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When Will the Unemployed Riot?

1977 Unemployment demonstration
A man resists two arresting officers during a 1977 demonstration concerning unemployment in America. Photo by Brian Alpert/Keystone/Getty Images.

Paul Solman answers questions from the NewsHour audience on business and economic news here on his Making Sen$e page. Here is Monday’s query:

Name: Stephanie Palmer

Question: How are all of these people who’ve stopped looking for work getting by? We don’t have millions of homeless people, the states have not been over flooded with people needing assistance. We don’t have gangs roaming the streets looking for bread. Where are these millions of people? Shouldn’t there by riots if that many people can’t make a living?

Paul Solman: Well, I’ve interviewed more than a few of them and from what I can tell, there are numerous ways of getting by. One is by drawing down savings. Another: getting help from friends, family and charities like one’s church or local soup kitchen. A third, taking out home equity loans or running up credit card debt; much of the latter can be eliminated by bankruptcy, which well over a million Americans a year have been newly declaring for more than a decade now.

Then there’s Social Security Disability insurance. Nearly 5 percent of Americans ages 18-64 now draw SSDI, 9 million or so categorized as “disabled workers,” a number that’s risen from 7 million or so at the time of the Crash. Once they’re on SSDI, people are no longer counted in any reckoning of the labor force, not even our inclusive U7 number. (See this story of ours from 2003 and this one from 2009. For more on U7, click here.)

There are also people working off the books, though most of them would figure to be undocumented immigrants, in which case they wouldn’t show up in any data at all, and certainly not as having stopped looking for work.

Finally, government programs provide food stamps, housing vouchers and other benefits. Here’s a chart of food stamp recipients, by month, since 2006, via blogger Matt Trivisonno, using Department of Agriculture data. The total — more than 46 million Americans — represents about 15 percent of the U.S. population, in the vicinity of the population below the official poverty line.

Americans are neither starving nor freezing to death. As to whether or not riots are in the offing, factors other than life-threatening destitution are more likely to be determinative. When the Kerner Commission interviewed inner-city Americans who had rioted in the 1960s, it turned out that many had jobs. One explanation of their behavior at the time: a “crisis of rising expectations,” a term that dates back to Alexis de Tocqueville’s analysis of the French Revolution. In other words, things were improving, but not fast enough. “Rising expectations” is hardly how one would characterize America’s crisis in recent years, so rioting in the streets may be a long way off.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions

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