Why aren't we hearing more about the worst job and wage situation since the Great Depression?
The latest employment figures (released Friday) show job losses continuing to grow. According to the payroll survey, job losses are increasing more slowly than in previous months. According to the household survey, they're accelerating -- from 9.4 percent of the workforce in July to 9.7 percent in August. Bottom line: almost one out of six Americans who need a full-time job either can't find one or is working part-time. Meanwhile, wage growth among people who have jobs has just about stopped. The Economic Policy Institute reports that between 2006 and 2008, wages grew at an annualized rate of 4.0%; by contrast, over the past three months annual wage growth has plummeted to just 0.7%. At the same time, furloughs -- requiring workers to take unpaid vacations -- are on the rise: recent surveys show 17% of companies imposing them. More than 20% of companies have suspended their contributions to 401(k)s and similar pension plans.
So why isn't the media screaming? Partly because these job and wage losses are not, for the most part, falling on the segment of our population most visible to the media. They're falling overwhelmingly on the middle class and the poor. Unemployment among those who have been in the top 10 percent of earnings is closer to 5 percent, and their earnings continue to climb -- although, to be sure, much more slowly than before the meltdown. It's much the same with health-care and pension benefits. Among people under 65 who are in the bottom 20% of incomes, only 21.9% have employer-sponsored health insurance -- if they have a job at all. Half of all people nearing retirement age have a 401(k) balance of less than $40,000.
I keep hearing that the economic meltdown has taken a huge toll on the stock portfolios of the rich. That's true. But the rich haven't lost nearly as much of their assets, proportionately, as everyone else. According to a report from the Bank of America Merrill Lynch ("The Myth of the Overleveraged Consumer"), analyzing data from the Federal Reserve, the bottom 90 percent of Americans hold 50 percent of more of their assets in residential real estate, which has taken a far bigger beating than stocks and bonds. The top 10 percent of Americans have only a quarter of their assets in housing; most of their assets are in stocks and bonds. And although the stock market is still a bit tipsy, it has rallied considerably since it hit bottom earlier this year. Home values, on the other hand, are down by an average of a third across the country, and are still falling.
What does all this mean for the economy as a whole? It raises the fundamental question of where demand will come from to get us out of this hole. If so many Americans are losing their jobs and wages, you have to wonder who will be returning to the malls.
That same Bank of America Merrill Lynch report notes cheerfully that 42 percent of consumer spending before the meltdown came from the top-earning 10 percent of Americans (not too surprising given that the top 10 percent was raking in half of total earnings) and the top 10 percent continues to do relatively well. So, says Bank of America Merrill, we can rely on the spending of the top 10 percent to get the economy moving again. Indeed, they conclude, Congress and the White House should be careful not to raise taxes on the top 10 percent, lest the consuming ardor of these most privileged members of our society be dampened.
This logic is morally and economically indefensible. If we've learned anything from the Great Recession-Mini Depression of the last 18 months, it's that the skewing of income and wealth to the top has made our economy far less stable. When the majority of middle-class and poor Americans are either losing their jobs or feel threatened by job loss, and when those who still have jobs are experiencing flat or declining wages, there's simply no way to get the economy back on track. The track we were on -- featuring stagnant median wages, widening inequality, and job insecurity -- got us into this mess in the first place.
Cross-posted from Robert Reich's Blog
Hale "Bonddad" Stewart: When Will the Jobs Return?
The question on everybody's minds is when will the unemployment number come down? Let's look at the data to see what it says.
Robert Reich: The Truth About Jobs That No One Wants to Tell You
Yes, I know. Our government is already deep in debt. But let me tell you something: When one out of six Americans is unemployed or underemployed, this is no time to worry about the debt.
Things aren't going to get any better without some serious fireworks.
The bleeding started in manufacturing and spread to technology. The people complain and government gives them "retraining" programs or helps them get a "loan" for a college education or skills training or whatever. The problem is that no amount of "retraining" is going to help in any meaningful way. Retraining every 3-5 years to an "outsourcing safe" job is a solution for the government, not for a person.
Observe the next few years as the mass of newly unemployed gets "retrained". My guess is that they will move into health care, which is good (for now) because there is a shortage in that field. But how many new workers can the field handle? At some point it will also become saturated and then the downward spiral will begin all over again.
Contd
Hot jobs (hiring) (health care No. 1): Average wage $23,000 annually.
Cool jobs (not hiring): Average wage $63,000 annually.
This is reporting on Long Island, where most homes are still over $300,000 for a modest shack in a decent area.
Think of it this way, if we didn't outsource a single job and kept all manufacturing at home, all those foreign companies with plants here in the US would close them too. If you don't like foreign run companies manufacturing on US soil, buy american; there are many that do that already....
What do you know about this Obama character? It seems to me that his goal was to stabilize the stock market. Can you please tell me it's more complicated than that and that he has assembled the right team of economists and advisers and that they are looking beyond the data to day NYSE charts? I just don't see alarm at unemployment numbers and I don't hear of any plans to avoid systemic risk that led to trillions infused in financial institutions. Can you give us reassurance?
Thank you.
who was able to pass tepid legislation that caved in to the most craven and monetized interests in America. It's really his choice. Even if he is a one term president and even if a full scale battle ensues over healthcare, it is far far better to leave office having done everything in his power to put people back to work and to finally deliver healthcare for all Americans. Win or lose, he wins. And the Republicans will have to answer as to why they opposed both job creation and healthcare. But if he is one term and does not even try to seek the change he asked us to believe in, then the loss is all the more pathetic and will affect both the 2010 elections and his legacy
Now there is not a single voice voicing that opinion nor one willing to admit they ever did.
They were like Mitzi Gaynor in "South Pacific" when she sang, "When the sky is a bright canary yellow I forget every cloud I've ever seen."
I'm not worried about our becoming a second rate country. Looks like we're already there. Maybe it's Senator McCain who is no longer practical.
Where is Super Boomerism?
Personal Graphic http://docs.google.com/present/edit?id=0AYLPNGHcuTBRZHc3a3E5NF8yMjNjemRxbmpjZg&hl=en
money to pay bills so we
GET GOVERNMENT TAXES, MANDATES, REGULATIONS OUT OF THE WAY SO I CAN GET BACK TO WORK!
Big gov't has regulated a shut-down in the credit markets? Truly insane.
Those agencies couldn't have made all those subprime loans if they were private businesses.
No FNMA or FHLMC, no huge bubble. Very simple.