Archive for category Unemployment

American Middle Class Poorest In 25 Years, Now Underemployed

Middle class

Annie Lowrey, New York magazine:

Labor-force participation has declined — partially because the baby boomers are retiring, but also because prime-age workers are fleeing the job market. Churn has remained slow, with workers too timid to quit their jobs. The middle class is poorer than it was when the recession started, poorer than it was when the recession ended, and poorer than it was in 1989. In real terms, wages are stagnant even though the jobless rate has dropped.

At the same time, the earnings of the wealthiest Americans have surged higher. Corporations are rolling in profits. Growth has strengthened. And the stock market has gone on an extraordinary tear.

The headline (U-3) unemployment rate for September was 5.9 percent, however the seasonally-adjusted real (U-6) unemployment rate was 11.8 percent, down from 12 percent in August. The latest Bureau of Labor Statistics (BLS) report estimates that 97,000 people dropped out of the labor force. Because you can’t be officially “unemployed” if you’re not looking for work, having a bunch of people give up looking for work makes the BLS unemployment rates lower.

As Forbes contributor Louis Efron pointed out last month, the U.S. has around 7.5 million underemployed workers. Most of the new jobs in this recovery have been low-wage and part-time jobs, which were taken by Americans just trying to survive while looking for a “real” job.

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‘We’re moving toward a winner-take-all economy’

Dead End One Way

Reportedly 18% of workers in the U.S. now can’t afford to retire.

Lynn Stuart Parramore on AlterNet interviews journalist Jessica Bruder, who gives a bleak picture of the many older Americans who are forced to work past retirement age, and concludes:

The social contract is falling apart. With the death of pensions and the increase of short-term, temporary jobs bearing no benefits, we’re moving toward a winner-take-all economy with no safety net to help people weather hard times.

Lance Roberts looked at employment statistics and found:

With 24% of “baby boomers” postponing retirement, due to an inability to retire, it is not surprising that the employment level of individuals OVER the age of 65, as a percent of the working age population 16 and over, has risen sharply in recent years.

More info:
Can’t find a job? Blame grandma

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In case you forgot,

…GOP economics is as bunk as everything else they do.

Despite the constant claims that paying people enough to actually live will destroy jobs, on average the states that raised the minimum wage are seeing higher than average job growth.

This could very well be due to other factors, and not because of the minimum wage, but certainly the minimum wage isn’t killing jobs.

Actually, turns out there is more evidence, and when we add that we start to see actual trends. As the Washington Post points out, raising the minimum seems to create jobs.

Naturally facts won’t change the arguments from the right. But I already wrote about that.

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Calculated Risk Blog Retires The Scary Jobs Graph

Scary jobs graph

With the May jobs report, the U.S. economy is now back to pre-recession levels of employment. It took more than six years to climb out of the hole George W. Bush put us in (by “us” I mean everyone except the Wall Street millionaires and billionaires who are guilty of precipitating the collapse of the financial sector). That’s nearly as long as it took to recover from the Great Depression in the 1930s. On the Calculated Risk Blog, Bill McBride says, “I’ll be retiring the graph many called the ‘scariest jobs chart ever’.”

Although employment numbers have come back, (1) That only gets us to the same number of jobs we had in 2007, not to where we would have been without Bush’s Great Recession; (2) Unemployment would be higher than 6.3% if we counted the discouraged workers; and (3) Our economy has replaced too many living-wage jobs with low-wage jobs.

Jim Hightower, on AlterNet:

Employment rose by 217,000 jobs in the month of May, according to the latest jobs report — and that brought us up to 8.7 million. That is how many new jobs the American economy has generated since the “Great Recession” officially ended in 2009 — and it also happens to be the number of jobs that were lost because of that recession. You can break out the champagne, for the American economy is back, baby — all of the lost jobs have been recovered!

…Now, let’s move on to the value of those jobs that have economists doing a happy dance. As a worker, you don’t merely want to know that 217,000 new jobs are on the market; you want to know what they’re worth — do they pay living wages, do they come with benefits, are they just part-time and temporary, do they include union rights, what are the working conditions, etc.? In other words, are these jobs … or scams?

So, it’s interesting that the recent news of job market “improvement” doesn’t mention that of the 10 occupation categories projecting the greatest growth in the next eight years, only one pays a middle-class wage. Four pay barely above poverty level and five pay beneath it, including fast-food workers, retail sales staff, health aids and janitors.

…To measure the job market by quantity — with no regard for quality — is to devalue workers themselves. Creating 217,000 new jobs is not a sign of economic health if each worker needs two or three of those jobs to patch together a barebones living — and millions more are left with no work at all.

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Less Than A Quarter Of The Unemployed From Bush’s Great Recession Had Steady Jobs 5 Years Later

Unemployed pie chart

Via Think Progress:

Just 22 percent of those who ended up unemployed for six months or longer during the 2008 recession found steady, full-time work by the beginning of 2013, according to a new analysis from Princeton professor Alan Krueger as reported by the Wall Street Journal.

Looking at a Census Bureau survey of households between 2008 and 2013, he found that the rest of the long-term unemployed weren’t faring very well. The largest share, 35 percent, had dropped out of the labor force altogether, either giving up on finding a job, going back to school, retiring, or choosing some option other than job hunting. While 28 percent had found some employment, it wasn’t steady or full time. Another 14 percent were still unsuccessfully job hunting five years after they lost their jobs.

Republican economic sabotage is working. They killed public sector jobs. They cut off unemployment benefits six months ago. They are constantly crying about “The Obama Economy” (if only Dems knew how to frame issues that effectively!) Most of the new jobs being created are low-wage jobs with no benefits. It’s been 7 years since the last time Congress raised the minimum wage. President Obama has to go beyond giving speeches about job growth, and hoping corporations will do the right thing.

That said, let’s remember that the Obama administration has created more than 8.7 million jobs, compared to 1.1 million during Bush’s entire two terms. Bush was the first President since Herbert Hoover to have a net loss of jobs. GDP was going down when Bush left office. Republicans in Congress have prevented the Obama administration from doing enough to repair the economic devastation left by Bush.

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Douglas Holtz-Eakin: Economic Recovery Resembles A Dead Parrot

Employment to Population Ratio

Douglas Holtz-Eakin, former director of the Congressional Budget Office and economic adviser on Senator John McCain’s 2008 presidential campaign, offers a series of graphs that compare the so-called “recovery” from Bush’s Great Recession to the dead parrot of Monty Python fame (though Holtz-Eakin doesn’t credit the classic “Dead Parrot Sketch”).

For anyone not familiar with Monty Python, the “Dead Parrot Sketch” involved a pet shop employee who steadfastly refuses to believe a customer’s contention that the parrot he was sold is in fact deceased.

More info:
Monty Python: The true story behind the ‘Dead Parrot Sketch’

UPDATES:
U.S. economy stalled during the first quarter
Why the first-quarter GDP may get even uglier

The government’s official reading of domestic growth clocked in at a puny annual rate of 0.1 percent, falling short of even the most modest expectations.

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No, Americans Are Not All To Blame for the Financial Crisis

EITB?

Writing in The New Republic, Dean Starkman counters the narrative still being repeated by the PTB and the media. The claim that Everyone-Is-To-Blame (EITB) for crashing the economy is not true. Wall Street financiers and predatory lenders are the guilty parties. Consumers didn’t suddenly start committing fraud on a massive scale in 2004 – that was the mortgage industry.

Why blame the victims? Because six years after the fact, no significant Wall Street figure has been criminally prosecuted. That’s a good enough reason, if you’re one of the crooks who got away with it.

Writes Starkman:

I’m not suggesting that Wall Street has gotten a free pass on its role in the crisis. People get it, sort of. But we also grade on a curve that assumes that banks’ criminal or quasi-criminal conspiracies are par for the course, Wall Street just being Wall Street. …Borrowers who wound up underwater, by contrast, are pitiful at best. Either they were greedy or dumb or both. They really should have been more careful.

…Sorry, everybody was not to blame. “We” didn’t all do it.

UPDATE:
According to a new NBC News/Wall Street Journal poll, 65 percent of Americans say the country is “on the wrong track,” and 57 percent say they believe we’re still in a recession. Republicans actively pursue measures to worsen the economy for average Americans (e.g. austerity budgeting, refusing to extend unemployment insurance), in the hope that their sabotage will be rewarded at the polls in November. There’s something really wrong with the two-party system if they can get away with this.

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Unemployment Displaces Dysfunctional Government As Top Problem in the U.S.

Gallup Poll

Gallup:

WASHINGTON, D.C. — Americans have a new No. 1 problem. Nearly one in four Americans mention jobs and unemployment as the most important problem facing the country, up from 16% in January. The government and politicians had topped the list since the government shutdown in October.

For the moment at least, right-wing Republicans have stopped deliberately trying to plunge us into another Great Depression. Maybe we can do start doing something about the mess they created. Too bad Dems have given up trying to re-take the House of Representatives. Howard Dean wouldn’t have given up if he were still in charge.

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Capitalism is a Failing System

This editorial by Richard D. Wolff caught my attention:

Janet Yellen, the United States’ Federal Reserve’s new chair, and I were graduate economics students around the same time at Yale University. The professor who shaped the macroeconomics we learned was James Tobin. He taught us to be Keynesian economists: that is, to accept capitalism as the sole object and focus of our studies, to celebrate it as the best possible system and to preserve it against its own serious faults. Keynesian economics teaches that to secure capitalism’s blessings requires systematic government intervention in the workings of the economy.

So far, conventionally Keynesian and even neo-liberal.

No courses at Yale troubled Yellen or myself with any analyses of how exploitation lies at the core of capitalist production. We were never taught that the majority of industrial workers produce more value for employers than what employers pay them. We were prevented from encountering arguments examining how this idea of “more” (or, in economic terms, of a surplus) contributed fundamentally to the systemic inequalities that define capitalist societies.

Now we’re getting interesting:

Capitalism’s dysfunctions have led me to appreciate and independently learn what Marxian economics has to teach me, outside of Yale’s mainstream economics. Yellen and her cohorts avoided and bypassed all that.

Convinced that we can do better than capitalism, many have analyzed the incipient alternatives emerging from capitalism’s deficiencies, such as cooperatives, workers’ self-directed enterprises and others. For us, Occupy Wall Street represents a powerful surge against capitalism, yet another sign of the waning tolerance for a system that Yellen will try to preserve.

The whole article is worth a read.

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TPP Sidetracked?

Coporatocracy

While a major media news blackout provides cover, Congress is debating whether to give the president the authority to fast-track a massive free trade agreement, the secretly-negotiated Trans Pacific Partnership (TPP). Members of Congress haven’t even been able to read it even though corporate lobbyists have.

President Obama is at odds with Democrats in both houses of Congress concerning reauthorizing a procedure called the “trade promotion authority” (TPA), that would grant the White House power to submit free trade deals to Congress for an up-or-down vote without amendments. Senate Majority Leader Harry Reid is strongly against it.

House Minority Leader Nancy Pelosi has now publicly opposed giving President Obama fast track authority.

“We need transparency. We need a seat at the table to understand what they believe they are doing, so we can make it better. And if we don’t make it better, then we will not accept a path that is a job loser.”

TPP is part of the plan for global corporatocracy run by and for the 1 Percent. Unelected lobbyists and trade representatives are at the table, while representatives from the public at large and businesses other than huge monopolies, are conspicuously absent. From what little we know of the agreement, it would violate the U.S. Constitution, weaken environmental protections, and lead to more job losses, erosion of wages, and worsening inequality. TPP also threatens freedom of speech on the Internet because it would extend restrictive intellectual property laws and rewrite international rules on enforcement.

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The State of the Union is Desperate

State of the Union

Year after year in his annual address to Congress, President Obama describes the state of the Union as “strong.” That adjective doesn’t describe the increasingly desperate and shrinking American middle class.

According to the Pew Research Center, the proportion of Americans who identify themselves as middle class has dropped sharply in recent years.

The nationally representative survey of 1,504 adults conducted Jan. 15-19 found that the share of Americans who identify with the middle class has never been lower, dropping to 44% in the latest survey from 53% in 2008 during the first months of the Great Recession.

…Economists also report a lack of jobs growth in middle-skill, middle-income jobs. An analysis by the New York Federal Reserve Bank found that employment in middle-skill jobs increased by 46% from 1980 to 2009. Meanwhile, employment in low-skill jobs increased 110% and employment in high-skill jobs increased 100%. This phenomenon of “jobs polarization” is perhaps most assiduously studied by David Autor, an MIT economist. His research demonstrates that employment growth over the past three decades has steadily gravitated toward low-skill jobs.

Tonight, President Obama’s challenge is not to explain or sympathize with the plight of the middle class, but to tell us what he’s going to do –as President– to solve the problem of rising income inequality. Relying on Congress is not a plan!

UPDATE:
7 Ways Obama Can Actually Get Something Done
Obama’s Last State Of The Union: A Report Card

UPDATE: What’s Obama Going to Say About the Trans-Pacific Partnership?

Obama has been urging Congress to use its “fast-track authority” to sign off on the still-unfinished deal between 12 Pacific nations. If lawmakers agree to fast-track the measure, they wouldn’t be able to offer amendments and would have to take an up-or-down vote on whatever deal the administration eventually reaches. The TPP has the backing of corporate interest groups, but liberals have balked over its potential to undermine environmental, public health and labor standards, as well as ship U.S. jobs overseas. The White House has yet to find a House Democratic cosponsor for it.

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Americans Believe Our Economy is Broken

Unemployed

According to new polling by the Center for American Progress:

Nearly two in three Americans (64 percent) agree that “Most people who live in poverty are poor because their jobs don’t pay enough, they lack good health care and education, and things cost too much for them to save and get ahead.” By contrast, only 25 percent of Americans agree with a competing idea that “Most people who live in poverty are poor because they make bad decisions or act irresponsibly in their own lives.” Even white conservatives and libertarians prefer the structural explanation for poverty over the personal by a significant margin, 63 to 29 percent.

These results are not a surprise if you belong to the reality-based community. Economic conditions in this country are the worst since the Great Depression. Six years after the start of Bush’s Great Recession, there has been hardly any recovery at all for most Americans. According to research by Emmanuel Saez, an economics professor at the University of California at Berkeley, between 2009 and 2011 the top 1 Percent became 11.2 percent richer while the bottom 99 Percent got 0.4 percent poorer.

Long-term unemployment benefits expired for 1.3 million Americans on December 28. They were just a fraction of the 4.1 million people whom the Labor Department counted as unemployed for more than 26 weeks. Beyond the official long-term unemployed, more than 760,000 others are counted by the Labor Department as “discouraged,” meaning they have stopped looking for work (some economists think that the number may be higher).

It remains to be seen whether our broken political system can do much to fix our broken economy. Congress hasn’t even been able to agree on an extension of Emergency Unemployment Compensation, something that used to be routine.

UPDATE: Unemployment Is Falling For All The Wrong Reasons

One reason for the big drop in unemployment in December was that many, many people dropped out of the labor force — 347,000, to be exact. They stopped looking for work, which made them no longer “unemployed” in the eyes of the Bureau of Labor Statistics.

UPDATE: 50 Years Into The War On Poverty, Right-Wing Media Want To Give Up The Fight

Right-wing media have spent the last few years baselessly dismissing the decades-long push to alleviate poverty as not worth the fight, despite evidence showing that government efforts to reduce poverty have been successful.

UPDATE: Robert Reich: Today’s Jobs Report and the Scourge of Inequality

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