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What Do You Do With 300K Discouraged Workers?

http://www.youtube.com/watch?feature=player_embedded&v=9mqVCctaBK4

We have a new jobless report, and it’s the good, the bad and the ugly.

The good involves America’s lower unemployment. 120,000 new jobs were created and the total number unemployed fell to 13.3 million. Let’s hope it continues. If we do the right things and believe the right things; any temporal benefit to certain incumbent politicians will prove short-lived and illusory.

The bad involves several of the internals in the current BLS report. Analyst Kathy Bostjancic describes this report as positive, but not good enough to do what’s necessary.

“These modest job gains are still not enough to propel economic growth to a sustainable 2 percent-plus growth path.”

Other reasons for Eeyore to stay gloomy exist. The average length of unemployment is at a record-high 40.9 weeks, and many workers hold more than one job. Of the 120,000 new jobs, a mere 2,000 were in manufacturing. Service sectors such as hospitality and soft retail added 105,000 of the 120,000 jobs. This leaves the unfortunate possibility that a lot of this was seasonal help. Merry Christmas while it lasts.

To me the ugliness occurs from having 315,000 workers leave the workforce. A part of me says you can’t just quit. Perhaps it’s the whole Jeebus-Man Thing. St. Paul minces no words in 2 Thessalonians (3:10)

For even when we were with you, this we commanded you, that if any would not work, neither should he eat.

It leaves we wondering what do these 315,000 people actually do with themselves? I would hate to think this Adam Corolla video explains why people leave the workforce and do absolutely nothing. (And furthermore, it’s profoundly NSFW)

http://www.youtube.com/watch?v=cJD8pZiRIzs

Another possibility involves an awful lot of this economy existing off the books. Anecdotal evidence suggests the possibility that people are leaving a failed system and doing what they have to do. It surfaces in funny ways sometimes. Mitt Romney’s landscaping crew was one amusing instance that reached the cable news networks.

Yet nobody really tracks this well. For one thing, the buyers and sellers of labor are about as forthcoming with employment data as your local drug kingpin. Everything they engage is illegal in some aspect. They’d say they are doing what they have to to get by, but the old saying goes “The Law is an Ass.”

“We really don’t have data,” Martin Kohler, regional economist with the Bureau of Labor Statistics, says in an e-mail. “And I am not sure who would.” Employment services uptown were unable to shed any light on the subject.

(HT: TheUptowner.org)

“The underground workforce is made up of individuals from many walks of life,” Susan Pozo, an economist at Western Michigan University, says via e-mail. Smith says, “They can be tailors, janitors, nannies, dog walkers.”… Pozo estimates that, based on the documented unemployment rate in upper Manhattan, off-the-books workers constitute roughly 13 percent of the labor force. She knows of no estimate of the total worth of the country’s underground economy.

In 1987, Italy actually made a serious effort to measure how much of their economy operated sub rosa. This resulted in a recalculation of GNP (This was pre-GDP) such that Italy was shown as having a larger economy than Great Britain. The New York Times describes this below.

Two years ago, a wave of euphoria swept over Italians after economists recalibrated their statistics, taking into account for the first time the country’s formidable underground economy of tax evaders and illegal workers, and announced that Italy had overtaken Britain to become the fifth-largest economy in the West, and was closing in on No. 4, France.

This leads me to wonder how much of America’s workforce is really made up of discouraged workers. These people could be doing a lot of things on a short-term cash only basis. A lot of them could be criminal enterprises for reasons beyond evasion of taxes and employment verification.

Or a lot of these people could just be doing the only thing they have left. In a nation once described as the land of opportunity, they could be doing the only thing left that gives them a chance to survive. Once these people have dropped out of the workforce, why wouldn’t they pretty much drop out of everything else? We lose these people to our society at some point. And that would prove to be ugly indeed.

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