The misery economy

The goal of U.S. business is a permanent lowering
of working-class living standards.

By: WSW

Job seekers wait in an endless line for a chance at finding a job


PREFACE

The rich / poor dynamic that has taken hold not only in the United States, but throughout the world will NOT end until Christ comes back — and if it hasn't yet caught up to you, it soon will — unless you are willing to make a pact with the devil to prevent it. Unfortunately, many Christians are doing just that today. [Please see our article, "The Elites Want High Unemployment."]

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CALL IT the "new normal."

The Obama administration is celebrating the government's report on jobs in April, which showed the largest monthly increase in U.S. employment in five years. This, we're told, proves the economy is finally starting to turn around for everybody.

But look below the surface, and the picture looks grim for millions and millions of those "everybodys."

Like the 6 million people who have been out of work for at least six months, according to official figures. Like all of the jobless, 14 million of them, searching for work in an economy where there's only one job opening for every four of them. Like the high school and college seniors graduating this spring who will face what the Economic Policy Institute (EPI) called "the worst job market for young workers on record."

If the U.S. economy is emerging from the Great Recession--and that's still an "if" following statistics showing slower rates of overall growth so far this year--it's into a new world in which the living standards of all but a tiny few in American society have been drastically reduced. Unlike past expansions following recession--even the weak ones--working people can't expect any rebound that returns their income to pre-recession levels, much less improves it.

That's the "new normal"--and opinion polls show that most people don't buy the happy talk about recovery, from Barack Obama or anyone else. Instead, there is a brewing anger about a system in which a tiny elite grows richer while ordinary people struggle to get by--and a radicalization about the nature of capitalism itself, expressed in many different ways.

This anger has also been expressed in action--most spectacularly, with the mass protests in Wisconsin against Gov. Scott Walker's union-busting law, but also many smaller struggles, often local and disconnected from one another, around a wide range of issues.

Protestors in Wisconsin against Governor Scott Walker

THE BUREAU of Labor Statistics (BLS) reported that the U.S. economy added 244,000 jobs in April. An EPI analysis points out that this is the best showing for employment statistics in five years--but it's notable that this is the first time that jobs have increased at a monthly rate characteristic of past recoveries. Yet even so, with 14 million unemployed, it would take more than five years of similar job gains to get back to the pre-recession unemployment rate.

Then there's the contradictory statistics also released this month. For example, the BLS reported that the unemployment rate for April, which is based on a survey of households, actually rose to 9 percent.

And at the beginning of May, the Labor Department said that new applications for unemployment benefits hit the highest level in eight months, for an increase of 23 percent over the preceding four weeks. "The trend is clearly upward, so that's disconcerting," financial analyst Kurt Karl told the Associated Press. "When you get three or four weeks in a row of special factors, they're no longer so special."

These figures come in the wake of the Commerce Department's report at the end of April that the growth rate of the overall economy--celebrated as a sign that the recovery was kicking in--was cut nearly in half in the first three months of 2011.

Even setting aside the conflicting statistics, the strong showing for job creation in April dims considerably when set beside the evidence of an ongoing crisis at recession, if not depression, levels--especially for the people hit hardest by the previous years of crisis.

Young workers aged 16 to 24 had an official unemployment rate of 18.4 percent [real rate, 36.8%] in 2010, the worst level recorded in the 60 years that this data has been collected. As always, the jobless rate for African Americans, currently at 16.1 percent, [32.4%], remains nearly twice as high as for the population as a whole — and that's taking into account both young and older workers.

One major reason for the drop in the overall unemployment rate since its November peak of 10.2 percent is that so many people have dropped out of the workforce altogether because of the dim prospects of finding work.

According to the BLS, the percentage of working-age people officially counted as employed or looking for work was just 64.2 percent in April, the lowest point since the beginning of the recession. "If the labor force participation rate had held steady over the last year, there would be roughly 2.3 million more workers in the labor force right now...[and] the unemployment rate would be 10.3 percent right now instead of 9.0 percent," the EPI reported.

For those still looking, it's as much a desert for finding work as it was last year or the year before. Government statistics show there are 4.4 unemployed workers for every job opening--a far worse gap than even the worst month of the recession in the early 2000s.

U.S. business is simply not hiring at anywhere near the pace needed to make up for the big job cuts during the recession. As a result, those looking for work have to consider anything they can find. Nearly 25 million people are classified by the government as "underemployed," which includes not only the unemployed, but those who have given up looking for work, as well as people who want full-time jobs, but had to settle for part-time.

Another sign of the times: One in four of the jobs added by private employers during 2010 was a temporary job. This is a much larger proportion of the jobs being created today compared to previous periods of economic recovery--the corresponding figure for the early 2000s recession, for example, was just 7 percent.

HOW BAD is it? Journalist Andy Kroll captured the scope of the misery economy with this example:

"On April 19th, McDonald's launched its first-ever national hiring day, signing up 62,000 new workers at stores throughout the country. For some context, that's more jobs created by one company in a single day than the net job creation of the entire U.S. economy in 2009.

"But if that boggles the mind, consider how many workers applied to local McDonald's franchises that day and left empty-handed: 938,000 of them. With a 6.2 percent acceptance rate in its spring hiring blitz, McDonald's was more selective than the Princeton, Stanford or Yale University admissions offices."

It's worth pointing out that the 1 million people who lined up for work at McDonald's were hoping for a job that doesn't even pay a living wage. As Kroll noted, the average hourly wage in the fast food industry is $8.89, barely half the average of $15.95 across all industries.

Kroll's article dramatically illustrates how the feeble job creation since the Great Recession has been overwhelmingly concentrated in low-wage sectors:

"According to a recent analysis by the National Employment Law Project, the biggest growth in private-sector job creation in the past year occurred in positions in the low-wage retail, administrative and food service sectors of the economy. While 23 percent of the jobs lost in the Great Recession that followed the economic meltdown of 2008 were 'low-wage' (those paying $9-$13 an hour), 49 percent of new jobs added in the sluggish 'recovery' are in those same low-wage industries. On the other end of the spectrum, 40 percent of the jobs lost paid high wages ($19-$31 an hour), while a mere 14 percent of new jobs pay similarly high wages."

This shows in a stark way how American business has used the Great Recession to impose a sharp and permanent lowering of living standards for working-class people.

Of course, the elites haven't required the same sacrifices from its own ranks. The latest example of outrageous excess: CEOs at the nation's largest companies were paid more in 2010 than in 2007, the height of the last economic expansion. As the Associated Press reported, "In the boardroom, it's as if the Great Recession never happened...The typical pay package for the head of a company in the Standard & Poor's 500 was $9 million in 2010...That was 24 percent higher than a year earlier."

What we're living through isn't just the down cycle of an up-and-down economy that will eventually return to the "good old days." The program of the U.S. ruling class--whether carried out in the private sector by maintaining a "reserve army of labor" to push down the wages of all workers, or in the public sector with layoffs and drastic cuts in spending on social programs--has been to redistribute wealth from workers to the rich.

OBAMA AND his administration are betting their future on the belief that the U.S. economy will show enough improvement by November 2012 for the president to win reelection.

As measured by gross domestic product or the Dow Jones average, they may have a case. But from the point of view of U.S. workers, these are still hard times--which is why a Gallup poll at the end of April found that more than half of people in the U.S. believed the economy was still in either a recession or depression.

Worse, the idea that the economic recovery is well underway has been the justification for political leaders--Democrats and Republicans alike--to reject all proposals for government jobs programs, and focus instead on slashing the deficit. The relentless drive for austerity has had a stifling effect on an already weak economy. As the EPI reports, "Over the last six months, state and local governments have shed an average of 24,000 jobs per month, and since their employment peak in August 2008, state and local governments have shed nearly half a million jobs."

The deficit obsession in Washington is increasing the gap between what passes for mainstream political debate and what working people actually want.

The deep dissatisfaction with the status quo--and now the liberal face for that status quo provided by Barack Obama--has taken many forms, and not just in terms of public opinion or election trends.

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God bless you all!

S.R. Shearer
Antipas Ministries

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FOR THOSE OF YOU WHO WANT TO FELLOWSHIP ON HOW TO GO ON IN THESE DANGEROUS AND TROUBLED TIMES, WE URGE YOU TO CONTACT US AT: [email protected].

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