Tag: Unemployment

Cross posted from The Stars Hollow Gazette

Where the hell is the outrage? That is the question that senior fellow at Campaign for America’s Future and former executive at AIG, Richard (RJ) Eskow asks about the current state of the US econoomy:

From the first breath of life to the last, our lives are being stolen out from under us. From infant care and early education to Social Security and Medicare, the dominant economic ideology is demanding more lifelong sacrifices from the vulnerable to appease the gods of wealth.

Middle-class wages are stagnant. Unemployment is stalled at record levels. College education is leading to debt servitude and job insecurity. Millions of unemployed Americans have essentially been abandoned by their government.  Poverty is soaring. Bankers break the law with impunity, are bailed out, and go on breaking the law, richer than they were before.

And yet, bizarrely, the only Americans who seem to be seething with anger are the beneficiaries of this economic injustice — the wealthiest and most privileged among us.  But those who are suffering seem strangely passive.

As long as they stay that way, there will be no movement to repair these injustices. And the more these injustices are allowed to persist, the harder it will be to end them.

Where the hell is the outrage? And how can we start some?

He notes that Paul Krugman, too, is feeling grim about the possibility that high unemployment has become acceptable and that the “political and policy elite” see no need to find a solution, one that is staring them right in the face:

First of all, I think many of us used to believe that sustained high unemployment would lead to substantial, perhaps accelerating deflation – and that this would push policymakers into doing something forceful. It’s now clear, however, that the relationship between inflation and unemployment flattens out at low inflation rates. We can probably have high unemployment and stable prices in Europe and America for a very long time – and all the wise heads will insist that it’s all structural, and nothing can be done until the public accepts drastic cuts in the safety net.

But won’t there be an ever-growing demand from the public for action? Actually, that’s not at all clear. While there is growing “austerity fatigue” in Europe, and this might provoke a crisis, the overwhelming result from U.S. political studies is that the level of unemployment matters hardly at all for elections; all that matters is the rate of change in the months leading up to the election. In other words, high unemployment could become accepted as the new normal, politically as well as in economic analysis.

Eskow points to the factors why Americans have learned to live in a “quiet state of desperation” and offers a Action Plan for the solution:

1. Expand our avenues of political expression: First, we need to remind ourselves that electoral politics is not the only productive avenue for political activism -that we need strong and independent voices and movements.

2. Refuse to let politicians use social issues to exploit us economically: We also need to reject the exploitation and manipulation of progressive values by corporatist politicians who use social issues like gay marriage and reproductive rights exactly the way Republicans do — to manipulate their own base into ignoring their own economic interests. Politicians who don’t take a stand on economic issues should be rejected, up and down the ticket.

3. Explain what is changing — and contrast what is with what should be:We need to do a better job of explaining what’s happening, so that we can make people aware of the harmful changes taking place all around them.And it’s not just about “change”: It’s also about contrast – between economic conditions as they are, and conditions as they should be and could be, if we can find the political will.

4. Expand the vocabulary of the possible: The “learned helplessness” outlook says “the rich and powerful always win; we don’t stand a chance.” History tells us otherwise. From the American Revolution to the breaking up of the railroads, from Teddy Roosevelt’s trust-busting to FDR’s New Deal, from Ike’s Social Security and labor union expansion to LBJ’s Great Society victories, we need to remind ourselves of what we’ve accomplished under similar conditions.

5. Tell stories: And we need to tell stories — human stories.

Some of those human stories started 22 years ago when Bill Moyers began documenting the stories of two families ordinary families in Milwaukee, Wisconsin who had lost good paying factory jobs and how they have managed over the years. In a 90 minute special on PBS’ Frontline, Moyers revisits the the Stanleys and Neumanns anf their struggles to finding other jobs, getting retrained yet still finding themselves on a “downward slope, working harder and longer for less pay and fewer benefits, facing devastating challenges and difficult choices.”

Over at AMERICAblog, our friend Gaius Publius has posted his interview with RJ Eskow that was taped at this year’s Netroots NAtion in San Jose, CA. It’s an excellent conversation.

Cross posted from The Stars Hollow Gazette

The June employment report from the Bureau of Labor Statistics reported that the US added 195,000 jobs but the unemployment rate remained at 7.6%. This better than expected number, along with upward revisions of the April and May jobs numbers led to some speculation by Wall Street analysts to speculate that the Federal Reserve would start to back away from part of its stimulus program.

But hold your horses on the optimism. The reality is that this an anaemic recovery with flat growth and low productivity, as Dean Baker points out in his article:

First, it is important to remember the size of the hole the economy is in. We are down roughly 8.5 million jobs from our trend growth path. We also need close to 100,000 jobs a month to keep pace with the underlying growth rate of the labor market. This means that even with the relatively good growth of the last few months, we were only closing the gap at the rate of 96,000 a month. At this pace, it will take up more than seven years to fill the jobs gap.

It is easy to miss the size of the jobs gap since the current 7.6% unemployment rate doesn’t seem that high. However, the main reason that the unemployment rate has fallen from its peak of 10% in the fall of 2009 is that millions of people have dropped out of the labor force and stopped looking for jobs. These people are no longer counted as being unemployed. [..]

This gets to the type of jobs that have been created in the upturn. Over the last three months, three sectors – restaurants, retail trade, and temporary help – have accounted for more than half of the jobs created. These sectors offer the lowest-paying jobs, with few benefits and little job security. [..]

Workers take these jobs when there are no better alternatives available.

There is also the impact of sequestration that has yet to have its full impact on the economy and Congress seems content to leave in place with one side blaming the other. There is little chance that a budget or any significant legislation will get through this Congress:

Do you see the problem here? The president’s adversaries lament his lack of warmth and his remote intellectualism; his supporters see the same quality as an analytical and cool-headed virtue. This could be a cute “the president is from Mars, Republicans are from Venus” thing – if it weren’t for the fact that several important issues this summer, including the budget and food-stamp funding, hinge on whether these two crazy kids will ever figure it out. At the base of their problem is an absence of mutual respect and a lack of legislative sportsmanship.

Until the players figure this out – and there’s no sign they ever will – we’re going to be stuck in an endless loop of revisiting these unhelpful battles that drag on for years. This summer is the last chance for any legislation to get through. Starting in the fall, the campaigns for the 2014 midterm elections are going to start, and the window for serious legislative action will have closed – at which point you can kiss any progress on major bills goodbye. [..]

the sequestration cuts are not a question of “one side” winning or losing. They’re a question of the nation, the economy and the American people losing. They’re a question of poor people losing: Meals on Wheels will suffer, as will those living in federal housing.

No one, so far, is winning at all. Even more concerning, it’s not abundantly clear that anyone in Washington knows how to play the game anymore.

Voters need to start making greater demands on their congress critters and start threatening to throw them out for ones who will represent the people and not Wall Street and their own self-interests.

America has never been this fucked up.

That bitter awareness is echoing from one end of reality to the other, it’s rumbling just under the surface of this Wonderland of the One-Percent, it can be heard in the whistling of Wall Street bankers past the graveyard of the economy, in the silence of a million foreclosed homes, in the blowing of the wind through the ragged lines of the unemployed, in the pounding of the waves of karma on the shores of capitalism, where the sandcastles of the American Dream are being swept away, where the piers of the political system are collapsing into the sea, where a long night is falling and the lights along the boardwalk of forgotten freedom are all going out.

“The industrial reserve army, during the periods of stagnation and average prosperity, weighs down the active army of workers during the periods of over-production and feverish activity, it puts a curb on their pretensions. The relative surplus population is therefore the background against which the law of the demand and supply of labour does its work. It confines the field of action of this law to the limits absolutely convenient to capital’s drive to exploit and dominate the workers (Marx, 1867, Capital, volume I, Penguin edition, p. 792).”

Introduction

This post is part I of a series discussing the labour market under capitalism. In this part, I am addressing the issue of persistent unemployment in capitalism and the introduction of workfare in the UK specifically. I am addressing both economic and political inconsistencies of the introduction of workfare under Capitalism and Bourgeois Democracy. I conclude this post by addressing the crisis of bourgeois democracy that is exemplified by the contradictions between the introduction of forced labour and human rights, one of the strongest weapons belonging to the ideology of bourgeois democracy.

Workfare, a welfare to work scheme, which forces welfare recipients to work to earn their benefit, has existed for some time in the US (see: 1996 Personal Responsibility and Work Opportunity Act: http://en.wikipedia.org/wiki/P… and for a comparison between state workfare programmes in the US see: http://www.ssc.wisc.edu/~gwall… Originally introduced in the UK by Labour in 1998 and insultingly called the “The New Deal” ( http://en.wikipedia.org/wiki/N… ), it enabled penalties for those that refused “reasonable work” and established courses and volunteer work to get those on benefits into work and provided tax credits for working families to keep them working.

However, the attempt by the current government in the UK to extend it has led to both legal action and resistance on the part of those being forced to labour. The 2010 “Work for your Benefits Pilot Scheme” ( http://www.legislation.gov.uk/… ) and the extension of the “Mandatory Work Activity scheme” (2011: http://www.legislation.gov.uk/…  http://www.parliament.uk/docum… which is supposedly for those that are not on board with the shift from welfare to work strategy of the government) in numbers of “customers” forced to labour without pay and  in light of severe criticism in terms of the introduction of forced labour as well as the known ineffectiveness of these schemes is more than questionable. However, it is certainly consistent with the policies and beliefs of the current government.

The second part of this series will concentrate on workfare in the UK and the actions that are part of the fight-back against the extension of workfare and this will go up tomorrow at 12 noon eastern.

One of the most important contradictions in the capitalist economic system lies in the nature of the labour market itself. On the one hand, capitalism requires free labour; that is, free in the sense that it is no longer tied by law to specific aristocrats that provided subsistence in exchange for labour on their land as serfs or tied to specific masters as slaves. In fact, the existence of slavery and indentured servitude in the US arose initially due to the insufficient number of labourers; it continued due to racism and the usefulness of divide and rule amongst working people. While not denying the importance of morality and human decency, when it started to be an impediment with the development of the domestic market, capital moved to eliminate it. Free labour means that instead labour is free to sell its labour to obtain subsistence. On the other hand, the dependence upon wages earned through labour means that they are subject to the vagaries of the labour market itself and the needs of profitability and capital accumulation within the system itself.  However, from its earliest, capitalism and unemployment go hand in hand. The numbers of workers needed by the system depends essentially on profitability criterion; full employment is a fantasy, even in periods of rapid economic growth.

  Allow me to repeat this headline: 236,000 Americans will lose unemployment benefits this week.  Nearly half of them will be Californians.

 According to CBS, the benefits will be cut due to terms of a benefit extension agreement in Congress. It stated benefits would be cut off if unemployment rates fell below certain thresholds.

  According to CNN Money, starting later this year the maximum number of weeks the jobless can collect unemployment benefits will be reduced to as little as 40 weeks in states with jobless rates below 6 percent and to as many as 73 weeks where unemployment tops 9 percent.

Cross posted from The Stars Hollow Gazette

Wages have not matched inflation, unemployment for those without work for more than six months is topping 40% while real unemployment (U-6) sits at 14.9%, the housing market continues to tumble. The cost of housing, food, health care, education, transportation has gone up while wages have gone in the other direction.

That is the reality of the US economy and it does not bode well for a sustainable recovery, not without a boost from the government. Nobel Economist Joseph E. Stiglitz writes that “the labor market is a shambles” and it’s not going to improve anytime soon without a boost from the government:

Let’s assume that job creation continues at the rate of 225,000 jobs a month. That is only about 100,000 beyond the number required to provide jobs for the average monthly number of new entrants into the labour force. At that pace, it would take 150 months to reach full employment – 13 years, some time around 2025. The independent Congressional Budget Office is more optimistic, forecasting the return of full employment by 2018. [..]

Before the crisis, 40 per cent of all investment was in property. We had a housing bubble that left a legacy of excess capacity. Continuing weakness in the property sector is reflected in high foreclosure rates and low home prices. [..]

Finally, US states and local governments are constrained, to a large extent, by having to balance their budgets. They depend heavily on property taxes, so both revenues and expenditures have plummeted. This is why there are a million fewer public employees than before the crisis. Government as a whole is being procyclical, not countercyclical. [..]

Unfortunately, little has been done about the underlying structural problems. Indeed, the downturn, during which wages have not kept pace with inflation, has in many ways made US inequality worse.

Today the American economy faces three big risks. First, a steeper European downturn, as a result of the excessive austerity and the euro crisis. Second, complacency that the economy will recover quickly without government support. Though every downturn comes to an end, that should not be of much comfort. Third, that we accept that an unemployment rate above 7 per cent is inevitable.

If my Cassandra forecast turns out to be wrong, stimulus can be cut. But if it turns out to be right, and we do too little, we will live to regret it.

We need Congress and the President to stop listening to “Washington Consensus” and the “main stream” economists that are preaching “austerity” that will only prolong the economic decline and increase poverty.

  There appears to be a lot of confusion and debate concerning the shrinking labor force participation numbers. People seem to have very strong opinions on both sides.

 On one side you have the people who believe that the government is messaging the data to hide the unemployment rate by simply not counting unemployed people.

 To these people I say: if it is a conspiracy it is a poorly concealed one, since the topic is debated even in the news media.

 On the other side you have two groups: a) those who believe that people are simply retiring early, or b) that this is nothing more than a continuation of a long-term trend.

 It is this latter group’s beliefs that I would like to address directly

  When Mohamed Bouazizi set himself on fire in Tunisia he set in motion a series of events that would topple governments across the Arab world. Because of the worlds-shaping events that followed, it is almost forgotten that the reason Bouazizi comitted suicide was simply his frustration and anguish over not having a job and a future.

 Across the world today, Bouazizi’s pain is being felt by a global generation. It isn’t limited to any one country, region, or continent. Almost the entire world has turned its back on the youth of the world in one way or another.

  It’s not a situation that the global economy or political system is capable of dealing with, and the consequences will continue to echo long after most of us reading this have passed on.

Cross posted from The Stars Hollow Gazette

President Obama’s Chief of Staff Bill Daley, former bankster and Third Way board member, thinks that it is “the deficit is a serious drag on the economy.” You would think that the Tea Party Republicans had taken over the White House. Oh, wait, they have.

Mr. Daley appeared on Meet the Press with corporate shill, David Gregory

As Scarecrow at FDL points out

Apparently, the man closest to the President of the United States, and on whom the President relies for political and economy advice, does not know that the only reason the terrible unemployment numbers that may end his President’s re-election hopes are at 9.2 percent and not 11 or 12 percent or higher is because of the increased federal deficit spending of the last two years.

And the only thing that can keep unemployment from reaching higher levels in 2012 is continued federal spending, which they will cover via more deficits. If Mr. Daley’s diagnosis were translated into policy – and that seems to be what’s happening – he and his President will need new jobs in 2013.

Mr. Daley and the completely useless David Gregory totally ignore the real causes for current economic disaster:

On the debt reduction negotiations, David Gregory asked Mr. Daley what he must have thought was a gotcha now question. He showed Mr. Daley a graphic showing the increase in the total debt since Obama took office, with the debt going from $10 trillion to $14 trillion or so, and projected to rise another $2 trillion.

Then Gregory smuggly concluded, “can’t you [Mr. Daley] see the logic of those who argue that given this huge increase in the debt, it makes sense that we reduce that only with spending cuts and not tax increases?”

The correct response to a question that jaw-droppingly stupid would have been to award Gregory the Douglas Feith Award and terminate his contract with NBC. Daley may not get the allusion and couldn’t say that in any event.

But in responding, Daley couldn’t even remember to remind viewers that the bulk of that debt increase was entirely the result of the recession: fallen tax revenues and increased safety-net spending, plus the stimulus, all responding to the recession Mr. Obama inherited. Instead, he left us with the lecture on how the debt or deficit was a serious drag on the economy, so our President was really focused on that.

Scarecrow is so right that “there are no more adults in this conversation.”

 

I Demand a War Tax and call it that, it’s been over a decade and counting of No Sacrifice by the Country as we demanded Sacrifice of our Soldiers and their Families, with multiple tours in two occupation theaters!

Those of us who were born during or in the years shortly after World War II grew into what our grand parents and parents with the help of our Government investments were building, joining in as we joined the workforce professions to build for our children, from the needed education professions to the skilled trades once professions.