Prospects for the New Year: Jobs picture bleak

by Michael Schreiber

The New Year’s season is ideally a time of cheerful hope for the future. But for many in the United States this year, it is the time to turn down the heater, scrimp on food for the family, and contemplate many more months of standing in unemployment lines.

Few communities have been immune to the current jobs crisis; it has hit people like an epidemic. In some areas, the recession has made a bad situation much worse. Some inner-city neighborhoods, like the mainly Puerto Rican and Black Fairhill section of Philadelphia, have been left with almost half the population jobless.

At the end of 2010, there were 14.5 million people officially unemployed in the United States, according to the U.S. Bureau of Labor Statistics (BLS), while another 11.5 million were stuck in unwanted part-time jobs or had even “given up” looking for work.

The latter category is important in trying to make sense of the government report that unemployment fell to 9.4% in December after edging up to 9.8% the previous month. The “decline” largely reflects the fact that the government deducted from its unemployment figures the number of jobless people who are considered to have not “searched for work” during the month.

Almost 4 million U.S. workers “left the labor force” since the beginning of the economic recession—most of them, according to the BLS, because they were “discouraged” about looking for jobs. If those “discouraged” workers were added in, the U.S. unemployment rate would be over 15 percent. Yet even that figure ignores part-time workers who cannot find full-time jobs; the real U.S. unemployment rate is probably over 19 percent.

It is easy to understand why many are discouraged. They are finding that decent jobs are almost non-existent. Often the jobs they do find offer lower wages than their old ones, and are insufficient to pay the bills.

The Philadelphia Inquirer in recent weeks has been running a series of profiles of unemployed workers in the region, which are often quite poignant. One of the people interviewed by the Inquirer was Donna Oxford, a former administrative assistant who was laid off from an e-commerce company in December 2007. “These days,” Inquirer staff writer Jane M. Von Bergen wrote, “Oxford stacks a pile of job-research books on her kitchen table. Her house, outside Coatesville, is cheerful, but a plastic sheet covers her front door to keep out a draft.

“Between unemployment benefits and a part-time job at the YMCA, she earns no more than $175 a week, and she worries about how she’ll support her family. … ‘I haven’t paid the mortgage in a couple of months,’ she said. … ‘Yes, it’s sad that I’m going to be homeless soon,’ said Oxford, her voice catching, her eyes swelling with tears….”

Oxford, without a full-time job for over three years, has joined the ranks of the “long-term unemployed,” a category that is getting increasing acknowledgment in the media. Last year, the percentage of workers who were unemployed for more than six months rose to a staggering 45.6 percent. The average length of unemployment topped 34 weeks in 2010, up from 29.1 weeks in 2009—the longest number of weeks since the Labor Department started keeping records in 1948.

What options are there for unemployed workers these days? Some households that had relied on two or more breadwinners in the past must now live on the income only of one person who is working. Workers who feel they are too old to be hired in a good job might elect to take “early retirement” if they are lucky enough to qualify for pensions or Social Security, or if they have savings. But few have very much in the bank.

The employment picture will not get better soon. Federal Reserve Chairman Ben Bernanke cautions, “It could take four to five more years for the job market to normalize fully.” But even that might be far too rosy a scenario. The U.S. economy would have to add 500,000 jobs every month for three years to restore the economy to pre-recession job levels. Many economists point out that U.S. employment levels might never stabilize to what was considered “normal” a few years ago—and could even get much worse if the economy should fall back into a “double-dip” recession.

Important portions of the U.S. economy are still downsizing. Construction lost 16,000 jobs last month. Government offices are laying off workers due to the budget crunch.

Yet a few sectors of the economy—such as the automobile industry, which is riding high on government bailouts—seem to be awakening. A Dec. 29 AP dispatch points out that some U.S. employers have begun hiring new workers, “but the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S.

Former Labor Secretary Robert Reich commented a year ago on his blog: “The basic assumption that jobs will eventually return when the economy recovers is probably wrong. Some jobs will come back, of course. But the reality that no one wants to talk about is a structural change in the economy that’s been going on for years but which the Great Recession has dramatically accelerated.

“Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They’ve discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.

“This means many Americans won’t be rehired unless they’re willing to settle for much lower wages and benefits. Today’s official unemployment numbers hide the extent to which Americans are already on this path. ”

Is there no way out of this dilemma? Frances Fox Piven, writing in the Nation (Jan. 10-17), outlines some elementary steps to create decent and beneficial jobs. Demands that we have also called for in Socialist Action would include massive investments in public-service programs, and using government resources to “spur big new initiatives in infrastructure and green energy.” Unfortunately, Piven notes, “Nothing like this seems to be on the agenda. Instead the next Congress is going to be fixated on an Alice in Wonderland policy of deficit reduction by means of tax and spending cuts.”

Piven points out that organizing unemployed workers presents many unique difficulties since “when people lose their jobs they are dispersed, no longer much connected to their fellow workers or their unions.” Still, fighting organizations of unemployed workers had success in some localities at the time of the mass union drives of the 1930s.

Today, Piven says, “An effective movement of the unemployed will have to look something like the strikes and riots that have spread across Greece in response to the austerity measures forced on the Greek government by the European Union, or like the student protests that recently spread with lightening speed across England in response to the prospect of greatly increased school fees.

“A loose and spontaneous movement of this sort could emerge. It is made more likely because unemployment rates are especially high among younger workers.”

We agree with Piven in many respects, while observing that mass movements that appear spontaneous on the surface often come about only as a result of long organizing efforts behind the scenes.

Unemployment, which is endemic to the capitalist system, must become a central issue for a revitalized and fighting labor movement in this country. A key job-creating demand that labor must fight for is lowering the workweek to 30 hours for 40-hours pay. Success will require a clean break with the Democratic Party. Workers need their own party, able to take on the bosses’ government—and win.

> This article was originally published in the January 2011 print edition of Socialist Action newspaper.

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