The excellent blog, My Budget 360, has a very interesting and important article today entitled 10 States with Underemployment Rates of 20+ Percent. Manufacturing Sector Employs Same Number of Workers that we did in 1940. It is a hard hitting piece that amplifies concerns raised here on many occasions regarding the ill-effects of globalization. And they have some nice, powerful graphs in support of their arguments.
For instance, on the underemployment issue, consider this data:
One thing that is clear is the employment situation is in a major funk. 10 states now have underemployment rates of over 20 percent. We are talking about Great Depression statistics here:
The above data is pulled from the Bureau of Labor and Statistics and is an average from the fourth quarter of 2008 to the end of the third quarter in 2009. In other words, the data above is optimistic and doesn’t use the latest data that is even higher. For example, California recently reported their U-6 rate is now up to 22 percent. Michigan? Their U-6 is now closer to 25 percent. There is nothing remotely close to a recovery in the data above.
They also track the destruction of the US manufacturing base and it's implications for recovery.
This recovery is unlike your daddy’s recovery because multinational companies can leverage cheap labor and a pathetically weak dollar to increase business overseas. In past recessions when we actually had a manufacturing base, once the recession started ebbing you started to see domestic production pick up thus bringing people back to work.
The pattern is unmistakable. After every recession since the 1940s, manufacturing jobs contracted throughout the recession only to pickup after the recession ended. This trend started getting weaker in the 1970s. Even in the early 1990s recession, manufacturing jobs picked up slightly throughout the decade. Now, in the 2001 recession manufacturing has been plummeting and has completely broken the trend. In fact, we now have the same number of people working in manufacturing as we did back in 1940. One slight difference. The U.S. had 132 million people in 1940 and now we have 307 million. We have nearly 2.5 times the population and the same amount of people working in manufacturing.
There is more at the link including a look at the record high levels of "long term unemployment" with a realistic assessment of how many of those jobs will ever return as we adjust to a "new economy".