The New Math Of Unemployment

On some pastoral, primitive islands of Micronesia, bare-breasted maidens and wives do a lot of the hardscrabble work and are among the primary breadwinners, going to the reefs and lagoons to fish for the family table. Naturally, their labors make life a lot easier for the menfolk. Women's lib notwithstanding, the U.S. has not approached this state of affairs--which male chauvinists may or may not applaud--but the fact is that women are surging into America's labor force, increasingly doing what in simpler times was called men's work. In the process they are drastically altering the whole U.S. job situation and changing the terms of the debate over unemployment.

Since 1956, women's share of the labor force has risen from 29% to 36%. Today 34.5 million American women hold jobs or are registered as looking for them, including almost three out of every five wives aged 18 to 44 and almost one out of two mothers.

Meanwhile, another group of work-seeking Americans has also expanded rapidly: teenagers. Their share of the labor force since 1956 has increased from 6.5% to 9.3%.

The profound consequence is that the number of people looking for work is leaping faster than the economy can provide jobs, and unemployment sticks on a high plateau (7.8% in September). Because women and teen-agers are often among the last hired and first fired--and the least trained--their presence in the job market swells the official unemployment rate. And that much headlined statistic tends to exaggerate the image of dire suffering caused by unemployment. In September only 2.5% of those in the labor force had been out of work for 15 weeks or more and .6% for a year or more. The unemployment rate was 5.4% among heads of households* and 6.1% among adult men (aged 20 and over); it was 7.5% for women and 18.6% for teens. Indeed, the large increase of women and teens in the labor force has persuaded most economists to change their "full employment" standard from an unemployment rate of 4% to 5%.

Unemployment is no longer the national trauma it once was--and, in large measure, Jerry Ford can thank the New Deal for that improvement. The Social Security Act of 1935 and subsequent social legislation so greatly extended the jobless benefits that most out-of-work Americans now collect tax-free income for up to 65 weeks, averaging from $48.15 weekly in Mississippi to $95.56 in the District of Columbia. In fiscal 1976 the average payment was $71.85 weekly, and more than 10 million people collected jobless checks at one time or another. Add food stamps, welfare, union unemployment benefits (which in the auto industry bring jobless aid up to as much as 95% of take-home pay for some workers), and it is clear that most of the unemployed get by today without severe hardship.

Some people--nobody has a good estimate of how many--are not actively looking for jobs but list themselves as unemployed in order to collect the benefits that are available. In scattered cases, the benefits amount to more than people can earn after deducting taxes and expenses and thus deter them from looking hard for work. Says an unemployed Miami secretary: "My take-home pay was $135 a week. I spent $35 for child care, about $10 getting back and forth to the office and maybe $10 for clothes to wear at work. I'm better off staying at home and drawing unemployment checks." With benefits so generous, still other workers arrange to leave their jobs to look for better employment; last month 929,000 people left their jobs of their own free will.

Armed with these figures, and the fact that the number of Americans at work has jumped from 86 million to 87.8 million in the 26 months of Ford's presidency, some economists argue that the unemployment picture is not as dismally gray as Jimmy Carter paints it. Moreover, the U.S. lists as unemployed some people--for example, full-time students looking for part-time work--who would not be counted as jobless in other industrial countries.

The AFL-CIO and the National Urban League argue, however, that the U.S. actually underestimates unemployment because it does not count people who have become so discouraged about seeking work that they have dropped out of the labor force. Counting them in, the AFL-CIO reckons that unemployment in September was not 7.8% but actually 10.3%.

There is no denying that the present unemployment if long continued would debilitate the nation. Though their prescriptions differ, Ford and Carter agree that the nation should not and cannot tolerate such unemployment. It will be difficult to get below the 5% "full employment" goal, in part because many people are merely "between jobs" or lack basic job skills. The difference between that 5% and the present level of nearly 8% is where the real unemployment problem lies. The Congressional Joint Economic Committee reckons that every 1% of unemployment costs the U.S. $18 billion in lost tax revenues and increased unemployment insurance benefits. At that rate, the U.S. could save $50 billion if joblessness were reduced from the present 7.8% to 5%. More important, in human terms the long-term unemployed are a serious problem. The unemployment rate among blacks (12.7%) is dreadful. It slows overall black progress and contributes to the decay of the cities. As long as modern society encourages so many women to want to work, more jobs must be created for them as well as for teen-agers --the alternative being a nagging despair and disillusionment with the capitalist system. These are social problems not solvable by overall economic policy, but requiring specific, targeted programs.

* In many of these households, of course, other members of the family were at work.

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