Sunday, February 1, 2015

On Texas Unemployment



As you may know, the past several months have been called the best months for job growth since the 2008 financial crisis. In December, 252,000 jobs were added, and the unemployment rate dropped by 0.1 percentage points to 5.6 percent.[i] Many regard this as good news, and to those who have gotten these new jobs, it very likely is. However, this still leaves 8,688,000 Americans unemployed. Furthermore, these numbers only represent a portion of the unemployed. They do not include people who have given up looking for work but have looked for work in the last 12 months, people who have a job-market-related reason for not currently looking for work, and people who would like to work full-time, but are only able to work part-time. With all of these people included, the unemployment rate increases to 11.1 percent[ii], and the number of individuals affected by unemployment increases to 17,330,000 Americans. This represents a 198 percent increase over the official rate.

“But,” many will say, “things are better in Texas!” To a certain degree, that is correct. The standard unemployment rates for Texas and several Metropolitan Statistical Areas are lower than for the nation as a whole[iii]:


Standard Unemployment Number
Percentage Rate
Texas
604,800
4.6
Austin
39,700
3.9
Dallas
159,200
4.6
El Paso
20,700
6.4
Houston
145,900
4.5
San Antonio
45,600
4.3

However, much like the standard unemployment numbers for the nation, these standard numbers for Texas do not paint a complete picture of unemployment here. Unfortunately, the BLS does not provide these numbers, and we must extrapolate from the national data to get this more complete picture.


Standard Unemployment
Percentage Rate
Plus Other Unemployed
Percentage Rate
Texas
604,800
4.6
1,197,500
9.1
Austin
39,700
3.9
78,600
7.7
Dallas
159,200
4.6
315,200
9.1
El Paso
20,700
6.4
41,000
12.7
Houston
145,900
4.5
288,900
8.9
San Antonio
45,600
4.3
90,300
8.5

As you can see, unemployment affects a much greater number of Texans than you might otherwise be lead to believe. But economists and others will tell you that unemployment is unavoidable, calling it structural unemployment or referring to the non-accelerating inflation rate of unemployment. In a capitalist system, wherein profits are prioritized above all other concerns, it is critical that labor costs be minimized. Employers use unemployment to achieve this in two ways. First, if a prospective worker does not want to work for a low wage, the employer can simply offer the job to someone else. Second, if employees ask for higher wages, an employer can tell them that they should be grateful to be working at all when so many others are not. In both cases, employers use this reserve army of labor to depress labor costs and to increase their own profits. 

Last month, Steve Rossignol explained why we call for a $15 minimum wage as a transitional step to a guaranteed minimum income. Additionally, we call for a full employment policy. This means full-time jobs for all persons who wish to work. Employers will naturally fight such a policy, as it deprives them of two important tools for increasing their profits. Only through organization will we workers be able to overcome the strength of employers.

James Wheat 2-1-2015




[i]
                The Bureau of Labor Statistics. (2015, January 9). The employment situation – December 2014. USDL 15-0001. Retrieved from http://www.bls.gov/news.release/pdf/empsit.pdf
[ii]      The Bureau of Labor Statistics. (2015, January 9). Table A-15: Alternative measures of labor underutilization. Retrieved from http://www.bls.gov/news.release/empsit.t15.htm
[iii]     The Bureau of Labor Statistics. (December 30, 2014). Table 1: Civilian labor force and unemployment by state and metropolitan area. Retrieved from http://www.bls.gov/news.release/metro.toc.htm Additionally, we must use the data from November, as the BLS releases jobs data for MSAs about a month after the national data release.

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