[Marxism] CBO statistics [was: The absence of real forces [was: The low point]]

[Joaquin Bustelo]

Sayan quotes: "According to the Congressional Budget Office, earnings for
the poorest fifth of Americans are also on the increase."

I think what is really on the increase are the problems with government
statistics that measure the situation at the bottom of the socio-economic
ladder. With the NOMINAL minimum wage frozen for a decade --meaning the REAL
minimum wage declining-- and "the end of welfare as we know it" the CBO's
findings give new depth of meaning to the phrase "voodoo economics."

The problems come from the fact that as the undocumented population has
grown, so has the number of people at the very bottom whose REAL situation
is not reflected in the statistics. That is partly because so many
undocumented do not cooperate with government surveys, and partly because
even if they DO cooperate, the survey is not designed to accurately measure
and reflect their situation (I'll get back to that last point in a minute.)

Say, for example, that the statistics claim the number of people making less
than the minimum wage has declined from 4% to 3%. The reality could well be
that it has INCREASED to 6%, but half the undocumented evade being included
in the household survey.

Even worse is unemployment. As defined by the government, the only
undocumented Latino immigrants that are unemployed are in graveyards. A
citizen may not feel compelled to go out and offer to work all day under the
hot sun for $50, but the undocumented have no choice. So if at some point in
the last month they did do a day or two of work, then presto, they're not
unemployed. Even though only by taking ten of them together could you get
enough hours to come up with one full-time equivalent. But as far as the
government is concerned, that isn't ten people who were each 9/10th
unemployed, but ten people who weren't unemployed AT ALL.

With this large population of up to 20 million undocumented, the modalities
through which unemployment manifests have changed, but the instrument that
detects unemployment has not been adjusted to pick up these new modalities.

And that ASSUMES all the undocumented will cooperate with the survey, which
we know not to be the case. 

As a result, current U.S. unemployment statistics are WORTHLESS. The claim
that the current four-and-a-half percent unemployment rate represents the
SAME general situation in the labor market at that figure reflected during
the Clinton years are laughable.

Back in the 90's every month's figures for new jobs and the unemployment
rate was accompanied by an explanation that the economy needed to generate
200,000-250,000 jobs a month just to keep up with the population growth. As
it turned out, the economy in those years generated many MORE jobs --and
unemployment did not decline nearly as much as would have been expected--
because the RATE of labor force participation of the adult non-institutional
population shot up. 

In other words, Marx was right, there really IS a HUGE reserve army of the
unemployed and one largely not captured in government statistics, not even
ones that include "discouraged workers," people who don't look for a job
because they know there isn't a boss within a hundred miles that will give
them one. In those (relatively) good times, MANY MILLIONS of such people
became employed.

During the Bush "growth" years (i.e., excluding the recession at the
beginning of his term) the FACT that the economy needs to generate up to a
quarter million additional jobs a month to keep up with demographic growth
has been turned into something like a state secret. Also unmentioned
everywhere is the RATE of labor force participation. The U.S. today is
SWIMMING in unused, available labor power, i.e., unemployed workers. 

During the Clinton years, a figure like the one released today, less than
100,000 new jobs created last month, would have been met with headlines like
"Job bust: are we headed towards a depression?" 

Today's figure is unlikely to draw such headlines, but the plunge in the Dow
shows quite dramatically what people who, in the last analysis, are
dependent on the REAL economy for their income, and understand it, really
think about the report.

It's an old saw in hack (="journalist") circles to dismiss what happened
today with the crack, "the stock market has predicted 9 out of the last 5
recessions." 

And it is true. Which means the odds are a little better than fifty-fifty
that a year or two from now, the joke will be "the stock market has
predicted 10 out of the last 6 recessions."

You have to be in dire straits, statistically speaking, when your best
indicator is the movement of price levels in that crowning glory of the
American Casino Industry, the New York Stock Exchange. 

But I think that's where we're at in this country right now. The "feel" of
people at these crap tables for how the dice are going to roll is probably
more reliable than anything the Congressional Budget Office can come up with
nowadays.

I keep thinking at SOME point the ruling class is going to go to their
windows, open them, and yell out onto the streets, "we're mad as hell and
we're not going to take it anymore" about stuff like this. But they haven't
done so yet. 

Joaquin