Brad Rourke's Blog

My latest article on my blog at the Washington Times Communities, Public Square Today, is now live:

Keeping Track Of The Other Unemployed

Yesterday, the government released data by metropolitan region on unemployment. That got me thinking about one of my pet peeves with unemployment data.

That number that gets reported? It dramatically understates the problem.

The official unemployment rate is the number of people actively looking for work. That number does not include so-called “discouraged workers” (people who could work but who have given up), people who are working part time because that’s all they can find, and more. In fact, here is the official list of all the unemployed and underemployed that the official figure does not take into account:

Marginally attached workers are persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for a job. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

I have long known this but have not looked closely at the actual numbers, simply filed it away as a curiosity. But today I was curious: How has the American underutilized workforce been doing over the past year? I took a look at the data from November 2008 through December 2009.

Here is the official unemployment rate, month by month, for the past year or so, compared what I think of as the actual unemployment rate (which includes all those folks described above):

(Click for full size)

In November 2008, the official unemployment rate was 6.9%, and the actual rate was almost double that, 12.8%. In December 2009 it was 10% with an actual rate of 17.3%.

More than one in six Americans are out of work or are working part time because they can’t find anything else.

I understand that ral economists might quibble with my terminology, “actual” unemployment. I am not trying to win a Nobel Prize here, just look at the actual experience of real people as opposed to the press releases. I am also not pointing fingers at any administration. The recession started on George W. Bush’s watch, and continues under Barack Obama’s. It appears to be beyond both of them.

I was also curious about the “other unemployed” people. This is the group that tugs most at my heart strings. Has this gap been widening? It is hard to visualize from the bar charts so I made a new chart:

(Click for full size)

The number of “other unemployed” has been growing slowly but steadily over the last year. In November 2008 it was 5.9% and we ended 2009 at 7.3%.

In fact, while the government just focuses on the “official unemployment” rate, they make the whole set of numbers available. News organizations would provide a better snapshot of America by reporting the larger number. So, in my view, our nation’s unemployment rate stands at an incredible 17.3%.

Let’s not forget these folks.

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(Note, the charts are by me, based on data from the Bureau of Labor Statistics. For those who are curious, the current recession began officially in December 2007, when the official unemployment rate was 5.0% and the actual rate was 8.8%.)

I got a note over the weekend:

I’m student [at an Israeli university]. I’m doing a Seminar work about Civil society in USA. I’m trying find an answer for the question: What have happened to the civil society in USA through the financial crisis. Is the civil society is getting stronger or weaker from it?

"Kevin's Utopian kettle bell workout" by Flickr user ~ggvic~

This is an interesting question and I thought it might spark a good dialogue. But I’d like to shift the question slightly, as it’s easy to claim that civil society is hurt by the current economy.

More interesting, to me, is this question:

How is civil society helped by the current economy?

Here are just a few ways that spring to mind:

• Better talent: With middle-management increasingly out of work, there is a broader talent pool to draw from at this important level.
• More with less: Tough times are forcing everyone to do more with lest. Without the iron fist of a profit motivation, many community benefit organizations have a fair amount of flab in their operations. They’ve had to cut.
• Revolutionary change: More with less is a the idea that you can do more by being efficient. Some new organizations are coming up with revolutionary ways to get the same things done, because.
• New partnerships: Consolidation in some areas of the social benefit sector is removing duplicated effort and forcing organizations that used to compete over turf to partner up, pool resource, and behave in complementary ways.
• Wake up call: My friend Hildy Gottlieb says that the current climate can jar people — especially governing boards — into taking actions that have been long-delayed or ignored because they are uncomfortable. (I am paraphrasing and probably getting it wrong, so Hildy correct me.)

Those are just a few. What do you think? What other ways can these tough times awork in the favor of the community benefit sector?

As I left Dayton last week after a series of meetings at the Kettering Foundation, I walked by this sign: “The Barber Shop Is Closed.” It was taped to a covered-over window just inside security at Dayton airport. Tip’s was gone.

I’d always wondered about Tip’s. It was a large barbershop with two chairs, behind an expanse of glass. I rarely saw anyone in it. There was often a person — whom I assumed was Tip — sitting on the bench opposite the barbershop, sometime resting, sometimes reading.

Over the years (I’ve been going to Dayton for a long time now), I developed a profile in my head. I imagined the barbershop used to have been quite busy, as gentlemen coming into one of the business hubs of the Midwest needed a quick trim on the way to or from their meetings. But as tastes changed and so did the times, I imagine the shop saw less and less activity.

The faster the world spun, the slower the shop might have seemed to.

It turns out that the closing was not a  negative thing for Tip. Turns out he’s Clair Tipton. He retired after 35 years.

But when I saw the “closed,” sign, I felt a twinge of nostalgia for something I’d never known. I regretted never having gotten my hair cut at Tip’s.

Funny how you don’t know you’ll miss something, often, until it’s gone.

Seth Godin wrote recently about the plight of agents. Literary agents, travel agents, stock brokers, real estate agents — all either extinct or becoming so. Why? Anonymity:

The problem with being a helpful, efficient but largely anonymous middleman is pretty obvious. Someone can come along who is cheaper, faster and more efficient. And that someone might be the customer aided by a computer. . . .

Middlemen add value when they bring taste or judgment or trust to bear on a transaction that isn’t transparent. . . . Key point: anonymous agents are interchangeable and virtually worthless. Agents that don’t do anything but help one side find the other side in a human approximation of Google aren’t so helpful any more.

Does that mean the business of being an agent is dead? No! It means it’s time to make sure you’re not anonymous. Add value that can’t be added otherwise — and that is where discernment comes in. Agents can provide a powerful filtering (or editing) function.

But, in order to provide this function, agents need to say “no,” perhaps as often or more than they say “yes.” This means they need to brand their own identity as someone who is a helpful nexus of good content, be that content a steady stream of well-priced homes, a stable of awesome authors, or a collection of well-performing startups.

This may mean there is room for fewer agents in the world, but it also means that the ones who are left can play a more important role.

There is a parable I learned long ago from the continuous improvement management philosophy. It’s called “rocks and water.”

Imagine you want to row your boat along a full, gently flowing river. No sweat. Imagine the water level drops significantly, exposing the jagged rocks along the riverbed. Now try rowing. Can’t do it; too many rocks.

In the parable, the water is any enabling resource of which having lots can obscure problems. In many businesses, the water is cash. Too much cash makes it easy to ignore the rocks underwater. Only when the water is drained can we see – and remove – the rocks. Many of the best organizations keep their water level low on purpose so that when rocks begin to appear they can be seen and dealt with.

Now with a panicking New York-DC axis, I can’t help but think about rocks and water. We’ve let the water level rise for decades, hoping it would keep everyone floating along. The so-called “predatory lending” that some point to is just a sliver of the problem. The real problem, as I understand it is that, driven by well-intentioned policies, some smart pencil-pushers figured out how to create a mechanism for avoiding risk altogether. Make the loans, sell the risk to someone else. This opened the floodgates as it became easy to invest with little apparent downside. With the system set up this way, no one feels the pain – until everyone feels the pain.

The river’s drying up now.

The main story being told is that those idiot “back bench” House members scuttled the imperfect-yet-necessary rescue boat for the American economy. In the howls from the editorial columns you can hear the derision. Almost the entire elite of America was unified behind the need to take the rescue deal on offer. How dare these rebels place mere “politics” ahead of the needs of the “market?” Don’t they understand the stakes? To read the coverage, you’d think some small minority had sunk the rescue dinghy because they did not like the color it was painted. Idiots. Cowards.

But take a step away from the panic for just a moment. It was not a small slice of the house of Representatives who voted against the bailout – it was most members of the People’s House. Some were reacting to what appeared to them to be too large a giveaway to the same Wall Street fat cats who had built the house of cards in the first place. Others saw the bailout as a grave rejection of the principles of responsibility, and freedom to fail, that our economy, at its best, is built upon.

But others, most perhaps, saw another problem. They just could not sell a “yes” vote to their constituents. One congressional staffer reported calls flooding in, verifiably from the district, at “a thousand to one” against. Ordinary people are up in arms.

The wise cluck their tongues and say the politicians should have some backbone. But why? It’s one thing to make a judgment call on the margins, but it’s yet another to jettison the clear will of the people one represents. No rational person can believe the “no” voters did not understand the stakes. They knew the stakes. They’d been briefed. They voted no anyway.

Sometimes the things that seem the worst possible turn out for the best. Maybe that will happen now.

If there is one piece of advice my older self wishes it could give my younger self, it is: Do not make decisions under duress and in haste. Looking back, I think of the many times I have been saved from bonehead moves by something that, at the time, thwarted my desire and seemed a setback. And I think of the times I was not saved, of the times that I forged ahead in panic – only to regret the move later.

Public life feels very much the same way these days.

I know from listening to ordinary Americans all through the country that there is a pervasive sense that, at some point, we’re going to have to pay the piper. The people I hear almost lament that nothing seems able to shake us from our collective consumption and obsession with more. When that time comes, companies will fail. Our lifestyle will drastically simplify. We will feel pain, all of us.

Maybe that time is now. Maybe, with the water receding, we can set to work removing the rocks.