The Truth About Jobs That No One Wants to Tell You
Unemployment will almost certainly hit double-digits next year -- and may remain there for some time. And for every person who shows up as unemployed in the Bureau of Labor Statistics' household survey, you can bet there's another either too discouraged to look for work, or working part-time who'd rather have a full-time job or else taking home less pay than before (I'm in the last category, now that the University of California has instituted pay cuts). And there's yet another person who's more fearful that he or she will be next to lose a job.
In other words, ten percent unemployment really means twenty percent underemployment or anxious employment. All of which translates directly into late payments on mortgages, credit cards, auto and student loans, and loss of health insurance. It also means sleeplessness for tens of millions of Americans. And, of course, fewer purchases (more on this in a moment).
Unemployment of this magnitude and duration also translates into ugly politics, because fear and anxiety are fertile grounds for demagogues weilding the politics of resentment against immigrants, blacks, the poor, government leaders, business leaders, Jews, and other easy targets. It's already started. Next year is a mid-term election. Be prepared for worse.
So why is unemployment and underemployment so high, and why is it likely to remain high for some time? Because, as noted, people who are worried about their jobs or have no jobs, and who are also trying to get out from under a pile of debt, are not going do a lot of shopping. And businesses that don't have customers aren't going do a lot of new investing. And foreign nations also suffering high unemployment aren't going to buy a lot of our goods and services.
And without customers, companies won't hire. They'll cut payrolls instead.
Which brings us to the obvious question: Who's going to buy the stuff we make or the services we provide, and therefore bring jobs back? There's only one buyer left: The government.
Let me say this as clearly and forcefully as I can: The federal government should be spending even more than it already is on roads and bridges and schools and parks and everything else we need. It should make up for cutbacks at the state level, and then some. This is the only way to put Americans back to work. We did it during the Depression. It was called the WPA.
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.
When I was a small boy my father told me that I and my kids and my grand-kids would be paying down the debt created by Franklin D. Roosevelt during the Depression and World War II. I didn't even know what a debt was, but it kept me up at night.
My father was right about a lot of things, but he was wrong about this. America paid down FDR's debt in the 1950s, when Americans went back to work, when the economy was growing again, and when our incomes grew, too. We paid taxes, and in a few years that FDR debt had shrunk to almost nothing.
You see? The most important thing right now is getting the jobs back, and getting the economy growing again.
People who now obsess about government debt have it backwards. The problem isn't the debt. The problem is just the opposite. It's that at a time like this, when consumers and businesses and exports can't do it, government has to spend more to get Americans back to work and recharge the economy. Then -- after people are working and the economy is growing -- we can pay down that debt.
But if government doesn't spend more right now and get Americans back to work, we could be out of work for years. And the debt will be with us even longer. And politics could get much uglier.
The numbers would be even worse but for the stimulus package. According to an analysis by the Economic Policy Institute, the stimulus is saving or creating between 200,000 and 250,000 jobs a month. Without it, job losses in September would have been nearly twice what they actually were.
State governments, meanwhile, continue to shed employees. Here's one of the most depressing statistics I've seen (if you need any additional ones): Some 15,600 teachers didn't return to work in September. They were laid off. So our classrooms are bigger, we have fewer teachers, and our students are presumably learning less -- at the very time when they need to be learning more than ever.
Cross-posted from Robert Reich's Blog.
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And to fund more government spending, higher tax rates on the upper income brackets. It has been obviously shown that their extreme incomes are not trickling down much. Financial institutions should be the most taxed, till they once again begin useful financing.
The comparisons are there, they are obvious. As income inequality increased and tax burdens shifted, things got worse. They only appeared better due to borrowed money.
It is just plainly obvious. A long stretch of sensible taxation and regulations led to a steady betterment for the majority. Reversing these things led to this chaos and burst bubble. It takes the majority to be living well to even sustain the top incomes to live well. Greed is blind even to it's own longterm best interests.
Elites in this country are not sufficiently worried about a lull in consumer spending because as income inequality rises, the wealthy account for an ever-growing slice of the spending pie. Their spending is not as volatile as that of the other classes, resulting in insufficient interest and political gain in propping up employment. I think it will be local businesses and economies that bear the brunt of increased unemployment.
Mr. Reich - I completely 1000% disagree.
Everyone likes to bemoan the automaker bailout, but what they don't realize is that GM along with all the other companies out there looking for pure profit, has outsourced quietly for at least a dozen years. That movement has happened right under our noses. Do you realize that in China, there isn't any automation to move parts along the lines? The labor is so cheap, they hire people to push them along! How in the world will we compete with that? As an autoworker, I have been watching our jobs disappear when no one cared because we were lazy and overpaid. We certainly have been fortunate in our workplace, but there has been so much outsourcing that we are obsolete now. And what we have been trying to tell people is: as we go, so will you go. Because without good paying jobs, the engine of our economy spits and sputters until it dies. The autoworker has been trying to meet the demands of the public and technology, but it hasn't seemed to make a difference to the people who view us as the problem. If it matters to anyone out there, we work hard at our jobs, hurrying to finish all aspects of our job with perfection. When we go home at night, we are exhausted, our feet are tender, and our hands are numb.
Well, the first portion of the article I think demands that you address the Fed. and how things are really being paid for. Since the FED REV is just printing money (behind closed doors, no less), adding inflation on top of everything else you've mentioned- we are essentially being taxed for the money that the government is getting to use, even if it is not enough.
And another sad fact, our government is broke and other countries that are in dire or questionable straights right now are hesitant to lend to us. China may give up on us all together because we have exported the jobs/factories that we would need to start -working- to pay all this money back.
Basically, I agree with your method of providing the ingredients to stock the stew, but in reality, the Government is broke too.
Mr. Reich
I get the current business model, consumption sustains the businesses that provide jobs.
The downside is the environment, as more consumption requires more energy and resources and produces more waste. Is an IPhone, maunfactured in China and becomes obsolete within 3 years the model we build our future on?
You forget one important factor -- there are no jobs in this country. The CEO's have shipped them overseas in order to increase their profit eg. the CEO salary, bonus and golden parachute. Unless the US starts MAKING something, there will not be enough jobs to decrease unemployment numbers - ever.
And if you think high tech jobs will save us, then we must educate the masses, not continue to dumb them down.
As I recall, of the approximately 12 million without work in the US during the Great Depression,
FDR's public works policies only put about 3 million or so to work.
It was the War that ended the Depression.
We are heading in similar direction: as long as the economic crisis continues to NOT produce viable income for the bulk of the (very struggling) middle class, and the lower class is definitely out of the loop in recessive times, the possibility of marketing and waging warfare is extremely high.
All that has happened (job exportation, domestic manufacturing decline, mergers, downsizing, TARP theft of available resource funding, artificial dollar integrity) has been prelude to the next major military event:
exactly what the militarists want to happen.
As of now war is between "very likely" and "inevitable" unless the financial empowerment shift back to rebuilding the middle and lower classes, away from enriching the greed-maddened rich.
African Americans voted over 95% for the Democratic party. They gave the Democrats control of the Whitehouse and the House and the Senate! There is no excuse for any failures on the part of the Democrats to deliver jobs, opportunity and real political power to African Americans. The Democrats may not have this much power again for a while and they have a moral obligation to help those that gave it to them. It also seems just that more African Americans would be in positions of power within the party.
it's not just african americans that are hurting and suffering. Quit making EVERYTHING a race thing.
It's an AMERICAN problem
Guilt doesn't get it! Plainly Huffingtons commentors have beat their drumbs for the last three yrs. "Bring our industries back" You cant be employed when there are no jobs....Outsoursing should be a crime, with much punishment. We got this way from outsoursing, we have to backtrack and change our wrong actions. Without change we are a hopeless cause.
The government is not spending the money .... they are giving 97% of it away to the Wall Street fellons who created the depression. Just look at Goldman Sachs. FOLLOW THE MONEY
There's no doubt the majority of Tea Baggers are not just unpatriotic; they are virulently anti-American. Do these people have some weird post-apocalyptic fantasy about defending their bunker cheese and catamites with a swollen armory?
Your starting to sound like a 2003 pro iraq war republican with all this anti-american nonsense.
Catamites, bunker cheese, and a swollen "what"?
I have always admired Mr. Reich and appreciated his concern for working people. His intellect and wisdom once again should be engaged at the highest levels of government. Unfortunately, he is being ignored for the most part. The Status Quo reigns supreme -- this is clear with every new report of financial institutions being given taxpayer money instead of their guilty principals being investigated for fraud and brought before a Grand Jury for prosecution. Take for example, the latest news of mortgage servicers getting a boost, when they previously had taken advantage of borrowers. This is rewarding the greedy ones and it smells of extortion.
We all know there is a better way: instead of always seeking top-down solutions (i.e. trickle down), the Federal Government now should be concentrating on bottom-up ones that put money into State Governments and into the pockets of taxpayers, consumers and small business people! We keep hearing the same refrain from Pres. Obama: "The unemployment level is unacceptable...troubling." Well then, are they NOT doing these things to "bail out" Americans? The answer is clear: they are mere pretenders who are not in control.
I believe Barack Obama began the presidency with idealistic ideas that conflicted with the world of practical reality. He is on a learning curve, but is a smart, logical, well meaning, and pragmatic person (in contrast to the most recent holder of the office) and will likely succeed. However, the economic situation is getting worse in my opinion. I'm a small businessman on main street USA in a major city, and things don't look good. People simply don't have much money to spend. And, an unusual number of our business customers are behind in paying their bills (some, months behind). Our employees are on a 34 hour week and even that isn't enough for the company to break even. I see lots of "for lease" signs and "for sale" signs on busniess property. Green shoots? Recession ending? Hardly. From my view at the bottom looking up, it looks like a worsening economy. Bankers are smiling but only because the administration made a colossal error at first, throwing money away on useless insolvent financial casinos..
Mr. Reich, shame on you. You know better than this.
We paid down the FDR debt in the 1950s because the U.S. was the only surviving industrial economy on the planet. The only game in town.
Our American factories provided what the rest of the world needed. Generous U.S. foreign aid gave the world the wherewithal to buy our manufactured goods, and our economy thrived as a direct result.
This is hardly the situation today.
World demand is not for American-made products these days.
In fact, "American-made products" is, sadly, an oxymoron.
So exactly how, Mr. Reich, should we move forward, given these hard truths?
And, oh, by the way, have you seen Michael Moore's new documentary yet??? You may find it enlightening....
One reason we paid down the debt in the 50s was that EVERYONE paid taxes then. The right-wingnuts hadn't destroyed the US tax system to benefit the top 1%.
PS: Huffpost. I don't want to be a Social News member. I don't want to link to Facebook. I don't want anything whatsoever to do with facebook.
Put in a switch so I can say NO once and for all FOREVER.
The top 1% of income earners pay approximately 40.4% of the overall tax burden. They pay more than the bottom 95% combined. (source: http://www.taxfoundation.org/blog/show/24944.html). In what topsy-turvey world does this tax system benefit the 1%?
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