<<http://www.zmag.org/content/showarticle.cfm?SectionID=10&ItemID=4293>>
yves engler Shouldn’t people’s ability to find work be central to any economy? Isn’t the point of an economy all about fulfilling human needs, one of which is meaningful work? Not according to today’s monetarist economists who only three years ago were warning of the dangers of the unemployment rate dropping below four percent. Then the business community and their economists were fearful that lower unemployment rates would increase labour’s bargaining position, which would drive up wages and inflation. Unfortunately full employment was never reached. Alan Greenspan, with the backing of the other monetarists who dominate today’s economic discourse, increased interest rates to deflate the economy. It worked. Unemployment rates began to climb. Officially it’s now at 6.1% but that number masks the huge number of people who’ve simply given up looking. In August, 93,000 jobs were lost and now there are 2.1 percent fewer workers on payrolls in the U.S. than there were two years ago, which doesn’t even take into account the needed job growth to keep up with population increases. (Business Week September 29) Yet as GDP rises again, at a rate of 5% this quarter, the economists are talking about a “jobless recovery” — the meaning of which was explained in a recent Financial Post article. “The total net worth of America’s richest people rose by ten percent to U.S $ 995 billion this year from 2002, according to Forbes Magazines annual ranking of the countries 400 wealthiest individuals.” (The four hundred richest U.S. residents wealth is now about the size of Canada’s economy, the eight largest in the world). In 2001/02 the 400 wealthiest people saw a slight decline in their wealth, as was the case for most of the population with some 1.7 million people in 2002 that joined the 34.6 million people living in poverty. (WSJ September 29) But now the rich — if you’re talking to economists, the essential part of the economy — are recovering. No matter that since the ‘recovery’ started in November of 2001 some 1.2 million more people joined the dole lines and “the number of people without health insurance shot up last year by 2.4 million, the largest increase in a decade.” (NY Times Sept 30) And, the past twenty years of neoliberal attacks against social entitlements such as welfare (the non-corporate kind) unemployment benefits, and social housing has made this unemployment crisis that much more painful. Homelessness and hunger are increasing, especially amongst the Black community where the job loss rate has been even more severe (On top of an unemployment rate that already doubled that of the white population.). This combination of GDP growth and increasing unemployment is no longer out of the ordinary in the context of the de-industrialized U.S. economy. According to Patrick Barkey in the East Central Indiana Star Press, “jobless recoveries have become normal recoveries, at least for the U.S. economy. There is no ‘bounce-back’ in hiring in the aftermath of recession because employers have made adjustments to permanently eliminate the need for the lost jobs. At least that is what the data for the last two recessions, in 1991 and 2001, tell us.” The USA Today further elaborates on the issue; “To see whether a pattern is developing Kansas City Fed economists looked at boom-and-bust cycles dating to 1960. They found that, on average, employment grew 2.7% in the first year of a recovery, except in the early 1990s and now. Put another way, the economy shed thousands of jobs during the initial year of the recovery, compared with more than 2 million created on average in previous rebounds.” (October 1) GDP now has to increase by as much as 4% for there to be any job growth. One reason for the jobless recovery phenomenon is the reduced manufacturing base. According to the Bureau of Labor Statistics, in July 14.6 million of 129.9 million payroll jobs were in the manufacturing sector down from a peak of 19.4 million in 1979. (http://www.bls.gov/news.release/empsit.nr0.htm) Automation of work has been used by the corporate sector to reduce companies’ payrolls. The effect of this downsizing is often an increased work hour burden and pace, for those fortunate enough to keep their jobs. As opposed to almost every industrialized nation U.S. residents are now working 200 hours more than they did in the early 1970s, which often adds to people’s stress levels. (NY Times April 12) Similarly, a heightened pace of work can increase workplace injuries. However from a business perspective, more hours per employee through automation and increased work pace usually increases GDP without increasing employment. In addition, U.S. jobs are being lost because the liberalization of investment and trade has allowed U.S. based multinationals to scour the globe – from Mexico to China to Vietnam - for the cheapest most compliant labor. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
