Danielle Kurtzleben at Vox has a fascinating article about real unemployment versus perceived unemployment. It turns out that not only Americans but workers all around the world vastly overestimate the number of people who are out of work. In America, people think the unemployment rate is an astonishing 32%, though the official figure is closer to 6% and wouldn’t top 12% even using much more relaxed definitions of “out of work.” Citizens of other countries are similarly wrong about their own unemployment rates.
Why does this matter? Well, first of all because you’ll be likelier to oppose social welfare programs for the jobless if you believe that one out of every three people isn’t working at all.
But second, it leads people to believe that the problem is that there aren’t enough jobs, when the bigger problem is that people with jobs are struggling due to low wages. That has an impact, for instance, on immigration policy: no one believes that undocumented immigrants are taking high-wage jobs, so you’ll be likelier to oppose immigration reform if you believe that there just aren’t enough even low-wage jobs, as opposed to that the jobs that exist don’t pay well enough.
While mechanization, outsourcing and flattening are eliminating industries and jobs entirely, the bigger impact is to flatten wages. This is the first recovery in modern history in which median wage growth has actually fallen.
But even as much much as Americans vastly overestimate the unemployment rate, they vastly underestimate income and wealth inequality. In short, it’s not so much that there aren’t enough jobs, though that is also true and getting truer over time. It’s that what jobs there are pay less and less, even as the productivity and GDP gains get soaked up by the upper crust.
That in turn leads Americans to make all sorts of poor policy decisions designed to boost “jobs” at any cost, while ignoring the sorts of redistributive and punitive policies that would actually enforce economic justice and help both the middle and working classes.
