Still waiting for help

March 30, 2009

Adam Turl explains how the more than 1,000 people who stood in line for entry-level jobs at a new Chicago hotel illustrate the crying need for more aggressive assistance for victims of the economic crisis.

THERE WERE coffee shop baristas, a former wine salesman from California, recent college graduates, unemployed accountants, journalists, food servers, laborers and sub-contractors.

They were among the more than 1,000 people who lined up for nearly eight hours in downtown Chicago to apply for fewer than 300 entry-level jobs at the new Hotel Wit, set to open in May.

Once inside the nearby Oriental Theater, each person filled out the paperwork--and was told they had "two minutes" to "sell" themselves.

It was another sign of the times as the worst economic crisis since the Great Depression progressively strips away what little was left of the "American Dream."

The jobless numbers are the clearest sign of how hard the crisis is hitting the working class at all levels--but not the only one. Access to health care and even food is declining. Retirement funds and family incomes are down. The housing crisis continues to claim victims among homeowners and renters alike.

The scene in Chicago dramatizes what is becoming clearer to people everywhere in the country--that more far-reaching changes are needed than any politician is willing to suggest today to present an alternative to a system built around the profit motive that doesn't serve the interests of the vast majority.

Hundreds of people stand in line to apply for jobs at the new Hotel Wit in Chicago
Hundreds of people stand in line to apply for jobs at the new Hotel Wit in Chicago (Adam Turl | SW)

OFFICIALLY, THE unemployment rate stands at 8.1 percent, representing 12.5 million people--the highest level since 1982. In Illinois, joblessness is even higher at 8.6 percent.

But these numbers underplay the true extent of the jobs crisis. The federal government's more accurate government "U-6 measure of labor underutilization"--which takes into account "involuntary part-time workers" (people who want full-time work but have to take part-time jobs) and "marginally attached workers" (workers who have given up on an increasingly futile weekly job search)--puts the real national jobless at 14.8 percent in February, representing more than 20 million workers.

Among those in line at the Hotel Wit job fair were many who represented the holes in the official statistics.

For example, Amy, an African American woman in her late 20s, isn't counted. She has been out of work for two years. Before that, she worked in retail. She went back to school for a degree, but that hasn't helped so far. "I don't think the government is helping enough," Amy said. "It's not looking good for anyone. Look at this line."

The crisis isn't confined to the retail sector, of course. Almost every section of the economy has been hit hard. Manufacturing, construction and retail have all lost hundreds of thousands of jobs. FIRE (Finance, insurance and real estate)--which was supposed to provide a new employment base in de-industrialized urban areas, according to the old propaganda--continues to hemorrhage jobs. According to the U.S. Federal Reserve, demand is plummeting for business services, consultants and law firms (except for bankruptcy lawyers).

Brian Guzman was also waiting in line. He used to do seasonal work at the Chicago Botanic Gardens north of the city, and usually got rehired each March. But not this year. Brian has been out of work for nearly seven months.

"Some people are going to have to move in with relatives," Brian said. "Some people move in with friends...They've got to do something for us. They need to make more jobs for people. Anything. People have kids, families, tuition for college."

Brian is among those groups of workers--minorities and younger workers--who are already living through Great Depression-like conditions. According to the Center for American Progress (CAP), youth unemployment is 21.6 percent. Official unemployment for Latino workers of all ages is 10.9 percent, and 13.4 percent for Black workers. And according to the official numbers, 10.3 percent of "female heads of households" are without work.

Caroline Grey was working at a bank while studying accounting at Saint Xavier University. Last year, the bank fired her because, saying her hours couldn't be scheduled around her classes. She earned her degree, but she's been out of work since December. Now she's waiting in line for an entry-level job at a hotel.

"I go to every job fair that I hear about," Caroline said. "In the last two months, I've been to five fairs. I send out at least seven applications a week--cover letters, resumes. I do everything. I expected my job search to be a little bit better when I got out of college. I was an accounting major. But now they aren't doing new hires."

Then there's Shataysha, who just graduated from Southern Illinois University in Carbondale with a bachelor's degree in journalism--and $50,000 in student loans. She says her job hunt has been "very, very, very difficult. I've been networking with different newspapers, but haven't received any phone calls. But in the meantime, I know I have to pay off my student loans, so I have to find work."

As part of their recession survival strategy, companies are not only laying off workers, but cutting back hours (without decreasing workloads). The result is a crisis-based speed-up in productivity. Average weekly hours for production workers are just 33.3 hours--the lowest on record, and companies are using the threat of unemployment to bully their employees.

Daniel works for a chain of retail "tea houses" modeled on Starbucks. He's looking for "anything" better--so he came out to wait in line at the hotel job fair.

"They seriously treat us like we're their slaves," Daniel said. "[They] have something like 15 locations in the city, and because they can't hold onto people because they're firing so many, they order me from store to store.

"They're stretching it. So there's literally two people to handle everything. I get huge crazy rushes. I can't handle it with two people--only one person on the register and another making drinks. "They expect me to keep showing up on time, and never be mad about it. If I have an attitude I would be fired.

"I definitely would be all for unions--a union to fight the big bosses--because we have absolutely no say. We have no say about our uniforms, about how much we get paid."

AS WORKERS are pushed out the labor force and hours taken from those who keep heir jobs, family incomes are declining. According to a recent CAP study, two-thirds of Americans say their family income doesn't keep up.

In addition, whatever savings or wealth some workers had accumulated is being obliterated--primarily as a result of the plummeting value of homes and the effect of the falling stock market on retirement savings.

The Center for Economic and Policy Research (CEPR) says that people aged 45 to 54 have seen their net worth decline by 45 percent to a median of $94,2000, down from $172,400. Five years ago, the average household in this age group had enough retirement savings to generate $14,000 in annual interest at retirement. That figure is now less than $8,000.

So for tens of millions of workers, retirement now seems impossible--or at least more difficult and far less comfortable. "My entire family is moving to Southern Illinois because it's cheap as hell--$400 rent for a three-bedroom house," Daniel said. "A lot of families are getting torn apart. It's hard--especially with the [Illinois state] minimum wage only being $7.75. I average about $400 every two weeks, and that's if I work 35 hours every week."

Meanwhile, one thing that sustained working-class households during a period of stagnating and declining wages in the previous period--access to credit--has dried up.

This is a direct result of a Wall Street bailout plan, initiated under George Bush and continued in almost exactly the same form by the new Obama administration--that has wasted hundreds of billions on banks rather than using the money to create jobs.

Now, the banks are tightening up on lending, squeezing workers with higher interest rates on credit cards--and lowering the boom when workers can't keep up with their mortgages or other loans. Credit card defaults rose to 6.3 percent in the last quarter of 2008, another record high.

And as workers' credit ratings suffer, there's a further effect when it comes to finding a job. "At a lot of places, if you have bad credit, you can't even get a job," Amy observed. "That needs to change right now. If you have bad credit, and you can't get a job because you have bad credit, then you can't work to pay your bills. It's kind of redundant."

The mortgage crisis continues to undermine the most valuable property for most workers--their homes. The CEPR estimates that 30 percent of homeowners in the 45 5to 54 age group are "underwater"--that is, they owe more than their homes are even worth. One in nine mortgages is delinquent or in foreclosure.

As Amy says, "I think the money should go to the people--to the homeowners instead of the banks. It really needs to go to the people who need it to pay off some of the mortgages." But under President Barack Obama's plan for helping homeowners in trouble, Amy points out, "the money goes to the banks, and there's a bracket you have to be in even to get help."

"I don't think the banks would be doing so bad if people could afford to pay their bills." Amy said. "That's the problem--people can't pay their bills. The banks are getting the bailout, and we're losing our houses."

Rising unemployment, declining incomes and the housing crisis have conspired to create a national homelessness boom. Tent cities are spreading through the warmer areas of the country--Sacramento, Phoenix, Portland, Reno. Meanwhile, New York City reported a 40 percent increase in families seeking emergency shelter since the onset of the recession.

Homeless advocates expect things to get worse. The National Alliance to End Homelessness projects 3.4 million people will be homeless at some point in the coming year--an increase of 35 percent since December 2007. The National Center on Family Homelessness reports that 1 in 50 children are now homeless.

Then there are the times that this crisis calls into question life itself for millions who can't afford to treat illnesses or put food on the table.

Employer-provided benefits had already decreased substantially before the crisis began, But the tattered patchwork of health care coverage associated with people's jobs is being torn apart by the recession. Among all the people I talked to in line for the Hotel Wit job fair, almost nobody reported having health coverage.

According to a joint Gallup-Healthways poll, the percentage of people reporting difficulty paying for medicine and other health care costs increased from 18 to 21 percent over the course of the last year, and the number of workers with employer-provided health care has declined. Health care workers are reporting a fall in the number of patients seeking treatment--because increasing numbers can't afford to "treat" themselves to medical care.

Just as millions have no health care, millions can't afford to eat. This was true even before the crisis, but with the recession, the numbers of people who don't get enough food each day are on the rise, including many who never thought they would have to rely on charity or the state for their daily bread. More than 1 in 10 people in the U.S.--32 million--are part of the food stamp program.

The problem isn't just declining incomes and joblessness, but also that the cost of food remains absurdly high. "[P]rices of such food commodities as maize, wheat and rice have fallen by 35-50 percent in the last year (although they are still 50 percent higher than in 2005, according to the International Monetary Fund)," the Los Angeles Times reported. "Oil prices have collapsed, too. Yet the price of food at the retail level around the world shows no sign of falling."

Why? Farmers and agribusiness are cutting back on planting and production in order to keep prices--and therefore profits--high. The USDA projects the lowest level of meat production this year since 1973. In short, the epidemic of hunger that stalks U.S. workers (and workers around the world) is being organized in corporate boardrooms.

As Brian Guzman put it, "If everything had gone down [in price], that would have been a little different. But prices are going up and there's less jobs."

THE QUESTION that is always asked these days on morning television news shows is some version of: "How can you survive the recession?"

Usually, what follows is a series of tips on job hunting and coupon clipping. John Challenger of the firm Challenger, Gray and Christmas suggests that the jobless consider "all options, including changing industries, taking a part-time job or relocating."

But the people in the Chicago job fair line were already considering "all the options"--and they're still falling behind. The scale and scope of the crisis rules out solutions at an individual level. People simply need more help. Far-reaching social solutions to unemployment, health care, housing and food access are necessary. As Brian Guzman suggested, "Maybe they should make up a plan for everything going on now."

The $787 billion stimulus plan was designed to create or save 3.5 million jobs, according to Obama. But the crisis has already cost the economy 4.4 million jobs. And there's worse still to come--according to economist Dean Baker, "The unemployment rate is likely to hit 8.5 percent by March and will almost certainly cross 9 percent by early summer. Without substantial additional stimulus, it could cross 10 percent by year-end."

Obviously, a larger stimulus is needed to expand unemployment benefits and end time limits on receiving them--and to create more and more varied types of jobs. "I love Barack Obama to death," Amy said, "but there's only so many people qualified to build bridges and roads."

But even more dramatic measures are needed. The banks that are sucking in bailout funds from the government could be nationalized outright, ordered to fund projects that benefit the majority in society, and required to cap credit card interest rates and stop foreclosures. A retirement system that depends far too much on personal wealth should be replaced by a government pension system. The same point can be said about health care and housing.

These kinds of solutions would get at the root of the problem--an economy run off the rails because it was (and still is) based on corporate greed.

Millions of people are gravitating toward more social and collective ideas when it comes to the economy. A 2009 CAP study on the "State of American Political Ideology" showed that six in ten people surveyed believe "government should do more to promote the common good." A majority agreed with the statement "freedom requires economic opportunity and minimum measures of security, such as food, housing, medical care and old-age protection."

But to achieve these things, workers--with and without jobs--are going to have to fight.

The potential is there for building such struggles. The calm on the surface of society conceals a rage building underneath. Thus, at the Wit Hotel job fair, when the managers suddenly cut off the line, leaving out hundreds of applicants, people were furious. Several threatened to "riot" if their applications weren't taken.

The question is how this anger can be channeled into struggles of all kinds that can achieve the social solutions necessary to solve the crisis in favor of working people.

Further Reading

From the archives