Employed Workers Face the Worst Conditions Since the Great Depression

[FOTD]

This should get your Monday juices going!

USA Today report: Workers face worst conditions since the Great Depression
By Barry Grey
13 June 2009
Even as US unemployment rolls soar to their highest levels in post-war history, employed workers face the worst conditions since the Great Depression, according to a front-page article in Friday's USA Today.
Based on its analysis of employment data, the newspaper reports that pay cuts, reduced hours, furloughs and involuntary part-time work have driven the working class back to conditions not seen since the 1930s.
USA Today writes that in the first quarter of 2009, US businesses cut total wages at a staggering 6.2 percent annual rate. It notes that paychecks are being further slashed by reduced hours of work. The employed worked fewer hours in May—an average of just 33.1 hours a week—than at any time since the Bureau of Labor Statistics began keeping records in 1964.
Part-time labor, the report continues, is at an all-time high, and overtime at a record low. A record 9 million people want full-time work but can find only part-time positions.
Those who are laid off face protracted unemployment. The average duration of joblessness is at a post-Depression high of 22.5 weeks. "Baby boomers—79 million people born from 1946 to 1964—have been hit particularly hard," the newspaper states. Unemployment rates for workers 45 years and older have reached the highest levels since at least 1948, when the government began tracking this demographic.
USAToday cites Laura Sejen of compensation consulting firm Watson Wyatt as saying, "The use of pay cuts—the last choice of most companies after hiring freezes, salary freezes and layoffs—shows how the recession is unlike any since the Depression."
These statistics demonstrate that the American ruling elite is carrying out a class-war policy. It is exploiting the economic crisis produced by capitalism to create an environment of mass unemployment, and utilizing the threat of protracted joblessness to blackmail workers into accepting cuts in wages and benefits.
This offensive is being spearheaded by the Obama administration. Its decision to force Chrysler and General Motors into bankruptcy, while it continues to hand over trillions of taxpayer dollars to the banks, is part of a deliberate policy aimed at permanently slashing the living standards of the working class.
A raft of economic indicators and reports released this week show that, despite the talk of recovery by the government and the media, the economic crisis in the US and internationally continues to deepen. The World Bank on Thursday nearly doubled its projection of global economic decline in 2009. On the eve of this weekend's meeting of G8 finance ministers in Italy, the World Bank said it expects the global economy to contract by "close to 3 percent," a far bleaker assessment than the 1.7 percent decline it made in March.
World Bank President Robert Zoellick said that while there are signs that the pace of the contraction may be easing in the wealthy countries, the crisis in the so-called "developing" countries is accelerating. The fall in consumer demand in the advanced countries, combined with massive government borrowing to bail out the banks and prevent a collapse in consumer spending, has led to a plunge in exports, remittances and foreign investment in much of Africa and Asia. He warned of "large-scale public defaults" that could undermine financial institutions in the US and Europe.
Even in the wealthy countries, the much-touted recovery trends are highly exaggerated. Figures released this week showed German exports falling 28.7 percent in April from a year earlier, the sharpest drop since the government began keeping records in 1950.
The Commerce Department report on the US trade deficit for April, released Wednesday, underscored the ongoing contraction in world trade. The deficit rose to $29.2 billion from $28.5 billion in March, but most significant was a decline in both exports and imports, with the fall in exports accelerating from March. The overall decline in trade surprised most analysts, who were predicting a small uptick in world trade volumes.
China, which is being looked to by the West as an engine of global recovery, issued a disastrous report on its exports for May. They fell 26.4 percent from a year earlier, accelerating from April's 22.6 percent decline. May exports also fell sharply in South Korea and Taiwan.
The crisis has already taken a massive toll on the wealth of the American people. The Federal Reserve Board reported Thursday that US households lost $1.33 trillion of their wealth in the first three months of the year. In its "flow of funds" report, the Fed said household net worth—total assets such as homes and checking accounts, minus liabilities such as mortgages and credit card debt—fell to $50.8 trillion, the lowest level since the third quarter of 2004.
The first quarter loss represented a decline of 2.6 percent from the final quarter of 2008. US households have seen their net worth contract for seven straight quarters. The first quarter 2009 figure represents a decline of $16 trillion from the highpoint in the second quarter of 2007.
A major part of the decline comes from the stock market. Stocks, which are disproportionately held by a small percentage of the population, have fallen $8.1 trillion from their peak. But the bulk of the decrease comes from the collapse in home prices, which are down 32.2 percent since peaking in the first quarter of 2006. Real-estate-related household assets decreased by $551 billion in the first quarter of this year, following a $974 billion fall in the final months of 2008.
Other indicators herald a further rise in unemployment, home foreclosures and defaults on consumer debt. The Labor Department's report on initial jobless claims, released Thursday, showed that 601,000 people filed for jobless benefits in the week ended June 6. While this is a small decline, 24,000, from the previous week, it brought the number of workers collecting benefits to an all-time high of 6.82 million.
Mass layoff announcements this week included American Airlines, which said it would cut 1,600 jobs, about 2.4 percent of its work force. Delta announced that it would slash capacity, a prelude to further layoffs by the world's largest airline.
Home foreclosure filings in May were up 18 percent from a year earlier, according to a report issued Thursday by the California firm RealtyTrac. "There were almost one million foreclosure filings in a three-month period, and that's simply unprecedented," said RealtyTrac Senior Vice President Rick Sharga.
The firm counted 321,480 filings nationally, making May the third consecutive month that foreclosure filings exceeded 300,000. RealtyTrac estimates that in a normal market, filings would be under 100,000 a month. May also saw a rise in bank repossessions. RealtyTrac forecasts some 4 million foreclosure filings will be made this year on 3.1 million households. This is 900,000 more than the record number in 2008.
Credit-reporting bureau TransUnion LCC reported Monday that delinquencies on bank credit cards jumped in the first quarter of this year by 11 percent from a year earlier.
The Commerce Department reported Thursday that retail sales rose slightly in May, up 0.5 percent from a month earlier. However, the bulk of the increase was the result of sharply higher gasoline prices, a trend that can only depress consumer spending going forward. Retail sales in May were still 9.6 percent below their levels of last year.
The Federal Reserve's "beige book" survey of regional economic conditions from mid-April to mid-May, released Wednesday, showed a continued weakening of economic activity. The report, issued by the Fed's 12 regional banks, concluded that economic conditions "remained weak or deteriorated further" in all regions.
While the report noted that businesses in five of the districts said the pace of economic decline was slowing, this marked no improvement from April, when the same number of districts reported a moderation of the rate of decline. Even the more optimistic regions reported that they "do not see a substantial increase in economic activity."
All districts reported the labor market remaining weak and wages generally "flat or falling." The report also warned of an accelerating crisis in commercial real estate, with vacancy rates rising "in many parts of the country."
In the Cleveland district, manufacturers predicted that demand this year would be lower than last. They said they were continuing to cut jobs and wages and slash capital spending.
Chicago reported that sales fell, and manufacturing and capital spending declined. Dallas said business was "bouncing along the bottom." A large number of manufacturers in the St. Louis region announced shutdowns and several auto companies said they planned permanent layoffs.
At the same time, massive government borrowing and the flooding of financial markets with dollars to pay for the rescue of Wall Street have sparked a decline in the dollar on world currency markets and sharply rising interest rates for Treasury notes. In the immediate term, this has reversed the decline in home mortgage rates, which track the yields on ten-year Treasury notes, aborting an earlier surge in home refinancings and new home sales.
Longer term, the rise in the price paid by the government to finance its huge deficits and soaring external debt—the federal government increased its borrowing by 22.6 percent in the first quarter of the year—threatens to undermine the position of the dollar as the world reserve currency, with catastrophic implications for the US and world economy.
This week Russia and Brazil announced that they were reducing their purchases of Treasury notes.
The so-called recovery envisioned by the Obama administration and the Fed entails an end to negative growth and a small rise in gross domestic product of 1-2 percent later this year or early in 2010. Even should this occur, it will not mean a recovery in the jobs and wages of workers.
The Wall Street Journal on Friday reported that economists in its latest forecasting survey expect the jobless rate to hit 9.9 percent by the end of this year. They see an additional one million jobs being wiped out over the next 12 months. As of December of 2010, they predict an unemployment rate of 9.4 percent. Even this dire prognosis is likely to prove optimistic.
The newspaper noted that officials at the Fed assume that the unemployment rate is "likely to remain above 9 percent for years."
Within this environment of mass unemployment and wage-cutting, policy makers in the Obama administration and the Fed are demanding austerity measures to slash social spending, so as to prop up the dollar and corporate profits. The Journal cited the remarks this weak of Dennis Lockhart, president of the Federal Reserve Bank of Atlanta. Pointing to the danger of rising rates on Treasury bills, Lockhart said the trend "can be seen as an expression of creeping doubt that the American polity, community, is up to the sacrifices, trade-off decisions and the courage of convictions the situation requires."
This is the reality behind the administration's talk of an imminent economic recovery. It is seeking to restabilize the banks, and the capitalist system as a whole, by wiping out the social gains won by previous generations of workers and impoverishing large sections of the working class.

By Barry Grey
13 June 2009
http://www.wsws.org/articles/2009/jun2009/econ-j13.shtml

  Go to college, get a degree and then?

[rhymnrzn]

All roads of success lead to Tulsa for the modern-day Pharisees and merchants to wax rich through the abundance.  Meanwhile the poor and working people get no rest from the yoke (yoke to the courts, to the government administration office, to the credit/background/drug screening, to the work required that is departed from justification): they are not being treated equally, as the system is programmed by certain masters, if there are any crumbs allowed to fall off their table.  

All the church attendance, yet this people do not set to practice towards the common good.  It is crazy to assert that we do.  Apostle Paul was talking about holy communion, and said "What! have ye not houses to eat and drink in? or despise ye the church of God, and shame them that have not?  What shall I say to you?  shall I praise you in this?  I praise you not." (1 Cor.11:22)  In the ancient times, the commandment (see Leviticus 25, etc.) was made common to release every debt for the seventh year, and to proclaim liberty every man to his brother, and to the strangers among them: and the consequences for not doing so followed at various times.  Seeing that we have machines and computers hired in the place of men and beasts, all that much more should they be given wages to afford their time off, lest the continual bondage turn into any further rigorous oppression, lest the keeping back of the sabbath year, sabbath days, and feast weeks be seen as fraud in the sight of God, who once plagued Egypt for the same reasons.  

[waterboy]

What I want to say, I really have a hard time expressing. Having lived through a few of these "recessions", I am not so scared. They are a chance to reconsider priorities, redirect energies and reflect on hypocrisies. I'm doing that daily. Trying to keep a home I no longer can afford. Working at a job that I was qualified for as a high school student and struggling with purpose.

Some aren't going to make it. Two of my contemporary friends died this past week. One from a massive heart attack, the other under questionable medications. I know they struggled the way I have. Its really strange to see change this time, and understand it more.

As far as the USA Today columnist this sticks out. Those on the right assure us that Obama is a socialist liberal who is hell bent on destroying capitalism either by intent or by incompetence. Now I see that those on the left consider him a tool of the capitalist financial wizards who are using him to prop up their capitalist empires.

He must be doing something right.

[Conan71]

What I want to say, I really have a hard time expressing. Having lived through a few of these "recessions", I am not so scared. They are a chance to reconsider priorities, redirect energies and reflect on hypocrisies. I'm doing that daily. Trying to keep a home I no longer can afford. Working at a job that I was qualified for as a high school student and struggling with purpose.

Some aren't going to make it. Two of my contemporary friends died this past week. One from a massive heart attack, the other under questionable medications. I know they struggled the way I have. Its really strange to see change this time, and understand it more.

As far as the USA Today columnist this sticks out. Those on the right assure us that Obama is a socialist liberal who is hell bent on destroying capitalism either by intent or by incompetence. Now I see that those on the left consider him a tool of the capitalist financial wizards who are using him to prop up their capitalist empires.

He must be doing something right.

WB, sorry to hear of the loss of your friends. 

[guido911]

But...but...but... Buttcrack told us that if we passed the stimulus bill all would be okay.

[FOTD]

But...but...but... Buttcrack told us that if we passed the stimulus bill all would be okay.

He NEVER said that...

[Gaspar]

He NEVER said that...

You're right FOTD.  As good old Joe put it yesterday:  "Everyone just guessed wrong."

Glad everyone is guessing.

Joe is priceless.  Throwing the boss under a bus at every turn.

[FOTD]

OP-ED COLUMNIST
No Recovery in Sight
By BOB HERBERT
Published: June 26, 2009
How do you put together a consumer economy that works when the consumers are out of work?

One of the great stories you'll be hearing over the next couple of years will be about the large number of Americans who were forced out of work in this recession and remained unable to find gainful employment after the recession ended. We're basically in denial about this.

There are now more than five unemployed workers for every job opening in the United States. The ranks of the poor are growing, welfare rolls are rising and young American men on a broad front are falling into an abyss of joblessness.

Some months ago, the Obama administration and various mainstream economists forecast a peak unemployment rate of roughly 8 percent this year. It has already reached 9.4 percent, and most analysts now expect it to hit 10 percent or higher. Economists are currently spreading the word that the recession may end sometime this year, but the unemployment rate will continue to climb. That's not a recovery. That's mumbo jumbo.

Why this rampant joblessness is not viewed as a crisis and approached with the sense of urgency and commitment that a crisis warrants, is beyond me. The Obama administration has committed a great deal of money to keep the economy from collapsing entirely, but that is not enough to cope with the scope of the jobless crisis.

There were roughly seven million people officially counted as unemployed in November 2007, a month before the recession began. Now there are about 14 million. If you add to these unemployed individuals those who are working part time but would like to work full time, and those who want jobs but have become discouraged and stopped looking, you get an underutilization rate that is truly alarming.

"By May 2009," according to the Center for Labor Market Studies at Northeastern University in Boston, "the total number of underutilized workers had increased dramatically from 15.63 million to 29.37 million — a rise of 13.7 million, or 88 percent. Nearly 30 million working-age individuals were underutilized in May 2009, the largest number in our nation's history. The overall labor underutilization rate in May 2009 had risen to 18.2 percent, its highest value in 26 years."

If it were true that the recession is approaching its end and that these startlingly high numbers were about to begin a steady and substantial decline, there would be much less reason for alarm. But while there is evidence the recession is easing, hardly anyone believes a big-time employment turnaround is in the offing.

Three-quarters of the workers let go over the past year were permanently displaced, as opposed to temporarily laid off. They won't be going back to their jobs when economic conditions improve. And many of those who were permanently displaced were in fields like construction and manufacturing in which the odds of finding work, even after a recovery takes hold, are not good.

Another startling aspect of this economic downturn is the toll it has taken on men, especially young men. Men accounted for nearly 80 percent of the loss in employment in this recession. As the labor market center reported, "The unemployment rate for males in April 2009 was 10 percent, versus only 7.2 percent for women, the largest absolute and relative gender gap in unemployment rates in the post-World War II period."

Workers under 30 have sustained nearly half the net job losses since November 2007.

This is not a recipe for a strong economic recovery once the recession officially ends, or for a healthy society. Young males, especially, are being clobbered at an age when, typically, they would be thinking about getting married, setting up new households and starting families. Moreover, work habits and experience developed in one's 20s often establish the foundation for decades of employment and earnings.

We've seen what happens when you rely on debt and inflated assets to keep the economy afloat. The economy can't be re-established on a sound basis without aggressive efforts to put people back to work in jobs with decent wages.

We also need to consider the suffering that is being endured by these high levels of joblessness, including the profound negative effect on the families of the unemployed. Lawrence Mishel, president of the Economic Policy Institute, warned about the consequences for children. "What does it mean," he asked, "when kids are under stress because there is no money in the household, or people have to move more, or are combining households, or lose their health insurance? I believe this is going to leave a permanent scar on a generation of kids."

The first step in dealing with a crisis is to recognize that it exists. This is not a problem that will evaporate when the gross domestic product finally begins to creep into positive territory.


http://www.nytimes.com/2009/06/27/opinion/27herbert.html?_r=1&th&emc=th