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Thursday, July 31, 2008

The hidden unemployment
Posted by Jill | 7:34 AM
There's more than one way to push people out of the workforce and out of the mainstream. One of the most cost-effective ways is to move people from full-time to part-time work. These people don't inflate and enlarge the unemployment figures because they are at least marginally employed, and they tend not to cost employers too much money, because in many companies, part-time employees are ineligible for health insurance.

But as reported in the New York Times today, part-time employees aren't reliable consumers, and part-time work is often the first step down the slide into poverty:

The number of Americans who have seen their full-time jobs chopped to part time because of weak business has swelled to more than 3.7 million — the largest figure since the government began tracking such data more than half a century ago.

The loss of pay has become a primary source of pain for millions of American families, reinforcing the downturn gripping the economy. Paychecks are shrinking just as home prices plunge and gas prices soar, furthering the austerity across the nation.

“I either stop eating, or stop using anything I can,” said Marvin L. Zinn, a clerk at a Walgreens drugstore in St. Joseph, Mich., who has seen his take-home pay drop to about $550 every two weeks from about $650, as his weekly hours have dropped to 37.5 from 44 in recent months.

Mr. Zinn has run up nearly $2,000 in credit card debt to buy food. He has put off dental work. He no longer attends church, he said, “because I can’t afford to drive.”

On the surface, the job market is weak but hardly desperate. Layoffs remain less frequent than in many economic downturns, and the unemployment rate is a relatively modest 5.5 percent. But that figure masks the strains of those who are losing hours or working part time because they cannot find full-time work — a stealth force that is eroding American spending power.

All told, people the government classifies as working part time involuntarily — predominantly those who have lost hours or cannot find full-time work — swelled to 5.3 million last month, a jump of greater than 1 million over the last year.


Workers who see their pay cut in half and their benefits terminated are more likely to accumulate debt just to make ends meet. They're more likely to put off medical and dental checkups and procedures. They're more likely to enter foreclosure. And this benefits overall American society -- how? Yes, reduced payroll costs can help companies get through the quarter without causing Jim Cramer to jump up and down and screech about them on his television show. But is this the best solution for reduced profits? Or are companies just killing the goose that laid the golden egg.

Yesterday I went for a dental cleaning and to have a crown started on a tooth my dentist has been monitoring for two years. I go for cleanings four times a year, and my dental coverage has helped out with two of them. By the time they were my age, both my parents were well into bridgework and other dental problems. My dental heredity is so bad that my baby teeth sprouted with cavities already in them. But I still have all of my own teeth. The back teeth are all crowned, but they're all mine. Preventive dental medicine and the gradual crowning of all of the teeth that contained more amalgam than tooth has kept me from being toothless in addition to being middle-aged and laid off. Last year I had a colonoscopy, which offers some protection against colon cancer by literally nipping potentially problematic polyps in the bud.

I'm relatively fortunate in that when my insurance lapses at the end of September, and I haven't been lucky enough to find another job by then, Mr. Brilliant can enroll us both on his employer's plan. Of course, this could have the effect of making him more expensive and therefore more expendable, but it's a risk we have to take. Othes aren't so lucky. Others like one of our own, Susie Madrak:

Here’s the deal, kids: I’m out of work now and I need three different surgeries. (I’m just the tiniest bit suspicious that this had something to do with the timing of my layoff.)

I’m having one surgery (an eye operation - I’m seeing double) in two weeks, but I need to schedule the other two and I just can’t fit them all into the next month, which is when my insurance runs out.

I figure three months’ COBRA coverage will do the trick. That’s $447.91 per month, for a grand total of $1343.73.

I plan to pick up some of that slack with blatant advertising (expect to see a lot more ads and text links - please click on them, it helps) but I also need to ask you for donations.


Is this what we've come to? That people have to beg for donations? We see it everywhere. Here in northern NJ, a foundation has been set up to help local families dealing with family members who are injured or ill. Coin collection cans and pancake breakfasts abound. Here in Blogtopia (™ Skippy), those needing help ask for it, and the community responds. This is the Republican dream society, in which individuals are reliant on the kindness of strangers, and the ability of strangers to help out. But is this the country we want to live in; one in which employees with health insurance are in danger of being fired because they are too expensive, in which private health insurance is prohibitively expensive, and where people in need of surgery are reliant on the five dollar donations of other people in similarly threatened straits?

Cutting staff is an easy way to make the balance sheet look better to the financial analysts in the short run. But after you get through the quarter, then what? Who buys your products? Who pays the taxes to perpetuate the Iraq War in perpetuity? And what happens to the sick people who have been let go?

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2 Comments:
Anonymous Anonymous said...
The purpose of business is not to employ people.
7/31/08, 12:14 PM  
Anonymous Anonymous said...
You need to read this. I thought about blogging it tomorrow, but you need it today.
7/31/08, 11:29 PM  
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