Today, just as then, almost one in four working-age Americans (or non-citizens, who also must be counted since they are part of the available work force) are unemployed. This 25% estimate includes those who previously were not in the workforce but who are looking now, presumably out of hardship. Tending to confirm this, a recent household survey found 22% unemployed. Conversely, the latest United States Bureau of Labor Statics (BLS) report puts the number at 9.9%. The disparity arises because the BLS number counts individuals receiving unemployment checks. No check? Not counted.
From what I can tell, the total number of unemployed in America today is at least 37.5 million, rising to over 65 million if the underemployed are included. These numbers sound too big to be true but can be pieced together from a variety of sources, including the BLS.
37.5 million unemployed out of 150 million potential workers -- one in four. If this is correct, then where are the bread lines? First, Americans entered the current downturn far wealthier than ever before. Many survive today on fast-depleting retirement accounts and strained credit. Second, massive security nets -- welfare, extensive unemployment benefits, disability payments, and school loans -- have disguised or deferred the physical presence of otherwise visible hardship and deprivation. Government-backed programs, many themselves insolvent, are the "bread lines" of today.
Persistent high unemployment will not soon resolve: job creation currently lags population growth. About 145,000 jobs must be created every month to reach parity -- not growth. 400,000 jobs would need to be created to replace by 2013 the jobs lost since 2007. Even with a sustained recovery starting immediately, it would take at least eight years to recover jobs lost during the last two.
One reason the job picture is so grim is that investors are confounded by Federal monetary policy. Under Roosevelt, just as it is now and was during Carter, Fed policy was an explicitly Keynesian effort to correct unemployment -- not a stable-dollar course like Reagan pursued, or Thatcher for the British Pound. As Margaret Thatcher pointed out in her autobiography, The Downing Street Years, monetary policies must either "hitch their star" to a stable currency or pursue specific social outcomes, such as reducing unemployment. Never both, it must be one or the other.
With trillions outlaid in "stimulus," America is committed to the latter course today.