A disturbing trend is happening with the latest US unemployment data. It's a trend that suggests that America is sliding into a divided society, and there's no going back. And claims that the US is headed for a jobless recovery are complete garbage, offensive stuff peddled by politicians trying to fool voters and economists who have no idea of the real world.
Associated Press reports that the proportion of people jobless for six months or more has accelerated in the past year and it now makes up 46% of the unemployed. Yes, that's 46%, about one out of every two unemployed people has been out of work for more than six months. That's the highest percentage on records dating to 1948. And within a few months, they are expected to make up half of all jobless Americans.
Economists warn they're likely to become a permanent feature. Since the start of the recession at the end of 2007, 7.4 million jobs have vanished from the US and many of those jobs aren't coming back. In industries like home construction, manufacturing and retail, fewer workers will be needed even after the economy has fully recovered. The reason for that is what economists like to call "higher productivity". It actually means that companies have learned how to produce the same level of goods or services with fewer workers. Older workers, those 45 and up, make up the largest slice of the long-term unemployed with African-Americans making up 20.8% and men accounting for six out of 10.
This is why the number of Americans on food stamps is now at an all time high, representing about one in eight Americans, and why the poor are selling food stamps to get cash.
Writing in the Financial Times , Mort Zuckerman says the mood of US households is bleak with only 11.3% believing they would see their income rise in the following six months, while 16.6% think they would see it decline. That's the first time in over four decades that more people believe they will be worse off than better.
And with more people looking for work than there are jobs available – 5.6 are now vying for each job opening – it can only mean one thing: wage deflation. Wages in the US are not going to be going up. And that means there will be no demand for goods, which means more companies will be laying off staff.
The so-called jobless recovery is not a recovery at all. It's an absolute crock peddled by politicians and economists.
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