Saturday, September 17, 2011

FLASHBACK: America's New Jobless 1975

America's New Jobless: The Frustration of Idleness

TIME Magazine
March 17, 1975

I need a job. Don't care what it is or how much pay. Am very eager to learn. Ask for Dave.

So read a plaintive ad in the Wilmington News and Journal papers, Delaware's two statewide dailies, which last week opened their classified pages to the unemployed free of charge. The response from the unemployed was startling. "We were expecting 400, maybe 500 ads at most," says Classified Manager Thomas P. Grant Jr. In the first week, 1,095 jobless people—secretaries and executives, graphic artists and truck drivers, bartenders, librarians and engineers—sent in their pleas for work.

Throughout the U.S., unemployment—or the fear of it—has become a gnawing preoccupation. The Gallup poll reports that 15% of the nation's working people fear that they will lose their jobs in the next year. The Harris survey shows that more than half the public has already been hurt by work cutbacks; of those questioned, 30% said that they or a family member had been laid off, 9% had lost overtime and 13% had had their working hours reduced. Police blame unemployment for a recent jump in robberies and purse snatchings; many of the culprits who have been caught are jobless first-time offenders. Calling last week for more federal funds to create summer jobs for restless youth, New York City Mayor Abe Beame said: "The social toll of this kind of unwilling idleness among our young people could be devastating."

No Jokes. Unemployment has become a compelling theme of soap operas, comic strips, rock songs. In ABC's ONE LIFE TO LIVE and CBS's THE YOUNG AND THE RESTLESS, characters talk as much about their job insecurities as their sexual insecurities. In the newspapers' Mary Worth, two characters are putting off marriage because they are out of work. (Comic-strip art imitates life; marriage rates are tumbling because of unemployment.) In a new song, Hard Times, Arlo Guthrie croons: "I ain't got a nickel to call mine ... We ain't even got a lousy dime." Nobody is cracking any jokes about unemployment, but once again the old line is being heard: "When you're unemployed, it's a recession. When I'm unemployed, it's a depression."

By that standard, millions of Americans would argue that the most severe slump since the 1930s has indeed become worse than a recession. As recently as August, unemployment was 5.4%. Lately it has risen in frightening leaps —to 7.2% in December and 8.2% in January. The rate was again 8.2% in February, the Labor Department reported last week, but the real situation had worsened. Total employment fell sharply. The jobless rate held stable only because so many people despaired of finding a job that they simply dropped out of the labor force. In all, 580,000 people left the work force, and total employment declined by 540,000, to a seasonally adjusted 84 million. But 7.5 million Americans are now out of work.

The jobless toll is expected to grow for several more months, probably topping 9%. It will stay high for the foreseeable future, even long after the economy turns up. The Ford Administration's 1976 budget projects that unemployment will average 7.9% next year and 7.5% in 1977 and that it will not dip below 6% until 1980.

Those sketchy and controversial projections may be overly pessimistic, but they have raised large questions. Is unemployment really as bad as the cold numbers suggest? How are people coping? What groups of Americans are being hurt most? And what should the U.S. do about the problem?

Indisputably, unemployment is high among all groups in the labor force. It has idled

1 out of 16 adult men,

1 out of 12 adult women,

1 out of 5 teenagers,

1 out of 6 young Viet Nam veterans,

1 out of 14 whites,

1 out of 7 nonwhites,

1 out of 9 blue-collar workers,

1 out of 19 heads of households.

Of course, the situation is quite unlike the apple-selling days of the Great Depression, when one in every four workers was desperately, hopelessly unemployed and practically no safety nets protected them. Today, 6 million of the jobless are collecting unemployment compensation. The payments are made for up to 52 weeks. The states pay for the first 26 weeks, raising the money by taxing employers; the states and the Federal Government share the costs for the next 13 weeks, and Washington finances the final 13 weeks. The amount of the payments and the eligibility for them vary from state to state, but most people who have worked for 26 weeks out of the past year should be able to collect. Except in a few states, the size of the payments is determined not by need or number of dependents, but by how much a person earned on his last job. In New York, for example, anyone who averaged $189 or more weekly gets the maximum: $95 per week. If he earned less than $189, he gets roughly half his previous pay. Nationwide, according to the Labor Department, the tax-free payments average $61 per week, which comes out to 40% of the worker's previous take-home pay. Understandably, many families cannot scrape by on that amount.

All together, 1.5 million of the jobless are ineligible for unemployment compensation. Among them: self-employed people who have not contributed to unemployment compensation funds; people who have not held steady jobs for the past year, including recent college graduates; people who quit jobs without good cause; workers who have already used up their 52 weeks of unemployment compensation.

Just about everybody has some extra cushions, though they are becoming thin and frayed. Most (but not all) jobless auto workers collect supplemental unemployment benefits of just under 95% of their basic pay. But Chrysler Corp.'s SUB funds are expected to run out by early April and General Motors' by mid-May. Other unemployed people are drawing down their bank savings and selling off stocks. In sum, few people are totally destitute yet, but there could be spreading poverty and grave social trouble if high unemployment persists.

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