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Archive for November 10, 2011

Creating and Saving Jobs: A National Emergency

by Ralph Scharnau

We live in a dual economy.  On one hand, corporate profits are high, corporate cash holdings are soaring, and income gains are proliferating for the rich.  On the other, the working and middle classes experience weak job growth, high levels of unemployment, and declining income.

The Occupy Wall Street movement has tapped into a broad discontent with this economy marked by rising joblessness, poverty, and economic injustice.  The movement correctly identifies the 1% of Americans as an oligarchy with income, wealth, and power concentrated in the hands of a small privileged class who now control 42% of the nation’s wealth.  The rest of us, 99%, confront varying levels of inequality.

Today, jobs understandably rank as voters’ top concern.  A job, after all, is crucial for establishing a person’s sense of security and self-worth, health and safety, and chances to participate in the life of the community.

Today American workers face unprecedented pressure.  About 14 million people are out of work, but only half of them receive unemployment insurance and 43% have been unemployed six months or longer.  By counting those who are involuntarily part-time and those classified as discouraged, the total unemployed or underemployed rate rises to 25 million workers, or about one-fourth of the workforce.

With the jobless rate hovering just over 9%, the economy is not even creating enough jobs to keep pace with population growth.  The average length of time a person who lost a job was unemployed reached 24 weeks during the recession but actually continued to rise to 40 weeks in September, the longest in more than 60 years.  Increasingly, American workers are falling prey to “off-loading,” cutting jobs and dumping the work on remaining staff.

Median annual household income declined more during the recovery (since June 2009) than it did during the recession (December 2007 to June 2009).  Hourly pay outpaced inflation during the recession but not during the recovery.
And people who lost their jobs have taken pay cuts in order to be hired again.  This explains why 8 in 10 people see the recession as ongoing.

A record 46.2 million people live in poverty in the nation today.   This means nearly one in six Americans lives below the poverty line of $22,000 for a family of four, including 20% of all children.

The gender wage gap also figures into inequality.  Today women are paid an average of 80 cents for every dollar paid to men, but for African-American women, it’s 70 cents and for Latina women, it’s 60 cents.

These grim signs of the devastating effects of the great recession amount to a human crisis that demands action.  The most effective way to reduce the deficit is to create jobs.  With consumption accounting for nearly 70% of our economy and private sector investment in jobs languishing, we need a major direct public jobs program.

President Obama has suggested a variety of job creation measures.  These have been blocked by a Republican Party that offers no actual job creating plans, only tired slogans about cutting taxes, social programs, and regulations which will only grow the deficit and eliminate jobs.

To create jobs, infrastructure spending on highways, bridges, and schools makes sense because of high need and extraordinarily low borrowing costs.  To save jobs, we need direct aid to states and municipalities to prevent layoffs.

More jobs mean more consumers spending, more tax revenues, less poverty, and less debt.  Thomas Jefferson wrote about our government’s “undiminished devotion” to human rights and the “palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.”

Ralph Scharnau teaches U. S. history at Northeast Iowa Community College, Peosta.  He holds a Ph.D. from Northern Illinois University.  His publications include articles on labor history in Iowa and Dubuque.  Scharnau, a peace and justice activist, writes monthly op-ed columns for the Dubuque Telegraph Herald.