… What is Normal?
This is not the first economic recovery in recent years in which employment lagged behind other economic indicators. But does that mean nothing can or should be done about it?
According to Paul Krugman in The New York Times, the jobless rate is being taken as a sign that our current unemployment rates need to be accepted: “the odds are that unemployment will rise, not fall, in the months ahead. That’s bad. But what’s worse is the growing evidence that our governing elite just doesn’t care — that a once-unthinkable level of economic distress is in the process of becoming the new normal.” (See, “Defining Prosperity Down.”)
For years, increasing structural unemployment has been forecast – with varying degrees of alarm. Continual threats to American jobs have been coming from improved productivity, leaner management, automation, information technology, and outsourcing. It is also true – and well-known – that official unemployment figures leave out large numbers of workers who have given up trying to find jobs, settling for reduced, marginal lives. Whoever gives up on the job search after 6 months is no longer “unemployed.”
So, perhaps, it is true that our economy has a “structural problem” with employment. The invisible hand that so deftly adjusts supply and demand may neglect jobs. According to our economic ideology that’s not supposed to happen – but, then, neither was the need for the government to bail out financial institutions “too big to fail.” Krugman’s worry about redefining acceptable levels of unemployment gains credence from the fact that Congress has allowed unemployment benefits to run out.
A few days before Krugman’s commentary, Bob Herbert, also in The Times, cited Andrew Sum, director of the Center for Labor Market Studies: corporations “threw out far more workers and hours than they lost output.” As a result, this period of economic recovery “has seen the most lopsided gains in corporate profits relative to real wages and salaries in our history.”
Professor Sum went on. “Here’s what happened: At the end of the fourth quarter in 2008, you see corporate profits begin to really take off, and they grow by the time you get to the first quarter of 2010 by $572 billion. And over that same time period, wage and salary payments go down by $122 billion.” He exclaimed: “I’ve never seen anything like this.” (See, “A Sin and a Shame.”)
Professor Sum along with Krugman and Herbert express a kind of shock and outrage at what their awareness of economic terms and trends allow them to see. Most of us don’t have their perspective. Wondering when will things get better, we know something is very wrong.
We don’t see it because consciousness is very selective. Words like “unemployment” define for us what is real, excluding what doesn’t fit. Moreover, disconnected facts prevent us from seeing the whole picture.
But we know it because we do have unconscious intuition. We just don’t know what we know.