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Unhappy holidays from Corporate America

By Nicole Colson | December 9, 2005 | Page 12

"WE HAVE every reason to be optimistic about our economic future," George Bush declared at a press conference to hype positive economic statistics released last week. Plenty of people must have wondered who he meant by "we."

The White House and its Republican allies in Congress claim that the new figures--including a Labor Department report that employers added 215,000 jobs in November--prove the economy is steaming along, to everyone's benefit.

But most people aren't buying it. According to a recent ABC News/Washington Post poll, 52 percent of Americans believe the economy is getting worse. Sixty-four percent said the economy was either not good or poor.

And no wonder. Scratch the surface of the administration's economic happy talk, and you find that more and more ordinary Americans are being pushed to the economic breaking point.

While it's true that 215,000 jobs were added to the economy in November--a modest gain by historical standards--just 11,000 were in manufacturing. As Peter Morici, a business professor at the University of Maryland, pointed out to the New York Times, "It's not just the number of jobs, it's the quality of jobs."

And that's to say nothing of the holiday "present" that tens of thousands of workers across the country are anticipating from their employers: pink slips. In addition to General Motors' recent announcement that it would cut some 30,000 jobs (about one-third of its North American workforce), Ford said that 7,500 jobs would go at eight North American plants, and Merck Pharmecueticals slashed another 7,000.

As the liberal Economic Policy Institute (EPI) pointed out, we are now entering the fourth year of one of the weakest economic "recoveries" in history.

Sylvia Allegretto of the EPI told Socialist Worker that the November job numbers were "actually better than they normally have been." But, she added, "is it as rosy as the Bush administration would like you to think? If you look in historical terms, 215,000 [jobs added] isn't that great. Since mid-2003, we've had positive job growth. But if you look at it historically, at this point out [in the last recovery], jobs were growing at 7.6 percent." Now, says Allegretto, "we're four years into a recovery, and jobs have only grown by 2.6 percent...It's by far the worst on record."

Vernon Esmond knows the reality behind the statistics. He is one of the estimated 500,000 to 700,000 homeless in the U.S. today. Vernon worked for an insurance company in downtown Chicago from 1993 to 2003. Today, he lives in the Pacific Garden Mission on the south end of downtown.

"When they started downsizing, after 10 years of being there, I hadn't been there long enough to retire," Vernon told Socialist Worker. "I was collecting unemployment, and I was doing pretty good with that, but then after the president said that the money had run out for unemployment...I wasn't eligible for it anymore, which made me lose my apartment.

Now, says Vernon, his options are few. He could panhandle, but refuses to do so because, he says, "if you don't have pride, you don't have anything."

There are "jobs" he could take, but they would do little to help him get back on his feet. "I can walk around out there putting flyers on people's doors--junk mail that most people don't want anyway--in this frigid weather from six o'clock in the morning, and if I'm lucky, I'm back at eight o'clock at night," he said. "I can get $40 a day in cash for doing that. Not enough to pay rent with."

As for assistance from the government, Vernon says that what little there is does him little good. "What is the government doing for me personally?" he said. "They're doing me the great favor of giving me $151 a month [in food stamps] which is only used to buy groceries.

"Although I am grateful, I'm confused, because when I went to the aid office, and I told them about the situation of being homeless and unemployed, they told me that this is the only assistance they could give me. That's fine, but what I can't understand is why you would give someone $150 a month in grocery money who doesn't have a stove or a refrigerator or a stove to cook them on."

As for the rosy economic picture that President Bush talks about, Vernon says he hasn't seen it. Instead, he says he's seen more homeless people in recent months--especially younger people--and no jobs or government assistance to help. "All I really need is an opportunity," said Vernon. "Being unemployed can happen to anybody, and let's just hope that it happens to this president, the sooner the better."

Beyond the weak job numbers, the economic picture for working people is even tougher in some respect.

Bush claims that tax and spending cuts are driving the "recovery," but the real driving forces are consumer spending and debt--already at record levels. As former Labor Secretary Robert Reich recently wrote, "Consumer spending is now more than three-quarters of the whole national economy--a record high."

"There's nothing left to spend," he added. "Yes, gas prices have settled down a bit, but so have paychecks. General Motors, Merck and major airlines are laying off tens of thousands. Job growth is anemic and pay is lousy. American families have exhausted all the coping mechanisms we've been using for years to spend more."

Those traditional "coping mechanisms" include things like a stay-at-home spouse entering the job market. But the number of women in the workforce is already at record highs--even women with toddlers.

As for working longer hours, last year, the typical working American put in two full weeks more at an office or factory than the average two decades ago. And squeezing equity out of homes through refinancing is also at the breaking point, says Reich--"because housing values have leveled off and mortgage rates are rising."

The other option? Go even deeper into debt--at a time when debt is already at record highs As Allegretto commented, "The savings rate is now zero, basically, or negative. If the housing bubble bursts, we could see something coming to a head."

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