Tag: unemployment

Yes, comrades, we need to talk about crises again, the term recession simply does not explain what is really going on! Just in case you might not have noticed or perhaps the mainstream media where you live ignored it, the obvious has happened and the end of the so-called recession has disappeared into the fantasy novel. Once again there is a slowdown in growth and the financial markets are not particularly happy. This time, Germany and China are showing signs of slowdown. Globalisation has not ended the potential towards crises in the capitalist economic system; in fact, the greater interconnectedness of the world economy has exacerbated the situation and ensured that the contagion spreads.  

For those who believe the fantasies of neoliberal economics, the shock of these latest failures of neoliberalism must come as a surprise. But for those of us that have been warning of the stupidity of squeezing wages and destroying work conditions, rising inequality in income and wealth, the dangers of export-led growth when wage incomes are being squeezed meaning that unless governments become the sole purchasers of goods and services that are being produced (and they are not) that obviously there comes a point when working people cannot purchase goods and services as their incomes are too low, wiping out of savings  has happened and personal indebtedness leads to default and bankruptcy. Neither of these things helps to maintain capitalist growth, accumulation and profitability in the long run; forget that, it hasn’t even lasted in the short run.

I will be giving a run through on what is going on and why our lives feel as though we are living through the Shock Doctrine (which we are) then address the proposals of dealing with persistent unemployment under capitalism from the Left on which there is significant disagreement.

Most probably people have heard of the bizarre investigative journalism by The Mail on Sunday in an article which appeared on Easter Sunday (of all days in the year). The Mail on Sunday sent in a reporter, a wannabe Jimmy Olsen, to investigate provision of food by food-banks in Britain and that reporter literally took food out of the mouths of the hungry in order to prove some point. This provoked a backlash on social media that demonstrated that the neoliberal agenda seems to not have sunk too deeply in the hearts and minds of the British people. That is a relief and quite honestly more than I expected, given the constant barrage in the newspapers and on the news on telly that has never questioned the logic (forget the morality) of welfare caps and cuts to welfare benefits.

ht: my sister Mia for comments and editing on this piece

The Democratic held Senate tried to pass a three month extension of unemployment benefits for 1.7 million people whose benefits had run out since December. It failed by 2 votes, 58-to-40, the second vote was by Senate Majority Leader Harry Reid (D-NV), a formality so he could reintroduce the bill at a later date. So, it actually failed by one vote. Since 2008, the federal government has provided extended benefits to the unemployed who used up the standard 26 weeks provided by the states. The average time it takes to find another job is at least 37 weeks. Republican Sens. Dean Heller (Nev.), Susan Collins (Maine), Lisa Murkowski (Alaska) and Kelly Ayotte (N.H.) voted with Democrats to end debate.

In other words, the Republicans filibustered, again. Yes, I know it is a cloture vote to end debate. No matter what you call the need for 60 votes, a super majority, for whatever reason, that is a filibuster. They refused to end debate to bring the bill to the floor for a majority vote.

Democrats tried to sweeten the deal by banning millionaires from receiving benefits. Thursday’s measure would have required unemployment claimants to certify they’d earned less than $1 million in the previous year; currently, there is no income restriction.

The bill’s cost would have been offset through “pension smoothing,” or allowing companies to make smaller contributions to employee pensions, thus earning higher profits and giving the government more tax revenue.

But that’s wasn’t good enough for 40 Republican senators. Sen, Reid has vowed not to give up getting the long term unemployed the benefits they need.

On Tuesday, the Congressional Budget Office released it’s latest report on the Affordable Care Act’s impact on the economy. In the report it estimated that the work force would be reduced by 2.3 million workers by 2021 (pdf). Needless to say, the right wing media and Republicans seized on this as proof positive that Obamacare was a “job killer.”

Well not so fast, this is what the report said:

CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor-given the new taxes and other incentives they will face and the financial benefits some will receive. Because the largest declines in labor supply will probably occur among lower-wage workers, the reduction in aggregate compensation (wages, salaries, and fringe benefits) and the impact on the overall economy will be proportionally smaller than the reduction in hours worked. [..]

The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor.

In other words, this isn’t about jobs, it’s about whether or not workers will choose to work less in order to hold on to their eligibility for subsidized health care or Medicaid.

The Washington Post‘s fact checker, Glenn Kessler clarified:

First, this is not about jobs offered by employers. It’s about workers – and the choices they make.

The CBO’s estimate is mostly the result of an analysis of the impact of the law on the supply of labor. That means how many people choose to participate in the work force. In other words, the nonpartisan agency is examining whether the law increases or decreases incentives for people to work. [..]

Some might believe that the overall impact of the health law on employment is bad because it would be encouraging people – some 2.3 million – not to work. Indeed, the decline in the workforce participation rate has been of concern to economists, as the baby boom generation leaves the work force, and the health care law appears to exacerbate that trend.

Moreover, the argument could go, this would hurt the nation’s budget because 2.3 million fewer people will pay taxes on their earnings. That’s certainly an intellectually solid argument – though others might counter that universal health care is worth a reduction in overall employment – but it’s not at all the same as saying these jobs would be lost.

On the brighter side, before a House hearing on Wednesday the Director of the CBO Doug Elmendorf made this argument:

“The reason we don’t use the term ‘lost jobs’ is there is a critical difference between people who like to work and can’t find a job – or have a job that’s lost for reasons beyond their control – and people who choose not to work,” he explained. “If someone comes up to you and says, ‘The boss says I’m being laid off because we don’t have enough business to pay,’ any other person feels bad about that and we sympathize for them having lost their job. If someone says, ‘I decided to retire or stay home and spend more time with my family and spend more time doing my hobby,’ they don’t feel bad about it – they feel good about it. And we don’t sympathize. We say congratulations.”

Matt Iglesias at Mother Jones makes a very salient point about the impact on the job force:

Obamacare will reduce employment primarily because it’s a means-tested welfare program, and means-tested programs always reduce employment among the poor.

If, for example, earning $100 in additional income means a $25 reduction in Obamacare subsidies, you’re only getting $75 for your extra work. At the margins, some people will decide that’s not worth it, so they’ll forego working extra hours. That’s the substitution effect. In addition, low-income workers covered by Obamacare will have lower medical bills. This makes them less desperate for additional money, and might also cause them to forego working extra hours. That’s the income effect.

This is not something specific to Obamacare. It’s a shortcoming in all means-tested welfare programs. It’s basically Welfare 101, and in over half a century, no one has really figured out how to get around it. It’s something you just have to accept if you support safety net programs for the poor.

It’s worth noting, however, that health care is an exception to this rule. It doesn’t have to be means tested. If we simply had a rational national health care system, available to everyone regardless of income, then none of this would be an issue. There might still be a small income effect, but it would probably be barely noticeable. Since everyone would be fully covered no matter what, there would no high effective marginal tax rate on the poor and no reason not to work more hours. Someday we’ll get there.

Optimistically, people leaving jobs or working less may be an opportunity for someone else to take their place. On the other side it could increase costs for employers who would then reduce the number of people they hire. This is an educated guessing game that we would not be engaged in if there were single payer or a public option that leveled the playing field.

Author’s Note: Hi everybody! Welcome to a participatory diary. That’s right, participatory. I’m offering this up as an exercise for everyone to try. The original text is  an explanation of the exercise and why I’m suggesting it, followed by a couple of examples. Then, it’s up to you to complete the diary. Add comments with your own examples and I’ll build out the diary with your content. Let’s see what the whole feels like when we make an attempt to respond to the State of the Union address together. When we make a conscious effort to dig into the principles we find buried in the speech and compare them to the principles we would like to live by, how aligned do they feel?

We’ve heard a lot of responses this week to President Obama’s State of the Union Address. What I find persistently frustrating with any US political speech the lack of unpacking the “capitalist”, “democratic” and “American Way” framework. Or rather, the lack of establishing the principles behind what is being said to see whether it’s fits with the principles and values that we hold.

I have not framed this diary as an “anti-capitalist” one. I am suggesting that regardless of how you feel about capitalism, you might find it useful to analyze what another capitalist is saying by setting aside the supposed common ground of capitalism and searching for what values are reflected in what is being said. Capitalism isn’t a value. It’s a type of economic system. When we identify as a capitalist, however, we probably attach a value system to that identity. What I’m wondering here is whether everyone attaches the same value system. Do you even know if the speaker has the same value system as you?

I am someone who gets frustrated when people try to make decisions or solve problems together without establishing their shared principles. “Capitalism” is not a principle. Principles are about values and beliefs. They are guides to how we behave, how we treat one another. You could claim to be a capitalist and believe that everyone has a right to food and shelter. You could claim to be a capitalist and believe that food and shelter are not rights, they must be “earned.” Those are mutually exclusive principles which two different people are claiming as part of the capitalist construct. If they simply greet each other as capitalists, it is possible for them to think they are aligned when they are not. This opens the door for misunderstanding, at best, and deception, manipulation and oppression, at worst.

Is that happening in this speech? The answer to that and the places where we feel it is happening may be different for each person. Hence, the participatory nature of this diary. What feels unaligned for me may feel aligned for you and vice versa. But, perhaps, we’ll find some common threads of values that we would like to see underpinning our governance and social life. Perhaps ….

The number of jobs created in the month of December fell far short of the expected 200,000 and unemployment (U-3) fell to 6.7% the lowest it has been since November 2008. I think the word “disappointing” is an understatement:

Stock futures fell after the report was released.

The slowdown in hiring could cause the Federal Reserve to rethink its plans to slow its stimulus efforts. The Fed decided last month to cut back on its monthly bond purchases by $10 billion. It could delay further reductions until it sees evidence that December’s weak numbers were temporary.

Cold weather may have slowed hiring. Construction firms cut 16,000 jobs, the biggest drop in 20 months.

Still, December’s hiring is far below the average gain of 214,000 jobs a month in the preceding four months. But monthly gains averaged 182,000 last year, nearly matching the previous two years.

The proportion of people working or looking for work fell to 62.8 percent, matching a nearly 36-year low.

As Huffington Post‘s Mark Gongloff writes “unemployment is falling for al 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.

Click on image to enlarge.

Some of this is due to the fact that Baby Boomers retiring — but only some. Most of it has to do with the fact that the economy is still too weak to create enough jobs to draw people into the market. This is most clearly evident in the fact that younger people are leaving the labor force, too — or never even entering it — because they can’t find jobs.

Meanwhile, Charles Pierce reports that the Republicans keep finding new ways for “screwing the unemployed”

Rob Portman of Ohio, who might have been the 2012 Republican vice-presidential nominee had the Romney people not been terrified that, if they put Romney and Portman on the same stage together, the earth would spin into a dark region of the galaxy made up only of the primeval tedium whence the cosmos came, and we’d all come out named Tagg or something. Now, though, he’s back in the Senate being “reasonable,” which means that Portman felt free to allow an extension of unemployment benefits to come to a vote in the Senate, so Portman then could devise a way to sabotage those benefits because that is reasonable and bipartisan and centrist, and nobody will yell at him on the radio too loudly back in Columbus or Elyria.

   It depends, he said, on whether lawmakers find a way to pay for the $6.4 billion cost. Wednesday, Portman said he has just such a way. He said that people drawing two other kinds of government aid — Social Security disability insurance payments (SSDI) and trade adjustment assistance (TAA) — can simultaneously get unemployment benefits, which he thinks is wrong.It depends, he said, on whether lawmakers find a way to pay for the $6.4 billion cost. Wednesday, Portman said he has just such a way. He said that people drawing two other kinds of government aid — Social Security disability insurance payments (SSDI) and trade adjustment assistance (TAA) — can simultaneously get unemployment benefits, which he thinks is wrong.

The “compromise” on offer is to help the unemployed while stoking the usua; anger at a vague claque of disabled freeloaders elsewhere. Where ever did Portman get the idea that the country’s economy is beset by double-dipping cripples?

The Labor Department reported Friday that in December, the average unemployed person had been out of work for more than 37 weeks.

Meanwhile, “Christiegate.”

The Senate will pass the budget bill that was approved by the House last week. It passes the hurdle of cloture with a “bipartisan” vote of 67 – 33. The bill leaves a lump of coal in the stockings of 1.5 million Americans whose unemployment benefits expire the end of December and future career servicemen and women whose cost of living increases to their pensions will be cut. But the Pentagon will get their due and so will the 1%.

Ryan-Murray Budget Deal Passes Senate Hurdle

By DSWright, FDL News Desk

The truly horrendous Ryan-Murray budget has passed the Senate clearing the way to fully pass Congress this week. The deal restores war spending to astronomical levels while cutting federal pensions and raising airline fees. In other words, cash for defense contractors and groin kicks for the middle class. [..]

Why any Democrat would vote for such an awful reactionary budget is beyond comprehension. According to Nancy Pelosi Democrats had to “embrace the suck.” Otherwise things might not suck? [..]

We truly have the best government money can buy. The naked corruption on display in dumping oceans of cash into the Pentagon patronage den while attacking worker pensions and leaving the unemployed to rot is proof positive that we live in a deranged oligarchy where money is everything and the people are nothing.

A bipartisan budget deal to avert another government shutdown comes before the Senate this week. The vast majority of House members from both parties approved the two-year budget agreement last week in a 332-to-94 vote. It is being hailed as a breakthrough compromise for Democrats and Republicans. The bill eases across-the-board spending cuts, replacing them with new airline fees and cuts to federal pensions. In a concession by Democrats, it does not extend unemployment benefits for 1.3 million people, which are set to expire this month. To discuss the deal, we are joined by David Cay Johnston, an investigative reporter who won a Pulitzer Prize while at The New York Times. He is currently a columnist for Tax Analysts and Al Jazeera, as well as a contributing editor at Newsweek.

Once again the vast majority are Scrooged.

A two year budget deal was reached yesterday with congressional leaders announcing the deal that would to replace $63 billion in sequester cuts, a very small part of the $180 billion in cuts that will occur over the next two years. The deal will restore defense cuts by funding from a tax on airline travel and cuts to federal pensions. The budget does not include extension of unemployment funds to the millions of workers who are about to lose their benefits the end of December. There will be no changes to Medicare or Social Security but none of the tax loop holes were closed.

As Ezra Klein puts it:

Whether this deal can be a model for future deals is an open question. The core principle of this deal is that Democrats didn’t have to touch entitlements and Republicans didn’t have to touch taxes. But a lot of the policies that made that possible got used up in this deal. It’s not clear that another deal like this would work in 2016.

DSWright at FDL News Desk notes:

The Republicans got everything they wanted. They get more cuts while none of their friends in the defense industry get hurt – actually they even got to do some damage to the federal pension system. All that while avoiding another shutdown that killed their poll numbers before the 2014 elections. Christmas came early for the GOP.

The Democratic Party, on the other hand, sold out its own base to help Republicans maintain power. Why? Who knows? The only thing that is clear is this is an awful deal for majority of Americans.

Once again, the majority of Americans get screwed by their elected representatives.  

Bureau of Labor Statistics

Employment Situation Summary

December 06, 2013

The unemployment rate declined from 7.3 percent to 7.0 percent in November

[…snip…]

Both the number of unemployed persons, at 10.9 million, and the unemployment rate, at 7.0 percent, declined in November. Among the unemployed, the number who reported being on temporary layoff decreased by 377,000. This largely reflects the return to work of federal employees who were furloughed in October due to the partial government shutdown.

(See tables A-1 and A-11.)

[…snip…]

The employment-population ratio increased by 0.3 percentage point to 58.6 percent in November

As of December 6, 2013, the United States has a total resident population of 317,208,000

58.6 percent of 317,208,000 is 185,883,888 people. Supporting 317,208,000 people.

Which means of course that 41.4 percent of the US population is “unemployed” (not working anywhere, for any money) now.

Fast-food workers are walking off the job in about 100 cities today in what organizers call their largest action to date. Today’s strikes and protests continue a campaign that began last year to call for a living wage of $15 an hour and the right to form a union without retaliation. Early this morning, Democracy Now!’s Amy Goodman and Hany Massoud headed to Times Square in New York City where a group of McDonald’s workers were joined by a crowd of hundreds of supporters to kick off their strike. We hear voices from the protest and speak to Camille Rivera of United NY, part of the newly formed New Day New York Coalition, which has organized this week of action to fight income inequality and build economic fairness.

US fast-food workers strike over low wages in nationwide protests

By Adam Gabatt, The Guardian

Thousands due to strike across 100 cities through the day in a signal of the growing clamour for action on income equality

Thousands of fast food and retail workers went on strike across the US on Thursday in a signal of the growing clamour for action on income equality.

In Chicago, hundreds of protesters gathered outside a McDonalds at 6.15am. As a large “Christmas Grinch” ambled about in freezing temperatures, demonstrators chanted for the minimum wage to be increased to $15 per hour.

It was the first of nine strikes in Chicago, with employees at McDonalds, Wendy’s, Walgreens, Macy’s and Sears also due to walk off shift. Low wage workers were due to strike across 100 cities through the day, including Boston, Detroit, New York City, Oakland, Los Angeles and St Louis.

“Poverty Wages in the Land of Plenty”

By Amy Goodman, Democracy Now!

The holiday season is upon us. Sadly, the big retailers are Scrooges when it comes to paying their staffs. Undergirding the sale prices is an army of workers earning the minimum wage or a fraction above it, living check to check on their meager pay and benefits. The dark secret that the retail giants like Wal-Mart don’t want you to know is that many of these workers subsist below the poverty line, and rely on programs like food stamps and Medicaid just to get by.  This holiday season, though, low-wage workers from Wal-Mart to fast-food restaurants are standing up and fighting back.

“Wal-Mart was put in an uncomfortable spotlight on what should be the happiest day of the year for the retailer,” Josh Eidelson told me, reporting on the coordinated Black Friday protests. “These were the largest protests we’ve seen against Wal-Mart … you had 1,500 stores involved; you had over a hundred people arrested.” Wal-Mart is the world’s largest retailer, with 2.2 million employees, 1.3 million of whom are in the U.S. It reported close to $120 billion in gross profit for 2012. Just six members of the Walton family, whose patriarch, Sam Walton, founded the retail giant, have amassed an estimated combined fortune of between $115 billion-$144 billion. These six individuals have more wealth than the combined financial assets of the poorest 40 percent of the U.S. population.