Monday, February 8, 2010

The Greatest Depression Continues For The Low Income Households

What you’re not hearing from the politicians and the talking heads is that the joblessness and underemployment in America’s low-income households rival their heights in the Great Depression of the 1930s — and in some instances are worse. The same holds true for some categories of blue-collar workers. Anyone who thinks this devastating problem is going away soon, or that the economy can be put back on track without addressing it, is deluded. There has been talk about income inequality over the past several years, but what is happening now is catastrophic....

The unemployment rate of the lowest group, which had annual household incomes of $12,499 or less...during the fourth quarter of last year was a staggering 30.8 percent. That’s more than five points higher than the overall jobless rate at the height of the Depression. The next lowest group, with incomes of $12,500 to $20,000, had an unemployment rate of 19.1 percent.

These are the kinds of jobless rates that push families already struggling on meager incomes into destitution. And such gruesome gaps in the condition of groups at the top and bottom of the economic ladder are unmistakable signs of impending societal instability. This is dangerous stuff. Nothing good can come of vast armies of the unemployed just sitting out there, simmering.

When the data about underemployment is factored in — meaning individuals who are working part time but would like to work full time, and those who have stopped looking but would take a job if one were available — the picture only worsens.The people suffering the most drastic employment reversals in this recession have been those who were in the lower-income groups to begin with — the young, less well-educated workers, especially black and Hispanic high school dropouts, and certain categories of service workers, such as food preparers and building cleaners. Blue-collar workers were also hammered, especially those in the construction industry....

The point here is that those in the lower-income groups are in a much, much deeper hole than the general commentary on the recession would lead people to believe. And none of the policy prescriptions being offered by the administration or the leaders of either party in Congress would in any way substantially alleviate the plight of those groups.

--more Bob Herbert

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