Workers' living standards slipping further behind in...
By Lee Sustar | July 9, 2004 | Page 12
THE ECONOMIC recovery continues--but workers are slipping further behind. The latest employment statistics from the federal government showed that just 112,000 jobs were created in June--less than half of the expected number of 250,000 and a falloff from the recent pace of new job creation.
Jobs in manufacturing--where employment had finally begun to increase this spring after a long slide--also dropped by 11,000. Yet manufacturing output continued to grow--a sign that employers are continuing to squeeze more work out of fewer workers.
Unemployment remains at 5.6 percent--the same level as in November 2001, the official end point of the recession. But this percentage greatly understates the real level of joblessness.
According to the Economic Policy Institute (EPI), if the government's jobless statistics were more complete, they would include those who are forced to work part time, are marginally attached to the labor force or are discouraged from seeking work altogether--and the jobless figure would be 9.6 percent.
All this is a far cry from George W. Bush's promise that his 2003 tax cuts would create 5.5 million new jobs by the end of this year. In fact, job creation has been nearly stagnant. Overall, employment in the private sector has declined by 1.8 million jobs since the beginning of the recession shortly after Bush took office.
And if the economy slows down again, the jobs picture--already the worst since the Great Depression of the 1930s--will likely get much worse. "The June job numbers, coupled with other data on car sales and retail sales, indicate that the economy is not growing nearly as rapidly as many economists had believed," Dean Baker, co-director of the Center for Economic and Policy Research, told Socialist Worker.
"The economy will have to grow rapidly for a long period of time to make up for three years of job losses. If it doesn't sustain a rapid pace of growth, then millions of workers will be unable to find jobs, and wages will continue to decline."
In fact, the lousy labor market has given employers a stick to beat workers with. Real wages have increased by just 2 percent over the last year, slower than the 3 percent inflation rate. At the same time, a slowing economy led employers to reduce the average weekly hours worked--leading to a further cut in pay.
In 2003, labor costs to employers--wages plus benefits--increased by 4 percent. Yet productivity--the measure of how efficient workers are--rose by 5.4 percent, meaning that Corporate America enjoyed a net decrease in labor costs.
This trend has enabled business to increase profits as a share of national income--meaning that workers get an even smaller slice of the economic pie. "Not since World War II has the distribution been so lopsided in the aftermath of a recession," the New York Times observed last December. Those figures go a long way to explaining why Corporate America continues to back George W. Bush despite his disastrous occupation of Iraq.
Democratic presidential candidate John Kerry has tried to tap workers' bitterness over Bush's policies by promising to create jobs. Yet the centerpiece of his economic program isn't government spending to boost employment, but a tax cut for corporations--whose share of income taxes is already at the lowest level in decades.
"On the economy, Kerry is keen on simply rehiring the old Bill Clinton team, led by [former Treasury Secretary and now Citigroup executive] Robert Rubin, which sided again and again with Wall Street over Main Street," wrote Matt Rothschild, editor of The Progressive--and a Kerry supporter. Union leaders who might be expected to voice demands for an aggressive jobs creation program are keeping quiet and backing Kerry.
Neither Kerry nor Bush will offer the kind of economic program that the U.S. really needs--government spending to create jobs, investment in education and public housing and the creation of a national, universal health insurance program. That's going to require a movement that won't settle for the politicians' promises--but that organizes from the bottom up.