Monday, August 18, 2008
American depression posted by Richard SeymourThe latest statistics suggest that unemployment in the US has risen to 5.7%. But that is the official, joke figure. At the height of the Clinton boom in 1997, unemployment was estimated by the Council on International and Public Affairs to be around 11.4% - more than double the official figure at the time. Almost ten years later, in early 2007 and before the housing crisis started to hammer the stock market, the official US unemployment rate was 4.5%, but the real figure was closer to 13%, nearly three times the official figure. So, when you hear that today it is around 5.7%, you have to think that the real figure is close to 15%, which is about 23 million people.
The official poverty rate in America is 11-12%. About 40% of Americans fall below the federal poverty level at some point in a given ten year period. But that is the official figure, an 'absolute' poverty threshold based on an absolute minimum income that would be required to meet the basic material needs. At present, it is set at $10,400 (£5,570) for a single person. Most anti-poverty campaigns use a relative measure, and for good reason. Poverty is a matter of social justice, not of charity - it has to be considered in light of the society's capacity to produce wealth, which is why one doesn't expect Sudan to meet the same criteria as the United States. The UNDP estimated that relative poverty, defined as 50% of median income, was 17% in the US, as of 2006. Today, amid record foreclosures (17% of all homes for sale in the US are repossessed) and as the credit crunch bites, even the absolute poverty figures will be soaring. Bear in mind that the trend has been for deep poverty to rise most significantly. Even in periods of growth, a third of US jobs pay low wages, and almost 1.5m workers receive less than the minimum wage (again, by official statistics that are certain to be an underestimate). The use of soup kitchens - corporate America's preferred response to poverty - has been rising for some years. In 2003, 31 million Americans didn't know where their next meal was coming from. Given the spate of news items detailing a recent rise in demand on the food lines and the disproportionate impact of food price rises on the poor, you can judge for yourself how much that figure must rise by. As you would expect, all of this has been taking place against a background of soaring inequality, so that during the Katrina crisis it was disclosed that the total number of millionaires in America had reached 8.9 million.
I just raise all this because, as the recession bites, there is some predictably callow commentary from American opinionators, generally of the variety that it isn't all that bad and the country is full of whiners. And, of course, for said opinionators, it probably isn't all that bad. For those who have little to complain about it, all this talk of depression probably does look like whining. One cannot help but recall the infamous Newsweek frontpage bemoaning "The Whine of '99: 'Everyone's Getting Rich But Me!'" What will "The Whine of '09" look like, I wonder? "Everyone's Getting Fed But Me"?