October 13, 2010
THE LATEST government statistics on employment and jobs are in--and they're appallingly bad.
Not only has hiring in the private sector slowed down--again--but public-sector jobs are evaporating at a record pace. According to the Labor Department, companies added just 64,000 jobs last month--down from 93,000 in August and 117,000 in July. Overall, the economy shed 95,000 non-farm jobs in September, with 159,000 government jobs lost at all levels. Local governments cut employment at the fastest rate in almost 30 years.
As Heidi Schierholz of the Economic Policy Institute (EPI) noted:
The pain of the state and local budget problems are clear in these numbers: of the 83,000 state and local jobs lost, 58,000 were in education, as teachers and other education workers were not called back for the new school year. September was the first month this year where, barring changes in temporary Census workers, the labor market lost jobs.The official unemployment rate has now been at or above 9.5 percent for a year and two months--the longest stretch since the Great Depression of the 1930s.
In September, 14.8 million Americans were without a job--and 6.1 million of them have been unemployed for more than six months. And the real picture is even worse than the official statistics show. Adding in those who have given up looking for work or who are working part time but want full time work, underemployment rises to 17.1 million--the highest number since last December.
As bleak as last month's employment figures were, the Obama White House was still trying to maintain the fantasy that the economy is recovering. At an appearance at a factory in Bladensburg, Md., Obama himself told reporters: "We've now seen nine straight months of private-sector job growth." The president barely acknowledged that more jobs were lost overall than were created.
In fact, the loss of government jobs is only expected to get worse in the coming months. "In a research note," reported McClatchy Newspapers, "Alan Levenson, the chief economist for investment manager T. Rowe Price, noted that 'downsizing at state (and) local governments began later than in private industries, and will restrain the rebound in total employment even if...private industry hiring picks up gradually in the months ahead.'"
For millions of workers and their families, the idea that the U.S. is experiencing an "economic recovery" is a bad joke.
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ONE REASON for the especially bleak jobs statistics last month is the tapering off of federal stimulus spending from the $787 billion measure passed within a month of Barack Obama taking office in 2009. Without that legislation, the unemployment rate would be even higher--by 2 percentage points, according to the Congressional Budget Office's estimate. But the politicians still haven't responded to the need for more spending.
"We need to wake up to the fact that the end of the stimulus has really hit hard on local governments," Andrew Stettner, deputy director of the National Employment Law Project, told the New York Times. "There is much more of a slide in the job market than what we really need to clearly turn around."
Republicans--in love, as always, with rhetoric about "fiscal responsibility"--are firmly opposed to further stimulus spending--or any increase in taxes on the rich. "The word 'stimulus' itself," reported the Times, "seems to have become politically toxic in the lead-up to the midterm Congressional elections next month."
For his part, Obama criticized Republicans, claiming, for example, that they held up legislation like the "Small Business Jobs Act" (which Obama recently signed into law) as well as loans and tax cuts to small businesses.
Last time we checked, though, the Democrats still have large majorities in both houses of Congress. So blaming the lack of action on Republicans seems like an exercise in shifting the blame.
More importantly, the proposals by Democrats for legislation that will create jobs are a drop in the bucket compared to what's needed. The Small Business Jobs Act will do next to nothing to benefit workers directly. Instead of programs that create employment or spending for infrastructure projects that would put people to work, the Obama administration is relying on the economic dogma repeated endlessly by its Republican predecessor--tax breaks for business.
The result is the weak employment statistics we've seen all year long. As Sheirholz pointed out in the EPI's statement, even when the jobs numbers have been in positive territory, they fall far short of what's needed to make up for the jobs lost during the recession. "To get down to the pre-recession unemployment rate within five years," Sheirholz said, "the labor market would have to add around 300,000 jobs every month for that entire [five-year period]. In September, excluding changes in temporary Census hiring, the labor market lost 18,000."
Meanwhile, one of the few effective job creation measures from the economic stimulus bill--a $1 billion program that directly paid the salaries of unemployed people so they could work in government jobs, or at nonprofit organizations and some small businesses--recently ran out of funds, without being extended by Congress. The program had provided 235,000 jobs in 36 states for low-income parents and young adults. If funding isn't restored, some 26,000 workers in Illinois and 12,000 workers in Pennsylvania will lose their jobs in the coming weeks, along with thousands more in other states.
Government programs like this one should have been a bigger part of the stimulus law from the start. Instead, they paled in comparison to corporate tax breaks--and they were positively dwarfed by the trillions of dollars committed to bailing out Wall Street.
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THE REALLY infuriating thing about all the talk in Washington about belt-tightening and fiscal responsibility--from Republicans and Democrats alike--is that public opinion is so obviously on the side of government programs to create more jobs.
According to a Washington Post/ABC News poll from July, 48 percent of people surveyed said that they thought "the federal government should spend more money to try to boost the economy in a way that creates jobs."
Yet Republicans--despite the fact that they promise to oppose all further stimulus spending, and repeal any measures that haven't yet been put into effect--appear poised to win big in November.
That's the result of the failure of Democrats to put forward programs and policies that would help in the lives of working people. From the bailout of Wall Street that neglected homeowners facing foreclosure, to health care legislation that will make the insurance industry more powerful rather than less, to the threat of cuts in Social Security benefits, millions of people are finding Obama's "Yes we can" slogan to be a hollow promise.
Of course, some people are doing great in today's economy--the people who caused the crisis in the first place.
For the second year in a row, according to the Wall Street Journal, compensation packages for bankers will hit an all-time high:
About three dozen of the top publicly held securities and investment-services firms--which include banks, investment banks, hedge funds, money-management firms and securities exchanges--are set to pay $144 billion in compensation and benefits this year, a 4 percent increase from the $139 billion paid out in 2009, according to the survey. Compensation was expected to rise at 26 of the 35 firms.This boom in profits isn't a coincidence. It's a direct result of Corporate America taking advantage of the bleak picture for working people.
High unemployment is being used against workers to drive down wages that were already stagnant for a generation--and to undermine the remaining benefits and protections that workers have, whether union members or not. The threats against teachers to accept wage cuts and layoffs, along with "reform" measures that weaken their unions; the blackmail used to extract concessions from industrial workers; the relentless pressure on those who still have a job to work harder for less--all these and more are part of an overall offensive by the U.S. ruling class.
The goal is to force U.S. workers--whether their employer is a private company or the government at any level--to accept a "new normal": declining living standards and wages.
Meanwhile, according to the Wall Street Journal, "Wall Street revenue is expected to rise 3 percent, to $448 billion from $433 billion, despite a slowdown in some high-profile activities like stock and bond trading...Profits, which were depressed by losses in the past two years, have bounced back from the 2008 crisis."
Too bad workers' jobs haven't bounced back--and the politicians in Washington have absolutely no solution.
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