In its September 2014 Jobs Report, the Bureau of Labor Statistics once again documented the persistent and pernicious effects of the Lesser Depression, which began to take shape when financial services firm Lehman Brothers collapsed and filed for bankruptcy in September 2008.
Exactly six years on, labor force participation continues to decrease, dropping to 62.7 percent last month, the lowest level recorded since 1978. Nonetheless, the BLS boasts the official unemployment rate declined from 6.1 percent in August to last month’s 5.9 percent, with employment increasing by 248,000 jobs. Retail trade added 35,300 jobs; health care brought on 23,000, with 7,000 Americans going into home health care services; state governments added 22,000 jobs; and, notching another monthly increase, leisure and hospitality added another 33,000 jobs. Curiously, performing arts and spectator sports showed up with 7,200 jobs. However, when it comes to jobs that produce tradable goods, the paltry numbers more clearly illustrate the US economy’s weaknesses. For instance, last month, job losses were noted in computer and electronic products, semiconductors and electronic components, paper and paper products. Overall, manufacturing only added 4,000 jobs across the country. In September 2014, just as it has since the onset of the Lesser Depression, the US economy remained torpid.
The straits into which the economy and working people have fallen was more evocatively revealed in another federal report issued in September, the Census Bureau’s Income and Poverty Report for 2013. In this study we get an even clearer picture of the crisis’ severity.
Based on unrealistically low federal guidelines, 45.3 million Americans survived in poverty last year. Based on this figure, the poverty rate was listed at 14.5 percent, with poverty-level income set at $11,888 for a one-person household, and $23,834 as the poverty threshold for a family of four. In 2013, 19.9 million people lived in families with an income below half of their poverty threshold. The poverty rate for children was nearly 20 percent, i.e. more than 14 million children in the country live in poverty. Median household income in 2013 was $51,939, essentially unchanged from the 2012 figure of $51,759. But real median household income was eight percent lower in 2013 than it was in 2007 and 8.7 percent lower than the 1999 peak of $56,895. Since that year, incomes in the 50th and 10th percentiles have declined 8.7 percent and 14.3 percent respectively, while there was not a decline, as we might have expected, in income at the 90th percentile.
Perhaps it’s the solidity of incomes at the highest levels that inspired President Obama to deliver the speech on the economy he gave last month at Northwestern University. In that talk, despite the précis above, our platitudinous president declared, “By every economic measure, we are better off now than when I took office.” He also enthused that “as Americans, we can and should be proud of the progress that our country has made over these past six years.” He considers it “indisputable” our economy is stronger today than when he took office. For Obama, “we need an economy that’s built on a rock…that is durable and competitive, and that’s a steady source of good, middle-class jobs. When that’s happening, everybody does well.” He’s right about that. The thing is, we are still waiting for the administration to take the steps necessary for such an economy to emerge.