the croakers want their own index

LI recommends David Leonardt’s column on unemployment in the NYT today. Leonardt has positioned himself as the NYT’s thorough Business columnist – he doesn’t have Gretchen’s instinct for hot stories of corrupt dealing, or Floyd Norris’ air of being a business columnist paterfamilias. Instead, he’s the economic historian of the bunch. In keeping with that rep, he begins with a fascinating story about the man who invented the way we measure unemployment, Carroll Wright, the chief of the Massachusetts Bureau of the Statistics of Labor in 1873 who was convinced that unemployment wasn’t as bad as the newspapers said it was. To “combat” the erroneous picture, “he created the first survey of unemployment.

The survey asked town assessors to estimate the number of local people out of work. Wright, however, added a crucial qualification. He wanted the assessors to count only adult men who “really want employment,” according to the historian Alexander Keyssar. By doing this, Wright said he understood that he was excluding a large number of men who would have liked to work if they could have found a job that paid as much as they
had been earning before.

Just as Wright hoped, his results were encouraging. Officially, there were only 22,000 unemployed in Massachusetts, less than one-tenth as many as one widely circulated (and patently wrong) guess had suggested. Wright announced that his “intelligent canvas” had proven the “croakers” wrong.”

The croakers have been down ever since – we croak that the reserve army of the unemployed is cynically manipulated to lower wages. Croak! We croak that the unemployment figures, like inflation figures, have been fine tuned by a combine of neo-classical economists and conservative politicians to churn out mind-numbingly bogus figures. Croak!
Which brings us up to the present:

“Over the last few decades, there has been an enormous increase in the number of people who fall into the no man’s land of the labor market that Carroll Wright created 130 years ago. These people are not employed, but they also don’t fit the government’s definition of the unemployed — those who “do not have a job, have actively looked for work in the prior four weeks, and are currently available for work.”

Consider this: the average unemployment rate in this decade, just above 5 percent, has been lower than in any decade since the 1960s. Yet the percentage of prime-age men (those 25 to 54 years old) who are not working has been higher than in any decade since World War II. In January, almost 13 percent of prime-age men did not hold a job, up from 11 percent in 1998, 11 percent in 1988, 9 percent in 1978 and just 6 percent in 1968.

Even prime-age women, who flooded into the work force in the 1970s and 1980s, aren’t working at quite the same rate they were when this decade began. About 27 percent of them don’t hold a job today, up from 25 percent in early 2000.”

It is a mad world, my masters. The croakers have still not penetrated the gated community in which dwell the pretty media princes and princesses. But outside that community, something is stirring. Us croakers have long been aware of an existential malaise, as we fight for our lives in our individual ratholes and receive reports about a world of sugar plum fairies in sugar plum McMansions, reports that are totally void of any hint that this magic world in which the dogs have all eaten the dogs and now want their desserts is not all the world there is.