Rise of the Invisible Unemployed

I know about the three types of unemployment taught in college economics: Natural, cyclical and seasonal unemployment. Now, ostensibly, we have another type of unemployment to consider in the 21st century. Invisible unemployment is the group of people who are not unemployed, yet desire more hours or work in industries with stagnant wage growth.

The Atlantic.com points to Cleveland Fed data on Real Annual Wage Growth , by Industry pre-recession and post-recession. From this data we see that the only two industries that have had post-recession wage growth have been for manufacturing and goods-producing industries. Lavughn M. Henry, vice president of the Cincinnati branch is quoted the Atlantic: “We’re adding few jobs in goods-producing industries like manufacturing, which have the highest overall post-recession wage growth, and lots of jobs in service-producing industries which have the lowest real wage growth.” 

The Bureau of Labor Statistics can buoy our thoughts on low national unemployment numbers, like the October 2014 unemployment rate of 5.8% , when in reality “the official unemployment rate is getting worse and worse at describing the real conditions facing American workers.” In my own situation, I can afford to work a part-time job and live a fulfilling life. However, I am a single male with no children and no mortgage, I am a bachelor. Unfortunately, families are struggling on a part-time salary all around the country leading to a deterioration of home life for millions of children. 

Leading economics analysts often use the stock market as a bellwether for the general well-being of the nation. The common response to stagnant wages would be to note the rise in the value of the DOW Jones Industrial Average or the price of NASDAQ as indication the nation is doing well, recovering sufficiently. Equity-traded firms are tossing the public a red-herring to distract from the reality of their corporate governance. “Corporations have used the recession and the recovery to increase profits by expanding abroad, hiring abroad, and controlling labor costs at home.” These actions cause the stock market to react positively in share price, yet it completely misleads the public on the general malaise the labor force is experiencing six years after the recession.