Three Secrets About Unemployment and Jobs

by Hanno Beck

I felt terrible that morning, so I called in sick. But as soon as I set down the phone I started feeling better. So I went out to the shopping mall to take care of an errand.

A weekday morning. The mall will be quiet, empty, peaceful, and Iíll get a great parking place, right? But no! The mall wasnít empty at all. I got a rotten, lousy parking space, and inside the usual crowds of people were there. What were all these other people doing there -- they canít all have called in sick this morning! Donít they have jobs? After all, the unemployment rate is only 4.5%.

This was puzzling. I wanted to know how all those other people could be at the mall. So I went on a fact-finding mission.

Iíll tell you the basic answer right now. Donít those crowds of people at the mall have jobs? The answer is no, most of them do not have jobs. They are unemployed.

Our government defines unemployment so that the term applies only to certain people who are seeking a job, have a certain type of household, and have only been looking for a job for a certain period of time. It is a statistic about a certain SUBSET of unemployed people, but donít make the mistake of believing that the unemployment statistic shows the full picture of how many people really are out of work.

I prefer to be very plain and direct. I call someone unemployed unless they are being paid money for at least 20 hours each week. That's it. And in that case, what is the national unemployment rate?

In 1996, the last year for which complete figures are available, 126,708,000 people were employed in the United States. On any given day, about 5.8 million are not working due to sickness, taking a vacation, or some other official reason.

Many people work weekdays, during the daytime hours, but some work night shifts, evenings, and on weekends. About one-fourth work significantly less than 35 hours per week.

I did some arithmetic, and here is the bottom line. During weekdays, daytime, the true unemployment rate in the United States is 64%, in the evenings itís about 85% and in the middle of the night, or on weekends, it can go as high as 95%. Most people are not working for pay.

When somebody says all responsible people work, or that unemployed people are just a handful of losers, quitters, and communists, you can point out that we never have more than 36% of Americans at work at any given time. And even if everyone in the workforce worked at the same moment, that would still amount to just 48% of us. That leaves a lot of people to take up parking spaces at the mall. Most people are not in the workforce. Most people do not have official jobs. Most people are unemployed. That is secret #1 about unemployment.

You might wonder who these vast hordes of unemployed people are. A lot of them are housewives and househusbands -- they may not be paid, but they do lots of work. And many people are volunteer workers -- there are over 100 million volunteers in the USA. A lot of unemployed people are youngsters, and a lot of them are elderly. We donít expect many of them to be employed. But they are real people, they buy goods and services, they pay taxes. They go to shopping malls. In just my own county there are about 330,000 of these unemployed people -- you see some unemployed people every time you are in public, every time you buy groceries, every time you attend a meeting.

Now suppose we only used the government statistics, that claim the unemployment rate is just 4.5%, not 64%. We can still find a few surprises.

The national unemployment rate in the last five years has fluctuated between 4 percent and 5.6 percent. The actual number of people considered unemployed according to that statistic has fluctuated between 5.7 million and 7.4 million.

Millions and millions. I donít think those numbers mean very much to most of us, so letís boil them down differently. A typical full time employee works about 81,000 hours during their lifetime. Thatís a personís career. How you spend that 81,000 hours is how you spend your career. When six and a half million people are unemployed for just one day, the number of work-hours wasted is equal to 80 careers. Adjust the number to take account of vacations and illness and so on, and we are wasting over 1400 careers every month, or 16,800 per year.

Thatís 16,800 work-lives thrown away each year, based on the small unemployment statistic of 4.5%, not my larger number of 64%. Even based on the small number, we can still see a great tragedy of unused human energy.

In my county alone, we forfeit, we waste, we destroy, a little more than one career every week. What are we wasting? We may have postponed or cancelled finding a cure for AIDS. We are saying no to more librarians, more teachers, more firemen. We may have pushed away, delayed, or stopped, the next Rev. Dr. Martin Luther King Jr., we may have discarded the next Albert Einstein. That tragic waste of 16,800 lifetimes of work every year is the second secret about unemployment.

The third secret about unemployment is also simple arithmetic. Very roughly, there are two people for every one job in this country, so very roughly, each person in America buys and consumes enough goods and services to keep about one half of one person employed. Each of us is to be thanked for ďcreatingĒ about one half of a job.

In the state of Maine last year, the government gave taxpayer money to a private business to locate there. You have heard of such deals, I am sure. They are usually called corporate welfare ó paying taxpayer money to private profitable companies. The companies try to justify the handouts by boasting that they ďbring jobs to a community.Ē National Semiconductor, the recipient of Maineís new corporate welfare giveaway, is bringing jobs all right ó at a ridiculous cost of $229,000 tax dollars each. And thatís not the highest such cost in these corporate welfare scandals, some are far worse.

National Semiconductor is bringing jobs to a community ó but only because people, you and I, are willing to buy their products or the products of companies that they sell to. The economy starts or stalls, and jobs are created or eliminated based on what end users ó consumers ó people just like you and me ó are willing to pay for. Corporations arenít the ones that create jobs, we are.

Please, in the future, whenever you hear about such corporate welfare deals, oppose them, and point out that you yourself are ďbringing jobs to a communityĒ ó each of us brings about one-half of one job, and nobody had to give us handouts. If National Semiconductor deserves $229,000 per job, then you must deserve $114,500 for the half-job that you support. And if you donít get this windfall, then neither should the corporate welfare applicant. That is secret #3 about unemployment -- employed or not, you support the economy. If you donít deserve huge handouts for bringing jobs to your community, then neither does a corporation.

To recap ó secret #1, the unemployment statistic is 4.5%, but really, friends, the unemployment rate is actually at least 64%. Secret #2, our economy wastes 16,800 entire lifetime careers every year. Can we afford that? Secret #3, you bring about one half of one job to your community so donít give your tax dollars away to corporate welfare snake oil salesmen.


Hanno T. Beck runs the Banneker Center for Economic Justice.

What Folks Have Been Saying

Hanno Beck, I thank you for being in this "confusing" world we all occupy. You have stated that which has been true about the government's under counting of its citizens who aren't "fully employed". Most people that I am aquainted with in the Jersey City area are working " the books". They have no health insurance, are in debt from attending college, or were laid off from the NYC Financial Services Industry (What a joke to now call it a "Service Industry")
Pia Francesca DeSilva <[email protected]>
Jersey City, NJ USofA - Monday, October 28, 2002 at 10:43:42 (EST)

In response to Pia Francesca DeSilva: Thanks for your remarks. It always amazes me when I take a simple government statistic, just one number, and then start to compare it with common sense. You scratch the surface and discover a whole weird world of contradictions and misunderstandings. Every little fragment of light that we can shine on subjects like unemployment, inflation, taxes, and so on, makes the subject a little less troubling for others.
Hanno Beck <[email protected]>
Baltimore, MD USA - Monday, November 04, 2002 at 13:12:04 (EST)
Yes, there are other ways of looking at unemployment. Paradoxically here full time "carers" doing medical work in the home get even less than unemployed people and probably work even harder than many employed people. The rhetoric is that education and training will wipe out unemployment, but I doubt this. To the lost careers, add all those forced into mindless jobs by the unemployment system. Plus casual workers like Simon Jones, killed on the job. Enjoyed the quiz - cheers.
Diana E Forrest <[email protected]>
TODMORDEN, Yorkshire UK - Monday, November 04, 2002 at 17:47:10 (EST)
We need more people like you doing this type of investigations. Our government has deceived it's citizens for too long already.Congratulations! Lets keep educating ourselves so that we can make the much needed change in our sociaty. Thank you.
Hector Sanchez <[email protected]>
New York, N Y USA - Tuesday, November 05, 2002 at 13:16:12 (EST)
I have spent a personal and professional lifetime dealing with the effects of coporate welfare while the media makes "hay" on the pure welfare cheater. The corporate bailouts and handouts have a new lease on life - with some variations of the usual themes. My response: yes, keep the voice clear and pointed, backed by the information that a "free press" should presenting day after day. Oh, what am I thinking, we don't have a free press in this country - except such adventures in progressive reporting as the PROGRESSIVE POPULIST from Storm Lake,Iowa. I am in danger of launching a sermon! I will stop now.
Lois L. Cunningham <>
Santa Monica, CA USA - Tuesday, November 12, 2002 at 15:13:57 (EST)
You write: "Thatís 16,800 work-lives thrown away each year, based on the small unemployment statistic of 4.5%, not my larger number of 64%. Even based on the small number, we can still see a great tragedy of unused human energy." This argument is quite disturbing, because it suggests that "full employment" is an ideal worth striving for, that those who are not employed are somehow deficient. It is an argument, in effect, in behalf of economic servitude. You state, even more strongly, "In my county alone, we forfeit, we waste, we destroy, a little more than one career every week." My time is my own, it is not yours to command, it is no waste of my life to be spent in pursuit of that which fulfils my desires. To suggest that "we" waste that which we individually retain for ourselves is nonsense. Economically speaking, in the act of fulfilling my wants and needs, I produce that which is of value to myself. In so doing, I am a benefactor of the economy, even though I have no conventional job. Indeed as others value what I produce, and exchange for it, the benefits are spread between each participant. No government policy is needed to understand this. Let us be for full unemployment then, the ideal that people may reclaim their lives for their own. Those who may choose to work for another should be able to do so on terms other than desperation and obligation. Nor is it consumption which drives economic growth, this is sheer neoclassical nonsense having no business on a Georgist site. But that is a rant for another time.
Mike Goldman <[email protected]>
Pittsburgh, PA USA - Monday, November 18, 2002 at 08:44:30 (EST)
In reply to Mike Goldman's thought-provoking post:
I am in agreement with your remarks. One of the points that I make, perhaps not clearly enough, is that a large majority of people are "unemployed" at any moment, and therefore the stigma associated with being "unemployed" is quite absurd.

When I criticize a massive waste of human energy, I am not referring to people who are spending their time in the way they want; rather, I am referring to people who want to get paid for doing work yet are artificially restricted from finding opportunity for this -- for these individuals, "full employment" is indeed a goal, a goal that they desire but find artificially elusive.

Employment, which includes self-employment, is neither inherently good nor inherently bad; but if someone wants it, I think their chance of getting it should not be artificially restricted. If it is restricted, then there's a waste and that is a tragedy.

(One last item -- concerning consumption, I am glad that I did not make the claim that you consider "neoclassical nonsense" since I agree with you about that. If you think I did make that claim, then I have been unclear and beg your forgiveness.)
Hanno Beck <[email protected]>
Baltimore, MD USA - Monday, November 18, 2002 at 11:50:42 (EST)

what are the prospects for economic justice for african contries especially nigeria.i do not think the theory works for us please.
innocent nwachukwu <[email protected]>
owerri, Imo Nigeria - Thursday, November 21, 2002 at 06:15:16 (EST)

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