Two recent stories about Walmart highlight how big our nation’s unemployment problem remains.
From the looks of things unemployment shouldn’t be a major problem in our country right now. While economic growth has been sluggish since 2009, many of the stories you read in the news paint a pretty happy picture about how the economy is doing as of late. The Dow Jones index recently hit a record high, recent quarterly economic growth numbers have been better than expected and consumer confidence appears to be recovering from its government shutdown induced downswing.
And with the official unemployment rate edging down towards seven percent, you might even think it makes sense to stop talking about unemployment and move on to those other “crises” we’ve been hearing about so much recently. But you would be quite wrong. And interestingly enough two unrelated stories about Walmart that have emerged recently are great examples of how big the problem still is, and how difficult the lives of the working class remain.
The first story comes from Washington D.C. where two brand new Walmart stores will be opening next month. According to local news reports a whopping 23,000 people have applied for the 600 jobs these stores will soon create, which works out to an amazing 38 applications per Walmart job.
So how could it be that so many people are applying for such few low paying jobs? Well part the answer lies in how the government actually calculates the unemployment rate. Simply put there are a lot of ways to define what “unemployed” means and even more ways calculate who should count as being in the labor force. The unemployment rate you hear about in the news, or “official unemployment rate” is known as the U-3 rate and it basically just looks at the percentage of the labor force that is actively looking for work and can’t find it. So if you are just entering the labor force, have re-entered it after a long absence or have stopped looking because you think your odds of actually finding a job are hopeless (because say forty other people applied for the same Walmart greeter job as you) you don’t count as being “unemployed” in government statics, even if you really need a job.
This reality helps explain why so many people could be looking for a job at Walmart when the unemployment rate has gone down quite a bit in the last few years. A lot of the people who applied for those Walmart jobs in Washington D.C. are probably people who are being counted by the government as being unemployed right now, but a lot more are probably people who for whatever reason aren’t being counted in government statistics. Like people who just left school or haven’t searched for a job actively in the last six months. All those types of people won’t show up in the official unemployment rate, but they still can be in desperate need of a job, which is why they recently came out of the woodwork in Washington.
The result is that even if the economy succeeds in creating more jobs in the future there still is an enormous backlog of people who want jobs but aren’t being counted. In fact if enough of these people reenter the labor market as the economy get better, the unemployment rate could actually go back up. In short our unemployment problem is even worse than it appears.
The second story comes from a Walmart in Northeast Ohio and shows an equally large problem for the working class in our current economy: the low skilled jobs that are getting created often simply don’t pay enough to survive. A Walmart in Canton, Ohio is actually holding an in store canned food drive so that Walmart employees will be able to celebrate the Thanksgiving Holiday. As they put it “Please Donate Food Items Here, so Associates in Need Can Enjoy Thanksgiving Dinner.”
It’s kind of amazing if you stop to think about, some of the people who work for the nation’s largest grocer can’t afford groceries.
Some of these problems probably have to do with the company itself. Walmart has accused of allegedly engaging in all sorts of rotten behaviors in the past, from discriminating again female employees to doing things like, “forcing hourly employees to work off the clock, failing to pay them overtime, and preventing them from taking rest and lunch breaks.” But while Walmart may be an egregious example of poor corporate behavior, it is unlikely that they are the only major retailer whose employees struggle to make ends meet.
This in turn makes the problem with the uncounted unemployed even worse. After all if desperate people can only get jobs that don’t pay enough for them to eat, even if we drive down the unemployment rate, what exactly have we accomplished?
We as Americans have been hearing about the “debt crisis” and the need for “grand bargains” to cut entitlement spending for literally years now. Meanwhile the slow rolling calamities of chronic high unemployment and falling wages for low skilled workers have continued on with very little attention at all. Talk about your misplaced priorities.
Photo quite peculiar/Flickr