed to get another job, 48%
took a step down in position, with 46% taking a job below their skill or education
level. A whopping 54% reported their
new job pays less.  A third took over a 30% pay cut to get a new
job.  Another third got hit with an 11%-30% cut in pay.

That’s
economic devastation for millions of Americans, even though they are working. 

And 56% of
Americans now have less in savings than before 2008. 38% reported they are
tapped out financially. Over half of people said they were running through
their savings just to get by and 30% said they were borrowing money.

Of the
almost one quarter of working America fired in the last four years, a full 22% cannot
find another job. That’s roughly eight million people. But it’s worse than
that. The BLS December JOLTS
report, or Job Openings and Labor Turnover Survey
shows there were 3,617 million job openings in December 2012, below the pre-recession levels of 4.7
million, although they have increased 65% from July 2009. Below is
the graph of the official BLS job openings.  

Since there
were 12.2 million unemployed in December 2012, that means we have 3.4 unemployed
per job opening. 

And in
conclusion:

If the
Study can be scaled up to the country, one-third of American households lost paychecks
over the past four years. A full 79% of America knows someone personally who
lost their job.   

Washington,
including Mr. Obama last night, have glossed over how truly decimated the
American middle class is, economically. This Study brings it home. 

Faced with
a Republican Party that is by turns, nihilistic and filled with zeal for small
government and fewer taxes, pragmatism about adding jobs will be met with
rhetoric about unleashing America’s businesses from regulation and how even
lower taxes will spur new jobs and new investment.

The
Wrongologist often asks: What kind of
society do we want to be? It should be intolerable
in our society that politicians won’t work together to return our
unemployed to work after 5 years.

Had the great
jobs slaughter affected just K Street and Wall Street, it would have been
solved in a great bi-partisan rush by our politicians.  

But, it’s
clear that Washington’s position is let the American worker be damned.

And damned
we are.