Unemployment has had a massive impact on American society and widened the gap between rich and poor. In the richest country in the world, we're seeing unemployment at Depression levels for certain sections of society.
Consider for example this study from The Centre for Labor Market Studies at Northeastern University in Boston which showed that the two lowest-income groups, who were earning under $12,500 and under $20,000 annually, faced unemployment rates of 30.8% and 19.1%, respectively. Compare that to the 3.2% unemployment rate for households with over $150,000 in income and the 4% in the next-highest income group of $100,000-plus. With rates like that, you would have to say that the labour market for the rich is close to full employment. For low income earners, it's more like where they were in the 1930s. "These extraordinarily high rates of labor underutilization among these two income groups would have to be classified as symbolic of a True Great Depression… There was no labor market recession for America's affluent,'' the researchers say.
The United Nation's Gini coefficient,which measures the national distribution of family income, reveals the US has the highest level of inequality of the highly industrialized countries. According to the CIA World Factbook, America has fallen behind Cameroon on the Gini Index.
This polarization will continue for many years because even the Obama administration concedes unemployment will remain high for some time. It's a different story for the bankers and CEOs who are pulling in millions with the likes of John G. Stumpf, head of Wells Fargo, getting paid $18.7 million in cash and stock for 2009 and Lloyd Blankfein from Goldman Sachs pocketing $9.7 million.
While the poor are struggling, the millionaire club is growing. "There are probably thousands of people that are in the Millionaire Club – or even the Ten Millionaire Club – that have gotten no heat," said Alan Johnson, a longtime Wall Street compensation consultant told the New York Times.
I'll say this. If high income earners were suffering unemployment levels of 31%, we wouldn't hear the end of it. The media, commentators, economists and politicians would be describing it as a national catastrophe. Instead, they're talking about recovery and ignoring the problem. Don't believe it.
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