Workers looking for jobs, unions looking for members

Monthly Review, April, 2004 by Michael D. Yates

In January 2004, the U.S. labor market looked like this: Out of a civilian labor force of 146,863,000 persons, 8,297,000 were officially unemployed, meaning that they were not working but had actively sought work in the past four weeks. This gave us an official unemployment rate of 5.6 percent, down very slightly from the 5.7 percent posted in December 2003. This unemployment rate masked considerable disparities in unemployment rates by race and ethnicity. The black unemployment rate for January 2004 was 10.5 percent, and the Hispanic rate was 7.3 percent. The national average also hid differences among the states. In some parts of the country, unemployment rates were significantly higher than the national average. In the Pacific Northwest, where I have been living for the past year, signs of economic distress are easy to see. Not only have the unemployment rates of Oregon and Washington been significantly higher than the national average--7.3 percent in Oregon in December 2003; 6.8 percent in Washington--both rates were only slightly lower than they had been one year before. Homelessness of both young and old abounds.

The official unemployment rate does not tell us how much unused labor there is in the economy, that is, how large is the reserve army of labor. Excluded from the official count of unemployed are a number of groups. People working part-time but who would prefer full-time work (now defined as 35 hours per week) are called "involuntary part-time workers." In January there were 4,714,000 such persons. People who stop looking for work but who want a job and have searched for work in the past year are described as persons "marginally attached to the labor market." In January there were 1,700,000 of these, of whom 432,000 were "discouraged workers," those who stopped looking for work for a "market-related" reason such as a lack of available jobs in their occupation. If we add the involuntary part-time workers and the marginally attached to the officially unemployed, we get 14,714,000 persons for January and an expanded unemployment rate of 9.9 percent, perhaps a truer measure of labor market employment distress. (1)

However, even the expanded unemployment rate does not include all of the labor surplus. In an economy experiencing slack labor markets for several years, some workers will just drop out of the labor force and not be counted even as marginally attached. For example, some may take a forced early retirement and live as best they can on a reduced income. There is evidence that workers whose bodies have begun to break down from a lifetime of strenuous work are increasingly seeking and getting social security disability benefits. As corporate downsizing, relocation, and outsourcing eliminate their jobs, these workers start to see disability as the only way for them to make an income. Since 1990, the number of persons on social security disability has risen by nearly 100 percent, to nearly 6 million. Between January 2001 and September of 2002, the disability rolls grew by almost 400,000. (2)

Some persons unable to find work end up in prison. Many unemployed persons today have been looking for work for a long time. In January 2004, the share of the officially unemployed who had been searching for work for at least 15 weeks was 40.2 percent, and this share has been rising for some time. In January 2003, it was 35.3 percent. For those unemployed 27 weeks or longer, the percentage for January 2004 was 22.7; a year earlier it had been 19.5 percent. The average (mean) duration of unemployment is now 19.8 weeks, up two weeks from one year ago. (3) Long spells of unemployment sometimes lead people to commit crimes or be in situations where it is more likely that they will be accused of crimes. This, in turn, will put some of them in prison. The United States leads the world in number of persons incarcerated in prisons and jails, more than 2 million, of whom about half are black. Suppose that just one-half of the black persons in prisons and jails are disguised unemployed, that is, about 500,000 people. If we added these persons to the number of black unemployed in January 2004 (and by definition, to the black labor force), the black unemployment rate would rise from 10.5 to 13.1 percent, an increase of more than 20 percent. In connection with these astounding numbers, it is well to remember that many prisoners are working behind bars, engaged in what can only be called forced labor. As one prison activist put it,

  For private business, prison labor is like a pot of gold. No strikes.
  No union organizing. No unemployment insurance or workers'
  compensation to pay. No language problem, as in a foreign country. New
  leviathan prisons are being built with thousands of eerie acres of
  factories inside the walls. Prisoners do data entry for Chevron, make
  telephone reservations for TWA, raise hogs, shovel manure, make
  circuit boards, limousines, waterbeds, and lingerie for Victoria's
  Secret. All at a fraction of the cost of "free labor." (4)