New unemployment stats are out this morning and the findings are grim. A quarter million jobs were shed in October, bringing the total number of lost jobs for 2008 to 1.2million. The government is reporting unemployment at 6.5% – a 14 year high. This number is deeply concerning to me, though not solely for its obvious somber bearing on the economy and on the qualities of life for those who are out jobs.

Firstly, a reality check: The federal unemployment statistic generally includes only jobs corporations have reported as shed and those who are using government tools to look for new employment. If you’re, say, a freelancer looking for hours, or someone who hasn’t had a job in years and has went through Monster or similar job-sites looking for work, you’re not counted in that number. I’d argue the actual jobless number in the country today is above 7%. It would appear that, per Planet Money’s David Kestenbaum, my understanding of the unemployment number was incorrect. Here’s his explanation:

The unemployment rate figures that are published on a monthly basis are actually derived from a monthly survey of 60,000 households in the United States known as the Current Population Survey.

So, my first point may is not the reality check I’d thought it was. The question I have now, though, is “What reality is the census bureau checking?” I.e., exactly whom is counted in that 60,000 households? (updated 11/10/08 —bh)

Secondly, 6.5%-to-7+% is a grim statistic indeed, and if these numbers were reported after a weak Christmas sales season, I’d feel okay about our fortunes and concur with the “recession” label economists and politicians are trying to stick to this sinking ship. The fact of the matter is that these jobs have been lost going into the Christmas shopping season – while food prices continue to rise and energy prices fluctuate wildly. Far fewer people are going to be shopping – for many because unemployment has drained them of disposable income, and for most because it has become all too apparent that conservative spending practices are the order of the day going forward. Economists predict the unemployment rate will grow to 8% at least by mid-2009, but I’m confident this is a grossly and irresponsibly conservative number. Yet economists working up to and through this crisis have been nothing if not consistently grossly conservative in their estimates… I expect unemployment to climb into the mid-teens by mid-January as retailers shed jobs, or even close their doors, in the wake of a crushingly weak Christmas shopping season. US retailers in this country count on Christmas sales to finance their operations the rest of the year. For the box retailers of the nation – Walmarts and Targets – these sales account for roughly a third of their yearly income. For other retailers, that number is much, much higher – particularly for entrepreneurial boutique shops catering to niche markets. Everyone from Williams-Sonoma to the hipster purse shoppe and the Hallmark Christmas ornament shop down the street will be hit very, very hard indeed.

Make no mistake, this is where the new century’s Great Depression begins. As I’ve been writing, everything that’s happened in the finance-o-sphere – Wall Street’s ecstatic upper echelons – will pale before what is happening on Main Street now, and what is going to happen on Main Street in just a few months. We’ve entered a downward spiral of tightening credit, stagnant wages, declining consumer spending, and increasing job losses – all of these factors feeding one another and spiraling ever downward until the breaks are put on. (Certainly, investments will be shattered as company sales plummet and more and more homeowners and credit card holders and student loan payees default on their debts, but the government will – at last – cease in its efforts to save the economy from the top down because the collapse of the real economy – you and me – will be the only place the economy really can be saved.) What those breaks are – either a shattered economy that, with a 25% unemployment rate, simply can’t shed any more jobs or some kind of federal initiative to shore up employers and thereby shore up employment – I can’t be certain. The fact of the matter is unemployment will be the single most important domestic concern of the first year of the Obama Administration, and by January the word “recession” will seem a paltry descriptor for the crushing reality of 2009’s wretched economy.

A Depression is a tragedy, one that is now entirely unavoidable, but it must also be seen for what it is: A reconciling of our debts, of our appetites, and of our avarice to the limits of reality. The national discussion will change – with great fervor – as citizens demand more social services and fewer corporate bail-outs, and in so doing we will revisit the ideals of FDR’s New Deal, and perhaps even contemplate comprehensive nationalization of many industries. There is hope: Healthcare, Green Technology, and even reinvention of the American automotive industry have great potential to create new jobs around new core values to build a renewed economy and society on. There is also great concern, though: Our resources are stretched too thin already, and turmoil with Iran, Russia, North Korea, or China could put crushing strain upon us. What we need is clarity and peace to regroup – not more military conflicts to distract our focus. The potential blessing here is that the whole world will feel the crunch – the whole world will be depressed with us. Hopefully our antagonists are as constricted by this as we will undoubtedly be.

Be prepared to know and help thy neighbor. And be patient: You’ve elected the best possible leadership for this job, and we will get through this – and emerge a newer, better country. But we must endure great hardship and account for the debts of our gross overconsumptions first.

current-events criticism /2008-11-07 by brandon e. heckman/

commenting closed for this article