(Diarist has received written permission from Naked Capitalism publisher Yves Smith to reprint posts from her blog in their entirety, here on Daily Kos.)
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Guest Post: Unemployment for Those Who Earn $150,000 or More is Only 3%, While Unemployment for the Poor is 31%
Naked Capitalism
Submitted by George Washington on 04/25/2010 01:27 -0500
Washington's Blog
Boeing CEO Jim McNerney succinctly summarized a recent study by Northwestern University's Center for Labor Market Studies regarding unemployment rates for different income brackets:
The Center analyzed the labor conditions faced by income-grouped U.S. households during the fourth quarter of 2009.
In the face of one of the worst economic environments in memory, those in the highest income groups had nearly full employment levels, with just a 3.2 percent unemployment rate for households with over $150,000 in income and a 4 percent rate in the next-highest income group of $100,000-plus.
The two lowest-income groups -- under $12,500 and under $20,000 annually -- faced unemployment rates of 30.8 percent and 19.1 percent, respectively.
The study -- published in February -- notes that the poor are suffering Depression levels of unemployment:
Workers in the lowest income decile faced a Great Depression type unemployment rate of nearly 31% while those in the second lowest income decile had an unemployment rate slightly below 20% .... Unemployment rates fell steadily and steeply across the ten income deciles. Workers in the top two deciles of the income distribution faced unemployment rates of only 4.0 and 3.2 percent respectively, the equivalent of full employment. The relative size of the gap in unemployment rates between workers in the bottom and top income deciles was close to ten to one. Clearly, these two groups of workers occupy radically different types of labor markets in the U.S.
The study is subtitled "A Truly Great Depression Among the Nation's Low Income Workers Amidst Full Employment Among the Most Affluent".
Arianna Huffington, commenting on the study, pointed out that it if were the high-earners suffering 31 percent unemployment, the media would be discussing unemployment non-stop. But because it is the poor who are suffering Depression-level unemployment, they largely ignore it.
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UPDATE: Regrettably, the denial, callousness and distortions of a handful of folks in this community persists. So, here's some data from the Leo Hindery article, linked at the bottom of this diary, in addition to right here. (Original diary continues after this "update" blurb.)
Our Dirty Little Secret: Who's Really Poor in America?
Huffington Post (via Alternet) / By Leo Hindery Jr.
March 9, 2010
The problem today for most isn't this recession, it's that except for the top 10 percent, average household income hasn't changed a bit for 10 to 20 years.
--SNIP--
* At least 50 million people are ill-fed -- up from 37 million just a year ago -- including 17 million children. Hunger in America is now at an all-time high, and there are currently entire national geographic regions -- the very large 15-state 'South' being one of them -- where more than half of all public school students are poor and ill-fed.
--SNIP--
* 30% of the nation's 50 million homeowners own a home whose value is below its mortgage balance, and this number could rise to an almost unbelievable 50% by year-end 2011. It would cost about $745 billion, more than the size of the original 2008 bank bailout, to restore these borrowers to the point where they were breaking even, which there is no obvious political will to find right now.
* Despite the truly dismal 'real unemployment' figures with which most everyone now agrees -- a staggering 30 million workers and 19% of the labor force -- very little attention is being paid to the particularly adverse effects the recession is having on people of color, recent immigrants, and out-of school youth. And almost no one is acknowledging the sad reality that even the nation's 130 million full-time workers have had an average economic loss of 15% just since December 2007 -- an average effective work week of 34 hours rather than 40 -- which means that the number of unemployed workers, measured economically, is actually as high as 50 million.
The overwhelming problem today for most workers isn't this recession, as horrible as it is -- it's the fact that for every earned income level except the top 10%, average household income hasn't changed a bit.
Additionally, New Deal Democrat has just posted an excellent diary which very much expands upon facts presented in this diary, and it's linked right HERE.
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Continuation of original diary...
As I noted last August:
Chris Tilly - director of the Institute for Research on Labor and Employment at UCLA - points out that some populations, such as African-Americans and high school dropouts, have been hit much harder than other populations, and that these groups are already experiencing depression-level unemployment.
For background on unemployment, see this and this.
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IMHO, if you project the Bureau of Labor Statistics' most recent nationwide comparisons between their U3 Index Unemployment Rate (the widely-publicized monthly numbers) and their U6 Unemployment/Underemployment Index results, for March 2010, it wouldn't be a stretch to say that the poorest among us--the bottom quintile of U.S. society--are now experiencing a jobless/underemployment rate of greater than 50%. For that segment of our society, it is a Great Depression.
Frankly, with everyone so engaged in spin about our extremely feeble "recovery," I think it's tragic that this truth isn't receiving more public notice from the Democratic Party, and even from those within this community.
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Links to a couple of recent, highly-suggested reads to accompany (and elaborate upon) this diary; and commentary regarding our "Two-Track Economy," from economist Simon Johnson, along with a diary I posted about it, both from August 20th, 2009:
"Our Dirty Little Secret: Who's Really Poor in America?" by Leo Hindery, Huffington Post (via Alternet), 3/9/10.
"Guest Post: It's Impossible To 'Get By' In The US," from Zero Hedge, 4/12/10.
"The Two-Track Economy," by Simon Johnson at his Baseline Scenario blog, 8/20/09.
"A Tale of Two Economies," my diary covering Johnson's post, from the same day.