As we approach Labor Day, it is sobering to remember that the national unemployment rate stands at 9.1 percent. For comparison, during the last two recessions, the rate never rose above 7.8 percent. Experts are predicting that unemployment will remain above eight percent for five years running.
And sadly, a new report from the Economic Policy Institute (EPI) suggests the human impact is even worse than the monthly unemployment figures suggest.
Many more Americans are underemployed – meaning that they have accepted part-time work when they really want full-time work, or they have become so discouraged that they have given up actively seeking work. While these individuals are not counted in the official unemployment rate, they represent a group of workers who are not finding adequate employment in the current job market. As of July, 16.1 percent of American workers were unemployed or underemployed. An amazing 31 percent of the workforce was unemployed or underemployed during some part of the year in 2009.
The recession has hit people of color the hardest. In 2009, 36 percent of blacks and 41 percent of Hispanics were unemployed or underemployed during some part of the year. Currently, unemployment or underemployment affects roughly one out of four minority workers.
For many, the search for work has been a long one. Almost half of all unemployed people have been out of work for more than six months.
The depth and breadth of the current unemployment crisis has serious consequences for all Americans, including those who are employed. The nation has experienced the slowest wage growth in the last three decades, a decline in median household income, and a substantial rise in poverty. According to the EPI report,
[T]he adverse effects…also include long-term “scarring”: young people who cannot get a proper footing at the start of their careers suffer lower lifetime earnings, older workers see their retirement security vanish, and the productive potential of the economy falls as innovation and investment suffer.
Here in Minnesota, the jobs picture remains troubling. According to EPI, Minnesota continues to face a “jobs deficit.” We have 124,600 fewer jobs today than we did when the recession started in December 2007. We would need to add another 73,300 jobs to keep up with population growth since the recession began. That means Minnesota needs to add 197,900 jobs just to regain our pre-recession employment rate – a number roughly equal to the populations of Rochester and Duluth combined.
But that’s not likely to happen anytime soon. The most recent job vacancy survey shows the state has one job opening for every 3.6 people looking for work. While this is an improvement from one year ago, many of these openings are for part-time, temporary or seasonal employment. The median wage offer for all vacancies was just $10 an hour.
This Labor Day, let’s not forget about the people behind the numbers. Most Americans have been affected in some way by this deep and prolonged period of unemployment. So, instead of focusing on the latest news from the stock market, policymakers should turn their attention to addressing the challenges facing the nation’s millions of unemployed and underemployed workers.