If there is one single factor that clouds both the prospects for the economy and the reelection of incumbents in the months ahead--including Bush--it is probably the specter of joblessness. In one way or another, a large number of American families have been touched by unemployment in recent years. And that trauma has imbued consumers with a cautious attitude toward spending that impedes the very pickup in business activity that could cure their malaise.
Just how serious have been the travails of job losers? Back in 1984, the Bureau of Labor Statistics began conducting biannual surveys of displaced workers, those losing permanent jobs in the previous five years. The latest survey conducted in January of this year reveals some stark developments.
The BLS found that 5.6 million workers over 20 years old lost permanent jobs (held for at least three years) from 1987 through 1991--12% more than in 1979-83, a recessionary period. By January of this year, only 65% were back at work, while 22% still were looking for a job, and 13% had left the labor force.
Most reemployed workers experienced downward mobility. Over 48% of those back at full-time jobs were earning less than before, and most of these accepted pay cuts of at least 20%. If you count part-timers, plus those who became self-employed or joined a family business, then over 55% of reemployed workers who previously held full-time jobs appear to have suffered earnings declines.
Even these numbers understate the woes of displaced workers. For one thing, they only count cash wages, and many reemployed workers wind up with fewer benefits than they previously enjoyed. Over one-fifth of those who formerly had health insurance, for example, lack such coverage in their new jobs. And the bls does not adjust wage levels for inflation, "a failure which significantly reduces the number of workers reported to have experienced pay cuts," observes economist Lawrence Mishel of the Economic Policy Institute.
Mishel calculates that the total number of displaced workers, including those who lost permanent jobs held less than three years, actually hit 12.3 million in the 1987-91 period. And he notes that white-collar workers have been feeling the brunt of joblessness for the first time in history. In the past two years, Mishel calculates that 13% more white-collar than blue-collar workers have joined the ranks of the unemployed. By contrast, more than 212 times as many blue-collar workers became unemployed during the 1981-82 recession.
"Though many white-collar workers are suburbanites who often voted Republican in the past," says Mishel, "their new brush with insecurity has turned them into a political loose cannon."