Jobless rate’s just the start of bad news
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KAI RYSSDAL: I’ll just cut right to the chase and give you the numbers: The unemployment rate hit 6.1 percent last month. That’s the highest it’s been in nearly five years. And for the eighth time in a row the economy had fewer jobs at the end of the month than at the beginning — 84,000 fewer.
In all, the economy’s down more than 600,000 jobs since the beginning of the year. Which sounds pretty bad. But Marketplace’s Steve Henn reports some economists believe the real story is even uglier.
STEVE HENN: You can sum up this month’s job report in one word: Yuck.
MARK ZANDI: There’s no positive spin on it. It was bad.
Mark Zandi at Economy.com says weakness in the labor market hit housing first. But now it’s spreading to business professionals, factory workers and retail clerks. Economist Peter Morici says the official unemployment rate understates the problem.
PETER MORICI: If we factor in discouraged workers, unemployment is about 7.6 percent.
Since 2000, Morici says more than 2 million Americans have simply stopped looking for work and aren’t counted in the official unemployment numbers.
Morici: We lost last month 69,000 jobs in construction and manufacturing. Historically, those are the sectors that high school graduates and people with a few years of college but no specialized skill can find the best paying jobs. Instead, they’re pushed into activities like being hotel clerks — waiting on tables and so forth. Often those jobs don’t pay enough to pay to cover things like childcare for a young couple.
As good jobs vanished, men dropped out of the labor force. But, for years, women picked up the slack.
Cheryl Russell: As more women went to work and as women became better educated. But even women’s earnings have now hit the wall.
Demographer Cheryl Russell is author of “Bet You Didn’t Know…” She says today women are leaving the workforce, too. And if that trend continues, it will have historic consequences.
RUSSELL: It’s the end of the rise of the American standard of living.
In Washington I’m Steve Henn for Marketplace.
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