America's New Jobless: The Frustration of Idleness

I need a job. Don't care what it is or how much pay. Am very eager to learn. Ask for Dave.

So read a plaintive ad in the Wilmington News and Journal papers, Delaware's two statewide dailies, which last week opened their classified pages to the unemployed free of charge. The response from the unemployed was startling. "We were expecting 400, maybe 500 ads at most," says Classified Manager Thomas P. Grant Jr. In the first week, 1,095 jobless people--secretaries and executives, graphic artists and truck drivers, bartenders, librarians and engineers--sent in their pleas for work.

Throughout the U.S., unemployment--or the fear of it--has become a gnawing preoccupation. The Gallup poll reports that 15% of the nation's working people fear that they will lose their jobs in the next year. The Harris survey shows that more than half the public has already been hurt by work cutbacks; of those questioned, 30% said that they or a family member had been laid off, 9% had lost overtime and 13% had had their working hours reduced. Police blame unemployment for a recent jump in robberies and purse snatchings; many of the culprits who have been caught are jobless first-time offenders. Calling last week for more federal funds to create summer jobs for restless youth, New York City Mayor Abe Beame said: "The social toll of this kind of unwilling idleness among our young people could be devastating."

No Jokes. Unemployment has become a compelling theme of soap operas, comic strips, rock songs. In ABC's One Life to Live and CBS's The Young and the Restless, characters talk as much about their job insecurities as their sexual insecurities. In the newspapers' Mary Worth, two characters are putting off marriage because they are out of work. (Comic-strip art imitates life; marriage rates are tumbling because of unemployment.) In a new song, Hard Times, Arlo Guthrie croons: "I ain't got a nickel to call mine ... We ain't even got a lousy dime." Nobody is cracking any jokes about unemployment, but once again the old line is being heard: "When you're unemployed, it's a recession. When I'm unemployed, it's a depression."

By that standard, millions of Americans would argue that the most severe slump since the 1930s has indeed become worse than a recession. As recently as August, unemployment was 5.4%. Lately it has risen in frightening leaps --to 7.2% in December and 8.2% in January. The rate was again 8.2% in February, the Labor Department reported last week, but the real situation had worsened. Total employment fell sharply. The jobless rate held stable only because so many people despaired of finding a job that they simply dropped out of the labor force. In all, 580,000 people left the work force, and total employment declined by 540,000, to a seasonally adjusted 84 million. But 7.5 million Americans are now out of work.

The jobless toll is expected to grow for several more months, probably topping 9%. It will stay high for the foreseeable future, even long after the economy turns up. The Ford Administration's 1976 budget projects that unemployment will average 7.9% next year and 7.5% in 1977 and that it will not dip below 6% until 1980.

Those sketchy and controversial projections may be overly pessimistic, but they have raised large questions. Is unemployment really as bad as the cold numbers suggest? How are people coping? What groups of Americans are being hurt most? And what should the U.S. do about the problem?

Indisputably, unemployment is high among all groups in the labor force. It has idled

1 out of 16 adult men,

1 out of 12 adult women,

1 out of 5 teenagers,

1 out of 6 young Viet Nam veterans,

1 out of 14 whites,

1 out of 7 nonwhites,

1 out of 9 blue-collar workers,

1 out of 19 heads of households.

Of course, the situation is quite unlike the apple-selling days of the Great Depression, when one in every four workers was desperately, hopelessly unemployed and practically no safety nets protected them. Today, 6 million of the jobless are collecting unemployment compensation. The payments are made for up to 52 weeks. The states pay for the first 26 weeks, raising the money by taxing employers; the states and the Federal Government share the costs for the next 13 weeks, and Washington finances the final 13 weeks. The amount of the payments and the eligibility for them vary from state to state, but most people who have worked for 26 weeks out of the past year should be able to collect. Except in a few states, the size of the payments is determined not by need or number of dependents, but by how much a person earned on his last job. In New York, for example, anyone who averaged $189 or more weekly gets the maximum: $95 per week. If he earned less than $189, he gets roughly half his previous pay. Nationwide, according to the Labor Department, the tax-free payments average $61 per week, which comes out to 40% of the worker's previous take-home pay. Understandably, many families cannot scrape by on that amount.

All together, 1.5 million of the jobless are ineligible for unemployment compensation. Among them: self-employed people who have not contributed to unemployment compensation funds; people who have not held steady jobs for the past year, including recent college graduates; people who quit jobs without good cause; workers who have already used up their 52 weeks of unemployment compensation.

Just about everybody has some extra cushions, though they are becoming thin and frayed. Most (but not all) jobless auto workers collect supplemental unemployment benefits of just under 95% of their basic pay. But Chrysler Corp.'s SUB funds are expected to run out by early April and General Motors' by mid-May. Other unemployed people are drawing down their bank savings and selling off stocks. In sum, few people are totally destitute yet, but there could be spreading poverty and grave social trouble if high unemployment persists.

In varying ways, the unemployed are learning how to cope. Jobless Viet Nam veterans are signing up in record numbers for college or vocational courses to collect G.I. Bill benefits, which pay $270 a month for a single person. After collecting their food stamps at the Los Angeles County Department of Social Services, some of the unemployed stop at nearby vacant lots--to pick wild mustard greens. A laid-off Chrysler senior engineer, James Howard, 44, has become a Mr. Fixit, going round his neighborhood in Detroit to repair furnaces, rehabilitate appliances and install storm windows that he builds. Norman Sanders, 55, an unemployed electrician from Somerville, N.J., found a solution: "My two married sons and I set up a commune. We share taxes, food bills and household expenses. We all get along real good."

Sin of Omission. The search for work is intense. So many job seekers want to enlist in the armed forces that recruiters have raised admission standards, and the Air Force even turns down some men with master's degrees. All over the U.S. employers find they can fill jobs that pay only $2 or $2.25 an hour for gas station attendants, security guards, dishwashers. Those openings are often grabbed up by people who used to earn twice or three times as much. To get any job at all, some people are downplaying their talents and training, hoping to avoid the stigma of "overqualification." Marge Johnston, 49, of Berkeley, Calif, has been a medical microbiologist for 23 years and unemployed for the past 17 months. Says she: "Nobody is going to hire a microbiologist to drive a bus. But I'm prepared to handle that. On job application forms, I can put down that I'm only a high school graduate. This is called the sin of omission. Everybody does it."

Even a successful job search can exhaust a person's resources. Charles Kent Evans, 48, lost a $25,000-per-year job as vice president of Delta, Inc., a manufacturing firm in Jonesboro, Ark. Looking for a new post, he was willing to accept a cut to as low as $9,000. He sent out 100 resumes, listed himself with five employment agencies, got written recommendations from his Senators, J. William Fulbright and John McClellan. Still, it took him 18 months to find work, as director of the Arkansas State Nurses Association. During his ordeal, he depleted his life savings, cashed in his son's life insurance, dropped the family's hospitalization insurance, sold his coin collection and moved from a twelve-room house to a three-room basement apartment in his in-laws' home.

Though Evans was exceptionally well fixed to cope with a layoff, he belongs to the group in the U.S. population whose unemployment most debilitates the nation's economy. They are the heads of households, and their unemployment rate has jumped in the past year from 3% to 5.4%. Whole families depend on these breadwinners. When they lose jobs, their spouses and children reduce their own spending, and the family drains its savings. Household heads have a tougher time than single adults in making ends meet on their unemployment-compensation checks. They tend to be people who have locked themselves into big payments for mortgages, cars, college bills.

The high rate of teen-age unemployment is a less severe problem because a working teen-ager usually represents a second income to his family. But in the case of black teenagers, that income may well mean the difference to a family between scraping by or remaining deep in poverty and on welfare. In the past year, black teen-age unemployment has soared from 29% to 41%. Warns Herbert Hill, national labor director of the NAACP: "The disastrous rate of unemployment among black youth is the single most explosive factor for causing potential social unrest." Workers with ghetto youth report a rapid rise in the teenagers' distrust of "the System." Says Cecil Williams, pastor of San Francisco's Glide Memorial Methodist Church: "We are witnessing a tremendous sense of hopelessness and a growing gulf between the haves and have-nots."

Job prospects for young people leaving college this June are bleaker than in many years. No longer does the $20,000 invested in their educations buy automatic preference in the job market. Michigan State University reports that some recent graduates of its School of Social Science list their occupations as janitor, fireman, auto mechanic, periodicals clerk, meat cutter, dog warden.

Placement directors say jobs are hardest to find in the social sciences, arts, foreign languages and education. The graduates in highest demand are those in engineering, physical sciences, health, business, accounting and computer services. At the Harvard Business School this year, oil companies, commercial banks and auto-parts and -servicing firms are recruiting heavily. But there is a decline in recruiting by auto manufacturers and investment banking and real estate firms. General Motors, whose recruiters ordinarily hire 400 to 600 graduates each year, has canceled all its 1975 campus searches.

To be sure that they can sign up for the limited number of job interviews, some students have even taken to sleeping in line in front of college placement offices. Youngsters are also dressing up for interviews. Columbia University's placement director, Athena Constantine, notes: "Men are coming in with shirts, ties and suits, and the gals look like they are stepping out of an ad."

But not even graduates in the "hot" fields can feel sure of jobs. For example, Clara Maria Chow, 22, has been looking for work in computer technology since last June, when she got a B.S. in math from St. Mary's College in Notre Dame, Ind. Now, she says, "I've come to the point of accepting anything -- even a clerk's job for $90 a week." She has been interviewed by IBM, Bendix, Marcor, Burroughs, Xerox, Miles Laboratories and many other companies. Her experience is that "most interviewers seem to like overly aggressive applicants. It seems as if politeness and the appearance of being a lady are not requirements. I've purposely put on an aggressive front in recent interviews, but I still don't have a job."

High unemployment also imposes hidden psychological costs on people who never stand in an unemployment line but nonetheless feel frustrated in their attempts to live by the work ethic. The longtime housewife who would like to pursue a career and earn her own money; the student who wishes to "stop out" of college for a year to help finance his education; the bored pensioner who yearns to devote his training to something more than basking in the sun--all are likely to give up the job quest. None may suffer hardship, but all have lost some freedom of choice, and society may have lost something as well.

Stay Pot. The same plight faces the ambitious worker who is stuck in a job that gives insufficient scope to his talents. In better times, he would look for and probably find another job. During recession, he is likely to stay put and may do only enough work to keep on drawing his paycheck. His career is blocked; society misses the enthusiasm that he could bring to a new job and incurs a loss of productivity.

When a man loses his job, he is also severed from much of his community. "Forty hours of interaction with his cronies is cut out from under him," says Psychiatrist Stephen Landau of the University of Michigan. Having studied the increasing numbers of unemployed who are being treated at the university's emergency psychiatric clinic, Landau says that they frequently show signs of apathy, lethargy, despair and even suicidal depression. The mere threat of losing a job, he reports, can lead to "anticipatory symptoms," including heavy drinking. The child clinic is also getting "a lot of cases where a father is laid off and the adolescents explode with the tensions created in the home." Landau cites studies showing that the stress signs caused by unemployment can remain in the family for up to two years after a worker regains a job.

Jules Siegel, a California state unemployment official, finds that "losing a job is like losing a loved one." Adds Toni St. James, a San Francisco vocational psychologist: "Unemployment can become a psychological illness with symptoms as clearly defined as a disease like measles. Tragically, too many of the unemployed face the trauma alone, feeling rejected even by those who love them." At social gatherings, unemployed people often find themselves standing alone. They have little to talk about because so much of the conversation is job-oriented. Other guests tend to avoid them, much as football players move away from an injured teammate.

The psychological strain is hardest on middleaged, upper-middle-income executives, who felt wedded to their companies and drew strong creative satisfactions from their jobs. Corporate managers find it even harder to adjust to unemployment than do entrepreneurs. Says Ari Kiev, a Manhattan psychiatrist: "Managers are probably more dependent persons who often tie up their whole lives with the corporation. When unemployed, they feel abandoned and have nothing to fall back upon. But entrepreneurs, however devastated by unemployment, are more flexible, more self-reliant." One of his patients, an unemployed entrepreneur, went out and found a job as a cab driver; an unemployed sales manager refused similar work because, Kiev says, "he didn't want to dirty his hands."

Real Anguish. Factory workers adjust best of all. They are used to many bumps in life, and they fatalistically accept layoffs. Explains Kiev: "The factory worker has more cynicism, more skepticism about the company than the executive. He feels that the company owes him something. When he is laid off, he rationalizes: 'Those sons of bitches at the company.' And he goes out to mow lawns and fend for himself."

Even blue-collar workers, however, often disguise the real anguish of their joblessness from friends and their own children. Birdie Gaston, 62, who lives in Harlem, was laid off as a packager for Alfred Dunhill, Inc. a week before Christmas. "I brood a lot, and I hurt inside," she says, but she has attempted to hide those feelings from her relatives. She feels "ashamed" that she has to collect unemployment compensation ($63 a week). Most of all, she misses the job. "When I am working, I feel 24 years old. When I am not working, I feel as if I'm 90. I don't even want to look in the mirror." She spends many days sitting in a state placement office or in a hall of her union, the Distributive Workers of America, waiting--and waiting--for a job to be posted. "There seems to be no hope, no hope," she says. "But I'm going to keep trying."

Invariably, the unemployed complain of the boredom and tensions of enforced idleness. They spend the first weeks off the job doing all the long-put-off chores--fixing up the house, puttering with the car. But after a while everything is fixed, and there is nothing to do. Says Dave Lee, 25, who lost his job with a window manufacturer in Bayport, Minn.: "I read magazines, I wash the car, I help my wife clean, I shovel snow. I just try to pass the time. It's 24 hours a day, and it's terrible."

For Emilio Remondi, 40, of Hyde Park, Mass., a diesel mechanic who has been laid off twice in the last year, prolonged unemployment has brought a sense of entrapment, a feeling that all the prosperity of the past ten years has been wiped away. "I really don't understand what this country is going through," he says. "The politicians aren't listening to the people. It's all going crazy." His $113 weekly unemployment check cannot carry his family of five; they have been living off his savings, which will run out by summer --unless he finds a job.

One cruel penalty of unemployment is that it also victimizes the 91.8% of the people in the labor force who still hold jobs. The recession causes unemployment; but unemployment itself is a drag on the whole economy. When so many people have no work, real personal income and spending go down. As a result, companies' sales and profits decline. Because demand and profits are lower, businesses reduce their spending for new plants and machines. The economy sputters at well below efficiency.

No Easy Way. That unhappy scenario is being played out now. Hit by sharp inflation, recession and unemployment, the real purchasing power of Americans has declined by 5.2% in the past year. Sales volume has fallen, and corporate profits plunged by 21% from the third quarter to the fourth quarter of last year. Manufacturers in the fourth quarter cut their capital-spending appropriations by 24%. Today the nation's factories and machines are operating well below capacity, and productivity during the fourth quarter fell at an annual rate of 3.7%.

Meanwhile, unemployment has vastly increased spending by governments at all levels--for food stamps, welfare, Medicaid. Just to pay their current bills, many states will have either to raise taxes or postpone capital construction. The former would weaken some of the buoyant effects of a federal tax cut; the latter would swell unemployment. The cost of unemployment compensation in this fiscal year will be at least $18 billion, and it stands to rise next year. To help pay for it, the Labor Department is urging states to raise company taxes that feed the unemployment compensation funds; if this happens, it will show up in higher prices.

There is no quick, easy or riskproof way to bring down unemployment. It has been caused primarily by a conscious federal policy of restricting spending and money growth in order to fight an oppressive inflation. The restrictive policy has helped reduce the rate of inflation, and that may be one of the necessary preconditions for a recovery. Most businessmen, however, question whether such high unemployment is still necessary to fight inflation. Says Chairman William May of American Can Co.: "This is a national emergency. Things have gone downhill so fast that it is dangerous to say that our high unemployment benefits anything. This level of joblessness is not going to be tolerated by the people over a long period of time." May urges that Congress rush through, among other measures, an expanded public works program and a 15% investment-tax credit for five years (Instead of President Ford's proposed 12% credit for one year).

John Bunting, chairman of the First Pennsylvania bank, argues that the Government has already waited much too long to loosen up and stimulate the economy, and that the longer it dallies the greater will be the risk that it will do too much too late. Says he: "Ultimately, we will have more inflation as a result of the Administration's tolerance of high unemployment than we would have if it were thwarted right now. [Treasury Secretary] Bill Simon says that he is horrified by the size of the deficit--well, I would be horrified if the deficit were not that large." Bunting calls for "a much more aggressive policy" toward easing the money supply and increasing federal spending. In his view, there should be big outlays for mass transportation and "a moon-shotlike operation to develop solar energy."

Economist Murray Weidenbaum, a Republican, urges Congress to cut taxes quickly in order to stimulate demand and employment. "The Ways and Means proposal for a $100 to $200 rebate is peanuts," he says. "It's not enough to enable anybody to put a down payment on a big-ticket item. There was nothing wrong with Ford's idea for rebates of up to $1,000." Weidenbaum also recommends that the Government speed the flow of federal contracts: "Order today what is supposed to be ordered next month." Like Bunting, he is afraid that if Congress waits too long, unemployment will go so high that Congress will later overreact and overstimulate the economy--and kick off more inflation.

Tax Cut. The economy is so soft that even big tax cuts and easier money would not add much to inflation. After extensive computerized studies, Economist David Grove, vice president of IBM, concludes that an immediate tax cut of up to $30 billion would add no more than two-tenths of a percentage point to living costs between now and the end of 1976. Economist Otto Eckstein, head of Data Resources, Inc., calculates that a tax cut of that size would raise the cost of living through the end of next year by seven-tenths of one percent.

There is a strong argument that such a stimulative policy would not only reduce unemployment but would actually shrink the budget deficits in future years. So long as the economy remains underemployed, tax collections will be low, and deficits will be huge. Each $1 of output in private enterprise adds about 400 to the tax revenues of the federal, state and local governments. Economists reckon that if the U.S. now had a "full employment" economy, it would be producing some $175 billion more goods and services annually, and federal and state governments would be collecting $70 billion more in taxes, thus reducing or eliminating their deficits.

Until recently, economists defined full employment as a 4% rate of joblessness. Lately they have raised that figure to 5%, in part because large numbers of women and teen-agers have entered the work force in recent years. By that reckoning, the U.S. is now 3.2% away from full employment. While that may not seem like much, it represents huge numbers of idle workers and tremendous losses in production, profits and personal income. Thus, getting back to full employment--by substantially cutting taxes and easing the money supply--should be an urgent national goal.

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