If it is the best of times for the bankers, it is the worst of times for workers. The titans of Wall Street came calling in Washington, D.C. just a few months ago, and were given the keys to the Treasury’s vault. So successful has been the government’s multi-trillion-dollar bailout that even those giant financial institutions in the worst shape are paying back what they owe, mainly to get out from under what they consider to be onerous public interference in their extraordinarily lucrative business activities.
They are profitable again because of the benefits they’ve accrued from a number of government programs: (a) the essentially zero interest rate they pay for money, while they can lend it out at higher rates (or, more likely, use it to trade and speculate); (b) the sale of toxic assets at favorable prices (for the banks); and (c) funds they received through bailouts of other companies, such as AIG. (It should be noted that, while the giant banks are returning to profitability as a result of extraordinary government support, small banks have not fared as well—140 failed banks were seized by the FDIC in 2009.) Where bankers once sat quietly while the people’s presumed tribunes in Congress scolded them for their errant ways, now they are dictating the terms of financial “reform” and feeling bold enough to phone in their regrets when fog delayed their plane and they couldn’t make a White House meeting with President Obama, who is begging them day and night to start making loans.
Workers, in contrast, haven’t fared nearly as well. Much was made by the news media and the Obama administration that the rate of unemployment in November fell by two-tenths of a percentage point after an extended period of rising rates, and that the loss of jobs in November was down substantially, to 11,000, after many months of losses well in excess of several hundred thousand per month. Do these data signal that recovery is at hand?
Let us look at unemployment first. In November, there were 15.4 million officially unemployed persons (those who were not employed and actively seeking work in the past four weeks). As high as that rate is, a record one-third of the officially unemployed (5.8 million people) have been without work for twenty-seven weeks or longer. And, if we add those reduced to working part-time (hours cut or only able to secure part-time work) and those “marginally attached to the labor force” (want work and have looked in past year), we get an unemployment rate of 17.2 percent, or 26.9 million persons. If we were also to count as unemployed all those who want a job but have not looked for one in the past year, the unemployment rate would be in excess of 20 percent. The slight fall in November’s unemployment rate is accounted for by a big increase in discouraged workers, that subset of those marginally attached to the labor force who have stopped looking for work because they believe no work is available for them. Given that there are about six times as many job-seekers as job openings, and that a job-seeker can expect to look for work for about half a year before finding a job, it is easy to see why people would stop looking for work. A recent New York Times/CBS poll of the unemployed tells us that a fearful toll is being taken on those without work: anxiety, fear, shame, insomnia, depression, family problems, and deteriorating health. In a few years, as research by Harvey Brenner and many others has shown, we will look back and be able to demonstrate that the “Great Recession” was responsible for a significant increase in suicides, homicides, domestic violence, arrests, prison admissions, stress-related diseases, and overall mortality. We are in the midst of a human crisis, make no mistake about it.
With respect to employment, many of those with jobs have suffered pay and hour cuts, loss of benefits, unpaid furloughs, and heavier workloads. The fact that productivity has risen dramatically during the Great Recession means that profits are increasing at the expense of the well-being of employees. Economist Paul Krugman estimates that, to replace the eight million jobs lost since the downturn began two years ago and to provide employment for the normal growth of the labor force over the next five years, the economy has to add at least 18,000,000 jobs, or 300,000 a month, to get “anything that feels like full employment.” The chance that the economy, left to itself, will generate this many jobs is close to zero. Here, we might note that the United States Department of Commerce’s Bureau of Labor Statistics predicts that the occupations with the greatest growth over the next ten years are low-paying: home health aides, customer service representatives, restaurant workers, clerks, retail salespersons, personal and home health care aides, nursing aides, and the like.
What is needed to alleviate this misery? In a word: jobs. In two words: public employment. The federal government must create jobs and now—not by subsidizing private employers, but by directly employing workers in high quality, well-paying jobs. The needs are many, almost unlimited, from child care, health care, and education, to rebuilding our infrastructure, public transportation, environmental repair, and organic food production. Of course, jobs would have to be combined with shorter hours and an expanded and more generous safety net, so that the insecurity haunting workers is greatly diminished. But the kinds of jobs we are talking about would not only be great for workers; they would also help to shift the economy’s focus from a one-sided myopia on production for profit toward a much more sensible production for human use.
In this connection, we urge everyone to get a copy of Monthly Review Press’s revised and expanded second edition of Nancy Rose’s fine study of Great Depression jobs’ programs, Put to Work: The WPA and Public Employment in the Great Depression. Here, we learn that, in less than two full years, one of the programs, the Civil Works Administration, laid millions of feet of sewer pipe, built thousands of miles of roads, and thousands of schools and playgrounds. The WPA itself did much more, the results of which are to be seen and enjoyed even today. Just think if we could do the modern-day equivalents of this. To order a copy of Professor Rose’s book, go to https://monthlyreview.org/books/puttowork.php, or call us at 1-800-670-9499.
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