Are we making progress on the jobs front? The Bureau of Labor Statistics reports 192,000 new jobs in February (220,000 new jobs in the private sector and a drop in government employment), and a drop in the overall unemployment rate from 9 to 8.9 percent.
We're heading in the right direction but far too slowly to make a real dent in unemployment. To get the unemployment rate down to 6 percent by 2014 we'd need over 300,000 new jobs a month, every month, between now and then.
Overall, the number of unemployed Americans -- 13.7 million -- is about the same as it was last month. The number working part time who'd rather be working full time -- 8.3 million -- is also about the same.
But to get to the most important trend you have to dig under the job numbers and look at what kind of new jobs are being created. That's where the big problem lies.
The National Employment Law Project did just that. Its new data brief shows that most of the new jobs created since February 2010 (about 1.26 million) pay significantly lower wages than the jobs lost (8.4 million) between January 2008 and February 2010.
While the biggest losses were higher-wage jobs paying an average of $19.05 to $31.40 an hour, the biggest gains have been lower-wage jobs paying an average of $9.03 to $12.91 an hour.
In other words, the big news isn't jobs. It's wages.
For several years now, conservative economists have blamed high unemployment on the purported fact that many Americans have priced themselves out of the global/high-tech jobs market.
So if we want more jobs, they say, we'll need to take pay and benefit cuts.
And that's exactly what Americans have been doing.
Employers have demanded wage and benefit concessions from their unionized workers and often got them. Detroit is creating auto jobs again -- but new hires are getting about half the pay that auto workers were getting before. Airline workers are taking home 30 to 50 percent less than they did years ago. And so on.
Conservatives say it's not enough. That's why unions have to be busted -- and why some governors are seeking to abolish laws requiring workers to become dues-paying union members in order to get certain jobs. Hence, the fights brewing in the Midwest.
Meanwhile, millions of non-union workers have accepted cuts in pay and benefits just to keep their jobs. Health benefits have been slashed, pension contributions from employers dramatically cut, wages dropped or "frozen."
Millions of private-sector workers have been fired and then re-hired as contract workers to do almost exactly what they were doing before, but without any benefits or job security.
The current attack on public-sector workers should be seen in this light. The charge is they now take home more generous pay and benefit packages than private-sector workers. It's not true on the wage side if you control for level of education, but it wasn't even true on the benefits side until private-sector benefits fell off a cliff. Meanwhile, across America, public-sector workers have been "furloughed," which is a nice word for not collecting any pay for weeks at a time.
At this rate, the unemployment rate will continue to decline. But so will the pay and benefits of most Americans.
Conservative economists have it wrong. The underlying problem isn't that so many Americans have priced themselves out of the global/high-tech labor market. It's that they're getting a smaller and smaller share of the pie.
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.
Republican "Starve the Beast" tactics are working, and the US is the worse for it.
More on Starve the Beast: http://completelybaked.blogspot.com/2011/02/starve-beast-are-we-hungry-enough-yet.html
Thanks for a lucid argument. It's refreshing.
Whe you compare incomes by educational level... private vs public sector, the public sector makes 11% less.
Their wages by the way have not increased in 30 years.. its just they got COLA increases while the private sector wages were dropping. The problem is thus in the porivate sector and out sourcing.. not taking everyone to the bottom.. Thats has been done in the south for 50 years and they are still the poorest states.
DEMAND is the problem. Very few small business survive with only 2% of the population as their customers. Try running a restauarant or any other small business.. when 10% of the population has 90% of the wealthand the top one percent make more than the bottom 50%. This is Banana Republic wealth distribution and the same distribution of welath that was in place for the great depression.
7% are in Unions now down from 34%. 7% can not be the problem.. it must be the 93%. Canada,the EU/Germany.. they MFG much more ( 5 times more), higher wages, shorter work weeks and better benefits and are 100% unionized with national healthcare.
As unions rose the middleclass rose (incomes doubled) as they declined, the middleclass fail (droppijng wages).
Regards
The MIS./accounting departments/research and engineering have always moved to where the production is.
The repug idealogy prohibits any chnages that are neccesary to compete and save the country. Thye want local school system that fight over chnaging teaching text to support beliefs, not fact, while therest of the world beats us with centralized controlled education. They are against single payer healthcare while the rest of the world kills us with it( its beeter and coist LT half). They are against export rebates of 19 8% that the rest of the world has, allowing them to sell here at below cost, no profits, no taxes and get 18% frpom their government and tarrifs like China of 25%.
They allow us no tools to compete in the world and that inlcudes Unions
"The jobs are not coming back to the US...."
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We progressives must work harder to make this (neo-liberal/conservative) mantra unacceptable.
It is the (unpatriotic) gospel of our adversaries, the elite free trade boosters who dominate both major parties: Full-blown (centrist) internationalists, they wish to see the entire globe "developed" along the Western industrial model. The most enlightened ones add that this should be done with appropriate technology, environmental responsibility, and social responsibility, etc..
They view the dispersion of American blue-collar manufacturing jobs to cheap labor sites throughout the third world (very prominently including China) as a rational, positive good (in large part) because it helps at least a fraction of the populace in those countries (totaling millions) to reach the first rungs of middle class lifestyles, comforts and bourgeois achievements and virtues.
Larry Summers is among the most ardent free trade exponents who gushes about this frequently. In their world it is "politically incorrect" to place a greater value on the well being and prosperity of an American worker over a worker in China or India.
The best that can be said for these views is that it is an example of being so open-minded that one's brains fall out.
Left-liberals Americans have a moral obligation to stop cold (and then reverse) the free trade regime that places our fellow citizens in wage competition with millions in the world's poorest places.
Eric C. Jacobson
Public Interest Lawyer
Los Angeles, California
Back in the 60's, under Kennedy's ideas of affordable education, it cost about $500 a semester and very good student loans and grants. We were lucky.
Why did greed have to ruin our lives.
About the time Reagan got in office, medical and eduction started it zippingly fast pace of un-affordability..
As for you? Your children? Our country considered as more than just the slice of population at the top? Good luck, buddy. See ya in the funny papers.
What I think is hurting America is the rising rate of imports. As long as we continue to allow record import rates of goods & services from outside of the US, we will also continue to import other countries' unemployment rates and/or accept lower wages domestically. We have to increase tariffs on certain countries (i.e. China, India) at the rates where we will see more domestic production & services fill our demand levels. Wages are decreasing because efficiency is increasing. Why should I continue to pay more for my cost of goods sold when it's so cheap to get it overseas.
One way to solve this problem is with rising oil prices. Expensive oil will cause corporations to fill their demands with domestic supply. I hate saying this, but the tension in the Middle East and the Asian regions, I believe, will actually really help American wages.
Their benefits are the benefits that were in the private sector, that along with wages have been dropping since 1980 in the private sector. They also pay taxes.
The problem is the private sector high tech and industry have been outsourced as unions dropped to only 7% of the workforce. Doing great howebver in 100% unionized Countries such as Germany that MFGs 5 times more than the U.S.. and is 1/4th our population! .. It appears the problem is the 93% not unionized. You dont create demand/jobs/middleclass by reducing wages . If that was true the red states would not all be welfare states living off of Blue state FED taxes.
Regards
Just as companies say higher wages drive up the cost of goods and services to the consumer, guess what? LOWER wages drive down disposable income to buy the goods and services, so the vicious circle they complain about works in both directions. No buyers for your goods and services due to less disposable income? No company, or reduced outlets, more layoffs, more people with no disposable income. Few consumers? Costs of goods and services rise as volume drops in demand.
Economics is an exercise is finding equilibrium. Continuing to model company practices in the same way as was done 75 to 100 years ago is not going to move this country forward in today's globally challenging environment.
Thank you, Robert Reich, for again being the voice of reason. The more this path is tread, the quicker we will see the demise of the middle class, a very unhealthy prospect for all, except the wealthiest.
We are in uncharted territory. In my opinion, we are all in for a very bumpy ride in the next few decades. This is just the beginning. Those of you alive in 2050 will look back at 2011 and long to turn the hands of time back to when unemployment U-6 was a mere 16%, and when gasoline was available, never mind the price.
And as far as buying power, we are useless to them because they have millions of new consumers in the foreign countries who have taken our jobs and are now the new consumers.
MOST U.S. WORKERS NEVER ASKED FOR PAY INCREASES OVER PAST 30 YEARS! OUR EMPLOYERS GAVE US PAY RAISES TO KEEP UP WITH SPECULATORS DRIVING UP PRICES ON EVERYTHING! AND NOW, U.S. WORKERS ARE THE PROBLEM?????
If housing, fuel, food, healthcare, etc were at 1960's price levels, then a middle class salary can be $15,000 a year. DO REPUBLICANS REALLY BELIEVE MOST FAMILIES CAN BUY FOOD, OWN A CAR AND HAVE ROOF OVERHEAD ON $15,000 A YEAR WITH ALL THESE UBER RICH PEOPLE SPECULATING ON EVERYTHING AND PRICES CONTINUOUSLY GOING UP-DOWN-UP-DOWN-UP-DOWN LIKE A ROLLERCOASTER!?!!?!?!?!? AND!!!! THEY DON'T WANT OUR WIVES TO WORK AND OUR KIDS TO GO TO PRIVATE SCHOOLS????
Getting skills/training costs money. And moving is easier said than done in a lot of cases.
The fact is people are desperate to have jobs & so are willing to accept lower pay just to have that job. The standard of living for millions of Americans is falling... The eroding middle class...
The person who said that we are in for a bumpy ride in the coming decades has hit the nail on the head,
Emboldened by success, Capital will continue, like a bacteria, to infect and destroy every avenue to a decent, dignified life that any wage-laborer may believe can be worked toward and attained. It is becoming a feeding-frenzy by the already gorged and bloated ruling class pigs that control the US, and that will continue until there is a significant blowback by the working class.
And, like an infection, the longer you let it go, the worse it gets. These vermin and their flunkies have to be neutralized by an organized, militant working class revolt.
Slowly but surely the lines are being drawn and eventually nearly everyone will be on the side of Capital or the side of Labor. Ask yourselves, which side am I on? If you have nothing but contempt for unions and organized labor, fine. Negotiate on your own. You don't like paying taxes? So what? No one likes paying taxes. If you think low taxes will enable Capital to hire more workers and provide prosperity for the masses. Great! Think what you want. For the rest of us, who aren't asleep or brainwashed, it's time to GET BUSY.
The time for debate and yackety-yack is over. It's time for action....
I applaud your call for a working class revolt. When the rich scream "class warfare" because we ask that they pay a fair share, they are forgetting what class warfare really is. We need to remind them. Look to the year 1789 for all the inspiration you need.