Inflation's One Problem, Labor Force Is Another
Cunniff, John, THE JOURNAL RECORD
The Federal Reserve had inflation in mind when its raised interest rates this year, but in doing so it turned the spotlight on another problem: Unemployment and underemployment.
These categories, more sizeable than commonly believed, are made up in part of an underclass of people who just don't qualify for jobs, a group deprived because of corporate restructuring, poor education and social problems.
Based on the April surveys by the U.S. Bureau of Labor Statistics, there are now 8.4 million potential workers unemployed, another half million who have given up looking, and 4.8 million involuntarily working only part time.
While these numbers have improved in recent months, they look more like those you would see in the middle of a recession rather than in an economic expansion now into its mature years.
In fact, some economists believe the United States is now at or approaching what is termed full employment, a vague term generally interpreted to mean a level after which inflation is likely to begin eroding the economy.
It is a point at which companies find it harder to hire qualified workers and are thus forced to extend hours of existing employees, pay higher wages or hire and train unskilled, low-productivity help. Result: Prices rise.
Is a total of 13.7 million unemployed or underemployed Americans full employment?
Lest that figure be misconstrued, it should be noted that in a labor force of more than 130 million there will always be millions counted as unemployed, simply because they change employers. Their joblessness is short-term.
But now, in the third year of economic recovery, the average duration of unemployment was 19.2 weeks in March, higher than for any month last year, and the jobless rate 15 weeks or longer was as high as it was a year ago. …