April 9 Week In Review

Week In Review

April 9 2013

by Bill Onasch

Beyond Discouraged

The March jobs reports for both the USA and Canada were bad news. There were far fewer new American jobs created than the experts expected–just 88,000, about half of what’s needed to keep up with population growth.

Canada was a real shocker–54,000 jobs lost. When you factor in the population difference between the two countries that’s equivalent to a half-million jobs in the USA.

Earlier in the week there were numerous media reports about the robust rebound of the auto industry. The average age of cars on the road today is eleven years and many need to be replaced. Both the Big Three and transplants have added some workers and Volkswagen opened a new plant in Chattanooga.

But there is no way the industry will ever replace the 100,000 jobs eliminated by President Obama’s bankruptcy-driven restructuring of General Motors and Chrysler during the Great Recession. And, since the new hires will earn little more than half the pre-2007 UAW wages, their consumer spending won’t be near the economic bump such hiring would have brought back in the day.

All along, some of the unemployed have been absorbed by America’s biggest private employer–Walmart. They recently grabbed headlines announcing a special effort to provide work to hard pressed returning veterans. (Stars & Stripes estimates there are at least 800,000 unemployed recent vets.) But an article by Stephanie Clifford in the New York Times began,

“Michelle Obama visited a Walmart in February to extol the fresh, healthy food in the company’s grocery aisles. But Walmart, Ms. Obama’s corporate partner in a campaign to make food healthier and more affordable, has been running into problems with food that is not so fresh. Walmart, the nation’s largest retailer and grocer, has cut so many employees that it no longer has enough workers to stock its shelves properly, according to some employees and industry analysts.”

Apparently even these low wage, no benefits jobs, once the last resort, are beginning to dry up as well.

The official U.S. unemployment rate now stands at 7.6 percent. Six years ago, the rate was 4.4. During the depths of the Great Recession in October, 2009 it rose to 10.9. On the face of it, it would appear after a scary collapse there has been a steady, if painfully slow recovery. But that would be misleading.

Every month this column notes the underlying “real” unemployment that adds the discouraged long-term jobless categorized as “marginally attached to the work force,” as well as those involuntarily working part-time. This real number has oscillated in a narrow range of 22-24 million through “recovery.”

But even this huge number doesn’t tell the whole story. Eventually the marginally attached become simply detached from any reasonable hope for a job and acquire a new statistical label. In March, the participation rate of those age sixteen and older in the civilian workforce, either working or seeking work, sank to 63.3 percent–the lowest since 1979. More than a third of working age Americans don’t expect to work in the foreseeable future.

  

What are those who have been dropped out now doing?

The oldest among them are increasingly opting for early retirement. IRAs can be tapped at age 59½. Even though there is a big penalty for drawing Social Security at 62 many don’t see any other prospect for reliable income.

Where one is still working, quite a few in formerly two breadwinner households are adapting to life as stay at home moms or dads. They hope the elimination of expenses for child care and commuting will soften the loss of a paycheck.

More and more younger jobless are getting student loans and going to school. Of course, many will not find jobs right away in the fields they train for–and maybe not any kind of work at all. They will also now be saddled with substantial new debt–a burden that can’t be discharged through bankruptcy and can follow them to their grave; if there are cosigners, perhaps even beyond.

Many who don’t have any of these options reluctantly move back in with their parents–or children.

Those without family lifelines can wind up in the growing homeless population.

This is the human side of the jobless recovery being played out behind the statistical curtain. They are not all invisible. You can easily identify some of them at community health clinics, food banks, blood banks, thrift stores, Dollar Stores. But others maintain a Middle Class personae disguising their hard times. There but for the grace of an employer goes thee.

These newly involuntarily detached from the workforce are not in their predicament because they didn’t work hard. Quite the contrary. American workers are second to none in productivity. Economist Dean Baker estimates that if the minimum wage had been indexed to nonfarm productivity it would now stand at 21.75 an hour–instead of 7.25. (Average hourly earnings of private-sector production and nonsupervisory employees is 20.03.)

The “job creators” of American capital hire only when they need more workers to enhance their profits. As they continue to set records for productivity with fewer workers toiling for stagnant or even falling wages, there will be little hiring. Chronic high unemployment and more detached workers are part of a “new normal” for American Free Enterprise.

It doesn’t have to be that way. We can reject this dismal outlook by going beyond the limits of private profit, instead putting all the willing and able to work on the urgent needs of society–our dangerously crumbling infrastructure and the many measures needed to meet the challenge of climate change. The working class majority, when organized for both workplace and political class solidarity, can become our own job creators while rebuilding a better, sustainable world for all humanity. Until we do–welcome to the New Normal.

A Really Bad Idea’s Time Has Come

As predicted in the last WIR, the White House has now confirmed the President will include in his budget proposal to Congress tomorrow the same cuts in Social Security and Medicare he offered the Republicans in past failed attempts at a Grand Bargain.

It seems labor’s leaders are realizing at last that this is a serious, imminent threat. Damon Silvers, AFL-CIO Director of Policy, said in an e-mail blast entitled Obama’s Really Bad Idea,

“It is unconscionable to ask seniors, people with disabilities and veterans who are barely making it to be squeezed even tighter at a time when corporations and the wealthiest 2% are not paying their fair share of taxes, despite soaring profits.”

That’s well said as far as it goes. Of course, the President will counter that he is demanding a fairer share of taxes on the wealthiest as well as the cuts to benefits. Still, brother Silvers gets it right at the end,

“No ‘chained’ CPI and no cuts to Medicare, Medicaid or other cuts to Social Security benefits. Period”

That’s a solid, principled demand. But what are we going to do to fight for it? What is the appropriate proportionate response to ruthless attacks by perfidious “friends” on our most sacred entitlements?

So far only today’s standard expressions of outrage–e-mail letters and petitions–are being suggested. Clearly this is insufficient.

There has been some media attention to the upcoming fiftieth anniversary of the 1963 March on Washington where hundreds of thousands heard Martin Luther King’s legendary I Have a Dream speech. That gathering had an important component of economic justice as well as basic civil rights and Black trade unionists–with some white allies–played no small role in assembling the massive turnout. There is no question that march was an historic watershed in social/political consciousness and action in this country.

While we have no leaders today of the caliber of MLK or A Phillip Randolph, or their allies such as Walter Reuther and Tony Mazzocchi, even the present office holders in the labor and civil rights groups have the ability to mobilize hundreds of thousands in Washington on short notice around such vital issues of concern to all. They should do that–right now.

And that action should be supplemented by borrowing elements of more recent legacy–the 2011 occupation of the Wisconsin state capitol. The call should go out for tens of thousands of those coming to march in Washington to stick around for as long as it takes in a peaceful occupation of our nation’s Capitol. Congress should not be permitted to take any action on anything until the threats to our Entitlements are withdrawn.

I think that would be a really good idea, a proportionate response to the President’s really bad one.

That’s all for this week.